September 4, 1996
Form S-4/A
Amendment to Form S-4 filed August
8, 1996
The following exhibits are hereby
filed electronically, pursuant to a
temporary hardship allowance.
Exhibit Nos. 4.1(1), 4.2(1), 4.3(1),
4.4(1), 4.5(1), 4.6(1), 4.7(1),
16.1(1), 21.1(1), 23.1(1), 23.2(1)
Sunday River Skiway Corporation
Sunday River Ltd.
Perfect Turn, Inc.
LBO Holding, Inc.
Sunday River Transportation, Inc.
Sugarbush Resort Holdings, Inc.
Sugarbush Leasing Company
Sugarbush Restaurants, Inc.
Cranmore, Inc.
Mountain Wastewater Treatment, Inc.
LBO Hotel Co.
S-K-I Limited
Killington Ltd.
Mount Snow Ltd.
Waterville Valley Ski Area, Ltd.
Sugarloaf Mountain Corporation
Killington Restaurants, Inc.
Dover Restaurants, Inc.
Resorts Technologies, Inc.
Resort Software Services, Inc.
Mountainside
Sugartech
Deerfield Operating Company
Pico Ski Area Management Company
By:/s/ Leslie B. Otten
President
93
AMERICAN SKIING COMPANY
As Issuer
Sunday River Skiway Corporation
Sunday River Ltd.
Perfect Turn, Inc.
LBO Holding, Inc.
Sunday River Transportation, Inc.
Sugarbush Resort Holdings, Inc.
Sugarbush Leasing Company
Sugarbush Restaurants, Inc.
Cranmore, Inc.
Mountain Wastewater Treatment, Inc.
LBO Hotel Co.
S-K-I Limited
Killington Ltd.
Mount Snow Ltd.
Waterville Valley Ski Area, Ltd.
Sugarloaf Mountain Corporation
Killington Restaurants, Inc.
Dover Restaurants, Inc.
Resorts Technologies, Inc.
Resort Software Services, Inc.
Mountainside
Sugartech
Deerfield Operating Company
Pico Ski Area Management Company
As Guarantors
SERIES A AND SERIES B
12% SENIOR SUBORDINATED NOTES DUE
2006
INDENTURE
Dated as of June 28, 1996
UNITED STATES TRUST COMPANY OF NEW
YORK
As Trustee
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.08;
7.10
(c) N.A.
311 (a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.05
(b) 12.03
(c) 12.03
313 (a) 7.06
(b)(1) 10.03
(b)(2) 7.07
(c) 7.06;
12.02
(d) 7.06
314 (a) 4.03; 12.02
(b) 10.02
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) 10.03-
10.05
(e) 12.05
(f) N.A.
315 (a) 7.01
(b) 7.05;
12.02
(c) 7.01
(d) 7.01
(e) 6.11
316 (a)(last sentence)
2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.12;
9.04
317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318 (a) 12.01
(b) N.A.
(c) 12.01
N.A. means not applicable.
*This Cross-Reference Table is not
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01.
Definitions
Section 1.02. Other
Definitions
Section 1.03.
Incorporation by
Reference of Trust
Indenture Act
Section 1.04. Rules
of Construction
ARTICLE 2
THE NOTES
Section 2.01. Form
and Dating
Section 2.02.
Execution and
Authentication
Section 2.03.
Registrar and Paying
Agent
Section 2.04. Paying
Agent to Hold Money in
Trust
Section 2.05. Holder
Lists
Section 2.06.
Transfer and Exchange
Section 2.07.
Replacement Notes
Section 2.08.
Outstanding Notes
Section 2.09.
Treasury Notes
Section 2.10.
Temporary Notes
Section 2.11.
Cancellation
Section 2.12.
Defaulted Interest
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices
to Trustee
Section 3.02.
Selection of Notes to
Be Redeemed
Section 3.03. Notice
of Redemption
Section 3.04. Effect
of Notice of
Redemption
Section 3.05. Deposit
of Redemption Price
Section 3.06. Notes
Redeemed in Part
Section 3.07.
Optional Redemption
Section 3.08.
Mandatory Redemption
Section 3.09. Offer
to Purchase by
Application of Excess
Proceeds
ARTICLE 4
COVENANTS
Section 4.01. Payment
of Notes
Section 4.02.
Maintenance of Office
or Agency
Section 4.03. Reports
Section 4.04.
Compliance Certificate
Section 4.05. Taxes
Section 4.06. Stay,
Extension and Usury
Laws
Section 4.07.
Restricted Payments
Section 4.08.
Dividend and Other
Payment Restrictions
Affecting Subsidiaries
Section 4.09.
Incurrence of
Indebtedness and
Issuance of Preferred
Stock
Section 4.10. Asset
Sales
Section 4.11.
Independent Director
Section 4.12.
Transactions with
Affiliates
Section 4.13. Liens
Section 4.14.
Corporate Existence
Section 4.15. Offer
to Repurchase Upon
Change of Control
Section 4.16.
Additional Subsidiary
Guarantees
Section 4.17. No
Senior Subordinated
Debt
ARTICLE 5
SUCCESSORS
Section 5.01. Merger,
Consolidation, or Sale
of Assets
Section 5.02.
Successor Corporation
Substituted
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of
Default
Section 6.02. Acceleration
Section 6.03. Other
Remedies
Section 6.04. Waiver
of Past Defaults
Section 6.05. Control
by Majority
Section 6.06.
Limitation on Suits
Section 6.07. Rights
of Holders of Notes to
Receive Payment
Section 6.08.
Collection Suit by
Trustee
Section 6.09. Trustee
May File Proofs of
Claim
Section 6.10.
Priorities
Section 6.11.
Undertaking for Costs
ARTICLE 7
TRUSTEE
Section 7.01. Duties
of Trustee
Section 7.02. Rights
of Trustee
Section 7.03.
Individual Rights of
Trustee
Section 7.04.
Trustee's Disclaimer
Section 7.05. Notice
of Defaults
Section 7.06. Reports
by Trustee to Holders
of the Notes
Section 7.07.
Compensation and
Indemnity
Section 7.08.
Replacement of Trustee
Section 7.09.
Successor Trustee by
Merger, etc
Section 7.10.
Eligibility;
Disqualification
Section 7.11.
Preferential
Collection of Claims
Against Company
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT
DEFEASANCE
Section 8.01. Option
to Effect Legal
Defeasance or Covenant
Defeasance
Section 8.02. Legal
Defeasance and
Discharge
Section 8.03.
Covenant Defeasance
Section 8.04.
Conditions to Legal or
Covenant Defeasance
Section 8.05.
Deposited Money and
Government Securities
to be Held in Trust;
Other Miscellaneous
Provisions.
Section 8.06.
Repayment to Company
Section 8.07.
Reinstatement
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without
Consent of Holders of
Notes
Section 9.02. With
Consent of Holders of
Notes
Section 9.03.
Compliance with Trust
Indenture Act
Section 9.04.
Revocation and Effect
of Consents
Section 9.05.
Notation on or
Exchange of Notes
Section 9.06. Trustee
to Sign Amendments,
etc
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to
Subordinate
Section 10.02. Certain
Definitions
Section 10.03. Liquidation;
Dissolution; Bankruptcy
Section 10.04. Default on
Senior Debt; No Stock
Collateral
Section 10.05. Acceleration
of Notes
Section 10.06. When
Distribution Must Be Paid
Over
Section 10.07. Notice
Section 10.08. Subrogation
Section 10.09. Relative
Rights
Section 10.10.
Subordination May Not Be
Impaired by Company
Section 10.11. Distribution
or Notice to Representative
Section 10.12. Rights of
Trustee and Paying Agent
Section 10.13.
Authorization to Effect
Subordination
Section 10.14. Payment
Section 10.15. Defeasance
of this Article 10
Section 10.16. No Claims
Against Subsidiaries
Section 10.17. Amendments
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01.
Subsidiary Guarantees
Section 11.02.
Execution and Delivery
of Subsidiary
Guarantees
Section 11.03.
Guarantors May
Consolidate, etc., on
Certain Terms
Section 11.04.
Releases Following
Sale of Assets
Section 11.05.
Limitation on
Guarantor Liability
Section 11.06.
Subordination of
Subsidiary Guarantee
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust
Indenture Act Controls
Section 12.02. Notices
Section 12.03.
Communication by
Holders of Notes with
Other Holders of Notes
Section 12.04.
Certificate and
Opinion as to
Conditions Precedent
Section 12.05.
Statements Required in
Certificate or Opinion
Section 12.06. Rules
by Trustee and Agents
Section 12.07.
"Trustee" to Include
Paying Agent
Section 12.08. No
Personal Liability of
Directors, Officers,
Employees or
Shareholders
Section 12.09.
Governing Law
Section 12.10. No
Adverse Interpretation
of Other Agreements
Section 12.11.
Successors
Section 12.12.
Severability
Section 12.13.
Counterpart Originals
Section 12.14. Table
of Contents, Headings,
etc
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
Exhibit C GUARANTORS
Exhibit D SUBSIDIARY GUARANTEE
<PAGE>
INDENTURE dated as of June 28, 1996
among American Skiing Company, a
Maine corporation ("ASC" or the
"Company"), each of the Persons
listed on Exhibit C hereto and United
States Trust Company of New York, as
trustee (the "Trustee").
The Company, the Guarantors
and the Trustee agree as follows for
the benefit of each other and for the
equal and ratable benefit of the
Holders of the 12% Series A Senior
Subordinated Notes due 2006 of the
Company (the "Series A Notes") and
the 12% Series B Senior Subordinated
Notes due 2006 of the Company (the
"Series B Notes" and, together with
the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquired Debt" means, with
respect to any specified Person, (i)
Indebtedness of any other Person
existing at the time such other
Person is merged with or into or
became a Restricted Subsidiary of
such specified Person, including,
without limitation, Indebtedness
incurred in connection with, or in
contemplation of, such other Person
merging with or into or becoming a
Restricted Subsidiary of such
specified Person, and (ii)
Indebtedness secured by a Lien
encumbering any asset acquired by
such specified Person.
"Affiliate" of any
specified Person means any other
Person directly or indirectly
controlling or controlled by or under
direct or indirect common control
with such specified Person. For
purposes of this definition,
"control" (including, with
correlative meanings, the terms
"controlling," "controlled by" and
"under common control with"), as used
with respect to any Person, shall
mean the possession, directly or
indirectly, of the power to direct or
cause the direction of the management
or policies of such Person, whether
through the ownership of voting
securities, by agreement or
otherwise; provided that beneficial
ownership of 10% or more of the
voting securities of a Person shall
be deemed to be control.
"Agent" means any
Registrar, Paying Agent or
co-registrar.
"Asset Sale" means (i) the
sale, lease, conveyance or other
disposition of any rights, property
or assets (including, without
limitation, by way of a sale and
leaseback), other than sales of
inventory, sales of obsolete or
unused equipment and sales by Real
Estate Subsidiaries of hotel,
condominium, interval ownership or
other units, in each case, in the
ordinary course of business
consistent with past practices
(provided that the sale, lease,
conveyance or other disposition of
all or substantially all of the
assets of the Company and its
Restricted Subsidiaries taken as a
whole will be governed by the
provisions of Section 4.15 and/or the
provisions described above under
Section 5.01 and not by the
provisions of Section 4.10) or (ii)
the issue or sale by the Company or
any of its Subsidiaries of Equity
Interests of any of the Company's
Subsidiaries, in the case of either
clause (i) or (ii), whether in a
single transaction or a series of
related transactions (a) that have a
fair market value in excess of $1.0
million or (b) for net proceeds in
excess of $1.0 million.
Notwithstanding the foregoing: (i) a
transfer of assets by the Company to
a Wholly Owned Restricted Subsidiary
or by a Wholly Owned Restricted
Subsidiary to the Company or to
another Wholly Owned Restricted
Subsidiary, (ii) an issuance of
Equity Interests by a Wholly Owned
Restricted Subsidiary to the Company
or to another Wholly Owned Restricted
Subsidiary, (iii) issuances of Equity
Interests by Sugarloaf Mountain
Corporation pursuant to warrants
outstanding on the date of this
Indenture, and (iv) a Restricted
Payment that is permitted by the
provisions of Section 4.07 will not
be deemed to be Asset Sales.
"Bank Credit Agreements"
means (i) the Credit Agreement dated
as of June 28, 1996 among the
Company, various Subsidiaries of the
Company, Fleet National Bank, as
Agent, and the lenders party thereto,
(ii) any other credit, loan,
reimbursement or other similar
agreements among the Company, any
Subsidiary and any bank, insurance
company, finance company or other
institutional lender, (iii) each
instrument pursuant to which
Obligations under any of the
agreements described in (i) or (ii)
above, are amended, deferred,
extended, renewed, replaced, refunded
or refinanced, in whole or in part,
and (iv) each instrument now or
hereafter evidencing, governing,
guarantying or securing any
Indebtedness under any agreements
described in (i), (ii) or (iii)
above, in each case, as modified,
amended, restated or supplemented
from time to time.
"Board of Directors" means
the Board of Directors of the Company
or a Guarantor, as applicable, or any
authorized committee of the Board of
Directors.
"Board Resolution" means a
resolution of the Board of Directors
of the Company set forth in an
Officers' Certificate delivered to
the Trustee.
"Business Day" means any
day other than a Legal Holiday.
"Capital Lease Obligation"
means, at the time any determination
thereof is to be made, the amount of
the liability in respect of a capital
lease that would at such time be
required to be capitalized on a
balance sheet in accordance with
GAAP.
"Capital Stock" means (i)
in the case of a corporation,
corporate stock, (ii) in the case of
an association or business entity,
any and all shares, interests,
participations, rights or other
equivalents (however designated) of
corporate stock, (iii) in the case of
a partnership, partnership interests
(whether general or limited) and (iv)
any other interest or participation
that confers on a Person the right to
receive a share of the profits and
losses of, or distributions of assets
of, the issuing Person.
"Cash Equivalents" means
(i) United States dollars, (ii)
securities issued or directly and
fully guaranteed or insured by the
United States government or any
agency or instrumentality thereof
having maturities of not more than
one year from the date of
acquisition, (iii) certificates of
deposit and eurodollar time deposits
with maturities of one year or less
from the date of acquisition,
bankers' acceptances with maturities
not exceeding one year and overnight
bank deposits, in each case with any
domestic commercial bank having
capital and surplus in excess of $500
million and a Keefe Bank Watch Rating
of "B" or better, (iv) repurchase
obligations with a term of not more
than seven days for underlying
securities of the types described in
clauses (ii) and (iii) above entered
into with any financial institution
meeting the qualifications specified
in clause (iii) above, and (v)
commercial paper having the highest
rating obtainable from Moody's
Investors Service, Inc. or Standard &
Poor's Corporation and in each case
maturing within one year after the
date of acquisition.
"Certificated Notes" means
Notes that are in the form of the
Notes attached hereto as Exhibit A
that do not include the information
called for by footnotes 1 and 2
thereof.
"Change of Control" means
the occurrence of any of the
following: (i) the sale, lease,
transfer, conveyance or other
disposition (other than by way of
merger or consolidation), in one or a
series of related transactions, of
all or substantially all of the
assets of the Company and its
Restricted Subsidiaries, taken as a
whole, to any "person" (as such term
is used in Section 13(d)(3) of the
Exchange Act) other than the
Permitted Holders, (ii) the adoption
of a plan relating to the liquidation
or dissolution of the Company, (iii)
the consummation of any transaction
(including, without limitation, any
merger or consolidation) the result
of which is that the Permitted
Holders cease to be the "beneficial
owners" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the
Exchange Act) of an aggregate of at
least 51% of the common stock of the
Company and at least 51% of the
voting power of the Capital Stock of
the Company, (iv) the consummation of
any transaction (including, without
limitation, any merger or
consolidation) the result of which is
that any "person" (as such term is
used in Section 13(d)(3) of the
Exchange Act), other than the
Permitted Holders, becomes the
"beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or
indirectly, of more than 35% of the
common stock of the Company or more
than 35% of the voting power of the
Capital Stock of the Company and (v)
the first day on which more than
one-third of the members of the board
of directors of the Company are not
Continuing Directors.
"Collateral Agent" means
United States Trust Company of New
York, as Collateral Agent for the
benefit of Holders of Notes under the
Pledge and Disbursement Agreement, or
any successor thereto appointed
pursuant to such agreement.
"Consolidated Cash Flow"
means, with respect to any Person for
any period, the Consolidated Net
Income of such Person for such period
plus, to the extent deducted in
computing Consolidated Net Income,
(i) an amount equal to any
extraordinary loss plus any net loss
realized in connection with an Asset
Sale, (ii) provision for taxes based
on income or profits of such Person
and its Restricted Subsidiaries for
such period, (iii) consolidated
interest expense of such Person and
its Restricted Subsidiaries for such
period, whether paid or accrued and
whether or not capitalized
(including, without limitation,
amortization of original issue
discount, non-cash interest payments,
the interest component of any
deferred payment obligations, the
interest component of all payments
associated with Capital Lease
Obligations, commissions, discounts
and other fees and charges incurred
in respect of letter of credit or
bankers' acceptance financings, and
net payments (if any) pursuant to
Hedging Obligations) and (iv)
depreciation and amortization
(including amortization of goodwill
and other intangibles but excluding
amortization of prepaid cash expenses
that were paid in a prior period) of
such Person and its Restricted
Subsidiaries for such period, in each
case, on a consolidated basis and
determined in accordance with GAAP.
Notwithstanding the foregoing, the
provision for taxes on the income or
profits of, and the depreciation and
amortization of, a Restricted
Subsidiary of the referent Person
shall be added to Consolidated Net
Income to compute Consolidated Cash
Flow only to the extent (and in same
proportion) that the Net Income of
such Restricted Subsidiary was
included in calculating the
Consolidated Net Income of such
Person and only if a corresponding
amount would be permitted at the date
of determination to be dividended to
the Company by such Restricted
Subsidiary without prior governmental
approval (that has not been
obtained), and without direct or
indirect restriction pursuant to the
terms of its charter and all
agreements, instruments, judgments,
decrees, orders, statutes, rules and
governmental regulations applicable
to such Restricted Subsidiary or its
stockholders.
"Consolidated Net Income"
means, with respect to any Person for
any period, the aggregate of the Net
Income of such Person and its
Restricted Subsidiaries for such
period, on a consolidated basis,
determined in accordance with GAAP;
provided that (i) the Net Income (but
not loss) of Real Estate Subsidiaries
or of any Person that is not a
Restricted Subsidiary or that is
accounted for by the equity method of
accounting shall be included only to
the extent of the amount of dividends
or distributions paid in cash to the
referent Person or a Wholly Owned
Restricted Subsidiary thereof (other
than a Real Estate Subsidiary), (ii)
the Net Income of any Restricted
Subsidiary that is not a Guarantor
shall be excluded 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 date of
determination permitted without any
prior governmental approval (that has
not been obtained) or, directly or
indirectly, by operation of the terms
of its charter or any agreement,
instrument, judgment, decree, order,
statute, rule or governmental
regulation applicable to such
Restricted Subsidiary or its
stockholders, (iii) the Net Income of
any Person acquired in a pooling of
interests transaction for any period
prior to the date of such acquisition
shall be excluded and (iv) the
cumulative effect of a change in
accounting principles shall be
excluded.
"Consolidated Net Worth"
means, with respect to any Person as
of any date, the sum of (i) the
consolidated equity of the common
equity holders of such Person and its
consolidated Restricted Subsidiaries
as of such date plus (ii) the
respective amounts reported on such
Person's balance sheet as of such
date with respect to any series of
preferred equity (other than
Disqualified Stock) that by its terms
is not entitled to the payment of
dividends or other distributions
unless such dividends or other
distributions may be declared and
paid only out of net earnings in
respect of the year of such
declaration and payment, but only to
the extent of any cash received by
such Person upon issuance of such
preferred equity, less (a) all
write-ups (other than write-ups
resulting from foreign currency
translations and write-ups of
tangible assets of a going concern
business made within 12 months after
the acquisition of such business)
subsequent to the date of this
Indenture in the book value of any
asset owned by such Person or a
consolidated Restricted Subsidiary of
such Person, (b) all investments as
of such date in unconsolidated
Subsidiaries and in Persons that are
not Restricted Subsidiaries (except,
in each case, Permitted Investments),
and (c) all unamortized debt discount
and expense and unamortized deferred
charges as of such date, all of the
foregoing determined in accordance
with GAAP.
"Continuing Directors"
means, as of any date of
determination, any member of the
board of directors of the Company who
(i) was a member of the board of
directors on the date of this
Indenture or (ii) was nominated for
election to the board of directors
with the approval of at least
two-thirds of the Continuing
Directors who were members of the
board of directors at the time of
such nomination or election.
"Corporate Trust Office of
the Trustee" shall be at the address
of the Trustee specified in Section
12.02 hereof or such other address as
to which the Trustee may give notice
to the Company.
"Default" means any event
that is or with the passage of time
or the giving of notice or both would
be an Event of Default.
"Demand Note" means the
promissory note of Sunday River
Skiway Corporation payable to Leslie
B. Otten in the original principal
amount of up to $5.2 million, as in
effect on the date of this Indenture.
"Depositary" means, with
respect to the Notes issuable or
issued in whole or in part in global
form, the Person specified in Section
2.03 hereof as the Depositary with
respect to the Notes, until a
successor shall have been appointed
and become such pursuant to the
applicable provision of this
Indenture, and, thereafter,
"Depositary" shall mean or include
such successor.
"Designated Senior Debt" of
any Person means such Person's
Obligations under the Bank Credit
Agreements and any other Senior Debt
of such Person permitted to be
incurred by such Person under the
terms hereof the principal amount of
which is $25.0 million or more and
that has been designated by the Board
of Directors of such Person as
"Designated Senior Debt" by notice to
the Trustee from both such Person and
the Senior Agent.
"Disqualified Stock" means
any Capital Stock that, by its terms
(or by the terms of any security into
which it is convertible or for which
it is exchangeable), or upon the
happening of any event, matures or is
mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise,
or redeemable at the option of the
Holder thereof, in whole or in part,
on or prior to the date that is 91
days after the date on which the
Notes mature.
"DOJ Divestiture" means the
divestiture of the Waterville Valley
and Mount Cranmore ski resorts,
whether effected by way of sale,
lease, conveyance or other
disposition of any rights, property
or assets, or by way of a sale of the
Capital Stock of Waterville Valley
Ski Area, Ltd. or Cranmore, Inc., or
a merger, consolidation or other
reorganization, effected in
compliance with the United States
Department of Justice consent decree
applicable thereto.
"Equity Interests" means
Capital Stock and all warrants,
options or other rights to acquire
Capital Stock (but excluding any debt
security that is convertible into, or
exchangeable for, Capital Stock).
"Equity Offering" means a
public or private sale of common
stock of the Company that results in
net proceeds of at least $25.0
million to the Company.
"Exchange Act" means the
Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the
offer that may be made by the Company
pursuant to the Registration Rights
Agreement to exchange Series B Notes
for Series A Notes.
"Existing Indebtedness"
means Indebtedness of the Company and
its Restricted Subsidiaries in
existence on the date of this
Indenture, until such amounts are
repaid.
"Fixed Charges" means, with
respect to any Person for any period,
the sum of (i) the consolidated
interest expense of such Person and
its Restricted Subsidiaries for such
period, whether paid or accrued
(including, without limitation,
amortization of original issue
discount, non-cash interest payments,
the interest component of any
deferred payment obligations, the
interest component of all payments
associated with Capital Lease
Obligations, commissions, discounts
and other fees and charges incurred
in respect of letter of credit or
bankers' acceptance financings, and
net payments (if any) pursuant to
Hedging Obligations) and (ii) the
consolidated interest expense of such
Person and its Restricted
Subsidiaries that was capitalized
during such period and (iii) any
interest expense on Indebtedness of
another Person to the extent that
such Indebtedness is Guaranteed by
such Person or one of its Restricted
Subsidiaries or secured by a Lien on
assets of such Person or one of its
Restricted Subsidiaries (whether or
not such Guarantee or Lien is called
upon) and (iv) the product of (a) all
cash dividend payments or other
distributions (and non-cash dividend
payments in the case of a Person that
is a Restricted Subsidiary) on any
series of preferred equity of such
Person, times (b) a fraction, the
numerator of which is one and the
denominator of which is one minus the
then current combined federal, state
and local statutory tax rate of such
Person, expressed as a decimal, in
each case, on a consolidated basis
and in accordance with GAAP.
"Fixed Charge Coverage
Ratio" means with respect to any
Person for any period, the ratio of
the Consolidated Cash Flow of such
Person for such period to the Fixed
Charges of such Person for such
period. In the event that the Company
or any of its Restricted Subsidiaries
incurs, assumes, Guarantees or
redeems any Indebtedness (other than
revolving credit borrowings) or
issues preferred stock subsequent to
the commencement of the period for
which the Fixed Charge Coverage Ratio
is being calculated but prior to the
date on which the event for which the
calculation of the Fixed Charge
Coverage Ratio is made (the
"Calculation Date"), then the Fixed
Charge Coverage Ratio shall be
calculated giving pro forma effect to
such incurrence, assumption,
Guarantee or redemption of
Indebtedness, or such issuance or
redemption of preferred stock, as if
the same had occurred at the
beginning of the applicable
four-quarter reference period. In
addition, for purposes of making the
computation referred to above, (i)
acquisitions that have been made by
the Company or any of its Restricted
Subsidiaries, including through
mergers or consolidations and
including any related financing
transactions, during the four-quarter
reference period or subsequent to
such reference period and on or prior
to the Calculation Date shall be
deemed to have occurred on the first
day of the four-quarter reference
period and Consolidated Cash Flow for
such reference period shall be
calculated without giving effect to
clause (iii) of the proviso set forth
in the definition of Consolidated Net
Income, and (ii) the Consolidated
Cash Flow attributable to Real Estate
Subsidiaries, Unrestricted
Subsidiaries, discontinued operations
(as determined in accordance with
GAAP) and operations or businesses
disposed of prior to the Calculation
Date shall be excluded, and (iii) the
Fixed Charges attributable to Real
Estate Subsidiaries, Unrestricted
Subsidiaries, discontinued operations
(as determined in accordance with
GAAP) and operations or businesses
disposed of prior to the Calculation
Date shall be excluded, but only to
the extent that the obligations
giving rise to such Fixed Charges
will not be obligations of the
referent Person or any of its
Restricted Subsidiaries (other than
Real Estate Subsidiaries) following
the Calculation Date and, in the case
of Real Estate Subsidiaries, only to
the extent that the obligations
giving rise to such Fixed Charges
consist of Non-Recourse Real Estate
Debt.
"GAAP" means generally
accepted accounting principles set
forth in the opinions and
pronouncements of the Accounting
Principles Board of the American
Institute of Certified Public
Accountants and statements and
pronouncements of the Financial
Accounting Standards Board or in such
other statements by such other entity
as have been approved by a
significant segment of the accounting
profession, which are in effect from
time to time.
"Global Note" means a Note
that contains the paragraph referred
to in footnote 1 and the additional
schedule referred to in footnote 2 to
the form of the Note attached hereto
as Exhibit A.
"Government Securities"
means direct obligations of, or
obligations guaranteed by, the United
States for the payment of which
guarantee or obligations the full
faith and credit of the United States
is pledged.
"Guarantee" means a
guarantee (other than by endorsement
of negotiable instruments for
collection in the ordinary course of
business), direct or indirect, in any
manner (including, without
limitation, letters of credit and
reimbursement agreements in respect
thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of
(i) Sunday River Skiway Corporation,
Sunday River Ltd., Perfect Turn Inc.,
LBO Holding, Inc., Sunday River
Transportation, Inc., Sugarbush
Resort Holdings, Inc., Sugarbush
Leasing Company, Sugarbush
Restaurants, Inc., Cranmore, Inc.,
Mountain Wastewater Treatment, Inc.,
LBO Hotel Co., S-K-I Limited,
Killington Ltd., Mount Snow Ltd.,
Waterville Valley Ski Area, Ltd.,
Sugarloaf Mountain Corporation,
Killington Restaurants, Inc., Dover
Restaurants, Inc., Resorts
Technologies, Inc., Resort Software
Services, Inc. Mountainside,
Sugartech, Deerfield Operating
Company and Pico Ski Area Management
Company and (ii) any other subsidiary
that executes a Subsidiary Guarantee
in accordance with the provisions of
this Indenture, and their respective
successors and assigns.
"Hedging Obligations"
means, with respect to any Person,
the obligations of such Person under
(i) interest and currency rate swap
agreements, interest rate cap
agreements and interest rate collar
agreements and (ii) other agreements
or arrangements designed to protect
such Person against fluctuations in
interest or currency exchange rates.
"Holder" means a Person in
whose name a Note is registered.
"Indebtedness" means, with
respect to any Person, without
duplication, (i) any indebtedness of
such Person, whether or not
contingent, in respect of borrowed
money or evidenced by bonds, notes,
debentures or similar instruments or
letters of credit (or reimbursement
agreements in respect thereof) or
banker's acceptances or representing
Capital Lease Obligations or the
balance deferred and unpaid of the
purchase price of any property or
representing any Hedging Obligations,
except any such balance that
constitutes an accrued expense or
trade payable, if and to the extent
any of the foregoing indebtedness
(other than letters of credit and
Hedging Obligations) would appear as
a liability upon a balance sheet of
such Person prepared in accordance
with GAAP, (ii) all indebtedness of
others secured by a Lien on any asset
of such Person (whether or not such
indebtedness is assumed by such
Person), (iii) Disqualified Stock of
such Person, (iv) preferred stock of
any Restricted Subsidiary of such
Person (other than Preferred Stock
held by such Person or any of its
Wholly Owned Restricted Subsidiaries)
and (v) to the extent not otherwise
included, the Guarantee by such
Person of any indebtedness of any
other Person.
"Indenture" means this
Indenture, as amended or supplemented
from time to time.
"Independent Director"
means a member of the Board of
Directors of the Company who is
neither an officer nor an employee of
the Company or any of its Affiliates.
"Investments" means, with
respect to any Person, all
investments by such Person in other
Persons in the forms of direct or
indirect loans (including guarantees
of Indebtedness or other
obligations), advances or capital
contributions (excluding commission,
travel and similar advances to
officers and employees made in the
ordinary course of business),
purchases or other acquisitions for
consideration of Indebtedness, Equity
Interests or other securities,
together with all items that are or
would be classified as investments on
a balance sheet prepared in
accordance with GAAP; provided that
an acquisition of assets, Equity
Interests or other securities by the
Company or any of its Restricted
Subsidiaries for consideration
consisting of common equity
securities of the Company shall not
be deemed to be an Investment.
"Legal Holiday" means a
Saturday, a Sunday or a day on which
banking institutions in the City of
New York or at a place of payment are
authorized by law, regulation or
executive order to remain closed. If
a payment date is a Legal Holiday at
a place of payment, payment may be
made at that place on the next
succeeding day that is not a Legal
Holiday, and no interest shall accrue
for the intervening period.
"Leverage Ratio" means, as
of any date of determination, the
ratio of (i) the total indebtedness
of the Company as shown on the
Company's most recent balance sheet,
as adjusted to give effect to any
repayment or incurrence of
indebtedness subsequent to the
balance sheet date through such date
of determination, to (ii) the sum of
(a) the total indebtedness of the
Company, calculated pursuant to
clause (i), plus (b) total
stockholders' equity of the Company
as shown on the Company's most recent
balance sheet, as adjusted to give
effect to any capital contributions
or issuances of Equity Interests of
the Company, any dividends or other
distributions with respect to any
Equity Interests of the Company, or
any repurchase or redemption of
Equity Interests of the Company, in
each case subsequent to the balance
sheet date through such date of
determination.
"Lien" means, with respect
to any asset, any mortgage, lien,
pledge, charge, security interest or
encumbrance of any kind in respect of
such asset, whether or not filed,
recorded or otherwise perfected under
applicable law (including any
conditional sale or other title
retention agreement, any lease in the
nature thereof, any option or other
agreement to sell or give a security
interest in and any filing of or
agreement to give any financing
statement under the Uniform
Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" means
all liquidated damages then owing
pursuant to this Indenture or the
Registration Rights Agreement.
"Net Income" means, with
respect to any Person for any period,
the net income (loss) of such Person
for such period, determined in
accordance with GAAP and before any
reduction in respect of preferred
stock dividends, excluding, however,
(i) any gain (but not loss), together
with any related provision for taxes
on such gain (but not loss), realized
in connection with (a) any Asset Sale
(including, without limitation,
dispositions pursuant to sale and
leaseback transactions) or (b) the
disposition of any securities by such
Person or any of its Restricted
Subsidiaries or the extinguishment of
any Indebtedness of such Person or
any of its Restricted Subsidiaries
and (ii) any extraordinary or
nonrecurring gain (but not loss),
together with any related provision
for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the
aggregate cash proceeds received by
the Company or any of its Restricted
Subsidiaries in respect of any Asset
Sale (including, without limitation,
any cash received upon the sale or
other disposition of any non-cash
consideration received in any Asset
Sale), net of the direct costs
relating to such Asset Sale
(including, without limitation,
legal, accounting and investment
banking fees, and sales commissions),
any relocation expenses incurred as a
result thereof, any taxes paid or
payable by the Company or any of its
Restricted Subsidiaries as a result
thereof (after taking into account
any available tax credits or
deductions and any tax sharing
arrangements) and any reserve for
adjustment in respect of the sale
price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means
Indebtedness (i) as to which neither
the Company nor any of its Restricted
Subsidiaries (a) provides credit
support of any kind (including any
undertaking, agreement or instrument
that would constitute Indebtedness),
(b) is directly or indirectly liable
(as a guarantor or otherwise), or (c)
constitutes the lender, (ii) no
default with respect to which
(including any rights that the
holders thereof may have to take
enforcement action against an
Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both)
any holder of any other Indebtedness
of the Company or any of its
Restricted Subsidiaries to declare a
default on such other Indebtedness or
cause the payment thereof to be
accelerated or payable prior to its
stated maturity and (iii) as to which
the lenders have been notified in
writing that they will not have any
recourse to the stock or assets of
the Company or any of its Restricted
Subsidiaries.
"Non-Recourse Real Estate
Debt" means Indebtedness (i) as to
which neither the Company nor any of
its Restricted Subsidiaries, other
than Real Estate Subsidiaries, (a)
provides credit support of any kind
(including any undertaking, agreement
or instrument that would constitute
Indebtedness), (b) is directly or
indirectly liable (as a guarantor or
otherwise), or (c) constitutes the
lender, (ii) no default with respect
to which (including any rights that
the holders thereof may have to take
enforcement action against a Real
Estate Subsidiary) would permit (upon
notice, lapse of time or both) any
holder of any other Indebtedness of
the Company or any of its Restricted
Subsidiaries, other than Real Estate
Subsidiaries, to declare a default on
such other Indebtedness or cause the
payment thereof to be accelerated or
payable prior to its stated maturity
and (iii) as to which the lenders
have been notified in writing that
they will not have any recourse to
the stock or assets of the Company or
any of its Restricted Subsidiaries,
other than Real Estate Subsidiaries,
except, in each case, to the extent
permitted by the provisions of
Section 4.09 hereof.
"Note Custodian" means the
Trustee, as custodian with respect to
the Notes in global form, or any
successor entity thereto.
"Obligations" with respect
to any instrument or agreement means
any and all principal, interest
(including Post-Petition Interest),
penalties, premiums, fees (including
without limitation, to the extent
provided for in such instrument or
agreement, fees and expenses of
counsel), indemnifications,
reimbursements, damages and other
charges, obligations and liabilities
existing from time to time under such
instrument or agreement, whether
direct or indirect, joint or several,
actual, absolute or contingent,
matured or unmatured, liquidated or
unliquidated, secured or unsecured,
arising by contract, operation of law
or otherwise, including any
obligations or liabilities to repay,
redeem, repurchase, retire, acquire
or defease any Indebtedness under
such instrument or agreement, or any
obligation to establish a sinking
fund for any such purpose.
"Officer" means, with
respect to any Person, the Chairman
of the Board, the Chief Executive
Officer, the President, the Chief
Operating Officer, the Chief
Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller,
the Secretary, any Assistant
Secretary or any Vice President of
such Person.
"Officers' Certificate"
means, with respect to the Company or
any Guarantor, a certificate signed
on behalf of the Company or such
Guarantor by two Officers of the
Company or such Guarantor, one of
whom must be the principal executive
officer, the principal financial
officer, the treasurer or the
principal accounting officer of the
Company or such Guarantor, that meets
the requirements of Section 12.05
hereof.
"Opinion of Counsel" means
an opinion from legal counsel who is
not unsatisfactory to the Trustee,
that meets the requirements of
Section 12.05 hereof. The counsel
may be an employee of or counsel to
the Company, any Subsidiary of the
Company or the Trustee.
"Permitted Holders" means
Leslie B. Otten (or, in the event of
his incompetence or death, his estate
and his and his estate's heirs,
executor, administrator, committee or
other representative (collectively,
"Heirs")) and any Person in which
Leslie B. Otten and his Heirs,
directly or indirectly, have an 80%
controlling interest.
"Permitted Investments"
means (i) any Investment in the
Company or in a Wholly Owned
Restricted Subsidiary of the Company
that is a Guarantor; (ii) any
Investment in Cash Equivalents; (iii)
any Investment by the Company or any
of its Restricted Subsidiaries in a
Person if, as a result of such
Investment, (a) such Person becomes a
Wholly Owned Restricted Subsidiary of
the Company and becomes a Guarantor
or (b) such Person is merged,
consolidated or amalgamated with or
into, or transfers or conveys
substantially all of its assets to,
or is liquidated into, the Company or
a Wholly Owned Restricted Subsidiary
of the Company that is a Guarantor;
(iv) any Restricted Investment made
as a result of the receipt of
non-cash consideration from an Asset
Sale that was made pursuant to and in
compliance with the provisions of
Section 4.10 hereof and (v)
Guarantees of Indebtedness permitted
to be made pursuant to clause (vi) of
Section 4.09 hereof.
"Permitted Liens" means (i)
Liens securing Senior Debt of the
Company and its Restricted
Subsidiaries; (ii) Liens securing
Indebtedness that is pari passu in
right of payment with the Notes,
provided that the Notes are equally
and ratably secured, (iii) Liens in
favor of the Company or any of its
Restricted Subsidiaries; (iv) Liens
on property of a Person existing at
the time such Person is merged into
or consolidated with the Company or
any of its Restricted Subsidiaries,
provided that such Liens were in
existence prior to the contemplation
of such merger or consolidation and
do not extend to any assets other
than those of the Person merged into
or consolidated with the Company or
any such Restricted Subsidiary; (v)
Liens on property existing at the
time of acquisition thereof by the
Company or any of its Restricted
Subsidiaries, provided that such
Liens were in existence prior to the
contemplation of such acquisition;
(vi) Liens to secure the performance
of statutory obligations, surety or
appeal bonds, performance bonds or
other obligations of a like nature
incurred in the ordinary course of
business; (vii) Liens to secure
Indebtedness permitted by clause (v)
of the second paragraph of Section
4.09 hereof covering only the assets
acquired with such Indebtedness;
(viii) Liens existing on the date of
this Indenture; (ix) Liens for taxes,
assessments or governmental charges
or claims that are not yet delinquent
or that are being contested in good
faith by appropriate proceedings
promptly instituted and diligently
concluded, provided that any reserve
or other appropriate provision as
shall be required in conformity with
GAAP shall have been made therefor;
(x) Liens incurred in the ordinary
course of business of the Company or
any of its Restricted Subsidiaries
with respect to obligations that do
not exceed $2.0 million at any one
time outstanding and that (a) are not
incurred in connection with the
borrowing of money or the obtaining
of advances or credit (other than
trade credit in the ordinary course
of business) and (b) do not in the
aggregate materially detract from the
value of the property or materially
impair the use thereof in the
operation of business by the Company
or any such Restricted Subsidiary;
(xi) Liens on assets of Real Estate
Subsidiaries securing Non-Recourse
Real Estate Debt; and (xii) Liens on
the Pledge Account in favor of the
Collateral Agent.
"Permitted Real Estate
Project" means a project relating to
one or more of the purposes for which
Real Estate Subsidiaries may be
formed.
"Permitted Refinancing
Debt" means any Indebtedness of the
Company or any of its Restricted
Subsidiaries issued in exchange for,
or the net proceeds of which are used
to extend, refinance, renew, replace,
defease or refund other Indebtedness
of the Company or any such Restricted
Subsidiary; provided that: (i) the
principal amount (or accreted value,
if applicable) of such Permitted
Refinancing Debt does not exceed the
principal amount (or accreted value,
if applicable) of the Indebtedness so
extended, refinanced, renewed,
replaced, defeased or refunded (plus
the amount of reasonable expenses
incurred in connection therewith);
(ii) such Permitted Refinancing Debt
has a final maturity date no earlier
than the final maturity date of, and
has a Weighted Average Life to
Maturity equal to or greater than the
Weighted Average Life to Maturity of,
the Indebtedness being extended,
refinanced, renewed, replaced,
defeased or refunded; (iii) if the
Indebtedness being extended,
refinanced, renewed, replaced,
defeased or refunded is subordinated
in right of payment to the Notes,
such Permitted Refinancing Debt has a
final maturity date no earlier than
the final maturity date of, and is
subordinated in right of payment to,
the Notes on terms at least as
favorable to the Holders of Notes as
those contained in the documentation
governing the Indebtedness being
extended, refinanced, renewed,
replaced, defeased or refunded; and
(iv) such Indebtedness is incurred
only by the Company or the Restricted
Subsidiary that is the obligor on the
Indebtedness being extended,
refinanced, renewed, replaced,
defeased or refunded.
"Person" means any
individual, corporation, partnership,
joint venture, association, joint-
stock company, trust, unincorporated
organization or government or agency
or political subdivision thereof
(including any subdivision or ongoing
business of any such entity or
substantially all of the assets of
any such entity, subdivision or
business).
"Pledge Account" means the
Pledge Account pledged by the Company
to the Collateral Agent for the
benefit of Holders of the Notes
pursuant to the Pledge and
Disbursement Agreement.
"Pledge and Disbursement
Agreement" means the Pledge and
Disbursement Agreement, dated as of
the date of this Indenture, by and
between the Collateral Agent and the
Company, governing the establishment
and maintenance of, and disbursement
from, the Pledge Account.
"Registration Rights
Agreement" means the Registration
Rights Agreement, dated as of the
date hereof, by and among the
Company, the Guarantors and the
initial purchasers named therein with
respect to the Notes, as such
agreement may be amended, modified or
supplemented from time to time.
"Responsible Officer," when
used with respect to the Trustee,
means any officer within the
Corporate Trust Administration of the
Trustee (or any successor group of
the Trustee) or, with respect to a
particular corporate trust matter,
any other officer to whom such matter
is referred because of his knowledge
of and familiarity with the
particular subject.
"Real Estate Subsidiary"
means a Restricted Subsidiary of the
Company that was formed for the
purpose of developing, constructing
and marketing hotel, condominium,
interval ownership and other
residential real estate projects,
together with commercial and other
space functionally related or
complementary thereto, and that is
designated by the Board of Directors
of the Company as a Real Estate
Subsidiary.
"Restricted Investment"
means any Investment other than a
Permitted Investment.
"Restricted Subsidiary" of
a Person means any Subsidiary of such
Person that is not an Unrestricted
Subsidiary.
"SEC" means the Securities
and Exchange Commission.
"Securities Act" means the
Securities Act of 1933, as amended.
"Senior Agent" means (i)
until all Indebtedness under the Bank
Credit Agreements is paid in full in
cash, the agent (or the institution
performing similar functions) under
the Bank Credit Agreement under which
the greatest aggregate principal
amount of Indebtedness is outstanding
and (ii) if all Indebtedness under
the Bank Credit Agreements has been
paid in full, the Person (or
representative of the Persons)
holding the greatest amount of Senior
Debt.
"Senior Debt" of any Person
means and includes all principal of,
premium and interest on and other
Obligations with respect to (i) the
Bank Credit Agreements and (ii) any
other Indebtedness of such Person
(other than as otherwise provided in
this definition), whether outstanding
on the date of issuance of the Notes
or thereafter incurred; provided,
however, Senior Debt shall not
include: (a) except in the case of
Indebtedness under the Credit
Agreement dated as of June 28, 1996
among the Company, various
Subsidiaries of the Company, Fleet
National Bank, as Agent, and the
lenders party thereto, and the
guarantees of various Subsidiaries of
the Company issued in connection
therewith, in each case as modified,
amended and in effect from time to
time, any Indebtedness which by the
terms of the instrument creating or
evidencing the same is subordinated
or junior in right of payment to any
other Senior Debt in any respect or
(b) that portion of any Indebtedness
incurred in violation of this
Indenture. Notwithstanding the
foregoing, Senior Debt shall not
include (1) Indebtedness evidenced by
the Notes, (2) Indebtedness which
when incurred and without respect to
any election under Section 1111(b) of
the United States Bankruptcy Code is
without recourse to such Person, (3)
any liability for foreign, federal,
state, local or other taxes owed or
owing by such Person, (4)
Indebtedness of such Person to the
extent such liability constitutes
Indebtedness to a Subsidiary or any
other Affiliate of such Person or any
of such Affiliate's subsidiaries, (5)
Indebtedness for the purchase of
goods or materials in the ordinary
course of business except purchase-
money Indebtedness secured by a
security interest in or Lien upon the
goods or materials purchased or (6)
Indebtedness owed by such Person for
compensation to employees or for
services.
"Significant Subsidiary"
means any Restricted Subsidiary that
would be a "significant subsidiary"
as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant
to the Securities Act, as such
Regulation is in effect on the date
hereof.
"Subordinated Note
Indenture" means the Indenture, dated
the date hereof, among the Company,
the Guarantors and United States
Trust Company of New York, as
trustee, relating to the Subordinated
Notes, as in effect on the date
hereof.
"Subordinated Note
Subsidiary Guarantees" means the
Guarantee of the Subordinated Notes
by the Guarantors.
"Subordinated Notes" means
the 13:% Subordinated Discount Notes
due 2007 of the Company.
"Subsidiary" means, with
respect to any Person, (i) any
corporation, association or other
business entity of which more than
50% of the total voting power of
shares of Capital Stock entitled
(without regard to the occurrence of
any contingency) to vote in the
election of directors, managers or
trustees thereof is at the time owned
or controlled, directly or
indirectly, by such Person or one or
more of the other Subsidiaries of
such Person (or a combination
thereof) and (ii) any partnership (a)
the sole general partner or the
managing general partner of which is
such Person or a Subsidiary of such
Person or (b) the only general
partners of which are such Person or
of one or more Subsidiaries of such
Person (or any combination thereof).
"TIA" means the Trust
Indenture Act of 1939 (15 U.S.C.
'' 77aaa-77bbbb) as in effect on the
date on which this Indenture is
qualified under the TIA.
"Transfer Restricted
Securities" means securities that
bear or are required to bear the
legend set forth in Section 2.06
hereof.
"Trustee" means the party
named as such above until a successor
replaces it in accordance with the
applicable provisions of this
Indenture and thereafter means the
successor serving hereunder.
"Unrestricted Subsidiary"
means any Subsidiary (i) that is
designated by the Board of Directors
of the Company as an Unrestricted
Subsidiary pursuant to a Board
Resolution, but only to the extent
that such Subsidiary (i) has no
Indebtedness other than Non-Recourse
Debt, (ii) is not party to any
agreement, contract, arrangement or
understanding with the Company or any
of its Restricted Subsidiaries unless
the terms of any such agreement,
contract, arrangement or
understanding are no less favorable
to the Company or such Restricted
Subsidiary than those that might be
obtained at the time from Persons who
are not Affiliates of the Company,
(iii) is a Person with respect to
which neither the Company nor any of
its Restricted Subsidiaries has any
direct or indirect obligation (a) to
subscribe for additional Equity
Interests or (b) to maintain or
preserve such Person's financial
condition or to cause such Person to
achieve any specified levels of
operating results (except, in the
case of Ski Insurance Company, for
the indirect obligation to maintain
adequate reserves and capital as
required by the State of Vermont),
(iv) has not guaranteed or otherwise
directly or indirectly provided
credit support for any Indebtedness
of the Company or any of its
Restricted Subsidiaries and (v) has
at least one disinterested member of
its board of directors. Any such
designation by the Board of Directors
of the Company shall be evidenced to
the Trustee by filing with the
Trustee a certified copy of the Board
Resolution giving effect to such
designation and an Officers'
Certificate certifying that such
designation complied with the
foregoing conditions and was
permitted by Section 4.07 hereof. If,
at any time, any Unrestricted
Subsidiary would fail to meet the
foregoing requirements as an
Unrestricted Subsidiary, it shall
thereafter cease to be an
Unrestricted Subsidiary for purposes
of this Indenture and any
Indebtedness of such Subsidiary shall
be deemed to be incurred by a
Restricted Subsidiary of the Company
as of such date (and, if such
Indebtedness is not permitted to be
incurred as of such date under by
Section 4.09 hereof, the Company
shall be in default of such
covenant). The Board of Directors of
the Company may at any time designate
any Unrestricted Subsidiary to be a
Restricted Subsidiary, provided that
such designation shall be deemed to
be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company
of any outstanding Indebtedness of
such Unrestricted Subsidiary and such
designation shall only be permitted
if (i) such Indebtedness is permitted
by Section 4.09 hereof and (ii) no
Default or Event of Default would be
in existence following such
designation; and, provided, further,
that such Subsidiary shall execute a
Subsidiary Guarantee and deliver an
opinion of counsel in accordance with
the terms of this Indenture.
"Weighted Average Life to
Maturity" means, when applied to any
Indebtedness at any date, the number
of years obtained by dividing (i) the
sum of the products obtained by
multiplying (a) the amount of each
then remaining installment, sinking
fund, serial maturity or other
required payments of principal,
including payment at final maturity,
in respect thereof, by (b) the number
of years (calculated to the nearest
one-twelfth) that will elapse between
such date and the making of such
payment, by (ii) the then outstanding
principal amount of such
Indebtedness.
"Wholly Owned Restricted
Subsidiary" of any Person means a
Restricted Subsidiary of such Person
all of the outstanding Capital Stock
or other ownership interests of which
(other than directors' qualifying
shares) shall at the time be owned by
such Person and the Wholly Owned
Restricted Subsidiaries of such
Person.
Section 1.02. Other Definitions.
Defined in
Term
Section
"Affiliate Transaction"
4.12
"Asset Sale Offer"
3.09
"Bank Lenders"
10.02
"Bankruptcy Law"
6.01
"Change of Control Offer"
4.15
"Change of Control Payment"
4.15
"Change of Control Payment Date"
4.15
"Covenant Defeasance"
8.03
"Custodian"
6.01
"DTC"
2.03
"Event of Default"
6.01
"Excess Proceeds"
4.10
"incur"
4.09
"Insolvency or Liquidation
Proceeding"
10.02
"Legal Defeasance"
8.02
"Offer Amount"
3.09
"Offer Period"
3.09
"Paying Agent"
2.03
"Payment Blockage Notice
10.04
"Payment Default"
6.01
"Post-Petition Interest"
10.02
"Purchase Date"
3.09
"Registrar"
2.03
"Representative"
10.02
"Restricted Payments"
4.07
"Senior Bank Debt"
10.02
"Stock Collateral"
10.02
"Subordinated Obligations"
10.02
Section 1.03. Incorporation by
Reference of Trust
Indenture Act.
Whenever this Indenture
refers to a provision of the TIA, the
provision is incorporated by
reference in and made a part of this
Indenture.
The following TIA terms
used in this Indenture have the
following meanings:
"indenture securities"
means the Notes;
"indenture security holder"
means a Holder of a Note;
"indenture to be qualified"
means this Indenture;
"indenture trustee" or
"institutional trustee" means the
Trustee;
"obligor" on the Notes and
the Subsidiary Guarantees means the
Company and the Guarantors,
respectively, and any successor
obligor upon the Notes and the
Subsidiary Guarantees, respectively.
All other terms used in
this Indenture that are defined by
the TIA, defined by TIA reference to
another statute or defined by SEC
rule under the TIA have the meanings
so assigned to them.
Section 1.04. Rules of
Construction.
Unless the context
otherwise requires:
(1) a term has the meaning
assigned to it;
(2) an accounting term not
otherwise defined has the meaning
assigned to it in accordance with
GAAP;
(3) "or" is not exclusive;
(4) words in the singular
include the plural, and in the
plural include the singular;
(5) provisions apply to
successive events and
transactions; and
(6) references to sections
of or rules under the Securities
Act shall be deemed to include
substitute, replacement of
successor sections or rules
adopted by the SEC from time to
time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's
certificate of authentication shall
be substantially in the form of
Exhibit A hereto, provided that in
the case of the Series B Notes, the
references to the Series A Notes in
the headings on pages A-1 and A-2
thereof shall be to the Series B
Notes. The Subsidiary Guarantees
shall be substantially in the form of
Exhibit D hereto, the terms of which
are incorporated in and made part of
this Indenture. The Notes may have
notations, legends or endorsements
required by law, stock exchange rule
or usage. Each Note shall be dated
the date of its authentication. The
Notes shall be in denominations of
$1,000 and integral multiples
thereof.
The terms and provisions
contained in the Notes shall
constitute, and are hereby expressly
made, a part of this Indenture and
the Company and the Trustee, by their
execution and delivery of this
Indenture, expressly agree to such
terms and provisions and to be bound
thereby.
Notes issued in global form
shall be substantially in the form of
Exhibit A attached hereto (including
the text referred to in footnotes 1
and 2 thereto). Notes issued in
certificated form shall be
substantially in the form of Exhibit
A attached hereto (but without
including the text referred to in
footnotes 1 and 2 thereto). Each
Global Note shall represent such of
the outstanding Notes as shall be
specified therein and each shall
provide that it shall represent the
aggregate amount of outstanding Notes
from time to time endorsed thereon
and that the aggregate amount of
outstanding Notes represented thereby
may from time to time be reduced or
increased, as appropriate, to reflect
exchanges and redemptions. Any
endorsement of a Global Note to
reflect the amount of any increase or
decrease in the amount of outstanding
Notes represented thereby shall be
made by the Trustee or the Note
Custodian, at the direction of the
Trustee, in accordance with
instructions given by the Holder
thereof as required by Section 2.06
hereof.
Section 2.02. Execution and
Authentication.
Two Officers shall sign the
Notes for the Company by manual or
facsimile signature.
If an Officer whose
signature is on a Note no longer
holds that office at the time a Note
is authenticated, the Note shall
nevertheless be valid.
A Note shall not be valid
until authenticated by the manual
signature of the Trustee. The
signature shall be conclusive
evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a
written order of the Company signed
by two Officers, authenticate Series
A Notes for original issue up to the
aggregate principal amount stated in
paragraph 4 of the Notes and Series B
Notes for original issuance up to the
aggregate principal amount stated in
paragraph 4 of the Notes. The
aggregate principal amount of Notes
outstanding at any time may not
exceed $120,000,000 in aggregate
principal amount except as provided
in Section 2.07 hereof.
The Trustee may appoint an
authenticating agent acceptable to
the Company to authenticate Notes.
An authenticating agent may
authenticate Notes whenever the
Trustee may do so. Each reference in
this Indenture to authentication by
the Trustee includes authentication
by such agent. An authenticating
agent has the same rights as an Agent
to deal with the Company or an
Affiliate of the Company.
Section 2.03. Registrar and Paying
Agent.
The Company shall maintain
an office or agency where Notes may
be presented for registration of
transfer or for exchange
("Registrar") and an office or agency
where Notes may be presented for
payment ("Paying Agent"). The
Registrar shall keep a register of
the Notes and of their transfer and
exchange. The Company may appoint
one or more co-registrars and one or
more additional paying agents. The
term "Registrar" includes any
co-registrar and the term "Paying
Agent" includes any additional paying
agent. The Company may change any
Paying Agent or Registrar without
notice to any Holder. The Company
shall notify the Trustee in writing
of the name and address of any Agent
not a party to this Indenture. If
the Company fails to appoint or
maintain another entity as Registrar
or Paying Agent, the Trustee shall
act as such. The Company or any of
its Subsidiaries may act as Paying
Agent or Registrar.
The Company initially
appoints The Depository Trust Company
("DTC") to act as Depositary with
respect to the Global Notes.
The Company initially
appoints the Trustee to act as the
Registrar and Paying Agent and to act
as Note Custodian with respect to the
Global Notes.
Section 2.04. Paying Agent to Hold
Money in Trust.
The Company shall require
each Paying Agent other than the
Trustee to agree in writing that the
Paying Agent will hold in trust for
the benefit of Holders or the Trustee
all money held by the Paying Agent
for the payment of principal of and
premium, interest and Liquidated
Damages, if any, on the Notes, and
will notify the Trustee of any
default by the Company or any
Guarantor in making any such payment.
While any such default continues, the
Trustee may require a Paying Agent to
pay all money held by it to the
Trustee. The Company at any time may
require a Paying Agent to pay all
money held by it to the Trustee.
Upon payment over to the Trustee, the
Paying Agent (if other than the
Company or a Subsidiary) shall have
no further liability for the money.
If the Company or a Subsidiary acts
as Paying Agent, it shall segregate
and hold in a separate trust fund for
the benefit of the Holders all money
held by it as Paying Agent. Upon any
bankruptcy or reorganization
proceedings relating to the Company
or a Guarantor, the Trustee shall
serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve
in as current a form as is reasonably
practicable the most recent list
available to it of the names and
addresses of all Holders and shall
otherwise comply with TIA ' 312(a).
If the Trustee is not the Registrar,
the Company and/or the Guarantors
shall furnish to the Trustee at least
seven Business Days before each
interest payment date and at such
other times as the Trustee may
request in writing, a list in such
form and as of such date as the
Trustee may reasonably require of the
names and addresses of the Holders of
Notes and the Company and the
Guarantors shall otherwise comply
with TIA Section 312(a).
Section 2.06. Transfer and
Exchange.
(a) Transfer and Exchange
of Certificated Notes. When
Certificated Notes are presented by a
Holder to the Registrar with a
request:
(x) to
register the transfer of
the Certificated Notes;
or
(y) to
exchange such
Certificated Notes for an
equal principal amount of
Certificated Notes of
other authorized
denominations,
the Registrar shall register the
transfer or make the exchange as
requested if its requirements for
such transactions are met; provided,
however, that the Certificated Notes
presented or surrendered for register
of transfer or exchange:
(i)
shall be duly endorsed
or accompanied by a
written instruction of
transfer in form
satisfactory to the
Registrar duly
executed by such
Holder or by his
attorney, duly
authorized in writing;
and
(ii) in
the case of a
Certificated Note that
is a Transfer
Restricted Security,
such request shall be
accompanied by the
following additional
information and
documents, as
applicable:
(A) if such
Transfer Restricted
Security is being
delivered to the
Registrar by a
Holder for
registration in the
name of such
Holder, without
transfer, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit B
hereto); or
(B) if such
Transfer Restricted
Security is being
transferred to a
"qualified
institutional
buyer" (as defined
in Rule 144A under
the Securities Act)
in accordance with
Rule 144A under the
Securities Act or
pursuant to an
exemption from
registration in
accordance with
Rule 144 or Rule
904 under the
Securities Act or
pursuant to an
effective
registration
statement under the
Securities Act, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit B
hereto); or
(C) if such
Transfer Restricted
Security is being
transferred in
reliance on another
exemption from the
registration
requirements of the
Securities Act, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit B
hereto) and an
Opinion of Counsel
from such Holder or
the transferee
reasonably
acceptable to the
Company and to the
Registrar to the
effect that such
transfer is in
compliance with the
Securities Act.
(b) Transfer of a
Certificated Note for a Beneficial
Interest in a Global Note. A
Certificated Note may not be
exchanged for a beneficial interest
in a Global Note except upon
satisfaction of the requirements set
forth below. Upon receipt by the
Trustee of a Certificated Note, duly
endorsed or accompanied by
appropriate instruments of transfer,
in form satisfactory to the Trustee,
together with:
(i) if such
Certificated Note is a
Transfer Restricted
Security, a certification
from the Holder thereof (in
substantially the form of
Exhibit B hereto) to the
effect that such
Certificated Note is being
transferred by such Holder
to a "qualified
institutional buyer" (as
defined in Rule 144A under
the Securities Act) in
accordance with Rule 144A
under the Securities Act;
and
(ii) whether or not
such Certificated Note is a
Transfer Restricted
Security, written
instructions from the Holder
thereof directing the
Trustee to make, or to
direct the Note Custodian to
make, an endorsement on the
Global Note to reflect an
increase in the aggregate
principal amount of the
Notes represented by the
Global Note,
the Trustee shall cancel such
Certificated Note in accordance with
Section 2.11 hereof and cause, or
direct the Note Custodian to cause,
in accordance with the standing
instructions and procedures existing
between the Depositary and the Note
Custodian, the aggregate principal
amount of Notes represented by the
Global Note to be increased
accordingly. If no Global Notes are
then outstanding, the Company shall
issue and, upon receipt of an
authentication order in accordance
with Section 2.02 hereof, the Trustee
shall authenticate a new Global Note
in the appropriate principal amount.
(c) Transfer and Exchange
of Global Notes. The transfer and
exchange of Global Notes or
beneficial interests therein shall be
effected through the Depositary, in
accordance with this Indenture and
the procedures of the Depositary
therefor, which shall include
restrictions on transfer comparable
to those set forth herein to the
extent required by the Securities
Act.
(d) Transfer of a
Beneficial Interest in a
Global Note for a
Certificated Note.
(i) Any Person
having a beneficial
interest in a Global Note
may upon request exchange
such beneficial interest
for a Certificated Note.
Upon receipt by the
Trustee of written
instructions or such
other form of
instructions as is
customary for the
Depositary, from the
Depositary or its nominee
on behalf of any Person
having a beneficial
interest in a Global
Note, and, in the case of
a Transfer Restricted
Security, the following
additional information
and documents (all of
which may be submitted by
facsimile):
(A) if such
beneficial interest
is being
transferred to the
Person designated
by the Depositary
as being the
beneficial owner, a
certification to
that effect from
such Person (in
substantially the
form of Exhibit B
hereto); or
(B) if such
beneficial interest
is being
transferred to a
"qualified
institutional
buyer" (as defined
in Rule 144A under
the Securities Act)
in accordance with
Rule 144A under the
Securities Act or
pursuant to an
exemption from
registration in
accordance with
Rule 144 or Rule
904 under the
Securities Act or
pursuant to an
effective
registration
statement under the
Securities Act, a
certification to
that effect from
the transferor (in
substantially the
form of Exhibit B
hereto); or
(C) if such
beneficial interest
is being
transferred in
reliance on another
exemption from the
registration
requirements of the
Securities Act, a
certification to
that effect from
the transferor (in
substantially the
form of Exhibit B
hereto) and an
Opinion of Counsel
from the transferee
or transferor
reasonably
acceptable to the
Company and to the
Registrar to the
effect that such
transfer is in
compliance with the
Securities Act,
the
Trustee or the Note
Custodian, at the
direction of the Trustee,
shall, in accordance with
the standing instructions
and procedures existing
between the Depositary
and the Note Custodian,
cause the aggregate
principal amount of
Global Notes to be
reduced accordingly and,
following such reduction,
the Company shall execute
and, upon receipt of an
authentication order in
accordance with Section
2.02 hereof, the Trustee
shall authenticate and
deliver to the transferee
a Certificated Note in
the appropriate principal
amount.
(ii)
Certificated Notes issued
in exchange for a
beneficial interest in a
Global Note pursuant to
this Section 2.06(d)
shall be registered in
such names and in such
authorized denominations
as the Depositary,
pursuant to instructions
from its direct or
indirect participants or
otherwise, shall instruct
the Trustee. The Trustee
shall deliver such
Certificated Notes to the
Persons in whose names
such Notes are so
registered.
(e) Restrictions on
Transfer and Exchange of Global
Notes. Notwithstanding any other
provision of this Indenture (other
than the provisions set forth in
subsection (f) of this Section 2.06),
a Global Note may not be transferred
as a whole except by the Depositary
to a nominee of the Depositary or by
a nominee of the Depositary to the
Depositary or another nominee of the
Depositary or by the Depositary or
any such nominee to a successor
Depositary or a nominee of such
successor Depositary.
(f) Authentication of
Certificated Notes in
Absence of Depositary. If
at any time:
(i) the
Depositary for the Notes
notifies the Company that
the Depositary is
unwilling or unable to
continue as Depositary
for the Global Notes and
a successor Depositary
for the Global Notes is
not appointed by the
Company within 90 days
after delivery of such
notice; or
(ii) the
Company, at its sole
discretion, notifies the
Trustee in writing that
it elects to cause the
issuance of Certificated
Notes under this
Indenture,
then the Company shall execute, and
the Trustee shall, upon receipt of an
authentication order in accordance
with Section 2.02 hereof,
authenticate and deliver,
Certificated Notes in an aggregate
principal amount equal to the
principal amount of the Global Notes
in exchange for such Global Notes.
(g) Legends.
(i) Except as
permitted by the
following paragraphs (ii)
and (iii), each Note
certificate evidencing
Global Notes and
Certificated Notes (and
all Notes issued in
exchange therefor or
substitution thereof)
shall bear legends in
substantially the
following form:
"THE SECURITY (OR ITS
PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF
THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)
(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A
TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF
THE COMPANY SO REQUESTS),
(2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCE HEREBY OF THE
RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
(ii) Upon any
sale or transfer of a
Transfer Restricted
Security (including any
Transfer Restricted
Security represented by a
Global Note) pursuant to
Rule 144 under the
Securities Act or
pursuant to an effective
registration statement
under the Securities Act:
(A) in
the case of any
Transfer Restricted
Security that is a
Certificated Note, the
Registrar shall permit
the Holder thereof to
exchange such Transfer
Restricted Security
for a Certificated
Note that does not
bear the legend set
forth in (i) above and
rescind any
restriction on the
transfer of such
Transfer Restricted
Security; and
(B) in
the case of any
Transfer Restricted
Security represented
by a Global Note, such
Transfer Restricted
Security shall not be
required to bear the
legend set forth in
(i) above, but shall
continue to be subject
to the provisions of
Section 2.06(c)
hereof; provided,
however, that with
respect to any request
for an exchange of a
Transfer Restricted
Security that is
represented by a
Global Note for a
Certificated Note that
does not bear the
legend set forth in
(i) above, which
request is made in
reliance upon Rule
144, the Holder
thereof shall certify
in writing to the
Registrar that such
request is being made
pursuant to Rule 144
(such certification to
be substantially in
the form of Exhibit B
hereto).
(iii)
Notwithstanding the
foregoing, upon
consummation of the
Exchange Offer, the
Company shall issue and,
upon receipt of an
authentication order in
accordance with Section
2.02 hereof, an Officers'
Certificate certifying
that the applicable
registration statement is
effective and an Opinion
of Counsel in form and
substance reasonably
satisfactory to the
Trustee as to all matters
it reasonably deems
appropriate with respect
to the issuance, sale and
delivery of the Series B
Notes and the
qualification of this
Indenture under the TIA,
the Trustee shall
authenticate Series B
Notes in exchange for
Series A Notes accepted
for exchange in the
Exchange Offer, which
Series B Notes shall not
bear the legend set forth
in (i) above, and the
Registrar shall rescind
any restriction on the
transfer of such Notes,
in each case unless the
Holder of such Series A
Notes is either (A) a
broker-dealer, (B) a
Person participating in
the distribution of the
Series A Notes or (C) a
Person who is an
affiliate (as defined in
Rule 144A) of the
Company.
(h) Cancellation and/or
Adjustment of Global Notes. At such
time as all beneficial interests in
Global Notes have been exchanged for
Certificated Notes, redeemed,
repurchased or cancelled, all Global
Notes shall be returned to or
retained and cancelled by the Trustee
in accordance with Section 2.11
hereof. At any time prior to such
cancellation, if any beneficial
interest in a Global Note is
exchanged for Certificated Notes,
redeemed, repurchased or cancelled,
the principal amount of Notes
represented by such Global Note shall
be reduced accordingly and an
endorsement shall be made on such
Global Note, by the Trustee or the
Notes Custodian, at the direction of
the Trustee, to reflect such
reduction.
(i) General Provisions
Relating to Transfers and
Exchanges.
(i) To
permit registrations
of transfers and
exchanges, the Company
shall execute and the
Trustee shall
authenticate
Certificated Notes and
Global Notes at the
Registrar's request.
(ii) No
service charge shall
be made to a Holder
for any registration
of transfer or
exchange, 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
similar governmental
charge payable upon
exchange or transfer
pursuant to Sections
3.07, 4.10, 4.15 and
9.05 hereof).
(iii)
The Registrar shall
not be required to
register the transfer
of or exchange any
Note selected for
redemption in whole or
in part, except the
unredeemed portion of
any Note being
redeemed in part.
(iv)
All Certificated Notes
and Global Notes
issued upon any
registration of
transfer or exchange
of Certificated Notes
or Global Notes shall
be the valid
obligations of the
Company, evidencing
the same debt, and
entitled to the same
benefits under this
Indenture, as the
Certificated Notes or
Global Notes
surrendered upon such
registration of
transfer or exchange.
(v)
The Company shall not
be required:
(A) to
issue, to register the
transfer of or to
exchange Notes during
a period beginning at
the opening of
business 15 days
before the day of any
selection of Notes for
redemption under
Section 3.02 hereof
and ending at the
close of business on
the day of selection;
or
(B) to
register the transfer
of or to exchange any
Note so selected for
redemption in whole or
in part, except the
unredeemed portion of
any Note being
redeemed in part; or
(C) to
register the transfer
of or to exchange a
Note between a record
date and the next
succeeding interest
payment date.
(vi)
Prior to due
presentment for the
registration of a
transfer of any Note,
the Trustee, any Agent
and the Company may
deem and treat the
Person in whose name
any Note is registered
as the absolute owner
of such Note for the
purpose of receiving
payment of principal
of and interest on
such Notes, and
neither the Trustee,
any Agent nor the
Company shall be
affected by notice to
the contrary.
(vii)
The Trustee shall
authenticate
Certificated Notes and
Global Notes in
accordance with the
provisions of Section
2.02 hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is
surrendered to the Trustee, or each
of the Company and the Trustee
receives evidence to its satisfaction
of the destruction, loss or theft of
any Note, the Company shall issue and
the Trustee, upon the written order
of the Company signed by two Officers
of the Company, shall authenticate a
replacement Note if the Trustee's
requirements are met. If required by
the Trustee or the Company, an
indemnity bond must be supplied by
the Holder that is sufficient in the
judgment of the Trustee and the
Company to protect the Company, the
Trustee, any Agent and any
authenticating agent from any loss
that any of them may suffer if a Note
is replaced. The Company may charge
for its expenses in replacing a Note.
Every replacement Note is
an additional obligation of the
Company and shall be entitled to all
of the benefits of this Indenture
equally and proportionately with all
other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at
any time are all the Notes
authenticated by the Trustee except
for those cancelled by it, those
delivered to it for cancellation,
those reductions in the interest in a
Global Note effected by the Trustee
in accordance with the provisions
hereof, and those described in this
Section as not outstanding. Except
as set forth in Section 2.09 hereof,
a Note does not cease to be
outstanding because the Company or an
Affiliate of the Company holds the
Note.
If a Note is replaced
pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the
Trustee receives proof satisfactory
to it that the replaced Note is held
by a bona fide purchaser.
If the principal amount of
any Note is considered paid under
Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases
to accrue.
If the Trustee or the
Paying Agent (other than the Company,
a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date
or maturity date, money sufficient to
pay principal, interest, premium and
Liquidated Damages, if any, on Notes
payable on that date, then on and
after that date such Notes shall be
deemed to be no longer outstanding
and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the
Holders of the required principal
amount of Notes have concurred in any
direction, waiver or consent, Notes
owned by the Company, by any
Guarantor, or by any Person directly
or indirectly controlling or
controlled by or under direct or
indirect common control with the
Company or any Guarantor, shall be
considered as though not outstanding,
except that for the purposes of
determining whether the Trustee shall
be protected in relying on any such
direction, waiver or consent, only
Notes that a Trustee knows are so
owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until Certificated Notes
are ready for delivery, the Company
may prepare and the Trustee shall
authenticate temporary Notes upon a
written order of the Company signed
by two Officers of the Company.
Temporary Notes shall be
substantially in the form of
Certificated Notes but may have
variations that the Company considers
appropriate for temporary Notes and
as shall be reasonably acceptable to
the Trustee. Without unreasonable
delay, the Company shall prepare and
the Trustee shall authenticate
Certificated Notes in exchange for
temporary Notes.
Holders of temporary Notes
shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may
deliver Notes to the Trustee for
cancellation. The Registrar and
Paying Agent shall forward to the
Trustee any Notes surrendered to them
for registration of transfer,
exchange or payment. The Trustee and
no one else shall cancel all Notes
surrendered for registration of
transfer, exchange, payment,
replacement or cancellation and shall
destroy cancelled Notes (subject to
the record retention requirement of
the Exchange Act). Certification of
the destruction of all cancelled
Notes shall be delivered to the
Company. The Company may not issue
new Notes to replace Notes that it
has paid or that have been delivered
to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in
a payment of interest on the Notes,
it shall pay the defaulted interest
in any lawful manner plus, to the
extent lawful, interest payable on
the defaulted interest, to the
Persons who are Holders on a
subsequent special record date, in
each case at the rate provided in the
Notes and in Section 4.01 hereof.
The Company shall notify the Trustee
in writing of the amount of defaulted
interest proposed to be paid on each
Note and the date of the proposed
payment. The Company shall fix or
cause to be fixed each such special
record date and payment date,
provided that no such special record
date shall be less than 10 days prior
to the related payment date for such
defaulted interest. At least 15 days
before the special record date, the
Company (or, upon the written request
of the Company, the Trustee in the
name and at the expense of the
Company) shall mail or cause to be
mailed to Holders a notice that
states the special record date, the
related payment date and the amount
of such interest to be paid. The
provisions of this Section 2.12 shall
also apply to the Liquidated Damages,
if any, payable on any interest
payment date that is not punctually
paid or duly provided for on such
interest payment date.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to
redeem Notes pursuant to the optional
redemption provisions of Section 3.07
hereof, it shall furnish to the
Trustee, at least 45 days but not
more than 60 days before a redemption
date, an Officers' Certificate
setting forth (i) the clause of this
Indenture pursuant to which the
redemption shall occur, (ii) the
redemption date, (iii) the principal
amount of Notes to be redeemed and
(iv) the redemption price.
Section 3.02. Selection of Notes
to Be Redeemed.
If less than all of the
Notes are to be redeemed at any time,
selection of the Notes for redemption
shall be made by the Trustee in
compliance with the requirements of
the principal national securities
exchange, if any, on which the Notes
are listed or, if the Notes are not
so listed, on a pro rata basis, by
lot or by such method as the Trustee
shall deem fair and appropriate. In
the event of partial redemption on a
pro rata basis, by lot or any other
method, the particular Notes to be
redeemed shall be selected, unless
otherwise provided herein, not less
than 30 nor more than 60 days prior
to the redemption date by the Trustee
from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly
notify the Company in writing of the
Notes selected for redemption and, in
the case of any Note selected for
partial redemption, the principal
amount thereof to be redeemed. Notes
and portions of Notes selected shall
be in amounts of $1,000 or whole
multiples of $1,000, except that if
all of the Notes of a Holder are to
be redeemed, the entire outstanding
amount of Notes held by such Holder,
even if not a multiple of $1,000,
shall be redeemed. A new Note in
principal amount equal to the
unredeemed portion thereof will be
issued in the name of the Holder
thereof upon cancellation of the
original Note. On and after the
redemption date, interest ceases to
accrue on Notes or portions of them
called for redemption. Except as
provided in this Section 3.02,
provisions of this Indenture that
apply to Notes called for redemption
also apply to portions of Notes
called for redemption.
Section 3.03. Notice of
Redemption.
Subject to the provisions
of Section 3.09 hereof, at least
30 days but not more than 60 days
before a redemption date, the Company
shall mail or cause to be mailed, by
first class mail, a notice of
redemption to each Holder whose Notes
are to be redeemed at its registered
address.
The notice shall identify
the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being
redeemed in part, the portion of
the principal amount of such Note
to be redeemed and that, after the
redemption date upon surrender of
such Note, a new Note or Notes in
the same series in principal
amount equal to the unredeemed
portion shall be issued upon
cancellation of the original Note;
(d) the name and address
of the Paying Agent;
(e) that Notes called for
redemption must be surrendered to
the Paying Agent to collect the
redemption price;
(f) that, unless the Company
defaults in making such redemption
payment, interest and Liquidated
Damages, if any, on Notes called
for redemption cease to accrue on
and after the redemption date;
(g) the paragraph of the
Notes and/or Section of this
Indenture pursuant to which the
Notes called for redemption are
being redeemed; and
(h) that no representation
is made as to the correctness or
accuracy of the CUSIP number, if
any, listed in such notice or
printed on the Notes.
At the Company's request,
the Trustee shall give the notice of
redemption in the Company's name and
at its expense; provided, however,
that the Company shall have delivered
to the Trustee, at least 45 days
prior to the redemption date, an
Officers' Certificate requesting that
the Trustee give such notice and
setting forth the information to be
stated in such notice as provided in
the preceding paragraph.
Section 3.04. Effect of Notice of
Redemption.
Once notice of redemption
is mailed in accordance with Section
3.03 hereof, Notes called for
redemption become irrevocably due and
payable on the redemption date at the
redemption price together with
accrued and unpaid interest and
Liquidated Damages, if any. A notice
of redemption may not be conditional.
Section 3.05. Deposit of
Redemption Price.
One Business Day prior to
the redemption date, the Company
shall deposit with the Trustee or
with the Paying Agent money in
immediately available funds
sufficient to pay the redemption
price of, and accrued interest and
Liquidated Damages, if any, on, all
Notes to be redeemed on that date.
The Trustee or the Paying Agent shall
promptly return to the Company any
money deposited with the Trustee or
the Paying Agent by the Company in
excess of the amounts necessary to
pay the redemption price of, and
accrued interest and Liquidated
Damages, if any, on, all Notes to be
redeemed.
If the Company complies
with the provisions of the preceding
paragraph, on and after the
redemption date, interest and
Liquidated Damages, if any, shall
cease to accrue on the Notes or the
portions of Notes called for
redemption whether or not such Notes
are presented for payment. If a Note
is redeemed on or after an interest
record date but on or prior to the
related interest payment date, then
any accrued and unpaid interest and
Liquidated Damages, if any, shall be
paid to the Person in whose name such
Note was registered at the close of
business on such record date. If any
Note called for redemption shall not
be so paid upon surrender for
redemption because of the failure of
the Company to comply with the
preceding paragraph, interest shall
be paid on the unpaid principal, from
the redemption date until such
principal is paid, and to the extent
lawful on any interest not paid on
such unpaid principal and on any
Liquidated Damages, in each case at
the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in
Part.
Upon surrender of a Note
that is redeemed in part, the Company
shall execute and the Trustee shall
authenticate and deliver to the
Holder at the expense of the Company
a new Note of the same series equal
in principal amount to the unredeemed
portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in
clause (b) of this Section 3.07, the
Notes will not be redeemable at the
Company's option prior to July 15,
2001. Thereafter, the Notes will be
subject to redemption at the option
of the Company, in whole or in part,
upon not less than 30 nor more than
60 days' notice to Holders, at the
redemption prices (expressed as
percentages of principal amount) set
forth below plus accrued and unpaid
interest and Liquidated Damages, if
any, thereon to the applicable
redemption date, if redeemed during
the twelve-month period beginning on
July 15 of the years indicated below:
Year Percentage
2001 106.250%
2002 104.688%
2003 103.125%
2004 101.563%
2005
and thereafter 100.000%
(b) Notwithstanding the
provisions of clause (a) of this
Section 3.07, on or prior to July 15,
1999, the Company may redeem up to
25% in aggregate principal amount of
the Notes at a redemption price of
112% of the principal amount thereof,
plus accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the redemption date, with the net
proceeds of one or more Equity
Offerings; provided that at least
$90.0 million in aggregate principal
amount of the Notes remains
outstanding immediately after the
occurrence of each such redemption;
and provided, further, that notice of
each such redemption shall have been
given within 30 days after the date
of the closing of such Equity
Offering.
(c) Any redemption
pursuant to this Section 3.07 shall
be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory
Redemption.
Except as set forth under
Sections 4.10 and 4.15 hereof, the
Company shall not be required to make
mandatory redemption or sinking fund
payments with respect to the Notes.
Section 3.09. Offer to Purchase by
Application of Excess
Proceeds.
In the event that, pursuant
to Section 4.10 hereof, the Company
shall be required to commence an
offer to all Holders to purchase
Notes (an "Asset Sale Offer"), it
shall follow the procedures specified
below.
The Asset Sale Offer shall
remain open for a period of 20
Business Days following its
commencement and no longer, except to
the extent that a longer period is
required by applicable law (the
"Offer Period"). No later than five
Business Days after the termination
of the Offer Period (the "Purchase
Date"), the Company shall purchase
the principal amount of Notes
required to be purchased pursuant to
Section 4.10 hereof (the "Offer
Amount") or, if less than the Offer
Amount has been tendered, all Notes
tendered in response to the Asset
Sale Offer. Payment for any Notes so
purchased shall be made in the same
manner as interest payments are made.
If the Purchase Date is on
or after an interest record date and
on or before the related interest
payment date, any accrued and unpaid
interest shall be paid to the Person
in whose name a Note is registered at
the close of business on such record
date, and no additional interest
shall be payable to Holders who
tender Notes pursuant to the Asset
Sale Offer.
Upon the commencement of an
Asset Sale Offer, the Company shall
send, by first class mail, a notice
to the Trustee and each of the
Holders, with a copy to the Trustee.
The notice shall contain all
instructions and materials necessary
to enable such Holders to tender
Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be
made to all Holders. The notice,
which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale
Offer is being made pursuant to
this Section 3.09 and Section 4.10
hereof and the length of time the
Asset Sale Offer shall remain
open;
(b) the Offer Amount,
the purchase price and the
Purchase Date;
(c) that any Note not
tendered or accepted for payment
shall continue to accrue interest
and Liquidated Damages, if any;
(d) that, unless the
Company defaults in making such
payment, any Note accepted for
payment pursuant to the Asset Sale
Offer shall cease to accrue
interest and Liquidated Damages,
if any, after the Purchase Date;
(e) that Holders
electing to have a Note purchased
pursuant to an Asset Sale Offer
may only elect to have all of such
Note purchased and may not elect
to have only a portion of such
Note purchased;
(f) that Holders
electing to have a Note purchased
pursuant to any Asset Sale Offer
shall be required to surrender the
Note, with the form entitled
"Option of Holder to Elect
Purchase" on the reverse of the
Note completed, or transfer by
book-entry transfer, to the
Company, a depositary, if
appointed by the Company, or a
Paying Agent at the address
specified in the notice at least
three days before the Purchase
Date;
(g) that Holders shall
be entitled to withdraw their
election if the Company, the
Depositary or the Paying Agent, as
the case may be, receives, not
later than 3:00 p.m. on the date
of the expiration of the Offer
Period, a telegram, telex,
facsimile transmission or letter
setting forth the name of the
Holder, the principal amount of
the Note the Holder delivered for
purchase and a statement that such
Holder is withdrawing his election
to have such Note purchased;
(h) that, if the
aggregate principal amount of
Notes surrendered by Holders
exceeds the Offer Amount, the
Trustee shall select the Notes to
be purchased on a pro rata basis
(with such adjustments as may be
deemed appropriate by the Company
so that only Notes in
denominations of $1,000, or
integral multiples thereof, shall
be purchased); and
(i) that Holders whose
Notes were purchased only in part
shall be issued new Notes of the
same series equal in principal
amount to the unpurchased portion
of the Notes surrendered (or
transferred by book-entry
transfer).
On or before the Purchase
Date, the Company shall, to the
extent lawful, accept for payment, on
a pro rata basis to the extent
necessary, the Offer Amount of Notes
or portions thereof tendered pursuant
to the Asset Sale Offer, or if less
than the Offer Amount has been
tendered, all Notes tendered, and
shall deliver to the Trustee an
Officers' Certificate stating that
such Notes or portions thereof were
accepted for payment by the Company
in accordance with the terms of this
Section 3.09. The Company, the
Depositary or the Paying Agent, as
the case may be, shall promptly (but
in any case not later than five days
after the Purchase Date) mail or
deliver to each tendering Holder an
amount equal to the purchase price of
the Notes tendered by such Holder and
accepted by the Company for purchase,
and the Company shall promptly issue
a new Note, and the Trustee shall
authenticate and mail or deliver such
new Note to such Holder, in a
principal amount equal to any
unpurchased portion of the Note
surrendered. Any Note not so
accepted shall be promptly mailed or
delivered by the Company to the
Holder thereof. The Company shall
publicly announce the results of the
Asset Sale Offer on or as soon as
practicable after the Purchase Date.
Other than as specifically
provided in this Section 3.09, any
purchase pursuant to this
Section 3.09 shall be made pursuant
to the provisions of Sections 3.01
through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or
cause to be paid the principal of,
premium, if any, and interest on the
Notes on the dates and in the manner
provided in the Notes. Principal,
premium, if any, and interest shall
be considered paid on the date due if
the Paying Agent, if other than the
Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time
on the due date money deposited by
the Company in immediately available
funds and designated for and
sufficient to pay all principal,
premium, if any, and interest then
due. The Company shall pay all
Liquidated Damages, if any, in the
same manner on the dates and in the
amounts set forth in the Registration
Rights Agreement.
The Company shall pay
interest (including Post-Petition
Interest in any proceeding under any
Bankruptcy Law) on overdue principal
at the rate equal to 1% per annum in
excess of the then applicable
interest rate on the Notes to the
extent lawful; it shall pay interest
(including Post-Petition Interest in
any proceeding under any Bankruptcy
Law) on overdue installments of
interest and Liquidated Damages
(without regard to any applicable
grace period) at the same rate to the
extent lawful.
Section 4.02. Maintenance of
Office or Agency.
The Company shall maintain
an office or agency (which may be an
office of the Trustee or an affiliate
of the Trustee, Registrar or
co-registrar) where Notes may be
surrendered for registration of
transfer or for exchange and where
notices and demands to or upon the
Company in respect of the Notes and
this Indenture may be served. The
Company shall give prompt written
notice to the Trustee of the
location, and any change in the
location, of such office or agency.
If at any time the Company shall fail
to maintain any such required office
or agency or shall fail to furnish
the Trustee with the address thereof,
such presentations, surrenders,
notices and demands may be made or
served at the Corporate Trust Office
of the Trustee.
The Company may also from
time to time designate one or more
other offices or agencies where the
Notes may be presented or surrendered
for any or all such purposes and may
from time to time rescind such
designations; provided, however, that
no such designation or rescission
shall in any manner relieve the
Company of its obligation to maintain
an office or agency for such
purposes. The Company shall give
prompt written notice to the Trustee
of any such designation or rescission
and of any change in the location of
any such other office or agency.
The Company hereby
designates the Corporate Trust Office
of the Trustee as one such office or
agency of the Company in accordance
with Section 2.03.
Section 4.03. Reports.
Whether or not required by
the rules and regulations of the SEC,
so long as any Notes are outstanding,
the Company and the Guarantors shall
furnish to the Holders of Notes and
to the Trustee (i) all quarterly and
annual financial information that
would be required to be contained in
a filing with the SEC on Forms 10-Q
and 10-K if the Company were required
to file such Forms, including a
"Management's Discussion and Analysis
of Financial Condition and Results of
Operations" that describes the
financial condition and results of
operations of the Company and its
Restricted Subsidiaries and, with
respect to the annual information
only, a report thereon by the
Company's certified independent
accountants and (ii) all current
reports that would be required to be
filed with the SEC on Form 8-K if the
Company were required to file such
reports. In addition, whether or not
required by the rules and regulations
of the SEC, the Company shall file a
copy of all such information and
reports with the SEC for public
availability (unless the SEC will not
accept such a filing) and make such
information available to securities
analysts and prospective investors
upon request. In addition, for so
long as any Notes remain outstanding,
the Company and the Guarantors shall
furnish to the Holders and to
securities analysts and prospective
investors, upon their request, the
information required to be delivered
pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04. Compliance
Certificate.
(a) The Company and each
Guarantor shall deliver to the
Trustee, within 90 days after the end
of each fiscal year, an Officers'
Certificate stating that a review of
the activities of the Company and its
Subsidiaries during the preceding
fiscal year has been made under the
supervision of the signing Officers
with a view to determining whether
the Company and each Guarantor has
kept, observed, performed and
fulfilled its obligations under this
Indenture, and further stating, as to
each such Officer signing such
certificate, that to the best of his
or her knowledge the Company has
kept, observed, performed and
fulfilled each and every covenant
contained in this Indenture and is
not in default in the performance or
observance of any of the terms,
provisions and conditions of this
Indenture (or, if a Default or Event
of Default shall have occurred,
describing all such Defaults or
Events of Default of which he or she
may have knowledge and what action
the Company is taking or proposes to
take with respect thereto) and that
to the best of his or her knowledge
no event has occurred and remains in
existence by reason of which payments
on account of the principal of,
Liquidated Damages or interest, if
any, on the Notes is prohibited or if
such event has occurred, a
description of the event and what
action the Company is taking or
proposes to take with respect
thereto.
(b) So long as not
contrary to the then current
recommendations of the American
Institute of Certified Public
Accountants, the year-end financial
statements delivered pursuant to
Section 4.03 above shall be
accompanied by a written statement of
the Company's independent public
accountants (who shall be a firm of
established national reputation) that
in making the examination necessary
for certification of such financial
statements, nothing has come to their
attention that would lead them to
believe that the Company has violated
any provisions of Article 4 or
Article 5 hereof or, if any such
violation has occurred, specifying
the nature and period of existence
thereof, it being understood that
such accountants shall not be liable
directly or indirectly to any Person
for any failure to obtain knowledge
of any such violation.
(c) The Company shall, so
long as any of the Notes are
outstanding, deliver to the Trustee,
forthwith upon any Officer becoming
aware of any Default or Event of
Default, an Officers' Certificate
specifying such Default or Event of
Default and what action the Company
is taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Company shall pay, and
shall cause each of its Subsidiaries
to pay, prior to delinquency, all
material taxes, assessments, and
governmental levies except such as
are contested in good faith and by
appropriate proceedings or where the
failure to effect such payment is not
adverse in any material respect to
the Holders of the Notes.
Section 4.06. Stay, Extension and
Usury Laws.
Each of the Company and the
Guarantors covenants (to the extent
that it may lawfully do so) that it
shall not at any time insist upon,
plead, or in any manner whatsoever
claim or take the benefit or
advantage of, any stay, extension or
usury law wherever enacted, now or at
any time hereafter in force, that may
affect the covenants or the
performance of this Indenture; and
each of the Company and the
Guarantors (to the extent that it may
lawfully do so) hereby expressly
waives all benefit or advantage of
any such law, and covenants that it
shall not, by resort to any such law,
hinder, delay or impede the execution
of any power herein granted to the
Trustee, but shall suffer and permit
the execution of every such power as
though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, (i) declare or pay any
dividend or make any other payment or
distribution on account of the
Company's Equity Interests
(including, without limitation, any
payment in connection with any merger
or consolidation involving the
Company) or to any direct or indirect
holder of the Company's Equity
Interests in its capacity as such,
other than dividends or distributions
payable in Equity Interests (other
than Disqualified Stock) of the
Company or dividends or distributions
payable to the Company or any Wholly
Owned Restricted Subsidiary of the
Company that is a Guarantor; (ii)
purchase, redeem or otherwise acquire
or retire for value any Equity
Interests of the Company or any
Subsidiary or other Affiliate of the
Company, other than any such Equity
Interests owned by the Company or any
Wholly Owned Restricted Subsidiary of
the Company that is a Guarantor;
(iii) make any principal payment on,
or purchase, redeem, defease or
otherwise acquire or retire for
value, prior to a scheduled mandatory
sinking fund payment date or final
maturity date, any Indebtedness that
is subordinated to the Notes; or (iv)
make any Restricted Investment (all
such payments and other actions set
forth in clauses (i) through (iv)
above being collectively referred to
as "Restricted Payments"), unless, at
the time of and after giving effect
to such Restricted Payment:
(A) no Default or Event of
Default shall have occurred and be
continuing or would occur as a
consequence thereof;
(B) the Company would be
permitted by virtue of the
Company's pro forma Fixed Charge
Coverage Ratio, immediately after
giving effect to such Restricted
Payment, to incur at least $1.00
of additional Indebtedness
pursuant to the Fixed Charge
Coverage Ratio test set forth in
Section 4.09 hereof; and
(C) such Restricted Payment,
together with the aggregate of all
other Restricted Payments made by
the Company and its Restricted
Subsidiaries on or after the date
hereof, is less than the sum of
(i) $5.0 million, plus (ii) 50% of
the Consolidated Net Income of the
Company for the period (taken as
one accounting period) from July
29, 1996 to the end of the
Company's most recently ended
fiscal quarter for which internal
financial statements are available
at the time of such Restricted
Payment (or, if such Consolidated
Net Income for such period is a
deficit, less 100% of such
deficit), plus (iii) 100% of the
aggregate net cash proceeds
received by the Company as capital
contributions or from the issue or
sale since the date of this
Indenture of Equity Interests of
the Company or of debt securities
of the Company that have been
converted into such Equity
Interests (other than Equity
Interests (or convertible debt
securities) sold to a Subsidiary
of the Company and other than
Disqualified Stock or debt
securities that have been
converted into Disqualified
Stock), plus (iv) to the extent
that any Restricted Investment is
sold for cash or otherwise
liquidated or repaid for cash,
100% of the net cash proceeds
thereof (less the cost of
disposition) (but only to the
extent not included in subclause
(ii) of this clause (C)); plus (v)
to the extent that any
Unrestricted Subsidiary is
designated to be a Restricted
Subsidiary, the fair market value
(as determined in good faith by
the Board of Directors of the
Company) of the Company's
Investment in such Subsidiary at
the time of such designation (but
only to the extent not included in
subclause (ii) of this clause
(C)); provided, however, that in
the case of (1) the declaration or
payment of any dividend or the
making of any other payment or
distribution on account of the
Company's Common Stock or to any
direct or indirect holder of the
Company's Common Stock in its
capacity as such or (2) the
purchase, redemption or other
acquisition or retirement for
value of any Common Stock of the
Company, (A) the Company may not
include the $5.0 million set forth
in subclause (i) of this clause
(C) and may only include 25% of
its Consolidated Net Income for
purposes of subclause (ii) of this
clause (C) in calculating the
amount available pursuant to this
clause (C) for the making of any
such Restricted Payment if, after
giving effect to such Restricted
Payment, the Company's Leverage
Ratio would exceed 70% and (B)
Consolidated Net Income for
purposes of this clause (C) shall
exclude the first $5.0 million of
Consolidated Net Income of the
Company reported from and after
July 29, 1996.
The foregoing provisions will not
prohibit (i) the payment of any
dividend or other distribution within
60 days after the date of declaration
thereof, if at said date of
declaration such payment would have
complied with the provisions of this
Indenture; (ii) the redemption,
repurchase, retirement or other
acquisition of any Equity Interests
of the Company in exchange for, or
out of the proceeds of, the
substantially concurrent sale (other
than to a Subsidiary of the Company)
of other Equity Interests of the
Company (other than any Disqualified
Stock); provided that the amount of
any such net cash proceeds that are
utilized for any such redemption,
repurchase, retirement or other
acquisition shall be excluded from
clause (C) of the preceding
paragraph; (iii) the defeasance,
redemption or repurchase of
subordinated Indebtedness with the
net cash proceeds from an incurrence
of Permitted Refinancing Debt or the
substantially concurrent sale (other
than to a Subsidiary of the Company)
of Equity Interests of the Company
(other than Disqualified Stock);
provided that the amount of any such
net cash proceeds that are utilized
for any such redemption, repurchase,
retirement or other acquisition shall
be excluded from clause (C) of the
preceding paragraph; (iv) Investments
in Real Estate Subsidiaries in an
amount not to exceed $10.0 million
plus, to the extent that any such
Investment is sold for cash or
otherwise liquidated or repaid for
cash, the net cash proceeds thereof
(less the cost of disposition);
provided that the amount of any such
net cash proceeds shall be excluded
from clause (C) of the preceding
paragraph; (v) the acquisition of
Equity Interests in Sugarloaf
Mountain Corporation within the six
months following the consummation of
the Acquisition; (vi) contributions
of real estate not used in or
essential to ski operations to Real
Estate Subsidiaries for Permitted
Real Estate Projects; (vii)
conveyance of real estate not used in
or essential to ski operations to
Unrestricted Subsidiaries with an
aggregate book value not in excess of
$2.0 million; (viii) Guarantees of
Indebtedness of Real Estate
Subsidiaries to the extent that such
Guarantees are permitted to be
incurred by the covenant described in
Section 4.09 hereof; (ix) payments of
principal of and interest on the
Demand Note; (x) Investments received
by the Company and its Restricted
Subsidiaries as non-cash
consideration from Asset Sales to the
extent permitted by the covenant
described in Section 4.10 hereof; and
(xi) the repurchase of Subordinated
Notes pursuant to a Subordinated Note
Change of Control Offer (as defined
in the Subordinated Note Indenture).
The Board of Directors of the
Company may designate any Restricted
Subsidiary to be an Unrestricted
Subsidiary if such designation would
not cause a Default. For purposes of
making such determination, all
outstanding Investments by the
Company and its Restricted
Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so
designated will be deemed to be
Restricted Payments at the time of
such designation and will reduce the
amount available for Restricted
Payments under the first paragraph of
this covenant. All such outstanding
Investments will be deemed to
constitute Investments in an amount
equal to the fair market value (as
determined in good faith by the Board
of Directors of the Company) of such
Investments at the time of such
designation. Such designation will
only be permitted if such Restricted
Payment would be permitted at such
time and if such Restricted
Subsidiary otherwise meets the
definition of an Unrestricted
Subsidiary.
The amount of all Restricted
Payments (other than cash) shall be
the fair market value (evidenced by a
resolution of the Board of Directors
of the Company set forth in an
Officers' Certificate delivered to
the Trustee) on the date of the
Restricted Payment of the asset(s)
proposed to be transferred by the
Company or such Subsidiary, as the
case may be, pursuant to the
Restricted Payment. Not later than
the date of making any Restricted
Payment, the Company shall deliver to
the Trustee an Officers' Certificate
stating that such Restricted Payment
is permitted and setting forth the
basis upon which the calculations
required by the covenant "Restricted
Payments" were computed, which
calculations may be based upon the
Company's latest available financial
statements.
Notwithstanding the
foregoing, the Company and its
Restricted Subsidiaries may not (i)
transfer any property or assets that
are a material part of the ski
operations of the Company and its
Restricted Subsidiaries to an
Unrestricted Subsidiary or (ii)
designate as an Unrestricted
Subsidiary any Restricted Subsidiary
of the Company that holds any
property or assets that are a
material part of the ski operations
of the Company and its Restricted
Subsidiaries.
Section 4.08. Dividend and Other
Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, create or otherwise
cause or suffer to exist or become
effective any encumbrance or
restriction on the ability of any
Restricted Subsidiary to (i)(a) pay
dividends or make any other
distributions to the Company or any
of its Restricted Subsidiaries on its
Capital Stock or with respect to any
other interest or participation in,
or measured by, its profits, or (b)
pay any indebtedness owed to the
Company or any of its Restricted
Subsidiaries, (ii) make loans or
advances to the Company or any of its
Restricted Subsidiaries or (iii)
transfer any of its properties or
assets to the Company or any of its
Restricted Subsidiaries, except for
such encumbrances or restrictions
existing under or by reason of: (a)
Existing Indebtedness as in effect on
the date of this Indenture; (b)
applicable law; (c) any instrument
governing Indebtedness or Capital
Stock of a Person acquired by the
Company or any of its Restricted
Subsidiaries as in effect at the time
of such acquisition (except to the
extent such Indebtedness was incurred
in connection with or in
contemplation of such acquisition),
which encumbrance or restriction is
not applicable to any Person, or the
properties or assets of any Person,
other than the Person, or the
property or assets of the Person, so
acquired; (d) by reason of customary
non-assignment provisions in leases
entered into in the ordinary course
of business and consistent with past
practices; (e) purchase money
obligations for property acquired in
the ordinary course of business that
impose restrictions of the nature
described in clause (iii) above on
the property so acquired; (f) any
instrument governing Non-Recourse
Real Estate Debt of a Real Estate
Subsidiary, which encumbrance or
restriction is not applicable to any
Person or the properties or assets of
any Person other than such Real
Estate Subsidiary or the property or
assets of such Real Estate
Subsidiary; (g) Senior Debt of the
Company and Indebtedness of
Guarantors, provided that such
Indebtedness was permitted to be
incurred pursuant to the provisions
of this Indenture; and (h) Permitted
Liens.
Section 4.09. Incurrence of
Indebtedness and Issuance
of Preferred Stock.
The Company shall not, and
shall not permit any of its
Subsidiaries to, directly or
indirectly, create, incur, issue,
assume, guaranty or otherwise become
directly or indirectly liable,
contingently or otherwise, with
respect to (collectively, "incur")
any Indebtedness (including Acquired
Debt), and shall not permit any of
its Restricted Subsidiaries to issue
any preferred stock; provided,
however, that, so long as no Default
or Event of Default has occurred and
is continuing, the Company and its
Restricted Subsidiaries that are
Guarantors may incur Indebtedness
(including Acquired Debt), and its
Restricted Subsidiaries that are
Guarantors may issue preferred stock,
if the Fixed Charge Coverage Ratio
for the Company's most recently ended
four full fiscal quarters for which
internal quarterly financial
statements are available immediately
preceding the date on which such
additional Indebtedness is incurred
or such additional preferred stock is
issued would have been at least 2.0
to 1, determined on a pro forma basis
(including a pro forma application of
the net proceeds therefrom), as if
the additional Indebtedness had been
incurred or the additional preferred
stock had been issued at the
beginning of such four-quarter
period.
The foregoing provisions shall
not apply to:
(i) the incurrence by the
Company and its Restricted
Subsidiaries of Indebtedness pursuant
to the Bank Credit Agreements in an
amount not to exceed the greater of
(a) $65.0 million and (b) 1.5 times
the Company's Consolidated Cash Flow
for the most recently ended four full
fiscal quarters for which internal
quarterly financial statements are
available immediately preceding the
date on which such Indebtedness is
incurred, less, in either case, the
aggregate amount of all permanent
reductions thereto pursuant to the
covenant described in Section 4.10
hereof;
(ii) the incurrence by the
Company and its Restricted
Subsidiaries of Existing
Indebtedness;
(iii) the incurrence by the
Company and the Guarantors of
Indebtedness represented by the
Notes, the Subsidiary Guarantees,
this Indenture, the Subordinated
Notes, the Subordinated Note
Subsidiary Guarantees and the
Subordinated Note Indenture;
(iv) the incurrence of
intercompany Indebtedness between or
among the Company and any of its
Wholly Owned Restricted Subsidiaries
(other than Real Estate
Subsidiaries); provided that any
subsequent issuance or transfer of
Equity Interests that results in any
such Indebtedness being held by a
Person other than the Company or a
Wholly Owned Restricted Subsidiary of
the Company, or any sale or other
transfer of any such Indebtedness to
a Person that is neither the Company
nor a Wholly Owned Restricted
Subsidiary of the Company, shall be
deemed to constitute an incurrence of
such Indebtedness by the Company or
such Restricted Subsidiary, as the
case may be;
(v) the incurrence by the
Company or any of its Restricted
Subsidiaries of purchase money
Indebtedness to finance the purchase
of property or assets to be used in
the ski operations of the Company and
its Restricted Subsidiaries or a
related business in an aggregate
amount at any one time outstanding
not to exceed the lesser of (a) the
purchase price of such property or
assets and (b) $15.0 million;
(vi) the incurrence by the
Company and its Restricted
Subsidiaries of Guarantees of
Indebtedness of Real Estate
Subsidiaries in an amount not to
exceed $15.0 million at any one time
outstanding in connection with
Permitted Real Estate Projects,
provided that the total purchase
price for the hotel, condominium,
interval ownership or other units
comprising the development to be
constructed, in whole or in part,
with the proceeds of the Indebtedness
so guaranteed, that have been
contracted for sale (evidenced by
executed purchase agreements and
security deposits from
credit-approved purchasers), equals
at least 35% of the estimated total
cost of construction (as determined
in good faith by the Board of
Directors of the Company) of the
Permitted Real Estate Projects
(except for the development of the
Summit Hotel at the Attitash resort,
for which such total purchase price
must equal at least 25% of the
estimated total cost of construction
(as determined in good faith by the
Board of Directors of the Company));
(vii) the incurrence by the
Company or any of its Restricted
Subsidiaries of Permitted Refinancing
Debt in exchange for, or the net
proceeds of which are used to extend,
refinance, renew, replace, defease or
refund Indebtedness that was
permitted to be incurred hereunder;
(viii) the incurrence by Real
Estate Subsidiaries of Non-Recourse
Real Estate Debt, provided that if
any such Indebtedness ceases to be
Non-Recourse Real Estate Debt of a
Real Estate Subsidiary, such event
shall be deemed to constitute an
incurrence of Indebtedness by a
Restricted Subsidiary of the Company
that is not a Real Estate Subsidiary;
(ix) the incurrence by the
Company's Unrestricted Subsidiaries
of Non-Recourse Debt, provided that
if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be
deemed to constitute an incurrence of
Indebtedness by a Restricted
Subsidiary of the Company; and
(x) the incurrence by the
Company and its Restricted
Subsidiaries of additional
Indebtedness in an amount not to
exceed $25.0 million at any one time
outstanding; provided that such
Indebtedness is expressly
subordinated in right of payment to
the Notes at least to the same extent
as the Notes are subordinated in
right of payment to Senior Debt of
the Company pursuant to Article 10
hereof.
Section 4.10. Asset Sales.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, engage in
an Asset Sale unless (i) the Company
or such Restricted Subsidiary, as the
case may be, receives consideration
at the time of such Asset Sale at
least equal to the fair market value
(evidenced by a resolution of the
Board of Directors of the Company set
forth in an Officers' Certificate
delivered to the Trustee) of the
assets or Equity Interests issued or
sold or otherwise disposed of and
(ii) at least 75% of the
consideration therefor received by
the Company or such Restricted
Subsidiary is in the form of cash;
provided that (x) the amount of (a)
any liabilities (as shown on the
Company's or such Restricted
Subsidiary's most recent balance
sheet) of the Company or any
Restricted Subsidiary (other than
contingent liabilities and
liabilities that are by their terms
subordinated to the Notes) that are
assumed by the transferee of any such
assets pursuant to a customary
novation agreement that releases the
Company or such Restricted Subsidiary
from further liability and (b) any
notes or other obligations received
by the Company or such Restricted
Subsidiary from such transferee that
are immediately converted by the
Company or such Restricted Subsidiary
into cash (to the extent of the cash
received) shall be deemed to be cash
for purposes of this provision and
(y) Asset Sales pursuant to the DOJ
Divestiture shall not be subject to
the 75% minimum cash requirement
specified in clause (ii) of this
paragraph, but such Asset Sales shall
otherwise continue to be subject to
this covenant and any cash proceeds
resulting from the subsequent
disposition of such non-cash
consideration shall be subject to the
provisions of this covenant.
Within 360 days after the
receipt of any Net Proceeds from an
Asset Sale, the Company or such
Restricted Subsidiary may apply such
Net Proceeds (a) to permanently
reduce Senior Debt of the Company or
such Restricted Subsidiary (and to
correspondingly reduce commitments
with respect thereto) or (b) to the
making of capital expenditures or the
acquisition of long-term assets in
the same line of business as the
Company or any Restricted Subsidiary
was engaged immediately prior to such
Asset Sale. Pending the final
application of any such Net Proceeds,
the Company may temporarily reduce
Senior Debt or otherwise invest such
Net Proceeds in any manner that is
not prohibited hereunder. Any Net
Proceeds from Asset Sales in excess
of $1.0 million in any fiscal year
that are not applied or invested as
provided in the first sentence of
this paragraph will be deemed to
constitute "Excess Proceeds." When
the aggregate amount of Excess
Proceeds exceeds $10.0 million, the
Company will be required to make an
offer to all Holders of Notes to
purchase the maximum principal amount
of Notes that may be purchased out of
the Excess Proceeds, at an offer
price in cash in an amount equal to
100% of the principal amount thereof,
plus accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the date of purchase, in
accordance with the procedures set
forth herein. To the extent that the
aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the
Company may use any remaining Excess
Proceeds for general corporate
purposes (subject to the restrictions
of this Indenture). Upon completion
of such offer to purchase, the amount
of Excess Proceeds shall be reset at
zero.
Section 4.11. Independent
Director.
From and after the earlier
of 30 days after the Consummation (as
defined in the Registration Rights
Agreement) of the Exchange Offer or
120 days after the date hereof, so
long as any of the Notes are
outstanding, the Company shall have
at least one Independent Director on
its Board of Directors. Any
transaction for which this Indenture
requires the approval of a majority
of the Independent Directors shall be
prohibited at any time that there is
not at least one Independent Director
on the Company's Board of Directors.
The Company shall use its best
efforts to have an Independent
Director by July 31, 1996. In
connection with any transaction for
which this Indenture requires the
approval of a majority of the
Independent Directors, the Company
shall provide an Officers'
Certificate to the Trustee stating
that a majority of the Independent
Directors has approved such
transaction.
Section 4.12. Transactions with
Affiliates.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, make any payment to,
or sell, lease, transfer or otherwise
dispose of any of its properties or
assets to, or purchase any property
or assets from, or enter into or make
or amend any contract, agreement,
understanding, loan, advance or
guarantee with, or for the benefit
of, any Affiliate (each of the
foregoing, an "Affiliate
Transaction"), unless (i) such
Affiliate Transaction is on terms
that are no less favorable to the
Company or the relevant Restricted
Subsidiary than those that would have
been obtained in a comparable
transaction with an unrelated Person
and (ii) the Company delivers to the
Trustee (a) with respect to any
Affiliate Transaction or series of
related Affiliate Transactions
involving aggregate consideration in
excess of $0.5 million, a resolution
of the Board of Directors of the
Company certified to in an Officers'
Certificate certifying also that such
Affiliate Transaction complies with
clause (i) above and that such
Affiliate Transaction has been
approved by a majority of the
disinterested members of the Board of
Directors of the Company and (b) with
respect to any Affiliate Transaction
or series of related Affiliate
Transactions involving aggregate
consideration in excess of $5.0
million, an opinion as to the
fairness to the Company of such
Affiliate Transaction from a
financial point of view issued by an
accounting, appraisal or investment
banking firm of national standing;
provided that (1) any employment
agreement or arrangement in existence
on the date hereof or entered into by
the Company or any of its Restricted
Subsidiaries in the ordinary course
of business and consistent with the
past practice of the Company or such
Restricted Subsidiary, (2)
transactions between or among the
Company and its Restricted
Subsidiaries and (3) Restricted
Payments and Permitted Investments
that are permitted by the provisions
of Section 4.07 hereof, in each case,
shall not be deemed Affiliate
Transactions.
Section 4.13. Liens.
The Company shall not, and
shall not permit any of its
Subsidiaries to, directly or
indirectly create, incur, assume or
suffer to exist any Lien on any asset
now owned or hereafter acquired, or
any income or profits therefrom, or
assign or convey any right to receive
income therefrom, except Permitted
Liens.
Section 4.14. Corporate Existence.
Subject to Article 5
hereof, the Company and the
Guarantors shall do or cause to be
done all things necessary to preserve
and keep in full force and effect (i)
its corporate existence, and the
corporate, partnership or other
existence of each of its Restricted
Subsidiaries, in accordance with the
respective organizational documents
(as the same may be amended from time
to time) of the Company or any such
Restricted Subsidiary and (ii) the
rights (charter and statutory),
licenses and franchises of the
Company, the Guarantors and their
respective Restricted Subsidiaries;
provided, however, that the Company
and the Guarantors shall not be
required to preserve any such right,
license or franchise, or the
corporate, partnership or other
existence of any of their respective
Restricted Subsidiaries, if the Board
of Directors of the Company
(including a majority of the
Independent Directors) shall
determine that the preservation
thereof is no longer desirable in the
conduct of the business of the
Company or such Guarantor, as
applicable, and its Restricted
Subsidiaries, taken as a whole, and
that the loss thereof is not adverse
in any material respect to the
Holders of the Notes.
Section 4.15. Offer to Repurchase
Upon Change of Control.
(a) Upon the occurrence of
a Change of Control, each Holder of
Notes shall have the right to require
the Company to repurchase all or any
part (equal to $1,000 or an integral
multiple thereof) of such Holder's
Notes pursuant to the offer described
below (the "Change of Control Offer")
at an offer price in cash equal to
101% of the principal amount thereof
plus, in each case, accrued and
unpaid interest and Liquidated
Damages, if any, thereon to the date
of purchase (the "Change of Control
Payment"). Within 30 days following
any Change of Control, the Company
shall mail a notice to each Holder
stating: (1) that the Change of
Control Offer is being made pursuant
to this Section 4.15 and that all
Notes tendered shall be accepted for
payment; (2) the purchase price and
the purchase date, which shall be no
later than 30 business days from the
date such notice is mailed (the
"Change of Control Payment Date");
(3) that any Note not tendered shall
continue to accrue interest and
Liquidated Damages, if any; (4) that,
unless the Company defaults in the
payment of the Change of Control
Payment, all Notes accepted for
payment pursuant to the Change of
Control Offer shall cease to accrue
interest after the Change of Control
Payment Date; (5) that Holders
electing to have any Notes purchased
pursuant to a Change of Control Offer
shall be required to surrender the
Notes, with the form entitled "Option
of Holder to Elect Purchase" on the
reverse of the Notes completed, to
the Paying Agent at the address
specified in the notice prior to the
close of business on the third
Business Day preceding the Change of
Control Payment Date; (6) that
Holders shall be entitled to withdraw
their election if the Paying Agent
receives, not later than the close of
business on the second Business Day
preceding the Change of Control
Payment Date, a telegram, telex,
facsimile transmission or letter
setting forth the name of the Holder,
the principal amount of Notes
delivered for purchase, and a
statement that such Holder is
withdrawing his election to have the
Notes purchased; and (7) that Holders
whose Notes are being purchased only
in part shall be issued new Notes of
the same series equal in principal
amount to the unpurchased portion of
the Notes surrendered, which
unpurchased portion must be equal to
$1,000 in principal amount or an
integral multiple thereof. The
Company shall comply with the
requirements of Rule 14e-1 under the
Exchange Act and any other securities
laws and regulations thereunder to
the extent such laws and regulations
are applicable in connection with the
repurchase of Notes in connection
with a Change of Control.
(b) On the Change of
Control Payment Date, the Company
shall, to the extent lawful and
subject to Article 10, (1) accept for
payment all Notes or portions thereof
properly tendered pursuant to the
Change of Control Offer, (2) deposit
with the Paying Agent an amount equal
to the Change of Control Payment in
respect of all Notes or portions
thereof so tendered and (3) deliver
or cause to be delivered to the
Trustee the Notes so accepted
together with an Officers'
Certificate stating the aggregate
principal amount of Notes or portions
thereof being purchased by the
Company. The Paying Agent shall
promptly mail to each Holder of Notes
so tendered the Change of Control
Payment for such Notes, and the
Trustee shall promptly authenticate
and mail (or cause to be transferred
by book entry) to each Holder a new
Note of the same series equal in
principal amount to any unpurchased
portion of the Notes surrendered, if
any; provided that each such new Note
shall be in a principal amount of
$1,000 or an integral multiple
thereof. Prior to complying with the
provisions of this Section 4.15, but
in any event within 60 days following
a Change of Control, the Company
shall either repay all outstanding
Senior Debt or obtain the requisite
consents, if any, under all
agreements governing outstanding
Senior Debt to permit the repurchase
of Notes required by this Section
4.15. The Company shall publicly
announce the results of the Change of
Control Offer on or as soon as
practicable after the Change of
Control Payment Date.
The Company shall not be
required to make a Change of Control
Offer upon a Change of Control if a
third party makes the Change of
Control Offer in the manner, at the
times and otherwise in compliance
with the requirements set forth in
this Section 4.15 and purchases all
Notes validly tendered and not
withdrawn under such Change of
Control Offer.
Section 4.16. Additional
Subsidiary Guarantees.
If the Company or any of
its Restricted Subsidiaries shall
acquire or create another Subsidiary
after the date hereof, then such
newly acquired or created Subsidiary
shall become a Guarantor and enter
into a supplemental indenture
pursuant to which such Subsidiary
shall agree to be bound by all of the
terms of this Indenture and shall
execute a Subsidiary Guarantee and
deliver an Opinion of Counsel in
accordance with the terms of this
Indenture; provided that this
covenant shall not apply to any
Subsidiary that has been properly
designated as an Unrestricted
Subsidiary in accordance with this
Indenture for so long as it continues
to constitute an Unrestricted
Subsidiary. Upon the acquisition or
creation of a Subsidiary by the
Company, the Company shall provide to
the Trustee an Officers' Certificate
stating whether such Subsidiary
constitutes an Unrestricted
Subsidiary or is required to enter
into a supplemental indenture and
execute a Subsidiary Guarantee.
Section 4.17. No Senior
Subordinated Debt.
Notwithstanding the
provisions of Section 4.09 hereof,
neither the Company nor any Guarantor
shall incur, create, issue, assume,
guarantee or otherwise become liable
for any Indebtedness that, in
accordance with the terms of the
instrument pursuant to which it was
created, is subordinate or junior in
right of payment to any Senior Debt
of the Company or such Guarantor, as
the case may be, and senior in any
respect in right of payment to the
Notes or such Guarantor's Subsidiary
Guarantee, other than as set forth in
the terms of the Credit Agreement
dated as of June 28, 1996 among the
Company, various Subsidiaries of the
Company, Fleet National Bank, as
Agent, and the lenders party thereto,
and the guarantees of various
Subsidiaries of the Company issued in
connection therewith, in each case as
in effect on the date of this
Indenture.
Section 4.18. Payments for
Consent.
The Company shall not and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, pay or cause to be
paid any consideration, whether by
way of interest, fee or otherwise, to
any Holder of any Notes for or as an
inducement to any consent, waiver or
amendment of any of the terms or
provisions of this Indenture or the
Notes unless such consideration is
offered to be paid or is paid to all
Holders of the Notes that consent,
waive or agree to amend in the time
frame set forth in the solicitation
documents relating to such consent,
waiver or agreement.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger,
Consolidation, or Sale of
Assets.
The Company shall not
consolidate or merge with or into
(whether or not the Company is the
surviving entity), or sell, assign,
transfer, lease, convey or otherwise
dispose of all or substantially all
of its properties or assets in one or
more related transactions, to another
corporation, Person or entity, unless
(i) the Company is the surviving
entity or the entity or the Person
formed by or surviving any such
consolidation or merger (if other
than the Company) or to which such
sale, assignment, transfer, lease,
conveyance or other disposition shall
have been made is a corporation
organized or existing under the laws
of the United States, any state
thereof or the District of Columbia;
(ii) the entity or Person formed by
or surviving any such consolidation
or merger (if other than the Company)
or the entity or Person to which such
sale, assignment, transfer, lease,
conveyance or other disposition shall
have been made assumes all the
obligations of the Company under the
Notes and this Indenture pursuant to
a supplemental indenture in a form
reasonably satisfactory to the
Trustee; (iii) immediately after such
transaction, no Default or Event of
Default exists; and (iv) except in
the case of a merger of the Company
with or into a Wholly Owned
Restricted Subsidiary of the Company,
the Company or the entity or Person
formed by or surviving any such
consolidation or merger (if other
than the Company) or to which such
sale, assignment, transfer, lease,
conveyance or other disposition shall
have been made (A) will have
Consolidated Net Worth immediately
after the transaction equal to or
greater than the Consolidated Net
Worth of the Company immediately
preceding the transaction and (B)
will, at the time of such transaction
and after giving pro forma effect
thereto as if such transaction had
occurred at the beginning of the
applicable four-quarter period, be
permitted to incur at least $1.00 of
additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test
set forth in the first paragraph of
Section 4.09 hereof.
Section 5.02. Successor
Corporation Substituted.
Upon any consolidation or
merger, or any sale, assignment,
transfer, lease, conveyance or other
disposition of all or substantially
all of the assets of the Company in
accordance with Section 5.01 hereof,
the successor corporation formed by
such consolidation or into or with
which the Company is merged or to
which such sale, assignment,
transfer, lease, conveyance or other
disposition is made shall succeed to,
and be substituted for and may
exercise every right and power of the
Company under this Indenture with the
same effect as if such successor
Person had been named as the Company
herein (so that from and after the
date of such consolidation, merger,
sale, lease, conveyance or other
disposition, the provisions of this
Indenture referring to the "Company"
shall refer instead to the successor
corporation and not to the Company);
provided, however, that the
predecessor Company shall not be
relieved from the obligation to pay
the principal of, and premium,
interest and Liquidated Damages, if
any, on the Notes except in the case
of a sale of all of the Company's
assets that meets the requirements of
Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default"
occurs if:
(1) the Company defaults for
30 days in the payment when due of
interest on the Notes (whether or
not such payment is prohibited by
the provisions of Article 10
hereof);
(2) the Company defaults in
the payment when due of the
principal of or premium or
Liquidated Damages, if any, on the
Notes (whether or not such payment
is prohibited by the provisions of
Article 10 hereof);
(3) the Company fails to
comply with, observe or perform
any covenant, condition or
agreement on the part of the
Company to be observed or
performed pursuant to Sections
4.07, 4.09, 4.10 and 4.15 hereof;
(4) the Company fails, for
30 days after notice, to comply
with any of its other agreements
or covenants in, or provisions of,
this Indenture or the Notes, other
than that which is provided for by
Section 4.11 hereof;
(5) a continuing default
occurs under any mortgage,
indenture or instrument under
which there may be issued or by
which there may be secured or
evidenced any Indebtedness for
money borrowed by the Company or
any of its Restricted Subsidiaries
(or the payment of which is
guaranteed by the Company or any
of its Restricted Subsidiaries)
whether such Indebtedness or
guarantee now exists, or is
created after the date hereof,
which default (a) is caused by a
failure to pay principal of or
premium, if any, or interest on
such Indebtedness prior to the
expiration of the grace period
provided in such Indebtedness (a
"Payment Default") or (b) results
in the acceleration of such
Indebtedness prior to its express
maturity and, in each case, the
principal amount of any such
Indebtedness, together with the
principal amount of any other such
Indebtedness under which there has
been a Payment Default or the
maturity of which has been so
accelerated, aggregates $5.0
million or more;
(6) the Company, or any of
its Restricted Subsidiaries, fails
to pay final judgments aggregating
in excess of $5.0 million and
either (a) any creditor commences
enforcement proceedings upon any
such judgment or (b) such
judgments are not paid, discharged
or stayed for a period of 60 days;
(7) any Subsidiary Guarantee
shall be held in any judicial
proceeding to be unenforceable or
invalid or shall cease for any
reason to be in full force and
effect or any Guarantor, or any
Person acting on behalf of any
Guarantor, shall deny or disaffirm
its obligations under its
Subsidiary Guarantee, except as
permitted by this Indenture;
(8) the Company or any of
its Restricted Subsidiaries
pursuant to or within the meaning
of any Bankruptcy Law:
(a) commences a
voluntary case,
(b) consents to the
entry of an order for relief
against it in an involuntary
case,
(c) consents to the
appointment of a Custodian of
it or for all or substantially
all of its property,
(d) makes a general
assignment for the benefit of
its creditors, or
(e) admits in
writing its inability generally
to pay its debts as they become
due; or
(9) a court of competent
jurisdiction enters an order or
decree under any Bankruptcy Law
that:
(a) is for relief
against the Company or any
Restricted Subsidiary in an
involuntary case,
(b) appoints a
Custodian of the Company or any
Restricted Subsidiary or for
all or substantially all of the
property of the Company or any
Subsidiary, or
(c) orders the
liquidation of the Company or
any Restricted Subsidiary,
and the order or decree remains
unstayed and in effect for
60 consecutive days.
The term "Bankruptcy Law"
means Title 11, U.S. Code or any
similar Federal or state law for the
relief of debtors. The term
"Custodian" means any receiver,
trustee, assignee, liquidator or
similar official under any Bankruptcy
Law.
An Event of Default shall
not be deemed to have occurred under
clause (3), (5) or (6) until the
Trustee shall have received written
notice from the Company or any of the
Holders or unless a Responsible
Officer shall have knowledge of such
Event of Default. A Default under
clause (4) is not an Event of Default
until the Trustee notifies the
Company, or the Holders of at least
25% in principal amount of the then
outstanding Notes notify the Company
and the Trustee, of the Default and
the Company does not cure the Default
within 30 days after receipt of the
notice. The notice must specify the
Default, demand that it be remedied
and state that the notice is a
"Notice of Default."
In the case of any Event of
Default pursuant to the provisions of
this Section 6.01 occurring by reason
of any willful action (or inaction)
taken (or not taken) by or on behalf
of the Company with the intention of
avoiding payment of the premium that
the Company would have had to pay if
the Company then had elected to
redeem the Notes pursuant to
Section 3.07 hereof, an equivalent
premium shall also become and be
immediately due and payable to the
extent permitted by law upon the
acceleration of the Notes, anything
in this Indenture or in the Notes to
the contrary notwithstanding. If an
Event of Default occurs prior to
July 15, 2001 by reason of any
willful action (or inaction) taken
(or not taken) by or on behalf of the
Company with the intention of
avoiding the prohibition on
redemption of the Notes prior to July
15, 2001, then the premium payable
for purposes of this paragraph for
each of the years beginning on July
15 of the years set forth below shall
be as set forth in the following
table expressed as a percentage of
the amount that would otherwise be
due but for the provisions of this
sentence, plus accrued interest and
Liquidated Damages, if any, to the
date of payment:
Year Percentage
1995 115.625%
1996 114.063%
1997 112.500%
1998 110.938%
1999 109.375%
2000 107.813%
Section 6.02. Acceleration.
If an Event of Default
(other than an Event of Default
specified in clauses (8) and (9) of
Section 6.01) relating to the Company
or any Restricted Subsidiary occurs
and is continuing, the Trustee by
notice to the Company, or the Holders
of at least 25% in principal amount
of the then outstanding Notes by
written notice to the Company and the
Trustee may declare the unpaid
principal amount of, any accrued
interest on and any Liquidated
Damages due in respect of all the
Notes to be due and payable
immediately. Upon such declaration
the principal, interest and
Liquidated Damages shall be due and
payable immediately (together with
the premium referred to in Section
6.01, if applicable). If any Event
of Default specified in clause (8) or
(9) of Section 6.01 relating to the
Company, any Restricted Subsidiary
that would constitute a Significant
Subsidiary or any group of Restricted
Subsidiaries that, taken together,
would constitute a Significant
Subsidiary occurs, such an amount
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.
The Holders of a majority in
principal amount of the then
outstanding Notes by written notice
to the Trustee may rescind an
acceleration and its consequences if
the rescission would not conflict
with any judgment or decree and if
all existing Events of Default
(except nonpayment of principal,
interest or Liquidated Damages that
has become due solely because of the
acceleration) have been cured or
waived.
Section 6.03. Other Remedies.
If an Event of Default
occurs and is continuing, the Trustee
may pursue any available remedy to
collect the payment of principal,
premium and Liquidated Damages, if
any, and 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. A delay or omission by
the Trustee or any Holder of a Note
in exercising any right or remedy
accruing upon an Event of Default
shall not impair the right or remedy
or constitute a waiver of or acquies
cence in the Event of Default. All
remedies are cumulative to the extent
permitted by law.
Section 6.04. Waiver of Past
Defaults.
The Holders of not less
than a majority in aggregate
principal amount of the Notes then
outstanding by written notice to the
Trustee may on behalf of the Holders
of all of the Notes waive any
existing Default or Event of Default
and its consequences hereunder except
a continuing Default or Event of
Default in the payment of the
principal of or premium, interest or
Liquidated Damages on the Notes
(including in connection with an
offer to purchase) (provided,
however, that the Holders of a
majority in aggregate principal
amount of the then outstanding Notes
may rescind an acceleration and its
consequences, including any related
payment default that resulted from
such acceleration). Upon any such
waiver, such Default shall cease to
exist, and any Event of Default
arising therefrom shall be deemed to
have been cured for every purpose of
this Indenture; but no such waiver
shall extend to any subsequent or
other Default or impair any right
consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in
principal amount of the then
outstanding Notes may direct in
writing the time, method and place of
conducting any proceeding for
exercising any remedy available to
the Trustee or exercising any trust
or power conferred on it. However,
the Trustee may refuse to follow any
direction that conflicts with law or
this Indenture that the Trustee
determines may be unduly prejudicial
to the rights of other Holders of
Notes or that may involve the Trustee
in personal liability. The Trustee
may take any other action deemed
proper by the Trustee which is not
inconsistent with such direction.
Section 6.06. Limitation on Suits.
A Holder of a Note may
pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note
gives to the Trustee written
notice of a continuing Event of
Default;
(b) the Holders of at least
25% in principal amount of the
then outstanding Notes make a
written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or
Holders of Notes offer and, if
requested, provide to the Trustee
indemnity satisfactory to the
Trustee against any loss,
liability or expense;
(d) the Trustee does not
comply with the request within 60
days after receipt of the request
and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day
period the Holders of a majority
in principal amount of the then
outstanding Notes do not give the
Trustee a direction inconsistent
with the request.
A Holder of a Note may not
use this Indenture to prejudice the
rights of another Holder of a Note or
to obtain a preference or priority
over another Holder of a Note.
Section 6.07. Rights of Holders of
Notes to Receive Payment.
Notwithstanding any other
provision of this Indenture, the
right of any Holder of a Note to
receive payment of principal, premium
and Liquidated Damages, if any, and
interest on the Note, on or after the
respective due dates expressed in the
Note (including in connection with an
offer to purchase), or to bring suit
for the enforcement of any such
payment on or after such respective
dates, shall not be impaired or
affected without the consent of such
Holder.
Section 6.08. Collection Suit by
Trustee.
If an Event of Default
specified in Section 6.01(1) or (2)
occurs and is continuing, the Trustee
is authorized to recover judgment in
its own name and as trustee of an
express trust against the Company or
any Guarantor for the whole amount of
principal of and premium, interest
and Liquidated Damages, if any,
remaining unpaid on the Notes and
interest on overdue principal and, to
the extent lawful, interest and such
further amount as shall be sufficient
to cover the costs and expenses of
collection, including the reasonable
compensation, expenses, disbursements
and advances of the Trustee, its
agents and counsel.
Section 6.09. Trustee May File
Proofs of Claim.
The Trustee is authorized
to file such proofs of claim and
other papers or documents as may be
necessary or advisable in order to
have the claims of the Trustee
(including any claim for the
reasonable compensation, expenses,
disbursements and advances of the
Trustee, its agents and counsel) and
the Holders of the Notes allowed in
any judicial proceedings relative to
the Company or any of the Guarantors
(or any other obligor upon the Notes
), its creditors or its property and
shall be entitled and empowered to
collect, receive and distribute any
money or other property payable or
deliverable on any such claims and
any custodian in any such judicial
proceeding is hereby authorized by
each Holder to make such payments to
the Trustee, and in the event that
the Trustee shall consent to the
making of such payments directly to
the Holders, to pay to the Trustee
any amount due to it for the
reasonable compensation, expenses,
disbursements and advances of the
Trustee, its agents and counsel, and
any other amounts due the Trustee
under Section 7.07 hereof. To the
extent that the payment of any such
compensation, expenses, disbursements
and advances of the Trustee, its
agents and counsel, and any other
amounts due the Trustee under Section
7.07 hereof out of the estate in any
such proceeding, shall be denied for
any reason, payment of the same shall
be secured by a Lien on, and shall be
paid out of, any and all
distributions, dividends, money,
securities and other properties that
the Holders may be entitled to
receive in such proceeding whether in
liquidation or under any plan of
reorganization or arrangement or
otherwise. Nothing herein contained
shall be deemed to authorize the
Trustee to authorize or consent to or
accept or adopt on behalf of any
Holder any plan of reorganization,
arrangement, adjustment or
composition affecting the Notes or
the rights of any Holder, 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 property pursuant to this
Article, it shall pay out the money
or property in the following order:
First: to the Trustee and
the Collateral Agent and each of its
agents and attorneys for amounts due
under Section 7.07 hereof and under
the Pledge and Disbursement
Agreement, including payment of all
compensation, expense and liabilities
incurred, and all advances made, by
the Trustee and the costs and
expenses of collection;
Second: to Holders of
Notes for amounts due and unpaid on
the Notes for principal and premium,
interest and Liquidated Damages, if
any, ratably, without preference or
priority of any kind, according to
the amounts due and payable on the
Notes for principal, premium and
Liquidated Damages, if any and
interest, respectively; and
Third: to the Company or
to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a
record date and payment date for any
payment to Holders of Notes 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 a Trustee,
a court in its discretion may require
the filing by any party litigant in
the suit of an undertaking to pay the
costs of the suit, and the court in
its discretion may assess reasonable
costs, including reasonable
attorneys' fees, against any party
litigant in the suit, having due
regard to the merits and good faith
of the claims or defenses made by the
party litigant. This Section does
not apply to a suit by the Trustee, a
suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by
Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default
has occurred and is continuing, the
Trustee shall exercise such of the
rights and powers vested in it by
this Indenture, and use the same
degree of care and skill in its
exercise, as a prudent man would
exercise or use under the circum
stances in the conduct of his own
affairs.
(b) Except during the
continuance of an Event of Default:
(i) the duties of the
Trustee shall be determined solely
by the express provisions of this
Indenture and the Trustee need
perform only those duties that are
specifically set forth in this
Indenture and no others, and no
implied covenants or obligations
shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad
faith on its part, the Trustee may
conclusively rely, as to the truth
of the statements and the
correctness of the opinions
expressed therein, upon
certificates or opinions furnished
to the Trustee and conforming to
the requirements of this
Indenture. However, the Trustee
shall examine the certificates and
opinions to determine whether or
not they conform to the
requirements of this Indenture.
(c) The Trustee may not be
relieved from liabilities for its own
negligent action, its own negligent
failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not
limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be
liable for any error of judgment
made in good faith by a
Responsible Officer, unless it is
proved that the Trustee was
negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall
not be liable with respect to any
action it takes or omits to take
in good faith in accordance with a
direction received by it pursuant
to Section 6.05 hereof.
(d) Whether or not therein
expressly so provided, every
provision of this Indenture that in
any way relates to the Trustee is
subject to paragraphs (a), (b), and
(c) of this Section.
(e) No provision of this
Indenture shall require the Trustee
to expend or risk its own funds or
incur any liability. The Trustee
shall be under no obligation to
exercise any of its rights and powers
under this Indenture at the request
of any Holders, unless such Holders
shall have offered to the Trustee
security and indemnity satisfactory
to it against any loss, liability or
expense.
(f) The Trustee shall not
be liable for interest on any money
received by it except as the Trustee
may agree in writing with the
Company. Money held in trust by the
Trustee need not be segregated from
other funds except to the extent
required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely
upon any document believed by it to
be genuine and to have been signed or
presented by the proper Person. The
Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Trustee
acts or refrains from acting, it may
require an Officers' Certificate or
an Opinion of Counsel or both. The
Trustee shall not be liable for any
action it takes or omits to take in
good faith in reliance on such
Officers' Certificate or Opinion of
Counsel. The Trustee may consult
with counsel and the written advice
of such counsel or any Opinion of
Counsel shall be full and complete
authorization and protection from
liability in respect of any action
taken, suffered or omitted by it
hereunder in good faith and in
reliance thereon.
(c) The Trustee may act
through its attorneys and agents and
shall not be responsible for the
misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not
be liable for any action it takes or
omits to take in good faith that it
believes to be authorized or within
the rights or powers conferred upon
it by this Indenture.
(e) Unless otherwise
specifically provided in this
Indenture, any demand, request,
direction or notice from the Company
or any Guarantor shall be sufficient
if signed by an Officer of the
Company or such Guarantor.
(f) 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.
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 the
Company, the Guarantors or any
Affiliate of the Company with the
same rights it would have if it were
not Trustee. However, in the event
that the Trustee acquires any
conflicting interest it must
eliminate such conflict within 90
days, apply to the SEC for permission
to continue as trustee or resign.
Any Agent may do the same with like
rights and duties. The Trustee is
also subject to Sections 7.10 and
7.11 hereof.
Section 7.04. Trustee's
Disclaimer.
The Trustee shall not be
responsible for and makes no
representation as to the validity or
adequacy of this Indenture, the Notes
or the Subsidiary Guarantees, it
shall not be accountable for the
Company's use of the proceeds from
the Notes or any money paid to the
Company or upon the Company's
direction under any provision of this
Indenture, it shall not be
responsible for the use or
application of any money received by
any Paying Agent other than the
Trustee, and it shall not be
responsible for any statement or
recital herein or any statement in
the Notes or any other document in
connection with the sale of the Notes
or pursuant to this Indenture other
than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of
Default occurs and is continuing and
if it is known to a Responsible
Officer of the Trustee, the Trustee
shall mail to Holders of Notes a
notice of the Default or Event of
Default within 90 days after it
occurs. Except in the case of a
Default or Event of Default in pay
ment of principal of, and premium,
interest or Liquidated Damages, if
any, on, any Note, the Trustee may
withhold the notice if and so long as
a committee of its Responsible
Officers in good faith determines
that withholding the notice is in the
interests of the Holders of the
Notes.
Section 7.06. Reports by Trustee
to Holders of the Notes.
Within 60 days after each
May 15 beginning with the May 15
following the date of this Indenture,
and for so long as Notes remain
outstanding, the Trustee shall mail
to the Holders of the Notes a brief
report dated as of such reporting
date that complies with TIA Section
313(a) (but if no event described in
TIA Section 313(a) has occurred
within the twelve months preceding
the reporting date, no report need be
transmitted). The Trustee also shall
comply with TIA Section 313(b)(2).
The Trustee shall also transmit by
mail all reports as required by TIA
Section 313(c).
A copy of each report at
the time of its mailing to the
Holders of Notes shall be mailed to
the Company and filed with the SEC
and each stock exchange on which the
Notes are listed in accordance with
TIA Section 313(d). The Company
shall promptly notify the Trustee
when the Notes are listed on any
stock exchange.
Section 7.07. Compensation and
Indemnity.
The Company and the
Guarantors shall pay to the Trustee
from time to time such compensation
for its acceptance of this Indenture
and services hereunder as the Company
and Trustee have separately agreed in
writing. The Trustee's compensation
shall not be limited by any law on
compensation of a trustee of an
express trust. The Company and the
Guarantors shall reimburse the
Trustee promptly upon request for all
reasonable disbursements, advances
and expenses incurred or made by it
in addition to the compensation for
its services. Such expenses shall
include the reasonable compensation,
disbursements and expenses of the
Trustee's agents and counsel.
The Company and the
Guarantors shall jointly and
severally indemnify the Trustee and
each of its officers, directors,
attorneys-in-fact and agents against
any and all losses, liabilities or
expenses incurred by it arising out
of or in connection with the
acceptance or administration of its
duties under this Indenture,
including the costs and expenses of
enforcing this Indenture against the
Company and the Guarantors (including
this Section 7.07) and defending
itself against any claim (whether
asserted by the Company, the
Guarantors or any Holder or any other
person) or liability in connection
with the exercise or performance of
any of its powers or duties
hereunder, except to the extent any
such loss, liability or expense may
be attributable to its negligence,
willful misconduct or bad faith. The
Trustee shall notify the Company and
the Guarantors promptly of any claim
for which it may seek indemnity.
Failure by the Trustee to so notify
the Company and the Guarantors shall
not relieve the Company and the
Guarantors of their obligations
hereunder. The Company and the
Guarantors shall defend the claim and
the Trustee shall cooperate in the
defense. The Trustee may have
separate counsel and the Company and
the Guarantors shall pay the
reasonable fees and expenses of such
counsel. The Company and the
Guarantors need not pay for any
settlement made without their
consent, which consent shall not be
unreasonably withheld.
The obligations of the
Company and the Guarantors under this
Section 7.07 shall survive the
satisfaction and discharge of this
Indenture.
To secure the Company's and
the Guarantors' payment obligations
in this Section, the Trustee shall
have a Lien prior to the Notes on all
money or property held or collected
by the Trustee, except that held in
trust to pay principal and interest
on particular Notes. Such Lien shall
survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs
expenses or renders services after an
Event of Default specified in
Section 6.01(8) or (9) hereof occurs,
the expenses and the compensation for
the services (including the fees and
expenses of its agents and counsel)
are intended to constitute expenses
of administration under any
Bankruptcy Law.
The Trustee shall comply
with the provisions of TIA
Section 313(b)(2) to the extent
applicable.
The Company's obligations
under this Section 7.07 and any lien
arising hereunder shall survive the
resignation or removal of the
Trustee, the discharge of the
Company's obligations pursuant to
Article 8 of this Indenture and any
rejection or termination of this
Indenture under Bankruptcy Law.
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.
The Trustee may resign in
writing at any time and be discharged
from the trust hereby created by so
notifying the Company. The Holders
of a majority in principal amount of
the then outstanding Notes may remove
the Trustee by so notifying the
Trustee and the Company in writing.
The Company may remove the Trustee
if:
(a) the Trustee fails to
comply with Section 7.10 hereof;
(b) the Trustee is adjudged
a bankrupt or an insolvent or an
order for relief is entered with
respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public
officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes
incapable of acting.
If the Trustee resigns or
is removed or if a vacancy exists in
the office of Trustee for any reason,
the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does
not take office within 60 days after
the retiring Trustee resigns or is
removed, the retiring Trustee, the
Company, or the Holders of at least
10% in principal amount of the then
outstanding Notes may petition any
court of competent jurisdiction for
the appointment of a successor
Trustee.
If the Trustee, after
written request by any Holder of a
Note who has been a Holder of a Note
for at least six months, fails to
comply with Section 7.10, such Holder
of a Note may petition any court of
competent jurisdiction for the
removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall
deliver a written acceptance of its
appointment to the retiring Trustee
and to the Company. Thereupon, the
resignation or removal of the
retiring Trustee shall become
effective, and the successor Trustee
shall have all the rights, powers and
duties of the Trustee under this
Indenture. The successor Trustee
shall mail a notice of its succession
to Holders of the Notes. The
retiring Trustee shall promptly
transfer all property held by it as
Trustee to the successor Trustee,
provided all sums owing to the
Trustee hereunder have been paid and
subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant
to this Section 7.08, the Company's
obligations under Section 7.07 hereof
shall continue for the benefit of the
retiring Trustee.
Section 7.09. Successor Trustee by
Merger, etc.
If the Trustee
consolidates, merges or converts
into, or transfers all or
substantially all of its corporate
trust business to, another
corporation, the successor corpora
tion without any further act shall be
the successor Trustee.
Section 7.10. Eligibility;
Disqualification.
There shall at all times be
a Trustee hereunder that is a
corporation organized and doing
business under the laws of the United
States of America or of any state
thereof that is authorized under such
laws to exercise corporate trustee
power, that is subject to supervision
or examination by federal or state
authorities and that has a combined
capital and surplus of at least $25
million as set forth in its most
recent published annual report of
condition.
This Indenture shall always
have a Trustee who satisfies the
requirements of TIA
Section 310(a)(1), (2) and (5). The
Trustee is subject to TIA
Section 310(b).
Section 7.11. Preferential
Collection of Claims
Against Company.
The Trustee is subject to
TIA Section 311(a), excluding any
creditor relationship listed in TIA
Section 311(b). A Trustee who has
resigned or been removed shall be
subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT
DEFEASANCE
Section 8.01. Option to Effect
Legal Defeasance or
Covenant Defeasance.
The Company may, at the
option of its Board of Directors
evidenced by a resolution set forth
in an Officers' Certificate, at any
time, elect to have either Section
8.02 or 8.03 hereof be applied to all
outstanding Notes upon compliance
with the conditions set forth below
in this Article 8.
Section 8.02. Legal Defeasance and
Discharge.
Upon the Company's exercise
under Section 8.01 hereof of the
option applicable to this Section
8.02, the Company and the Guarantors
shall, subject to the satisfaction of
the conditions set forth in Section
8.04 hereof, be deemed to have been
discharged from their obligations
with respect to all outstanding Notes
and Subsidiary Guarantees on the date
the conditions set forth below are
satisfied (hereinafter, "Legal
Defeasance"). For this purpose,
Legal Defeasance means that the
Company shall be deemed to have paid
and discharged the entire
Indebtedness represented by the
outstanding Notes, which shall
thereafter be deemed to be
"outstanding" only for the purposes
of Section 8.05 hereof and the other
Sections of this Indenture referred
to in (a) and (b) below, and to have
satisfied all its other obligations
under such Notes and this Indenture
(and the Trustee, on demand of and at
the expense of the Company, shall
execute proper instruments
acknowledging the same), except for
the following provisions which shall
survive until otherwise terminated or
discharged hereunder: (a) the rights
of Holders of outstanding Notes to
receive payments in respect of the
principal of and premium, interest
and Liquidated Damages, if any, on
such Notes when such payments are due
solely from the trust fund described
in Section 8.04 hereof, and as more
fully set forth in such Section,
(b) the Company's obligations with
respect to such Notes under Article 2
and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and
immunities of the Trustee hereunder
and the Company's obligations in
connection therewith and (d) this
Article 8. Subject to compliance
with this Article 8, the Company may
exercise its option under this
Section 8.02 notwithstanding the
prior exercise of its option under
Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise
under Section 8.01 hereof of the
option applicable to this Section
8.03, the Company and the Guarantors
shall, subject to the satisfaction of
the conditions set forth in Section
8.04 hereof, be released from their
obligations under the covenants
contained in Sections 4.03, 4.04,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.15, 4.16, 4.17, 4.18 and 5.01
hereof with respect to the
outstanding Notes on and after the
date the conditions set forth below
are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall
thereafter be deemed not
"outstanding" for the purposes of any
direction, waiver, consent or
declaration or act of Holders (and
the consequences of any thereof) in
connection with such covenants, but
shall continue to be deemed
"outstanding" for all other purposes
hereunder (it being understood that
such Notes shall not be deemed
outstanding for accounting purposes).
For this purpose, Covenant Defeasance
means that, with respect to the
outstanding Notes, the Company may
omit to comply with and shall have no
liability in respect of any term,
condition or limitation set forth in
any such covenant, whether directly
or indirectly, by reason of any
reference elsewhere herein to any
such covenant or by reason of any
reference in any such covenant to any
other provision herein or in any
other document and such omission to
comply shall not constitute a Default
or an Event of Default under Section
6.01 hereof, but, except as specified
above, the remainder of this
Indenture and such Notes shall be
unaffected thereby. In addition,
upon the Company's exercise under
Section 8.01 hereof of the option
applicable to this Section 8.03
hereof, subject to the satisfaction
of the conditions set forth in
Section 8.04 hereof, Sections 6.01(4)
through 6.01(7) hereof shall not
constitute Events of Default.
Section 8.04. Conditions to Legal
or Covenant Defeasance.
The following shall be the
conditions to the application of
either Section 8.02 or 8.03 hereof to
the outstanding Notes:
In order to exercise either
Legal Defeasance or Covenant
Defeasance:
(a) the Company
must irrevocably deposit with
the Trustee, in trust, for the
benefit of the Holders, cash in
United States dollars,
non-callable Government
Securities, or a combination
thereof, in such amounts as
will be sufficient, without
reinvestment, in the opinion of
a nationally recognized firm of
independent public accountants,
to pay the principal of and
premium, interest and
Liquidated Damages, if any, on
the outstanding Notes on the
stated maturity or on the
applicable redemption date, as
the case may be, and the
Company must specify whether
the Notes are being defeased to
maturity or to a particular
redemption date;
(b) in the case
of an election under Section
8.02 hereof, the Company shall
have delivered to the Trustee
an Opinion of Counsel in the
United States reasonably
acceptable to the Trustee
confirming that (A) the Company
has received from, or there has
been published by, the Internal
Revenue Service a ruling or (B)
since the date of this
Indenture, there has been a
change in the applicable
federal income tax law, in
either case to the effect that,
and based thereon such Opinion
of Counsel shall confirm that,
the Holders of the outstanding
Notes will not recognize
income, gain or loss for
federal income tax purposes as
a result of such Legal
Defeasance and will be subject
to federal income tax on the
same amounts, in the same
manner and at the same times as
would have been the case if
such Legal Defeasance had not
occurred;
(c) in the case
of an election under Section
8.03 hereof, the Company shall
have delivered to the Trustee
an Opinion of Counsel in the
United States reasonably
acceptable to the Trustee
confirming that the Holders of
the outstanding Notes will not
recognize income, gain or loss
for federal income tax purposes
as a result of such Covenant
Defeasance and will be subject
to federal income tax on the
same amounts, in the same
manner and at the same times as
would have been the case if
such Covenant Defeasance had
not occurred;
(d) no Default
or Event of Default shall have
occurred and be continuing on
the date of such deposit (other
than a Default or Event of
Default resulting from the
borrowing of funds to be
applied to such deposit) or
insofar as Sections 6.01(8) or
6.01(9) hereof is concerned, at
any time in the period ending
on the 91st day after the date
of deposit;
(e) such Legal
Defeasance or Covenant
Defeasance shall not result in
a breach or violation of, or
constitute a default under, any
material agreement or
instrument (other than this
Indenture) to which the Company
or any of its Subsidiaries is a
party or by which the Company
or any of its Subsidiaries is
bound;
(f) the Company
shall have delivered to the
Trustee an opinion of counsel
to the effect that after the
91st day following the deposit,
the trust funds will not be
subject to the effect of any
applicable bankruptcy,
insolvency, reorganization or
similar laws affecting
creditors' rights generally;
(g) the Company
shall have delivered to the
Trustee an Officers'
Certificate stating that the
deposit was not made by the
Company with the intent of
preferring the Holders of Notes
over the other creditors of the
Company with the intent of
defeating, hindering, delaying
or defrauding creditors of the
Company or others; and
(h) the Company
shall have delivered to the
Trustee an Officers'
Certificate and an Opinion of
Counsel, each stating that all
conditions precedent provided
for or relating to the Legal
Defeasance or the Covenant
Defeasance have been complied
with.
Section 8.05. Deposited Money and
Government Securities to
be Held in Trust; Other
Miscellaneous Provisions.
Subject to Section 8.06
hereof, all money and non-callable
Government Securities (including the
proceeds thereof) deposited with the
Trustee (or other qualifying trustee,
collectively for purposes of this
Section 8.05, the "Trustee") pursuant
to Section 8.04 hereof in respect of
the outstanding Notes shall be held
in trust and applied by the Trustee,
in accordance with the provisions of
such Notes and this Indenture, to the
payment, either directly or through
any Paying Agent (including the
Company acting as Paying Agent) as
the Trustee may determine, to the
Holders of such Notes of all sums due
and to become due thereon in respect
of principal, premium, interest and
Liquidated Damages, if any, but such
money need not be segregated from
other funds except to the extent
required by law.
The Company and the
Guarantors shall pay and indemnify
the Trustee against any tax, fee or
other charge imposed on or assessed
against the cash or non-callable
Government Securities deposited
pursuant to Section 8.04 hereof or
the principal and interest received
in respect thereof other than any
such tax, fee or other charge which
by law is for the account of the
Holders of the outstanding Notes.
Anything in this Article 8
to the contrary notwithstanding, the
Trustee shall deliver or pay to the
Company from time to time upon the
request of the Company any money or
non-callable Government Securities
held by it as provided in
Section 8.04 hereof which, in the
opinion of a nationally recognized
firm of independent public
accountants expressed in a written
certification thereof delivered to
the Trustee (which may be the opinion
delivered under Section 8.04(a)
hereof), are in excess of the amount
thereof that would then be required
to be deposited to effect an
equivalent Legal Defeasance or
Covenant Defeasance.
Section 8.06. Repayment to
Company.
Any money deposited with
the Trustee or any Paying Agent, or
then held by the Company, in trust
for the payment of the principal of,
premium or Liquidated Damages, if
any, or interest on any Note and
remaining unclaimed for two years
after such principal, and premium or
Liquidated Damages, if any, or
interest has become due and payable
shall be paid to the Company on its
request or (if then held by the
Company) shall be discharged from
such trust; and the Holder of such
Note shall thereafter, as a secured
creditor, look only to the Company
for payment thereof, and all
liability of the Trustee or such
Paying Agent with respect to such
trust money, and all liability of the
Company as trustee thereof, shall
thereupon cease; provided, however,
that the Trustee or such Paying
Agent, before being required to make
any such repayment, may at the
expense of the Company cause to be
published once, in the New York Times
and The Wall Street Journal (national
edition), notice that such money
remains unclaimed and that, after a
date specified therein, which shall
not be less than 30 days from the
date of such notification or
publication, any unclaimed balance of
such money then remaining will be
repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying
Agent is unable to apply any United
States dollars or non-callable
Government Securities in accordance
with Section 8.02 or 8.03 hereof, as
the case may be, by reason of any
order or judgment of any court or
governmental authority enjoining,
restraining or otherwise prohibiting
such application, then the
obligations of the Company and the
Guarantors under this Indenture, the
Notes and the Subsidiary Guarantees
shall be revived and reinstated as
though no deposit had occurred
pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee
or Paying Agent is permitted to apply
all such money in accordance with
Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that,
if the Company or any Guarantor makes
any payment of principal of, premium
or Liquidated Damages, if any, or
interest on any Note following the
reinstatement of its obligations, the
Company or such Guarantor shall be
subrogated to the rights of the
Holders of such Notes to receive such
payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of
Holders of Notes.
Notwithstanding Section
9.02 of this Indenture, the Company,
the Guarantors and the Trustee may
amend or supplement this Indenture or
the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity,
defect or inconsistency;
(b) to provide for
uncertificated Notes in addition
to or in place of Certificated
Notes;
(c) to provide for the
assumption of the Company's or any
Guarantor's obligations to the
Holders of the Notes in the case
of a merger or consolidation
pursuant to Article 5 or Article
11 hereof, as applicable;
(d) to provide for the
addition of a Guarantor pursuant
to Section 4.16 of this Indenture;
(e) to make any change that
would provide any additional
rights or benefits to the Holders
of the Notes or that does not
adversely affect the legal rights
hereunder of any Holder of the
Note; or
(f) to comply with
requirements of the SEC in order
to effect or maintain the
qualification of this Indenture
under the TIA.
Upon the request of the
Company accompanied by a resolution
of the Board of Directors of the
Company and each of the Guarantors,
as the case may be, authorizing the
execution of any such amended or
supplemental Indenture, and upon
receipt by the Trustee of the
documents described in Section 7.02
hereof, the Trustee shall join with
the Company and the Guarantors in the
execution of any amended or supple
mental Indenture authorized or
permitted by the terms of this
Indenture and to make any further
appropriate agreements and
stipulations that may be therein
contained, but the Trustee shall not
be obligated to enter into such
amended or supplemental Indenture
that affects its own rights, duties
or immunities under this Indenture or
otherwise.
Section 9.02. With Consent of
Holders of Notes.
Except as provided below in
this Section 9.02, the Company, the
Guarantors and the Trustee may amend
or supplement this Indenture
(including Sections 3.09, 4.10 and
4.15 hereof) and the Notes with the
consent of the Holders of at least a
majority in principal amount of the
Notes then outstanding (including
consents obtained in connection with
a tender offer or exchange offer for
the Notes), and, subject to Sections
6.04 and 6.07 hereof, any existing
Default or Event of Default (other
than a Default or Event of Default in
the payment of the principal of and
premium, interest and Liquidated
Damages, if any, on the Notes, except
a payment default resulting from an
acceleration that has been rescinded)
or compliance with any provision of
this Indenture or the Notes may be
waived with the consent of the
Holders of a majority in principal
amount of the then outstanding Notes
(including consents obtained in
connection with a tender offer or
exchange offer for the Notes).
Without the consent of at least 75%
in aggregate principal amount of the
Notes then outstanding (including
consents obtained in connection with
a tender offer or exchange offer for
such Notes), no waiver or amendment
to this Indenture may make any change
in the provisions of Article 10
hereof that adversely affects the
rights of any Holder of Notes.
Upon the request of the
Company accompanied by a resolution
of the Board of Directors of the
Company and each of the Guarantors,
as the case may be, authorizing the
execution of any such amended or
supplemental Indenture, and upon the
filing with the Trustee of evidence
satisfactory to the Trustee of the
consent of the Holders of Notes as
aforesaid, and upon receipt by the
Trustee of the documents described in
Section 7.02 hereof, the Trustee
shall join with the Company and the
Guarantors in the execution of such
amended or supplemental Indenture
unless such amended or supplemental
Indenture affects the Trustee's own
rights, duties or immunities under
this Indenture or otherwise, in which
case the Trustee may in its
discretion, but shall not be
obligated to, enter into such amended
or supplemental Indenture.
It shall not be necessary
for the consent of the Holders of
Notes under this Section 9.02 to
approve the particular form of any
proposed amendment or waiver, but it
shall be sufficient if such consent
approves the substance thereof.
After an amendment,
supplement or waiver under this
Section becomes effective, the
Company shall mail to the Holders of
Notes affected thereby a notice
briefly describing the amendment,
supplement or waiver. Any failure of
the Company to mail such notice, or
any defect therein, shall not,
however, in any way impair or affect
the validity of any such amended or
supplemental Indenture or waiver.
Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in
aggregate principal amount of the
Notes then outstanding may waive
compliance in a particular instance
by the Company or any Guarantor with
any provision of this Indenture or
the Notes. However, without the
consent of each Holder affected, an
amendment or waiver may not (with
respect to any Notes held by a non-
consenting Holder):
(a) reduce the
principal amount of Notes whose
Holders must consent to an
amendment, supplement or
waiver;
(b) reduce the
principal of or change the
fixed maturity of any Note or
alter the provisions with
respect to the redemption of
the Notes (except as provided
above with respect to Sections
4.10 and 4.15 hereof);
(c) reduce the rate
of or change the time for
payment of interest or
Liquidated Damages on any Note;
(d) waive a Default
or Event of Default in the
payment of principal of or
premium interest or Liquidated
Damages on the Notes (except a
rescission of acceleration of
the Notes by the Holders of at
least a majority in aggregate
principal amount of the Notes
and a waiver of the payment
default that resulted from such
acceleration);
(e) make any Note
payable in money other than
that stated in the Notes;
(f) make any change
in the provisions of this
Indenture relating to waivers
of past Defaults or the rights
of Holders of Notes to receive
payments of principal of or
premium, interest or Liquidated
Damages on the Notes;
(g) waive a
redemption payment with respect
to any Note (except as provided
above with respect to Sections
4.10 and 4.15 hereof);
(h) make any change
in the foregoing amendment and
waiver provisions.
Section 9.03. Compliance with
Trust Indenture Act.
Every amendment or
supplement to this Indenture or the
Notes shall be set forth in a amended
or supplemental Indenture that
complies with the TIA as then in
effect.
Section 9.04. Revocation and
Effect of Consents.
Until an amendment,
supplement or waiver becomes
effective, a consent to it by a
Holder of a Note is a continuing
consent by the Holder of a Note and
every subsequent Holder of a Note or
portion of a Note that evidences the
same debt as the consenting Holder's
Note, even if notation of the consent
is not made on any Note. However,
any such Holder of a Note or
subsequent Holder of a Note may
revoke the consent as to its Note if
the Trustee receives written notice
of revocation before the date the
waiver, supplement or amendment
becomes effective. An amendment,
supplement or waiver becomes
effective in accordance with its
terms and thereafter binds every
Holder.
Section 9.05. Notation on or
Exchange of Notes.
The Trustee may place an
appropriate notation about an
amendment, supplement or waiver on
any Note thereafter authenticated.
The Company in exchange for all Notes
may issue and the Trustee shall
authenticate new Notes that reflect
the amendment, supplement or waiver.
Failure to make the
appropriate notation or issue a new
Note shall not affect the validity
and effect of such amendment,
supplement or waiver.
Section 9.06. Trustee to Sign
Amendments, etc.
The Trustee shall sign any
amended or supplemental Indenture
authorized pursuant to this Article
Nine if the amendment or supplement
does not adversely affect the rights,
duties, liabilities or immunities of
the Trustee. Neither the Company nor
any Guarantor may sign an amendment
or supplemental indenture until its
respective Board of Directors
approves it. In executing any
amended or supplemental indenture,
the Trustee shall be entitled to
receive and (subject to Section 7.01)
shall be fully protected in relying
upon, an Officer's Certificate and an
Opinion of Counsel stating that the
execution of such amended or
supplemental indenture is authorized
or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to
Subordinate.
The Company agrees, and
each Holder of Notes by accepting a
Note agrees, that the Subordinated
Obligations (as defined in Section
10.02) are subordinated in right of
payment, to the extent and in the
manner provided in this Article, to
the prior payment in full in cash of
all Obligations with respect to
Senior Debt of the Company (whether
outstanding on the date hereof or
hereafter created, incurred, assumed
or guaranteed), and that the
subordination is for the benefit of
the holders of Senior Debt.
Section 10.02. Certain Definitions.
"Bank Lenders" means the
lenders and creditors under the Bank
Credit Agreements.
"Insolvency or Liquidation
Proceeding" means, with respect to
any Person, (i) any insolvency or
bankruptcy or similar case or
proceeding, or any reorganization,
receivership, liquidation,
dissolution or winding up of such
person, whether voluntary or
involuntary, or (ii) any assignment
for the benefit of creditors or any
other marshalling of assets and
liabilities of such Person.
"Post-Petition Interest"
means, with respect to any
Indebtedness of any Person, all
interest accrued or accruing on such
Indebtedness after the commencement
of any Insolvency or Liquidation
Proceeding against such Person in
accordance with and at the contract
rate (including, without limitation,
any rate applicable upon default)
specified in the agreement or
instrument creating, evidencing or
governing such Indebtedness, whether
or not, pursuant to applicable law or
otherwise, the claim for such
interest is allowed as a claim in
such Insolvency or Liquidation
proceeding.
"Representative" means,
with respect to any Senior Debt, the
agent or other representative(s), if
any, of holders of such Senior Debt.
"Senior Bank Debt" means
all Obligations outstanding under the
Bank Credit Agreements.
"Stock Collateral" means
any Equity Interests in any
Subsidiary of the Company.
"Subordinated Obligations"
means all Indebtedness and other
Obligations of the Company or any of
its Subsidiaries, contingent or
otherwise, now or hereafter existing
under or in respect of the Notes
(pursuant to the terms thereof or any
other agreement or instrument
relating thereto) or this Indenture,
other than (i) the making of the
interest payment payable on July 15,
1997 from the Pledge Account pursuant
to the terms of the Pledge and
Disbursement Agreement and (ii)
payments and other distributions made
from any defeasance trust created
pursuant to Article 8 hereof, which
obligations, in each case, shall not
constitute Subordinated Obligations.
Section 10.03. Liquidation;
Dissolution; Bankruptcy.
Upon any distribution of
cash, securities or other property to
creditors of the Company in a
liquidation or dissolution of the
Company or in a bankruptcy,
reorganization, insolvency,
receivership or similar proceeding
relating to the Company or its
property, in an assignment for the
benefit of creditors or any
marshalling of the Company's assets
and liabilities;
(1) holders of
Senior Debt of the Company
shall be entitled to receive
payment in full in cash of all
Obligations due in respect of
such Senior Debt before Holders
of the Notes shall be entitled
to receive any payment with
respect to the Notes (except
that Holders may receive (i)
the interest payment payable on
July 15, 1997 from the Pledge
Account pursuant to the Pledge
and Disbursement Agreement,
(ii) securities that are
subordinated to at least the
same extent as the Notes to (a)
Senior Debt of the Company and
(b) any securities issued in
exchange for Senior Debt of the
Company and (iii) payments and
other distributions made from
any defeasance trust created
pursuant to Article 8 hereof);
and
(2) until all
Obligations with respect to
Senior Debt of the Company (as
provided in subsection (1)
above) are paid in full in
cash, any distribution to which
Holders of Notes would be
entitled but for this Article
shall be made to holders of
such Senior Debt (except that
Holders may receive (i) the
interest payment payable on
July 15, 1997 from the Pledge
Account pursuant to the Pledge
and Disbursement Agreement,
(ii) securities that are
subordinated to at least the
same extent as the Notes to (a)
Senior Debt of the Company and
(b) any securities issued in
exchange for Senior Debt of the
Company and (iii) payments and
other distributions made from
any defeasance trust created
pursuant to Article 8 hereof),
as their interests may appear.
Section 10.04. Default on Senior
Debt; No Stock Collateral.
The Company may not make
any payment or distribution to the
Trustee or any Holder in respect of
Obligations with respect to the Notes
and may not acquire from the Trustee
or any Holder any Notes for cash or
property (other than (i) the interest
payment payable on July 15, 1997 from
the Pledge Account, (ii) securities
that are subordinated to at least the
same extent as the Notes to (a)
Senior Debt of the Company and (b)
any securities issued in exchange for
Senior Debt of the Company and (iii)
payments and other distributions made
from any defeasance trust created
pursuant to Article 8 hereof) until
all principal and other Obligations
with respect to such Senior Debt have
been paid in full in cash if:
(i) a default in the
payment of the principal of or
premium or interest on Senior
Debt of the Company occurs and
in continuing; or
(ii) a default, other
than a payment default, under
the agreement, indenture, or
other document governing
Designated Senior Debt occurs
and is continuing that permits
holders of the Designated
Senior Debt as to which such
default relates to accelerate
its maturity and the Trustee
receives a notice of such
default (a "Payment Blockage
Notice") from the Senior Agent.
If the Trustee receives any
such Payment Blockage Notice,
no subsequent Payment Blockage
Notice shall be effective for
purposes of this Section unless
until at least 360 days shall
have elapsed since the
effectiveness of the
immediately prior Payment
Blockage Notice. No nonpayment
default that existed or was
continuing on the date of
delivery of any Payment
Blockage Notice to the Trustee
shall be, or made, the basis
for a subsequent Payment
Blockage Notice.
The Company may and shall
resume payments on and distributions
in respect of the Notes and it may
acquire them upon:
(1) in the case of a
default referred to in Section
10.04(i) hereof, the date upon
which such default is cured or
waived, or
(2) in the case of a
default referred to in Section
10.04(ii) hereof, the earlier
of the date upon which the
default is cured or waived or
179 days after the date on
which the applicable Payment
Blockage Notice is received,
unless the maturity of such
Senior Debt has been
accelerated,
if this Article otherwise permits the
payment, distribution or acquisition
at the time of such payment or
acquisition.
The Company agrees that it
will not, directly or indirectly,
transfer or pledge or grant any
security interests in any Stock
Collateral for any of the
Subordinated Obligations, and the
Trustee and the Holders agree that
neither the Trustee nor any Holder
will demand or accept any such Stock
Collateral, and should any transfer
or pledge of or security interest in
any Stock Collateral at any time be
made to or received by the Trustee or
any such Holder, such Stock
Collateral shall be held for the
benefit of the holders of Senior Debt
of the Company and, upon request,
delivered and transferred to the
Senior Agent for the benefit of the
holders of such Senior Debt.
Section 10.05. Acceleration of Notes.
If payment of the Notes is
accelerated because of an Event of
Default, the Company shall promptly
notify holders of Senior Debt of the
Company of the acceleration.
Section 10.06. When Distribution Must
Be Paid Over.
In the event that the
Trustee or any Holder of Notes
receives any payment of any
Obligations with respect to the Notes
at a time when a Responsible Officer
of the Trustee or such Holder, as
applicable, has actual knowledge that
such payment is prohibited by Section
10.04 hereof, such payment shall be
held by the Trustee or such Holder,
in trust for the benefit of, and
shall be paid forthwith over and
delivered, upon written request, to
the holders of Senior Debt of the
Company as their interests may appear
under the indenture or other
agreement (if any) pursuant to which
such Senior Debt may have been
issued, as their respective interests
may appear as set forth in a writing
provided to the Trustee and consented
to by all Representatives of the
holders of Senior Debt of the
Company, for application to the
payment of all Obligations with
respect to such Senior Debt remaining
unpaid to the extent necessary to pay
such Obligations in full in
accordance with their terms, after
giving affect to any concurrent
payment or distribution to or for the
holders of such Senior Debt.
With respect to the holders
of Senior Debt of the Company, the
Trustee undertakes to perform only
such obligations on the part of the
Trustee as are specifically set forth
in this Article 10, and no implied
covenants or obligations with respect
to the holders of such Senior Debt
shall be read into this Indenture
against the Trustee. The Trustee
shall not be deemed to owe any
fiduciary duty to the holders of
Senior Debt of the Company, and shall
not be liable to any such holders if
the Trustee shall pay over or
distribute to or on behalf of Holders
of Notes of the Company or any other
Person money or assets to which any
holders of such Senior Debt shall be
entitled by virtue of this Article
10, except if such payment is made at
a time when a Responsible Officer has
actual knowledge that the terms of
this Article 10 prohibit such
payment.
Section 10.07. Notice.
The Company shall promptly
notify the Trustee and the Paying
Agent in writing of any facts known
to the Company that would cause a
payment of any Obligations with
respect to the Notes to violate this
Article, but failure to give such
notice shall not affect the
subordination of the Notes to the
Senior Debt of the Company as
provided in this Article.
Section 10.08. Subrogation.
After all Senior Debt of
the Company is paid in full in cash
and until the Notes are paid in full,
Holders of Notes shall be subrogated
(equally and ratably with all other
Indebtedness pari passu with the
Notes) to the rights of holders of
such Senior Debt to receive
distributions applicable to such
Senior Debt to the extent that
distributions otherwise payable to
the Holders have been applied to the
payment of such Senior Debt. A
distribution made under this Article
to holders of Senior Debt of the
Company that otherwise would have
been made to Holders of Notes is not,
as between the Company and Holders of
Notes, a payment by the Company on
the Notes.
Section 10.09. Relative Rights.
This Article defines the
relative rights of Holders of Notes
and holders of Senior Debt of the
Company. Nothing in this Indenture
shall:
(1) impair, as
between the Company and Holders
of Notes, the obligation of the
Company, which is absolute and
unconditional, to pay principal
of and premium, interest and
Liquidated Damages, if any, on
the Notes in accordance with
their terms;
(2) affect the
relative rights of Holders of
Notes and creditors of the
Company other than their rights
in relation to holders of such
Senior Debt; or
(3) prevent the
Trustee or any Holder of Notes
from exercising its available
remedies upon a Default or
Event of Default, subject to
the rights of holders of owners
of such Senior Debt to receive
distributions and payments
otherwise payable to Holders of
Notes.
If the Company fails
because of this Article to pay
principal of or premium, interest or
Liquidated Damages, if any, on a Note
on the due date, the failure is still
a Default or Event of Default.
Section 10.10. Subordination May Not
Be Impaired by Company.
(a) No right of any holder
of Senior Debt of the Company to
enforce the subordination of the
Indebtedness evidenced by the Notes
shall be impaired by any act or
failure to act by the Company or any
Holder or the failure of the Company
or any Holder to comply with this
Indenture.
(b) Without in any way
limiting Section 10.10(a), the
holders of any Senior Debt of the
Company may, at any time and from
time to time, without the consent of
or notice to any Holders, without
incurring any liabilities to any
Holder and without impairing or
releasing the subordination and other
benefits provided in this Indenture
or the Holders' obligations to the
holders of such Senior Debt, even if
any Holder's right of reimbursement
or subrogation or other right or
remedy is affected, impaired or
extinguished thereby, but subject to
the proviso contained in the first
sentence, and to the second sentence,
of the definition of "Senior Debt,"
do any one or more of the following:
(i) amend, renew, exchange, extend,
modify, increase or supplement in any
manner such Senior Debt or any
instrument evidencing or guaranteeing
or securing such Senior Debt or any
agreement under which such Senior
Debt is outstanding (including, but
not limited to, changing the manner,
place or terms of payment or changing
or extending the time of payment of,
or renewing, exchanging, amending,
increasing, releasing, terminating or
altering, (1) the terms of such
Senior Debt, (2) any security for, or
any guarantee of, such Senior Debt,
(3) any liability of any obligor on
such Senior Debt (including any
guarantor) or any liability incurred
in respect of such Senior Debt); (ii)
sell, exchange, release, surrender,
realize upon, enforce or otherwise
deal with in any manner and in any
order any property pledged, mortgaged
or otherwise securing such Senior
Debt or any liability of any obligor
thereon, to such holder, or any
liability incurred in respect
thereof; (iii) settle or compromise
any such Senior Debt or any other
liability of any obligor of such
Senior Debt to such holder or any
security therefor or any liability
incurred in respect thereof and apply
any sums by whomsoever paid and
however realized to any liability
(including, without limitation,
payment of any Senior Debt) in any
manner or order; and (iv) release,
terminate or otherwise cancel, or
fail to take or to record or
otherwise perfect, for any reason or
for no reason, any lien or security
interest securing such Senior Debt by
whomsoever granted, exercise or delay
in or refrain from exercising any
right or remedy against any obligor
or any guarantor or any other Person,
elect any remedy and otherwise deal
freely with any obligor and any
security for such Senior Debt or any
liability of any obligor to the
holders of such Senior Debt or any
liability incurred in respect to such
Senior Debt.
Section 10.11. Distribution or Notice
to Representative.
Whenever a distribution is
to be made or a notice given to
holders of Senior Debt of the
Company, the distribution may be made
and the notice given to their
Representative.
Upon any payment or
distribution of assets of the Company
referred to in this Article 10, the
Trustee and the Holders of Notes
shall be entitled to rely upon any
order or decree made by any court of
competent jurisdiction or upon any
certificate of such Representative or
of the liquidating trustee or agent
or other Person making any
distribution to the Trustee or to the
Holders of Notes for the purpose of
ascertaining the Persons entitled to
participate in such distribution, the
holders of the Senior Debt and other
Indebtedness of the Company, the
amount thereof or payable thereon,
the amount or amounts paid or
distributed thereon and all other
facts pertinent thereto or to this
Article 10.
Section 10.12. Rights of Trustee and
Paying Agent.
Neither the Trustee nor any
Paying Agent shall at any time be
charged with the knowledge of the
existence of any facts that would
prohibit the making of any payment to
or by the Trustee or Paying Agent
under this Article 10, unless and
until the Trustee or Paying Agent
shall have received written notice
thereof from the Company, the Senior
Agent, one or more holders of Senior
Debt of the Company or a
Representative of any holders of
Senior Debt of the Company; and,
prior to the receipt of any such
written notice, the Trustee or Paying
Agent shall be entitled to assume
conclusively that no such facts
exist. The Trustee shall be entitled
to rely on the delivery to it of
written notice by a Person
representing itself to be a holder of
Senior Debt (or a Representative
thereof) to establish that such
notice has been given. In the event
that the Trustee or Paying Agent
determines in good faith that further
evidence is required with respect to
the right of any Person as a holder
of Senior Debt to participate in any
payment or distribution pursuant to
this Article 10, the Trustee or
Paying Agent may request such Person
to furnish evidence to the reasonable
satisfaction of the Trustee or Paying
Agent as to the amount of Senior Debt
held by such Person, the extent to
which such Person is entitled to
participate in such payment or
distribution and any other facts
pertinent to the rights of such
Person under this Article 10, and if
such evidence is not furnished, the
Trustee or Paying Agent may defer any
payment to such Person pending
judicial determination as to the
right of such Person to receive such
payment. Only the Company, a
Representative or a holder of Senior
Debt of the Company that has no
Representative may give the notice.
Nothing in this Article 10 shall
impair the claims of, or payments to,
the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its
individual or any other capacity may
hold Senior Debt with the same rights
it would have if it were not Trustee.
Any Agent may do the same with like
rights.
Section 10.13. Authorization to
Effect Subordination.
Each Holder of Notes by the
Holder's acceptance thereof
authorizes and directs the Trustee on
the Holder's behalf to take such
action as may be necessary or
appropriate to effectuate the
subordination as provided in this
Article 10, and appoints the Trustee
to act as the Holder's attorney-in-
fact for any and all such purposes.
If the Trustee does not file a proper
proof of claim or proof of debt in
the form required in any proceeding
referred to in Section 6.09 hereof at
least 30 days before the expiration
of the time to file such claim, the
Senior Agent is hereby authorized to
file an appropriate claim for and on
behalf of the Holders of the Notes.
Section 10.14. Payment.
For all purposes of this
Article 10, a "payment or
distribution on account of
Subordinated Obligations" shall
include, without limitation, any
direct or indirect payment or
distribution on account of the
purchase, prepayment, redemption,
retirement, defeasance (other than
payments and other distributions made
from any defeasance trust created
pursuant to Article 8 hereof) or
acquisition of any Note, any recovery
by the exercise of any right of set-
off, any direct or indirect payment
of principal, premium or interest
with respect to or in connection with
any mandatory or optional redemption
or purchase provisions, any direct or
indirect payment or distribution
payable or distributable by reason of
any other Indebtedness or Obligation
being subordinated or any
Subordinated Obligations, and any
direct or indirect payment or
recovery on any claim (including
claims for Liquidated Damages)
relating to or arising out of this
Indenture, any Note or the issuance
of the Notes.
Section 10.15. Defeasance of this
Article 10.
The subordination of the
Notes provided by this Article 10 is
expressly made subject to the
provisions for defeasance in Article
8 hereof and, anything herein to the
contrary notwithstanding, upon the
effectiveness of any such defeasance
(provided that any deposit pursuant
to Article 8 was not prohibited by
this Article 10 or any other
instrument or agreement governing any
Senior Debt of the Company and did
not constitute a default under any
such instrument or agreement), the
Notes then outstanding shall
thereupon cease to be subordinated
pursuant to this Article 10;
provided, however, that if the
Company's obligations under this
Indenture and the Notes are revived
and reinstated in accordance with the
terms of Section 8.07 hereof, the
subordination provisions of this
Article 10 shall be revived and
reinstated with respect to all
Subordinated Obligations.
Section 10.16. No Claims Against
Subsidiaries.
The Company and the Holders
acknowledge and agree as follows:
(a) the Notes are an obligation of
the Company only, and the Holders
have and will have no claim, right or
demand against any Subsidiary of the
Company or any assets or properties
of any Subsidiary of the Company on
or in respect of the Notes except to
the extent that any Subsidiary is a
Guarantor; (b) the Company is, and is
capitalized as, a separate legal
entity such that any claim, right or
demand by the Holders with respect to
the assets and properties of any
Subsidiary of the Company would be
solely as a creditor of a direct or
indirect shareholder of such
Subsidiary except to the extent that
any Subsidiary is a Guarantor, and
that such arrangement has been relied
upon by and is for the benefit of
holders of Senior Debt of the Company
or any Guarantor; (c) the Company's
direct and indirect Subsidiaries have
no obligation to pay dividends to or
to make investments in the Company,
for the purpose of funding payment
obligations of the Company to the
Holders or otherwise; (d) the Bank
Credit Agreements permit Subsidiaries
of the Company to pay dividends to or
to make investments in the Company
only in limited amounts and under
specified circumstances; and (e) the
Bank Credit Agreements restrict the
amendment of this Indenture and the
Notes without the consent of certain
of the Bank Lenders.
Section 10.17. Amendments.
The provisions of this
Article 10 shall not be amended or
modified without the written consent
of the holders of all Senior Debt of
the Company.
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01. Subsidiary
Guarantees.
Each of the Guarantors
hereby, jointly and severally,
unconditionally guarantee to each
Holder of a Note authenticated and
delivered by the Trustee and to the
Trustee and its successors and
assigns, irrespective of the validity
and enforceability of this Indenture,
the Notes or the obligations of the
Company hereunder or thereunder,
that: (a) the principal of and
premium, interest and Liquidated
Damages, if any, on the Notes will be
promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest
on the overdue principal of, premium
and interest and Liquidated Damages
on the Notes, if any, if lawful, and
all other obligations of the Company
to the Holders or the Trustee
hereunder or thereunder will be
promptly paid in full or performed,
all in accordance with the terms
hereof and thereof; and (b) in case
of any extension of time of payment
or renewal of any Notes or any of
such other obligations, that same
will be promptly paid in full when
due or performed in accordance with
the terms of the extension or
renewal, whether at stated maturity,
by acceleration or otherwise.
Failing payment when due of any
amount so guaranteed or any perform
ance so guaranteed for whatever
reason, the Guarantors will be
jointly and severally obligated to
pay the same immediately. The
Guarantors hereby agree that their
obligations hereunder shall be
unconditional, irrespective of the
validity, regularity or
enforceability of the Notes or this
Indenture, the absence of any action
to enforce the same, any waiver or
consent by any Holder of the Notes
with respect to any provisions hereof
or thereof, the recovery of any
judgment against the Company, any
action to enforce the same or any
other circumstance which might
otherwise constitute a legal or
equitable discharge or defense of a
guarantor. Each Guarantor hereby
waives diligence, presentment, demand
of payment, filing of claims with a
court in the event of insolvency or
bankruptcy of the Company, any right
to require a proceeding first against
the Company, protest, notice and all
demands whatsoever and covenant that
this Subsidiary Guarantee will not be
discharged except by complete
performance of the obligations
contained in the Notes and this
Indenture. If any Holder of Notes or
the Trustee is required by any court
or otherwise to return to the Company
or Guarantors, or any Custodian,
trustee, liquidator or other similar
official acting in relation to either
the Company or Guarantors, any amount
paid by either to the Trustee or such
Holder, this Subsidiary Guarantee, to
the extent theretofore discharged,
shall be reinstated in full force and
effect. Each Guarantor agrees that
it shall not be entitled to any right
of subrogation in relation to the
Holders of Notes in respect of any
obligations guaranteed hereby until
payment in full of all obligations
guaranteed hereby. Each Guarantor
further agrees that, as between the
Guarantors, on the one hand, and the
Holders and the Trustee, on the other
hand, (x) the maturity of the
obligations guaranteed hereby may be
accelerated as provided in Article 6
for the purposes of this Subsidiary
Guarantee, notwithstanding any stay,
injunction or other prohibition
preventing such acceleration in
respect of the obligations guaranteed
hereby and (y) in the event of any
declaration of acceleration of such
obligations as provided in Article 6,
such obligations (whether or not due
and payable) shall forthwith become
due and payable by the Guarantors for
the purpose of this Subsidiary
Guarantee. The Guarantors shall have
the right to seek contribution from
any non-paying Guarantor so long as
the exercise of such right does not
impair the rights of the Holders
under the Subsidiary Guarantees.
Section 11.02. Execution and
Delivery of Subsidiary
Guarantees.
To evidence its Subsidiary
Guarantee set forth in Section 11.01,
each Guarantor hereby agrees that a
notation of such Subsidiary Guarantee
substantially in the form of
Exhibit D (executed by the manual or
facsimile signature of one of its
Officers) shall be endorsed by an
officer of such Guarantor on each
Note authenticated and delivered by
the Trustee and that this Indenture
shall be executed on behalf of such
Guarantor by its President or one of
its Vice Presidents and attested to
by an Officer.
Each Guarantor hereby
agrees that its Subsidiary Guarantee
set forth in Section 11.01 shall
remain in full force and effect
notwithstanding any failure to
endorse on each Note a notation of
such Subsidiary Guarantee.
If an Officer whose
signature is on this Indenture or on
the Subsidiary Guarantee no longer
holds that office at the time the
Trustee authenticates the Note on
which a Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee
shall be valid nevertheless.
The delivery of any Note by
the Trustee, after the authentication
thereof hereunder, shall constitute
due delivery of the Subsidiary
Guarantee set forth in this Indenture
on behalf of the Guarantors.
Section 11.03. Guarantors May
Consolidate, etc., on
Certain Terms.
(a) Except as set forth in
Articles 4 and 5, nothing contained
in this Indenture or in any of the
Notes shall prevent any consolidation
or merger of a Guarantor with or into
the Company or shall prevent any sale
or conveyance of the property of a
Guarantor as an entirety or
substantially as an entirety, to the
Company.
(b) Subject to the
provisions set forth in Articles 4
and 5, no Guarantor shall consolidate
with or merge with or into (whether
or not such Guarantor is the
surviving Person) another
corporation, Person or entity,
whether or not affiliated with such
Guarantor, unless (i) subject to the
provisions of the following
paragraph, the Person formed by or
surviving any such consolidation or
merger (if other than such Guarantor)
assumes all of the Obligations of
such Guarantor, pursuant to a
supplemental indenture in form and
substance reasonably satisfactory to
the Trustee, under the Notes and this
Indenture; (ii) immediately after
giving effect to such transaction, no
Default or Event of Default exists;
(iii) such Guarantor, or any Person
formed by or surviving any such
consolidation or merger, would have
Consolidated Net Worth (immediately
after giving effect to such
transaction) equal to or greater than
the Consolidated Net Worth of such
Guarantor immediately preceding the
transaction; and (iv) the Company
would be permitted by virtue of the
Company's pro forma Fixed Charge
Coverage Ratio, immediately after
giving effect to such transaction, to
incur at least $1.00 of additional
Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth
in Section 4.09 hereof; provided,
however, that this provision shall
not prohibit any merger or
consolidation among the Company or
one or more Wholly Owned Restricted
Subsidiaries that are Guarantors.
Subject to Section 11.04 of this
Indenture, in the event of a sale or
other disposition of all of the
assets of any Guarantor, by way of
merger, consolidation or otherwise,
or a sale or other disposition of all
of the Capital Stock of any
Guarantor, such Guarantor (in the
event of a sale or other disposition,
by way of such a merger,
consolidation or otherwise, of all of
the Capital Stock of such Guarantor)
or the corporation acquiring the
property (in the event of a sale or
other disposition of all of the
assets of such Guarantor) will be
released and relieved of any
Obligations under its Subsidiary
Guarantee; provided that such sale
would be permitted under Section 4.10
hereof and the Net Proceeds of such
sale or other disposition are applied
in accordance with the applicable
provisions in Section 4.10 hereof.
Section 11.04. Releases Following
Sale of Assets.
In the event (i) of a sale
or other disposition of all of the
assets of any Guarantor, by way of
merger, consolidation or otherwise,
or a sale or other disposition of all
of the Capital Stock of any Guarantor
or (ii) that a Guarantor is properly
designated by the Board of Directors
of the Company as an Unrestricted
Subsidiary in accordance with the
provisions of this Indenture, then
such Guarantor (in the event of a
sale or other disposition, by way of
such a merger, consolidation or
otherwise, of all of the Capital
Stock of such Guarantor or the proper
designation of such Guarantor as an
Unrestricted Subsidiary in accordance
with the provisions of this
Indenture) or the corporation
acquiring the property (in the event
of a sale or other disposition of all
of the assets of such Guarantor),
shall be released and relieved of its
obligations under its Subsidiary
Guarantee or Section 11.03 hereof, as
the case may be; provided that in the
event of an Asset Sale, such Asset
Sale would be permitted under Section
4.10 hereof and the Net Proceeds from
such sale or other disposition are
treated in accordance with the
provisions of Section 4.10 hereof.
Upon delivery by the Company to the
Trustee of an Officers' Certificate
and an Opinion of Counsel to the
effect that such sale or other
disposition was made by the Company
in accordance with the provisions of
this Indenture, including without
limitation Section 4.10 hereof, the
Trustee shall execute any documents
reasonably required in order to
evidence the release of any Guarantor
from its obligations under its
Subsidiary Guarantee. Any Guarantor
not released from its obligations
under its Subsidiary Guarantee shall
remain liable for the full amount of
principal of, and premium, interest
and Liquidated Damages, if any, on,
the Notes and for the other
obligations of any Guarantor under
this Indenture as provided in this
Article 11. The release of any
Guarantor pursuant to this Section
shall be effective whether or not
such release shall be noted on any
Note then outstanding or thereafter
authenticated and delivered. Upon
release of any Guarantor, the Company
shall mail notice of such release to
the Holders of the Notes.
Section 11.05. Limitation on
Guarantor Liability.
For purposes hereof, each
Guarantor's liability will be that
amount from time to time equal to the
aggregate liability of such Guarantor
thereunder, but shall be limited to
the lesser of (i) the aggregate
amount of the Obligations of the
Company under the Notes and this
Indenture and (ii) the amount, if
any, which would not have (A)
rendered such Guarantor "insolvent"
(as such term is defined in the
federal Bankruptcy Law and in the
Debtor and Creditor Law of the State
of New York) or (B) left it with
unreasonably small capital at the
time its Guarantee of the Notes was
entered into, after giving effect to
the incurrence of existing
Indebtedness immediately prior to
such time; provided that it shall be
a presumption in any lawsuit or other
proceeding in which such Guarantor is
a party that the amount guaranteed
pursuant to its Guarantee is the
amount set forth in clause (i) above
unless any creditor, or
representative of creditors of such
Guarantor, or debtor in possession or
trustee in bankruptcy of such
Guarantor, otherwise proves in such a
lawsuit that the aggregate liability
of such Guarantor is limited to the
amount set forth in clause (ii). In
making any determination as to the
solvency or sufficiency of capital of
a Guarantor in accordance with the
previous sentence, the right of such
Guarantor to contribution from other
Guarantors and any other rights such
Guarantor may have, contractual or
otherwise, shall be taken into
account.
Section 11.06. Subordination of
Subsidiary Guarantee.
The obligations of each
Guarantor under its Subsidiary
Guarantee pursuant to this Article 11
shall be junior and subordinated to
the Senior Debt of such Guarantor on
the same basis as the Notes are
junior and subordinated to Senior
Debt of the Company. For the
purposes of the foregoing sentence,
the Trustee and the Holders shall
have the right to receive and/or
retain payments by any of the
Guarantors in respect of any
Subsidiary Guarantee only at such
times as they may receive and/or
retain payments in respect of the
Notes pursuant to this Indenture,
including Article 10 hereof.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act
Controls.
If any provision of this
Indenture limits, qualifies or
conflicts with the duties imposed by
TIA Section 318(c), the duties
imposed by the TIA shall control.
Section 12.02. Notices.
Any notice or communication
by the Company, the Guarantors or the
Trustee to the others is duly given
if in writing and delivered in Person
or mailed by first class mail (regis
tered or certified, return receipt
requested), telex, telecopier or
overnight air courier guaranteeing
next day delivery, to the others'
address:
If to the Company or any
Guarantors:
American Skiing Company
Sunday River Access Road
Bethel, ME 04217
Telecopier No.: (207) 824-
2111
Attention: Thomas M.
Richardson
With a copy to:
Pierce Atwood
One Monument Square
Portland, ME 04101-1110
Telecopier No.: (207) 773-
3419 Attention:
Christopher E. Howard
If to the Trustee:
United States Trust Company
of New York
114 West 47th Street
New York, NY 10036
Telecopier No.: (212) 852-
1625
Attention: Corporate Trust
Administration
The Company, any Guarantor
or the Trustee, by notice to the
others may designate additional or
different addresses for subsequent
notices or communications.
All notices and
communications (other than those sent
to Holders) shall be deemed to have
been duly given: at the time
delivered by hand, if personally
delivered; five Business Days after
being deposited in the mail, postage
prepaid, if mailed; when answered
back, if telexed; when receipt
acknowledged, if telecopied; and the
next Business Day after timely
delivery to the courier, if sent by
overnight air courier guaranteeing
next day delivery.
Any notice or communication
to a Holder shall be mailed by first
class mail, certified or registered,
return receipt requested, or by
overnight air courier guaranteeing
next day delivery to its address
shown on the register kept by the
Registrar. 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. Failure to mail
a notice or communication to a Holder
or any defect in it shall not affect
its sufficiency with respect to other
Holders.
If a notice or
communication is mailed in the manner
provided above within the time
prescribed, it is duly given, whether
or not the addressee receives it.
If the Company mails a
notice or communication to Holders,
it shall mail a copy to the Trustee
and each Agent at the same time.
Section 12.03. Communication by
Holders of Notes with
Other Holders of Notes.
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 Guarantors,
the Trustee, the Registrar and anyone
else shall have the protection of TIA
Section 312(c).
Section 12.04. Certificate and
Opinion as to Conditions
Precedent.
Upon any request or
application by the Company or any
Guarantor to the Trustee to take any
action under this Indenture, the
Company or such Guarantor, as the
case may be, shall furnish to the
Trustee:
(a) an Officers' Certificate
in form and substance reasonably
satisfactory to the Trustee (which
shall include the statements set
forth in Section 12.05 hereof)
stating that, in the opinion of
the signers, all conditions
precedent and covenants, if any,
provided for in this Indenture
relating to the proposed action
have been satisfied; and
(b) an Opinion of Counsel in
form and substance reasonably
satisfactory to the Trustee (which
shall include the statements set
forth in Section 12.05 hereof)
stating that, in the opinion of
such counsel, all such conditions
precedent and covenants have been
satisfied.
Section 12.05. Statements Required
in Certificate or
Opinion.
Each certificate or opinion
with respect to compliance with a
condition or covenant provided for in
this Indenture (other than a
certificate provided pursuant to TIA
Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e)
and shall include:
(a) a statement that the
Person making such certificate or
opinion has read such covenant or
condition;
(b) a brief statement as to
the nature and scope of the
examination or investigation upon
which the statements or opinions
contained in such certificate or
opinion are based;
(c) a statement that, in the
opinion of such Person, he or she
has made such examination or
investigation as is necessary to
enable him to express an informed
opinion as to whether or not such
covenant or condition has been
satisfied; and
(d) a statement as to
whether or not, in the opinion of
such Person, such condition or
covenant has been satisfied.
Section 12.06. Rules by Trustee and
Agents.
The Trustee may make
reasonable rules for action by or at
a meeting of Holders. The Registrar
or Paying Agent may make reasonable
rules and set reasonable requirements
for its functions.
Section 12.07. "Trustee" to Include
Paying Agent.
In case at any time any
Paying Agent other than the Trustee
shall have been appointed by the
Company and be then acting hereunder,
the term "Trustee" as used in this
Article 11 shall in such case (unless
the context shall otherwise require)
be construed as extending to and
including such Paying Agent within
its meaning as fully and for all
intents and purposes as if such
Paying Agent were named in this
Article 11 in place of the Trustee.
Section 12.08. No Personal
Liability of Directors,
Officers, Employees or
Shareholders.
No director, officer,
employee, incorporator or shareholder
of the Company, and no director,
officer, employee or incorporator of
any Guarantor, as such, shall have
any liability for any Obligations of
the Company under the Notes or this
Indenture or of any Guarantor under
its Subsidiary Guarantee or this
Indenture or for any claim based on,
in respect of, or by reason of, such
Obligations or their creation. Each
Holder of Notes by accepting a Note
waives and releases all such
liability. The waiver and release are
part of the consideration for
issuance of the Notes. Such waiver
may not be effective to waive
liabilities under the federal
securities laws and it is the view of
the SEC that such a waiver is against
public policy.
Section 12.09. Governing Law.
THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE
NOTES AND THE SUBSIDIARY GUARANTEES.
Section 12.10. No Adverse
Interpretation of Other
Agreements.
This Indenture may not be
used to interpret any other
indenture, loan or debt agreement of
the Company or its Subsidiaries or of
any other Person. Any such
indenture, loan or debt agreement may
not be used to interpret this
Indenture and the Subsidiary
Guarantees.
Section 12.11. Successors.
All agreements of the
Company and each Guarantor in this
Indenture and the Notes shall bind
its respective successors. All
agreements of the Trustee in this
Indenture shall bind its successors.
Section 12.12. Severability.
In case any provision in
this Indenture or in the Notes shall
be invalid, illegal or unenforceable,
the validity, legality and
enforceability of the remaining
provisions shall not in any way be
affected or impaired thereby.
Section 12.13. Counterpart
Originals.
The parties may sign any
number of copies of this Indenture.
Each signed copy shall be an
original, but all of them together
represent the same agreement.
Section 12.14. 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 of this
Indenture and shall in no way modify
or restrict any of the terms or
provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of June 28, 1996
AMERICAN SKIING
COMPANY
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUNDAY RIVER
SKIWAY
CORPORATION
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUNDAY RIVER LTD.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
PERFECT TURN,
INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
<PAGE>
LBO HOLDING, INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUNDAY RIVER
TRANSPORTATION,
INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUGARBUSH RESORT
HOLDINGS,
INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUGARBUSH LEASING
COMPANY
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUGARBUSH
RESTAURANTS,
INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
CRANMORE, INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
MOUNTAIN
WASTEWATER
TREATMENT, INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
LBO HOTEL CO.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
S-K-I LIMITED
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
KILLINGTON LTD.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
MOUNT SNOW LTD.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
WATERVILLE VALLEY
SKI
AREA, LTD.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUGARLOAF
MOUNTAIN
CORPORATION
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
KILLINGTON
RESTAURANTS,
INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
DOVER
RESTAURANTS, INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
RESORTS
TECHNOLOGIES, INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
RESORT SOFTWARE
SERVICES,
INC.
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
MOUNTAINSIDE
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
SUGARTECH
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
DEERFIELD
OPERATING
COMPANY
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
PICO SKI AREA
MANAGEMENT
COMPANY
Attest: By: /s/
Leslie B. Otten
Name:
/s/ Christopher E. Howard Title:
<PAGE>
Dated as of June 28, 1996
UNITED STATES
TRUST
COMPANY OF NEW
YORK
Trustee
By: /s/ United
States
Trust Company
of New
York
Exhibit A
(Face of Note)
12% Series A Senior Subordinated
Notes due 2006
CUSIP
______
No. $__________
AMERICAN SKIING COMPANY
promises to pay to
________________________
or registered assigns, the principal
sum of ___________________ Dollars on
July 15, 2006.
Interest Payment Dates: January 15
and July 15
Record Dates: January 1 and July 1
Dated: _______________
AMERICA
N
SKIING
COMPANY
By:______________________
Name:
Title:
This is one of the Notes
referred to in the
within-mentioned Indenture:
UNITED STATES TRUST COMPANY OF NEW
YORK
as Trustee
By:__________________________________
<PAGE>
(Back of Note)
12% Series A Senior Subordinated
Notes due 2006
[Unless and until it is
exchanged in whole or in part for
Notes in definitive form, this Note
may not be transferred except as a
whole by the Depositary to a nominee
of the Depositary or by a nominee of
the Depositary to the Depositary or
another nominee of the Depositary or
by the Depositary or any such nominee
to a successor Depositary or a
nominee of such successor Depositary.
Unless this certificate is presented
by an authorized representative of
The Depository Trust Company (55
Water Street, New York, New York)
("DTC"), to the issuer or its agent
for registration of transfer,
exchange or payment, and any
certificate issued is registered in
the name of Cede & Co. or such other
name as may be requested by an
authorized representative of DTC (and
any payment is made to Cede & Co. or
such other entity as may be requested
by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede
& Co., has an interest herein.]<F1>
[FN]
<F1> To be included only if the Note
is issued in Global form.
"THE SECURITY (OR ITS PREDECESSOR)
EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE
SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (a) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN
A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY
EVIDENCE HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
Capitalized terms used
herein shall have the meanings
assigned to them in the Indenture
referred to below unless otherwise
indicated.
1. Interest. American
Skiing Company, a Maine corporation
(the "Company"), promises to pay
interest on the Notes at a rate of
12% per annum and shall pay the
Liquidated Damages payable pursuant
to Section 5 of the Registration
Rights Agreement referred to below.
The Company will pay interest and
Liquidated Damages semi-annually on
January 15 and July 15 of each year
commencing January 15, 1997, or if
any such day is not a Business Day,
on the next succeeding Business Day
(each an "Interest Payment Date").
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 the date
of original issuance of the Series A
Notes. The Company shall pay
interest (including Post-Petition
Interest in any proceeding under any
Bankruptcy Law) on overdue principal
and premium, if any, from time to
time on demand at a rate that is 1%
per annum in excess of the rate then
in effect; it shall pay interest
(including Post-Petition Interest in
any proceeding under any Bankruptcy
Law) on overdue installments of
interest and Liquidated Damages
(without regard to any applicable
grace periods) from time to time on
demand at the same rate to the extent
lawful. Interest will be computed on
the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment. The
Company will pay interest and
Liquidated Damages, if any, on the
Notes (except defaulted interest and
Liquidated Damages) to the Persons
who are registered Holders of Notes
at the close of business on the
January 1 or July 1 next preceding
the Interest Payment Date, even if
such Notes are cancelled after such
record date and on or before such
Interest Payment Date, except as
provided in Section 2.12 of the
Indenture with respect to defaulted
interest and Liquidated Damages. The
Notes will be payable as to
principal, premium, interest and
Liquidated Damages at the office or
agency of the Company maintained for
such purpose within or without the
City and State of New York, or, at
the option of the Company, payment of
interest and Liquidated Damages may
be made by check mailed to the
Holders at their addresses set forth
in the register of Holders; provided
that all payments with respect to
Global Notes and Certificated Notes
the Holders of which have given wire
transfer instructions to the Company
will be required to be made by wire
transfer of immediately available
funds to the accounts specified by
the Holders thereof. Such payment
shall be in such coin or currency of
the United States of America as at
the time of payment is legal tender
for payment of public and private
debts.
3. Paying Agent and
Registrar. Initially, United States
Trust Company of New York, the
Trustee under the Indenture, will act
as Paying Agent and Registrar. The
Company may change any Paying Agent
or Registrar without notice to any
Holder. The Company, any Guarantor
or any other of its Subsidiaries may
act in any such capacity.
4. Indenture. The Company
issued the Notes under an Indenture
dated June 28, 1996 (the "Indenture")
among the Company, the Guarantors and
the Trustee. The terms of the Notes
include those stated in the Indenture
and those made part of the Indenture
by reference to the Trust Indenture
Act of 1939, as amended (15 U.S.
Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms,
and Holders are referred to the
Indenture and such Act for a
statement of such terms. The Notes
are limited to $120,000,000 in
aggregate principal amount.
5. Optional Redemption.
(a) The Notes will not be
redeemable at the Company's option
prior to July 15, 2001. Thereafter,
the Notes will be subject to
redemption at the option of the
Company, in whole or in part, upon
not less than 30 nor more than 60
days' notice, at the redemption
prices (expressed as percentages of
principal amount) set forth below
plus accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the applicable redemption date, if
redeemed during the twelve-month
period beginning on July 15 of the
years indicated below:
Year Percentage
2001 106.250%
2002 104.688%
2003 103.125%
2004 101.563%
2005
and thereafter 100.000%
(b) Notwithstanding
the provisions of clause (a) of this
Paragraph 5, prior to July 15, 1999,
the Company may redeem up to 25% in
aggregate principal amount of the
Notes at a redemption price of 112%
of the principal amount thereof, plus
accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the redemption date, with the net
proceeds of one or more Equity
Offerings; provided that at least
$90.0 million in aggregate principal
amount of the Notes remains
outstanding immediately after the
occurrence of each such redemption;
and provided, further, that notice of
each such redemption shall have been
given within 30 days after the date
of the closing of such Equity
Offering.
6. Mandatory Redemption.
Except as set forth in
paragraph 7 below, the Company shall
not be required to make mandatory
redemption or sinking fund payments
with respect to the Notes.
7. Repurchase at Option of
Holder.
(a) If there is a Change
of Control, each Holder of Notes
shall have the right to require the
Company to repurchase all or any part
(equal to $1,000 or an integral
multiple thereof) of such Holder's
Notes pursuant to the offer described
below (the "Change of Control Offer")
at an offer price in cash equal to
101% of the principal amount thereof,
plus accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the date of repurchase (the
"Change of Control Payment"). Within
30 days following any Change of
Control, the Company shall mail a
notice to each Holder setting forth
the procedures governing the Change
of Control Offer as required by the
Indenture.
(b) If the Company or a
Restricted Subsidiary consummates any
Asset Sales, within five days of each
date on which the aggregate amount of
Excess Proceeds exceeds $10.0
million, the Company shall commence
an offer to all Holders of Notes (an
"Asset Sale Offer") pursuant to
Section 3.09 of the Indenture to
purchase the maximum principal amount
of Notes that may be purchased out of
the Excess Proceeds at an offer price
in cash in an amount equal to 100% of
the principal amount thereof, plus
accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the date fixed for the closing of
such offer in accordance with the
procedures set forth in the
Indenture. To the extent that the
aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the
Company (or such Restricted
Subsidiary) may use such deficiency
for general corporate purposes. If
the aggregate principal amount of
Notes surrendered by Holders thereof
exceeds the amount of Excess
Proceeds, the Trustee shall select
the Notes to be purchased on a pro
rata basis (in denominations of
$1,000 or integral multiples
thereof). Holders of Notes that are
the subject of an offer to purchase
will receive an Asset Sale Offer from
the Company prior to any related
purchase date and may elect to have
such Notes purchased by completing
the form entitled "Option of Holder
to Elect Purchase."
8. Notice of Redemption.
Notice of redemption will be mailed
at least 30 days but not more than 60
days before the redemption date to
each Holder whose Notes are to be
redeemed at its registered address.
Notes in denominations larger than
$1,000 may be redeemed in part but
only in whole multiples of $1,000,
unless all of the Notes held by a
Holder are to be redeemed. On and
after the redemption date interest
ceases to accrue on Notes or portions
thereof called for redemption.
9. Denominations,
Transfer, Exchange. The Notes are in
registered form without coupons in
denominations of $1,000 and integral
multiples of $1,000. The transfer of
Notes may be registered and Notes may
be exchanged as provided in the
Indenture. The Registrar and the
Trustee may require a Holder, among
other things, to furnish appropriate
endorsements and transfer documents
and the Company may require a Holder
to pay any taxes and fees required by
law or permitted by the Indenture.
The Company need not exchange or
register the transfer of any Note or
portion of a Note selected for
redemption, except for the unredeemed
portion of any Note being redeemed in
part. Also, it need not exchange or
register the transfer of any Notes
for a period of 15 days before a
selection of Notes to be redeemed or
during the period between a record
date and the corresponding Interest
Payment Date.
10. Persons Deemed
Owners. The registered Holder of a
Note may be treated as its owner for
all purposes.
11. Amendment, Supplement
and Waiver. Subject to certain
exceptions, the Indenture or the
Notes may be amended or supplemented
with the consent of the Holders of at
least a majority in principal amount
of the then outstanding Notes and any
existing Default or Event of Default
in respect of any provision of the
Indenture or the Notes may be waived
with the consent of the Holders of a
majority in principal amount of the
then outstanding Notes. Without the
consent of at least 75% in aggregate
principal amount of the Notes then
outstanding no waiver or amendment to
the Indenture may make any change in
the Subordination provisions
thereunder that adversely affects the
rights of any Holder of Notes.
Without the consent of any Holder of
a Note, the Indenture or the Notes
may be amended or supplemented to
cure any ambiguity, defect or
inconsistency, to provide for
uncertificated Notes in addition to
or in place of certificated Notes, to
provide for the assumption of the
Company's obligations to Holders of
the Notes in case of a merger or
consolidation of the Company or any
Guarantor, to provide for the
addition of a Guarantor to be bound
by the terms of the Indenture and the
Subsidiary Guarantee, to make any
change that would provide any
additional rights or benefits to the
Holders of the Notes or that does not
adversely affect the legal rights
under the Indenture of any such
Holder, or to comply with the
requirements of the SEC in order to
effect or maintain the qualification
of the Indenture under the Trust
Indenture Act.
12. Defaults and
Remedies. Events of Default include:
(i) default for 30 days in the
payment when due of interest on the
Notes (whether or not such payment is
prohibited by Article 10 of the
Indenture); (ii) default in payment
when due of the principal of or
premium or Liquidated Damages, if
any, on the Notes (whether or not
such payment is prohibited by the
provisions of Article 10 of the
Indenture), (iii) failure by the
Company to comply with Section 4.07,
4.09, 4.10 or 4.15 of the Indenture;
(iv) failure by the Company for 30
days after notice to comply with any
other agreements or covenants in the
Indenture or the Notes, other than
failure to comply with Section 4.11
of the Indenture; (v) occurrence of a
continuing default under any
mortgage, indenture or instrument
under which there may be issued or by
which there may be secured or
evidenced any Indebtedness for money
borrowed by the Company or any of its
Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists,
or is created after the date hereof,
which default (a) is caused by a
failure to pay principal of or
premium, if any, or interest on such
Indebtedness prior to the expiration
of the grace period provided in such
Indebtedness on the date of such
Payment Default or (b) results in the
acceleration of such Indebtedness
prior to its express maturity and, in
each case, the principal amount of
any such Indebtedness, together with
the principal amount of any other
such Indebtedness under which there
has been a Payment Default or the
maturity of which has been so
accelerated, aggregates $5.0 million
or more; (vi) failure by the Company
or any of its Restricted Subsidiaries
to pay final judgments aggregating in
excess of $5.0 million and either (a)
any creditor commences enforcement
proceedings upon any such judgment or
(b) such judgments are not paid,
discharged or stayed for a period of
60 days; (vii) any Subsidiary
Guarantee is held in any judicial
proceeding to be unenforceable or
invalid or ceases for any reason to
be in full force and effect or any
Guarantor, or any Person acting on
behalf of any Guarantor, denies or
disaffirms its obligations under its
Subsidiary Guarantee, except as
permitted by the Indenture; and
(viii) certain events of bankruptcy
or insolvency with respect to the
Company or any Restricted Subsidiary.
If any Event of Default occurs and is
continuing, the Trustee or the
Holders of at least 25% in principal
amount of the then outstanding Notes
may declare all the Notes to be due
and payable. Notwithstanding the
foregoing, in the case of an Event of
Default arising from certain events
of bankruptcy or insolvency, all
outstanding Notes will become due and
payable without further action or
notice. Holders may not enforce the
Indenture or the Notes except as
provided in the Indenture. Subject
to certain limitations, Holders of a
majority in principal amount of the
then outstanding Notes may direct the
Trustee in its exercise of any trust
or power. The Trustee may withhold
from Holders of the Notes notice of
any continuing Default or Event of
Default (except a Default or Event of
Default relating to the payment of
principal or interest) if it
determines that withholding notice is
in their interest. The Holders of a
majority in aggregate principal
amount of the Notes then outstanding
by notice to the Trustee may on
behalf of the Holders of all of the
Notes waive any existing Default or
Event of Default and its consequences
under the Indenture except a
continuing Default or Event of
Default in the payment of the
principal of, or premium, interest or
Liquidated Damages on, the Notes.
The Company and each Guarantor is
required to deliver to the Trustee
annually a statement regarding
compliance with the Indenture and
such Guarantor's Subsidiary
Guarantee, and the Company is
required upon becoming aware of any
Default or Event of Default, to
deliver to the Trustee a statement
specifying such Default or Event of
Default.
13. Subordination. Each
Holder by accepting a Note agrees
that the payment of principal of, and
premium and interest and Liquidated
Damages, if any, on each Note is
subordinated in right of payment, to
the extent and in the manner provided
in the Indenture, to the prior
payment in full of all Senior Debt of
the Company (whether outstanding on
the date of the Indenture or
thereafter created, incurred, assumed
or guaranteed), and that the
subordination is for the benefit of
the holders of such Senior Debt.
14. Trustee Dealings with
Company. The Trustee, in its
individual or any other capacity, may
become the owner or pledgee of Notes,
and may otherwise deal with the
Company, any Guarantor or any of
their respective Affiliates, as if it
were not the Trustee. However, in
the event that the Trustee acquires
any conflicting interest it must
eliminate such conflict within 90
days, apply to the SEC for permission
to continue as trustee or resign.
15. No Recourse Against
Others. No director, officer,
employee, incorporator or shareholder
of the Company, and no director,
officer, employee or incorporation of
any Guarantor, as such, shall have
any liability for any Obligations of
the Company under the Notes or the
Indenture or of any Guarantor under
the Subsidiary Guarantee or the
Indenture or for any claim based on,
in respect of, or by reason of, such
Obligations or their creation. Each
Holder of Notes by accepting a Note
waives and releases all such
liability. The waiver and release are
part of the consideration for
issuance of the Notes. Such waiver
may not be effective to waive
liabilities under the federal
securities laws and it is the view of
the SEC that such a waiver is against
public policy.
16. Authentication. This
Note shall not be valid until
authenticated by the manual signature
of the Trustee or an authenticating
agent.
17. Abbreviations.
Customary abbreviations may be used
in the name of a Holder or an
assignee, such as: TEN COM (=
tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (=
joint tenants with right of
survivorship and not as tenants in
common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors
Act).
18. Additional Rights of
Holders of Transfer Restricted
Securities. In addition to the
rights provided to Holders of Notes
under the Indenture, Holders of
Transferred Restricted Securities
shall have all the rights set forth
in the Registration Rights Agreement
dated June 28, 1996, between the
Company and the parties named on the
signature pages thereof (the
"Registration Rights Agreement").
19. CUSIP Numbers.
Pursuant to a recommendation
promulgated by the Committee on
Uniform Security Identification
Procedures, the Company has caused
CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP
numbers in notices of redemption as a
convenience to Holders. No
representation is made as to the
accuracy of such numbers either as
printed on the Notes or as contained
in any notice of redemption and
reliance may be placed only on the
other identification numbers placed
thereon.
The Company will furnish to
any Holder upon written request and
without charge a copy of the
Indenture and/or the Registration
Rights Agreement. Requests may be
made to:
American Skiing Company
Sunday River Access Road
Bethel, ME 04217
Telecopier No.: (207) 824-2111
Attention: Thomas M. Richardson
<PAGE>
Assignment Form
To assign this Security, fill in
the form below: (I) or (we) assign
and transfer this Security to
(Insert assignee's Social Security or
tax I.D. No.)
(Print or type assignee's name,
address and zip code)
and irrevocably appoint
agent to transfer this Security on
the books of the Company. The agent
may substitute another to act for
him.
Date:
Your Signature:
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
<PAGE>
Option of Holder to Elect
Purchase
If you want to elect to have this
Note purchased by the Company
pursuant to Section 3.09 or 4.15 of
the Indenture, check the box below:
__ Section 3.09 __
Section 4.15
If you want to elect to have only
part of the Note purchased by the
Company pursuant to Section 3.09 or
Section 4.15 of the Indenture, state
the amount you elect to have
purchased: $___________
Date:
Your Signature:
(Sign exactly as your name appears on
the Security)
Tax Identification No.:
Signature Guarantee:
<PAGE>
SCHEDULE OF EXCHANGES OF
CERTIFICATED NOTE<F2>
The following exchanges of a part of
this Global Note for Certificated
Notes have been made:
<TABLE>
Date Amount of Amount of Principal Signatur
of decrease increase in Amount of e of
Exchan in Principal this Global authoriz
ge Principal Amount of Note ed
Amount of this Global following officer
this Note such of
Global decrease Trustee
Note (or or Note
increase) Custodia
n
<S> <C> <C> <C> <C>
<F2> To be included only if the Note
is issued in Global form.
</TABLE>
<PAGE>
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON
EXCHANGE OR REGISTRATION OF TRANSFER
OF NOTES
Re: 12% Senior Subordinated Notes
due 2006 of American Skiing Company
This Certificate relates to
$_____ principal amount of Notes held
in * ________ book-entry or *_______
definitive form by ________________
(the "Transferor").
The Transferor*:
__ has requested the Trustee
by written order to deliver in
exchange for its beneficial interest
in the Global Note held by the
Depositary a Note or Notes in
definitive, registered form of
authorized denominations in an
aggregate principal amount equal to
its beneficial interest in such
Global Note (or the portion thereof
indicated above); or
__ has requested the Trustee
by written order to exchange or
register the transfer of a Note or
Notes.
In connection with such
request and in respect of each such
Note, the Transferor does hereby
certify that Transferor is familiar
with the Indenture relating to the
above captioned Notes and as provided
in Section 2.06 of such Indenture,
the transfer of this Note does not
require registration under the
Securities Act (as defined below)
because:*
__ Such Note is being acquired
for the Transferor's own account,
without transfer (in satisfaction of
Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
__ Such Note is being
transferred to a "qualified
institutional buyer" (as defined in
Rule 144A under the Securities Act of
1933, as amended (the "Securities
Act")) in reliance on Rule 144A (in
satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(i) or
Section 2.06(d)(i) (B) of the
Indenture) or pursuant to an
exemption from registration in
accordance with Rule 904 under the
Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture.)
*Check applicable box.
<PAGE>
__ Such Note is being
transferred in accordance with Rule
144 under the Securities Act, or
pursuant to an effective registration
statement under the Securities Act
(in satisfaction of Section
2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
__ Such Note is being
transferred in reliance on and in
compliance with an exemption from the
registration requirements of the
Securities Act, other than Rule 144A,
144 or Rule 904 under the Securities
Act. An Opinion of Counsel to the
effect that such transfer does not
require registration under the
Securities Act accompanies this
Certificate (in satisfaction of
Section 2.06(a)(ii)(C) or Section
2.06(d)(i)(C) of the Indenture).
[INSERT NAME OF TRANSFEROR]
By:
Date:
_______________
*Check applicable box.
<PAGE>
EXHIBIT C
GUARANTORS
1. Sunday River Skiway Corporation
2. Sunday River Ltd.
3 Perfect Turn, Inc.
4. LBO Holding, Inc.
5. Sunday River Transportation,
Inc.
6. Sugarbush Resort Holdings, Inc.
7. Sugarbush Leasing Company
8. Sugarbush Restaurant, Inc.
9. Cranmore, Inc.
10. S-K-I Limited
11. Killington Ltd.
12. Mount Snow Ltd.
13. Waterville Valley Ski Area, Ltd.
14. Sugarloaf Mountain Corporation
15. Killington Restaurants, Inc.
16. Dover Restaurants, Inc.
17. Resorts Technologies, Inc.
18. Resort Software Services, Inc.
19. Mountain Wastewater Treatment,
Inc.
20. LBO Hotel Co.
21. Mountainside
22. Sugartech
23. Deerfield Operating Company
24. Pico Ski Area Management Company
<PAGE>
EXHIBIT D
SUBSIDIARY GUARANTEE
Each of the Guarantors
hereby, jointly and severally,
unconditionally guarantee to each
Holder of a Note authenticated and
delivered by the Trustee and to the
Trustee and its successors and
assigns, irrespective of the validity
and enforceability of this Indenture,
the Notes or the obligations of the
Company hereunder or thereunder,
that: (a) the principal of and
premium, interest and Liquidated
Damages, if any, on the Notes will be
promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest
on the overdue principal of, premium
and interest and Liquidated Damages
on the Notes, if any, if lawful, and
all other obligations of the Company
to the Holders or the Trustee
hereunder or thereunder will be
promptly paid in full or performed,
all in accordance with the terms
hereof and thereof; and (b) in case
of any extension of time of payment
or renewal of any Notes or any of
such other obligations, that same
will be promptly paid in full when
due or performed in accordance with
the terms of the extension or
renewal, whether at stated maturity,
by acceleration or otherwise.
Failing payment when due of any
amount so guaranteed or any perform
ance so guaranteed for whatever
reason, the Guarantors will be
jointly and severally obligated to
pay the same immediately.
The obligations of the
Guarantors to the Holders of Notes
and to the Trustee pursuant to this
Subsidiary Guarantee and the
Indenture are expressly set forth in
Article 11 of the Indenture, and
reference is hereby made to such
Indenture for the precise terms of
this Subsidiary Guarantee. The terms
of Article 11 of the Indenture are
incorporated herein by reference.
This is a continuing Subsidiary
Guarantee and shall remain in full
force and effect and shall be binding
upon each Guarantor and its
respective successors and assigns to
the extent set forth in the Indenture
until full and final payment of all
of the Company's Obligations under
the Notes and the Indenture and shall
inure to the benefit of the
successors and assigns of the Trustee
and the Holders of Notes and, in the
event of any transfer or assignment
of rights by any Holder of Notes or
the Trustee, the rights and
privileges herein conferred upon that
party shall automatically extend to
and be vested in such transferee or
assignee, all subject to the terms
and conditions hereof. This a
Subsidiary Guarantee of payment and
not a guarantee of collection.
In certain circumstances more
fully described in the Indenture, any
Guarantor may be released from its
liability under this Subsidiary
Guarantee, and any such release will
be effective whether or not noted
hereon.
This Subsidiary Guarantee shall
not be valid or obligatory for any
purpose until the certificate of
authentication on the Note upon which
this Subsidiary Guarantee is noted
shall have been executed by the
Trustee under the Indenture by the
manual signature of one of its
authorized officers.
For purposes hereof, each
Guarantor's liability will be that
amount from time to time equal to the
aggregate liability of such Guarantor
hereunder, but shall be limited to
the lesser of (i) the aggregate
amount of the Obligations of the
Company under the Notes and the
Indenture and (ii) the amount, if
any, which would not have (A)
rendered such Guarantor "insolvent"
(as such term is defined in the
federal Bankruptcy Law and in the
Debtor and Creditor Law of the State
of New York) or (B) left it with
unreasonably small capital at the
time its Guarantee of the Notes was
entered into, after giving effect to
the incurrence of existing
Indebtedness immediately prior to
such time; provided that, it shall be
a presumption in any lawsuit or other
proceeding in which such Guarantor is
a party that the amount guaranteed
pursuant to its Subsidiary Guarantee
is the amount set forth in clause (i)
above unless any creditor, or
representative of creditors of such
Guarantor, or debtor in possession or
trustee in bankruptcy of such
Guarantor, otherwise proves in such a
lawsuit that the aggregate liability
of such Guarantor is limited to the
amount set forth in clause (ii). In
making any determination as to the
solvency or sufficiency of capital of
a Guarantor in accordance with the
previous sentence, the right of such
Guarantor to contribution from other
Guarantors and any other rights such
Guarantor may have, contractual or
otherwise, shall be taken into
account.
Capitalized terms used herein
have the same meanings given in the
Indenture unless otherwise
indicated.
SUNDAY RIVER SKIWAY CORPORATION
By:
Name:
Title:
SUNDAY RIVER LTD.
By:
Name:
Title:
PERFECT TURN, INC.
By:
Name:
Title:
LBO HOLDING, INC.
By:
Name:
Title:
SUNDAY RIVER TRANSPORTATION, INC.
By:
Name:
Title:
SUGARBUSH RESORT HOLDINGS, INC.
By:
Name:
Title:
SUGARBUSH LEASING COMPANY
By:
Name:
Title:
SUGARBUSH RESTAURANTS, INC.
By:
Name:
Title:
CRANMORE, INC.
By:
Name:
Title:
MOUNTAIN WASTEWATER TREATMENT, INC.
By:
Name:
Title:
LBO HOTEL CO.
By:
Name:
Title:
S-K-I LIMITED
By:
Name:
Title:
KILLINGTON LTD.
By:
Name:
Title:
MOUNT SNOW LTD.
By:
Name:
Title:
WATERVILLE VALLEY SKI AREA, LTD.
By:
Name:
Title:
SUGARLOAF MOUNTAIN CORPORATION
By:
Name:
Title:
KILLINGTON RESTAURANTS, INC.
By:
Name:
Title:
DOVER RESTAURANTS, INC.
By:
Name:
Title:
RESORTS TECHNOLOGIES, INC.
By:
Name:
Title:
RESORT SOFTWARE SERVICES, INC.
By:
Name:
Title:
MOUNTAINSIDE
By:
Name:
Title:
SUGARTECH
By:
Name:
Title:
DEERFIELD OPERATING COMPANY
By:
Name:
Title:
PICO SKI AREA MANAGEMENT COMPANY
By:
Name:
Title:
SHAREHOLDERS' AGREEMENT
Dated as of June 28, 1996
by and among
LESLIE B. OTTEN
AMERICAN SKIING COMPANY
and
BEAR, STEARNS & CO. INC.
SHAREHOLDERS' AGREEMENT
This SHAREHOLDERS' AGREEMENT (this "Agreement")
is entered into as of June 28, 1996 by and
among (i) American Skiing Company, a Maine
corporation (the "Company"), (ii) Leslie B.
Otten (the "Principal Shareholder") and (iii)
Bear, Stearns & Co. Inc. (the "Initial
Purchaser"). The shares of Common Stock, par
value $.01 per share, of the Company (the
"Common Stock") to be purchased by the Initial
Purchaser pursuant to the terms of the Purchase
Agreement (as defined below) are sometimes
referred to herein as the "Shares." All rights
and obligations of the Initial Purchaser
pursuant to the terms and conditions of this
Agreement shall be the rights and obligations
of all subsequent holders (the "Holders") of
Shares. The Initial Purchaser and the Holders
are sometimes collectively referred to herein
as the "Investors." The Principal Shareholder
and the Investors are sometimes collectively
referred to herein as the "Shareholders."
Unless otherwise defined herein, capitalized
terms shall have the meanings set forth in
Section 9 hereof or in the Subordinated Note
Indenture.
WHEREAS, the Initial Purchaser has
agreed to purchase 39,132 Units (the "Units")
consisting in the aggregate of $39,132,000
aggregate principal amount of 13 3/4% Series A
Subordinated Discount Notes due 2007 of the
Company and 39,132 shares of Common Stock
pursuant to a Purchase Agreement, dated June
25, 1996, by and among the Initial Purchaser,
SPP Hambro & Co., LLC, the Company and the
Guarantors named on the signature pages thereof
(the "Purchase Agreement"); and
WHEREAS, it is a condition
precedent to the obligation of the Initial
Purchaser to purchase the Units that the
Company, the Principal Shareholder and the
Initial Purchaser shall have entered into this
Agreement;
NOW THEREFORE, in consideration of
the mutual covenants herein contained and for
other good and valuable consideration, the
Initial Purchaser, the Principal Shareholder
and the Company hereby agree as follows:
Section 1. Tag-Along Rights.
With respect to any proposed transfer, sale or
other disposition or series of related
transfers, sales or other dispositions
(collectively, a "proposed transfer") of more
than 50% of the Common Stock held by the
Permitted Holders, or securities convertible
into, or exercisable or exchangeable for, more
than 50% of the Common Stock held by the
Permitted Holders, directly or indirectly by
the Permitted Holders to a person (such other
person being hereafter referred to as the
"proposed purchaser"), other than a sale to
another Permitted Holder, the Investors shall
each have the right (the "Tag-Along Right") to
require the proposed purchaser to purchase from
each of them the number of Shares equalling the
sum of (A) the number derived by multiplying
the total number of Fully Diluted shares the
Permitted Holders propose to transfer by a
fraction, the numerator of which is the total
number of Fully Diluted shares owned by such
Investor, and the denominator of which is the
total number of Fully Diluted shares owned by
the Permitted Holders and all Investors and (B)
any additional Shares such Investor shall be
entitled to have purchased pursuant to the next
paragraph if any other Investor elects not to
exercise its rights hereunder; provided,
however, that Investors shall not have the Tag-
Along Right in the event that the Permitted
Holders exercise the Drag-Along Right pursuant
to Section 2 below. Any Shares purchased from
Investors pursuant to this Section 1 shall be
purchased at the same price and upon
substantially the same terms and conditions as
such proposed transfer by the Permitted
Holders, it being agreed however, that in the
event that the Permitted Holders transfer
Subject Securities other than Common Stock, the
price paid by such proposed purchaser for
Shares purchased from the Investors shall be
the same as the price paid to the Permitted
Holders for such Subject Securities plus any
amount that must be paid upon the conversion,
exercise or exchange of such Subject
Securities, and such terms and conditions will
not include the making of any representations
and warranties, indemnities or other similar
agreements other than representations and
warranties with respect to title of the Shares
being sold and authority to sell such Shares
("Title Representations") and indemnities
related thereto. The Permitted Holders shall,
not less than 30 nor more than 45 days prior to
each proposed transfer, notify, or cause to be
notified, each Investor in writing of each such
proposed transfer. Such notice shall set forth
(i) the name of the transferor and the number
and type of Subject Securities proposed to be
transferred, (ii) the name and address of the
proposed purchaser, (iii) the proposed amount
and form of consideration and terms and
conditions of payment offered by such proposed
purchaser and (iv) that the proposed purchaser
has been informed of the Tag-Along Right
provided for in this Section 1 and has agreed
to purchase Subject Securities in accordance
with the terms hereof. The Permitted Holders
hereby agree not to transfer any Subject
Securities directly or indirectly in a manner
that would be inconsistent with the essential
intent of this Section 1. For purposes of this
Section 1, any transfer of an equity interest
of an entity that was formed for the purpose of
acquiring Subject Securities shall be deemed to
be a transfer of such portion of the Subject
Securities owned by such entity as corresponds
to the portion of the equity of such entity
that has been so transferred.
The Tag-Along Right may be
exercised by any Investor by delivery of a
written notice to the Permitted Holder
proposing to sell Subject Securities (the
"Tag-Along Notice") within 20 days following
its receipt of the notice specified in the
preceding paragraph. The Tag-Along Notice
shall state the number of Shares that such
Investor proposes to include in such transfer
to the proposed purchaser determined as
aforesaid, plus the amount of additional
Shares, if any, that such Investor would be
willing to sell to the proposed purchaser in
the event that any of the other Investors elect
not to exercise their Tag-Along Rights in whole
or in part. The maximum amount of additional
Shares that each such Investor shall be
entitled to sell, and the proposed purchaser be
required to purchase, shall be the number of
Shares determined by multiplying the aggregate
number of Fully Diluted shares that, under the
formula described in the previous paragraph,
all Investors could have elected to sell to the
proposed purchaser but elected not to so sell,
by a fraction, the numerator of which is the
total number of Fully Diluted shares owned by
such Investor electing to sell additional
Shares and the denominator of which is the
total number of Fully Diluted shares owned by
all Investors who delivered Tag-Along Notices
specifying a desire to sell additional Shares
in the event that any of the other Investors
elected not to exercise its Tag-Along Rights.
In the event that the proposed purchaser does
not purchase Shares from the Investors on the
same terms and conditions as specified in the
notice referred to in the preceding paragraph,
then the Permitted Holders shall not be
permitted to sell any Subject Securities to the
proposed purchaser in the proposed transfer.
If no Tag-Along Notice is received during the
20-day period referred to above (or if the
number of Shares included in all such Notices
is less than the aggregate number of Shares
that the Investors could have elected to sell
to the proposed purchaser), the Permitted
Holders shall have the right, for a 30-day
period after the expiration of the 20-day
period referred to above, to transfer the
Subject Securities specified in the notice
referred to in the preceding paragraph (or the
remaining Subject Securities) on terms and
conditions no more favorable than those stated
in the Tag-Along Notice and in accordance with
the provisions of this Section 1.
The Company agrees not to effect
any direct or indirect transfer of Subject
Securities by the Permitted Holders until it
has received evidence reasonably satisfactory
to it that the Tag-Along Right, if applicable
to such transfer, has been complied with.
Section 2. Drag-Along Rights.
With respect to any proposed transfer by the
Permitted Holders of 50% or more of the Common
Stock held by them, or securities convertible
into, or exercisable or exchangeable for, 50%
or more of the Common Stock held by them, to a
proposed purchaser that is not a Permitted
Holder, the Permitted Holders shall have the
right (the "Drag-Along Right"), exercisable by
the Permitted Holders holding a majority of the
Common Stock proposed to be transferred, to
require each Investor to sell in the proposed
transfer to the proposed purchaser the number
of Shares equalling the number derived by
multiplying the total number of Fully Diluted
shares the Permitted Holders propose to
transfer by a fraction, the numerator of which
is the total number of Fully Diluted shares
owned by such Investor, and the denominator of
which is the total number of Fully Diluted
shares owned by the Permitted Holders and all
Investors. Any securities purchased from an
Investor pursuant to this Section 2 shall be
purchased at the same price and upon the same
terms and conditions as such proposed transfer
by the Permitted Holders, it being agreed,
however, that such terms and conditions shall
not include the making by an Investor of any
representations and warranties, indemnities or
other similar agreements other than Title
Representations and indemnities related
thereto. The Permitted Holders shall, not less
than 30 nor more than 45 days prior to any such
proposed transfer, deliver written notice to
each Investor of such proposed transfer. Such
notice shall set forth (i) the name of the
transferor and the number of shares of Common
Stock proposed to be transferred, (ii) the name
and address of the proposed purchaser,
(iii) the proposed amount and form of considera
tion and terms and conditions of payment
offered by such proposed purchaser and (iv)
that the proposed purchaser has been informed
of the Drag-Along Right provided for in this
Section 2 and desires to purchase the Shares in
accordance with the terms hereof.
Section 3. Registration Rights.
(a) Piggyback Registration
Rights.
(1) Right to Piggyback. Whenever
the Company proposes to register any Subject
Securities under the Securities Act of 1933, as
amended (the "Act"), and the registration form
to be used may be used for the registration of
the Registrable Securities (other than a
registration statement on Form S-8 or any
similar successor form) (a "Piggyback
Registration"), the Company shall give written
notice to all Holders of Registrable
Securities, at least 30 days prior to the
anticipated filing date, of its intention to
effect such a registration, which notice will
specify the proposed offering price, the kind
and number of securities proposed to be
registered, the distribution arrangements and
such other information that at the time would
be appropriate to include in such notice, and
will, subject to subsection (a)(2) below,
include in such Piggyback Registration all
Registrable Securities with respect to which
the Company has received written requests for
inclusion therein within 15 business days after
the delivery of such notice; provided,
however, that if, at any time after giving
written notice of its intention to register any
securities and prior to the effective date of
the Registration Statement filed in connection
with such registration, the Company shall
determine for any reason not to register or to
delay registration of such securities, the
Company may, at its election, give written
notice of such determination to each Holder
and, thereupon, (A) in the case of a
determination not to register, the Company
shall be relieved of its obligation to register
any Registrable Securities under this Section
3(a)(1) in connection with such registration
(but not from its obligation to pay the
registration expenses incurred in connection
therewith) and (B) in the case of a
determination to delay registering, the Company
shall be permitted to delay registering any
Registrable Securities under this Section
3(a)(1) during the period that the registration
of such other securities is delayed. The
Company further agrees to supplement or amend a
Registration Statement if required by
applicable laws, rules or regulations or by the
instructions applicable to the registration
form used by the Company for such Registration
Statement. Each Holder shall be permitted to
withdraw all or any part of such Holder's
Registrable Securities from a registration at
any time prior to the effective date of the
Registration Statement by notifying the Company
of such withdrawal not later than two business
days prior to such effective date. Any Holder
of Registrable Securities who withdraws any
such securities from a registration shall pay
to the Company any incremental expenses of such
registration specifically attributable to the
withdrawal of such Holder. Registrable
Securities with respect to which such request
for registration has been received will be
registered by the Company and offered to the
public in a Piggyback Registration pursuant to
this Section 3 on the terms and conditions at
least as favorable as those applicable to the
registration of Subject Securities to be sold
by the Company and by any other person selling
under such Piggyback Registration.
Notwithstanding the foregoing, the Holders (i)
will not be entitled to piggy-back in an
initial public offering of the Common Stock and
(ii) will not be permitted to sell, offer to
sell or otherwise transfer or dispose of the
Shares for a period of 90 days commencing from
the date on which the registration statement
relating to such initial public offering is
declared effective by the Commission if, in the
case of clauses (i) and (ii), (a) the lead
managing underwriter notifies the Company that
the execution of such initial public offering
or the valuation of the Common Stock in the
initial public offering would thereby be
enhanced, (b) no other Shareholders of the
Company are selling any securities in such
initial public offering and (c) the net
proceeds of such initial public offering are
not used by the Company to repurchase any of
its equity securities or to pay a dividend or
other distribution to any holders of any equity
securities of the Company.
(2) Priority on Piggyback
Registrations. If, in the case of any
underwritten public offering other than an
initial public offering of Common Stock, the
managing underwriter or underwriters advise the
Company in writing that in its or their
reasonable opinion the number or kind of
securities proposed to be sold in such
registration (including Registrable Securities
to be included pursuant to subsection (a)(1)
above) will materially adversely affect the
success of such offering or will affect the
price at which the securities of the Company
will be sold therein, the Company will include
in such registration only the number of
securities, if any, which, in the opinion of
such underwriter or underwriters, can be sold
without such effects, in the following order of
priority: (i) first, the shares the Company
proposes to sell and (ii) second, the
Registrable Securities requested to be included
in such registration by the Investors or any
other person or entity granted similar
registration rights after the date hereof. To
the extent that the privilege of including
Registrable Securities in any Piggyback
Registration must be allocated among the
Holders thereof pursuant to clause (ii) above,
the allocation shall be made pro rata based on
the number of Registrable Securities that each
such participant shall have requested to
include therein.
(b) Other Registration Rights.
Upon the earliest to occur of (i) July 15,
2001, (ii) the consummation of an initial
public offering of the Common Stock and (iii) a
Change of Control, the Company shall, within 90
days thereafter, file a shelf registration
statement with the Commission, under and in
accordance with the provisions of the Act, with
respect to the Registrable Securities. The
Company shall give written notice to all
Holders of Registrable Securities, at least 30
days prior to the anticipated filing date of
such shelf registration statement, of its
intention to effect such a registration, which
notice will specify such information that at
the time would be appropriate to include in
such notice, and will include in such
registration all Registrable Securities with
respect to which the Company has received
written requests for inclusion therein within
15 business days after the delivery of such
notice, and the Company shall maintain such
shelf registration statement continuously
effective for a period of at least three years
or until such time as no Registrable Securities
are outstanding; provided, however, that the
Company may allow such shelf registration
statement to fail to be effective or usable for
a period of up to 60 days during the three-year
period of effectiveness required hereby, but in
no event for any period in excess of 30
consecutive days, if (1) the board of directors
of the Company determines in good faith that it
is in the best interests of the Company not to
disclose the existence of or facts surrounding
any proposed or pending material corporate
transaction involving the Company and (2) the
Company notifies the Investors within two
business days after such determination by the
board of directors; provided, further, however,
that the three-year period referred to herein
shall be extended by the number of days during
which the shelf registration statement was not
effective or usable pursuant to the foregoing.
(c) Registration Procedures.
With respect to any Piggyback Registration or
other registration pursuant to Section 3(b)
above (generically, a "Registration"), the
Company will as expeditiously as practicable:
(1) prepare and file with the
Commission a Registration Statement or
Registration Statements relating to the
applicable Registration on any appropriate form
under the Act, which form shall be available
for the sale of the Registrable Securities in
accordance with the intended method or methods
of distribution thereof (provided, however,
that the Company will include in any
Registration Statement on a form other than
Form S-1 all information that the Holders of
the Registrable Securities so to be registered
shall reasonably request and shall include all
financial statements required by the Commission
to be filed therewith), cooperate and assist in
any filings required to be made with the
National Association of Securities Dealers,
Inc. ("NASD"), and use its best efforts to
cause such Registration Statement to become
effective; provided, that before filing a
Registration Statement or Prospectus related
thereto or any amendments or supplements
thereto, the Company will furnish to the
Holders of the Registrable Securities covered
by such Registration Statement and the
underwriters, if any, copies of all such
documents proposed to be filed, which documents
will be subject to the reasonable review of
such Holders and underwriters and their
respective counsel, and the Company will not
file any Registration Statement or amendment
thereto or any Prospectus or any supplement
thereto to which the Holders of a majority of
the Registrable Securities covered by such
Registration Statement or the underwriters, if
any, shall reasonably object;
(2) prepare and file with the
Commission such amendments and post-effective
amendments to the Registration Statement as may
be necessary to keep each Registration
Statement effective for the applicable period,
or such shorter period which will terminate
when all Registrable Securities covered by such
Registration Statement have been sold; cause
each Prospectus to be supplemented by any
required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424
under the Act; and comply with the provisions
of the Act with respect to the disposition of
all securities covered by such Registration
Statement during the applicable period in
accordance with the intended method or methods
of distribution by the sellers thereof set
forth in such Registration Statement or
supplement to the Prospectus; the Company shall
not be deemed to have used its best efforts to
keep a Registration Statement effective during
the applicable period if it voluntarily takes
any action that would result in selling Holders
of the Registrable Securities covered thereby
not being able to sell such Registrable
Securities during that period unless such
action is required under applicable law,
provided, however, that the foregoing shall not
apply to actions taken by the Company in good
faith and for valid business reasons, including
without limitation the acquisition or
divestiture of assets, so long as the Company
promptly thereafter complies with the
requirements of subsection (11) of this
subsection (c), if applicable;
(3) notify the selling Holders of
Registrable Securities and the managing
underwriters, if any, promptly, and (if
requested by any such person or entity) confirm
such advice in writing, (A) when the Prospectus
or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to
the Registration Statement or any
post-effective amendment, when the same has
become effective, (B) of any request by the
Commission for amendments or supplements to the
Registration Statement or the Prospectus or for
additional information, (C) of the issuance by
the Commission of any stop order suspending the
effectiveness of the Registration Statement or
the initiation of any proceedings for that
purpose, (D) if at any time the representations
and warranties of the Company contemplated by
subsection (14) below cease to be true and
correct, (E) of the receipt by the Company of
any notification with respect to the suspension
of the qualification of the Registrable
Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for
such purpose and (F) of the happening of any
event which makes any statement made in the
Registration Statement, the Prospectus or any
document incorporated therein by reference
untrue or which requires the making of any
changes in the Registration Statement, the
Prospectus or any document incorporated therein
by reference in order to make the statements
therein, in light of the circumstances under
which they were made, not misleading;
(4) make every reasonable effort
to obtain the withdrawal of any order
suspending the effectiveness of the
Registration Statement at the earliest possible
moment;
(5) if requested by the managing
underwriter or underwriters or a Holder of
Registrable Securities being sold in connection
with an underwritten offering, promptly
incorporate in a Prospectus supplement or
post-effective amendment such information as
the managing underwriters and the Holders of a
majority of the Registrable Securities being
sold agree should be included therein relating
to the plan of distribution with respect to
such Registrable Securities, including, without
limitation, information with respect to the
number of Registrable Securities being sold to
such underwriters, the purchase price being
paid therefor by such underwriters and with
respect to any other terms of the underwritten
(or best efforts underwritten) offering of the
Registrable Securities to be sold in such
offering; and make all required filings of such
Prospectus supplement or post-effective
amendment promptly after being notified of the
matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(6) furnish to each selling
Holder of Registrable Securities and each
managing underwriter, without charge, at least
one copy of the Registration Statement and any
amendment thereto, including financial
statements and schedules, all documents
incorporated therein by reference and all
exhibits (including those incorporated by
reference);
(7) deliver to each selling
Holder of Registrable Securities and the
underwriters, if any, without charge, as many
copies of the Prospectus (including each
preliminary prospectus) and any amendment or
supplement thereto as such selling Holder of
Registrable Securities and underwriters may
reasonably request; the Company consents to the
use of each Prospectus or any amendment or
supplement thereto by each of the selling
Holders of Registrable Securities and the
underwriters, if any, in connection with the
offering and sale of the Registrable Securities
covered by such Prospectus or any amendment or
supplement thereto;
(8) prior to any public offering
of Registrable Securities, register or qualify
or cooperate with the selling Holders of
Registrable Securities, the underwriters, if
any, and their respective counsel in connection
with the registration or qualification of such
Registrable Securities for offer and sale under
the securities or "blue sky" laws of such
jurisdictions as any seller or underwriter
reasonably requests in writing, considering the
amount of Registrable Securities proposed to be
sold in each such jurisdiction, and do any and
all other acts or things necessary or advisable
to enable the disposition in such jurisdictions
of the Registrable Securities covered by the
Registration Statement; provided, however, that
the Company will not be required to qualify
generally to do business in any jurisdiction
where it is not then so qualified or to take
any action that would subject it to general
service of process in any such jurisdiction
where it is not then so subject;
(9) cooperate with the selling
Holders of Registrable Securities and the
managing underwriters, if any, to facilitate
the timely preparation and delivery of
certificates representing Registrable
Securities to be sold and not bearing any
restrictive legends and to be in such
denominations and registered in such names as
the managing underwriters may request at least
two business days prior to any sale of
Registrable Securities to the underwriters;
(10) use its best efforts to
cause the Registrable Securities covered by the
applicable Registration Statement to be
registered with or approved by such other
governmental agencies or authorities as may be
necessary to enable the seller or sellers
thereof or the underwriters, if any, to
consummate the disposition of such Registrable
Securities;
(11) upon the occurrence of any
event contemplated by subsection (c)(3)(F) of
this Section 3, prepare a supplement or post-
effective amendment to the Registration
Statement or the related Prospectus or any
document incorporated therein by reference or
file any other required document so that, as
thereafter delivered to the purchasers of the
Registrable Securities, the Prospectus will not
contain an untrue statement of a material fact
or omit to state any material fact necessary to
make the statements therein, in light of the
circumstances under which they were made, not
misleading;
(12) cause all Registrable
Securities covered by any Registration
Statement to be listed on each securities
exchange on which similar securities issued by
the Company are then listed;
(13) provide a CUSIP number for
all Registrable Securities, not later than the
effective date of the applicable Registration
Statement;
(14) enter into such agreements
(including an underwriting agreement) and take
all such other actions in connection therewith
in order to expedite or facilitate the
disposition of such Registrable Securities and
in such connection, whether or not an
underwriting agreement is entered into and
whether or not the Registration is an under
written Registration (A) make such
representations and warranties to the Holders
of such Registrable Securities and the under
writers, if any, in form, substance and scope
as are customarily made by issuers to
underwriters in primary underwritten offerings;
(B) use its reasonable best efforts to obtain
opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably
satisfactory to the managing underwriters, if
any, and the Holders of a majority of the
Registrable Securities being sold) addressed to
each selling Holder and the underwriters, if
any, covering the matters customarily covered
in opinions requested in underwritten offerings
and such other matters as may be reasonably
requested by such Holders and underwriters;
(C) use its reasonable best efforts to obtain
"comfort" letters and updates thereof from the
Company's independent certified public
accountants addressed to the selling Holders of
Registrable Securities and the underwriters, if
any, such letters to be in customary form and
covering matters of the type customarily
covered in "comfort" letters to underwriters in
connection with primary underwritten offerings,
provided, however, that if such offering is not
an underwritten offering and the customary
comfort letter referred to above cannot be
delivered, the Company shall use its reasonable
best efforts to cause its independent
accountants to deliver the highest level of
comfort permitted to be given by such
accountants under the then applicable standards
of the American Institute of Certified Public
Accountants with respect to such registration
statement; (D) if an underwriting agreement is
entered into, the same shall set forth in full
the indemnification provisions and procedures
set forth in subsection (f) below with respect
to all parties to be indemnified pursuant to
said subsection; and (E) the Company shall
deliver such documents and certificates as may
be requested by the Holders of a majority of
the Registrable Securities being sold and the
managing underwriters, if any, to evidence
compliance with subsection (c)(3)(F) of this
Section 3 and with any customary conditions
contained in the underwriting agreement or
other agreement entered into by the Company.
The above shall be done at each closing under
such underwriting or similar agreement or as
and to the extent required thereunder;
(15) subject to the execution of
customary confidentiality agreements, make
available for inspection by a representative of
the Holders of a majority of the Registrable
Securities, any underwriter participating in
any disposition pursuant to such Registration,
and any attorney or accountant retained by the
sellers or underwriter, all financial and other
records, pertinent corporate documents and
properties of the Company, and cause the
Company's officers, directors and employees to
supply all information, reasonably requested by
any such representative, underwriter, attorney
or accountant in connection with such
Registration Statement; provided, however, that
any records, information or documents that are
designated by the Company in writing as
confidential shall be kept confidential by such
Persons unless disclosure of such records,
information or documents is required by court
or administrative order or any regulatory body
having jurisdiction;
(16) otherwise use its reasonable
best efforts to comply with all applicable
rules and regulations of the Commission, and
make generally available to its security
Holders, earnings statements satisfying the
provisions of Section 11(a) of the Act, no
later than 45 days after the end of any
12-month period (or 90 days, if such period is
a fiscal year) (A) commencing at the end of any
fiscal quarter in which Registrable Securities
are sold to underwriters in a firm or best
efforts underwritten offering, or (B) if not
sold to underwriters in such an offering,
beginning with the first month of the Company's
first fiscal quarter commencing after the
effective date of the Registration Statement,
which statements shall cover said 12-month
periods; and
(17) promptly prior to the filing
of any document that is to be incorporated by
reference into any Registration Statement or
Prospectus (after initial filing of the
Registration Statement), provide copies of such
document to counsel to the managing
underwriters, if any, and, if requested by any
selling Holders of Registrable Securities, such
selling Holder, and to make the Company's
representatives available for discussion of
such document and make such changes in such
document prior to the filing thereof as counsel
for such underwriters or selling Holders may
reasonably request.
The Company may require each
seller of Registrable Securities as to which
any Registration is being effected to furnish
to the Company such information regarding the
proposed distribution of such securities as the
Company may from time to time reasonably
request in writing.
Each Holder of Registrable
Securities agrees by acquisition of such
Registrable Securities that, upon receipt of
any notice from the Company of the happening of
any event of the kind described in subsection
(3)(F) of this subsection (c), such Holder will
forthwith discontinue disposition of
Registrable Securities pursuant to the
Registration Statement until such Holder's
receipt of copies of the supplemented or
amended Prospectus as contemplated by
subsection (11) of this subsection (c), or
until it is advised in writing (the "Advice")
by the Company that the use of the Prospectus
may be resumed, and has received copies of any
additional or supplemental filings that are
incorporated by reference in the Prospectus,
and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's
expense) all copies, other than permanent file
copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
In the event the Company shall give any such no
tice, the time periods referred to in
subsection (2) of this subsection (c) shall be
extended by the number of days during the
period from and including the date of the
giving of such notice to and including the date
when each seller of Registrable Securities
covered by such Registration Statement shall
have received the copies of the supplemented or
amended prospectus contemplated by subsection
(11) of this subsection (c) or the Advice.
(d) Restrictions on Public Sale.
(1) Public Sale by Holders of
Registrable Securities. To the extent not
inconsistent with applicable law, each Investor
whose Registrable Securities are included in a
Registration Statement hereunder, if requested
by the managing underwriter or underwriters for
such Registration, agrees not to effect any
public sale or distribution of Registrable
Securities, including a sale pursuant to
Rule 144, during the 15 business days prior to,
and during the 90-day period (or such shorter
period as may be agreed to by such
underwriters) beginning on, the effective date
of a Registration Statement pursuant to such
Registration (except as part of such Registra
tion).
(2) Public Sale by the Company
and Others. If requested by the managing
underwriter or underwriters for any
underwritten Registration, or by the Holders of
a majority of the Registrable Securities
registered in a Registration pursuant to
subsection (b) above that is not being
underwritten, none of the Company or the
Permitted Holders will effect any public sale
or distribution of Common Stock for its own
account (or securities convertible into, or
exercisable or exchangeable for, Common Stock)
during the 15 business days prior to, and
during the 90-day period beginning on, the
effective date of such Registration.
(3) Other Registrations. If the
Company has previously filed a Registration
Statement with respect to Registrable
Securities, and if such previous Registration
has not been withdrawn or abandoned, the
Company will not file or cause to be effected
any other registration of any of its Common
Stock (or securities convertible into, or
exercisable or exchangeable for, Common Stock)
under the Act (except on Form S-8 or any
similar successor form), whether on its own
behalf or at the request of any Holder or
holders of Common Stock (or securities
convertible into, or exercisable or
exchangeable for Common Stock), until a period
of at least 90 days has elapsed from the
effective date of such previous Registration.
(e) Registration Expenses.
(1) All expenses incident to the
Company's performance of or compliance with
this Agreement will be borne by the Company,
including, without limitation, all registration
and filing fees, the fees and expenses of the
counsel and accountants for the Company
(including the expenses of any "comfort"
letters and special audits required by or
incident to the performance of such persons),
all other costs and expenses of the Company
incident to the preparation, printing and
filing under the Act of the Registration
Statement (and all amendments and supplements
thereto) and furnishing copies thereof and of
the Prospectus included therein, the costs and
expenses incurred by the Company in connection
with the qualification of the Registrable
Securities under the state securities or "blue
sky" laws of various jurisdictions, the costs
and expenses associated with filings required
to be made with the NASD (including, if
applicable, the fees and expenses of any
"qualified independent underwriter" and its
counsel as may be required by the rules and
regulations of the NASD), the costs and
expenses of listing the Registrable Securities
for trading on a national securities exchange
and all other costs and expenses incurred by
the Company in connection with any Registration
hereunder; provided, however, that, except as
otherwise provided in subsection (2) below, the
Company shall not bear the costs and expenses
of any Investors for underwriters' commissions,
brokerage fees, transfer taxes, or the fees and
expenses of any counsel, accountants or other
representative retained by any Investor.
(2) Notwithstanding the foregoing
and except as provided below, in connection
with each Registration hereunder, the Company
will reimburse the Investors who are Holders of
Registrable Securities being registered in any
Registration hereunder for (i) the reasonable
fees and disbursements of not more than one
counsel, which counsel shall be chosen by
Investors who are the Holders of a majority of
the Registrable Securities being registered,
and (ii) the reasonable out-of-pocket expenses
of the Holders of Registrable Securities,
including travel costs (if any).
(f) Indemnification and
Contribution.
(1) The Company agrees to
indemnify and hold harmless (i) each Investor,
(ii) each person, if any, who controls any
Investor within the meaning of Section 15 of
the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act") and (iii) the respective officers,
directors, partners, employees, representatives
and agents of each Investor or any controlling
person to the fullest extent lawful, from and
against any and all losses, liabilities,
claims, damages and expenses whatsoever
(including but not limited to reasonable
attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing
or defending against any investigation or
litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation),
joint or several, to which they or any of them
may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are
based upon any untrue statement or alleged
untrue statement of a material fact contained
in any Registration Statement or Prospectus, or
in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission
or alleged omission to state therein a material
fact required to be stated therein or necessary
to make the statements therein, in the light of
the circumstances under which they were made,
not misleading; provided, however, that the
Company will not be liable in any such case to
the extent, but only to the extent, that any
such loss, liability, claim, damage or expense
(A) arises out of or is based upon any such
untrue statement or alleged untrue statement or
omission or alleged omission made therein in
reliance upon and in conformity with
information relating to any Investor furnished
to the Company in writing by or on behalf of
such Investor expressly for use therein or (B)
is caused by an untrue statement or omission
that was contained or made in any preliminary
prospectus and corrected in the related
Prospectus or any supplement or amendment
thereto and (i) any such loss, liability,
claim, damage or expense suffered or insured by
any indemnified party resulted from an action,
claim or suit by any person who purchased
Shares from an Investor in the offering to
which such Prospectus relates, (ii) such
Investor failed to deliver or provide a copy of
such Prospectus or any such supplement or
amendment thereto to such person at or prior to
the confirmation of the sale of such Shares in
any case where such delivery is required by the
Act and (iii) such Prospectus (as so amended
and supplemented) would have cured the defect
giving rise to such loss, liability, claim,
damage or expense. This indemnity agreement
will be in addition to any liability which the
Company may otherwise have, including under
this Agreement.
(2) Each Investor, severally and
not jointly, agrees to indemnify and hold
harmless (i) the Company, (ii) each person, if
any, who controls the Company within the
meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, and (iii) the
respective officers, directors, partners,
employees, representatives and agents of the
Company, against any losses, liabilities,
claims, damages and expenses whatsoever
(including but not limited to reasonable
attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing
or defending against any investigation or
litigation, commenced or threatened, or any
claim whatsoever and any and all amounts paid
in settlement of any claim or litigation),
joint or several, to which they or any of them
may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are
based upon any untrue statement or alleged
untrue statement of a material fact contained
in any Registration Statement or Prospectus, or
in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission
or alleged omission to state therein a material
fact required to be stated therein or necessary
to make the statements therein, in the light of
the circumstances under which they were made,
not misleading, in each case to the extent, but
only to the extent, that any such loss,
liability, claim, damage or expense arises out
of or is based upon any untrue statement or
alleged untrue statement or omission or alleged
omission made therein in reliance upon and in
conformity with information relating to such
Investor furnished to the Company in writing by
or on behalf of such Investor expressly for use
therein; provided, however, that in no case
shall any Investor be liable or responsible for
any amount in excess of the net proceeds
received by such Investor in connection with
the sale of Registrable Securities. This
indemnity will be in addition to any liability
which the Investors may otherwise have,
including under this Agreement.
(3) Promptly after receipt by an
indemnified party under subsection (i) or (ii)
above of notice of the commencement of any
action, such indemnified party shall, if a
claim in respect thereof is to be made against
the indemnifying party under such subsection,
notify each party against whom indemnification
is to be sought in writing of the commencement
thereof (but the failure so to notify an
indemnifying party shall not relieve it from
any liability which it may have under this
Section 3(f) except to the extent that it has
been prejudiced in any material respect by such
failure or from any liability which it may
otherwise have). In case any such action is
brought against any indemnified party, and it
notifies an indemnifying party of the
commencement thereof, the indemnifying party
will be entitled to participate therein, and to
the extent it may elect by written notice
delivered to the indemnified party promptly
after receiving the aforesaid notice from such
indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to
such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties
shall have the right to employ its or their own
counsel in any such case, but the fees and
expenses of such counsel shall be at the
expense of such indemnified party or parties
unless (i) the employment of such counsel shall
have been authorized in writing by the
indemnifying parties in connection with the
defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take
charge of the defense of such action within a
reasonable time after notice of commencement of
the action, or (iii) such indemnified party or
parties shall have reasonably concluded that
there may be defenses available to it or them
which are different from or additional to those
available to one or all of the indemnifying
parties (in which case the indemnifying party
or parties shall not have the right to direct
the defense of such action on behalf of the
indemnified party or parties), in any of which
events such fees and expenses of counsel shall
be borne by the indemnifying parties; provided,
however, that the indemnifying party under
subsection (i) or (ii) above shall only be
liable for the legal expenses of one counsel
(in addition to any local counsel) for all
indemnified parties in each jurisdiction in
which any claim or action is brought. Anything
in this subsection to the contrary
notwithstanding, an indemnifying party shall
not be liable for any settlement of any claim
or action effected without its prior written
consent; provided, however, that such consent
was not unreasonably withheld.
(4) In order to provide for
contribution in circumstances in which the
indemnification provided for in this Section
3(f) is for any reason held to be unavailable
from the Company or is insufficient to hold
harmless a party indemnified thereunder, the
Company, on the one hand, and each Investor, on
the other hand, shall contribute to the
aggregate losses, claims, damages, liabilities
and expenses of the nature contemplated by such
indemnification provision (including any
investigation, legal and other expenses
incurred in connection with, and any amount
paid in settlement of, any action, suit or
proceeding or any claims asserted, but after
deducting in the case of losses, claims,
damages, liabilities and expenses suffered by
the Company, any contribution received by the
Company from persons, other than the Investors,
who may also be liable for contribution,
including persons who control the Company
within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the
Company and such Investor may be subject, in
such proportion as is appropriate to reflect
the relative benefits received by the Company,
on one hand, and such Investor, on the other
hand, or, if such allocation is not permitted
by applicable law or indemnification is not
available as a result of the indemnifying party
not having received notice as provided in this
Section 3(f), in such proportion as is
appropriate to reflect not only the relative
benefits referred to above but also the
relative fault of the Company, on one hand, and
such Investor, on the other hand, in connection
with the statements or omissions which resulted
in such losses, claims, damages, liabilities or
expenses, as well as any other relevant
equitable considerations. The relative
benefits received by the Company, on one hand,
and each Investor, on the other hand, shall be
deemed to be in the same proportion as (i) the
total proceeds from the offering (net of
discounts but before deducting expenses)
received by the Company and (ii) the net
proceeds received by such Investor,
respectively. The relative fault of the
Company, on one hand, and of each Investor, on
the other hand, shall be determined by
reference to, among other things, whether the
untrue or alleged untrue statement of a
material fact or the omission or alleged
omission to state a material fact relates to
information supplied by the Company or such
Investor and the parties' relative intent,
knowledge, access to information and
opportunity to correct or prevent such
statement or omission. The Company and each
Investor agree that it would not be just and
equitable if contribution pursuant to this
Section 3(f) were determined by pro rata
allocation or by any other method of allocation
which does not take into account the equitable
considerations referred to above.
Notwithstanding the provisions of this Section
3(f), (i) in no case shall any Investor be
required to contribute any amount in excess of
the amount by which the net proceeds received
such Investor from the sale of Registrable
Securities exceeds the amount of any damages
which such Investor has otherwise been required
to pay by reason of any untrue or alleged
untrue statement or omission or alleged
omission and (ii) no person guilty of
fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who
was not guilty of such fraudulent
misrepresentation. For purposes of this
Section 3(f), (A) each person, if any, who
controls any Investor within the meaning of
Section 15 of the Act or Section 20(a) of the
Exchange Act and (B) the respective officers,
directors, partners, employees, representatives
and agents of each Investor or any controlling
person shall have the same rights to
contribution as such Investor, and (A) each
person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act and (B) the
respective officers, directors, partners,
employees, representatives and agents of the
Company shall have the same rights to
contribution as the Company, subject in each
case to clauses (i) and (ii) of this Section
3(f). Any party entitled to contribution will,
promptly after receipt of notice of
commencement of any action, suit or proceeding
against such party in respect of which a claim
for contribution may be made against another
party or parties under this Section 3(f),
notify such party or parties from whom
contribution may be sought, but the failure to
so notify such party or parties shall not
relieve the party or parties from whom
contribution may be sought from any obligation
it or they may have under this Section 3(f) or
otherwise. No party shall be liable for
contribution with respect to any action or
claim settled without its prior written
consent; provided, however, that such written
consent was not unreasonably withheld.
(g) Rule 144. The Company agrees
that at all times after it has filed a
Registration Statement pursuant to the
requirements of the Act relating to any class
of equity securities of the Company, it will
file in a timely manner all reports required to
be filed by it pursuant to the Act and the
Exchange Act and will take such further action
as any Holder of Registrable Securities may
reasonably request in order that such Holder
may effect sales of Shares pursuant to Rule
144. At any reasonable time and upon request
of an Investor, the Company will furnish such
Investor and others with such information as
may be necessary to enable the Investor to
effect sales of Common Stock pursuant to
Rule 144 under the Act and will deliver to such
Investor a written statement as to whether the
Company has complied with such requirements.
Notwithstanding the foregoing, the Company may
deregister any class of its equity securities
under Section 12 of the Exchange Act or suspend
its duty to file reports with respect to any
class of its securities pursuant to
Section 15(d) of the Exchange Act if it is then
permitted to do so pursuant to the Exchange Act
and the rules and regulations thereunder.
(h) Participation in Underwritten
Registrations. No Investor may participate in
any underwritten registration hereunder unless
such Investor (i) agrees to sell its
Registrable Securities on the basis provided in
any underwriting arrangements approved by the
persons entitled hereunder to select the
underwriter, and (ii) accurately completes in a
timely manner and executes all questionnaires,
powers of attorney, underwriting agreements and
other documents customarily required under the
terms of such underwriting arrangements.
(i) Limitation on Other
Registration Rights. The Company will not
grant to any person (including the Investors)
any piggyback or other registration rights with
respect to the Common Stock of the Company (or
securities convertible into, or exercisable or
exchangeable for, Common Stock) other than
piggyback or other registration rights that are
not inconsistent with the terms of this
Section 3.
Section 4. Redemption at the
Option of the Company. The Company shall have
the right to redeem the Shares, at a price per
share equal to the fair market value of each
share of Common Stock determined as set forth
herein, by delivering a notice (the "Redemption
Notice") to all Holders of the Shares at any
time on or after July 15, 2001 and prior to
July 15, 2002. The Redemption Notice shall (i)
indicate that the Company is electing to redeem
the Shares pursuant to this Section 4, (ii)
identify an independent investment banking firm
of national standing selected by the Company to
deliver an opinion as to the fair market value
of the Common Stock, (iii) state such
investment banking firm's opinion as to the
fair market value of the Common Stock and (iv)
attach a copy of such investment banking firm's
opinion. Within 30 days after receipt of a
Redemption Notice, the Holder of the largest
number of Shares shall deliver a notice to the
Company (which the Company shall promptly send
to each other Holder of Shares) identifying a
second independent investment banking firm of
national standing that it has selected to
deliver an opinion as to the fair market value
of the Common Stock, which opinion shall be
delivered to the Company (which the Company
shall promptly send to each other Holder of
Shares) within 30 days following delivery of
such notice to the Company.
If the fair market value of the
Common Stock as determined by the investment
banking firm selected by the Holder of Shares
is within 10% of the fair market value of the
Common Stock as determined by the investment
banking firm selected by the Company, the
Company may, at its option, redeem the Shares
at a price equal to the average of the two fair
market values by delivering notice to such
effect to the Holders of the Shares within 10
days following delivery of the opinion of the
second investment banking firm to the Company,
which notice shall set forth (i) the purchase
price per Share (as so determined) and the
calculation thereof and (ii) the date set for
redemption, which shall be no less than 15 nor
more than 30 days after delivery of such
notice. On the redemption date, the Company
shall redeem the Shares by wiring the
redemption price in immediately available funds
to or for the account of the Holders of the
Shares against delivery of the certificate or
certificates evidencing the Shares.
If the fair market value of the
Common Stock as determined by the investment
banking firm selected by the Holder of Shares
is not within 10% of the fair market value of
the Common Stock as determined by the
investment banking firm selected by the
Company, the two investment banking firms
shall, within 15 days following the delivery of
the opinion of the second investment banking
firm to the Company, select a third independent
investment banking firm of national standing to
deliver an opinion as to the fair market value
of the Common Stock, which opinion shall be
delivered to the Company (which the Company
shall promptly send to each Holder of Shares)
within 30 days following such selection. The
Company may, at its option, redeem the Shares
at a price equal to the average of the fair
market values of the Common Stock set forth in
the opinions of the two investment banking
firms that are the closest in their valuation
by delivering a notice to such effect to the
Holders of the Shares within ten days following
delivery of the opinion of the third investment
banking firm to the Company, which notice shall
set forth (i) the purchase price per Share (as
so determined) and the calculation thereof and
(ii) the date set for redemption, which shall
be no less than 15 nor more than 30 days after
delivery of such notice. On the redemption
date, the Company shall redeem the Shares by
wiring the redemption price in immediately
available funds to or for the account of the
Holders of the Shares against delivery of the
certificate or certificates evidencing the
Shares.
Whether or not the Company redeems
the Shares pursuant to the provisions of this
Section 4, the Company shall pay the reasonable
fees and expenses of the investment banking
firms selected pursuant hereto.
Section 5. Legends.
(a) The Principal Shareholder and
the Investors agree that each certificate
representing shares of Common Stock shall bear
the following legend until such time as the
same is no longer applicable:
"THE SECURITY (OR ITS PREDECESSOR)
EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. 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)
UNDER THE SECURITIES ACT) OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(b) Upon original issuance
thereof, and until such time as the same is no
longer applicable, the certificates evidencing
Shares shall bear the following additional
legend:
"THE SHARES OF COMMON STOCK REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF,
AND ARE ENTITLED TO THE BENEFITS SET FORTH IN,
A SHAREHOLDERS' AGREEMENT DATED JUNE 28, 1996,
A COPY OF WHICH IS ON FILE AT THE OFFICE OF
AMERICAN SKIING COMPANY. AMERICAN SKIING
COMPANY WILL FURNISH A COPY OF SUCH
SHAREHOLDERS' AGREEMENT TO THE RECORD HOLDER
HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST TO
AMERICAN SKIING COMPANY AT ITS PRINCIPAL PLACE
OF BUSINESS OR REGISTERED OFFICE."
Section 6. Reports. Whether or
not required by the rules and regulations of
the Commission, so long as any Shares are
outstanding, the Company shall file with the
Commission (unless the Commission will not
accept such a filing) (i) all quarterly and
annual financial information required to be
contained in a filing with the Commission on
Forms 10-Q and 10-K if the Company were
required to file such Forms, including a
"Management's Discussion and Analysis of
Financial Condition and Results of Operations"
of the Company and its Restricted Subsidiaries
and, with respect to the annual information
only, a report thereon by the Company's
certified independent accountants and (ii) all
current reports required to be filed with the
Commission on Form 8-K if the Company were
required to file such reports. In addition,
the Company agrees that, for so long as any
Registrable Securities remain outstanding, the
Company shall furnish to the Holders and to
securities analysts and prospective investors,
upon their request, the information required by
Rule 144A(d)(4) under the Act.
Section 7. Specific Performance,
Etc. The Company, the Principal Shareholder
and each Investor, in addition to being
entitled to exercise all rights provided
herein, in the Company's Certificate of
Organization or granted by law, including
recovery of damages, will be entitled to
specific performance of its rights under this
Agreement. The Company, the Principal
Shareholder and each Investor agree that
monetary damages would not be adequate
compensation for any loss incurred by reason of
a breach by it of the provisions of this
Agreement and hereby agrees to waive the
defense in any action for specific performance
that a remedy at law would be adequate.
Section 8. Miscellaneous.
(a) Notices. All notices and
other communications provided for or permitted
hereunder shall be in writing and shall be
deemed to have been duly given if delivered
personally or sent by telecopy, overnight
courier or registered or certified mail (return
receipt requested) postage prepaid to the
parties at the following addresses (or such
other address for any party as shall be
specified by like notice, provided, however,
that notices of a change of address shall be
effective only upon receipt thereof). Notice
sent by mail shall be effective five days after
mailing.
(i) If to the Company or the
Principal Shareholder at:
c/o American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
Telecopy No.: (207) 824-2111
Attention: Thomas M. Richardson
with copies to:
Pierce, Atwood, Scribner, Allen, Smith &
Lancaster
One Monument Square
Portland, Maine
Telecopier No.: (207) 773-3419
Attention: Christopher E. Howard, Esq.
(ii) If to the Investors: at
their respective addresses appearing on the
stock transfer agent's register.
(b) Amendments and Waivers. The
provisions of this Agreement, including the
provisions of this sentence, may only be
amended, modified or supplemented, and waivers
of or consents to departures from the
provisions hereof may only be given if approved
by the Company in writing and the Company has
obtained the written consent of Investors
holding at least 50% of the then outstanding
Fully Diluted shares subject to this Agreement.
No action taken pursuant to this Agreement,
including, without limitation, any
investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the
party taking such action. The waiver by any
party hereto of a breach of any provision of
this Agreement shall not operate or be
construed as waiver of any preceding or
succeeding breach and no failure by any party
to exercise any right or privilege hereunder
shall be deemed a waiver of such party's rights
or privileges hereunder or shall be deemed a
waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
(d) Successors and Assigns. This
Agreement shall inure to the benefit of and be
binding upon the parties and their respective
successors and assigns, including, without
limitation, subsequent Holders of Shares.
(e) Counterparts. This Agreement
may be executed in one or more 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
instrument.
(f) Headings. The headings in
this Agreement are for convenience of reference
only and shall not affect the meaning of any
provision of this Agreement.
(G) GOVERNING LAW. THE VALIDITY,
PERFORMANCE, CONSTRUCTION AND EFFECT OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MAINE
APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN. THE PARTIES HERETO AGREE TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF MAINE IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(h) Severability. If any one or
more of the provisions contained herein, or the
application thereof in any circumstance, is
held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of
any such provision in every other respect and
of the remaining provisions contained herein
shall not be affected or impaired thereby.
(i) Entire Agreement. This
Agreement is intended by the parties as a final
expression of their agreement and intended to
be a complete and exclusive statement of the
agreement and understanding of the parties
hereto in respect of the subject matter
contained herein. There are no restrictions,
promises, warranties or undertakings other than
those set forth or referred to herein with
respect to the registration rights granted by
the Company with respect to the Registrable
Securities. This Agreement supersedes all
prior agreements and understandings between the
parties with respect to such subject matter.
(j) Attorneys' Fees. In any
action or proceeding brought to enforce any
provision of this Agreement, or where any
provision hereof is validly asserted as a
defense, the successful party shall be entitled
to recover reasonable attorneys, fees in
addition to any other available remedy.
Section 9. Definitions.
The following terms, as used
herein, have the following respective meanings:
Capital Stock means (i) in the
case of a corporation, corporate stock, (ii) in
the case of an association or business entity,
any and all shares, interests, participations,
rights or other equivalents (however
designated) of corporate stock, (iii) in the
case of a partnership, partnership interests
(whether general or limited) and (iv) any other
interest or participation that confers on a
Person the right to receive a share of the
profits and losses of, or distributions of
assets of, the issuing Person.
Change of Control means the
occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other
disposition (other than by way of merger or
consolidation), in one or a series of related
transactions, of all or substantially all of
the assets of the Company and its Restricted
Subsidiaries, taken as a whole, to any "person"
(as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Permitted
Holders, (ii) the adoption of a plan relating
to the liquidation or dissolution of the
Company, (iii) the consummation of any
transaction (including, without limitation, any
merger or consolidation) the result of which is
that the Permitted Holders cease to be the
"beneficial owners" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange
Act) of an aggregate of at least 51% of the
common stock of the Company and at least 51% of
the voting power of the Capital Stock of the
Company, (iv) the consummation of any
transaction (including, without limitation, any
merger or consolidation) the result of which is
that any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act), other
than the Permitted Holders, becomes the
"beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than 35%
of the common stock of the Company or more than
35% of the voting power of the Capital Stock of
the Company and (v) the first day on which more
than one-third of the members of the board of
directors of the Company are not Continuing
Directors.
Commission means the Securities
and Exchange Commission.
Continuing Directors means, as of
any date of determination, any member of the
board of directors of the Company who (i) was a
member of the board of directors on the date of
this Agreement or (ii) was nominated for
election to the board of directors with the
approval of at least two-thirds of the
Continuing Directors who were members of the
board of directors at the time of such
nomination or election.
Fully Diluted shares shall mean
all issued and outstanding shares of Common
Stock and all shares of Common Stock issuable
upon conversion, exchange or exercise of
Subject Securities other than shares of Common
Stock.
Subordinated Note Indenture means
the Subordinated Note Indenture, dated as of
the date hereof, among the Company, the
Guarantors named on the signature pages thereof
and United States Trust Company of New York, as
Trustee.
Permitted Holders means Leslie B.
Otten (or, in the event of his incompetence or
death, his estate and his and his estate's
heirs, executor, administrator, committee or
other representative (collectively, "Heirs"))
and any Person in which Leslie B. Otten and his
Heirs, directly or indirectly, have an 80%
controlling interest; provided that each such
Person and each such Heir shall not be deemed
to be a Permitted Holder until such time as
such Person or such Heir, as the case may be,
agrees in writing to be bound by the terms of
this Agreement as if such Person or such Heir
were the Principal Shareholder.
Person shall mean any individual,
corporation, partnership, joint venture,
association, joint-stock company, trust,
unincorporated organization, government or any
agency or political subdivision thereof or any
other entity.
Prospectus shall mean the
Prospectus included in any Registration
Statement, as amended or supplemented by any
prospectus supplement with respect to the terms
of the offering of any portion of the
Registrable Securities covered by such
Registration Statement and all other amendments
and supplements to the Prospectus, including
post-effective amendments, and all material
incorporated by reference in such Prospectus.
Registrable Securities means the
Shares, but with respect to any Share, only
until such time as such Share (i) has been
effectively registered under the Act and
disposed of in accordance with the Registration
Statement covering it or (ii) has been sold to
the public pursuant to Rule 144 (or any similar
provision then in force) under the Act or may
be sold to the public pursuant to Rule 144(k)
under the Act and the legend referred to in
Section 5(a) has been removed or the Company
has authorized the removal thereof from the
certificate representing such Share.
Registration Statement means any
registration statement of the Company filed
pursuant to the Securities Act and which covers
any of the Registrable Securities pursuant to
the provisions of this Agreement, including the
Prospectus amendments and supplements to such
Registration Statement, including post-
effective amendments, and all exhibits and all
material incorporated by reference in such
Registration Statement.
Subject Securities means Common
Stock, or securities convertible into, or
exercisable or exchangeable for, Common Stock.
IN WITNESS WHEREOF, the parties
have executed this Shareholders' Agreement as
of the date first above written.
AMERICAN SKIING COMPANY
By:
/s/ Leslie
B. Otten
Name: Leslie B. Otten
Title: President
/s/ Leslie B. Otten
LESLIE B. OTTEN
BEAR, STEARNS & CO. INC.
By: /s/ Bear Stearns & Co.,
Inc. Name:
Title:
A-19
PLEDGE AND DISBURSEMENT AGREEMENT
by and among
AMERICAN SKIING COMPANY
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Collateral Agent
Dated: June 28, 1996
<PAGE>
Pledge and Disbursement Agreement
THIS Pledge and
Disbursement Agreement (this
"Agreement"), dated as of June 28,
1996, is by and among AMERICAN SKIING
COMPANY (the "Company"), UNITED
STATES TRUST COMPANY OF NEW YORK, as
trustee under the Indenture referred
to below (the "Trustee"), and UNITED
STATES TRUST COMPANY OF NEW YORK, in
its capacity as collateral agent for
the Trustee and the Holders of the
Notes hereinafter described (the
"Collateral Agent").
RECITALS
A. The Notes. Pursuant to
that certain Indenture (the
"Indenture") dated as of June 28,
1996 by and among the Company, the
Guarantors named on the signature
pages thereof and the Trustee, the
Company will issue $120,000,000
aggregate principal amount of 12%
Senior Subordinated Notes due 2006
(collectively, the "Notes").
Simultaneously with the payment for
the Notes (the "Deposit Time"),
$14,453,759 of the net proceeds from
the sale of the Notes (the "Pledged
Proceeds") will be deposited into a
segregated cash collateral trust
account with the Collateral Agent at
its office at 114 West 47th Street,
in New York, New York, Account No.
04639200, in the name of United
States Trust Company of New York, as
Trustee for American Skiing Company
(the "Collateral Account"). The
Collateral Account and all balances
and investments from time to time
therein shall be under the sole
control and dominion of the
Collateral Agent for the benefit of
the Holders of the Notes, the
Collateral Agent and the Trustee,
subject to the terms and conditions
hereof. Capitalized terms used but
not defined herein shall have the
meanings assigned to them in the
Indenture.
B. Purpose. The parties
hereto desire to set forth their
agreement with regard to the
administration of the Collateral
Account, the creation of a security
interest in the Collateral (as
defined herein) and the conditions
upon which funds will be released
from the Collateral Account and the
conditions upon which the security
interest and Lien described herein
will be released.
AGREEMENT
NOW, THEREFORE, for good
and valuable consideration, the
receipt and sufficiency of which are
hereby acknowledged, the parties
hereto agree as follows:
1. Security Interest.
1.1 Pledge and Assignment.
The Company hereby irrevocably
pledges, assigns and sets over to the
Trustee, and grants to the Trustee,
for the benefit of the Holders of the
Notes, a first priority continuing
security interest in all of the
Company's right, title and interest
to all of the following, whether now
owned or existing or hereafter
acquired or created (collectively,
the "Collateral"):
1.1.1 the Collateral
Account;
1.1.2 all funds from time
to time held in the Collateral
Account, including, without
limitation, the Pledged Proceeds
and all certificates and
instruments, if any, from time
to time, representing or
evidencing the Collateral
Account or the Pledged Proceeds;
1.1.3 all Allowable
Investments (as defined herein),
whether the same shall
constitute certificated
securities, uncertificated
securities, investment property,
instruments, general intangibles
or otherwise held by or
registered in the name of the
Collateral Agent or the Trustee
and all certificates and
instruments, if any, from time
to time representing or
evidencing the Allowable
Investments;
1.1.4 all notes,
certificates of deposit, deposit
accounts, checks and other
instruments from time to time
hereafter delivered to or
otherwise possessed by the
Trustee or the Collateral Agent
for or on behalf of the Company
in substitution for or in
addition to any or all of the
then existing Collateral;
1.1.5 all interest,
dividends, cash, instruments and
other property from time to time
received, receivable or
otherwise distributed in respect
of or in exchange for any or all
of the then existing Collateral;
and
1.1.6 all proceeds of the
foregoing including, without
limitation, cash proceeds.
The Company and the Trustee hereby
appoint the Collateral Agent to act
as the Trustee's agent, on behalf of
the Holders of the Notes, for
purposes of perfecting the foregoing
pledge, assignment and security
interest in the Collateral, and the
Collateral Agent hereby accepts such
appointment. Subject to the
provisions of Section 7.07 of the
Indenture, for so long as the
foregoing pledge, assignment and
security interest remains in effect,
the Collateral Agent hereby waives
any right of setoff or banker's lien
that it, in its individual capacity,
may have with respect to any or all
of the Collateral.
1.2 Secured Obligations.
This Agreement secures the due and
punctual payment and performance of
all obligations and indebtedness of
the Company, whether now or hereafter
existing, under the Notes and the
Indenture including, without
limitation, interest accrued thereon
after the commencement of a
bankruptcy, reorganization or similar
proceeding involving the Company to
the extent permitted by applicable
law (collectively, the "Secured
Obligations").
1.3 Delivery of
Collateral. All certificates or
instruments, if any, representing or
evidencing the Collateral shall be
held by or on behalf of the
Collateral Agent pursuant hereto and
shall be in suitable form for
transfer by delivery, or shall be
accompanied by duly executed
instruments of transfer or
assignments in blank, all in form and
substance reasonably satisfactory to
the Trustee and the Collateral Agent.
All securities in uncertificated or
book-entry form, if any, representing
or evidencing the Collateral shall be
registered in the name of the Trustee
or any of its nominees by book-entry
or as otherwise appropriate so as to
properly identify the interest of the
Trustee therein. In addition, the
Trustee shall have the right, at any
time following the occurrence of an
Event of Default, and only for so
long as such Event of Default is
continuing, to transfer to or to
register in the name of the Trustee
or any of its nominees any or all
other Collateral. Except as
otherwise provided herein, all
Collateral shall be deposited and
held in the Collateral Account. The
Trustee shall have the right at any
time to exchange certificates or
instruments representing or
evidencing all or any portion of the
Collateral for certificates or
instruments of smaller or larger
denominations in the same aggregate
amount.
1.4 Further Assurances.
Prior to, contemporaneously herewith,
and at any time and from time to time
hereafter, the Company will, at the
Company's expense, execute and
deliver to the Trustee or the
Collateral Agent such other
instruments and documents, and take
all further action as it deems
necessary or advisable or as the
Trustee or the Collateral Agent may
reasonably request including an
Opinion of Counsel, upon which the
Trustee or the Collateral Agent, as
the case may be, may conclusively
rely, to confirm or perfect the
security interest of the Trustee
granted or purported to be granted
hereby or to enable the Trustee to
exercise and enforce its rights and
remedies hereunder with respect to
any Collateral and the Company will
take all necessary action to preserve
and protect the security interest
created hereby as a first priority,
perfected lien and encumbrance upon
the Collateral. The Company will pay
all costs incurred in connection with
any of the foregoing.
1.5 Maintaining the
Collateral Account. So long as this
Agreement is in full force and
effect:
1.5.1 the Company shall
establish and maintain the
Collateral Account with the
Collateral Agent in New York,
New York, and the Collateral
Account shall at all times
remain under the exclusive
dominion and control of the
Collateral Agent for the benefit
of the Holders of the Notes; and
1.5.2 it shall be a
term and condition of the
Collateral Account,
notwithstanding any term or
condition to the contrary in any
other agreement relating to the
Collateral Account and except as
otherwise provided by Section
2.5 of this Agreement, that no
amount (including, without
limitation, interest on or other
proceeds of the Collateral
Account or on any Allowable
Investments held therein) shall
be paid or released to or for
the account of, or withdrawn by
or for the account of, the
Company or any other person or
entity other than the Trustee or
its designated agent from the
Collateral Account.
1.6 Transfers and Other
Liens. Until termination of this
Agreement pursuant to Section 8, the
Company agrees that it will not (i)
sell, assign (by operation of law or
otherwise) or otherwise dispose of,
or grant any option with respect to,
any of the Collateral or (ii) create
or permit to exist any Lien upon or
with respect to any of the
Collateral, except for the security
interest under this Agreement.
1.7 Attorneys-in-Fact. In
addition to all of the powers granted
to the Trustee pursuant to Article 6
of the Indenture, the Company hereby
irrevocably appoints each of the
Trustee and the Collateral Agent as
the Company's attorney-in-fact,
coupled with an interest, with full
authority in the place and stead of
the Company and in the name of the
Company or otherwise, from time to
time in the Trustee's or the
Collateral Agent's discretion to, so
long as any Event of Default has
occurred and is continuing, take any
action and to execute any instrument
which the Trustee or the Collateral
Agent may deem necessary or advisable
to accomplish the purposes of this
Agreement, including, without
limitation, to receive, endorse and
collect all instruments made payable
to the Company representing any
interest payment, dividend or other
distribution in respect of the
Collateral or any part thereof and to
give full discharge for the same, and
the expenses of the Trustee incurred
in connection therewith shall be
payable by the Company.
1.8 Trustee May Perform.
Without limiting the authority
granted under Section 1.7 and except
with respect to the failure of the
Company to deliver investment
instructions, which shall be governed
by the second paragraph of Section
2.1 hereof, if the Company fails to
perform any agreement contained
herein, the Trustee or the Collateral
Agent may, but shall not be obligated
to, itself perform, or cause
performance of, such agreement, and
the expenses of the Trustee or the
Collateral Agent incurred in
connection therewith shall be payable
by the Company. In the event that
the Trustee or the Collateral Agent
perform pursuant to this Section 1.8,
the Company shall indemnify the
Trustee or the Collateral Agent, as
the case may be, in the manner
provided in Section 7.07 of the
Indenture.
1.9 Collateral Account
Statement. Each month, the
Collateral Agent shall deliver to the
Company and the Trustee a statement
signed by the Collateral Agent in a
form satisfactory to the Company and
the Trustee setting forth with
reasonable particularity the balance
of funds then in the Collateral
Account and the manner in which such
funds are invested. The parties
hereto irrevocably instruct the
Collateral Agent that on the first
date upon which the balance in the
Collateral Account is reduced to
zero, the Collateral Agent shall
deliver to the Company and to the
Trustee a notice that the balance in
the Collateral Account has been
reduced to zero.
2. Investment and Liquidation
of Funds in Collateral Account.
Funds deposited in the Collateral
Account shall be invested and
reinvested by the Collateral Agent on
the following terms and conditions:
2.1 Allowable Investments.
Subject to the provisions of Articles
2 and 3, funds held by the Collateral
Agent in the Collateral Account may,
at the written direction of the
Company, be invested and reinvested
in U.S. Government Treasury
securities (the "Allowable
Investments"); provided, however,
that such Allowable Investments have
maturity dates not later than one
business day before the dates on
which the payments of interest on the
Notes to which such Allowable
Investments are pledged to secure
occur.
If the Company fails to
give written investment instructions
to the Collateral Agent by 12:00 noon
(New York time) on any Business Day
on which there is uninvested cash
and/or maturing Allowable Investments
in the Collateral Account, the
Trustee is hereby authorized and
directed to direct the Collateral
Agent to, and the Collateral Agent
shall, invest any such cash or the
proceeds of any maturing Allowable
Investments in Allowable Investments
maturing on the next Business Day.
The Company's failure to give such
investment instructions shall not
constitute a default or an event of
default hereunder.
2.2 Interest. All
interest earned on funds invested in
Allowable Investments shall be held
in the Collateral Account and
reinvested in accordance with the
terms hereof and will be subject to
the security interest granted
hereunder to the Trustee.
2.3 Limitation of
Trustee's and Collateral Agent's
Liability. In no event shall the
Trustee or the Collateral Agent have
any liability to the Company or any
other Person for investing the funds
from time to time in the Collateral
Account in accordance with the
provisions of this Article 2,
regardless of whether greater income
or a higher yield could have been
obtained had the Collateral Agent
invested such funds in different
Allowable Investments, or for any
loss (including breakage costs or
loss of principal) associated with
the sale or liquidation of Allowable
Investments in accordance with the
terms of this Agreement, in each case
other than with respect to gross
negligence or willful misconduct of
the Collateral Agent.
2.4 Liquidation of Funds.
In liquidating any Allowable
Investments in accordance with
Article 3 of this Agreement, the
Company shall direct the Trustee or
the Collateral Agent as to which
Allowable Investments shall be
liquidated.
3.
Interest
Payments.
3.1 One Business Day prior
to the date of each of the first two
scheduled interest payments due on
the Notes, the Collateral Agent shall
transfer from the Collateral Account
to the Paying Agent funds necessary
to provide for payment in full of the
next scheduled interest payment on
the Notes. The Collateral Agent will
take any action necessary to provide
for the payment of such interest
payment on the Notes directly to the
Holders of Notes from proceeds of the
Collateral in the Collateral Account.
Concurrently with any release of
funds to the Paying Agent pursuant to
this Section 3.1, the Company will
deliver to the Trustee a certificate
substantially in the form of Exhibit
A hereto.
3.2 Upon payment in full
of the first two scheduled interest
payments on the Notes, the security
interest in the Collateral evidenced
by this Agreement will terminate and
be of no further force and effect.
Furthermore, upon the release of any
Collateral from the Collateral
Account in accordance with the terms
of this Agreement, whether upon
release of Collateral to Holders as
payment of interest, to the Company
or otherwise, the security interest
evidenced by this Agreement in the
Collateral so released will terminate
and be of no further force and
effect.
4. Representations and
Warranties. The Company hereby
represents and warrants that:
4.1 The execution,
delivery and performance by the
Company of this Agreement are within
the Company's corporate powers, have
been duly authorized by all necessary
corporate action, and do not
contravene, or constitute a default
under, any provision of applicable
law or regulation or of the
certificate of incorporation of the
Company or of any agreement,
judgment, injunction, order, decree
or other instrument binding upon the
Company or result in the creation or
imposition of any Lien on any assets
of the Company, except for the
security interests granted under this
Agreement.
4.2 The Company is the
record and beneficial owner of the
Collateral, free and clear of any
Lien or claims of any person or
entity (except for the security
interests granted under this
Agreement). No financing statement
covering the Collateral and creating
a perfected security interest in the
Collateral is on file in any public
office other than the financing
statements filed pursuant to this
Agreement.
4.3 This Agreement has
been duly executed and delivered by
the Company and constitutes a valid
and binding obligation of the
Company, enforceable against the
Company in accordance with its terms,
except as such enforceability may be
limited by the effect of any
applicable bankruptcy, insolvency,
reorganization, moratorium or other
similar laws affecting creditors'
rights generally or general
principles of equity and commercial
reasonableness.
4.4 Upon the filing of
financing statements required by the
Uniform Commercial Code (the "UCC"),
the pledge of the Collateral pursuant
to this Agreement creates a valid and
perfected first priority security
interest in and to the Collateral,
securing the payment of the Secured
Obligations for the benefit of the
Trustee and the ratable benefit of
the Holders of Notes, enforceable as
such against all creditors of the
Company and any persons purporting to
purchase any of the Collateral from
the Company other than as permitted
by the Indenture.
4.5 Except as have been
obtained, no consent of any other
Person and no consent, authorization,
approval, or other action by, and no
notice to or filing with, any
governmental authority or regulatory
body is required either (1) for the
pledge by the Company of the
Collateral pursuant to this Agreement
or for the execution, delivery or
performance of this Agreement by the
Company (except for any filings
necessary to perfect Liens on the
Collateral) or (2) for the exercise
by the Trustee of the rights provided
for in this Agreement or the remedies
in respect of the Collateral pursuant
to this Agreement.
4.6 No litigation,
investigation or proceeding of or
before any arbitrator or governmental
authority is pending or, to the
knowledge of the Company, threatened
by or against the Company with
respect to this Agreement or any of
the transactions contemplated hereby.
4.7 The pledge of the
Collateral pursuant to this Agreement
is not prohibited by any applicable
law or governmental regulation,
release, interpretation or opinion of
the Board of Governors of the Federal
Reserve System or other regulatory
agency (including, without
limitation, Regulations G, T, U and X
of the Board of Governors of the
Federal Reserve System).
5. Covenants
The Company covenants and
agrees with the Collateral Agent, the
Trustee and the Holders of Notes from
and after the date of this Agreement
until the earlier of payment in full
in cash of (A) each of the first two
scheduled interest payments due on
the Notes under the terms of the
Indenture or (B) all obligations
(including, but not limited to all
Secured Obligations) due and owing
under the Indenture and the Notes in
the event such obligations
(including, but not limited to all
Secured Obligations) become due and
payable prior to the payment of the
first two scheduled interest payments
on the Notes:
(i) The Company agrees that
it will not (a) sell or
otherwise dispose of, or grant
any option or warrant with
respect to, any of the
Collateral or (b) create or
permit to exist any Lien upon or
with respect to any of the
Collateral (except for the lien
created pursuant to this
Agreement) and, except as
otherwise provided in this
Agreement, at all times will be
the sole beneficial owner of the
Collateral.
(ii) Subject to Article 10
of the Indenture, the Company
agrees that it will not (a)
enter into any agreement or
understanding that purports to
or may restrict or inhibit the
Trustee's rights or remedies
hereunder, including, without
limitation, the Trustee's right
to sell or otherwise dispose of
the Collateral in accordance
with the terms of this Agreement
or (b) fail to pay or discharge
any tax, assessment or levy of
any nature not later than five
days prior to the date of any
proposed sale under any
judgement, writ or warrant of
attachment with regard to the
Collateral.
6. Remedies upon Default.
If any Event of Default shall have
occurred and be continuing:
(i) The Trustee may,
without notice to the Company
except as required by law and at
any time or from time to time,
direct the Collateral Agent to
liquidate all Allowable
Investments and transfer all
funds in the Collateral Account
to the Paying Agent to apply
such funds in accordance with
Section 6.10 of the Indenture.
(ii) The Collateral Agent
and/or the Trustee may also
exercise in respect of the
Collateral, in addition to the
other rights and remedies
provided for herein or otherwise
available to it, all the rights
and remedies of a secured party
on default under the UCC
(whether or not the UCC applies
to the affected Collateral), and
may also, without notice except
as specified below, sell the
Collateral or any part thereof
in one or more parcels at public
or private sale, at any of the
Trustee's or the Collateral
Agent's offices or elsewhere,
for cash, on credit or for
future delivery, and upon such
other terms as the Trustee may
deem commercially reasonable.
The Company agrees that, to the
extent notice of sale shall be
required by law, at least ten
days' notice to the Company of
the time and place of any public
sale or the time after which any
private sale is to be made shall
constitute reasonable
notification. The Trustee and
the Collateral Agent shall not
be obligated to make any sale of
Collateral regardless of notice
of sale having been given. The
Trustee or the Collateral Agent
may adjourn any public or
private sale from time to time
by announcement at the time and
place fixed therefor, and such
sale may, without further
notice, be made at the time and
place to which it was so
adjourned.
(iii) Any cash held by the
Collateral Agent as Collateral
and all net cash proceeds
received by the Trustee or the
Collateral Agent in respect of
any sale or liquidation of,
collection from, or other
realization upon all or any part
of the Collateral may, in the
discretion of the Trustee, be
held by the Trustee or the
Collateral Agent as collateral
for, and/or then or at any time
thereafter be applied (after
payment of any costs and
expenses incurred in connection
with any sale, liquidation or
disposition of or realization
upon the Collateral and the
payment of any amounts payable
to the Trustee or the Collateral
Agent) in whole or in part by
the Trustee or the Collateral
Agent for the ratable benefit of
the Holders of the Notes
against, all or any part of the
Secured Obligations in such
order as the Trustee shall
elect. Any surplus of such cash
or cash proceeds held by the
Trustee or the Collateral Agent
and remaining after payment in
full of all the Secured
Obligations and the costs and
expenses incurred by and amounts
payable to the Trustee or the
Collateral Agent hereunder or
under the Indenture shall be
paid over to the Company or to
whomsoever shall be lawfully
entitled to receive such
surplus.
7. Indemnity and
Authority of the Collateral Agent.
7.1 The Collateral
Agent shall have and be entitled
to exercise all powers hereunder
that are specifically granted to
the Collateral Agent by the
terms hereof, together with such
powers as are reasonably
incident thereto. The
Collateral Agent may perform any
of its duties hereunder or in
connection with the Collateral
Account by or through agents or
employees and shall be entitled
to retain counsel of its choice
and to act in reliance upon the
advice of such counsel
concerning all such matters.
Neither the Collateral Agent nor
any director, officer, employee,
attorney or agent of the
Collateral Agent shall be
responsible for the validity,
effectiveness or sufficiency
hereof or of any document or
security furnished pursuant
hereto. The Collateral Agent
and its directors, officers,
employees, attorneys and agents
shall be entitled to rely on any
communication, instrument or
document believed by it or them
to be genuine and correct and to
have been signed or sent by the
proper person or persons. The
Company agrees to indemnify and
hold harmless the Collateral
Agent, the Holders of Notes and
any other Person from and
against any and all costs,
expenses (including the
reasonable fees and
disbursements of counsel
(including the reasonably
allocated costs of inside
counsel)), claims and
liabilities incurred by the
Collateral Agent, the Holders of
Notes or such Person hereunder,
unless such claim or liability
shall be due to willful
misconduct or gross negligence
on the part of the Collateral
Agent, the Holders of Notes or
such Person.
7.2 The Company
acknowledges that the rights and
responsibilities of the
Collateral Agent under this
Agreement with respect to any
action taken by the Collateral
Agent or the exercise or
non-exercise by the Collateral
Agent of any option, right,
request, judgment or other right
or remedy provided for herein or
resulting or arising out of this
Agreement shall, as between the
Collateral Agent and the Holders
of Notes, be governed by the
Indenture and by such other
agreements with respect thereto
as may exist from time to time
among them, but, as between the
Collateral Agent and the
Company, the Collateral Agent
shall be conclusively presumed
to be acting as agent for the
Holders of Notes with full and
valid authority so to act or
refrain from acting, and the
Company shall not be obligated
or entitled to make any inquiry
respecting such authority.
7.3 No provision of
this Agreement shall require the
Trustee to expend or risk its
own funds or incur any
liability. The Trustee shall be
under no obligation to exercise
any of its rights and powers
under this Agreement at the
request of any Holders, unless
such Holder shall have offered
to the Trustee security and
indemnity satisfactory to it
against any loss, liability or
expense.
8. Termination.
8.1 This Agreement shall
create a continuing security interest
in and to the Collateral and such
security interest shall, unless
otherwise provided in the Indenture
or in this Agreement, remain in full
force and effect until the earlier of
payment in full in cash of (A) each
of the first two scheduled interest
payments due on the Notes under the
terms of the Indenture or (B) all
obligations (including, but not
limited to, all Secured Obligations)
due and owing under the Indenture and
the Notes in the event such
obligations become payable prior to
the payment of the first two
scheduled interest payments on the
Notes. This Agreement shall be
binding upon the Company, its
successors and assigns, and shall
inure, together with the rights and
remedies of the Trustee hereunder, to
the benefit of the Trustee, the
Collateral Agent, the Holders of
Notes and their respective
successors, transferees and assigns.
8.2 Subject to the
provisions of Section 9.3 hereof,
this Agreement shall terminate upon
the earlier of payment in full in
cash of (A) each of the first two
scheduled interest payments due on
the Notes under the terms of the
Indenture or (B) all obligations
(including, but not limited to, all
Secured Obligations) due and owing
under the Indenture and the Notes in
the event such obligations
(including, but not limited to all
Secured Obligations) become payable
prior to the payment of the first two
scheduled interest payments on the
Notes. At such time, the Trustee
shall, at the written request of the
Company, reassign and redeliver to
the Company all of the Collateral
hereunder that has not been sold,
disposed of, retained or applied by
the Trustee in accordance with the
terms of this Agreement and the
Indenture. Such reassignment and
redelivery shall be without warranty
(either express or implied) by or
recourse to the Trustee, except as to
the absence of any prior assignments
by or encumbrances created by the
Trustee on its interest in the
Collateral, and shall be at the
expense of the Company.
9. Miscellaneous.
9.1 Waiver. Either party
hereto may specifically waive any
breach of this Agreement by any other
party, but no such waiver shall be
deemed to have been given unless such
waiver is in writing, signed by the
waiving party, and specifically
designates the breach waived, nor
shall any such waiver constitute a
continuing waiver of similar or other
breaches.
9.2 Invalidity. If, for
any reason whatsoever, any one or
more of the provisions of this
Agreement shall be held or deemed to
be inoperative, unenforceable or
invalid in a particular case or in
all cases, such circumstances shall
not have the effect of rendering any
of the other provisions of this
Agreement inoperative, unenforceable
or invalid, and the inoperative,
unenforceable or invalid provision
shall be construed as if it were
written so as to effectuate, to the
maximum extent possible, the parties'
intent.
9.3 Survival of
Provisions. All representations,
warranties and covenants of the
Company contained herein shall
survive the execution and delivery of
this Agreement, and shall terminate
only upon the termination of this
Agreement; provided, however that the
Company's obligations pursuant to
Section 7 hereof shall survive the
termination of this Agreement
(including any termination under
applicable bankruptcy laws) or the
resignation or removal of the Trustee
or the Collateral Agent.
9.4 Assignment. This
Agreement shall inure to and be
binding upon the parties and their
respective successors and permitted
assigns; provided, however, that the
Company may not assign its rights or
obligations hereunder without the
express prior written consent of the
Trustee, acting at the direction of
the Holders as provided in the
Indenture.
9.5 Entire Agreement;
Amendments. This Agreement and the
Indenture contain the entire
agreement among the parties with
respect to the subject matter hereof
and supersede any and all prior
agreements, understandings and
commitments with respect thereto,
whether oral or written; provided,
however, that this Agreement is
executed and accepted by the Trustee
and the Collateral Agent subject to
all terms and conditions of its
acceptance of the trust under the
Indenture, as fully as if said terms
and conditions were set forth at
length herein. This Agreement may be
amended only by a writing signed by
duly authorized representatives of
all parties. The Trustee and the
Collateral Agent may execute an
amendment to this Agreement only if
the requisite consent of the Holders
of the Notes required by Section 9.02
of the Indenture has been obtained,
unless no such consent is required by
such Section 9.02 of the Indenture.
9.6 Notices. All notices
and other communications required or
permitted to be given or made under
this Agreement to any party hereto
shall be delivered in writing by hand
delivery or overnight delivery, or
shall be delivered by facsimile or
telephonically with confirmation in
writing not more than twenty-four
hours following such telephonic
notice. A notice given in accordance
with the preceding sentence shall be
deemed to have been duly given upon
the sending thereof, except for
notice to the Trustee or the
Collateral Agent, which shall be
deemed given only when received.
Notices should be addressed as
follows:
To the Company:
American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
Attention: Thomas M. Richardson
Facsimile number: (207) 824-2111
Telephone number: (207) 824-3000
With copies to:
Pierce, Atwood, Scribner, Allen,
Smith & Lancaster
One Monument Square
Portland, Maine 04101
Attention: Christopher E. Howard,
Esq.
Facsimile number: (207) 773-3419
Telephone number: (212) 773-6411
To the Trustee:
United States Trust Company of New
York
114 West 47th Trust
New York, New York 10036
Attention: Corporate Trust
Administration (Reference - American
Skiing Company)
Facsimile number: (212) 852-1625
Telephone number: (212) 852-1000
To the Collateral Agent:
United States Trust Company of New
York
114 West 47th Trust
New York, New York 10036
Attention: Corporate Trust
Administration (Reference - American
Skiing Company)
Facsimile number: (212) 852-1625
Telephone number: (212) 852-1000
or at such other address, facsimile
number or phone number as the
specified entity most recently may
have designated in writing in
accordance with this paragraph to the
other parties.
9.7 Expenses. The Company
will upon demand pay to the Trustee
and the Collateral Agent the amount
of any and all reasonable fees and
expenses, including, without
limitation, the reasonable fees,
expenses and disbursements of its
counsel, retained by the Trustee and
Collateral Agent that the Trustee and
Collateral Agent may incur in
connection with (a) the
administration of this Agreement, (b)
the custody or preservation of, or
the sale of, collection from, or
other realization upon, any of the
Collateral, (c) the exercise or
enforcement of any of the rights of
the Trustee and Collateral Agent and
the Holders of Notes hereunder or (d)
the failure by the Company to perform
or observe any of the provisions
hereof, in each case other than any
such expenses that arise from the
gross negligence or willful
misconduct of the Trustee or
Collateral Agent.
9.8 Security Interest
Absolute. All rights of the Trustee
and the Holders of Notes and security
interests hereunder, and all
obligations of the Company hereunder,
shall be absolute and unconditional
irrespective of (a) any lack of
validity or enforceability of the
Indenture or any other agreement or
instrument relating thereto; (b) any
change in the time, manner or place
of payment of, or in any other term
of, all or any of the Secured
Obligations, or any other amendment
or waiver of or any consent to any
departure from the Indenture; (c) any
exchange, surrender, release or
non-perfection of any Liens on any
other collateral for all or any of
the Secured Obligations; or (d) to
the extent permitted by applicable
law, any other circumstance which
might otherwise constitute a defense
available to, or a discharge of, the
Company in respect of the Secured
Obligations or of this Agreement.
9.9 Counterparts. This
Agreement may be executed in one or
more counterparts, each of which
shall be deemed an original but all
of which together shall constitute
one and the same instrument.
Delivery of an executed counterpart
of a signature page to this Agreement
by facsimile shall be effective as
delivery of a manually executed
counterpart of this Agreement.
9.10 Limitation by Law.
All rights, remedies and powers
provided herein may be exercised only
to the extent that they will not
render this Agreement not entitled to
be recorded, registered or filed
under provisions of any applicable
law.
9.11 Rights of Holders of
Notes. No Holder of Notes shall have
any independent rights hereunder
other than those rights granted to
individual Holders of Notes pursuant
to Section 6.06 of the Indenture;
provided that nothing in this
subsection shall limit any rights
granted to the Trustee under the
Notes or the Indenture.
9.12 GOVERNING LAW;
SUBMISSION TO JURISDICTION; WAIVER OF
DAMAGES.
(i) THIS AGREEMENT SHALL
BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK,
AND ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THE COMPANY, THE
TRUSTEE AND THE HOLDERS OF NOTES IN
CONNECTION WITH THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
(ii) THE COMPANY AGREES
THAT THE TRUSTEE SHALL, IN ITS
CAPACITY AS TRUSTEE OR IN THE NAME
AND ON BEHALF OF ANY HOLDER OF NOTES,
HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO
PROCEED AGAINST THE COMPANY OR ITS
PROPERTY IN A COURT IN ANY LOCATION
REASONABLY SELECTED IN GOOD FAITH
(AND HAVING PERSONAL OR IN REM
JURISDICTION OVER THE COMPANY OR ITS
PROPERTY, AS THE CASE MAY BE) TO
ENABLE THE TRUSTEE TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF
THE TRUSTEE. THE COMPANY AGREES THAT
IT WILL NOT ASSERT ANY COUNTERCLAIMS,
SETOFFS OR CROSS CLAIMS IN ANY
PROCEEDING BROUGHT BY THE TRUSTEE TO
REALIZE ON SUCH PROPERTY OR TO
ENFORCE A JUDGEMENT OR OTHER COURT
ORDER IN FAVOR OF THE TRUSTEE, EXCEPT
FOR SUCH COUNTERCLAIMS, SETOFFS OR
CROSSCLAIMS WHICH, IF NOT ASSERTED IN
ANY SUCH PROCEEDING, COULD NOT
OTHERWISE BE BROUGHT OR ASSERTED.
THE COMPANY WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH THE TRUSTEE HAS
COMMENCED A PROCEEDING DESCRIBED IN
THIS PARAGRAPH INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS.
(iii) THE COMPANY, THE
TRUSTEE AND THE COLLATERAL AGENT EACH
WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(iv) THE COMPANY AGREES
THAT NEITHER THE TRUSTEE, THE
COLLATERAL AGENT NOR ANY HOLDER OF
NOTES SHALL HAVE ANY LIABILITY TO THE
COMPANY (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) FOR LOSSES
SUFFERED BY THE COMPANY IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY
RELATED TO, THE TRANSACTIONS
CONTEMPLATED AND THE RELATIONSHIP
ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT
THAT IS BINDING ON THE TRUSTEE OR
SUCH HOLDER OF NOTES, AS THE CASE MAY
BE, THAT SUCH LOSSES WERE THE RESULT
OF ACTS OR OMISSIONS ON THE PART OF
THE TRUSTEE OR SUCH HOLDER OF NOTES,
AS THE CASE MAY BE, CONSTITUTING BAD
FAITH, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(v) TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AND
EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, THE COMPANY WAIVES ALL
RIGHTS OF NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY THE
TRUSTEE OR ANY HOLDER OF NOTES OF ITS
RIGHTS DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT TO REPOSSESS THE
COLLATERAL WITH JUDICIAL PROCESS OR
TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE
SECURED OBLIGATIONS. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE
COMPANY WAIVES THE POSTING OF ANY
BOND OTHERWISE REQUIRED OF THE
TRUSTEE OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO OBTAIN POSSESSION
OF, REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE
SECURED OBLIGATIONS, TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF THE TRUSTEE OR ANY HOLDER
OF NOTES, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING
ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION, THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN
THE COMPANY ON THE ONE HAND AND THE
TRUSTEE AND/OR THE HOLDERS OF NOTES
ON THE OTHER HAND.
IN WITNESS WHEREOF, the
parties hereto have executed and
delivered this Pledge and
Disbursement Agreement as of the day
first written above.
COMPANY: AMERICAN SKIING COMPANY
By
Name:
Title:
TRUSTEE: UNITED STATES TRUST COMPANY
OF NEW YORK
By
Name:
Title:
COLLATERAL AGENT:UNITED STATES TRUST
COMPANY OF NEW YORK
By
Name:
Title:
<PAGE>
EXHIBIT A
[Form of Certificate for Release
of Funds to [Company][Paying Agent]]
AMERICAN SKIING COMPANY
Date:
The undersigned officer of
American Skiing Company, a Maine
corporation (the "Company"), hereby
certifies, pursuant to Section 3.1 of
the Pledge and Disbursement
Agreement, dated as of June 28, 1996
(the "Pledge and Disbursement
Agreement"), by and among the
Company, United States Trust Company
of New York, as trustee (the
"Trustee"), and United States Trust
Company of New York, as collateral
agent (the "Collateral Agent"), under
the Indenture, dated as of June 28,
1996 (the "Indenture"), among the
Company, the Guarantors named on the
signature pages thereof and the
Trustee, that:
The release of funds has been
duly authorized by all necessary
corporation action and does not
contravene, or constitute a
default under, any provision of
applicable law or regulation or
the certificate of incorporation
of the Company or of any
agreement, judgment, injunction,
order, decree or other
instrument binding upon the
Company or result in the
creation or imposition of any
Lien on any assets of the
Company.
Capitalized terms used
herein without definition shall have
the meanings set forth in the Pledge
and Disbursement Agreement.
By:
Name:
Title:
Letterhead of Berry,
Dunn, McNeil & Parker
Certified Public
Accountants
Management Consultants
100 Middle Street
P.O. Box 1100
Portland, Maine 04104-
1100/207-775-2387/Fax
(207) 774-2375
July 25, 1996
American Skiing Company
Attention: Thomas M.
Richardson
Sunday River Access Road
Bethel, ME 04217
Dear Mr. Richardson:
You are hereby notified
that the undersigned
agrees with the
statements set forth in
the attachment to this
letter proposed to be
included in American
Skiing Company's
registration statement
on Form S-4 to be filed
with the Securities and
Exchange Commission
regarding Item 304(a) of
Regulation S-K. In
addition, the
undersigned hereby
consents to the filing
of this letter as an
exhibit to such
registration statement.
Very truly yours,
/s/ Berry, Dunn, McNeil
& Parker
<PAGE>
As of September 1, 1995,
the Company and its
independent accountants,
Berry, Dunn, McNeil &
Parker, mutually agreed
that the engagement of
such accounting firm
would be limited. Such
firm's reports on the
Company's financial
statements for the two
years preceding such
decision did not contain
any adverse opinion or
disclaimer of opinion,
and were not qualified
or modified as to
uncertainty, audit scope
or accounting
principles. During the
two fiscal years of the
Company immediately
preceding such decision
and during the
subsequent interim
period prior to such
decision, there were no
disagreements with such
firm on any matter of
accounting principles or
practices, financial
statement disclosure or
auditing scope or
procedure. Price
Waterhouse was engaged
as the Company's
independent accountants
on September 1, 1995.
Subsidiaries of American Skiing Company
<TABLE>
<CAPTION>
Name of Jurisdicti Transacting
Corporation on of Business
Incorporat Under
ion Following
Names
<S> <C> <C>
Sunday River Maine Sunday River
Skiway Skiway
Corporation Corporation
Sunday River Maine Sunday River
Ltd. Ltd.
Perfect Turn, Maine Perfect Turn,
Inc. Inc.
LBO Holding, Maine LBO Holding,
Inc. Inc.
Sunday River Maine Sunday River
Transportatio Transportatio
n, Inc. n, Inc.
Sugarbush Vermont Sugarbush
Resort Resort
Holdings, Holdings,
Inc. Inc.
Sugarbush Vermont Sugarbush
Leasing Leasing
Company Company
Sugarbush Vermont Sugarbush
Restaurants, Restaurants,
Inc. Inc.
Cranmore, Maine Cranmore,
Inc. Inc.
Mountain Vermont Mountain
Wastewater Wastewater
Treatment, Treatment,
Inc. Inc.
LBO Hotel Co. Maine LBO Hotel Co.
S-K-I Limited Delaware S-K-I Limited
Killington Vermont Killington
Ltd. Ltd.
Mount Snow Vermont Mount Snow
Ltd. Ltd.
Waterville New Waterville
Valley Ski Hampshire Valley Ski
Area, Ltd. Area, Ltd.
Sugarloaf \Maine Sugarloaf
Mountain Mountain
Corporation Corporation
Killington Vermont Killington
Restaurants, Restaurants,
Inc. Inc.
Dover Vermont Dover
Restaurants, Restaurants,
Inc. Inc.
Resort Vermont Resort
Technologies, Technologies,
Inc. Inc.
Resort Vermont Resort
Software Software
Services, Services,
Inc. Inc.
Mountainside Maine Mountainside
Sugartech Maine Sugartech
Deerfield Vermont Deerfield
Operating Operating
Company Company
Pico Ski Area Vermont Pico Ski Area
Management Management
Company Company
Killington, Vermont Killington,
Ltd. Ltd.
SKI Insurance Vermont SKI Insurance
Co. Co.
LBO Maine LBO
Development Development
Co. Co.
Club Vermont Club
Sugarbush Sugarbush
</TABLE>
Consent of Independent Accountants
We hereby consent to the use in the
Prospectus constituting part of this
Registration Statement on Form S-4 of
American Skiing Company of our report
dated December 22, 1995 relating to
the financial statements of American
Skiing Company, which appears in such
Prospectus. We also consent to the
references to us under the headings
"Experts", "Summary Historical
Financial Data" and "Selected
Historical Financial Data" in such
Prospectus. However, it should be
noted that Price Waterhouse LLP has
not prepared or certified such
"Summary Historical Financial Data"
or "Selected Historical Financial
Data."
We hereby consent to the use in the
Prospectus constituting part of this
Registration Statement on Form S-4 of
American Skiing Company of our report
dated June 11, 1996 relating to the
financial statements of Sugarbush
Resort Corporation, which appears in
such Prospectus. We also consent to
the reference to us under the
headings "Experts" in such
Prospectus.
We hereby consent to the use in the
Prospectus constituting part of this
Registration Statement on Form S-4 of
American Skiing Company of our report
dated August 31, 1995 relating to the
financial statements of S-K-I Ltd.,
which appears in such Prospectus. We
also consent to the references to us
under the headings "Experts",
"Summary Historical Financial Data"
and "Selected Historical Financial
Data" in such Prospectus. However,
it should be noted that Price
Waterhouse LLP has not prepared or
certified such "Summary Historical
Financial Data" or "Selected
Historical Financial Data."
/s/ Price Waterhouse LLP
Boston, MA
August 7, 1996
Letterhead of Berry,
Dunn, McNeil & Parker
Certified Public
Accountants
Management Consultants
100 Middle Street
P.O. Box 1100
Portland, Maine 04104-
1100/207-775-2387/Fax
(207) 774-2375
Consent of Independent Accountants
We hereby consent to the use in the
Prospectus constituting part of this
Registration Statement on Form S-4 of
American Skiing Company of our report
dated December 22, 1995 relating to
the financial statements of American
Skiing Company, which appears in such
Prospectus. We also consent to the
references to us under the headings
"Experts", "Summary Historical
Financial Data" and "Selected
Historical Financial Data" in such
Prospectus. However, it should be
noted that Berry, Dunn, McNeil &
Parker has not prepared or certified
such "Summary Historical Financial
Data" or "Selected Historical
Financial Data."
/s/ Berry, Dunn, Mc|Neil & Parker
Portland, Maine
August 7, 1996
29
REGISTRATION RIGHTS AGREEMENT
Dated as of June 28, 1996
by and among
American Skiing Company,
the Guarantors Named on the Signature
Pages Hereto
and
Bear, Stearns & Co. Inc.,
SPP Hambro & Co., LLC
<PAGE>
This Registration Rights
Agreement (this "Agreement") is made
and entered into as of June 28, 1996
by and among American Skiing Company,
a Maine corporation (the "Company"),
the guarantors named on the signature
pages hereto (collectively, the
"Guarantors") and Bear, Stearns & Co.
Inc. and SPP Hambro & Co., LLC (the
"Initial Purchasers"), who have agreed
to purchase the Company's 12% Series A
Senior Subordinated Notes due 2006
(the "Series A Senior Subordinated
Notes") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made
pursuant to the Purchase Agreement,
dated June 25, 1996 (the "Purchase
Agreement"), by and among the Company,
the Guarantors and the Initial
Purchasers. In order to induce the
Initial Purchasers to purchase the
Series A Senior Subordinated Notes,
the Company has agreed to provide the
registration rights set forth in this
Agreement. The execution and delivery
of this Agreement is a condition to
the obligations of the Initial
Purchasers set forth in Section 3 of
the Purchase Agreement.
The parties hereby agree as
follows:
SECTION 1. DEFINITIONS
As used in this Agreement,
the following capitalized terms shall
have the following meanings:
Act: The Securities Act of
1933, as amended.
Broker-Dealer: Any broker
or dealer registered under the
Exchange Act.
Closing Date: The date of
this Agreement.
Commission: The Securities
and Exchange Commission.
Consummate: An Exchange
Offer shall be deemed "Consummated"
for purposes of this Agreement upon
the occurrence of (i) the filing and
effectiveness under the Act of the
Exchange Offer Registration Statement
relating to the Series B Senior
Subordinated Notes to be issued in the
Exchange Offer, (ii) the maintenance
of such Registration Statement
continuously effective and the keeping
of the Exchange Offer open for a
period not less than the minimum
period required pursuant to Section
3(b) hereof, and (iii) the delivery by
the Company to the Registrar under the
Indenture of Series B Senior
Subordinated Notes in the same
aggregate principal amount as the
aggregate principal amount of Series A
Senior Subordinated Notes that were
tendered by Holders thereof pursuant
to the Exchange Offer.
Damages Payment Date: With
respect to the Series A Senior
Subordinated Notes, each Interest
Payment Date.
Effectiveness Target Date:
As defined in Section 5.
Exchange Act: The
Securities Exchange Act of 1934, as
amended.
Exchange Offer: The
registration by the Company under the
Act of the Series B Senior
Subordinated Notes pursuant to the
Exchange Offer Registration Statement
pursuant to which the Company offers
the Holders of all outstanding
Transfer Restricted Securities the
opportunity to exchange all such
outstanding Transfer Restricted
Securities held by such Holders for
Series B Senior Subordinated Notes in
an aggregate principal amount equal to
the aggregate principal amount of the
Transfer Restricted Securities
tendered in such exchange offer by
such Holders.
Exchange Offer Registration
Statement: The Registration Statement
relating to the Exchange Offer,
including the related Prospectus.
Exempt Resales: The
transactions in which the Initial
Purchasers propose to sell the Series
A Senior Subordinated Notes to certain
"qualified institutional buyers," as
such term is defined in Rule 144A
under the Act, and to certain
institutional "accredited investors,"
as such term is defined in Rule
501(a)(1), (2), (3) or (7) of
Regulation D under the Act
("Accredited Institutions").
Holders: As defined in
Section 2(b) hereof.
Indenture: The Indenture,
dated as of June 28, 1996, among the
Company, the Guarantors and United
States Trust Company of New York, as
trustee (the "Trustee"), pursuant to
which the Notes are to be issued, as
such Indenture is amended or
supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As
defined in the Indenture and the
Notes.
NASD: National Association
of Securities Dealers, Inc.
Notes: The Series A Senior
Subordinated Notes and the Series B
Senior Subordinated Notes.
Person: An individual,
partnership, corporation, limited
liability company, trust or
unincorporated organization, or a
government or agency or political
subdivision thereof.
Prospectus: The prospectus
included in a Registration Statement,
as amended or supplemented by any
prospectus supplement and by all other
amendments thereto, including post-
effective amendments, and all material
incorporated by reference into such
Prospectus.
Record Holder: With respect
to any Damages Payment Date relating
to Notes, each Person who is a Holder
of Notes on the record date with
respect to the Interest Payment Date
on which such Damages Payment Date
shall occur.
Registration Default: As
defined in Section 5 hereof.
Registration Statement: Any
registration statement of the Company
relating to (a) an offering of Series
B Senior Subordinated Notes pursuant
to an Exchange Offer or (b) the
registration for resale of Transfer
Restricted Securities pursuant to the
Shelf Registration Statement, which is
filed pursuant to the provisions of
this Agreement, in each case,
including the Prospectus included
therein, all amendments and
supplements thereto (including post-
effective amendments) and all exhibits
and material incorporated by reference
therein.
Series B Senior Subordinated
Notes: The Company's 12% Series B
Senior Subordinated Notes due 2006 to
be issued pursuant to the Indenture
(a) in the Exchange Offer or (b)
pursuant to a Shelf Registration
Statement, in each case, in exchange
for Series A Senior Subordinated
Notes.
Shelf Filing Deadline: As
defined in Section 4 hereof.
Shelf Registration
Statement: As defined in Section 4
hereof.
TIA: The Trust Indenture
Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date
of the Indenture.
Transfer Restricted
Securities: Each Note, until the
earliest to occur of (a) the date on
which such Note is exchanged in the
Exchange Offer and entitled to be
resold to the public by the Holder
thereof without complying with the
prospectus delivery requirements of
the Act, (b) the date on which such
Note has been effectively registered
under the Act and disposed of in
accordance with a Shelf Registration
Statement and (c) the date on which
such Note is distributed to the public
pursuant to Rule 144 under the Act or
by a Broker-Dealer pursuant to the
"Plan of Distribution" contemplated by
the Exchange Offer Registration
Statement (including delivery of the
Prospectus contained therein).
Underwritten Registration or
Underwritten Offering: A registration
in which securities of the Company are
sold to an underwriter for reoffering
to the public.
SECTION 2. SECURITIES SUBJECT
TO THIS AGREEMENT
(a) Transfer Restricted
Securities. The securities entitled
to the benefits of this Agreement are
the Transfer Restricted Securities.
(b) Holders of Transfer
Restricted Securities. A Person is
deemed to be a holder of Transfer
Restricted Securities (each, a
"Holder") whenever such Person owns
Transfer Restricted Securities.
SECTION 3. REGISTERED
EXCHANGE OFFER
(a) Unless the Exchange
Offer shall not be permissible under
applicable law or Commission policy
(after the procedures set forth in
Section 6(a) below have been complied
with), the Company and the Guarantors
shall (i) cause to be filed with the
Commission as soon as practicable
after the Closing Date, but in no
event later than 45 days after the
Closing Date, the Exchange Offer
Registration Statement, (ii) use their
best efforts to cause such Exchange
Offer Registration Statement to become
effective no later than 150 days after
the Closing Date, (iii) in connection
with the foregoing, file (A) all pre-
effective amendments to such Exchange
Offer Registration Statement as may be
necessary in order to cause such
Exchange Offer Registration Statement
to become effective, (B) if
applicable, a post-effective amendment
to such Exchange Offer Registration
Statement pursuant to Rule 430A under
the Act and (C) cause all necessary
filings in connection with the
registration and qualification of the
Series B Senior Subordinated Notes to
be made under the Blue Sky laws of
such jurisdictions as are necessary to
permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness
of such Exchange Offer Registration
Statement, commence and Consummate the
Exchange Offer. The Exchange Offer
shall be on the appropriate form
permitting registration of the Series
B Senior Subordinated Notes to be
offered in exchange for the Transfer
Restricted Securities and to permit
resales of Notes held by Broker-
Dealers as contemplated by Section
3(c) below.
(b) The Company and the
Guarantors shall use their best
efforts to cause the Exchange Offer
Registration Statement to be effective
continuously and shall keep the
Exchange Offer open for a period of
not less than the minimum period
required under applicable federal and
state securities laws to Consummate
the Exchange Offer; provided, however,
that in no event shall such period be
less than 20 business days. The
Company and the Guarantors shall cause
the Exchange Offer to comply with all
applicable federal and state
securities laws. No securities other
than the Notes shall be included in
the Exchange Offer Registration
Statement. The Company and the
Guarantors shall use their best
efforts to cause the Exchange Offer to
be Consummated on the earliest
practicable date after the Exchange
Offer Registration Statement has
become effective, but in no event
later than 30 business days
thereafter.
(c) The Company and the
Guarantors shall include a "Plan of
Distribution" section in the
Prospectus contained in the Exchange
Offer Registration Statement and
indicate therein that any Broker-
Dealer who holds Series A Senior
Subordinated Notes that are Transfer
Restricted Securities and that were
acquired for its own account as a
result of market-making activities or
other trading activities (other than
Transfer Restricted Securities
acquired directly from the Company),
may exchange such Series A Senior
Subordinated Notes pursuant to the
Exchange Offer; however, such Broker-
Dealer may be deemed to be an
"underwriter" within the meaning of
the Act and must, therefore, deliver a
prospectus meeting the requirements of
the Act in connection with any resales
of the Series B Senior Subordinated
Notes received by such Broker-Dealer
in the Exchange Offer, which
prospectus delivery requirement may be
satisfied by the delivery by such
Broker-Dealer of the Prospectus
contained in the Exchange Offer
Registration Statement. Such "Plan of
Distribution" section shall also
contain all other information with
respect to such resales by Broker-
Dealers that the Commission may
require in order to permit such
resales pursuant thereto, but such
"Plan of Distribution" shall not name
any such Broker-Dealer or disclose the
amount of Notes held by any such
Broker-Dealer except to the extent
required by the Commission as a result
of a change in policy after the date
of this Agreement.
The Company and the
Guarantors shall use their best
efforts to keep the Exchange Offer
Registration Statement continuously
effective, supplemented and amended as
required by the provisions of Section
6(c) below to the extent necessary to
ensure that it is available for
resales of Notes acquired by Broker-
Dealers for their own accounts as a
result of market-making activities or
other trading activities, and to
ensure that it conforms with the
requirements of this Agreement, the
Act and the policies, rules and
regulations of the Commission as
announced from time to time, for a
period of 180 days from the date on
which the Exchange Offer Registration
Statement is declared effective.
The Company shall provide
sufficient copies of the latest
version of such Prospectus to Broker-
Dealers promptly upon request at any
time during such 180-day period in
order to facilitate such resales, and
Broker-Dealers are not authorized by
the Company to, and shall not, deliver
such Prospectus after such 180-day
period in connection with resales
contemplated by this Section 3 or
otherwise.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If
(i) the Company and the Guarantors are
not required to file an Exchange Offer
Registration Statement or permitted to
consummate the Exchange Offer because
the Exchange Offer is not permitted by
applicable law or Commission policy
(after the procedures set forth in
Section 6(a) below have been complied
with) or (ii) if any Holder of
Transfer Restricted Securities
notifies the Company on or prior to
the 20th business day following the
Consummation of the Exchange Offer (A)
that such Holder is prohibited by
applicable law or Commission policy
from participating in the Exchange
Offer or (B) that such Holder may not
resell the Series B Senior
Subordinated Notes acquired by it in
the Exchange Offer to the public
without delivering a prospectus and
that the Prospectus contained in the
Exchange Offer Registration Statement
is not appropriate or available for
such resales by such Holder, or (C)
that such Holder is a Broker-Dealer
and holds Series A Senior Subordinated
Notes acquired directly from the
Company or one of its affiliates, then
the Company and the Guarantors shall:
(x) use their best
efforts to file a shelf
registration statement with the
Commission pursuant to Rule 415
under the Act, which may be an
amendment to the Exchange Offer
Registration Statement (in either
event, the "Shelf Registration
Statement") on or prior to the
earliest to occur of (1) the 60th
day after the date on which the
Company and the Guarantors
determine that they are not
required to file the Exchange Offer
Registration Statement, (2) the
60th day after the date on which
the Company and the Guarantors
receive notice from a Holder of
Transfer Restricted Securities as
contemplated by clause (ii) above,
and (3) the 150th day after the
Closing Date (such earliest date
being the "Shelf Filing Deadline"),
which Shelf Registration Statement
shall provide for resales of all
Transfer Restricted Securities the
Holders of which shall have
provided the information required
pursuant to Section 4(b) hereof;
and
(y) use their best
efforts to cause such Shelf
Registration Statement to be
declared effective by the
Commission on or prior to the 90th
day after the Shelf Filing
Deadline.
The Company and the Guarantors shall
use their best efforts to keep such
Shelf Registration Statement
continuously effective, supplemented
and amended as required by the
provisions of Sections 6(b) and (c)
hereof to the extent necessary to
ensure that it is available for
resales of Notes by the Holders of
Transfer Restricted Securities
entitled to the benefit of this
Section 4(a), and to ensure that it
conforms with the requirements of this
Agreement, the Act and the policies,
rules and regulations of the
Commission as announced from time to
time, for a period of at least three
years following the Closing Date or
such shorter period ending when all
Transfer Restricted Securities covered
by such Shelf Registration Statement
have been sold in the manner set forth
and as contemplated by such Shelf
Registration Statement.
(b) Provision by Holders of
Certain Information in Connection with
the Shelf Registration Statement. No
Holder of Transfer Restricted
Securities may include any of its
Transfer Restricted Securities in any
Shelf Registration Statement pursuant
to this Agreement unless and until
such Holder furnishes to the Company
in writing, within 20 business days
after receipt of a request therefor,
such information as the Company may
reasonably request for use in
connection with any Shelf Registration
Statement or Prospectus or preliminary
Prospectus included therein. No
Holder of Transfer Restricted
Securities shall be entitled to
Liquidated Damages pursuant to Section
5 hereof unless and until such Holder
shall have used its best efforts to
provide all such reasonably requested
information. Each Holder as to which
any Shelf Registration Statement is
being effected agrees to furnish
promptly to the Company all
information required to be disclosed
in order to make the information
previously furnished to the Company by
such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the
Registration Statements required by
this Agreement is not filed with the
Commission on or prior to the date
specified for such filing in this
Agreement, (ii) any of such
Registration Statements has not been
declared effective by the Commission
on or prior to the date specified for
such effectiveness in this Agreement
(the "Effectiveness Target Date"),
(iii) the Exchange Offer has not been
Consummated within 30 business days
after the Effectiveness Target Date
with respect to the Exchange Offer
Registration Statement or (iv) any
Registration Statement required by
this Agreement is filed and declared
effective but shall thereafter cease
to be effective or fail to be usable
for its intended purpose without being
succeeded immediately by a post-
effective amendment to such
Registration Statement that cures such
failure and that is itself immediately
declared effective (each such event
referred to in clauses (i) through
(iv), a "Registration Default"), the
Company and the Guarantors hereby
jointly and severally agree to pay
liquidated damages to each Holder of
Transfer Restricted Securities, with
respect to the first 30-day period
immediately following the occurrence
of a Registration Default listed in
clause (i) of the definition thereof,
or with respect to the first 90-day
period immediately following the
occurrence of a Registration Default
listed in clauses (ii), (iii) or (iv)
of the definition thereof, in an
amount equal to 0.25% per annum of the
principal amount of Transfer
Restricted Securities held by such
Holder. The amount of the liquidated
damages shall increase by an
additional 0.25% per annum of the
principal amount of Transfer
Restricted Securities with respect to
each subsequent 30- or 90-day period,
as the case may be, until all
Registration Defaults have been cured,
up to a maximum amount of liquidated
damages of 1.0% per annum of the
principal amount of Transfer
Restricted Securities. All accrued
liquidated damages shall be paid to
Record Holders by the Company on each
Damages Payment Date by wire transfer
of immediately available funds or by
such other method, as provided in the
Indenture. Following the cure of all
Registration Defaults, relating to any
particular Transfer Restricted
Securities, the accrual of liquidated
damages with respect to such Transfer
Restricted Securities will cease.
All obligations of the
Company and the Guarantors set forth
in the preceding paragraph that are
outstanding with respect to any
Transfer Restricted Security at the
time such security ceases to be a
Transfer Restricted Security shall
survive until such time as all such
obligations with respect to such
security shall have been satisfied in
full.
SECTION 6. REGISTRATION
PROCEDURES
(a) Exchange Offer
Registration Statement. In connection
with the Exchange Offer, the Company
and the Guarantors shall comply with
all of the provisions of Section 6(c)
below, shall use their best efforts to
effect such exchange to permit the
sale of Transfer Restricted Securities
being sold in accordance with the
intended method or methods of
distribution thereof, and shall comply
with all of the following provisions:
(i) If in the reasonable
opinion of counsel to the Company
there is a question as to whether
the Exchange Offer is permitted by
applicable law, the Company and the
Guarantors hereby agree to seek a
no-action letter or other favorable
decision from the Commission
allowing the Company and the
Guarantors to Consummate an
Exchange Offer for such Series A
Senior Subordinated Notes. Each of
the Company and the Guarantors
hereby agrees to pursue the
issuance of such a decision to the
Commission staff level but shall
not be required to take
commercially unreasonable action to
effect a change of Commission
policy. Each of the Company and
the Guarantors hereby agrees,
however, to (A) participate in
telephonic conferences with the
Commission, (B) deliver to the
Commission staff an analysis
prepared by counsel to the Company
setting forth the legal bases, if
any, upon which such counsel has
concluded that such an Exchange
Offer should be permitted and (C)
diligently pursue a resolution
(which need not be favorable) by
the Commission staff of such
submission.
(ii) As a condition to
its participation in the Exchange
Offer pursuant to the terms of this
Agreement, each Holder of Transfer
Restricted Securities shall
furnish, upon the request of the
Company, prior to the Consummation
thereof, a written representation
to the Company (which may be
contained in the letter of
transmittal contemplated by the
Exchange Offer Registration
Statement) to the effect that
(A) it is not an affiliate of the
Company or any Guarantor, (B) it is
not engaged in, and does not intend
to engage in, and has no
arrangement or understanding with
any person to participate in, a
distribution of the Series B Senior
Subordinated Notes to be issued in
the Exchange Offer and (C) it is
acquiring the Series B Senior
Subordinated Notes in its ordinary
course of business. In addition,
all such Holders of Transfer
Restricted Securities shall
otherwise cooperate in the
Company's preparations for the
Exchange Offer. The Initial
Purchasers hereby acknowledge and
agree that any Broker-Dealer and
any Holder using the Exchange Offer
to participate in a distribution of
the securities to be acquired in
the Exchange Offer (1) could not
under Commission policy as in
effect on the date of this
Agreement rely on the position of
the Commission enunciated in Morgan
Stanley and Co., Inc. (available
June 5, 1991) and Exxon Capital
Holdings Corporation (available May
13, 1988), as interpreted in the
Commission's letter to Shearman &
Sterling dated July 2, 1993, and
similar no-action letters
(including any no-action letter
obtained pursuant to clause (i)
above), and (2) must comply with
the registration and prospectus
delivery requirements of the Act in
connection with a secondary resale
transaction and that such a
secondary resale transaction should
be covered by an effective
registration statement containing
the selling security holder
information required by Item 507 or
508, as applicable, of Regulation S-
K if the resales are of Series B
Senior Subordinated Notes obtained
by a Holder in exchange for Series
A Senior Subordinated Notes
acquired by such Holder directly
from the Company.
(iii) Prior to
effectiveness of the Exchange Offer
Registration Statement, the Company
and the Guarantors shall provide a
supplemental letter to the
Commission (A) stating that the
Company and the Guarantors are
registering the Exchange Offer in
reliance on the position of the
Commission enunciated in Exxon
Capital Holdings Corporation
(available May 13, 1988), Morgan
Stanley and Co., Inc. (available
June 5, 1991) and, if applicable,
any no-action letter obtained
pursuant to clause (i) above and
(B) including a representation that
neither the Company nor any of the
Guarantors has entered into any
arrangement or understanding with
any Person to distribute the Series
B Senior Subordinated Notes to be
received in the Exchange Offer and
that, to the best of the Company's
and the Guarantors' information and
belief, each Holder participating
in the Exchange Offer is acquiring
the Series B Senior Subordinated
Notes in its ordinary course of
business and has no arrangement or
understanding with any Person to
participate in the distribution of
the Series B Senior Subordinated
Notes received in the Exchange
Offer.
(b) Shelf Registration
Statement. In connection with the
Shelf Registration Statement, the
Company and the Guarantors shall
comply with all the provisions of
Section 6(c) below and shall use their
best efforts to effect such
registration to permit the sale of the
Transfer Restricted Securities being
sold in accordance with the intended
method or methods of distribution
thereof (as indicated in the
information furnished to the Company
pursuant to Section 4(b) hereof), and
pursuant thereto the Company will
prepare and file with the Commission a
Registration Statement relating to the
registration on any appropriate form
under the Act, which form shall be
available for the sale of the Transfer
Restricted Securities in accordance
with the intended method or methods of
distribution thereof.
(c) General Provisions. In
connection with any Registration
Statement and any Prospectus required
by this Agreement to permit the sale
or resale of Transfer Restricted
Securities (including, without
limitation, any Registration Statement
and the related Prospectus required to
permit resales of Notes by Broker-
Dealers), the Company and the
Guarantors shall:
(i) use their best
efforts to keep such Registration
Statement continuously effective
and provide all requisite financial
statements (including, if required
by the Act or any regulation
thereunder, financial statements of
the Guarantors) for the period
specified in Section 3 or 4 of this
Agreement, as applicable; upon the
occurrence of any event that would
cause any such Registration
Statement or the Prospectus
contained therein (A) to contain a
material misstatement or omission
or (B) not to be effective and
usable for resale of Transfer
Restricted Securities during the
period required by this Agreement,
the Company shall file promptly an
appropriate amendment to such
Registration Statement, in the case
of clause (A), correcting any such
misstatement or omission, and, in
the case of either clause (A) or
(B), use their best efforts to
cause such amendment to be declared
effective and such Registration
Statement and the related
Prospectus to become usable for
their intended purpose(s) as soon
as practicable thereafter;
provided, however, that the Company
and the Guarantors may allow the
Shelf Registration Statement to
fail to be effective or usable for
a period of up to 60 days during
the three-year period of
effectiveness required by Section 4
hereof, but in no event for any
period in excess of 30 consecutive
days, if (1) the board of directors
of the Company determines in good
faith that it is in the best
interests of the Company not to
disclose the existence of or facts
surrounding any proposed or pending
material corporate transaction
involving the Company or any of the
Guarantors and (2) the Company
notifies the Holders within two
business days after such
determination by the board of
directors; provided, further,
however, that the three-year period
referred to in Section 4 hereof
shall be extended by the number of
days during which the Shelf
Registration Statement was not
effective or usable pursuant to the
foregoing;
(ii) prepare and file
with the Commission such amendments
and post-effective amendments to
the Registration Statement as may
be necessary to keep the
Registration Statement effective
for the applicable period set forth
in Section 3 or 4 hereof, as
applicable, or such shorter period
as will terminate when all Transfer
Restricted Securities covered by
such Registration Statement have
been sold; cause the Prospectus to
be supplemented by any required
Prospectus supplement, and as so
supplemented to be filed pursuant
to Rule 424 under the Act, and to
comply fully with the applicable
provisions of Rules 424 and 430A
under the Act in a timely manner;
and comply with the provisions of
the Act with respect to the
disposition of all securities
covered by such Registration
Statement during the applicable
period in accordance with the
intended method or methods of
distribution by the sellers thereof
set forth in such Registration
Statement or supplement to the
Prospectus;
(iii) advise the
underwriter(s), if any, and selling
Holders promptly and, if requested
by such Persons, to confirm such
advice in writing, (A) when the
Prospectus or any Prospectus
supplement or post-effective
amendment has been filed, and, with
respect to any Registration
Statement or any post-effective
amendment thereto, when the same
has become effective, (B) of any
request by the Commission for
amendments to the Registration
Statement or amendments or
supplements to the Prospectus or
for additional information relating
thereto, (C) of the issuance by the
Commission of any stop order
suspending the effectiveness of the
Registration Statement under the
Act or of the suspension by any
state securities commission of the
qualification of the Transfer
Restricted Securities for offering
or sale in any jurisdiction, or the
initiation of any proceeding for
any of the preceding purposes, (D)
of the existence of any fact or the
happening of any event that makes
any statement of a material fact
made in the Registration Statement,
the Prospectus, any amendment or
supplement thereto, or any document
incorporated by reference therein
untrue, or that requires the making
of any additions to or changes in
the Registration Statement in order
to make the statements therein not
misleading, or that requires the
making of any additions to or
changes in the Prospectus in order
to make the statements therein, in
light of the circumstances under
which they were made, not
misleading. If at any time the
Commission shall issue any stop
order suspending the effectiveness
of the Registration Statement, or
any state securities commission or
other regulatory authority shall
issue an order suspending the
qualification or exemption from
qualification of the Transfer
Restricted Securities under state
securities or Blue Sky laws, the
Company and the Guarantors shall
use their best efforts to obtain
the withdrawal or lifting of such
order at the earliest possible
time;
(iv) furnish to each of
the selling Holders and each of the
underwriter(s), if any, before
filing with the Commission, copies
of any Registration Statement or
any Prospectus included therein or
any amendments or supplements to
any such Registration Statement or
Prospectus (including all documents
incorporated by reference after the
initial filing of such Registration
Statement), which documents will be
subject to the review and comment
of such Holders and underwriter(s),
if any, for a period of at least
five business days, and the Company
will not file any such Registration
Statement or Prospectus or any
amendment or supplement to any such
Registration Statement or
Prospectus (including all such
documents incorporated by
reference) to which a selling
Holder of Transfer Restricted
Securities covered by such
Registration Statement or the
underwriter(s), if any, shall
reasonably object within five
business days after the receipt
thereof. A selling Holder or
underwriter, if any, shall be
deemed to have reasonably objected
to such filing if such Registration
Statement, amendment, Prospectus or
supplement, as applicable, as
proposed to be filed, contains a
material misstatement or omission
or fails to comply with the
applicable requirements of the Act;
(v) promptly prior to
the filing of any document that is
to be incorporated by reference
into a Registration Statement or
Prospectus, provide copies of such
document to the underwriter(s), if
any, and, if requested by any
selling Holder, such selling
Holder, make the Company's
representatives available (and
representatives of the Guarantors)
for discussion of such document and
other customary due diligence
matters, and include such
information in such document prior
to the filing thereof as such
underwriter(s), if any, or selling
Holders reasonably may request;
(vi) subject to the
execution of customary
confidentiality agreements, make
available at reasonable times for
inspection by the selling Holders,
any underwriter participating in
any disposition pursuant to such
Registration Statement, and any
attorney or accountant retained by
such selling Holders or any of the
underwriter(s), all financial and
other records, pertinent corporate
documents and properties of the
Company and the Guarantors and
cause the Company's and the
Guarantors' officers, directors and
employees to supply all information
reasonably requested by any such
Holder, underwriter, attorney or
accountant in connection with such
Registration Statement subsequent
to the filing thereof and prior to
its effectiveness;
(vii) if requested by
any selling Holders or the
underwriter(s), if any, promptly
include in any Registration
Statement or Prospectus, pursuant
to a supplement or post-effective
amendment if necessary, such
information as such selling Holders
and underwriter(s), if any, may
reasonably request to have included
therein, including, without
limitation, information relating to
the "Plan of Distribution" of the
Transfer Restricted Securities,
information with respect to the
principal amount of Transfer
Restricted Securities being sold to
such underwriter(s), the purchase
price being paid therefor and any
other terms of the offering of the
Transfer Restricted Securities to
be sold in such offering; and make
all required filings of such
Prospectus supplement or
post-effective amendment as soon as
practicable after the Company are
notified of the matters to be
included in such Prospectus
supplement or post-effective
amendment;
(viii) if not currently
rated, cause the Transfer
Restricted Securities covered by
the Registration Statement to be
rated with the appropriate rating
agencies, if so requested by the
Holders of a majority in aggregate
principal amount of Notes covered
thereby or the underwriter(s), if
any;
(ix) furnish to each
selling Holder and each of the
underwriter(s), if any, without
charge, at least one copy of the
Registration Statement, as first
filed with the Commission, and of
each amendment thereto, including
all documents incorporated by
reference therein and all exhibits
(including exhibits incorporated
therein by reference);
(x) deliver to each
selling Holder and each of the
underwriter(s), if any, without
charge, as many copies of the
Prospectus (including each
preliminary prospectus) and any
amendment or supplement thereto as
such Persons reasonably may
request; the Company and the
Guarantors hereby consent to the
use of the Prospectus and any
amendment or supplement thereto by
each of the selling Holders and
each of the underwriter(s), if any,
in connection with the offering and
the sale of the Transfer Restricted
Securities covered by the
Prospectus or any amendment or
supplement thereto;
(xi) enter into, and
cause the Guarantors to enter into,
such agreements (including one
underwriting agreement in form and
scope as is customary for similar
offerings of debt securities), and
make, and cause the Guarantors to
make, such representations and
warranties, and take all such other
actions in connection therewith in
order to expedite or facilitate the
disposition of the Transfer
Restricted Securities pursuant to
any Registration Statement
contemplated by this Agreement, all
to such extent as may be requested
by the Initial Purchasers or by any
Holder of Transfer Restricted
Securities or underwriter in
connection with any sale or resale
pursuant to any Registration
Statement contemplated by this
Agreement; and whether or not an
underwriting agreement is entered
into and whether or not the
registration is an Underwritten
Registration, the Company and the
Guarantors shall:
(A) furnish to each
selling Holder and each
underwriter, if any, in such
substance and scope as they may
request and as are customarily
made by issuers to underwriters
in primary underwritten
offerings, upon the date of the
Consummation of the Exchange
Offer and, if applicable, the
effectiveness of the Shelf
Registration Statement:
(1) a
certificate, dated the date
of Consummation of the
Exchange Offer or the date of
effectiveness of the Shelf
Registration Statement, as
the case may be, signed by
(x) the President or any Vice
President and (y) a principal
financial or accounting
officer of each of the
Company and the Guarantors,
confirming, as of the date
thereof, the matters set
forth in paragraphs (a), (b),
(c) and (d) of Section 8 of
the Purchase Agreement and
such other matters as such
parties may reasonably
request;
(2) an
opinion, dated the date of
Consummation of the Exchange
Offer or the date of
effectiveness of the Shelf
Registration Statement, as
the case may be, of counsel
for the Company and the
Guarantors, covering the
matters set forth in
paragraphs (f) and (g) of
Section 8 of the Purchase
Agreement and such other
matters as such parties may
reasonably request, and in
any event including a
statement to the effect that
such counsel has participated
in conferences with officers
and other representatives of
the Company and the
Guarantors, representatives
of the independent public
accountants for the Company,
the Initial Purchasers'
representatives and the
Initial Purchasers' counsel
in connection with the
preparation of such
Registration Statement and
the related Prospectus and
have considered the matters
required to be stated therein
and the statements contained
therein, although such
counsel has not independently
verified the accuracy,
completeness or fairness of
such statements; and that
such counsel advises that, on
the basis of the foregoing
(relying as to materiality to
a large extent upon facts
provided to such counsel by
officers and other
representatives of the
Company and the Guarantors
and without independent check
or verification), no facts
came to such counsel's
attention that caused such
counsel to believe that the
applicable Registration
Statement, at the time such
Registration Statement or any
post-effective amendment
thereto became effective,
and, in the case of the
Exchange Offer Registration
Statement, as of the date of
Consummation, contained an
untrue statement of a
material fact or omitted to
state a material fact re
quired to be stated therein
or necessary to make the
statements therein not
misleading, or that the
Prospectus contained in such
Registration Statement as of
its date and, in the case of
the opinion dated the date of
Consummation of the Exchange
Offer, as of the date of
Consummation, contained an
untrue statement of a
material fact or omitted to
state a material fact
necessary in order to make
the statements therein, in
light of the circumstances
under which they were made,
not misleading. Without
limiting the foregoing, such
counsel may state further
that such counsel assumes no
responsibility for, and has
not independently verified,
the accuracy, completeness or
fairness of the financial
statements, notes and
schedules and other financial
data included in any
Registration Statement
contemplated by this
Agreement or the related
Prospectus; and
(3) a
customary comfort letter,
dated as of the date of
Consummation of the Exchange
Offer or the date of
effectiveness of the Shelf
Registration Statement, as
the case may be, from the
Company's independent
accountants, in the customary
form and covering matters of
the type customarily covered
in comfort letters by
underwriters in connection
with primary underwritten
offerings, and affirming the
matters set forth in the
comfort letters delivered
pursuant to Section 8(h) of
the Purchase Agreement,
without exception;
(B) set forth in full
or incorporate by reference in
the underwriting agreement, if
any, the indemnification
provisions and procedures of
Section 8 hereof with respect to
all parties to be indemnified
pursuant to said Section; and
(C) deliver such
other documents and certificates
as may be reasonably requested
by such parties to evidence
compliance with clause (A) above
and with any customary
conditions contained in the
underwriting agreement or other
agreement entered into by the
Company pursuant to this clause
(xi), if any.
If at any time the
representations and warranties of
the Company and the Guarantors
contemplated in clause (A)(1) above
cease to be true and correct, the
Company or the Guarantors shall so
advise the Initial Purchasers and
the underwriter(s), if any, and
each selling Holder promptly and,
if requested by such Persons, shall
confirm such advice in writing;
(xii) prior to any
public offering of Transfer
Restricted Securities, cooperate
with, and cause the Guarantors to
cooperate with, the selling
Holders, the underwriter(s), if
any, and their respective counsel
in connection with the registration
and qualification of the Transfer
Restricted Securities under the
securities or Blue Sky laws of such
jurisdictions as the selling
Holders or underwriter(s) may
request and do any and all other
acts or things necessary or
advisable to enable the disposition
in such jurisdictions of the
Transfer Restricted Securities
covered by the Shelf Registration
Statement; provided, however, that
neither the Company nor any of the
Guarantors shall be required to
register or qualify as a foreign
corporation where it is not now so
qualified or to take any action
that would subject it to the
service of process in suits or to
taxation, other than as to matters
and transactions relating to the
Registration Statement, in any
jurisdiction where it is not now so
subject;
(xiii) shall issue, upon
the request of any Holder of Series
A Senior Subordinated Notes covered
by the Shelf Registration
Statement, Series B Senior
Subordinated Notes, having an
aggregate principal amount equal to
the aggregate principal amount of
Series A Senior Subordinated Notes
surrendered to the Company by such
Holder in exchange therefor or
being sold by such Holder; such
Series B Senior Subordinated Notes
to be registered in the name of
such Holder or in the name of the
purchaser(s) of such Notes, as the
case may be; in return, the Series
A Senior Subordinated Notes held by
such Holder shall be surrendered to
the Company for cancellation;
(xiv) in connection with
any sale of Transfer Restricted
Securities that will result in such
securities no longer being Transfer
Restricted Securities, cooperate
with, and cause the Guarantors to
cooperate with, the selling Holders
and the underwriter(s), if any, to
facilitate the timely preparation
and delivery of certificates
representing Transfer Restricted
Securities to be sold and not
bearing any restrictive legends;
and enable such Transfer Restricted
Securities to be in such
denominations and registered in
such names as the Holders or the
underwriter(s), if any, may request
at least two business days prior to
any sale of Transfer Restricted
Securities made by such
underwriter(s);
(xv) use its best
efforts to cause the Transfer
Restricted Securities covered by
the Registration Statement to be
registered with or approved by such
other governmental agencies or
authorities as may be necessary to
enable the seller or sellers
thereof or the underwriter(s), if
any, to consummate the disposition
of such Transfer Restricted
Securities, subject to the proviso
contained in clause (viii) above;
(xvi) if any fact or
event contemplated by clause
(c)(iii)(D) above shall exist or
have occurred, prepare a supplement
or post-effective amendment to the
Registration Statement or related
Prospectus or any document
incorporated therein by reference
or file any other required document
so that, as thereafter delivered to
the purchasers of Transfer
Restricted Securities, the
Prospectus will not contain an
untrue statement of a material fact
or omit to state any material fact
necessary to make the statements
therein, in light of the
circumstances under which they were
made, not misleading;
(xvii) provide a CUSIP
number for all Transfer Restricted
Securities not later than the
effective date of the Registration
Statement and provide the Trustee
under the Indenture with printed
certificates for the Transfer
Restricted Securities which are in
a form eligible for deposit with
the Depository Trust Company;
(xviii) cooperate and
assist in any filings required to
be made with the NASD and in the
performance of any due diligence
investigation by any underwriter
(including any "qualified
independent underwriter") that is
required to be retained in
accordance with the rules and
regulations of the NASD, and use
its reasonable best efforts to
cause such Registration Statement
to become effective and approved by
such governmental agencies or
authorities as may be necessary to
enable the Holders selling Transfer
Restricted Securities to consummate
the disposition of such Transfer
Restricted Securities;
(xix) otherwise use its
best efforts to comply with all
applicable rules and regulations of
the Commission, and make generally
available to its security holders,
as soon as practicable, a
consolidated earnings statement
meeting the requirements of Rule
158 (which need not be audited) for
the twelve-month period (A)
commencing at the end of any fiscal
quarter in which Transfer
Restricted Securities are sold to
underwriters in a firm or best
efforts Underwritten Offering or
(B) if not sold to underwriters in
such an offering, beginning with
the first month of the Company's
first fiscal quarter commencing
after the effective date of the
Registration Statement;
(xx) cause the Indenture
to be qualified under the TIA not
later than the effective date of
the first Registration Statement
required by this Agreement, and, in
connection therewith, cooperate,
and cause the Guarantors to
cooperate, with the Trustee and the
Holders of Notes to effect such
changes to the Indenture as may be
required for such Indenture to be
so qualified in accordance with the
terms of the TIA; and execute, and
cause the Guarantors to execute,
and use its best efforts to cause
the Trustee to execute, all
documents that may be required to
effect such changes and all other
forms and documents required to be
filed with the Commission to enable
such Indenture to be so qualified
in a timely manner;
(xxi) cause all Transfer
Restricted Securities covered by
the Registration Statement to be
listed on each securities exchange
on which similar securities issued
by the Company are then listed if
requested by the Holders of a
majority in aggregate principal
amount of Series A Senior
Subordinated Notes or the managing
underwriter(s), if any; and
(xxii) provide
promptly to each Holder upon
request each document filed with
the Commission pursuant to the
requirements of Section 13 and
Section 15 of the Exchange Act.
Each Holder agrees by
acquisition of a Transfer Restricted
Security that, upon receipt of any
notice from the Company of the
existence of any fact of the kind
described in Section 6(c)(iii)(C) or
(D) hereof, such Holder will forthwith
discontinue disposition of Transfer
Restricted Securities pursuant to the
applicable Registration Statement
until such Holder's receipt of the
copies of the supplemented or amended
Prospectus contemplated by Section
6(c)(xvi) hereof, or until it is
advised in writing (the "Advice") by
the Company that the use of the
Prospectus may be resumed, and has
received copies of any additional or
supplemental filings that are
incorporated by reference in the
Prospectus. If so directed by the
Company, each Holder will deliver to
the Company (at the Company's expense)
all copies, other than permanent file
copies then in such Holder's
possession, of the Prospectus covering
such Transfer Restricted Securities
that was current at the time of
receipt of such notice. In the event
the Company shall give any such
notice, the time period regarding the
effectiveness of such Registration
Statement set forth in Section 3 or 4
hereof, as applicable, shall be
extended by the number of days during
the period from and including the date
of the giving of such notice pursuant
to Section 6(c)(iii)(C) or (D) hereof
to and including the date when each
selling Holder covered by such
Registration Statement shall have
received the copies of the
supplemented or amended Prospectus
contemplated by Section 6(c)(xvi)
hereof or shall have received the
Advice.
SECTION 7. REGISTRATION
EXPENSES
(a) All expenses incident
to the Company's or the Guarantors'
performance of or compliance with this
Agreement will be borne by the Company
or such Guarantor, regardless of
whether a Registration Statement
becomes effective, including without
limitation: (i) all registration and
filing fees and expenses (including
filings made by any Initial Purchasers
or Holder with the NASD (and, if
applicable, the fees and expenses of
any "qualified independent
underwriter" and its counsel that may
be required by the rules and
regulations of the NASD)); (ii) all
fees and expenses of compliance with
federal securities and state Blue Sky
or securities laws; (iii) all expenses
of printing (including printing
certificates for the Series B Senior
Subordinated Notes to be issued in the
Exchange Offer and printing of
Prospectuses), messenger and delivery
services and telephone; (iv) all fees
and disbursements of counsel for the
Company, the Guarantors and, subject
to Section 7(b) below, the Holders of
Transfer Restricted Securities; (v)
all application and filing fees in
connection with listing Notes on a
national securities exchange or
automated quotation system pursuant to
the requirements hereof; and (vi) all
fees and disbursements of independent
certified public accountants of the
Company and the Guarantors (including
the expenses of any special audit and
comfort letters required by or
incident to such performance).
The Company will, in any
event, bear its and the Guarantors'
internal expenses (including, without
limitation, all salaries and expenses
of its officers and employees
performing legal or accounting
duties), the expenses of any annual
audit and the fees and expenses of any
Person, including special experts,
retained by the Company.
(b) In connection with any
Registration Statement required by
this Agreement (including, without
limitation, the Exchange Offer
Registration Statement and the Shelf
Registration Statement), the Company
will reimburse the Initial Purchasers
and the Holders of Transfer Restricted
Securities being tendered in the
Exchange Offer and/or resold pursuant
to the "Plan of Distribution"
contained in the Exchange Offer
Registration Statement or registered
pursuant to the Shelf Registration
Statement, as applicable, for the
reasonable fees and disbursements of
not more than one counsel, who shall
be Latham & Watkins or such other
counsel as may be chosen by the
Holders of a majority in aggregate
principal amount of the Transfer
Restricted Securities for whose
benefit such Registration Statement is
being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the
Guarantors, jointly and severally,
agree to indemnify and hold harmless
(i) each Holder, (ii) each person, if
any, who controls any Holder within
the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act
and (iii) the respective officers,
directors, partners, employees,
representatives and agents of each
Holder or any controlling person to
the fullest extent lawful, from and
against any and all losses,
liabilities, claims, damages and
expenses whatsoever (including but not
limited to attorneys' fees and any and
all expenses whatsoever incurred in
investigating, preparing or defending
against any investigation or
litigation, commenced or threatened,
or any claim whatsoever, and any and
all amounts paid in settlement of any
claim or litigation), joint or
several, to which they or any of them
may become subject under the Act, the
Exchange Act or otherwise, insofar as
such losses, liabilities, claims,
damages or expenses (or actions in
respect thereof) arise out of or are
based upon any untrue statement or
alleged untrue statement of a material
fact contained in any Registration
Statement or Prospectus, or in any
supplement thereto or amendment
thereof, or arise out of or are based
upon the omission or alleged omission
to state therein a material fact
required to be stated therein or
necessary to make the statements
therein, in the light of the
circumstances under which they were
made, not misleading; provided,
however, that the Company and the
Guarantors will not be liable in any
such case to the extent, but only to
the extent, that any such loss,
liability, claim, damage or expense
(A) arises out of or is based upon any
such untrue statement or alleged
untrue statement or omission or
alleged omission made therein in
reliance upon and in conformity with
information relating to any Holder
furnished to the Company in writing by
or on behalf of such Holder expressly
for use therein or (B) is caused by an
untrue statement or omission that was
contained or made in any preliminary
prospectus and corrected in the
related Prospectus or any supplement
or amendment thereto and (1) any such
loss, liability, claim, damage or
expense suffered or insured by any
indemnified party resulted from an
action, claim or suit by any person
who purchased Notes from a Holder in
the offering to which such Prospectus
relates, (2) such Holder failed to
deliver or provide a copy of such
Prospectus or any such supplement or
amendment thereto to such person at or
prior to the confirmation of the sale
of such Notes in any case where such
delivery is required by the Act and
(3) such Prospectus (as so amended and
supplemented) would have cured the
defect giving rise to such loss,
liability, claim, damage or expense.
This indemnity agreement will be in
addition to any liability which the
Company and the Guarantors may
otherwise have, including, under this
Agreement.
(b) Each Holder agrees,
severally and not jointly, to
indemnify and hold harmless the
Company and the Guarantors and each
person, if any, who controls the
Company and the Guarantors within the
meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act,
against any losses, liabilities,
claims, damages and expenses
whatsoever (including but not limited
to attorneys' fees and any and all
expenses whatsoever incurred in
investigating, preparing or defending
against any investigation or
litigation, commenced or threatened,
or any claim whatsoever and any and
all amounts paid in settlement of any
claim or litigation), joint or
several, to which they or any of them
may become subject under the Act, the
Exchange Act or otherwise, insofar as
such losses, liabilities, claims,
damages or expenses (or actions in
respect thereof) arise out of or are
based upon any untrue statement or
alleged untrue statement of a material
fact contained in any Registration
Statement or Prospectus, or in any
amendment thereof or supplement
thereto, or arise out of or are based
upon the omission or alleged omission
to state therein a material fact
required to be stated therein or
necessary to make the statements
therein, in the light of the
circumstances under which they were
made, not misleading, in each case to
the extent, but only to the extent,
that any such loss, liability, claim,
damage or expense arises out of or is
based upon any untrue statement or
alleged untrue statement or omission
or alleged omission made therein in
reliance upon and in conformity with
information relating to any Holder
furnished to the Company in writing by
or on behalf of such Holder expressly
for use therein; provided, however,
that in no case shall any Holder be
liable or responsible for any amount
in excess of the dollar amount of the
proceeds received by such Holder upon
the sale of the Notes giving rise to
such indemnification obligation. This
indemnity will be in addition to any
liability which any Holder may
otherwise have, including under this
Agreement.
(c) Promptly after receipt
by an indemnified party under
subsection (a) or (b) above of notice
of the commencement of any action,
such indemnified party shall, if a
claim in respect thereof is to be made
against the indemnifying party under
such subsection, notify each party
against whom indemnification is to be
sought in writing of the commencement
thereof (but the failure so to notify
an indemnifying party shall not
relieve it from any liability which it
may have under this Section 8 except
to the extent that it has been
prejudiced in any material respect by
such failure or from any liability
which it may otherwise have). In case
any such action is brought against any
indemnified party, and it notifies an
indemnifying party of the commencement
thereof, the indemnifying party will
be entitled to participate therein,
and to the extent it may elect by
written notice delivered to the
indemnified party promptly after
receiving the aforesaid notice from
such indemnified party, to assume the
defense thereof with counsel
reasonably satisfactory to such
indemnified party. Notwithstanding
the foregoing, the indemnified party
or parties shall have the right to
employ its or their own counsel in any
such case, but the fees and expenses
of such counsel shall be at the
expense of such indemnified party or
parties unless (i) the employment of
such counsel shall have been
authorized in writing by the
indemnifying parties in connection
with the defense of such action, (ii)
the indemnifying parties shall not
have employed counsel to take charge
of the defense of such action within a
reasonable time after notice of
commencement of the action, or (iii)
such indemnified party or parties
shall have reasonably concluded that
there may be defenses available to it
or them which are different from or
additional to those available to one
or all of the indemnifying parties (in
which case the indemnifying party or
parties shall not have the right to
direct the defense of such action on
behalf of the indemnified party or
parties), in any of which events such
fees and expenses of counsel shall be
borne by the indemnifying parties;
provided, however, that the
indemnifying party under subsection
(a) or (b) above shall only be liable
for the legal expenses of one counsel
(in addition to any local counsel) for
all indemnified parties in each
jurisdiction in which any claim or
action is brought. Anything in this
subsection to the contrary
notwithstanding, an indemnifying party
shall not be liable for any settlement
of any claim or action effected
without its prior written consent;
provided, however, that such consent
was not unreasonably withheld.
(d) In order to provide for
contribution in circumstances in which
the indemnification provided for in
this Section 8 is for any reason held
to be unavailable from the Company and
the Guarantors or is insufficient to
hold harmless a party indemnified
hereunder, the Company and the
Guarantors, on the one hand, and each
Holder, on the other hand, shall
contribute to the aggregate losses,
claims, damages, liabilities and
expenses of the nature contemplated by
such indemnification provision
(including any investigation, legal
and other expenses incurred in
connection with, and any amount paid
in settlement of, any action, suit or
proceeding or any claims asserted, but
after deducting in the case of losses,
claims, damages, liabilities and
expenses suffered by the Company and
the Guarantors, any contribution
received by the Company and the
Guarantors from persons, other than
the Holders, who may also be liable
for contribution, including persons
who control the Company and the
Guarantors within the meaning of
Section 15 of the Act or Section 20(a)
of the Exchange Act) to which the
Company, the Guarantors and such
Holder may be subject, in such
proportion as is appropriate to
reflect the relative benefits received
by the Company and the Guarantors, on
one hand, and such Holder, on the
other hand, if such allocation is not
permitted by applicable law or
indemnification is not available as a
result of the indemnifying party not
having received notice as provided in
this Section 8, in such proportion as
is appropriate to reflect not only the
relative benefits referred to above
but also the relative fault of the
Company and the Guarantors, on the one
hand, and such Holder, on the other
hand, in connection with the
statements or omissions which resulted
in such losses, claims, damages,
liabilities or expenses, as well as
any other relevant equitable
considerations. The relative benefits
received by the Company and the
Guarantors, on one hand, and each
Holder, on the other hand, shall be
deemed to be in the same proportion as
(i) the total proceeds from the
offering of the Notes (net of
discounts but before deducting
expenses) received by the Company and
the Guarantors and (ii) the total
proceeds received by such Holder upon
the sale of the Notes giving rise to
such indemnification obligation. The
relative fault of the Company and the
Guarantors, on the one hand, and of
each Holder, on the other hand, shall
be determined by reference to, among
other things, whether the untrue or
alleged untrue statement of a material
fact or the omission or alleged
omission to state a material fact
relates to information supplied by the
Company, the Guarantors or such Holder
and the parties' relative intent,
knowledge, access to information and
opportunity to correct or prevent such
statement or omission. The Company,
the Guarantors and the Holders agree
that it would not be just and
equitable if contribution pursuant to
this Section 8(d) were determined by
pro rata allocation or by any other
method of allocation which does not
take into account the equitable
considerations referred to above.
Notwithstanding the provisions of this
Section 8(d), (i) in no case shall any
Holder be required to contribute any
amount in excess of the dollar amount
by which the proceeds received by such
Holder upon the sale of the Notes
exceeds the amount of any damages
which such Holder has otherwise been
required to pay by reason of such
untrue or alleged untrue statement or
omission or alleged omission and (ii)
no person guilty of fraudulent
misrepresentation (within the meaning
of Section 11(f) of the Act) shall be
entitled to contribution from any
person who was not guilty of such
fraudulent misrepresentation. For
purposes of this Section 8(d), (A)
each person, if any, who controls any
Holder within the meaning of Section
15 of the Act or Section 20(a) of the
Exchange Act and (B) the respective
officers, directors, partners,
employees, representatives and agents
of each Holder or any controlling
person shall have the same rights to
contribution as such Holder, and each
person, if any, who controls the
Company and the Guarantors within the
meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act
shall have the same rights to
contribution as the Company and the
Guarantors, subject in each case to
clauses (i) and (ii) of this Section
8(d). Any party entitled to
contribution will, promptly after
receipt of notice of commencement of
any action, suit or proceeding against
such party in respect of which a claim
for contribution may be made against
another party or parties under this
Section 8(d), notify such party or
parties from whom contribution may be
sought, but the failure to so notify
such party or parties shall not
relieve the party or parties from whom
contribution may be sought from any
obligation it or they may have under
this Section 8(d) or otherwise. No
party shall be liable for contribution
with respect to any action or claim
settled without its prior written
consent; provided, however, that such
written consent was not unreasonably
withheld.
SECTION 9. RULE 144A
The Company hereby agrees
with each Holder, for so long as any
Transfer Restricted Securities remain
outstanding, to make available to any
Holder or beneficial owner of Transfer
Restricted Securities in connection
with any sale thereof and any
prospective purchaser of such Transfer
Restricted Securities from such Holder
or beneficial owner, the information
required by Rule 144A(d)(4) under the
Act in order to permit resales of such
Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN
UNDERWRITTEN REGISTRATIONS
No Holder may participate in
any Underwritten Registration
hereunder unless such Holder (a)
agrees to sell such Holder's Transfer
Restricted Securities on the basis
provided in any underwriting
arrangements approved by the Persons
entitled hereunder to approve such
arrangements and (b) completes and
executes all reasonable
questionnaires, powers of attorney,
indemnities, underwriting agreements,
lock-up letters and other documents
required under the terms of such
underwriting arrangements.
SECTION 11. SELECTION OF
UNDERWRITERS
The Holders of Transfer
Restricted Securities covered by the
Shelf Registration Statement who
desire to do so may sell such Transfer
Restricted Securities in an
Underwritten Offering. In any such
Underwritten Offering, the investment
banker or investment bankers and
manager or managers that will
administer the offering will be
selected by the Holders of a majority
in aggregate principal amount of the
Transfer Restricted Securities
included in such offering; provided,
that such investment bankers and
managers must be reasonably
satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company
and the Guarantors agree that monetary
damages (including the liquidated
damages contemplated hereby) would not
be adequate compensation for any loss
incurred by reason of a breach by it
of the provisions of this Agreement
and hereby agree to waive the defense
in any action for specific performance
that a remedy at law would be
adequate.
(b) No Inconsistent
Agreements. The Company will not, and
will cause the Guarantors not to, on
or after the date of this Agreement
enter into any agreement with respect
to its securities that is inconsistent
with the rights granted to the Holders
in this Agreement or otherwise
conflicts with the provisions hereof.
Neither of the Company nor any of the
Guarantors has previously entered into
any agreement granting any
registration rights with respect to
its securities to any Person. The
rights granted to the Holders
hereunder do not in any way conflict
with and are not inconsistent with the
rights granted to the holders of the
Company's securities under any
agreement in effect on the date
hereof.
(c) Adjustments Affecting
the Notes. The Company will not take
any action, or permit any change to
occur, with respect to the Notes that
would materially and adversely affect
the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers.
The provisions of this Agreement may
not be amended, modified or
supplemented, and waivers or consents
to or departures from the provisions
hereof may not be given unless the
Company has obtained the written
consent of Holders of a majority of
the outstanding principal amount of
Transfer Restricted Securities.
Notwithstanding the foregoing, a
waiver or consent to departure from
the provisions hereof that relates
exclusively to the rights of Holders
whose securities are being tendered
pursuant to the Exchange Offer and
that does not affect directly or
indirectly the rights of other Holders
whose securities are not being
tendered pursuant to such Exchange
Offer may be given by the Holders of a
majority of the outstanding principal
amount of Transfer Restricted
Securities being tendered or
registered.
(e) Notices. All notices
and other communications provided for
or permitted hereunder shall be made
in writing by hand-delivery, first-
class mail (registered or certified,
return receipt requested), telex,
telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at
the address set forth on the
records of the Registrar under the
Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company
or any of the Guarantors:
American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
Telecopy No.: (207) 824-2111
Attention: Secretary
With copies to:
Pierce, Atwood, Scribner, Allen, Smith
& Lancaster
One Monument Square
Portland, Maine 04101
Telecopy No.: (207) 773-3419
Attention: Christopher E. Howard,
Esq.; and
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telecopy No.: (212) 735-2000
Attention: Phyllis G. Korff, Esq.
All such notices and
communications shall be deemed to have
been duly given: at the time
delivered by hand, if personally
delivered; five business days after
being deposited in the mail, postage
prepaid, if mailed; when answered
back, if telexed; when receipt
acknowledged, if telecopied; and on
the next business day, if timely
delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices,
demands or other communications shall
be concurrently delivered by the
Person giving the same to the Trustee
at the address specified in the
Indenture.
(f) Successors and Assigns.
This Agreement shall inure to the
benefit of and be binding upon the
successors and assigns of each of the
parties, including without limitation
and without the need for an express
assignment, subsequent Holders of
Transfer Restricted Securities;
provided, however, that this Agreement
shall not inure to the benefit of or
be binding upon a successor or assign
of a Holder unless and to the extent
such successor or assign acquired
Transfer Restricted Securities from
such Holder.
(g) Counterparts. This
Agreement 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.
(h) Headings. The headings
in this Agreement are for convenience
of reference only and shall not limit
or otherwise affect the meaning
hereof.
(i) Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW RULES
THEREOF.
(j) Severability. In the
event that any one or more of the
provisions contained herein, or the
application thereof in any
circumstance, is held invalid, illegal
or unenforceable, the validity,
legality and enforceability of any
such provision in every other respect
and of the remaining provisions
contained herein shall not be affected
or impaired thereby.
(k) Entire Agreement. This
Agreement, together with the other
Operative Documents (as defined in the
Purchase Agreement), is intended by
the parties as a final expression of
their agreement and intended to be a
complete and exclusive statement of
the agreement and understanding of the
parties hereto in respect of the
subject matter contained herein.
There are no restrictions, promises,
warranties or undertakings, other than
those set forth or referred to herein
with respect to the registration
rights granted by the Company with
respect to the Transfer Restricted
Securities. This Agreement supersedes
all prior agreements and
understandings between the parties
with respect to such subject matter.
IN WITNESS WHEREOF, the
parties have executed this Agreement
as of the date first written above.
AMERICAN SKIING COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER SKIWAY CORPORATION
By: /s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER LTD.
By: /s/ Leslie B. Otten
Name:
Title:
PERFECT TURN, INC.
By: /s/ Leslie B. Otten
Name:
Title:
LBO HOLDING, INC.
By: /s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER TRANSPORTATION, INC.
By: /s/ Leslie B. Otten
Name:
Title:
SUGARBUSH RESORT HOLDINGS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
SUGARBUSH LEASING COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
SUGARBUSH RESTAURANTS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
CRANMORE, INC.
By: /s/ Leslie B. Otten
Name:
Title:
MOUNTAIN WASTEWATER TREATMENT, INC.
By: /s/ Leslie B. Otten
Name:
Title:
LBO HOTEL CO.
By: /s/ Leslie B. Otten
Name:
Title:
S-K-I LIMITED
By: /s/ Leslie B. Otten
Name:
Title:
KILLINGTON LTD.
By: /s/ Leslie B. Otten
Name:
Title:
MOUNT SNOW LTD.
By: /s/ Leslie B. Otten
Name:
Title:
WATERVILLE VALLEY SKI AREA, LTD.
By: /s/ Leslie B. Otten
Name:
Title:
SUGARLOAF MOUNTAIN CORPORATION
By: /s/ Leslie B. Otten
Name:
Title:
KILLINGTON RESTAURANTS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
DOVER RESTAURANTS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
RESORT TECHNOLOGIES, INC.
By: /s/ Leslie B. Otten
Name:
Title:
RESORT SOFTWARE SERVICES, INC.
By: /s/ Leslie B. Otten
Name:
Title:
DEERFIELD OPERATING COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
PICO SKI AREA MANAGEMENT COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
SUGARTECH
By: /s/ Leslie B. Otten
Name:
Title:
MOUNTAINSIDE
By: /s/ Leslie B. Otten
Name:
Title:
Accepted and agreed
BEAR, STEARNS & CO. INC.
By: /s/ Bear Stearns & Co. Inc.
Name:
Title:
SPP Hambro & Co., LLC
By: /s/ Stefan Shaffer
Name: Stefan Shaffer
Title: President
28
REGISTRATION RIGHTS AGREEMENT
Dated as of June 28, 1996
by and among
American Skiing Company,
the Guarantors Named on the Signature
Pages Hereto
and
Bear, Stearns & Co. Inc.
<PAGE>
This Registration Rights
Agreement (this "Agreement") is made
and entered into as of June 28, 1996
by and among American Skiing Company,
a Maine corporation (the "Company"),
the guarantors named on the signature
pages hereto (collectively, the
"Guarantors") and Bear, Stearns & Co.
Inc. (the "Initial Purchaser"), who
has agreed to purchase the Company's
13 3/4 Series A Subordinated Discount
Notes due 2007 (the "Series A
Subordinated Notes") pursuant to the
Purchase Agreement (as defined below).
This Agreement is made
pursuant to the Purchase Agreement,
dated June 25, 1996 (the "Purchase
Agreement"), by and among the Company,
the Guarantors and the Initial
Purchaser. In order to induce the
Initial Purchaser to purchase the
Series A Subordinated Notes, the
Company has agreed to provide the
registration rights set forth in this
Agreement. The execution and delivery
of this Agreement is a condition to
the obligations of the Initial
Purchaser set forth in Section 3 of
the Purchase Agreement.
The parties hereby agree as
follows:
SECTION 1. DEFINITIONS
As used in this Agreement,
the following capitalized terms shall
have the following meanings:
Accreted Value: As defined
in the Indenture.
Act: The Securities Act of
1933, as amended.
Broker-Dealer: Any broker
or dealer registered under the
Exchange Act.
Closing Date: The date of
this Agreement.
Commission: The Securities
and Exchange Commission.
Consummate: An Exchange
Offer shall be deemed "Consummated"
for purposes of this Agreement upon
the occurrence of (i) the filing and
effectiveness under the Act of the
Exchange Offer Registration Statement
relating to the Series B Subordinated
Notes to be issued in the Exchange
Offer, (ii) the maintenance of such
Registration Statement continuously
effective and the keeping of the
Exchange Offer open for a period not
less than the minimum period required
pursuant to Section 3(b) hereof, and
(iii) the delivery by the Company to
the Registrar under the Indenture of
Series B Subordinated Notes in the
same aggregate principal amount as the
aggregate principal amount of Series A
Subordinated Notes that were tendered
by Holders thereof pursuant to the
Exchange Offer.
Damages Payment Date: With
respect to the Series A Subordinated
Notes, January 15 and July 15 of each
year, commencing January 15, 1997.
Effectiveness Target Date:
As defined in Section 5.
Exchange Act: The
Securities Exchange Act of 1934, as
amended.
Exchange Offer: The
registration by the Company under the
Act of the Series B Subordinated Notes
pursuant to the Exchange Offer
Registration Statement pursuant to
which the Company offers the Holders
of all outstanding Transfer Restricted
Securities the opportunity to exchange
all such outstanding Transfer
Restricted Securities held by such
Holders for Series B Subordinated
Notes in an aggregate principal amount
equal to the aggregate principal
amount of the Transfer Restricted
Securities tendered in such exchange
offer by such Holders.
Exchange Offer Registration
Statement: The Registration Statement
relating to the Exchange Offer,
including the related Prospectus.
Exempt Resales: The
transactions in which the Initial
Purchaser proposes to sell the Series
A Subordinated Notes to certain
"qualified institutional buyers," as
such term is defined in Rule 144A
under the Act, and to certain
institutional "accredited investors,"
as such term is defined in Rule
501(a)(1), (2), (3) or (7) of
Regulation D under the Act
("Accredited Institutions").
Holders: As defined in
Section 2(b) hereof.
Indenture: The Indenture,
dated as of June 28, 1996, among the
Company, the Guarantors and United
States Trust Company of New York, as
trustee (the "Trustee"), pursuant to
which the Notes are to be issued, as
such Indenture is amended or
supplemented from time to time in
accordance with the terms thereof.
NASD: National Association
of Securities Dealers, Inc.
Notes: The Series A
Subordinated Notes and the Series B
Subordinated Notes.
Person: An individual,
partnership, corporation, limited
liability company, trust or
unincorporated organization, or a
government or agency or political
subdivision thereof.
Prospectus: The prospectus
included in a Registration Statement,
as amended or supplemented by any
prospectus supplement and by all other
amendments thereto, including post-
effective amendments, and all material
incorporated by reference into such
Prospectus.
Record Holder: With respect
to any Damages Payment Date relating
to Notes, each Person who is a Holder
of Notes on the January 1 or July 1
next preceding such Damages Payment
Date.
Registration Default: As
defined in Section 5 hereof.
Registration Statement: Any
registration statement of the Company
relating to (a) an offering of Series
B Subordinated Notes pursuant to an
Exchange Offer or (b) the registration
for resale of Transfer Restricted
Securities pursuant to the Shelf
Registration Statement, which is filed
pursuant to the provisions of this
Agreement, in each case, including the
Prospectus included therein, all
amendments and supplements thereto
(including post-effective amendments)
and all exhibits and material
incorporated by reference therein.
Series B Subordinated Notes:
The Company's 13 3/4% Series B
Subordinated Discount Notes due 2007
to be issued pursuant to the Indenture
(a) in the Exchange Offer or (b)
pursuant to a Shelf Registration
Statement, in each case, in exchange
for Series A Subordinated Notes.
Shelf Filing Deadline: As
defined in Section 4 hereof.
Shelf Registration
Statement: As defined in Section 4
hereof.
TIA: The Trust Indenture
Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date
of the Indenture.
Transfer Restricted
Securities: Each Note, until the
earliest to occur of (a) the date on
which such Note is exchanged in the
Exchange Offer and entitled to be
resold to the public by the Holder
thereof without complying with the
prospectus delivery requirements of
the Act, (b) the date on which such
Note has been effectively registered
under the Act and disposed of in
accordance with a Shelf Registration
Statement and (c) the date on which
such Note is distributed to the public
pursuant to Rule 144 under the Act or
by a Broker-Dealer pursuant to the
"Plan of Distribution" contemplated by
the Exchange Offer Registration
Statement (including delivery of the
Prospectus contained therein).
Underwritten Registration or
Underwritten Offering: A registration
in which securities of the Company are
sold to an underwriter for reoffering
to the public.
SECTION 2. SECURITIES SUBJECT TO
THIS AGREEMENT
(a) Transfer Restricted
Securities. The securities entitled
to the benefits of this Agreement are
the Transfer Restricted Securities.
(b) Holders of Transfer
Restricted Securities. A Person is
deemed to be a holder of Transfer
Restricted Securities (each, a
"Holder") whenever such Person owns
Transfer Restricted Securities.
SECTION 3. REGISTERED
EXCHANGE OFFER
(a) Unless the Exchange
Offer shall not be permissible under
applicable law or Commission policy
(after the procedures set forth in
Section 6(a) below have been complied
with), the Company and the Guarantors
shall (i) cause to be filed with the
Commission as soon as practicable
after the Closing Date, but in no
event later than 45 days after the
Closing Date, the Exchange Offer
Registration Statement, (ii) use their
best efforts to cause such Exchange
Offer Registration Statement to become
effective no later than 150 days after
the Closing Date, (iii) in connection
with the foregoing, file (A) all pre-
effective amendments to such Exchange
Offer Registration Statement as may be
necessary in order to cause such
Exchange Offer Registration Statement
to become effective, (B) if
applicable, a post-effective amendment
to such Exchange Offer Registration
Statement pursuant to Rule 430A under
the Act and (C) cause all necessary
filings in connection with the
registration and qualification of the
Series B Subordinated Notes to be made
under the Blue Sky laws of such
jurisdictions as are necessary to
permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness
of such Exchange Offer Registration
Statement, commence and Consummate the
Exchange Offer. The Exchange Offer
shall be on the appropriate form
permitting registration of the Series
B Subordinated Notes to be offered in
exchange for the Transfer Restricted
Securities and to permit resales of
Notes held by Broker-Dealers as
contemplated by Section 3(c) below.
(b) The Company and the
Guarantors shall use their best
efforts to cause the Exchange Offer
Registration Statement to be effective
continuously and shall keep the
Exchange Offer open for a period of
not less than the minimum period
required under applicable federal and
state securities laws to Consummate
the Exchange Offer; provided, however,
that in no event shall such period be
less than 20 business days. The
Company and the Guarantors shall cause
the Exchange Offer to comply with all
applicable federal and state
securities laws. No securities other
than the Notes shall be included in
the Exchange Offer Registration
Statement. The Company and the
Guarantors shall use their best
efforts to cause the Exchange Offer to
be Consummated on the earliest
practicable date after the Exchange
Offer Registration Statement has
become effective, but in no event
later than 30 business days
thereafter.
(c) The Company and the
Guarantors shall include a "Plan of
Distribution" section in the
Prospectus contained in the Exchange
Offer Registration Statement and
indicate therein that any Broker-
Dealer who holds Series A Subordinated
Notes that are Transfer Restricted
Securities and that were acquired for
its own account as a result of market-
making activities or other trading
activities (other than Transfer
Restricted Securities acquired
directly from the Company), may
exchange such Series A Subordinated
Notes pursuant to the Exchange Offer;
however, such Broker-Dealer may be
deemed to be an "underwriter" within
the meaning of the Act and must,
therefore, deliver a prospectus
meeting the requirements of the Act in
connection with any resales of the
Series B Subordinated Notes received
by such Broker-Dealer in the Exchange
Offer, which prospectus delivery
requirement may be satisfied by the
delivery by such Broker-Dealer of the
Prospectus contained in the Exchange
Offer Registration Statement. Such
"Plan of Distribution" section shall
also contain all other information
with respect to such resales by Broker-
Dealers that the Commission may
require in order to permit such
resales pursuant thereto, but such
"Plan of Distribution" shall not name
any such Broker-Dealer or disclose the
amount of Notes held by any such
Broker-Dealer except to the extent
required by the Commission as a result
of a change in policy after the date
of this Agreement.
The Company and the
Guarantors shall use their best
efforts to keep the Exchange Offer
Registration Statement continuously
effective, supplemented and amended as
required by the provisions of Section
6(c) below to the extent necessary to
ensure that it is available for
resales of Notes acquired by Broker-
Dealers for their own accounts as a
result of market-making activities or
other trading activities, and to
ensure that it conforms with the
requirements of this Agreement, the
Act and the policies, rules and
regulations of the Commission as
announced from time to time, for a
period of 180 days from the date on
which the Exchange Offer Registration
Statement is declared effective.
The Company shall provide
sufficient copies of the latest
version of such Prospectus to Broker-
Dealers promptly upon request at any
time during such 180-day period in
order to facilitate such resales, and
Broker-Dealers are not authorized by
the Company to, and shall not, deliver
such Prospectus after such 180-day
period in connection with resales
contemplated by this Section 3 or
otherwise.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If
(i) the Company and the Guarantors are
not required to file an Exchange Offer
Registration Statement or permitted to
consummate the Exchange Offer because
the Exchange Offer is not permitted by
applicable law or Commission policy
(after the procedures set forth in
Section 6(a) below have been complied
with) or (ii) if any Holder of
Transfer Restricted Securities
notifies the Company on or prior to
the 20th business day following the
Consummation of the Exchange Offer (A)
that such Holder is prohibited by
applicable law or Commission policy
from participating in the Exchange
Offer or (B) that such Holder may not
resell the Series B Subordinated Notes
acquired by it in the Exchange Offer
to the public without delivering a
prospectus and that the Prospectus
contained in the Exchange Offer
Registration Statement is not
appropriate or available for such
resales by such Holder, or (C) that
such Holder is a Broker-Dealer and
holds Series A Subordinated Notes
acquired directly from the Company or
one of its affiliates, then the
Company and the Guarantors shall:
(x) use their best
efforts to file a shelf
registration statement with the
Commission pursuant to Rule 415
under the Act, which may be an
amendment to the Exchange Offer
Registration Statement (in either
event, the "Shelf Registration
Statement") on or prior to the
earliest to occur of (1) the 60th
day after the date on which the
Company and the Guarantors
determine that they are not
required to file the Exchange Offer
Registration Statement, (2) the
60th day after the date on which
the Company and the Guarantors
receive notice from a Holder of
Transfer Restricted Securities as
contemplated by clause (ii) above,
and (3) the 150th day after the
Closing Date (such earliest date
being the "Shelf Filing Deadline"),
which Shelf Registration Statement
shall provide for resales of all
Transfer Restricted Securities the
Holders of which shall have
provided the information required
pursuant to Section 4(b) hereof;
and
(y) use their best
efforts to cause such Shelf
Registration Statement to be
declared effective by the
Commission on or prior to the 90th
day after the Shelf Filing
Deadline.
The Company and the Guarantors shall
use their best efforts to keep such
Shelf Registration Statement
continuously effective, supplemented
and amended as required by the
provisions of Sections 6(b) and (c)
hereof to the extent necessary to
ensure that it is available for
resales of Notes by the Holders of
Transfer Restricted Securities
entitled to the benefit of this
Section 4(a), and to ensure that it
conforms with the requirements of this
Agreement, the Act and the policies,
rules and regulations of the
Commission as announced from time to
time, for a period of at least three
years following the Closing Date or
such shorter period ending when all
Transfer Restricted Securities covered
by such Shelf Registration Statement
have been sold in the manner set forth
and as contemplated by such Shelf
Registration Statement.
(b) Provision by Holders of
Certain Information in Connection with
the Shelf Registration Statement. No
Holder of Transfer Restricted
Securities may include any of its
Transfer Restricted Securities in any
Shelf Registration Statement pursuant
to this Agreement unless and until
such Holder furnishes to the Company
in writing, within 20 business days
after receipt of a request therefor,
such information as the Company may
reasonably request for use in
connection with any Shelf Registration
Statement or Prospectus or preliminary
Prospectus included therein. No
Holder of Transfer Restricted
Securities shall be entitled to
Liquidated Damages pursuant to Section
5 hereof unless and until such Holder
shall have used its best efforts to
provide all such reasonably requested
information. Each Holder as to which
any Shelf Registration Statement is
being effected agrees to furnish
promptly to the Company all
information required to be disclosed
in order to make the information
previously furnished to the Company by
such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the
Registration Statements required by
this Agreement is not filed with the
Commission on or prior to the date
specified for such filing in this
Agreement, (ii) any of such
Registration Statements has not been
declared effective by the Commission
on or prior to the date specified for
such effectiveness in this Agreement
(the "Effectiveness Target Date"),
(iii) the Exchange Offer has not been
Consummated within 30 business days
after the Effectiveness Target Date
with respect to the Exchange Offer
Registration Statement or (iv) any
Registration Statement required by
this Agreement is filed and declared
effective but shall thereafter cease
to be effective or fail to be usable
for its intended purpose without being
succeeded immediately by a post-
effective amendment to such
Registration Statement that cures such
failure and that is itself immediately
declared effective (each such event
referred to in clauses (i) through
(iv), a "Registration Default"), the
Company and the Guarantors hereby
jointly and severally agree to pay
liquidated damages to each Holder of
Transfer Restricted Securities, with
respect to the first 30-day period
immediately following the occurrence
of a Registration Default listed in
clause (i) of the definition thereof,
or with respect to the first 90-day
period immediately following the
occurrence of a Registration Default
listed in clauses (ii), (iii) or (iv)
of the definition thereof, in an
amount equal to 0.25% per annum of the
Accreted Value (if prior to July 15,
2001) or 0.25% per annum of the
principal amount (if on or after July
15, 2001) of Transfer Restricted
Securities held by such Holder. The
amount of the liquidated damages shall
increase by an additional 0.25% per
annum of the Accreted Value (if prior
to July 15, 2001) or 0.25% per annum
of the principal amount (if on or
after July 15, 2001) of Transfer
Restricted Securities with respect to
each subsequent 30- or 90-day period,
as the case may be, until all
Registration Defaults have been cured,
up to a maximum amount of liquidated
damages of 1.0% per annum of the
Accreted Value (if prior to July 15,
2001) or 1.0% per annum of the
principal amount (if on or after July
15, 2001) of Transfer Restricted
Securities. All accrued liquidated
damages shall be paid to Record
Holders by the Company on each Damages
Payment Date by wire transfer of
immediately available funds or by such
other method, as provided in the
Indenture. Following the cure of all
Registration Defaults, relating to any
particular Transfer Restricted
Securities, the accrual of liquidated
damages with respect to such Transfer
Restricted Securities will cease.
All obligations of the
Company and the Guarantors set forth
in the preceding paragraph that are
outstanding with respect to any
Transfer Restricted Security at the
time such security ceases to be a
Transfer Restricted Security shall
survive until such time as all such
obligations with respect to such
security shall have been satisfied in
full.
SECTION 6. REGISTRATION
PROCEDURES
(a) Exchange Offer
Registration Statement. In connection
with the Exchange Offer, the Company
and the Guarantors shall comply with
all of the provisions of Section 6(c)
below, shall use their best efforts to
effect such exchange to permit the
sale of Transfer Restricted Securities
being sold in accordance with the
intended method or methods of
distribution thereof, and shall comply
with all of the following provisions:
(i) If in the reasonable
opinion of counsel to the Company
there is a question as to whether
the Exchange Offer is permitted by
applicable law, the Company and the
Guarantors hereby agree to seek a
no-action letter or other favorable
decision from the Commission
allowing the Company and the
Guarantors to Consummate an
Exchange Offer for such Series A
Subordinated Notes. Each of the
Company and the Guarantors hereby
agrees to pursue the issuance of
such a decision to the Commission
staff level but shall not be
required to take commercially
unreasonable action to effect a
change of Commission policy. Each
of the Company and the Guarantors
hereby agrees, however, to (A)
participate in telephonic
conferences with the Commission,
(B) deliver to the Commission staff
an analysis prepared by counsel to
the Company setting forth the legal
bases, if any, upon which such
counsel has concluded that such an
Exchange Offer should be permitted
and (C) diligently pursue a
resolution (which need not be
favorable) by the Commission staff
of such submission.
(ii) As a condition to
its participation in the Exchange
Offer pursuant to the terms of this
Agreement, each Holder of Transfer
Restricted Securities shall
furnish, upon the request of the
Company, prior to the Consummation
thereof, a written representation
to the Company (which may be
contained in the letter of
transmittal contemplated by the
Exchange Offer Registration
Statement) to the effect that
(A) it is not an affiliate of the
Company or any Guarantor, (B) it is
not engaged in, and does not intend
to engage in, and has no
arrangement or understanding with
any person to participate in, a
distribution of the Series B
Subordinated Notes to be issued in
the Exchange Offer and (C) it is
acquiring the Series B Subordinated
Notes in its ordinary course of
business. In addition, all such
Holders of Transfer Restricted
Securities shall otherwise
cooperate in the Company's
preparations for the Exchange
Offer. The Initial Purchaser
hereby acknowledges and agrees that
any Broker-Dealer and any Holder
using the Exchange Offer to
participate in a distribution of
the securities to be acquired in
the Exchange Offer (1) could not
under Commission policy as in
effect on the date of this
Agreement rely on the position of
the Commission enunciated in Morgan
Stanley and Co., Inc. (available
June 5, 1991) and Exxon Capital
Holdings Corporation (available May
13, 1988), as interpreted in the
Commission's letter to Shearman &
Sterling dated July 2, 1993, and
similar no-action letters
(including any no-action letter
obtained pursuant to clause (i)
above), and (2) must comply with
the registration and prospectus
delivery requirements of the Act in
connection with a secondary resale
transaction and that such a
secondary resale transaction should
be covered by an effective
registration statement containing
the selling security holder
information required by Item 507 or
508, as applicable, of Regulation S-
K if the resales are of Series B
Subordinated Notes obtained by a
Holder in exchange for Series A
Subordinated Notes acquired by such
Holder directly from the Company.
(iii) Prior to
effectiveness of the Exchange Offer
Registration Statement, the Company
and the Guarantors shall provide a
supplemental letter to the
Commission (A) stating that the
Company and the Guarantors are
registering the Exchange Offer in
reliance on the position of the
Commission enunciated in Exxon
Capital Holdings Corporation
(available May 13, 1988), Morgan
Stanley and Co., Inc. (available
June 5, 1991) and, if applicable,
any no-action letter obtained
pursuant to clause (i) above and
(B) including a representation that
neither the Company nor any of the
Guarantors has entered into any
arrangement or understanding with
any Person to distribute the Series
B Subordinated Notes to be received
in the Exchange Offer and that, to
the best of the Company's and the
Guarantors' information and belief,
each Holder participating in the
Exchange Offer is acquiring the
Series B Subordinated Notes in its
ordinary course of business and has
no arrangement or understanding
with any Person to participate in
the distribution of the Series B
Subordinated Notes received in the
Exchange Offer.
(b) Shelf Registration
Statement. In connection with the
Shelf Registration Statement, the
Company and the Guarantors shall
comply with all the provisions of
Section 6(c) below and shall use their
best efforts to effect such
registration to permit the sale of the
Transfer Restricted Securities being
sold in accordance with the intended
method or methods of distribution
thereof (as indicated in the
information furnished to the Company
pursuant to Section 4(b) hereof), and
pursuant thereto the Company will
prepare and file with the Commission a
Registration Statement relating to the
registration on any appropriate form
under the Act, which form shall be
available for the sale of the Transfer
Restricted Securities in accordance
with the intended method or methods of
distribution thereof.
(c) General Provisions. In
connection with any Registration
Statement and any Prospectus required
by this Agreement to permit the sale
or resale of Transfer Restricted
Securities (including, without
limitation, any Registration Statement
and the related Prospectus required to
permit resales of Notes by Broker-
Dealers), the Company and the
Guarantors shall:
(i) use their best
efforts to keep such Registration
Statement continuously effective
and provide all requisite financial
statements (including, if required
by the Act or any regulation
thereunder, financial statements of
the Guarantors) for the period
specified in Section 3 or 4 of this
Agreement, as applicable; upon the
occurrence of any event that would
cause any such Registration
Statement or the Prospectus
contained therein (A) to contain a
material misstatement or omission
or (B) not to be effective and
usable for resale of Transfer
Restricted Securities during the
period required by this Agreement,
the Company shall file promptly an
appropriate amendment to such
Registration Statement, in the case
of clause (A), correcting any such
misstatement or omission, and, in
the case of either clause (A) or
(B), use their best efforts to
cause such amendment to be declared
effective and such Registration
Statement and the related
Prospectus to become usable for
their intended purpose(s) as soon
as practicable thereafter;
provided, however, that the Company
and the Guarantors may allow the
Shelf Registration Statement to
fail to be effective or usable for
a period of up to 60 days during
the three-year period of
effectiveness required by Section 4
hereof, but in no event for any
period in excess of 30 consecutive
days, if (1) the board of directors
of the Company determines in good
faith that it is in the best
interests of the Company not to
disclose the existence of or facts
surrounding any proposed or pending
material corporate transaction
involving the Company or any of the
Guarantors and (2) the Company
notifies the Holders within two
business days after such
determination by the board of
directors; provided, further,
however, that the three-year period
referred to in Section 4 hereof
shall be extended by the number of
days during which the Shelf
Registration Statement was not
effective or usable pursuant to the
foregoing;
(ii) prepare and file
with the Commission such amendments
and post-effective amendments to
the Registration Statement as may
be necessary to keep the
Registration Statement effective
for the applicable period set forth
in Section 3 or 4 hereof, as
applicable, or such shorter period
as will terminate when all Transfer
Restricted Securities covered by
such Registration Statement have
been sold; cause the Prospectus to
be supplemented by any required
Prospectus supplement, and as so
supplemented to be filed pursuant
to Rule 424 under the Act, and to
comply fully with the applicable
provisions of Rules 424 and 430A
under the Act in a timely manner;
and comply with the provisions of
the Act with respect to the
disposition of all securities
covered by such Registration
Statement during the applicable
period in accordance with the
intended method or methods of
distribution by the sellers thereof
set forth in such Registration
Statement or supplement to the
Prospectus;
(iii) advise the
underwriter(s), if any, and selling
Holders promptly and, if requested
by such Persons, to confirm such
advice in writing, (A) when the
Prospectus or any Prospectus
supplement or post-effective
amendment has been filed, and, with
respect to any Registration
Statement or any post-effective
amendment thereto, when the same
has become effective, (B) of any
request by the Commission for
amendments to the Registration
Statement or amendments or
supplements to the Prospectus or
for additional information relating
thereto, (C) of the issuance by the
Commission of any stop order
suspending the effectiveness of the
Registration Statement under the
Act or of the suspension by any
state securities commission of the
qualification of the Transfer
Restricted Securities for offering
or sale in any jurisdiction, or the
initiation of any proceeding for
any of the preceding purposes, (D)
of the existence of any fact or the
happening of any event that makes
any statement of a material fact
made in the Registration Statement,
the Prospectus, any amendment or
supplement thereto, or any document
incorporated by reference therein
untrue, or that requires the making
of any additions to or changes in
the Registration Statement in order
to make the statements therein not
misleading, or that requires the
making of any additions to or
changes in the Prospectus in order
to make the statements therein, in
light of the circumstances under
which they were made, not
misleading. If at any time the
Commission shall issue any stop
order suspending the effectiveness
of the Registration Statement, or
any state securities commission or
other regulatory authority shall
issue an order suspending the
qualification or exemption from
qualification of the Transfer
Restricted Securities under state
securities or Blue Sky laws, the
Company and the Guarantors shall
use their best efforts to obtain
the withdrawal or lifting of such
order at the earliest possible
time;
(iv) furnish to each of
the selling Holders and each of the
underwriter(s), if any, before
filing with the Commission, copies
of any Registration Statement or
any Prospectus included therein or
any amendments or supplements to
any such Registration Statement or
Prospectus (including all documents
incorporated by reference after the
initial filing of such Registration
Statement), which documents will be
subject to the review and comment
of such Holders and underwriter(s),
if any, for a period of at least
five business days, and the Company
will not file any such Registration
Statement or Prospectus or any
amendment or supplement to any such
Registration Statement or
Prospectus (including all such
documents incorporated by
reference) to which a selling
Holder of Transfer Restricted
Securities covered by such
Registration Statement or the
underwriter(s), if any, shall
reasonably object within five
business days after the receipt
thereof. A selling Holder or
underwriter, if any, shall be
deemed to have reasonably objected
to such filing if such Registration
Statement, amendment, Prospectus or
supplement, as applicable, as
proposed to be filed, contains a
material misstatement or omission
or fails to comply with the
applicable requirements of the Act;
(v) promptly prior to
the filing of any document that is
to be incorporated by reference
into a Registration Statement or
Prospectus, provide copies of such
document to the underwriter(s), if
any, and, if requested by any
selling Holder, such selling
Holder, make the Company's
representatives available (and
representatives of the Guarantors)
for discussion of such document and
other customary due diligence
matters, and include such
information in such document prior
to the filing thereof as such
underwriter(s), if any, or selling
Holders reasonably may request;
(vi) subject to the
execution of customary
confidentiality agreements, make
available at reasonable times for
inspection by the selling Holders,
any underwriter participating in
any disposition pursuant to such
Registration Statement, and any
attorney or accountant retained by
such selling Holders or any of the
underwriter(s), all financial and
other records, pertinent corporate
documents and properties of the
Company and the Guarantors and
cause the Company's and the
Guarantors' officers, directors and
employees to supply all information
reasonably requested by any such
Holder, underwriter, attorney or
accountant in connection with such
Registration Statement subsequent
to the filing thereof and prior to
its effectiveness;
(vii) if requested by
any selling Holders or the
underwriter(s), if any, promptly
include in any Registration
Statement or Prospectus, pursuant
to a supplement or post-effective
amendment if necessary, such
information as such selling Holders
and underwriter(s), if any, may
reasonably request to have included
therein, including, without
limitation, information relating to
the "Plan of Distribution" of the
Transfer Restricted Securities,
information with respect to the
principal amount of Transfer
Restricted Securities being sold to
such underwriter(s), the purchase
price being paid therefor and any
other terms of the offering of the
Transfer Restricted Securities to
be sold in such offering; and make
all required filings of such
Prospectus supplement or
post-effective amendment as soon as
practicable after the Company are
notified of the matters to be
included in such Prospectus
supplement or post-effective
amendment;
(viii) if not currently
rated, cause the Transfer
Restricted Securities covered by
the Registration Statement to be
rated with the appropriate rating
agencies, if so requested by the
Holders of a majority in aggregate
principal amount of Notes covered
thereby or the underwriter(s), if
any;
(ix) furnish to each
selling Holder and each of the
underwriter(s), if any, without
charge, at least one copy of the
Registration Statement, as first
filed with the Commission, and of
each amendment thereto, including
all documents incorporated by
reference therein and all exhibits
(including exhibits incorporated
therein by reference);
(x) deliver to each
selling Holder and each of the
underwriter(s), if any, without
charge, as many copies of the
Prospectus (including each
preliminary prospectus) and any
amendment or supplement thereto as
such Persons reasonably may
request; the Company and the
Guarantors hereby consent to the
use of the Prospectus and any
amendment or supplement thereto by
each of the selling Holders and
each of the underwriter(s), if any,
in connection with the offering and
the sale of the Transfer Restricted
Securities covered by the
Prospectus or any amendment or
supplement thereto;
(xi) enter into, and
cause the Guarantors to enter into,
such agreements (including one
underwriting agreement in form and
scope as is customary for similar
offerings of debt securities), and
make, and cause the Guarantors to
make, such representations and
warranties, and take all such other
actions in connection therewith in
order to expedite or facilitate the
disposition of the Transfer
Restricted Securities pursuant to
any Registration Statement
contemplated by this Agreement, all
to such extent as may be requested
by the Initial Purchaser or by any
Holder of Transfer Restricted
Securities or underwriter in
connection with any sale or resale
pursuant to any Registration
Statement contemplated by this
Agreement; and whether or not an
underwriting agreement is entered
into and whether or not the
registration is an Underwritten
Registration, the Company and the
Guarantors shall:
(A) furnish to each
selling Holder and each
underwriter, if any, in such
substance and scope as they may
request and as are customarily
made by issuers to underwriters
in primary underwritten
offerings, upon the date of the
Consummation of the Exchange
Offer and, if applicable, the
effectiveness of the Shelf
Registration Statement:
(1) a
certificate, dated the date
of Consummation of the
Exchange Offer or the date of
effectiveness of the Shelf
Registration Statement, as
the case may be, signed by
(x) the President or any Vice
President and (y) a principal
financial or accounting
officer of each of the
Company and the Guarantors,
confirming, as of the date
thereof, the matters set
forth in paragraphs (a), (b),
(c) and (d) of Section 8 of
the Purchase Agreement and
such other matters as such
parties may reasonably
request;
(2) an
opinion, dated the date of
Consummation of the Exchange
Offer or the date of
effectiveness of the Shelf
Registration Statement, as
the case may be, of counsel
for the Company and the
Guarantors, covering the
matters set forth in
paragraphs (f) and (g) of
Section 8 of the Purchase
Agreement and such other
matters as such parties may
reasonably request, and in
any event including a
statement to the effect that
such counsel has participated
in conferences with officers
and other representatives of
the Company and the
Guarantors, representatives
of the independent public
accountants for the Company,
the Initial Purchaser's
representatives and the
Initial Purchaser's counsel
in connection with the
preparation of such
Registration Statement and
the related Prospectus and
have considered the matters
required to be stated therein
and the statements contained
therein, although such
counsel has not independently
verified the accuracy,
completeness or fairness of
such statements; and that
such counsel advises that, on
the basis of the foregoing
(relying as to materiality to
a large extent upon facts
provided to such counsel by
officers and other
representatives of the
Company and the Guarantors
and without independent check
or verification), no facts
came to such counsel's
attention that caused such
counsel to believe that the
applicable Registration
Statement, at the time such
Registration Statement or any
post-effective amendment
thereto became effective,
and, in the case of the
Exchange Offer Registration
Statement, as of the date of
Consummation, contained an
untrue statement of a
material fact or omitted to
state a material fact re
quired to be stated therein
or necessary to make the
statements therein not
misleading, or that the
Prospectus contained in such
Registration Statement as of
its date and, in the case of
the opinion dated the date of
Consummation of the Exchange
Offer, as of the date of
Consummation, contained an
untrue statement of a
material fact or omitted to
state a material fact
necessary in order to make
the statements therein, in
light of the circumstances
under which they were made,
not misleading. Without
limiting the foregoing, such
counsel may state further
that such counsel assumes no
responsibility for, and has
not independently verified,
the accuracy, completeness or
fairness of the financial
statements, notes and
schedules and other financial
data included in any
Registration Statement
contemplated by this
Agreement or the related
Prospectus; and
(3) a
customary comfort letter,
dated as of the date of
Consummation of the Exchange
Offer or the date of
effectiveness of the Shelf
Registration Statement, as
the case may be, from the
Company's independent
accountants, in the customary
form and covering matters of
the type customarily covered
in comfort letters by
underwriters in connection
with primary underwritten
offerings, and affirming the
matters set forth in the
comfort letters delivered
pursuant to Section 8(h) of
the Purchase Agreement,
without exception;
(B) set forth in full
or incorporate by reference in
the underwriting agreement, if
any, the indemnification
provisions and procedures of
Section 8 hereof with respect to
all parties to be indemnified
pursuant to said Section; and
(C) deliver such
other documents and certificates
as may be reasonably requested
by such parties to evidence
compliance with clause (A) above
and with any customary
conditions contained in the
underwriting agreement or other
agreement entered into by the
Company pursuant to this clause
(xi), if any.
If at any time the
representations and warranties of
the Company and the Guarantors
contemplated in clause (A)(1) above
cease to be true and correct, the
Company or the Guarantors shall so
advise the Initial Purchaser and
the underwriter(s), if any, and
each selling Holder promptly and,
if requested by such Persons, shall
confirm such advice in writing;
(xii) prior to any
public offering of Transfer
Restricted Securities, cooperate
with, and cause the Guarantors to
cooperate with, the selling
Holders, the underwriter(s), if
any, and their respective counsel
in connection with the registration
and qualification of the Transfer
Restricted Securities under the
securities or Blue Sky laws of such
jurisdictions as the selling
Holders or underwriter(s) may
request and do any and all other
acts or things necessary or
advisable to enable the disposition
in such jurisdictions of the
Transfer Restricted Securities
covered by the Shelf Registration
Statement; provided, however, that
neither the Company nor any of the
Guarantors shall be required to
register or qualify as a foreign
corporation where it is not now so
qualified or to take any action
that would subject it to the
service of process in suits or to
taxation, other than as to matters
and transactions relating to the
Registration Statement, in any
jurisdiction where it is not now so
subject;
(xiii) shall issue, upon
the request of any Holder of Series
A Subordinated Notes covered by the
Shelf Registration Statement,
Series B Subordinated Notes, having
an aggregate principal amount equal
to the aggregate principal amount
of Series A Subordinated Notes
surrendered to the Company by such
Holder in exchange therefor or
being sold by such Holder; such
Series B Subordinated Notes to be
registered in the name of such
Holder or in the name of the
purchaser(s) of such Notes, as the
case may be; in return, the Series
A Subordinated Notes held by such
Holder shall be surrendered to the
Company for cancellation;
(xiv) in connection with
any sale of Transfer Restricted
Securities that will result in such
securities no longer being Transfer
Restricted Securities, cooperate
with, and cause the Guarantors to
cooperate with, the selling Holders
and the underwriter(s), if any, to
facilitate the timely preparation
and delivery of certificates
representing Transfer Restricted
Securities to be sold and not
bearing any restrictive legends;
and enable such Transfer Restricted
Securities to be in such
denominations and registered in
such names as the Holders or the
underwriter(s), if any, may request
at least two business days prior to
any sale of Transfer Restricted
Securities made by such
underwriter(s);
(xv) use its best
efforts to cause the Transfer
Restricted Securities covered by
the Registration Statement to be
registered with or approved by such
other governmental agencies or
authorities as may be necessary to
enable the seller or sellers
thereof or the underwriter(s), if
any, to consummate the disposition
of such Transfer Restricted
Securities, subject to the proviso
contained in clause (viii) above;
(xvi) if any fact or
event contemplated by clause
(c)(iii)(D) above shall exist or
have occurred, prepare a supplement
or post-effective amendment to the
Registration Statement or related
Prospectus or any document
incorporated therein by reference
or file any other required document
so that, as thereafter delivered to
the purchasers of Transfer
Restricted Securities, the
Prospectus will not contain an
untrue statement of a material fact
or omit to state any material fact
necessary to make the statements
therein, in light of the
circumstances under which they were
made, not misleading;
(xvii) provide a CUSIP
number for all Transfer Restricted
Securities not later than the
effective date of the Registration
Statement and provide the Trustee
under the Indenture with printed
certificates for the Transfer
Restricted Securities which are in
a form eligible for deposit with
the Depository Trust Company;
(xviii) cooperate and
assist in any filings required to
be made with the NASD and in the
performance of any due diligence
investigation by any underwriter
(including any "qualified
independent underwriter") that is
required to be retained in
accordance with the rules and
regulations of the NASD, and use
its reasonable best efforts to
cause such Registration Statement
to become effective and approved by
such governmental agencies or
authorities as may be necessary to
enable the Holders selling Transfer
Restricted Securities to consummate
the disposition of such Transfer
Restricted Securities;
(xix) otherwise use its
best efforts to comply with all
applicable rules and regulations of
the Commission, and make generally
available to its security holders,
as soon as practicable, a
consolidated earnings statement
meeting the requirements of Rule
158 (which need not be audited) for
the twelve-month period (A)
commencing at the end of any fiscal
quarter in which Transfer
Restricted Securities are sold to
underwriters in a firm or best
efforts Underwritten Offering or
(B) if not sold to underwriters in
such an offering, beginning with
the first month of the Company's
first fiscal quarter commencing
after the effective date of the
Registration Statement;
(xx) cause the Indenture
to be qualified under the TIA not
later than the effective date of
the first Registration Statement
required by this Agreement, and, in
connection therewith, cooperate,
and cause the Guarantors to
cooperate, with the Trustee and the
Holders of Notes to effect such
changes to the Indenture as may be
required for such Indenture to be
so qualified in accordance with the
terms of the TIA; and execute, and
cause the Guarantors to execute,
and use its best efforts to cause
the Trustee to execute, all
documents that may be required to
effect such changes and all other
forms and documents required to be
filed with the Commission to enable
such Indenture to be so qualified
in a timely manner;
(xxi) cause all Transfer
Restricted Securities covered by
the Registration Statement to be
listed on each securities exchange
on which similar securities issued
by the Company are then listed if
requested by the Holders of a
majority in aggregate principal
amount of Series A Subordinated
Notes or the managing
underwriter(s), if any; and
(xxii) provide
promptly to each Holder upon
request each document filed with
the Commission pursuant to the
requirements of Section 13 and
Section 15 of the Exchange Act.
Each Holder agrees by
acquisition of a Transfer Restricted
Security that, upon receipt of any
notice from the Company of the
existence of any fact of the kind
described in Section 6(c)(iii)(C) or
(D) hereof, such Holder will forthwith
discontinue disposition of Transfer
Restricted Securities pursuant to the
applicable Registration Statement
until such Holder's receipt of the
copies of the supplemented or amended
Prospectus contemplated by Section
6(c)(xvi) hereof, or until it is
advised in writing (the "Advice") by
the Company that the use of the
Prospectus may be resumed, and has
received copies of any additional or
supplemental filings that are
incorporated by reference in the
Prospectus. If so directed by the
Company, each Holder will deliver to
the Company (at the Company's expense)
all copies, other than permanent file
copies then in such Holder's
possession, of the Prospectus covering
such Transfer Restricted Securities
that was current at the time of
receipt of such notice. In the event
the Company shall give any such
notice, the time period regarding the
effectiveness of such Registration
Statement set forth in Section 3 or 4
hereof, as applicable, shall be
extended by the number of days during
the period from and including the date
of the giving of such notice pursuant
to Section 6(c)(iii)(C) or (D) hereof
to and including the date when each
selling Holder covered by such
Registration Statement shall have
received the copies of the
supplemented or amended Prospectus
contemplated by Section 6(c)(xvi)
hereof or shall have received the
Advice.
SECTION 7. REGISTRATION
EXPENSES
(a) All expenses incident
to the Company's or the Guarantors'
performance of or compliance with this
Agreement will be borne by the Company
or such Guarantor, regardless of
whether a Registration Statement
becomes effective, including without
limitation: (i) all registration and
filing fees and expenses (including
filings made by any Initial Purchaser
or Holder with the NASD (and, if
applicable, the fees and expenses of
any "qualified independent
underwriter" and its counsel that may
be required by the rules and
regulations of the NASD)); (ii) all
fees and expenses of compliance with
federal securities and state Blue Sky
or securities laws; (iii) all expenses
of printing (including printing
certificates for the Series B
Subordinated Notes to be issued in the
Exchange Offer and printing of
Prospectuses), messenger and delivery
services and telephone; (iv) all fees
and disbursements of counsel for the
Company, the Guarantors and, subject
to Section 7(b) below, the Holders of
Transfer Restricted Securities; (v)
all application and filing fees in
connection with listing Notes on a
national securities exchange or
automated quotation system pursuant to
the requirements hereof; and (vi) all
fees and disbursements of independent
certified public accountants of the
Company and the Guarantors (including
the expenses of any special audit and
comfort letters required by or
incident to such performance).
The Company will, in any
event, bear its and the Guarantors'
internal expenses (including, without
limitation, all salaries and expenses
of its officers and employees
performing legal or accounting
duties), the expenses of any annual
audit and the fees and expenses of any
Person, including special experts,
retained by the Company.
(b) In connection with any
Registration Statement required by
this Agreement (including, without
limitation, the Exchange Offer
Registration Statement and the Shelf
Registration Statement), the Company
will reimburse the Initial Purchaser
and the Holders of Transfer Restricted
Securities being tendered in the
Exchange Offer and/or resold pursuant
to the "Plan of Distribution"
contained in the Exchange Offer
Registration Statement or registered
pursuant to the Shelf Registration
Statement, as applicable, for the
reasonable fees and disbursements of
not more than one counsel, who shall
be Latham & Watkins or such other
counsel as may be chosen by the
Holders of a majority in aggregate
principal amount of the Transfer
Restricted Securities for whose
benefit such Registration Statement is
being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the
Guarantors, jointly and severally,
agree to indemnify and hold harmless
(i) each Holder, (ii) each person, if
any, who controls any Holder within
the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act
and (iii) the respective officers,
directors, partners, employees,
representatives and agents of each
Holder or any controlling person to
the fullest extent lawful, from and
against any and all losses,
liabilities, claims, damages and
expenses whatsoever (including but not
limited to attorneys' fees and any and
all expenses whatsoever incurred in
investigating, preparing or defending
against any investigation or
litigation, commenced or threatened,
or any claim whatsoever, and any and
all amounts paid in settlement of any
claim or litigation), joint or
several, to which they or any of them
may become subject under the Act, the
Exchange Act or otherwise, insofar as
such losses, liabilities, claims,
damages or expenses (or actions in
respect thereof) arise out of or are
based upon any untrue statement or
alleged untrue statement of a material
fact contained in any Registration
Statement or Prospectus, or in any
supplement thereto or amendment
thereof, or arise out of or are based
upon the omission or alleged omission
to state therein a material fact
required to be stated therein or
necessary to make the statements
therein, in the light of the
circumstances under which they were
made, not misleading; provided,
however, that the Company and the
Guarantors will not be liable in any
such case to the extent, but only to
the extent, that any such loss,
liability, claim, damage or expense
(A) arises out of or is based upon any
such untrue statement or alleged
untrue statement or omission or
alleged omission made therein in
reliance upon and in conformity with
information relating to any Holder
furnished to the Company in writing by
or on behalf of such Holder expressly
for use therein or (B) is caused by an
untrue statement or omission that was
contained or made in any preliminary
prospectus and corrected in the
related Prospectus or any supplement
or amendment thereto and (1) any such
loss, liability, claim, damage or
expense suffered or insured by any
indemnified party resulted from an
action, claim or suit by any person
who purchased Notes from a Holder in
the offering to which such Prospectus
relates, (2) such Holder failed to
deliver or provide a copy of such
Prospectus or any such supplement or
amendment thereto to such person at or
prior to the confirmation of the sale
of such Notes in any case where such
delivery is required by the Act and
(3) such Prospectus (as so amended and
supplemented) would have cured the
defect giving rise to such loss,
liability, claim, damage or expense.
This indemnity agreement will be in
addition to any liability which the
Company and the Guarantors may
otherwise have, including, under this
Agreement.
(b) Each Holder agrees,
severally and not jointly, to
indemnify and hold harmless the
Company and the Guarantors and each
person, if any, who controls the
Company and the Guarantors within the
meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act,
against any losses, liabilities,
claims, damages and expenses
whatsoever (including but not limited
to attorneys' fees and any and all
expenses whatsoever incurred in
investigating, preparing or defending
against any investigation or
litigation, commenced or threatened,
or any claim whatsoever and any and
all amounts paid in settlement of any
claim or litigation), joint or
several, to which they or any of them
may become subject under the Act, the
Exchange Act or otherwise, insofar as
such losses, liabilities, claims,
damages or expenses (or actions in
respect thereof) arise out of or are
based upon any untrue statement or
alleged untrue statement of a material
fact contained in any Registration
Statement or Prospectus, or in any
amendment thereof or supplement
thereto, or arise out of or are based
upon the omission or alleged omission
to state therein a material fact
required to be stated therein or
necessary to make the statements
therein, in the light of the
circumstances under which they were
made, not misleading, in each case to
the extent, but only to the extent,
that any such loss, liability, claim,
damage or expense arises out of or is
based upon any untrue statement or
alleged untrue statement or omission
or alleged omission made therein in
reliance upon and in conformity with
information relating to any Holder
furnished to the Company in writing by
or on behalf of such Holder expressly
for use therein; provided, however,
that in no case shall any Holder be
liable or responsible for any amount
in excess of the dollar amount of the
proceeds received by such Holder upon
the sale of the Notes giving rise to
such indemnification obligation. This
indemnity will be in addition to any
liability which any Holder may
otherwise have, including under this
Agreement.
(c) Promptly after receipt
by an indemnified party under
subsection (a) or (b) above of notice
of the commencement of any action,
such indemnified party shall, if a
claim in respect thereof is to be made
against the indemnifying party under
such subsection, notify each party
against whom indemnification is to be
sought in writing of the commencement
thereof (but the failure so to notify
an indemnifying party shall not
relieve it from any liability which it
may have under this Section 8 except
to the extent that it has been
prejudiced in any material respect by
such failure or from any liability
which it may otherwise have). In case
any such action is brought against any
indemnified party, and it notifies an
indemnifying party of the commencement
thereof, the indemnifying party will
be entitled to participate therein,
and to the extent it may elect by
written notice delivered to the
indemnified party promptly after
receiving the aforesaid notice from
such indemnified party, to assume the
defense thereof with counsel
reasonably satisfactory to such
indemnified party. Notwithstanding
the foregoing, the indemnified party
or parties shall have the right to
employ its or their own counsel in any
such case, but the fees and expenses
of such counsel shall be at the
expense of such indemnified party or
parties unless (i) the employment of
such counsel shall have been
authorized in writing by the
indemnifying parties in connection
with the defense of such action, (ii)
the indemnifying parties shall not
have employed counsel to take charge
of the defense of such action within a
reasonable time after notice of
commencement of the action, or (iii)
such indemnified party or parties
shall have reasonably concluded that
there may be defenses available to it
or them which are different from or
additional to those available to one
or all of the indemnifying parties (in
which case the indemnifying party or
parties shall not have the right to
direct the defense of such action on
behalf of the indemnified party or
parties), in any of which events such
fees and expenses of counsel shall be
borne by the indemnifying parties;
provided, however, that the
indemnifying party under subsection
(a) or (b) above shall only be liable
for the legal expenses of one counsel
(in addition to any local counsel) for
all indemnified parties in each
jurisdiction in which any claim or
action is brought. Anything in this
subsection to the contrary
notwithstanding, an indemnifying party
shall not be liable for any settlement
of any claim or action effected
without its prior written consent;
provided, however, that such consent
was not unreasonably withheld.
(d) In order to provide for
contribution in circumstances in which
the indemnification provided for in
this Section 8 is for any reason held
to be unavailable from the Company and
the Guarantors or is insufficient to
hold harmless a party indemnified
hereunder, the Company and the
Guarantors, on the one hand, and each
Holder, on the other hand, shall
contribute to the aggregate losses,
claims, damages, liabilities and
expenses of the nature contemplated by
such indemnification provision
(including any investigation, legal
and other expenses incurred in
connection with, and any amount paid
in settlement of, any action, suit or
proceeding or any claims asserted, but
after deducting in the case of losses,
claims, damages, liabilities and
expenses suffered by the Company and
the Guarantors, any contribution
received by the Company and the
Guarantors from persons, other than
the Holders, who may also be liable
for contribution, including persons
who control the Company and the
Guarantors within the meaning of
Section 15 of the Act or Section 20(a)
of the Exchange Act) to which the
Company, the Guarantors and such
Holder may be subject, in such
proportion as is appropriate to
reflect the relative benefits received
by the Company and the Guarantors, on
one hand, and such Holder, on the
other hand, if such allocation is not
permitted by applicable law or
indemnification is not available as a
result of the indemnifying party not
having received notice as provided in
this Section 8, in such proportion as
is appropriate to reflect not only the
relative benefits referred to above
but also the relative fault of the
Company and the Guarantors, on the one
hand, and such Holder, on the other
hand, in connection with the
statements or omissions which resulted
in such losses, claims, damages,
liabilities or expenses, as well as
any other relevant equitable
considerations. The relative benefits
received by the Company and the
Guarantors, on one hand, and each
Holder, on the other hand, shall be
deemed to be in the same proportion as
(i) the total proceeds from the
offering of the Notes (net of
discounts but before deducting
expenses) received by the Company and
the Guarantors and (ii) the total
proceeds received by such Holder upon
the sale of the Notes giving rise to
such indemnification obligation. The
relative fault of the Company and the
Guarantors, on the one hand, and of
each Holder, on the other hand, shall
be determined by reference to, among
other things, whether the untrue or
alleged untrue statement of a material
fact or the omission or alleged
omission to state a material fact
relates to information supplied by the
Company, the Guarantors or such Holder
and the parties' relative intent,
knowledge, access to information and
opportunity to correct or prevent such
statement or omission. The Company,
the Guarantors and the Holders agree
that it would not be just and
equitable if contribution pursuant to
this Section 8(d) were determined by
pro rata allocation or by any other
method of allocation which does not
take into account the equitable
considerations referred to above.
Notwithstanding the provisions of this
Section 8(d), (i) in no case shall any
Holder be required to contribute any
amount in excess of the dollar amount
by which the proceeds received by such
Holder upon the sale of the Notes
exceeds the amount of any damages
which such Holder has otherwise been
required to pay by reason of such
untrue or alleged untrue statement or
omission or alleged omission and (ii)
no person guilty of fraudulent
misrepresentation (within the meaning
of Section 11(f) of the Act) shall be
entitled to contribution from any
person who was not guilty of such
fraudulent misrepresentation. For
purposes of this Section 8(d), (A)
each person, if any, who controls any
Holder within the meaning of Section
15 of the Act or Section 20(a) of the
Exchange Act and (B) the respective
officers, directors, partners,
employees, representatives and agents
of each Holder or any controlling
person shall have the same rights to
contribution as such Holder, and each
person, if any, who controls the
Company and the Guarantors within the
meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act
shall have the same rights to
contribution as the Company and the
Guarantors, subject in each case to
clauses (i) and (ii) of this Section
8(d). Any party entitled to
contribution will, promptly after
receipt of notice of commencement of
any action, suit or proceeding against
such party in respect of which a claim
for contribution may be made against
another party or parties under this
Section 8(d), notify such party or
parties from whom contribution may be
sought, but the failure to so notify
such party or parties shall not
relieve the party or parties from whom
contribution may be sought from any
obligation it or they may have under
this Section 8(d) or otherwise. No
party shall be liable for contribution
with respect to any action or claim
settled without its prior written
consent; provided, however, that such
written consent was not unreasonably
withheld.
SECTION 9. RULE 144A
The Company hereby agrees
with each Holder, for so long as any
Transfer Restricted Securities remain
outstanding, to make available to any
Holder or beneficial owner of Transfer
Restricted Securities in connection
with any sale thereof and any
prospective purchaser of such Transfer
Restricted Securities from such Holder
or beneficial owner, the information
required by Rule 144A(d)(4) under the
Act in order to permit resales of such
Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN
UNDERWRITTEN REGISTRATIONS
No Holder may participate in
any Underwritten Registration
hereunder unless such Holder (a)
agrees to sell such Holder's Transfer
Restricted Securities on the basis
provided in any underwriting
arrangements approved by the Persons
entitled hereunder to approve such
arrangements and (b) completes and
executes all reasonable
questionnaires, powers of attorney,
indemnities, underwriting agreements,
lock-up letters and other documents
required under the terms of such
underwriting arrangements.
SECTION 11. SELECTION OF
UNDERWRITERS
The Holders of Transfer
Restricted Securities covered by the
Shelf Registration Statement who
desire to do so may sell such Transfer
Restricted Securities in an
Underwritten Offering. In any such
Underwritten Offering, the investment
banker or investment bankers and
manager or managers that will
administer the offering will be
selected by the Holders of a majority
in aggregate principal amount of the
Transfer Restricted Securities
included in such offering; provided,
that such investment bankers and
managers must be reasonably
satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company
and the Guarantors agree that monetary
damages (including the liquidated
damages contemplated hereby) would not
be adequate compensation for any loss
incurred by reason of a breach by it
of the provisions of this Agreement
and hereby agree to waive the defense
in any action for specific performance
that a remedy at law would be
adequate.
(b) No Inconsistent
Agreements. The Company will not, and
will cause the Guarantors not to, on
or after the date of this Agreement
enter into any agreement with respect
to its securities that is inconsistent
with the rights granted to the Holders
in this Agreement or otherwise
conflicts with the provisions hereof.
Neither of the Company nor any of the
Guarantors has previously entered into
any agreement granting any
registration rights with respect to
its securities to any Person. The
rights granted to the Holders
hereunder do not in any way conflict
with and are not inconsistent with the
rights granted to the holders of the
Company's securities under any
agreement in effect on the date
hereof.
(c) Adjustments Affecting
the Notes. The Company will not take
any action, or permit any change to
occur, with respect to the Notes that
would materially and adversely affect
the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers.
The provisions of this Agreement may
not be amended, modified or
supplemented, and waivers or consents
to or departures from the provisions
hereof may not be given unless the
Company has obtained the written
consent of Holders of a majority of
the outstanding principal amount of
Transfer Restricted Securities.
Notwithstanding the foregoing, a
waiver or consent to departure from
the provisions hereof that relates
exclusively to the rights of Holders
whose securities are being tendered
pursuant to the Exchange Offer and
that does not affect directly or
indirectly the rights of other Holders
whose securities are not being
tendered pursuant to such Exchange
Offer may be given by the Holders of a
majority of the outstanding principal
amount of Transfer Restricted
Securities being tendered or
registered.
(e) Notices. All notices
and other communications provided for
or permitted hereunder shall be made
in writing by hand-delivery, first-
class mail (registered or certified,
return receipt requested), telex,
telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at
the address set forth on the
records of the Registrar under the
Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company
or any of the Guarantors:
American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
Telecopy No.: (207) 824-2111
Attention: Secretary
With copies to:
Pierce, Atwood, Scribner, Allen, Smith
& Lancaster
One Monument Square
Portland, Maine 04101
Telecopy No.: (207) 773-3419
Attention: Christopher E. Howard,
Esq.; and
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telecopy No.: (212) 735-2000
Attention: Phyllis G. Korff, Esq.
All such notices and
communications shall be deemed to have
been duly given: at the time
delivered by hand, if personally
delivered; five business days after
being deposited in the mail, postage
prepaid, if mailed; when answered
back, if telexed; when receipt
acknowledged, if telecopied; and on
the next business day, if timely
delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices,
demands or other communications shall
be concurrently delivered by the
Person giving the same to the Trustee
at the address specified in the
Indenture.
(f) Successors and Assigns.
This Agreement shall inure to the
benefit of and be binding upon the
successors and assigns of each of the
parties, including without limitation
and without the need for an express
assignment, subsequent Holders of
Transfer Restricted Securities;
provided, however, that this Agreement
shall not inure to the benefit of or
be binding upon a successor or assign
of a Holder unless and to the extent
such successor or assign acquired
Transfer Restricted Securities from
such Holder.
(g) Counterparts. This
Agreement 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.
(h) Headings. The headings
in this Agreement are for convenience
of reference only and shall not limit
or otherwise affect the meaning
hereof.
(i) Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW RULES
THEREOF.
(j) Severability. In the
event that any one or more of the
provisions contained herein, or the
application thereof in any
circumstance, is held invalid, illegal
or unenforceable, the validity,
legality and enforceability of any
such provision in every other respect
and of the remaining provisions
contained herein shall not be affected
or impaired thereby.
(k) Entire Agreement. This
Agreement, together with the other
Operative Documents (as defined in the
Purchase Agreement), is intended by
the parties as a final expression of
their agreement and intended to be a
complete and exclusive statement of
the agreement and understanding of the
parties hereto in respect of the
subject matter contained herein.
There are no restrictions, promises,
warranties or undertakings, other than
those set forth or referred to herein
with respect to the registration
rights granted by the Company with
respect to the Transfer Restricted
Securities. This Agreement supersedes
all prior agreements and
understandings between the parties
with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the
parties have executed this Agreement
as of the date first written above.
AMERICAN SKIING COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER SKIWAY CORPORATION
By: /s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER LTD.
By: /s/ Leslie B. Otten
Name:
Title:
PERFECT TURN, INC.
By: /s/ Leslie B. Otten
Name:
Title:
LBO HOLDING, INC.
By: /s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER TRANSPORTATION, INC.
By: /s/ Leslie B. Otten
Name:
Title:
SUGARBUSH RESORT HOLDINGS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
SUGARBUSH LEASING COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
SUGARBUSH RESTAURANTS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
CRANMORE, INC.
By: /s/ Leslie B. Otten
Name:
Title:
MOUNTAIN WASTEWATER TREATMENT, INC.
By: /s/ Leslie B. Otten
Name:
Title:
LBO HOTEL CO.
By: /s/ Leslie B. Otten
Name:
Title:
S-K-I LIMITED
By: /s/ Leslie B. Otten
Name:
Title:
KILLINGTON LTD.
By: /s/ Leslie B. Otten
Name:
Title:
MOUNT SNOW LTD.
By: /s/ Leslie B. Otten
Name:
Title:
WATERVILLE VALLEY SKI AREA, LTD.
By: /s/ Leslie B. Otten
Name:
Title:
SUGARLOAF MOUNTAIN CORPORATION
By: /s/ Leslie B. Otten
Name:
Title:
KILLINGTON RESTAURANTS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
DOVER RESTAURANTS, INC.
By: /s/ Leslie B. Otten
Name:
Title:
RESORT TECHNOLOGIES, INC.
By: /s/ Leslie B. Otten
Name:
Title:
RESORT SOFTWARE SERVICES, INC.
By: /s/ Leslie B. Otten
Name:
Title:
DEERFIELD OPERATING COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
PICO SKI AREA MANAGEMENT COMPANY
By: /s/ Leslie B. Otten
Name:
Title:
SUGARTECH
By: /s/ Leslie B. Otten
Name:
Title:
MOUNTAINSIDE
By: /s/ Leslie B. Otten
Name:
Title:
Accepted and agreed
BEAR, STEARNS & CO. INC.
By: /s/ Bear Stearns & Co. Inc.
Name:
Title:
c
AMERICAN SKIING COMPANY
As Issuer
Sunday River Skiway Corporation
Sunday River Ltd.
Perfect Turn, Inc.
LBO Holding, Inc.
Sunday River Transportation, Inc.
Sugarbush Resort Holdings, Inc.
Sugarbush Leasing Company
Sugarbush Restaurants, Inc.
Cranmore, Inc.
Mountain Wastewater Treatment, Inc.
LBO Hotel Co.
S-K-I Limited
Killington Ltd.
Mount Snow Ltd.
Waterville Valley Ski Area, Ltd.
Sugarloaf Mountain Corporation
Killington Restaurants, Inc.
Dover Restaurants, Inc.
Resorts Technologies, Inc.
Resort Software Services, Inc.
Mountainside
Sugartech
Deerfield Operating Company
Pico Ski Area Management Company
As Guarantors
SERIES A AND SERIES B
13 3/4% SUBORDINATED DISCOUNT NOTES
DUE 2007
INDENTURE
Dated as of June 28, 1996
UNITED STATES TRUST COMPANY OF NEW
YORK
As Trustee
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.08;
7.10
(c) N.A.
311 (a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.05
(b) 12.03
(c) 12.03
313 (a) 7.06
(b)(1) 10.03
(b)(2) 7.07
(c) 7.06;
12.02
(d) 7.06
314 (a) 4.03; 12.02
(b) 10.02
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) 10.03-
10.05
(e) 12.05
(f) N.A.
315 (a) 7.01
(b) 7.05;
12.02
(c) 7.01
(d) 7.01
(e) 6.11
316 (a)(last sentence)
2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.12;
9.04
317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318 (a) 12.01
(b) N.A.
(c) 12.01
N.A. means not applicable.
*This Cross-Reference Table is not
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions
Section 1.02. Other Definitions
Section 1.03. Incorporation by
Reference of Trust
Indenture Act
Section 1.04. Rules of Construction
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating
Section 2.02. Execution and
Authentication
Section 2.03. Registrar and Paying
Agent
Section 2.04. Paying Agent to Hold
Money in Trust
Section 2.05. Holder Lists
Section 2.06. Transfer and Exchange
Section 2.07. Replacement Notes
Section 2.08. Outstanding Notes
Section 2.09. Treasury Notes
Section 2.10. Temporary Notes
Section 2.11. Cancellation
Section 2.12. Defaulted Interest
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee
Section 3.02. Selection of Notes to
Be Redeemed
Section 3.03. Notice of Redemption
Section 3.04. Effect of Notice of
Redemption
Section 3.05. Deposit of Redemption
Price
Section 3.06. Notes Redeemed in Part
Section 3.07. Optional Redemption
Section 3.08. Mandatory Redemption
Section 3.09. Offer to Purchase by
Application of Axcess
Proceeds
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes
Section 4.02. Maintenance of Office
or Agency
Section 4.03. Reports
Section 4.04. Compliance Certificate
Section 4.05. Taxes
Section 4.06. Stay, Extension and
Usury Laws
Section 4.07. Restricted Payments
Section 4.08. Dividend and Other
Payment Restrictions
Affecting Subsidiaries
Section 4.09. Incurrence of
Indebtedness and Issuance
of Preferred Stock
Section 4.10. Asset Sales
Section 4.11. Independent Director
Section 4.12. Transactions with
Affiliates
Section 4.13. Liens
Section 4.14. Corporate Existence
Section 4.15. Offer to Repurchase
Upon Change of Control
Section 4.16. Additional Subsidiary
Guarantees
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation,
or Sale of Assets
Section 5.02. Successor Corporation
Substituted
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default
Section 6.02. Acceleration
Section 6.03. Other Remedies
Section 6.04. Waiver of Past
Defaults
Section 6.05. Control by Majority
Section 6.06. Limitation on Suits
Section 6.07. Rights of Holders of
Notes to Receive Payment
Section 6.08. Collection Suit by
Trustee
Section 6.09. Trustee May File
Proofs of Claim
Section 6.10. Priorities
Section 6.11. Undertaking for Costs
Section 6.12. Acceleration Prior to
July 15, 2001
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee
Section 7.02. Rights of Trustee
Section 7.03. Individual Rights of
Trustee
Section 7.04. Trustee's Disclaimer
Section 7.05. Notice of Defaults
Section 7.06. Reports by Trustee to
Holders of the Notes
Section 7.07. Compensation and
Indemnity
Section 7.08. Replacement of Trustee
Section 7.09. Successor Trustee by
Merger, etc
Section 7.10. Eligibility;
Disqualification
Section 7.11. Preferential
Collection of Claims
Against Company
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT
DEFEASANCE
Section 8.01. Option to Effect Legal
Defeasance or Covenant
Defeasance
Section 8.02. Legal Defeasance and
Discharge
Section 8.03. Covenant Defeasance
Section 8.04. Conditions to Legal or
Covenant Defeasance
Section 8.05. Deposited Money and
Government Securities to be
Held in Trust; Other
Miscellaneous Provisions
Section 8.06. Repayment to Company
Section 8.07. Reinstatement
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of
Holders of Notes
Section 9.02. With Consent of
Holders of Notes
Section 9.03. Compliance with Trust
Indenture Act
Section 9.04. Revocation and Effect
of Consents
Section 9.05. Notation on or
Exchange of Notes
Section 9.06. Trustee to Sign
Amendments, etc
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to
Subordinate
Section 10.02. Certain Definitions
Section 10.03. Liquidation;
Dissolution; Bankruptcy
Section 10.04. Default on Senior
Debt; No Stock
Collateral
Section 10.05. Acceleration of Notes
Section 10.06. When Distribution Must
Be Paid Over
Section 10.07. Notice
Section 10.08. Subrogation
Section 10.09. Relative Rights
Section 10.10. Subordination May Not
Be Impaired by Company
Section 10.11. Distribution or Notice
to
Representative
Section 10.12. Rights of Trustee and
Paying Agent
Section 10.13. Authorization to
Effect Subordination
Section 10.14. Payment
Section 10.15. Defeasance of this
Article 10
Section 10.16. No Claims Against
Subsidiaries
Section 10.17. Amendments
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01. Subsidiary Guarantees
Section 11.02. Execution and Delivery
of Subsidiary Guarantees
Section 11.03. Guarantors May
Consolidate, etc., on
Certain Terms
Section 11.04. Releases Following
Sale of Assets
Section 11.05. Limitation on
Guarantor Liability
Section 11.06. Subordination of
Subsidiary Guarantee
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act
Controls
Section 12.02. Notices
Section 12.03. Communication by
Holders of Notes with Other
Holders of Notes
Section 12.04. Certificate and
Opinion as to Conditions
Precedent
Section 12.05. Statements Required in
Certificate or Opinion
Section 12.06. Rules by Trustee and
Agents
Section 12.07. "Trustee" to Include
Paying Agent
Section 12.08. No Personal Liability
of Directors, Officers,
Employees or Shareholders
Section 12.09. Governing Law
Section 12.10. No Adverse
Interpretation of Other
Agreements
Section 12.11. Successors
Section 12.12. Severability
Section 12.13. Counterpart Originals
Section 12.14. Table of Contents,
Headings, etc
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
Exhibit C GUARANTORS
Exhibit D SUBSIDIARY GUARANTEE
<PAGE>
INDENTURE dated as of
June 28, 1996 among American Skiing
Company, a Maine corporation ("ASC"
or the "Company"), each of the
Persons listed on Exhibit C hereto
and United States Trust Company of
New York, as trustee (the "Trustee").
The Company, the Guarantors
and the Trustee agree as follows for
the benefit of each other and for the
equal and ratable benefit of the
Holders of the 13 3/4% Series A
Subordinated Discount Notes due 2007
of the Company (the "Series A Notes")
and the 13 3/4% Series B Subordinated
Discount Notes due 2007 of the
Company (the "Series B Notes" and,
together with the Series A Notes, the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Accreted Value" means, as
of any date of determination, the sum
of (a) $511.10 per $1,000 principal
amount of Notes and (b) the portion
of the excess of the principal amount
of each Note over $511.10 which shall
have been accreted thereon through
such date of determination, such
amount to be accreted daily,
compounding on a semi-annual bond
equivalent basis on January 15 and
July 15 of each year, at the rate of
13 3/4% per annum.
"Acquired Debt" means, with
respect to any specified Person, (i)
Indebtedness of any other Person
existing at the time such other
Person is merged with or into or
became a Restricted Subsidiary of
such specified Person, including,
without limitation, Indebtedness
incurred in connection with, or in
contemplation of, such other Person
merging with or into or becoming a
Restricted Subsidiary of such
specified Person, and (ii)
Indebtedness secured by a Lien
encumbering any asset acquired by
such specified Person.
"Affiliate" of any
specified Person means any other
Person directly or indirectly
controlling or controlled by or under
direct or indirect common control
with such specified Person. For
purposes of this definition,
"control" (including, with
correlative meanings, the terms
"controlling," "controlled by" and
"under common control with"), as used
with respect to any Person, shall
mean the possession, directly or
indirectly, of the power to direct or
cause the direction of the management
or policies of such Person, whether
through the ownership of voting
securities, by agreement or
otherwise; provided that beneficial
ownership of 10% or more of the
voting securities of a Person shall
be deemed to be control.
"Agent" means any
Registrar, Paying Agent or
co-registrar.
"Asset Sale" means (i) the
sale, lease, conveyance or other
disposition of any rights, property
or assets (including, without
limitation, by way of a sale and
leaseback), other than sales of
inventory, sales of obsolete or
unused equipment and sales by Real
Estate Subsidiaries of hotel,
condominium, interval ownership or
other units, in each case, in the
ordinary course of business
consistent with past practices
(provided that the sale, lease,
conveyance or other disposition of
all or substantially all of the
assets of the Company and its
Restricted Subsidiaries taken as a
whole will be governed by the
provisions of Section 4.15 and/or the
provisions described above under
Section 5.01 and not by the
provisions of Section 4.10) or (ii)
the issue or sale by the Company or
any of its Subsidiaries of Equity
Interests of any of the Company's
Subsidiaries, in the case of either
clause (i) or (ii), whether in a
single transaction or a series of
related transactions (a) that have a
fair market value in excess of $1.0
million or (b) for net proceeds in
excess of $1.0 million.
Notwithstanding the foregoing: (i) a
transfer of assets by the Company to
a Wholly Owned Restricted Subsidiary
or by a Wholly Owned Restricted
Subsidiary to the Company or to
another Wholly Owned Restricted
Subsidiary, (ii) an issuance of
Equity Interests by a Wholly Owned
Restricted Subsidiary to the Company
or to another Wholly Owned Restricted
Subsidiary, (iii) issuances of Equity
Interests by Sugarloaf Mountain
Corporation pursuant to warrants
outstanding on the date of this
Indenture, and (iv) a Restricted
Payment that is permitted by the
provisions of Section 4.07 will not
be deemed to be Asset Sales.
"Bank Credit Agreements"
means (i) the Credit Agreement dated
as of June 28, 1996 among the
Company, various Subsidiaries of the
Company, Fleet National Bank, as
Agent, and the lenders party thereto,
(ii) any other credit, loan,
reimbursement or other similar
agreements among the Company, any
Subsidiary and any bank, insurance
company, finance company or other
institutional lender, (iii) each
instrument pursuant to which
Obligations under any of the
agreements described in (i) or (ii)
above, are amended, deferred,
extended, renewed, replaced, refunded
or refinanced, in whole or in part,
and (iv) each instrument now or
hereafter evidencing, governing,
guarantying or securing any
Indebtedness under any agreements
described in (i), (ii) or (iii)
above, in each case, as modified,
amended, restated or supplemented
from time to time.
"Board of Directors" means
the Board of Directors of the Company
or a Guarantor, as applicable, or any
authorized committee of the Board of
Directors.
"Board Resolution" means a
resolution of the Board of Directors
of the Company set forth in an
Officers' Certificate delivered to
the Trustee.
"Business Day" means any
day other than a Legal Holiday.
"Capital Lease Obligation"
means, at the time any determination
thereof is to be made, the amount of
the liability in respect of a capital
lease that would at such time be
required to be capitalized on a
balance sheet in accordance with
GAAP.
"Capital Stock" means (i)
in the case of a corporation,
corporate stock, (ii) in the case of
an association or business entity,
any and all shares, interests,
participations, rights or other
equivalents (however designated) of
corporate stock, (iii) in the case of
a partnership, partnership interests
(whether general or limited) and (iv)
any other interest or participation
that confers on a Person the right to
receive a share of the profits and
losses of, or distributions of assets
of, the issuing Person.
"Cash Equivalents" means
(i) United States dollars, (ii)
securities issued or directly and
fully guaranteed or insured by the
United States government or any
agency or instrumentality thereof
having maturities of not more than
one year from the date of
acquisition, (iii) certificates of
deposit and eurodollar time deposits
with maturities of one year or less
from the date of acquisition,
bankers' acceptances with maturities
not exceeding one year and overnight
bank deposits, in each case with any
domestic commercial bank having
capital and surplus in excess of $500
million and a Keefe Bank Watch Rating
of "B" or better, (iv) repurchase
obligations with a term of not more
than seven days for underlying
securities of the types described in
clauses (ii) and (iii) above entered
into with any financial institution
meeting the qualifications specified
in clause (iii) above, and (v)
commercial paper having the highest
rating obtainable from Moody's
Investors Service, Inc. or Standard &
Poor's Corporation and in each case
maturing within one year after the
date of acquisition.
"Certificated Notes" means
Notes that are in the form of the
Notes attached hereto as Exhibit A
that do not include the information
called for by footnotes 1 and 2
thereof.
"Change of Control" means
the occurrence of any of the
following: (i) the sale, lease,
transfer, conveyance or other
disposition (other than by way of
merger or consolidation), in one or a
series of related transactions, of
all or substantially all of the
assets of the Company and its
Restricted Subsidiaries, taken as a
whole, to any "person" (as such term
is used in Section 13(d)(3) of the
Exchange Act) other than the
Permitted Holders, (ii) the adoption
of a plan relating to the liquidation
or dissolution of the Company, (iii)
the consummation of any transaction
(including, without limitation, any
merger or consolidation) the result
of which is that the Permitted
Holders cease to be the "beneficial
owners" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the
Exchange Act) of an aggregate of at
least 51% of the common stock of the
Company and at least 51% of the
voting power of the Capital Stock of
the Company, (iv) the consummation of
any transaction (including, without
limitation, any merger or
consolidation) the result of which is
that any "person" (as such term is
used in Section 13(d)(3) of the
Exchange Act), other than the
Permitted Holders, becomes the
"beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or
indirectly, of more than 35% of the
common stock of the Company or more
than 35% of the voting power of the
Capital Stock of the Company and (v)
the first day on which more than
one-third of the members of the board
of directors of the Company are not
Continuing Directors.
"Collateral Agent" means
United States Trust Company of New
York, as Collateral Agent for the
benefit of Holders of Notes under the
Pledge and Disbursement Agreement, or
any successor thereto appointed
pursuant to such agreement.
"Consolidated Cash Flow"
means, with respect to any Person for
any period, the Consolidated Net
Income of such Person for such period
plus, to the extent deducted in
computing Consolidated Net Income,
(i) an amount equal to any
extraordinary loss plus any net loss
realized in connection with an Asset
Sale, (ii) provision for taxes based
on income or profits of such Person
and its Restricted Subsidiaries for
such period, (iii) consolidated
interest expense of such Person and
its Restricted Subsidiaries for such
period, whether paid or accrued and
whether or not capitalized
(including, without limitation,
amortization of original issue
discount, non-cash interest payments,
the interest component of any
deferred payment obligations, the
interest component of all payments
associated with Capital Lease
Obligations, commissions, discounts
and other fees and charges incurred
in respect of letter of credit or
bankers' acceptance financings, and
net payments (if any) pursuant to
Hedging Obligations) and (iv)
depreciation and amortization
(including amortization of goodwill
and other intangibles but excluding
amortization of prepaid cash expenses
that were paid in a prior period) of
such Person and its Restricted
Subsidiaries for such period, in each
case, on a consolidated basis and
determined in accordance with GAAP.
Notwithstanding the foregoing, the
provision for taxes on the income or
profits of, and the depreciation and
amortization of, a Restricted
Subsidiary of the referent Person
shall be added to Consolidated Net
Income to compute Consolidated Cash
Flow only to the extent (and in same
proportion) that the Net Income of
such Restricted Subsidiary was
included in calculating the
Consolidated Net Income of such
Person and only if a corresponding
amount would be permitted at the date
of determination to be dividended to
the Company by such Restricted
Subsidiary without prior governmental
approval (that has not been
obtained), and without direct or
indirect restriction pursuant to the
terms of its charter and all
agreements, instruments, judgments,
decrees, orders, statutes, rules and
governmental regulations applicable
to such Restricted Subsidiary or its
stockholders.
"Consolidated Net Income"
means, with respect to any Person for
any period, the aggregate of the Net
Income of such Person and its
Restricted Subsidiaries for such
period, on a consolidated basis,
determined in accordance with GAAP;
provided that (i) the Net Income (but
not loss) of Real Estate Subsidiaries
or of any Person that is not a
Restricted Subsidiary or that is
accounted for by the equity method of
accounting shall be included only to
the extent of the amount of dividends
or distributions paid in cash to the
referent Person or a Wholly Owned
Restricted Subsidiary thereof (other
than a Real Estate Subsidiary), (ii)
the Net Income of any Restricted
Subsidiary that is not a Guarantor
shall be excluded 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 date of
determination permitted without any
prior governmental approval (that has
not been obtained) or, directly or
indirectly, by operation of the terms
of its charter or any agreement,
instrument, judgment, decree, order,
statute, rule or governmental
regulation applicable to such
Restricted Subsidiary or its
stockholders, (iii) the Net Income of
any Person acquired in a pooling of
interests transaction for any period
prior to the date of such acquisition
shall be excluded and (iv) the
cumulative effect of a change in
accounting principles shall be
excluded.
"Consolidated Net Worth"
means, with respect to any Person as
of any date, the sum of (i) the
consolidated equity of the common
equity holders of such Person and its
consolidated Restricted Subsidiaries
as of such date plus (ii) the
respective amounts reported on such
Person's balance sheet as of such
date with respect to any series of
preferred equity (other than
Disqualified Stock) that by its terms
is not entitled to the payment of
dividends or other distributions
unless such dividends or other
distributions may be declared and
paid only out of net earnings in
respect of the year of such
declaration and payment, but only to
the extent of any cash received by
such Person upon issuance of such
preferred equity, less (a) all
write-ups (other than write-ups
resulting from foreign currency
translations and write-ups of
tangible assets of a going concern
business made within 12 months after
the acquisition of such business)
subsequent to the date of this
Indenture in the book value of any
asset owned by such Person or a
consolidated Restricted Subsidiary of
such Person, (b) all investments as
of such date in unconsolidated
Subsidiaries and in Persons that are
not Restricted Subsidiaries (except,
in each case, Permitted Investments),
and (c) all unamortized debt discount
and expense and unamortized deferred
charges as of such date, all of the
foregoing determined in accordance
with GAAP.
"Continuing Directors"
means, as of any date of
determination, any member of the
board of directors of the Company who
(i) was a member of the board of
directors on the date of this
Indenture or (ii) was nominated for
election to the board of directors
with the approval of at least
two-thirds of the Continuing
Directors who were members of the
board of directors at the time of
such nomination or election.
"Corporate Trust Office of
the Trustee" shall be at the address
of the Trustee specified in Section
12.02 hereof or such other address as
to which the Trustee may give notice
to the Company.
"Default" means any event
that is or with the passage of time
or the giving of notice or both would
be an Event of Default.
"Demand Note" means the
promissory note of Sunday River
Skiway Corporation payable to Leslie
B. Otten in the original principal
amount of up to $5.2 million, as in
effect on the date of this Indenture.
"Depositary" means, with
respect to the Notes issuable or
issued in whole or in part in global
form, the Person specified in Section
2.03 hereof as the Depositary with
respect to the Notes, until a
successor shall have been appointed
and become such pursuant to the
applicable provision of this
Indenture, and, thereafter,
"Depositary" shall mean or include
such successor.
"Designated Senior Debt" of
any Person means such Person's
Obligations under the Bank Credit
Agreements and any other Senior Debt
of such Person permitted to be
incurred by such Person under the
terms hereof the principal amount of
which is $25.0 million or more and
that has been designated by the Board
of Directors of such Person as
"Designated Senior Debt" by notice to
the Trustee from both such Person and
the Senior Agent.
"Disqualified Stock" means
any Capital Stock that, by its terms
(or by the terms of any security into
which it is convertible or for which
it is exchangeable), or upon the
happening of any event, matures or is
mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise,
or redeemable at the option of the
Holder thereof, in whole or in part,
on or prior to the date that is 91
days after the date on which the
Notes mature.
"DOJ Divestiture" means the
divestiture of the Waterville Valley
and Mount Cranmore ski resorts,
whether effected by way of sale,
lease, conveyance or other
disposition of any rights, property
or assets, or by way of a sale of the
Capital Stock of Waterville Valley
Ski Area, Ltd. or Cranmore, Inc., or
a merger, consolidation or other
reorganization, effected in
compliance with the United States
Department of Justice consent decree
applicable thereto.
"Equity Interests" means
Capital Stock and all warrants,
options or other rights to acquire
Capital Stock (but excluding any debt
security that is convertible into, or
exchangeable for, Capital Stock).
"Equity Offering" means a
public or private sale of common
stock of the Company that results in
net proceeds of at least $25.0
million to the Company.
"Exchange Act" means the
Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the
offer that may be made by the Company
pursuant to the Registration Rights
Agreement to exchange Series B Notes
for Series A Notes.
"Existing Indebtedness"
means Indebtedness of the Company and
its Restricted Subsidiaries in
existence on the date of this
Indenture, until such amounts are
repaid.
"Fixed Charges" means, with
respect to any Person for any period,
the sum of (i) the consolidated
interest expense of such Person and
its Restricted Subsidiaries for such
period, whether paid or accrued
(including, without limitation,
amortization of original issue
discount, non-cash interest payments,
the interest component of any
deferred payment obligations, the
interest component of all payments
associated with Capital Lease
Obligations, commissions, discounts
and other fees and charges incurred
in respect of letter of credit or
bankers' acceptance financings, and
net payments (if any) pursuant to
Hedging Obligations) and (ii) the
consolidated interest expense of such
Person and its Restricted
Subsidiaries that was capitalized
during such period and (iii) any
interest expense on Indebtedness of
another Person to the extent that
such Indebtedness is Guaranteed by
such Person or one of its Restricted
Subsidiaries or secured by a Lien on
assets of such Person or one of its
Restricted Subsidiaries (whether or
not such Guarantee or Lien is called
upon) and (iv) the product of (a) all
cash dividend payments or other
distributions (and non-cash dividend
payments in the case of a Person that
is a Restricted Subsidiary) on any
series of preferred equity of such
Person, times (b) a fraction, the
numerator of which is one and the
denominator of which is one minus the
then current combined federal, state
and local statutory tax rate of such
Person, expressed as a decimal, in
each case, on a consolidated basis
and in accordance with GAAP.
"Fixed Charge Coverage
Ratio" means with respect to any
Person for any period, the ratio of
the Consolidated Cash Flow of such
Person for such period to the Fixed
Charges of such Person for such
period. In the event that the Company
or any of its Restricted Subsidiaries
incurs, assumes, Guarantees or
redeems any Indebtedness (other than
revolving credit borrowings) or
issues preferred stock subsequent to
the commencement of the period for
which the Fixed Charge Coverage Ratio
is being calculated but prior to the
date on which the event for which the
calculation of the Fixed Charge
Coverage Ratio is made (the
"Calculation Date"), then the Fixed
Charge Coverage Ratio shall be
calculated giving pro forma effect to
such incurrence, assumption,
Guarantee or redemption of
Indebtedness, or such issuance or
redemption of preferred stock, as if
the same had occurred at the
beginning of the applicable
four-quarter reference period. In
addition, for purposes of making the
computation referred to above, (i)
acquisitions that have been made by
the Company or any of its Restricted
Subsidiaries, including through
mergers or consolidations and
including any related financing
transactions, during the four-quarter
reference period or subsequent to
such reference period and on or prior
to the Calculation Date shall be
deemed to have occurred on the first
day of the four-quarter reference
period and Consolidated Cash Flow for
such reference period shall be
calculated without giving effect to
clause (iii) of the proviso set forth
in the definition of Consolidated Net
Income, and (ii) the Consolidated
Cash Flow attributable to Real Estate
Subsidiaries, Unrestricted
Subsidiaries, discontinued operations
(as determined in accordance with
GAAP) and operations or businesses
disposed of prior to the Calculation
Date shall be excluded, and (iii) the
Fixed Charges attributable to Real
Estate Subsidiaries, Unrestricted
Subsidiaries, discontinued operations
(as determined in accordance with
GAAP) and operations or businesses
disposed of prior to the Calculation
Date shall be excluded, but only to
the extent that the obligations
giving rise to such Fixed Charges
will not be obligations of the
referent Person or any of its
Restricted Subsidiaries (other than
Real Estate Subsidiaries) following
the Calculation Date and, in the case
of Real Estate Subsidiaries, only to
the extent that the obligations
giving rise to such Fixed Charges
consist of Non-Recourse Real Estate
Debt.
"GAAP" means generally
accepted accounting principles set
forth in the opinions and
pronouncements of the Accounting
Principles Board of the American
Institute of Certified Public
Accountants and statements and
pronouncements of the Financial
Accounting Standards Board or in such
other statements by such other entity
as have been approved by a
significant segment of the accounting
profession, which are in effect from
time to time.
"Global Note" means a Note
that contains the paragraph referred
to in footnote 1 and the additional
schedule referred to in footnote 2 to
the form of the Note attached hereto
as Exhibit A.
"Government Securities"
means direct obligations of, or
obligations guaranteed by, the United
States for the payment of which
guarantee or obligations the full
faith and credit of the United States
is pledged.
"Guarantee" means a
guarantee (other than by endorsement
of negotiable instruments for
collection in the ordinary course of
business), direct or indirect, in any
manner (including, without
limitation, letters of credit and
reimbursement agreements in respect
thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of
(i) Sunday River Skiway Corporation,
Sunday River Ltd., Perfect Turn Inc.,
LBO Holding, Inc., Sunday River
Transportation, Inc., Sugarbush
Resort Holdings, Inc., Sugarbush
Leasing Company, Sugarbush
Restaurants, Inc., Cranmore, Inc.,
Mountain Wastewater Treatment, Inc.,
LBO Hotel Co., S-K-I Limited,
Killington Ltd., Mount Snow Ltd.,
Waterville Valley Ski Area, Ltd.,
Sugarloaf Mountain Corporation,
Killington Restaurants, Inc., Dover
Restaurants, Inc., Resorts
Technologies, Inc., Resort Software
Services, Inc. Mountainside,
Sugartech, Deerfield Operating
Company and Pico Ski Area Management
Company and (ii) any other subsidiary
that executes a Subsidiary Guarantee
in accordance with the provisions of
this Indenture, and their respective
successors and assigns.
"Hedging Obligations"
means, with respect to any Person,
the obligations of such Person under
(i) interest and currency rate swap
agreements, interest rate cap
agreements and interest rate collar
agreements and (ii) other agreements
or arrangements designed to protect
such Person against fluctuations in
interest or currency exchange rates.
"Holder" means a Person in
whose name a Note is registered.
"Indebtedness" means, with
respect to any Person, without
duplication, (i) any indebtedness of
such Person, whether or not
contingent, in respect of borrowed
money or evidenced by bonds, notes,
debentures or similar instruments or
letters of credit (or reimbursement
agreements in respect thereof) or
banker's acceptances or representing
Capital Lease Obligations or the
balance deferred and unpaid of the
purchase price of any property or
representing any Hedging Obligations,
except any such balance that
constitutes an accrued expense or
trade payable, if and to the extent
any of the foregoing indebtedness
(other than letters of credit and
Hedging Obligations) would appear as
a liability upon a balance sheet of
such Person prepared in accordance
with GAAP, (ii) all indebtedness of
others secured by a Lien on any asset
of such Person (whether or not such
indebtedness is assumed by such
Person), (iii) Disqualified Stock of
such Person, (iv) preferred stock of
any Restricted Subsidiary of such
Person (other than Preferred Stock
held by such Person or any of its
Wholly Owned Restricted Subsidiaries)
and (v) to the extent not otherwise
included, the Guarantee by such
Person of any indebtedness of any
other Person.
"Indenture" means this
Indenture, as amended or supplemented
from time to time.
"Independent Director"
means a member of the Board of
Directors of the Company who is
neither an officer nor an employee of
the Company or any of its Affiliates.
"Investments" means, with
respect to any Person, all
investments by such Person in other
Persons in the forms of direct or
indirect loans (including guarantees
of Indebtedness or other
obligations), advances or capital
contributions (excluding commission,
travel and similar advances to
officers and employees made in the
ordinary course of business),
purchases or other acquisitions for
consideration of Indebtedness, Equity
Interests or other securities,
together with all items that are or
would be classified as investments on
a balance sheet prepared in
accordance with GAAP; provided that
an acquisition of assets, Equity
Interests or other securities by the
Company or any of its Restricted
Subsidiaries for consideration
consisting of common equity
securities of the Company shall not
be deemed to be an Investment.
"Legal Holiday" means a
Saturday, a Sunday or a day on which
banking institutions in the City of
New York or at a place of payment are
authorized by law, regulation or
executive order to remain closed. If
a payment date is a Legal Holiday at
a place of payment, payment may be
made at that place on the next
succeeding day that is not a Legal
Holiday, and no interest shall accrue
for the intervening period.
"Leverage Ratio" means, as
of any date of determination, the
ratio of (i) the total indebtedness
of the Company as shown on the
Company's most recent balance sheet,
as adjusted to give effect to any
repayment or incurrence of
indebtedness subsequent to the
balance sheet date through such date
of determination, to (ii) the sum of
(a) the total indebtedness of the
Company, calculated pursuant to
clause (i), plus (b) total
stockholders' equity of the Company
as shown on the Company's most recent
balance sheet, as adjusted to give
effect to any capital contributions
or issuances of Equity Interests of
the Company, any dividends or other
distributions with respect to any
Equity Interests of the Company, or
any repurchase or redemption of
Equity Interests of the Company, in
each case subsequent to the balance
sheet date through such date of
determination.
"Lien" means, with respect
to any asset, any mortgage, lien,
pledge, charge, security interest or
encumbrance of any kind in respect of
such asset, whether or not filed,
recorded or otherwise perfected under
applicable law (including any
conditional sale or other title
retention agreement, any lease in the
nature thereof, any option or other
agreement to sell or give a security
interest in and any filing of or
agreement to give any financing
statement under the Uniform
Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" means
all liquidated damages then owing
pursuant to this Indenture or the
Registration Rights Agreement.
"Net Income" means, with
respect to any Person for any period,
the net income (loss) of such Person
for such period, determined in
accordance with GAAP and before any
reduction in respect of preferred
stock dividends, excluding, however,
(i) any gain (but not loss), together
with any related provision for taxes
on such gain (but not loss), realized
in connection with (a) any Asset Sale
(including, without limitation,
dispositions pursuant to sale and
leaseback transactions) or (b) the
disposition of any securities by such
Person or any of its Restricted
Subsidiaries or the extinguishment of
any Indebtedness of such Person or
any of its Restricted Subsidiaries
and (ii) any extraordinary or
nonrecurring gain (but not loss),
together with any related provision
for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the
aggregate cash proceeds received by
the Company or any of its Restricted
Subsidiaries in respect of any Asset
Sale (including, without limitation,
any cash received upon the sale or
other disposition of any non-cash
consideration received in any Asset
Sale), net of the direct costs
relating to such Asset Sale
(including, without limitation,
legal, accounting and investment
banking fees, and sales commissions),
any relocation expenses incurred as a
result thereof, any taxes paid or
payable by the Company or any of its
Restricted Subsidiaries as a result
thereof (after taking into account
any available tax credits or
deductions and any tax sharing
arrangements) and any reserve for
adjustment in respect of the sale
price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means
Indebtedness (i) as to which neither
the Company nor any of its Restricted
Subsidiaries (a) provides credit
support of any kind (including any
undertaking, agreement or instrument
that would constitute Indebtedness),
(b) is directly or indirectly liable
(as a guarantor or otherwise), or (c)
constitutes the lender, (ii) no
default with respect to which
(including any rights that the
holders thereof may have to take
enforcement action against an
Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both)
any holder of any other Indebtedness
of the Company or any of its
Restricted Subsidiaries to declare a
default on such other Indebtedness or
cause the payment thereof to be
accelerated or payable prior to its
stated maturity and (iii) as to which
the lenders have been notified in
writing that they will not have any
recourse to the stock or assets of
the Company or any of its Restricted
Subsidiaries.
"Non-Recourse Real Estate
Debt" means Indebtedness (i) as to
which neither the Company nor any of
its Restricted Subsidiaries, other
than Real Estate Subsidiaries, (a)
provides credit support of any kind
(including any undertaking, agreement
or instrument that would constitute
Indebtedness), (b) is directly or
indirectly liable (as a guarantor or
otherwise), or (c) constitutes the
lender, (ii) no default with respect
to which (including any rights that
the holders thereof may have to take
enforcement action against a Real
Estate Subsidiary) would permit (upon
notice, lapse of time or both) any
holder of any other Indebtedness of
the Company or any of its Restricted
Subsidiaries, other than Real Estate
Subsidiaries, to declare a default on
such other Indebtedness or cause the
payment thereof to be accelerated or
payable prior to its stated maturity
and (iii) as to which the lenders
have been notified in writing that
they will not have any recourse to
the stock or assets of the Company or
any of its Restricted Subsidiaries,
other than Real Estate Subsidiaries,
except, in each case, to the extent
permitted by the provisions of
Section 4.09 hereof.
"Note Custodian" means the
Trustee, as custodian with respect to
the Notes in global form, or any
successor entity thereto.
"Obligations" with respect
to any instrument or agreement means
any and all principal, interest
(including Post-Petition Interest),
penalties, premiums, fees (including
without limitation, to the extent
provided for in such instrument or
agreement, fees and expenses of
counsel), indemnifications,
reimbursements, damages and other
charges, obligations and liabilities
existing from time to time under such
instrument or agreement, whether
direct or indirect, joint or several,
actual, absolute or contingent,
matured or unmatured, liquidated or
unliquidated, secured or unsecured,
arising by contract, operation of law
or otherwise, including any
obligations or liabilities to repay,
redeem, repurchase, retire, acquire
or defease any Indebtedness under
such instrument or agreement, or any
obligation to establish a sinking
fund for any such purpose.
"Officer" means, with
respect to any Person, the Chairman
of the Board, the Chief Executive
Officer, the President, the Chief
Operating Officer, the Chief
Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller,
the Secretary, any Assistant
Secretary or any Vice President of
such Person.
"Officers' Certificate"
means, with respect to the Company or
any Guarantor, a certificate signed
on behalf of the Company or such
Guarantor by two Officers of the
Company or such Guarantor, one of
whom must be the principal executive
officer, the principal financial
officer, the treasurer or the
principal accounting officer of the
Company or such Guarantor, that meets
the requirements of Section 12.05
hereof.
"Opinion of Counsel" means
an opinion from legal counsel who is
not unsatisfactory to the Trustee,
that meets the requirements of
Section 12.05 hereof. The counsel
may be an employee of or counsel to
the Company, any Subsidiary of the
Company or the Trustee.
"Permitted Holders" means
Leslie B. Otten (or, in the event of
his incompetence or death, his estate
and his and his estate's heirs,
executor, administrator, committee or
other representative (collectively,
"Heirs")) and any Person in which
Leslie B. Otten and his Heirs,
directly or indirectly, have an 80%
controlling interest.
"Permitted Investments"
means (i) any Investment in the
Company or in a Wholly Owned
Restricted Subsidiary of the Company
that is a Guarantor; (ii) any
Investment in Cash Equivalents; (iii)
any Investment by the Company or any
of its Restricted Subsidiaries in a
Person if, as a result of such
Investment, (a) such Person becomes a
Wholly Owned Restricted Subsidiary of
the Company and becomes a Guarantor
or (b) such Person is merged,
consolidated or amalgamated with or
into, or transfers or conveys
substantially all of its assets to,
or is liquidated into, the Company or
a Wholly Owned Restricted Subsidiary
of the Company that is a Guarantor;
(iv) any Restricted Investment made
as a result of the receipt of
non-cash consideration from an Asset
Sale that was made pursuant to and in
compliance with the provisions of
Section 4.10 hereof and (v)
Guarantees of Indebtedness permitted
to be made pursuant to clause (vi) of
Section 4.09 hereof.
"Permitted Liens" means (i)
Liens securing Senior Debt of the
Company and its Restricted
Subsidiaries; (ii) Liens securing
Indebtedness that is pari passu in
right of payment with the Notes,
provided that the Notes are equally
and ratably secured, (iii) Liens in
favor of the Company or any of its
Restricted Subsidiaries; (iv) Liens
on property of a Person existing at
the time such Person is merged into
or consolidated with the Company or
any of its Restricted Subsidiaries,
provided that such Liens were in
existence prior to the contemplation
of such merger or consolidation and
do not extend to any assets other
than those of the Person merged into
or consolidated with the Company or
any such Restricted Subsidiary; (v)
Liens on property existing at the
time of acquisition thereof by the
Company or any of its Restricted
Subsidiaries, provided that such
Liens were in existence prior to the
contemplation of such acquisition;
(vi) Liens to secure the performance
of statutory obligations, surety or
appeal bonds, performance bonds or
other obligations of a like nature
incurred in the ordinary course of
business; (vii) Liens to secure
Indebtedness permitted by clause (v)
of the second paragraph of Section
4.09 hereof covering only the assets
acquired with such Indebtedness;
(viii) Liens existing on the date of
this Indenture; (ix) Liens for taxes,
assessments or governmental charges
or claims that are not yet delinquent
or that are being contested in good
faith by appropriate proceedings
promptly instituted and diligently
concluded, provided that any reserve
or other appropriate provision as
shall be required in conformity with
GAAP shall have been made therefor;
(x) Liens incurred in the ordinary
course of business of the Company or
any of its Restricted Subsidiaries
with respect to obligations that do
not exceed $2.0 million at any one
time outstanding and that (a) are not
incurred in connection with the
borrowing of money or the obtaining
of advances or credit (other than
trade credit in the ordinary course
of business) and (b) do not in the
aggregate materially detract from the
value of the property or materially
impair the use thereof in the
operation of business by the Company
or any such Restricted Subsidiary;
(xi) Liens on assets of Real Estate
Subsidiaries securing Non-Recourse
Real Estate Debt; and (xii) Liens on
the Pledge Account in favor of the
Collateral Agent.
"Permitted Real Estate
Project" means a project relating to
one or more of the purposes for which
Real Estate Subsidiaries may be
formed.
"Permitted Refinancing
Debt" means any Indebtedness of the
Company or any of its Restricted
Subsidiaries issued in exchange for,
or the net proceeds of which are used
to extend, refinance, renew, replace,
defease or refund other Indebtedness
of the Company or any such Restricted
Subsidiary; provided that: (i) the
principal amount (or accreted value,
if applicable) of such Permitted
Refinancing Debt does not exceed the
principal amount (or accreted value,
if applicable) of the Indebtedness so
extended, refinanced, renewed,
replaced, defeased or refunded (plus
the amount of reasonable expenses
incurred in connection therewith);
(ii) such Permitted Refinancing Debt
has a final maturity date no earlier
than the final maturity date of, and
has a Weighted Average Life to
Maturity equal to or greater than the
Weighted Average Life to Maturity of,
the Indebtedness being extended,
refinanced, renewed, replaced,
defeased or refunded; (iii) if the
Indebtedness being extended,
refinanced, renewed, replaced,
defeased or refunded is subordinated
in right of payment to the Notes,
such Permitted Refinancing Debt has a
final maturity date no earlier than
the final maturity date of, and is
subordinated in right of payment to,
the Notes on terms at least as
favorable to the Holders of Notes as
those contained in the documentation
governing the Indebtedness being
extended, refinanced, renewed,
replaced, defeased or refunded; and
(iv) such Indebtedness is incurred
only by the Company or the Restricted
Subsidiary that is the obligor on the
Indebtedness being extended,
refinanced, renewed, replaced,
defeased or refunded.
"Person" means any
individual, corporation, partnership,
joint venture, association, joint-
stock company, trust, unincorporated
organization or government or agency
or political subdivision thereof
(including any subdivision or ongoing
business of any such entity or
substantially all of the assets of
any such entity, subdivision or
business).
"Pledge Account" means the
Pledge Account pledged by the Company
to the Collateral Agent for the
benefit of Holders of the Senior
Subordinated Notes pursuant to the
Pledge and Disbursement Agreement.
"Pledge and Disbursement
Agreement" means the Pledge and
Disbursement Agreement, dated as of
June 28, 1996, by and between the
Collateral Agent and the Company,
governing the establishment and
maintenance of, and disbursement
from, the Pledge Account.
"Registration Rights
Agreement" means the Registration
Rights Agreement, dated as of the
date hereof, by and among the
Company, the Guarantors and the
initial purchaser named therein with
respect to the Notes, as such
agreement may be amended, modified or
supplemented from time to time.
"Responsible Officer," when
used with respect to the Trustee,
means any officer within the
Corporate Trust Administration of the
Trustee (or any successor group of
the Trustee) or, with respect to a
particular corporate trust matter,
any other officer to whom such matter
is referred because of his knowledge
of and familiarity with the
particular subject.
"Real Estate Subsidiary"
means a Restricted Subsidiary of the
Company that was formed for the
purpose of developing, constructing
and marketing hotel, condominium,
interval ownership and other
residential real estate projects,
together with commercial and other
space functionally related or
complementary thereto, and that is
designated by the Board of Directors
of the Company as a Real Estate
Subsidiary.
"Restricted Investment"
means any Investment other than a
Permitted Investment.
"Restricted Subsidiary" of
a Person means any Subsidiary of such
Person that is not an Unrestricted
Subsidiary.
"SEC" means the Securities
and Exchange Commission.
"Securities Act" means the
Securities Act of 1933, as amended.
"Senior Agent" means (i)
until all Indebtedness under the Bank
Credit Agreements is paid in full in
cash, the agent (or the institution
performing similar functions) under
the Bank Credit Agreement under which
the greatest aggregate principal
amount of Indebtedness is outstanding
and (ii) if all Indebtedness under
the Bank Credit Agreements has been
paid in full, the Person (or
representative of the Persons)
holding the greatest amount of Senior
Debt.
"Senior Debt" of any Person
means and includes all principal of,
premium and interest on and other
Obligations with respect to (i) the
Bank Credit Agreements, (ii) the
Senior Subordinated Notes and (iii)
any other Indebtedness of such Person
(other than as otherwise provided in
this definition), whether outstanding
on the date of issuance of the Notes
or thereafter incurred; provided,
however, Senior Debt shall not
include: (a) except in the case of
Indebtedness under the Credit
Agreement dated as of June 28, 1996
among the Company, various
Subsidiaries of the Company, Fleet
National Bank, as Agent, and the
lenders party thereto, and the
guarantees of various Subsidiaries of
the Company issued in connection
therewith, in each case as modified,
amended and in effect from time to
time, any Indebtedness which by the
terms of the instrument creating or
evidencing the same is pari passu
with or subordinated or junior in
right of payment to the Notes or the
Subsidiary Guarantees in any respect
or (b) that portion of any
Indebtedness incurred in violation of
this Indenture. Notwithstanding the
foregoing, Senior Debt shall not
include (1) Indebtedness evidenced by
the Notes, (2) Indebtedness which
when incurred and without respect to
any election under Section 1111(b) of
the United States Bankruptcy Code is
without recourse to such Person, (3)
any liability for foreign, federal,
state, local or other taxes owed or
owing by such Person, (4)
Indebtedness of such Person to the
extent such liability constitutes
Indebtedness to a Subsidiary or any
other Affiliate of such Person or any
of such Affiliate's subsidiaries, (5)
Indebtedness for the purchase of
goods or materials in the ordinary
course of business except purchase-
money Indebtedness secured by a
security interest in or Lien upon the
goods or materials purchased or (6)
Indebtedness owed by such Person for
compensation to employees or for
services.
"Senior Subordinated Note
Indenture" means the Indenture, dated
the date hereof, among the Company,
the Guarantors and United States
Trust Company of New York, as
trustee, relating to the Senior
Subordinated Notes, as in effect on
the date hereof.
"Senior Subordinated Note
Subsidiary Guarantees" means the
Guarantee of the Senior Subordinated
Notes by the Guarantors.
"Senior Subordinated Notes"
means the 12% Senior Subordinated
Notes due 2006 of the Company.
"Significant Subsidiary"
means any Restricted Subsidiary that
would be a "significant subsidiary"
as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant
to the Securities Act, as such
Regulation is in effect on the date
hereof.
"Subsidiary" means, with
respect to any Person, (i) any
corporation, association or other
business entity of which more than
50% of the total voting power of
shares of Capital Stock entitled
(without regard to the occurrence of
any contingency) to vote in the
election of directors, managers or
trustees thereof is at the time owned
or controlled, directly or
indirectly, by such Person or one or
more of the other Subsidiaries of
such Person (or a combination
thereof) and (ii) any partnership (a)
the sole general partner or the
managing general partner of which is
such Person or a Subsidiary of such
Person or (b) the only general
partners of which are such Person or
of one or more Subsidiaries of such
Person (or any combination thereof).
"TIA" means the Trust
Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect
on the date on which this Indenture
is qualified under the TIA.
"Transfer Restricted
Securities" means securities that
bear or are required to bear the
legend set forth in Section 2.06
hereof.
"Trustee" means the party
named as such above until a successor
replaces it in accordance with the
applicable provisions of this
Indenture and thereafter means the
successor serving hereunder.
"Unrestricted Subsidiary"
means any Subsidiary (i) that is
designated by the Board of Directors
of the Company as an Unrestricted
Subsidiary pursuant to a Board
Resolution, but only to the extent
that such Subsidiary (i) has no
Indebtedness other than Non-Recourse
Debt, (ii) is not party to any
agreement, contract, arrangement or
understanding with the Company or any
of its Restricted Subsidiaries unless
the terms of any such agreement,
contract, arrangement or
understanding are no less favorable
to the Company or such Restricted
Subsidiary than those that might be
obtained at the time from Persons who
are not Affiliates of the Company,
(iii) is a Person with respect to
which neither the Company nor any of
its Restricted Subsidiaries has any
direct or indirect obligation (a) to
subscribe for additional Equity
Interests or (b) to maintain or
preserve such Person's financial
condition or to cause such Person to
achieve any specified levels of
operating results (except, in the
case of Ski Insurance Company, for
the indirect obligation to maintain
adequate reserves and capital as
required by the State of Vermont),
(iv) has not guaranteed or otherwise
directly or indirectly provided
credit support for any Indebtedness
of the Company or any of its
Restricted Subsidiaries and (v) has
at least one disinterested member of
its board of directors. Any such
designation by the Board of Directors
of the Company shall be evidenced to
the Trustee by filing with the
Trustee a certified copy of the Board
Resolution giving effect to such
designation and an Officers'
Certificate certifying that such
designation complied with the
foregoing conditions and was
permitted by Section 4.07 hereof. If,
at any time, any Unrestricted
Subsidiary would fail to meet the
foregoing requirements as an
Unrestricted Subsidiary, it shall
thereafter cease to be an
Unrestricted Subsidiary for purposes
of this Indenture and any
Indebtedness of such Subsidiary shall
be deemed to be incurred by a
Restricted Subsidiary of the Company
as of such date (and, if such
Indebtedness is not permitted to be
incurred as of such date under by
Section 4.09 hereof, the Company
shall be in default of such
covenant). The Board of Directors of
the Company may at any time designate
any Unrestricted Subsidiary to be a
Restricted Subsidiary, provided that
such designation shall be deemed to
be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company
of any outstanding Indebtedness of
such Unrestricted Subsidiary and such
designation shall only be permitted
if (i) such Indebtedness is permitted
by Section 4.09 hereof and (ii) no
Default or Event of Default would be
in existence following such
designation; and, provided, further,
that such Subsidiary shall execute a
Subsidiary Guarantee and deliver an
opinion of counsel in accordance with
the terms of this Indenture.
"Weighted Average Life to
Maturity" means, when applied to any
Indebtedness at any date, the number
of years obtained by dividing (i) the
sum of the products obtained by
multiplying (a) the amount of each
then remaining installment, sinking
fund, serial maturity or other
required payments of principal,
including payment at final maturity,
in respect thereof, by (b) the number
of years (calculated to the nearest
one-twelfth) that will elapse between
such date and the making of such
payment, by (ii) the then outstanding
principal amount of such
Indebtedness.
"Wholly Owned Restricted
Subsidiary" of any Person means a
Restricted Subsidiary of such Person
all of the outstanding Capital Stock
or other ownership interests of which
(other than directors' qualifying
shares) shall at the time be owned by
such Person and the Wholly Owned
Restricted Subsidiaries of such
Person.
Section 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"
4.12
"Asset Sale Offer" 3.09
"Bank Lenders" 10.02
"Bankruptcy Law" 6.01
"Change of Control Offer"
4.15
"Change of Control Payment"
4.15
"Change of Control Payment Date"
4.15
"Covenant Defeasance"
8.03
"Custodian" 6.01
"DTC" 2.03
"Event of Default" 6.01
"Excess Proceeds" 4.10
"incur" 4.09
"Insolvency or Liquidation
Proceeding" 10.02
"Legal Defeasance" 8.02
"Offer Amount" 3.09
"Offer Period" 3.09
"Paying Agent" 2.03
"Payment Blockage Notice 10.04
"Payment Default" 6.01
"Post-Petition Interest" 10.02
"Purchase Date"
3.09
"Registrar" 2.03
"Representative" 10.02
"Restricted Payments"
4.07
"Senior Bank Debt" 10.02
"Stock Collateral" 10.02
"Subordinated Obligations"
10.02
Section 1.03. Incorporation by
Reference of Trust
Indenture Act.
Whenever this Indenture
refers to a provision of the TIA, the
provision is incorporated by
reference in and made a part of this
Indenture.
The following TIA terms
used in this Indenture have the
following meanings:
"indenture securities"
means the Notes;
"indenture security holder"
means a Holder of a Note;
"indenture to be qualified"
means this Indenture;
"indenture trustee" or
"institutional trustee" means the
Trustee;
"obligor" on the Notes and
the Subsidiary Guarantees means the
Company and the Guarantors,
respectively, and any successor
obligor upon the Notes and the
Subsidiary Guarantees, respectively.
All other terms used in
this Indenture that are defined by
the TIA, defined by TIA reference to
another statute or defined by SEC
rule under the TIA have the meanings
so assigned to them.
Section 1.04. Rules of
Construction.
Unless the context
otherwise requires:
(1) a term has the meaning
assigned to it;
(2) an accounting term not
otherwise defined has the meaning
assigned to it in accordance with
GAAP;
(3) "or" is not exclusive;
(4) words in the singular
include the plural, and in the
plural include the singular;
(5) provisions apply to
successive events and
transactions; and
(6) references to sections
of or rules under the Securities
Act shall be deemed to include
substitute, replacement of
successor sections or rules
adopted by the SEC from time to
time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's
certificate of authentication shall
be substantially in the form of
Exhibit A hereto, provided that in
the case of the Series B Notes, the
references to the Series A Notes in
the headings on pages A-1 and A-2
thereof shall be to the Series B
Notes. The Subsidiary Guarantees
shall be substantially in the form of
Exhibit D hereto, the terms of which
are incorporated in and made part of
this Indenture. The Notes may have
notations, legends or endorsements
required by law, stock exchange rule
or usage. Each Note shall be dated
the date of its authentication. The
Notes shall be in denominations of
$1,000 principal amount and integral
multiples thereof.
The terms and provisions
contained in the Notes shall
constitute, and are hereby expressly
made, a part of this Indenture and
the Company and the Trustee, by their
execution and delivery of this
Indenture, expressly agree to such
terms and provisions and to be bound
thereby.
Notes issued in global form
shall be substantially in the form of
Exhibit A attached hereto (including
the text referred to in footnotes 1
and 2 thereto). Notes issued in
certificated form shall be
substantially in the form of Exhibit
A attached hereto (but without
including the text referred to in
footnotes 1 and 2 thereto). Each
Global Note shall represent such of
the outstanding Notes as shall be
specified therein and each shall
provide that it shall represent the
aggregate amount of outstanding Notes
from time to time endorsed thereon
and that the aggregate amount of
outstanding Notes represented thereby
may from time to time be reduced or
increased, as appropriate, to reflect
exchanges and redemptions. Any
endorsement of a Global Note to
reflect the amount of any increase or
decrease in the amount of outstanding
Notes represented thereby shall be
made by the Trustee or the Note
Custodian, at the direction of the
Trustee, in accordance with
instructions given by the Holder
thereof as required by Section 2.06
hereof.
Section 2.02. Execution and
Authentication.
Two Officers shall sign the
Notes for the Company by manual or
facsimile signature.
If an Officer whose
signature is on a Note no longer
holds that office at the time a Note
is authenticated, the Note shall
nevertheless be valid.
A Note shall not be valid
until authenticated by the manual
signature of the Trustee. The
signature shall be conclusive
evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a
written order of the Company signed
by two Officers, authenticate Series
A Notes for original issue up to the
aggregate principal amount stated in
paragraph 4 of the Notes and Series B
Notes for original issuance up to the
aggregate principal amount stated in
paragraph 4 of the Notes. The
aggregate principal amount of Notes
outstanding at any time may not
exceed the aggregate principal amount
stated in paragraph 4 of the Notes
except as provided in Section 2.07
hereof.
The Trustee may appoint an
authenticating agent acceptable to
the Company to authenticate Notes.
An authenticating agent may
authenticate Notes whenever the
Trustee may do so. Each reference in
this Indenture to authentication by
the Trustee includes authentication
by such agent. An authenticating
agent has the same rights as an Agent
to deal with the Company or an
Affiliate of the Company.
Section 2.03. Registrar and Paying
Agent.
The Company shall maintain
an office or agency where Notes may
be presented for registration of
transfer or for exchange
("Registrar") and an office or agency
where Notes may be presented for
payment ("Paying Agent"). The
Registrar shall keep a register of
the Notes and of their transfer and
exchange. The Company may appoint
one or more co-registrars and one or
more additional paying agents. The
term "Registrar" includes any
co-registrar and the term "Paying
Agent" includes any additional paying
agent. The Company may change any
Paying Agent or Registrar without
notice to any Holder. The Company
shall notify the Trustee in writing
of the name and address of any Agent
not a party to this Indenture. If
the Company fails to appoint or
maintain another entity as Registrar
or Paying Agent, the Trustee shall
act as such. The Company or any of
its Subsidiaries may act as Paying
Agent or Registrar.
The Company initially
appoints The Depository Trust Company
("DTC") to act as Depositary with
respect to the Global Notes.
The Company initially
appoints the Trustee to act as the
Registrar and Paying Agent and to act
as Note Custodian with respect to the
Global Notes.
Section 2.04. Paying Agent to Hold
Money in Trust.
The Company shall require
each Paying Agent other than the
Trustee to agree in writing that the
Paying Agent will hold in trust for
the benefit of Holders or the Trustee
all money held by the Paying Agent
for the payment of principal of and
premium, interest and Liquidated
Damages, if any, on the Notes, and
will notify the Trustee of any
default by the Company or any
Guarantor in making any such payment.
While any such default continues, the
Trustee may require a Paying Agent to
pay all money held by it to the
Trustee. The Company at any time may
require a Paying Agent to pay all
money held by it to the Trustee.
Upon payment over to the Trustee, the
Paying Agent (if other than the
Company or a Subsidiary) shall have
no further liability for the money.
If the Company or a Subsidiary acts
as Paying Agent, it shall segregate
and hold in a separate trust fund for
the benefit of the Holders all money
held by it as Paying Agent. Upon any
bankruptcy or reorganization
proceedings relating to the Company
or a Guarantor, the Trustee shall
serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve
in as current a form as is reasonably
practicable the most recent list
available to it of the names and
addresses of all Holders and shall
otherwise comply with TIA
Section 312(a). If the Trustee is
not the Registrar, the Company and/or
the Guarantors shall furnish to the
Trustee at least seven Business Days
before each interest payment date and
at such other times as the Trustee
may request in writing, a list in
such form and as of such date as the
Trustee may reasonably require of the
names and addresses of the Holders of
Notes and the Company and the
Guarantors shall otherwise comply
with TIA Section 312(a).
Section 2.06. Transfer and
Exchange.
(a) Transfer and Exchange
of Certificated Notes. When
Certificated Notes are presented by a
Holder to the Registrar with a
request:
(x) to
register the transfer of
the Certificated Notes;
or
(y) to
exchange such
Certificated Notes for an
equal principal amount of
Certificated Notes of
other authorized
denominations,
the Registrar shall register the
transfer or make the exchange as
requested if its requirements for
such transactions are met; provided,
however, that the Certificated Notes
presented or surrendered for register
of transfer or exchange:
(i)
shall be duly endorsed
or accompanied by a
written instruction of
transfer in form
satisfactory to the
Registrar duly
executed by such
Holder or by his
attorney, duly
authorized in writing;
and
(ii) in
the case of a
Certificated Note that
is a Transfer
Restricted Security,
such request shall be
accompanied by the
following additional
information and
documents, as
applicable:
(A) if such
Transfer Restricted
Security is being
delivered to the
Registrar by a
Holder for
registration in the
name of such
Holder, without
transfer, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit B
hereto); or
(B) if such
Transfer Restricted
Security is being
transferred to a
"qualified
institutional
buyer" (as defined
in Rule 144A under
the Securities Act)
in accordance with
Rule 144A under the
Securities Act or
pursuant to an
exemption from
registration in
accordance with
Rule 144 or Rule
904 under the
Securities Act or
pursuant to an
effective
registration
statement under the
Securities Act, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit B
hereto); or
(C) if such
Transfer Restricted
Security is being
transferred in
reliance on another
exemption from the
registration
requirements of the
Securities Act, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit B
hereto) and an
Opinion of Counsel
from such Holder or
the transferee
reasonably
acceptable to the
Company and to the
Registrar to the
effect that such
transfer is in
compliance with the
Securities Act.
(b) Transfer of a
Certificated Note for a Beneficial
Interest in a Global Note. A
Certificated Note may not be
exchanged for a beneficial interest
in a Global Note except upon
satisfaction of the requirements set
forth below. Upon receipt by the
Trustee of a Certificated Note, duly
endorsed or accompanied by
appropriate instruments of transfer,
in form satisfactory to the Trustee,
together with:
(i) if such
Certificated Note is a
Transfer Restricted
Security, a certification
from the Holder thereof (in
substantially the form of
Exhibit B hereto) to the
effect that such
Certificated Note is being
transferred by such Holder
to a "qualified
institutional buyer" (as
defined in Rule 144A under
the Securities Act) in
accordance with Rule 144A
under the Securities Act;
and
(ii) whether or not
such Certificated Note is a
Transfer Restricted
Security, written
instructions from the Holder
thereof directing the
Trustee to make, or to
direct the Note Custodian to
make, an endorsement on the
Global Note to reflect an
increase in the aggregate
principal amount of the
Notes represented by the
Global Note,
the Trustee shall cancel such
Certificated Note in accordance with
Section 2.11 hereof and cause, or
direct the Note Custodian to cause,
in accordance with the standing
instructions and procedures existing
between the Depositary and the Note
Custodian, the aggregate principal
amount of Notes represented by the
Global Note to be increased
accordingly. If no Global Notes are
then outstanding, the Company shall
issue and, upon receipt of an
authentication order in accordance
with Section 2.02 hereof, the Trustee
shall authenticate a new Global Note
in the appropriate principal amount.
(c) Transfer and Exchange
of Global Notes. The transfer and
exchange of Global Notes or
beneficial interests therein shall be
effected through the Depositary, in
accordance with this Indenture and
the procedures of the Depositary
therefor, which shall include
restrictions on transfer comparable
to those set forth herein to the
extent required by the Securities
Act.
(d) Transfer of a
Beneficial Interest in a
Global Note for a
Certificated Note.
(i) Any Person
having a beneficial
interest in a Global Note
may upon request exchange
such beneficial interest
for a Certificated Note.
Upon receipt by the
Trustee of written
instructions or such
other form of
instructions as is
customary for the
Depositary, from the
Depositary or its nominee
on behalf of any Person
having a beneficial
interest in a Global
Note, and, in the case of
a Transfer Restricted
Security, the following
additional information
and documents (all of
which may be submitted by
facsimile):
(A) if such
beneficial interest
is being
transferred to the
Person designated
by the Depositary
as being the
beneficial owner, a
certification to
that effect from
such Person (in
substantially the
form of Exhibit B
hereto); or
(B) if such
beneficial interest
is being
transferred to a
"qualified
institutional
buyer" (as defined
in Rule 144A under
the Securities Act)
in accordance with
Rule 144A under the
Securities Act or
pursuant to an
exemption from
registration in
accordance with
Rule 144 or Rule
904 under the
Securities Act or
pursuant to an
effective
registration
statement under the
Securities Act, a
certification to
that effect from
the transferor (in
substantially the
form of Exhibit B
hereto); or
(C) if such
beneficial interest
is being
transferred in
reliance on another
exemption from the
registration
requirements of the
Securities Act, a
certification to
that effect from
the transferor (in
substantially the
form of Exhibit B
hereto) and an
Opinion of Counsel
from the transferee
or transferor
reasonably
acceptable to the
Company and to the
Registrar to the
effect that such
transfer is in
compliance with the
Securities Act,
the
Trustee or the Note
Custodian, at the
direction of the Trustee,
shall, in accordance with
the standing instructions
and procedures existing
between the Depositary
and the Note Custodian,
cause the aggregate
principal amount of
Global Notes to be
reduced accordingly and,
following such reduction,
the Company shall execute
and, upon receipt of an
authentication order in
accordance with Section
2.02 hereof, the Trustee
shall authenticate and
deliver to the transferee
a Certificated Note in
the appropriate principal
amount.
(ii)
Certificated Notes issued
in exchange for a
beneficial interest in a
Global Note pursuant to
this Section 2.06(d)
shall be registered in
such names and in such
authorized denominations
as the Depositary,
pursuant to instructions
from its direct or
indirect participants or
otherwise, shall instruct
the Trustee. The Trustee
shall deliver such
Certificated Notes to the
Persons in whose names
such Notes are so
registered.
(e) Restrictions on
Transfer and Exchange of Global
Notes. Notwithstanding any other
provision of this Indenture (other
than the provisions set forth in
subsection (f) of this Section 2.06),
a Global Note may not be transferred
as a whole except by the Depositary
to a nominee of the Depositary or by
a nominee of the Depositary to the
Depositary or another nominee of the
Depositary or by the Depositary or
any such nominee to a successor
Depositary or a nominee of such
successor Depositary.
(f) Authentication of
Certificated Notes in
Absence of Depositary. If
at any time:
(i) the
Depositary for the Notes
notifies the Company that
the Depositary is
unwilling or unable to
continue as Depositary
for the Global Notes and
a successor Depositary
for the Global Notes is
not appointed by the
Company within 90 days
after delivery of such
notice; or
(ii) the
Company, at its sole
discretion, notifies the
Trustee in writing that
it elects to cause the
issuance of Certificated
Notes under this
Indenture,
then the Company shall execute, and
the Trustee shall, upon receipt of an
authentication order in accordance
with Section 2.02 hereof,
authenticate and deliver,
Certificated Notes in an aggregate
principal amount equal to the
principal amount of the Global Notes
in exchange for such Global Notes.
(g) Legends.
(i) Except as
permitted by the
following paragraphs (ii)
and (iii), each Note
certificate evidencing
Global Notes and
Certificated Notes (and
all Notes issued in
exchange therefor or
substitution thereof)
shall bear legends in
substantially the
following form:
"THE SECURITY (OR ITS
PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF
THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)
(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A
TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF
THE COMPANY SO REQUESTS),
(2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCE HEREBY OF THE
RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
(ii) Upon any
sale or transfer of a
Transfer Restricted
Security (including any
Transfer Restricted
Security represented by a
Global Note) pursuant to
Rule 144 under the
Securities Act or
pursuant to an effective
registration statement
under the Securities Act:
(A) in
the case of any
Transfer Restricted
Security that is a
Certificated Note, the
Registrar shall permit
the Holder thereof to
exchange such Transfer
Restricted Security
for a Certificated
Note that does not
bear the legend set
forth in (i) above and
rescind any
restriction on the
transfer of such
Transfer Restricted
Security; and
(B) in
the case of any
Transfer Restricted
Security represented
by a Global Note, such
Transfer Restricted
Security shall not be
required to bear the
legend set forth in
(i) above, but shall
continue to be subject
to the provisions of
Section 2.06(c)
hereof; provided,
however, that with
respect to any request
for an exchange of a
Transfer Restricted
Security that is
represented by a
Global Note for a
Certificated Note that
does not bear the
legend set forth in
(i) above, which
request is made in
reliance upon Rule
144, the Holder
thereof shall certify
in writing to the
Registrar that such
request is being made
pursuant to Rule 144
(such certification to
be substantially in
the form of Exhibit B
hereto).
(iii)
Notwithstanding the
foregoing, upon
consummation of the
Exchange Offer, the
Company shall issue and,
upon receipt of an
authentication order in
accordance with Section
2.02 hereof, an Officers'
Certificate certifying
that the applicable
registration statement is
effective and an Opinion
of Counsel in form and
substance reasonably
satisfactory to the
Trustee as to all matters
it reasonably deems
appropriate with respect
to the issuance, sale and
delivery of the Series B
Notes and the
qualification of this
Indenture under the TIA,
the Trustee shall
authenticate Series B
Notes in exchange for
Series A Notes accepted
for exchange in the
Exchange Offer, which
Series B Notes shall not
bear the legend set forth
in (i) above, and the
Registrar shall rescind
any restriction on the
transfer of such Notes,
in each case unless the
Holder of such Series A
Notes is either (A) a
broker-dealer, (B) a
Person participating in
the distribution of the
Series A Notes or (C) a
Person who is an
affiliate (as defined in
Rule 144A) of the
Company.
(h) Cancellation and/or
Adjustment of Global Notes. At such
time as all beneficial interests in
Global Notes have been exchanged for
Certificated Notes, redeemed,
repurchased or cancelled, all Global
Notes shall be returned to or
retained and cancelled by the Trustee
in accordance with Section 2.11
hereof. At any time prior to such
cancellation, if any beneficial
interest in a Global Note is
exchanged for Certificated Notes,
redeemed, repurchased or cancelled,
the principal amount of Notes
represented by such Global Note shall
be reduced accordingly and an
endorsement shall be made on such
Global Note, by the Trustee or the
Notes Custodian, at the direction of
the Trustee, to reflect such
reduction.
(i) General Provisions
Relating to Transfers and
Exchanges.
(i) To
permit registrations
of transfers and
exchanges, the Company
shall execute and the
Trustee shall
authenticate
Certificated Notes and
Global Notes at the
Registrar's request.
(ii) No
service charge shall
be made to a Holder
for any registration
of transfer or
exchange, 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
similar governmental
charge payable upon
exchange or transfer
pursuant to Sections
3.07, 4.10, 4.15 and
9.05 hereof).
(iii)
The Registrar shall
not be required to
register the transfer
of or exchange any
Note selected for
redemption in whole or
in part, except the
unredeemed portion of
any Note being
redeemed in part.
(iv)
All Certificated Notes
and Global Notes
issued upon any
registration of
transfer or exchange
of Certificated Notes
or Global Notes shall
be the valid
obligations of the
Company, evidencing
the same debt, and
entitled to the same
benefits under this
Indenture, as the
Certificated Notes or
Global Notes
surrendered upon such
registration of
transfer or exchange.
(v)
The Company shall not
be required:
(A) to
issue, to register the
transfer of or to
exchange Notes during
a period beginning at
the opening of
business 15 days
before the day of any
selection of Notes for
redemption under
Section 3.02 hereof
and ending at the
close of business on
the day of selection;
or
(B) to
register the transfer
of or to exchange any
Note so selected for
redemption in whole or
in part, except the
unredeemed portion of
any Note being
redeemed in part; or
(C) to
register the transfer
of or to exchange a
Note between a record
date and the next
succeeding interest
payment date.
(vi)
Prior to due
presentment for the
registration of a
transfer of any Note,
the Trustee, any Agent
and the Company may
deem and treat the
Person in whose name
any Note is registered
as the absolute owner
of such Note for the
purpose of receiving
payment of principal
of and interest on
such Notes, and
neither the Trustee,
any Agent nor the
Company shall be
affected by notice to
the contrary.
(vii)
The Trustee shall
authenticate
Certificated Notes and
Global Notes in
accordance with the
provisions of Section
2.02 hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is
surrendered to the Trustee, or each
of the Company and the Trustee
receives evidence to its satisfaction
of the destruction, loss or theft of
any Note, the Company shall issue and
the Trustee, upon the written order
of the Company signed by two Officers
of the Company, shall authenticate a
replacement Note if the Trustee's
requirements are met. If required by
the Trustee or the Company, an
indemnity bond must be supplied by
the Holder that is sufficient in the
judgment of the Trustee and the
Company to protect the Company, the
Trustee, any Agent and any
authenticating agent from any loss
that any of them may suffer if a Note
is replaced. The Company may charge
for its expenses in replacing a Note.
Every replacement Note is
an additional obligation of the
Company and shall be entitled to all
of the benefits of this Indenture
equally and proportionately with all
other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at
any time are all the Notes
authenticated by the Trustee except
for those cancelled by it, those
delivered to it for cancellation,
those reductions in the interest in a
Global Note effected by the Trustee
in accordance with the provisions
hereof, and those described in this
Section as not outstanding. Except
as set forth in Section 2.09 hereof,
a Note does not cease to be
outstanding because the Company or an
Affiliate of the Company holds the
Note.
If a Note is replaced
pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the
Trustee receives proof satisfactory
to it that the replaced Note is held
by a bona fide purchaser.
If the principal amount of
any Note is considered paid under
Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases
to accrue.
If the Trustee or the
Paying Agent (other than the Company,
a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date
or maturity date, money sufficient to
pay principal, interest, premium and
Liquidated Damages, if any, on Notes
payable on that date, then on and
after that date such Notes shall be
deemed to be no longer outstanding
and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the
Holders of the required principal
amount of Notes have concurred in any
direction, waiver or consent, Notes
owned by the Company, by any
Guarantor, or by any Person directly
or indirectly controlling or
controlled by or under direct or
indirect common control with the
Company or any Guarantor, shall be
considered as though not outstanding,
except that for the purposes of
determining whether the Trustee shall
be protected in relying on any such
direction, waiver or consent, only
Notes that a Trustee knows are so
owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until Certificated Notes
are ready for delivery, the Company
may prepare and the Trustee shall
authenticate temporary Notes upon a
written order of the Company signed
by two Officers of the Company.
Temporary Notes shall be
substantially in the form of
Certificated Notes but may have
variations that the Company considers
appropriate for temporary Notes and
as shall be reasonably acceptable to
the Trustee. Without unreasonable
delay, the Company shall prepare and
the Trustee shall authenticate
Certificated Notes in exchange for
temporary Notes.
Holders of temporary Notes
shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may
deliver Notes to the Trustee for
cancellation. The Registrar and
Paying Agent shall forward to the
Trustee any Notes surrendered to them
for registration of transfer,
exchange or payment. The Trustee and
no one else shall cancel all Notes
surrendered for registration of
transfer, exchange, payment,
replacement or cancellation and shall
destroy cancelled Notes (subject to
the record retention requirement of
the Exchange Act). Certification of
the destruction of all cancelled
Notes shall be delivered to the
Company. The Company may not issue
new Notes to replace Notes that it
has paid or that have been delivered
to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in
a payment of interest on the Notes,
it shall pay the defaulted interest
in any lawful manner plus, to the
extent lawful, interest payable on
the defaulted interest, to the
Persons who are Holders on a
subsequent special record date, in
each case at the rate provided in the
Notes and in Section 4.01 hereof.
The Company shall notify the Trustee
in writing of the amount of defaulted
interest proposed to be paid on each
Note and the date of the proposed
payment. The Company shall fix or
cause to be fixed each such special
record date and payment date,
provided that no such special record
date shall be less than 10 days prior
to the related payment date for such
defaulted interest. At least 15 days
before the special record date, the
Company (or, upon the written request
of the Company, the Trustee in the
name and at the expense of the
Company) shall mail or cause to be
mailed to Holders a notice that
states the special record date, the
related payment date and the amount
of such interest to be paid. The
provisions of this Section 2.12 shall
also apply to the Liquidated Damages,
if any, payable on any interest
payment date that is not punctually
paid or duly provided for on such
interest payment date.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to
redeem Notes pursuant to the optional
redemption provisions of Section 3.07
hereof, it shall furnish to the
Trustee, at least 45 days but not
more than 60 days before a redemption
date, an Officers' Certificate
setting forth (i) the clause of this
Indenture pursuant to which the
redemption shall occur, (ii) the
redemption date, (iii) the principal
amount of Notes to be redeemed and
(iv) the redemption price.
Section 3.02. Selection of Notes
to Be Redeemed.
If less than all of the
Notes are to be redeemed at any time,
selection of the Notes for redemption
shall be made by the Trustee in
compliance with the requirements of
the principal national securities
exchange, if any, on which the Notes
are listed or, if the Notes are not
so listed, on a pro rata basis, by
lot or by such method as the Trustee
shall deem fair and appropriate. In
the event of partial redemption on a
pro rata basis, by lot or any other
method, the particular Notes to be
redeemed shall be selected, unless
otherwise provided herein, not less
than 30 nor more than 60 days prior
to the redemption date by the Trustee
from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly
notify the Company in writing of the
Notes selected for redemption and, in
the case of any Note selected for
partial redemption, the principal
amount thereof to be redeemed. Notes
and portions of Notes selected shall
be in principal amounts of $1,000 or
whole multiples of $1,000, except
that if all of the Notes of a Holder
are to be redeemed, the entire
outstanding amount of Notes held by
such Holder, even if not a multiple
of $1,000, shall be redeemed. A new
Note in principal amount equal to the
unredeemed portion thereof will be
issued in the name of the Holder
thereof upon cancellation of the
original Note. On and after the
redemption date, interest ceases to
accrue on Notes or portions of them
called for redemption. Except as
provided in this Section 3.02,
provisions of this Indenture that
apply to Notes called for redemption
also apply to portions of Notes
called for redemption.
Section 3.03. Notice of
Redemption.
Subject to the provisions
of Section 3.09 hereof, at least
30 days but not more than 60 days
before a redemption date, the Company
shall mail or cause to be mailed, by
first class mail, a notice of
redemption to each Holder whose Notes
are to be redeemed at its registered
address.
The notice shall identify
the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being
redeemed in part, the portion of
the principal amount of such Note
to be redeemed and that, after the
redemption date upon surrender of
such Note, a new Note or Notes in
the same series in principal
amount equal to the unredeemed
portion shall be issued upon
cancellation of the original Note;
(d) the name and address
of the Paying Agent;
(e) that Notes called for
redemption must be surrendered to
the Paying Agent to collect the
redemption price;
(f) that, unless the Company
defaults in making such redemption
payment, interest and Liquidated
Damages, if any, on Notes called
for redemption cease to accrue on
and after the redemption date;
(g) the paragraph of the
Notes and/or Section of this
Indenture pursuant to which the
Notes called for redemption are
being redeemed; and
(h) that no representation
is made as to the correctness or
accuracy of the CUSIP number, if
any, listed in such notice or
printed on the Notes.
At the Company's request,
the Trustee shall give the notice of
redemption in the Company's name and
at its expense; provided, however,
that the Company shall have delivered
to the Trustee, at least 45 days
prior to the redemption date, an
Officers' Certificate requesting that
the Trustee give such notice and
setting forth the information to be
stated in such notice as provided in
the preceding paragraph.
Section 3.04. Effect of Notice of
Redemption.
Once notice of redemption
is mailed in accordance with Section
3.03 hereof, Notes called for
redemption become irrevocably due and
payable on the redemption date at the
redemption price together with
accrued and unpaid interest and
Liquidated Damages, if any. A notice
of redemption may not be conditional.
Section 3.05. Deposit of
Redemption Price.
One Business Day prior to
the redemption date, the Company
shall deposit with the Trustee or
with the Paying Agent money in
immediately available funds
sufficient to pay the redemption
price of, and accrued interest and
Liquidated Damages, if any, on, all
Notes to be redeemed on that date.
The Trustee or the Paying Agent shall
promptly return to the Company any
money deposited with the Trustee or
the Paying Agent by the Company in
excess of the amounts necessary to
pay the redemption price of, and
accrued interest and Liquidated
Damages, if any, on, all Notes to be
redeemed.
If the Company complies
with the provisions of the preceding
paragraph, on and after the
redemption date, interest and
Liquidated Damages, if any, shall
cease to accrue on the Notes or the
portions of Notes called for
redemption whether or not such Notes
are presented for payment. If a Note
is redeemed on or after an interest
record date but on or prior to the
related interest payment date, then
any accrued and unpaid interest and
Liquidated Damages, if any, shall be
paid to the Person in whose name such
Note was registered at the close of
business on such record date. If any
Note called for redemption shall not
be so paid upon surrender for
redemption because of the failure of
the Company to comply with the
preceding paragraph, interest shall
be paid on the unpaid principal, from
the redemption date until such
principal is paid, and to the extent
lawful on any interest not paid on
such unpaid principal and on any
Liquidated Damages, in each case at
the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in
Part.
Upon surrender of a Note
that is redeemed in part, the Company
shall execute and the Trustee shall
authenticate and deliver to the
Holder at the expense of the Company
a new Note of the same series equal
in principal amount to the unredeemed
portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in
clause (b) of this Section 3.07, the
Notes will not be redeemable at the
Company's option prior to July 15,
2001. Thereafter, the Notes will be
subject to redemption at the option
of the Company, in whole or in part,
upon not less than 30 nor more than
60 days' notice to Holders, at the
redemption prices (expressed as
percentages of principal amount) set
forth below plus accrued and unpaid
interest and Liquidated Damages, if
any, thereon to the applicable
redemption date, if redeemed during
the twelve-month period beginning on
July 15 of the years indicated below:
Year Percentage
2001 106.875%
2002 105.156%
2003 103.438%
2004 101.719%
2005 and thereafter 100.000%
(b) Notwithstanding the
provisions of clause (a) of this
Section 3.07, on or prior to July 15,
1999, the Company may redeem the
Notes, in whole or in part, at a
redemption price of 113.75% of the
Accreted Value thereof, plus accrued
and unpaid Liquidated Damages, if
any, thereon to the redemption date,
with the net proceeds of one or more
Equity Offerings; provided that
notice of each such redemption shall
have been given within 30 days after
the date of the closing of such
Equity Offering.
(c) Any redemption
pursuant to this Section 3.07 shall
be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory
Redemption.
Except as set forth under
Sections 4.10 and 4.15 hereof, the
Company shall not be required to make
mandatory redemption or sinking fund
payments with respect to the Notes.
Section 3.09. Offer to Purchase by
Application of Excess
Proceeds.
In the event that, pursuant
to Section 4.10 hereof, the Company
shall be required to commence an
offer to all Holders to purchase
Notes (an "Asset Sale Offer"), it
shall follow the procedures specified
below.
The Asset Sale Offer shall
remain open for a period of 20
Business Days following its
commencement and no longer, except to
the extent that a longer period is
required by applicable law (the
"Offer Period"). No later than five
Business Days after the termination
of the Offer Period (the "Purchase
Date"), the Company shall purchase
the principal amount of Notes
required to be purchased pursuant to
Section 4.10 hereof (the "Offer
Amount") or, if less than the Offer
Amount has been tendered, all Notes
tendered in response to the Asset
Sale Offer. Payment for any Notes so
purchased shall be made in the same
manner as interest payments are made.
If the Purchase Date is on
or after an interest record date and
on or before the related interest
payment date, any accrued and unpaid
interest shall be paid to the Person
in whose name a Note is registered at
the close of business on such record
date, and no additional interest
shall be payable to Holders who
tender Notes pursuant to the Asset
Sale Offer.
Upon the commencement of an
Asset Sale Offer, the Company shall
send, by first class mail, a notice
to the Trustee and each of the
Holders, with a copy to the Trustee.
The notice shall contain all
instructions and materials necessary
to enable such Holders to tender
Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be
made to all Holders. The notice,
which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale
Offer is being made pursuant to
this Section 3.09 and Section 4.10
hereof and the length of time the
Asset Sale Offer shall remain
open;
(b) the Offer Amount,
the purchase price and the
Purchase Date;
(c) that any Note not
tendered or accepted for payment
shall continue to accrue interest
(on and after July 15, 2001) and
Liquidated Damages, if any;
(d) that, unless the
Company defaults in making such
payment, any Note accepted for
payment pursuant to the Asset Sale
Offer shall cease to accrue
interest and Liquidated Damages,
if any, after the Purchase Date;
(e) that Holders
electing to have a Note purchased
pursuant to an Asset Sale Offer
may only elect to have all of such
Note purchased and may not elect
to have only a portion of such
Note purchased;
(f) that Holders
electing to have a Note purchased
pursuant to any Asset Sale Offer
shall be required to surrender the
Note, with the form entitled
"Option of Holder to Elect
Purchase" on the reverse of the
Note completed, or transfer by
book-entry transfer, to the
Company, a depositary, if
appointed by the Company, or a
Paying Agent at the address
specified in the notice at least
three days before the Purchase
Date;
(g) that Holders shall
be entitled to withdraw their
election if the Company, the
Depositary or the Paying Agent, as
the case may be, receives, not
later than 3:00 p.m. on the date
of the expiration of the Offer
Period, a telegram, telex,
facsimile transmission or letter
setting forth the name of the
Holder, the principal amount of
the Note the Holder delivered for
purchase and a statement that such
Holder is withdrawing his election
to have such Note purchased;
(h) that, if the
aggregate principal amount of
Notes surrendered by Holders
exceeds the Offer Amount, the
Trustee shall select the Notes to
be purchased on a pro rata basis
(with such adjustments as may be
deemed appropriate by the Company
so that only Notes in
denominations of $1,000 principal
amount, or integral multiples
thereof, shall be purchased); and
(i) that Holders whose
Notes were purchased only in part
shall be issued new Notes of the
same series equal in principal
amount to the unpurchased portion
of the Notes surrendered (or
transferred by book-entry
transfer).
On or before the Purchase
Date, the Company shall, to the
extent lawful, accept for payment, on
a pro rata basis to the extent
necessary, the Offer Amount of Notes
or portions thereof tendered pursuant
to the Asset Sale Offer, or if less
than the Offer Amount has been
tendered, all Notes tendered, and
shall deliver to the Trustee an
Officers' Certificate stating that
such Notes or portions thereof were
accepted for payment by the Company
in accordance with the terms of this
Section 3.09. The Company, the
Depositary or the Paying Agent, as
the case may be, shall promptly (but
in any case not later than five days
after the Purchase Date) mail or
deliver to each tendering Holder an
amount equal to the purchase price of
the Notes tendered by such Holder and
accepted by the Company for purchase,
and the Company shall promptly issue
a new Note, and the Trustee shall
authenticate and mail or deliver such
new Note to such Holder, in a
principal amount equal to any
unpurchased portion of the Note
surrendered. Any Note not so
accepted shall be promptly mailed or
delivered by the Company to the
Holder thereof. The Company shall
publicly announce the results of the
Asset Sale Offer on or as soon as
practicable after the Purchase Date.
Other than as specifically
provided in this Section 3.09, any
purchase pursuant to this
Section 3.09 shall be made pursuant
to the provisions of Sections 3.01
through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or
cause to be paid the principal of,
premium, if any, and interest on the
Notes on the dates and in the manner
provided in the Notes. Principal,
premium, if any, and interest shall
be considered paid on the date due if
the Paying Agent, if other than the
Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time
on the due date money deposited by
the Company in immediately available
funds and designated for and
sufficient to pay all principal,
premium, if any, and interest then
due. The Company shall pay all
Liquidated Damages, if any, in the
same manner on the dates and in the
amounts set forth in the Registration
Rights Agreement.
The Company shall pay
interest (including Post-Petition
Interest in any proceeding under any
Bankruptcy Law) on overdue principal
at the rate equal to 1% per annum in
excess of the then applicable
interest rate on the Notes to the
extent lawful; it shall pay interest
(including Post-Petition Interest in
any proceeding under any Bankruptcy
Law) on overdue installments of
interest and Liquidated Damages
(without regard to any applicable
grace period) at the same rate to the
extent lawful.
Section 4.02. Maintenance of
Office or Agency.
The Company shall maintain
an office or agency (which may be an
office of the Trustee or an affiliate
of the Trustee, Registrar or
co-registrar) where Notes may be
surrendered for registration of
transfer or for exchange and where
notices and demands to or upon the
Company in respect of the Notes and
this Indenture may be served. The
Company shall give prompt written
notice to the Trustee of the
location, and any change in the
location, of such office or agency.
If at any time the Company shall fail
to maintain any such required office
or agency or shall fail to furnish
the Trustee with the address thereof,
such presentations, surrenders,
notices and demands may be made or
served at the Corporate Trust Office
of the Trustee.
The Company may also from
time to time designate one or more
other offices or agencies where the
Notes may be presented or surrendered
for any or all such purposes and may
from time to time rescind such
designations; provided, however, that
no such designation or rescission
shall in any manner relieve the
Company of its obligation to maintain
an office or agency for such
purposes. The Company shall give
prompt written notice to the Trustee
of any such designation or rescission
and of any change in the location of
any such other office or agency.
The Company hereby
designates the Corporate Trust Office
of the Trustee as one such office or
agency of the Company in accordance
with Section 2.03.
Section 4.03. Reports.
Whether or not required by
the rules and regulations of the SEC,
so long as any Notes are outstanding,
the Company and the Guarantors shall
furnish to the Holders of Notes and
to the Trustee (i) all quarterly and
annual financial information that
would be required to be contained in
a filing with the SEC on Forms 10-Q
and 10-K if the Company were required
to file such Forms, including a
"Management's Discussion and Analysis
of Financial Condition and Results of
Operations" that describes the
financial condition and results of
operations of the Company and its
Restricted Subsidiaries and, with
respect to the annual information
only, a report thereon by the
Company's certified independent
accountants and (ii) all current
reports that would be required to be
filed with the SEC on Form 8-K if the
Company were required to file such
reports. In addition, whether or not
required by the rules and regulations
of the SEC, the Company shall file a
copy of all such information and
reports with the SEC for public
availability (unless the SEC will not
accept such a filing) and make such
information available to securities
analysts and prospective investors
upon request. In addition, for so
long as any Notes remain outstanding,
the Company and the Guarantors shall
furnish to the Holders and to
securities analysts and prospective
investors, upon their request, the
information required to be delivered
pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04. Compliance
Certificate.
(a) The Company and each
Guarantor shall deliver to the
Trustee, within 90 days after the end
of each fiscal year, an Officers'
Certificate stating that a review of
the activities of the Company and its
Subsidiaries during the preceding
fiscal year has been made under the
supervision of the signing Officers
with a view to determining whether
the Company and each Guarantor has
kept, observed, performed and
fulfilled its obligations under this
Indenture, and further stating, as to
each such Officer signing such
certificate, that to the best of his
or her knowledge the Company has
kept, observed, performed and
fulfilled each and every covenant
contained in this Indenture and is
not in default in the performance or
observance of any of the terms,
provisions and conditions of this
Indenture (or, if a Default or Event
of Default shall have occurred,
describing all such Defaults or
Events of Default of which he or she
may have knowledge and what action
the Company is taking or proposes to
take with respect thereto) and that
to the best of his or her knowledge
no event has occurred and remains in
existence by reason of which payments
on account of the principal of,
Liquidated Damages or interest, if
any, on the Notes is prohibited or if
such event has occurred, a
description of the event and what
action the Company is taking or
proposes to take with respect
thereto.
(b) So long as not
contrary to the then current
recommendations of the American
Institute of Certified Public
Accountants, the year-end financial
statements delivered pursuant to
Section 4.03 above shall be
accompanied by a written statement of
the Company's independent public
accountants (who shall be a firm of
established national reputation) that
in making the examination necessary
for certification of such financial
statements, nothing has come to their
attention that would lead them to
believe that the Company has violated
any provisions of Article 4 or
Article 5 hereof or, if any such
violation has occurred, specifying
the nature and period of existence
thereof, it being understood that
such accountants shall not be liable
directly or indirectly to any Person
for any failure to obtain knowledge
of any such violation.
(c) The Company shall, so
long as any of the Notes are
outstanding, deliver to the Trustee,
forthwith upon any Officer becoming
aware of any Default or Event of
Default, an Officers' Certificate
specifying such Default or Event of
Default and what action the Company
is taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Company shall pay, and
shall cause each of its Subsidiaries
to pay, prior to delinquency, all
material taxes, assessments, and
governmental levies except such as
are contested in good faith and by
appropriate proceedings or where the
failure to effect such payment is not
adverse in any material respect to
the Holders of the Notes.
Section 4.06. Stay, Extension and
Usury Laws.
Each of the Company and the
Guarantors covenants (to the extent
that it may lawfully do so) that it
shall not at any time insist upon,
plead, or in any manner whatsoever
claim or take the benefit or
advantage of, any stay, extension or
usury law wherever enacted, now or at
any time hereafter in force, that may
affect the covenants or the
performance of this Indenture; and
each of the Company and the
Guarantors (to the extent that it may
lawfully do so) hereby expressly
waives all benefit or advantage of
any such law, and covenants that it
shall not, by resort to any such law,
hinder, delay or impede the execution
of any power herein granted to the
Trustee, but shall suffer and permit
the execution of every such power as
though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, (i) declare or pay any
dividend or make any other payment or
distribution on account of the
Company's Equity Interests
(including, without limitation, any
payment in connection with any merger
or consolidation involving the
Company) or to any direct or indirect
holder of the Company's Equity
Interests in its capacity as such,
other than dividends or distributions
payable in Equity Interests (other
than Disqualified Stock) of the
Company or dividends or distributions
payable to the Company or any Wholly
Owned Restricted Subsidiary of the
Company that is a Guarantor; (ii)
purchase, redeem or otherwise acquire
or retire for value any Equity
Interests of the Company or any
Subsidiary or other Affiliate of the
Company, other than any such Equity
Interests owned by the Company or any
Wholly Owned Restricted Subsidiary of
the Company that is a Guarantor;
(iii) make any principal payment on,
or purchase, redeem, defease or
otherwise acquire or retire for
value, prior to a scheduled mandatory
sinking fund payment date or final
maturity date, any Indebtedness that
is subordinated to the Notes; or (iv)
make any Restricted Investment (all
such payments and other actions set
forth in clauses (i) through (iv)
above being collectively referred to
as "Restricted Payments"), unless, at
the time of and after giving effect
to such Restricted Payment:
(A) no Default or Event of
Default shall have occurred and be
continuing or would occur as a
consequence thereof;
(B) the Company would be
permitted by virtue of the
Company's pro forma Fixed Charge
Coverage Ratio, immediately after
giving effect to such Restricted
Payment, to incur at least $1.00
of additional Indebtedness
pursuant to the Fixed Charge
Coverage Ratio test set forth in
Section 4.09 hereof; and
(C) such Restricted Payment,
together with the aggregate of all
other Restricted Payments made by
the Company and its Restricted
Subsidiaries on or after the date
hereof, is less than the sum of
(i) $5.0 million, plus (ii) 50% of
the Consolidated Net Income of the
Company for the period (taken as
one accounting period) from July
29, 1996 to the end of the
Company's most recently ended
fiscal quarter for which internal
financial statements are available
at the time of such Restricted
Payment (or, if such Consolidated
Net Income for such period is a
deficit, less 100% of such
deficit), plus (iii) 100% of the
aggregate net cash proceeds
received by the Company as capital
contributions or from the issue or
sale since the date of this
Indenture of Equity Interests of
the Company or of debt securities
of the Company that have been
converted into such Equity
Interests (other than Equity
Interests (or convertible debt
securities) sold to a Subsidiary
of the Company and other than
Disqualified Stock or debt
securities that have been
converted into Disqualified
Stock), plus (iv) to the extent
that any Restricted Investment is
sold for cash or otherwise
liquidated or repaid for cash,
100% of the net cash proceeds
thereof (less the cost of
disposition) (but only to the
extent not included in subclause
(ii) of this clause (C)); plus (v)
to the extent that any
Unrestricted Subsidiary is
designated to be a Restricted
Subsidiary, the fair market value
(as determined in good faith by
the Board of Directors of the
Company) of the Company's
Investment in such Subsidiary at
the time of such designation (but
only to the extent not included in
subclause (ii) of this clause
(C)); provided, however, that in
the case of (1) the declaration or
payment of any dividend or the
making of any other payment or
distribution on account of the
Company's Common Stock or to any
direct or indirect holder of the
Company's Common Stock in its
capacity as such or (2) the
purchase, redemption or other
acquisition or retirement for
value of any Common Stock of the
Company, (A) the Company may not
include the $5.0 million set forth
in subclause (i) of this clause
(C) and may only include 25% of
its Consolidated Net Income for
purposes of subclause (ii) of this
clause (C) in calculating the
amount available pursuant to this
clause (C) for the making of any
such Restricted Payment if, after
giving effect to such Restricted
Payment, the Company's Leverage
Ratio would exceed 70% and (B)
Consolidated Net Income for
purposes of this clause (C) shall
exclude the first $5.0 million of
Consolidated Net Income of the
Company reported from and after
July 29, 1996.
The foregoing provisions will not
prohibit (i) the payment of any
dividend or other distribution within
60 days after the date of declaration
thereof, if at said date of
declaration such payment would have
complied with the provisions of this
Indenture; (ii) the redemption,
repurchase, retirement or other
acquisition of any Equity Interests
of the Company in exchange for, or
out of the proceeds of, the
substantially concurrent sale (other
than to a Subsidiary of the Company)
of other Equity Interests of the
Company (other than any Disqualified
Stock); provided that the amount of
any such net cash proceeds that are
utilized for any such redemption,
repurchase, retirement or other
acquisition shall be excluded from
clause (C) of the preceding
paragraph; (iii) the defeasance,
redemption or repurchase of
subordinated Indebtedness with the
net cash proceeds from an incurrence
of Permitted Refinancing Debt or the
substantially concurrent sale (other
than to a Subsidiary of the Company)
of Equity Interests of the Company
(other than Disqualified Stock);
provided that the amount of any such
net cash proceeds that are utilized
for any such redemption, repurchase,
retirement or other acquisition shall
be excluded from clause (C) of the
preceding paragraph; (iv) Investments
in Real Estate Subsidiaries in an
amount not to exceed $10.0 million
plus, to the extent that any such
Investment is sold for cash or
otherwise liquidated or repaid for
cash, the net cash proceeds thereof
(less the cost of disposition);
provided that the amount of any such
net cash proceeds shall be excluded
from clause (C) of the preceding
paragraph; (v) the acquisition of
Equity Interests in Sugarloaf
Mountain Corporation within the six
months following the consummation of
the Acquisition; (vi) contributions
of real estate not used in or
essential to ski operations to Real
Estate Subsidiaries for Permitted
Real Estate Projects; (vii)
conveyance of real estate not used in
or essential to ski operations to
Unrestricted Subsidiaries with an
aggregate book value not in excess of
$2.0 million; (viii) Guarantees of
Indebtedness of Real Estate
Subsidiaries to the extent that such
Guarantees are permitted to be
incurred by the covenant described in
Section 4.09 hereof; (ix) payments of
principal of and interest on the
Demand Note; and (x) Investments
received by the Company and its
Restricted Subsidiaries as non-cash
consideration from Asset Sales to the
extent permitted by the covenant
described in Section 4.10 hereof.
The Board of Directors of the
Company may designate any Restricted
Subsidiary to be an Unrestricted
Subsidiary if such designation would
not cause a Default. For purposes of
making such determination, all
outstanding Investments by the
Company and its Restricted
Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so
designated will be deemed to be
Restricted Payments at the time of
such designation and will reduce the
amount available for Restricted
Payments under the first paragraph of
this covenant. All such outstanding
Investments will be deemed to
constitute Investments in an amount
equal to the fair market value (as
determined in good faith by the Board
of Directors of the Company) of such
Investments at the time of such
designation. Such designation will
only be permitted if such Restricted
Payment would be permitted at such
time and if such Restricted
Subsidiary otherwise meets the
definition of an Unrestricted
Subsidiary.
The amount of all Restricted
Payments (other than cash) shall be
the fair market value (evidenced by a
resolution of the Board of Directors
of the Company set forth in an
Officers' Certificate delivered to
the Trustee) on the date of the
Restricted Payment of the asset(s)
proposed to be transferred by the
Company or such Subsidiary, as the
case may be, pursuant to the
Restricted Payment. Not later than
the date of making any Restricted
Payment, the Company shall deliver to
the Trustee an Officers' Certificate
stating that such Restricted Payment
is permitted and setting forth the
basis upon which the calculations
required by the covenant "Restricted
Payments" were computed, which
calculations may be based upon the
Company's latest available financial
statements.
Notwithstanding the
foregoing, the Company and its
Restricted Subsidiaries may not (i)
transfer any property or assets that
are a material part of the ski
operations of the Company and its
Restricted Subsidiaries to an
Unrestricted Subsidiary or (ii)
designate as an Unrestricted
Subsidiary any Restricted Subsidiary
of the Company that holds any
property or assets that are a
material part of the ski operations
of the Company and its Restricted
Subsidiaries.
Section 4.08. Dividend and Other
Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, create or otherwise
cause or suffer to exist or become
effective any encumbrance or
restriction on the ability of any
Restricted Subsidiary to (i)(a) pay
dividends or make any other
distributions to the Company or any
of its Restricted Subsidiaries on its
Capital Stock or with respect to any
other interest or participation in,
or measured by, its profits, or (b)
pay any indebtedness owed to the
Company or any of its Restricted
Subsidiaries, (ii) make loans or
advances to the Company or any of its
Restricted Subsidiaries or (iii)
transfer any of its properties or
assets to the Company or any of its
Restricted Subsidiaries, except for
such encumbrances or restrictions
existing under or by reason of: (a)
Existing Indebtedness as in effect on
the date of this Indenture; (b)
applicable law; (c) any instrument
governing Indebtedness or Capital
Stock of a Person acquired by the
Company or any of its Restricted
Subsidiaries as in effect at the time
of such acquisition (except to the
extent such Indebtedness was incurred
in connection with or in
contemplation of such acquisition),
which encumbrance or restriction is
not applicable to any Person, or the
properties or assets of any Person,
other than the Person, or the
property or assets of the Person, so
acquired; (d) by reason of customary
non-assignment provisions in leases
entered into in the ordinary course
of business and consistent with past
practices; (e) purchase money
obligations for property acquired in
the ordinary course of business that
impose restrictions of the nature
described in clause (iii) above on
the property so acquired; (f) any
instrument governing Non-Recourse
Real Estate Debt of a Real Estate
Subsidiary, which encumbrance or
restriction is not applicable to any
Person or the properties or assets of
any Person other than such Real
Estate Subsidiary or the property or
assets of such Real Estate
Subsidiary; (g) Senior Debt of the
Company and Indebtedness of
Guarantors, provided that such
Indebtedness was permitted to be
incurred pursuant to the provisions
of this Indenture; and (h) Permitted
Liens.
Section 4.09. Incurrence of
Indebtedness and Issuance
of Preferred Stock.
The Company shall not, and
shall not permit any of its
Subsidiaries to, directly or
indirectly, create, incur, issue,
assume, guaranty or otherwise become
directly or indirectly liable,
contingently or otherwise, with
respect to (collectively, "incur")
any Indebtedness (including Acquired
Debt), and shall not permit any of
its Restricted Subsidiaries to issue
any preferred stock; provided,
however, that, so long as no Default
or Event of Default has occurred and
is continuing, the Company and its
Restricted Subsidiaries that are
Guarantors may incur Indebtedness
(including Acquired Debt), and its
Restricted Subsidiaries that are
Guarantors may issue preferred stock,
if the Fixed Charge Coverage Ratio
for the Company's most recently ended
four full fiscal quarters for which
internal quarterly financial
statements are available immediately
preceding the date on which such
additional Indebtedness is incurred
or such additional preferred stock is
issued would have been at least 2.0
to 1, determined on a pro forma basis
(including a pro forma application of
the net proceeds therefrom), as if
the additional Indebtedness had been
incurred or the additional preferred
stock had been issued at the
beginning of such four-quarter
period.
The foregoing provisions shall
not apply to:
(i) the incurrence by the
Company and its Restricted
Subsidiaries of Indebtedness pursuant
to the Bank Credit Agreements in an
amount not to exceed the greater of
(a) $65.0 million and (b) 1.5 times
the Company's Consolidated Cash Flow
for the most recently ended four full
fiscal quarters for which internal
quarterly financial statements are
available immediately preceding the
date on which such Indebtedness is
incurred, less, in either case, the
aggregate amount of all permanent
reductions thereto pursuant to the
covenant described in Section 4.10
hereof;
(ii) the incurrence by the
Company and its Restricted
Subsidiaries of Existing
Indebtedness;
(iii) the incurrence by the
Company and the Guarantors of
Indebtedness represented by the
Notes, the Subsidiary Guarantees,
this Indenture, the Senior
Subordinated Notes, the Senior
Subordinated Note Subsidiary
Guarantees and the Senior
Subordinated Note Indenture;
(iv) the incurrence of
intercompany Indebtedness between or
among the Company and any of its
Wholly Owned Restricted Subsidiaries
(other than Real Estate
Subsidiaries); provided that any
subsequent issuance or transfer of
Equity Interests that results in any
such Indebtedness being held by a
Person other than the Company or a
Wholly Owned Restricted Subsidiary of
the Company, or any sale or other
transfer of any such Indebtedness to
a Person that is neither the Company
nor a Wholly Owned Restricted
Subsidiary of the Company, shall be
deemed to constitute an incurrence of
such Indebtedness by the Company or
such Restricted Subsidiary, as the
case may be;
(v) the incurrence by the
Company or any of its Restricted
Subsidiaries of purchase money
Indebtedness to finance the purchase
of property or assets to be used in
the ski operations of the Company and
its Restricted Subsidiaries or a
related business in an aggregate
amount at any one time outstanding
not to exceed the lesser of (a) the
purchase price of such property or
assets and (b) $15.0 million;
(vi) the incurrence by the
Company and its Restricted
Subsidiaries of Guarantees of
Indebtedness of Real Estate
Subsidiaries in an amount not to
exceed $15.0 million at any one time
outstanding in connection with
Permitted Real Estate Projects,
provided that the total purchase
price for the hotel, condominium,
interval ownership or other units
comprising the development to be
constructed, in whole or in part,
with the proceeds of the Indebtedness
so guaranteed, that have been
contracted for sale (evidenced by
executed purchase agreements and
security deposits from
credit-approved purchasers), equals
at least 35% of the estimated total
cost of construction (as determined
in good faith by the Board of
Directors of the Company) of the
Permitted Real Estate Projects
(except for the development of the
Summit Hotel at the Attitash resort,
for which such total purchase price
must equal at least 25% of the
estimated total cost of construction
(as determined in good faith by the
Board of Directors of the Company));
(vii) the incurrence by the
Company or any of its Restricted
Subsidiaries of Permitted Refinancing
Debt in exchange for, or the net
proceeds of which are used to extend,
refinance, renew, replace, defease or
refund Indebtedness that was
permitted to be incurred hereunder;
(viii) the incurrence by Real
Estate Subsidiaries of Non-Recourse
Real Estate Debt, provided that if
any such Indebtedness ceases to be
Non-Recourse Real Estate Debt of a
Real Estate Subsidiary, such event
shall be deemed to constitute an
incurrence of Indebtedness by a
Restricted Subsidiary of the Company
that is not a Real Estate Subsidiary;
(ix) the incurrence by the
Company's Unrestricted Subsidiaries
of Non-Recourse Debt, provided that
if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be
deemed to constitute an incurrence of
Indebtedness by a Restricted
Subsidiary of the Company; and
(x) the incurrence by the
Company and its Restricted
Subsidiaries of additional
Indebtedness in an amount not to
exceed $25.0 million at any one time
outstanding; provided that such
Indebtedness is expressly
subordinated in right of payment to
the Notes at least to the same extent
as the Notes are subordinated in
right of payment to Senior Debt of
the Company pursuant to Article 10
hereof.
Section 4.10. Asset Sales.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, engage in
an Asset Sale unless (i) the Company
or such Restricted Subsidiary, as the
case may be, receives consideration
at the time of such Asset Sale at
least equal to the fair market value
(evidenced by a resolution of the
Board of Directors of the Company set
forth in an Officers' Certificate
delivered to the Trustee) of the
assets or Equity Interests issued or
sold or otherwise disposed of and
(ii) at least 75% of the
consideration therefor received by
the Company or such Restricted
Subsidiary is in the form of cash;
provided that (x) the amount of (a)
any liabilities (as shown on the
Company's or such Restricted
Subsidiary's most recent balance
sheet) of the Company or any
Restricted Subsidiary (other than
contingent liabilities and
liabilities that are by their terms
subordinated to the Notes) that are
assumed by the transferee of any such
assets pursuant to a customary
novation agreement that releases the
Company or such Restricted Subsidiary
from further liability and (b) any
notes or other obligations received
by the Company or such Restricted
Subsidiary from such transferee that
are immediately converted by the
Company or such Restricted Subsidiary
into cash (to the extent of the cash
received) shall be deemed to be cash
for purposes of this provision and
(y) Asset Sales pursuant to the DOJ
Divestiture shall not be subject to
the 75% minimum cash requirement
specified in clause (ii) of this
paragraph, but such Asset Sales shall
otherwise continue to be subject to
this covenant and any cash proceeds
resulting from the subsequent
disposition of such non-cash
consideration shall be subject to the
provisions of this covenant.
Within 360 days after the
receipt of any Net Proceeds from an
Asset Sale, the Company or such
Restricted Subsidiary may apply such
Net Proceeds (a) to permanently
reduce Senior Debt of the Company or
such Restricted Subsidiary (and to
correspondingly reduce commitments
with respect thereto) or (b) to the
making of capital expenditures or the
acquisition of long-term assets in
the same line of business as the
Company or any Restricted Subsidiary
was engaged immediately prior to such
Asset Sale. Pending the final
application of any such Net Proceeds,
the Company may temporarily reduce
Senior Debt or otherwise invest such
Net Proceeds in any manner that is
not prohibited hereunder. Any Net
Proceeds from Asset Sales in excess
of $1.0 million in any fiscal year
that are not applied or invested as
provided in the first sentence of
this paragraph will be deemed to
constitute "Excess Proceeds." When
the aggregate amount of Excess
Proceeds exceeds $10.0 million, the
Company will be required to make an
offer to all Holders of Notes to
purchase the maximum principal amount
of Notes that may be purchased out of
the Excess Proceeds, at an offer
price in cash in an amount equal to
100% of the Accreted Value thereof,
plus accrued and unpaid Liquidated
Damages, if any, thereon (if prior to
July 15, 2001), or 100% of the
principal amount thereof, plus
accrued and unpaid interest and
Liquidated Damages, if any, thereon
(if on or after July 15, 2001), to
the date of purchase, in accordance
with the procedures set forth herein.
To the extent that the aggregate
amount of Notes tendered pursuant to
an Asset Sale Offer is less than the
Excess Proceeds, the Company may use
any remaining Excess Proceeds for
general corporate purposes (subject
to the restrictions of this
Indenture). Upon completion of such
offer to purchase, the amount of
Excess Proceeds shall be reset at
zero.
Section 4.11. Independent
Director.
From and after the earlier
of 30 days after the Consummation (as
defined in the Registration Rights
Agreement) of the Exchange Offer or
120 days after the date hereof, so
long as any of the Notes are
outstanding, the Company shall have
at least one Independent Director on
its Board of Directors. Any
transaction for which this Indenture
requires the approval of a majority
of the Independent Directors shall be
prohibited at any time that there is
not at least one Independent Director
on the Company's Board of Directors.
The Company shall use its best
efforts to have an Independent
Director by July 31, 1996. In
connection with any transaction for
which this Indenture requires the
approval of a majority of the
Independent Directors, the Company
shall provide an Officers'
Certificate to the Trustee stating
that a majority of the Independent
Directors has approved such
transaction.
Section 4.12. Transactions with
Affiliates.
The Company shall not, and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, make any payment to,
or sell, lease, transfer or otherwise
dispose of any of its properties or
assets to, or purchase any property
or assets from, or enter into or make
or amend any contract, agreement,
understanding, loan, advance or
guarantee with, or for the benefit
of, any Affiliate (each of the
foregoing, an "Affiliate
Transaction"), unless (i) such
Affiliate Transaction is on terms
that are no less favorable to the
Company or the relevant Restricted
Subsidiary than those that would have
been obtained in a comparable
transaction with an unrelated Person
and (ii) the Company delivers to the
Trustee (a) with respect to any
Affiliate Transaction or series of
related Affiliate Transactions
involving aggregate consideration in
excess of $0.5 million, a resolution
of the Board of Directors of the
Company certified to in an Officers'
Certificate certifying also that such
Affiliate Transaction complies with
clause (i) above and that such
Affiliate Transaction has been
approved by a majority of the
disinterested members of the Board of
Directors of the Company and (b) with
respect to any Affiliate Transaction
or series of related Affiliate
Transactions involving aggregate
consideration in excess of $5.0
million, an opinion as to the
fairness to the Company of such
Affiliate Transaction from a
financial point of view issued by an
accounting, appraisal or investment
banking firm of national standing;
provided that (1) any employment
agreement or arrangement in existence
on the date hereof or entered into by
the Company or any of its Restricted
Subsidiaries in the ordinary course
of business and consistent with the
past practice of the Company or such
Restricted Subsidiary, (2)
transactions between or among the
Company and its Restricted
Subsidiaries and (3) Restricted
Payments and Permitted Investments
that are permitted by the provisions
of Section 4.07 hereof, in each case,
shall not be deemed Affiliate
Transactions.
Section 4.13. Liens.
The Company shall not, and
shall not permit any of its
Subsidiaries to, directly or
indirectly create, incur, assume or
suffer to exist any Lien on any asset
now owned or hereafter acquired, or
any income or profits therefrom, or
assign or convey any right to receive
income therefrom, except Permitted
Liens.
Section 4.14. Corporate Existence.
Subject to Article 5
hereof, the Company and the
Guarantors shall do or cause to be
done all things necessary to preserve
and keep in full force and effect (i)
its corporate existence, and the
corporate, partnership or other
existence of each of its Restricted
Subsidiaries, in accordance with the
respective organizational documents
(as the same may be amended from time
to time) of the Company or any such
Restricted Subsidiary and (ii) the
rights (charter and statutory),
licenses and franchises of the
Company, the Guarantors and their
respective Restricted Subsidiaries;
provided, however, that the Company
and the Guarantors shall not be
required to preserve any such right,
license or franchise, or the
corporate, partnership or other
existence of any of their respective
Restricted Subsidiaries, if the Board
of Directors of the Company
(including a majority of the
Independent Directors) shall
determine that the preservation
thereof is no longer desirable in the
conduct of the business of the
Company or such Guarantor, as
applicable, and its Restricted
Subsidiaries, taken as a whole, and
that the loss thereof is not adverse
in any material respect to the
Holders of the Notes.
Section 4.15. Offer to Repurchase
Upon Change of Control.
(a) Upon the occurrence of
a Change of Control, each Holder of
Notes shall have the right to require
the Company to repurchase all or any
part (equal to $1,000 principal
amount or an integral multiple
thereof) of such Holder's Notes
pursuant to the offer described below
(the "Change of Control Offer") at an
offer price in cash equal to 101% of
the Accreted Value thereof, plus
accrued and unpaid Liquidated
Damages, if any, thereon (if prior to
July 15, 2001), or 101% of the
principal amount thereof plus, in
each case, accrued and unpaid
interest and Liquidated Damages, if
any, thereon (if on or after July 15,
2001), to the date of purchase (the
"Change of Control Payment"). Within
30 days following any Change of
Control, the Company shall mail a
notice to each Holder stating: (1)
that the Change of Control Offer is
being made pursuant to this Section
4.15 and that all Notes tendered
shall be accepted for payment; (2)
the purchase price and the purchase
date, which shall be no later than 30
business days from the date such
notice is mailed (the "Change of
Control Payment Date"); (3) that any
Note not tendered shall continue to
accrue interest (on and after July
15, 2001) and Liquidated Damages, if
any; (4) that, unless the Company
defaults in the payment of the Change
of Control Payment, all Notes
accepted for payment pursuant to the
Change of Control Offer shall cease
to accrue interest after the Change
of Control Payment Date; (5) that
Holders electing to have any Notes
purchased pursuant to a Change of
Control Offer shall be required to
surrender the Notes, with the form
entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes
completed, to the Paying Agent at the
address specified in the notice prior
to the close of business on the third
Business Day preceding the Change of
Control Payment Date; (6) that
Holders shall be entitled to withdraw
their election if the Paying Agent
receives, not later than the close of
business on the second Business Day
preceding the Change of Control
Payment Date, a telegram, telex,
facsimile transmission or letter
setting forth the name of the Holder,
the principal amount of Notes
delivered for purchase, and a
statement that such Holder is
withdrawing his election to have the
Notes purchased; and (7) that Holders
whose Notes are being purchased only
in part shall be issued new Notes of
the same series equal in principal
amount to the unpurchased portion of
the Notes surrendered, which
unpurchased portion must be equal to
$1,000 in principal amount or an
integral multiple thereof. The
Company shall comply with the
requirements of Rule 14e-1 under the
Exchange Act and any other securities
laws and regulations thereunder to
the extent such laws and regulations
are applicable in connection with the
repurchase of Notes in connection
with a Change of Control.
(b) On the Change of
Control Payment Date, the Company
shall, to the extent lawful and
subject to Article 10, (1) accept for
payment all Notes or portions thereof
properly tendered pursuant to the
Change of Control Offer, (2) deposit
with the Paying Agent an amount equal
to the Change of Control Payment in
respect of all Notes or portions
thereof so tendered and (3) deliver
or cause to be delivered to the
Trustee the Notes so accepted
together with an Officers'
Certificate stating the aggregate
principal amount of Notes or portions
thereof being purchased by the
Company. The Paying Agent shall
promptly mail to each Holder of Notes
so tendered the Change of Control
Payment for such Notes, and the
Trustee shall promptly authenticate
and mail (or cause to be transferred
by book entry) to each Holder a new
Note of the same series equal in
principal amount to any unpurchased
portion of the Notes surrendered, if
any; provided that each such new Note
shall be in a principal amount of
$1,000 or an integral multiple
thereof. Prior to complying with the
provisions of this Section 4.15, but
in any event within 60 days following
a Change of Control, the Company
shall either repay all outstanding
Senior Debt or obtain the requisite
consents, if any, under all
agreements governing outstanding
Senior Debt to permit the repurchase
of Notes required by this Section
4.15. The Company shall publicly
announce the results of the Change of
Control Offer on or as soon as
practicable after the Change of
Control Payment Date.
The Company shall not be
required to make a Change of Control
Offer upon a Change of Control if a
third party makes the Change of
Control Offer in the manner, at the
times and otherwise in compliance
with the requirements set forth in
this Section 4.15 and purchases all
Notes validly tendered and not
withdrawn under such Change of
Control Offer.
Section 4.16. Additional
Subsidiary Guarantees.
If the Company or any of
its Restricted Subsidiaries shall
acquire or create another Subsidiary
after the date hereof, then such
newly acquired or created Subsidiary
shall become a Guarantor and enter
into a supplemental indenture
pursuant to which such Subsidiary
shall agree to be bound by all of the
terms of this Indenture and shall
execute a Subsidiary Guarantee and
deliver an Opinion of Counsel in
accordance with the terms of this
Indenture; provided that this
covenant shall not apply to any
Subsidiary that has been properly
designated as an Unrestricted
Subsidiary in accordance with this
Indenture for so long as it continues
to constitute an Unrestricted
Subsidiary. Upon the acquisition or
creation of a Subsidiary by the
Company, the Company shall provide to
the Trustee an Officers' Certificate
stating whether such Subsidiary
constitutes an Unrestricted
Subsidiary or is required to enter
into a supplemental indenture and
execute a Subsidiary Guarantee.
Section 4.17. Payments for
Consent.
The Company shall not and
shall not permit any of its
Restricted Subsidiaries to, directly
or indirectly, pay or cause to be
paid any consideration, whether by
way of interest, fee or otherwise, to
any Holder of any Notes for or as an
inducement to any consent, waiver or
amendment of any of the terms or
provisions of this Indenture or the
Notes unless such consideration is
offered to be paid or is paid to all
Holders of the Notes that consent,
waive or agree to amend in the time
frame set forth in the solicitation
documents relating to such consent,
waiver or agreement.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger,
Consolidation, or Sale of
Assets.
The Company shall not
consolidate or merge with or into
(whether or not the Company is the
surviving entity), or sell, assign,
transfer, lease, convey or otherwise
dispose of all or substantially all
of its properties or assets in one or
more related transactions, to another
corporation, Person or entity, unless
(i) the Company is the surviving
entity or the entity or the Person
formed by or surviving any such
consolidation or merger (if other
than the Company) or to which such
sale, assignment, transfer, lease,
conveyance or other disposition shall
have been made is a corporation
organized or existing under the laws
of the United States, any state
thereof or the District of Columbia;
(ii) the entity or Person formed by
or surviving any such consolidation
or merger (if other than the Company)
or the entity or Person to which such
sale, assignment, transfer, lease,
conveyance or other disposition shall
have been made assumes all the
obligations of the Company under the
Notes and this Indenture pursuant to
a supplemental indenture in a form
reasonably satisfactory to the
Trustee; (iii) immediately after such
transaction, no Default or Event of
Default exists; and (iv) except in
the case of a merger of the Company
with or into a Wholly Owned
Restricted Subsidiary of the Company,
the Company or the entity or Person
formed by or surviving any such
consolidation or merger (if other
than the Company) or to which such
sale, assignment, transfer, lease,
conveyance or other disposition shall
have been made (A) will have
Consolidated Net Worth immediately
after the transaction equal to or
greater than the Consolidated Net
Worth of the Company immediately
preceding the transaction and (B)
will, at the time of such transaction
and after giving pro forma effect
thereto as if such transaction had
occurred at the beginning of the
applicable four-quarter period, be
permitted to incur at least $1.00 of
additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test
set forth in the first paragraph of
Section 4.09 hereof.
Section 5.02. Successor
Corporation Substituted.
Upon any consolidation or
merger, or any sale, assignment,
transfer, lease, conveyance or other
disposition of all or substantially
all of the assets of the Company in
accordance with Section 5.01 hereof,
the successor corporation formed by
such consolidation or into or with
which the Company is merged or to
which such sale, assignment,
transfer, lease, conveyance or other
disposition is made shall succeed to,
and be substituted for and may
exercise every right and power of the
Company under this Indenture with the
same effect as if such successor
Person had been named as the Company
herein (so that from and after the
date of such consolidation, merger,
sale, lease, conveyance or other
disposition, the provisions of this
Indenture referring to the "Company"
shall refer instead to the successor
corporation and not to the Company);
provided, however, that the
predecessor Company shall not be
relieved from the obligation to pay
the principal of, and premium,
interest and Liquidated Damages, if
any, on the Notes except in the case
of a sale of all of the Company's
assets that meets the requirements of
Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default"
occurs if:
(1) the Company defaults for
30 days in the payment when due of
interest on the Notes (whether or
not such payment is prohibited by
the provisions of Article 10
hereof);
(2) the Company defaults in
the payment when due of the
principal of or premium or
Liquidated Damages, if any, on the
Notes (whether or not such payment
is prohibited by the provisions of
Article 10 hereof);
(3) the Company fails to
comply with, observe or perform
any covenant, condition or
agreement on the part of the
Company to be observed or
performed pursuant to Sections
4.07, 4.09, 4.10 and 4.15 hereof;
(4) the Company fails, for
30 days after notice, to comply
with any of its other agreements
or covenants in, or provisions of,
this Indenture or the Notes, other
than that which is provided for by
Section 4.11 hereof;
(5) a continuing default
occurs under any mortgage,
indenture or instrument under
which there may be issued or by
which there may be secured or
evidenced any Indebtedness for
money borrowed by the Company or
any of its Restricted Subsidiaries
(or the payment of which is
guaranteed by the Company or any
of its Restricted Subsidiaries)
whether such Indebtedness or
guarantee now exists, or is
created after the date hereof,
which default (a) is caused by a
failure to pay principal of or
premium, if any, or interest on
such Indebtedness prior to the
expiration of the grace period
provided in such Indebtedness (a
"Payment Default") or (b) results
in the acceleration of such
Indebtedness prior to its express
maturity and, in each case, the
principal amount of any such
Indebtedness, together with the
principal amount of any other such
Indebtedness under which there has
been a Payment Default or the
maturity of which has been so
accelerated, aggregates $5.0
million or more;
(6) the Company, or any of
its Restricted Subsidiaries, fails
to pay final judgments aggregating
in excess of $5.0 million and
either (a) any creditor commences
enforcement proceedings upon any
such judgment or (b) such
judgments are not paid, discharged
or stayed for a period of 60 days;
(7) any Subsidiary Guarantee
shall be held in any judicial
proceeding to be unenforceable or
invalid or shall cease for any
reason to be in full force and
effect or any Guarantor, or any
Person acting on behalf of any
Guarantor, shall deny or disaffirm
its obligations under its
Subsidiary Guarantee, except as
permitted by this Indenture;
(8) the Company or any of
its Restricted Subsidiaries
pursuant to or within the meaning
of any Bankruptcy Law:
(a) commences a
voluntary case,
(b) consents to the
entry of an order for relief
against it in an involuntary
case,
(c) consents to the
appointment of a Custodian of
it or for all or substantially
all of its property,
(d) makes a general
assignment for the benefit of
its creditors, or
(e) admits in
writing its inability generally
to pay its debts as they become
due; or
(9) a court of competent
jurisdiction enters an order or
decree under any Bankruptcy Law
that:
(a) is for relief
against the Company or any
Restricted Subsidiary in an
involuntary case,
(b) appoints a
Custodian of the Company or any
Restricted Subsidiary or for
all or substantially all of the
property of the Company or any
Subsidiary, or
(c) orders the
liquidation of the Company or
any Restricted Subsidiary,
and the order or decree remains
unstayed and in effect for
60 consecutive days.
The term "Bankruptcy Law"
means Title 11, U.S. Code or any
similar Federal or state law for the
relief of debtors. The term
"Custodian" means any receiver,
trustee, assignee, liquidator or
similar official under any Bankruptcy
Law.
An Event of Default shall
not be deemed to have occurred under
clause (3), (5) or (6) until the
Trustee shall have received written
notice from the Company or any of the
Holders or unless a Responsible
Officer shall have knowledge of such
Event of Default. A Default under
clause (4) is not an Event of Default
until the Trustee notifies the
Company, or the Holders of at least
25% in principal amount of the then
outstanding Notes notify the Company
and the Trustee, of the Default and
the Company does not cure the Default
within 30 days after receipt of the
notice. The notice must specify the
Default, demand that it be remedied
and state that the notice is a
"Notice of Default."
In the case of any Event of
Default pursuant to the provisions of
this Section 6.01 occurring by reason
of any willful action (or inaction)
taken (or not taken) by or on behalf
of the Company with the intention of
avoiding payment of the premium that
the Company would have had to pay if
the Company then had elected to
redeem the Notes pursuant to
Section 3.07 hereof, an equivalent
premium shall also become and be
immediately due and payable to the
extent permitted by law upon the
acceleration of the Notes, anything
in this Indenture or in the Notes to
the contrary notwithstanding. If an
Event of Default occurs prior to
July 15, 2001 by reason of any
willful action (or inaction) taken
(or not taken) by or on behalf of the
Company with the intention of
avoiding the prohibition on
redemption of the Notes prior to July
15, 2001, then the premium payable
for purposes of this paragraph for
each of the years beginning on July
15 of the years set forth below shall
be as set forth in the following
table expressed as a percentage of
the amount that would otherwise be
due but for the provisions of this
sentence, plus accrued interest and
Liquidated Damages, if any, to the
date of payment:
Year Percentage
1995 117.188%
1996 115.469%
1997 113.750%
1998 112.031%
1999 110.313%
2000 108.594%
Section 6.02. Acceleration.
If an Event of Default
(other than an Event of Default
specified in clauses (8) and (9) of
Section 6.01) relating to the Company
or any Restricted Subsidiary occurs
and is continuing, the Trustee by
notice to the Company, or the Holders
of at least 25% in principal amount
of the then outstanding Notes by
written notice to the Company and the
Trustee may declare the unpaid
principal amount of (which, prior to
July 15, 2001, shall be the Accreted
Value of the Notes on the date of
acceleration), any accrued interest
on and any Liquidated Damages due in
respect of all the Notes to be due
and payable immediately. Upon such
declaration the principal, interest
and Liquidated Damages shall be due
and payable immediately (together
with the premium referred to in
Section 6.01, if applicable). If any
Event of Default specified in clause
(8) or (9) of Section 6.01 relating
to the Company, any Restricted
Subsidiary that would constitute a
Significant Subsidiary or any group
of Restricted Subsidiaries that,
taken together, would constitute a
Significant Subsidiary occurs, such
an amount 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. The Holders of a majority in
principal amount of the then
outstanding Notes by written notice
to the Trustee may rescind an
acceleration and its consequences if
the rescission would not conflict
with any judgment or decree and if
all existing Events of Default
(except nonpayment of principal,
interest or Liquidated Damages that
has become due solely because of the
acceleration) have been cured or
waived.
Section 6.03. Other Remedies.
If an Event of Default
occurs and is continuing, the Trustee
may pursue any available remedy to
collect the payment of principal,
premium and Liquidated Damages, if
any, and 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. A delay or omission by
the Trustee or any Holder of a Note
in exercising any right or remedy
accruing upon an Event of Default
shall not impair the right or remedy
or constitute a waiver of or acquies
cence in the Event of Default. All
remedies are cumulative to the extent
permitted by law.
Section 6.04. Waiver of Past
Defaults.
The Holders of not less
than a majority in aggregate
principal amount of the Notes then
outstanding by written notice to the
Trustee may on behalf of the Holders
of all of the Notes waive any
existing Default or Event of Default
and its consequences hereunder except
a continuing Default or Event of
Default in the payment of the
principal of or premium, interest or
Liquidated Damages on the Notes
(including in connection with an
offer to purchase) (provided,
however, that the Holders of a
majority in aggregate principal
amount of the then outstanding Notes
may rescind an acceleration and its
consequences, including any related
payment default that resulted from
such acceleration). Upon any such
waiver, such Default shall cease to
exist, and any Event of Default
arising therefrom shall be deemed to
have been cured for every purpose of
this Indenture; but no such waiver
shall extend to any subsequent or
other Default or impair any right
consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in
principal amount of the then
outstanding Notes may direct in
writing the time, method and place of
conducting any proceeding for
exercising any remedy available to
the Trustee or exercising any trust
or power conferred on it. However,
the Trustee may refuse to follow any
direction that conflicts with law or
this Indenture that the Trustee
determines may be unduly prejudicial
to the rights of other Holders of
Notes or that may involve the Trustee
in personal liability. The Trustee
may take any other action deemed
proper by the Trustee which is not
inconsistent with such direction.
Section 6.06. Limitation on Suits.
A Holder of a Note may
pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note
gives to the Trustee written
notice of a continuing Event of
Default;
(b) the Holders of at least
25% in principal amount of the
then outstanding Notes make a
written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or
Holders of Notes offer and, if
requested, provide to the Trustee
indemnity satisfactory to the
Trustee against any loss,
liability or expense;
(d) the Trustee does not
comply with the request within 60
days after receipt of the request
and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day
period the Holders of a majority
in principal amount of the then
outstanding Notes do not give the
Trustee a direction inconsistent
with the request.
A Holder of a Note may not
use this Indenture to prejudice the
rights of another Holder of a Note or
to obtain a preference or priority
over another Holder of a Note.
Section 6.07. Rights of Holders of
Notes to Receive Payment.
Notwithstanding any other
provision of this Indenture, the
right of any Holder of a Note to
receive payment of principal, premium
and Liquidated Damages, if any, and
interest on the Note, on or after the
respective due dates expressed in the
Note (including in connection with an
offer to purchase), or to bring suit
for the enforcement of any such
payment on or after such respective
dates, shall not be impaired or
affected without the consent of such
Holder.
Section 6.08. Collection Suit by
Trustee.
If an Event of Default
specified in Section 6.01(1) or (2)
occurs and is continuing, the Trustee
is authorized to recover judgment in
its own name and as trustee of an
express trust against the Company or
any Guarantor for the whole amount of
principal of and premium, interest
and Liquidated Damages, if any,
remaining unpaid on the Notes and
interest on overdue principal and, to
the extent lawful, interest and such
further amount as shall be sufficient
to cover the costs and expenses of
collection, including the reasonable
compensation, expenses, disbursements
and advances of the Trustee, its
agents and counsel.
Section 6.09. Trustee May File
Proofs of Claim.
The Trustee is authorized
to file such proofs of claim and
other papers or documents as may be
necessary or advisable in order to
have the claims of the Trustee
(including any claim for the
reasonable compensation, expenses,
disbursements and advances of the
Trustee, its agents and counsel) and
the Holders of the Notes allowed in
any judicial proceedings relative to
the Company or any of the Guarantors
(or any other obligor upon the Notes
), its creditors or its property and
shall be entitled and empowered to
collect, receive and distribute any
money or other property payable or
deliverable on any such claims and
any custodian in any such judicial
proceeding is hereby authorized by
each Holder to make such payments to
the Trustee, and in the event that
the Trustee shall consent to the
making of such payments directly to
the Holders, to pay to the Trustee
any amount due to it for the
reasonable compensation, expenses,
disbursements and advances of the
Trustee, its agents and counsel, and
any other amounts due the Trustee
under Section 7.07 hereof. To the
extent that the payment of any such
compensation, expenses, disbursements
and advances of the Trustee, its
agents and counsel, and any other
amounts due the Trustee under Section
7.07 hereof out of the estate in any
such proceeding, shall be denied for
any reason, payment of the same shall
be secured by a Lien on, and shall be
paid out of, any and all
distributions, dividends, money,
securities and other properties that
the Holders may be entitled to
receive in such proceeding whether in
liquidation or under any plan of
reorganization or arrangement or
otherwise. Nothing herein contained
shall be deemed to authorize the
Trustee to authorize or consent to or
accept or adopt on behalf of any
Holder any plan of reorganization,
arrangement, adjustment or
composition affecting the Notes or
the rights of any Holder, 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 property pursuant to this
Article, it shall pay out the money
or property in the following order:
First: to the Trustee and
the Collateral Agent and each of its
agents and attorneys for amounts due
under Section 7.07 hereof and under
the Pledge and Disbursement
Agreement, including payment of all
compensation, expense and liabilities
incurred, and all advances made, by
the Trustee and the costs and
expenses of collection;
Second: to Holders of
Notes for amounts due and unpaid on
the Notes for principal and premium,
interest and Liquidated Damages, if
any, ratably, without preference or
priority of any kind, according to
the amounts due and payable on the
Notes for principal, premium and
Liquidated Damages, if any and
interest, respectively; and
Third: to the Company or
to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a
record date and payment date for any
payment to Holders of Notes 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 a Trustee,
a court in its discretion may require
the filing by any party litigant in
the suit of an undertaking to pay the
costs of the suit, and the court in
its discretion may assess reasonable
costs, including reasonable
attorneys' fees, against any party
litigant in the suit, having due
regard to the merits and good faith
of the claims or defenses made by the
party litigant. This Section does
not apply to a suit by the Trustee, a
suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by
Holders of more than 10% in principal
amount of the then outstanding Notes.
Section 6.12. Acceleration Prior
to July 15, 2001.
Notwithstanding the
foregoing, in the event that payment
of the Notes is accelerated prior to
July 15, 2001, all references to
"principal" or "principal amount" in
this Article 6, other than in Section
6.01, shall, as applicable, be deemed
to be references to "Accreted Value."
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default
has occurred and is continuing, the
Trustee shall exercise such of the
rights and powers vested in it by
this Indenture, and use the same
degree of care and skill in its
exercise, as a prudent man would
exercise or use under the circum
stances in the conduct of his own
affairs.
(b) Except during the
continuance of an Event of Default:
(i) the duties of the
Trustee shall be determined solely
by the express provisions of this
Indenture and the Trustee need
perform only those duties that are
specifically set forth in this
Indenture and no others, and no
implied covenants or obligations
shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad
faith on its part, the Trustee may
conclusively rely, as to the truth
of the statements and the
correctness of the opinions
expressed therein, upon
certificates or opinions furnished
to the Trustee and conforming to
the requirements of this
Indenture. However, the Trustee
shall examine the certificates and
opinions to determine whether or
not they conform to the
requirements of this Indenture.
(c) The Trustee may not be
relieved from liabilities for its own
negligent action, its own negligent
failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not
limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be
liable for any error of judgment
made in good faith by a
Responsible Officer, unless it is
proved that the Trustee was
negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall
not be liable with respect to any
action it takes or omits to take
in good faith in accordance with a
direction received by it pursuant
to Section 6.05 hereof.
(d) Whether or not therein
expressly so provided, every
provision of this Indenture that in
any way relates to the Trustee is
subject to paragraphs (a), (b), and
(c) of this Section.
(e) No provision of this
Indenture shall require the Trustee
to expend or risk its own funds or
incur any liability. The Trustee
shall be under no obligation to
exercise any of its rights and powers
under this Indenture at the request
of any Holders, unless such Holders
shall have offered to the Trustee
security and indemnity satisfactory
to it against any loss, liability or
expense.
(f) The Trustee shall not
be liable for interest on any money
received by it except as the Trustee
may agree in writing with the
Company. Money held in trust by the
Trustee need not be segregated from
other funds except to the extent
required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely
upon any document believed by it to
be genuine and to have been signed or
presented by the proper Person. The
Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Trustee
acts or refrains from acting, it may
require an Officers' Certificate or
an Opinion of Counsel or both. The
Trustee shall not be liable for any
action it takes or omits to take in
good faith in reliance on such
Officers' Certificate or Opinion of
Counsel. The Trustee may consult
with counsel and the written advice
of such counsel or any Opinion of
Counsel shall be full and complete
authorization and protection from
liability in respect of any action
taken, suffered or omitted by it
hereunder in good faith and in
reliance thereon.
(c) The Trustee may act
through its attorneys and agents and
shall not be responsible for the
misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not
be liable for any action it takes or
omits to take in good faith that it
believes to be authorized or within
the rights or powers conferred upon
it by this Indenture.
(e) Unless otherwise
specifically provided in this
Indenture, any demand, request,
direction or notice from the Company
or any Guarantor shall be sufficient
if signed by an Officer of the
Company or such Guarantor.
(f) 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.
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 the
Company, the Guarantors or any
Affiliate of the Company with the
same rights it would have if it were
not Trustee. However, in the event
that the Trustee acquires any
conflicting interest it must
eliminate such conflict within 90
days, apply to the SEC for permission
to continue as trustee or resign.
Any Agent may do the same with like
rights and duties. The Trustee is
also subject to Sections 7.10 and
7.11 hereof.
Section 7.04. Trustee's
Disclaimer.
The Trustee shall not be
responsible for and makes no
representation as to the validity or
adequacy of this Indenture, the Notes
or the Subsidiary Guarantees, it
shall not be accountable for the
Company's use of the proceeds from
the Notes or any money paid to the
Company or upon the Company's
direction under any provision of this
Indenture, it shall not be
responsible for the use or
application of any money received by
any Paying Agent other than the
Trustee, and it shall not be
responsible for any statement or
recital herein or any statement in
the Notes or any other document in
connection with the sale of the Notes
or pursuant to this Indenture other
than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of
Default occurs and is continuing and
if it is known to a Responsible
Officer of the Trustee, the Trustee
shall mail to Holders of Notes a
notice of the Default or Event of
Default within 90 days after it
occurs. Except in the case of a
Default or Event of Default in pay
ment of principal of, and premium,
interest or Liquidated Damages, if
any, on, any Note, the Trustee may
withhold the notice if and so long as
a committee of its Responsible
Officers in good faith determines
that withholding the notice is in the
interests of the Holders of the
Notes.
Section 7.06. Reports by Trustee
to Holders of the Notes.
Within 60 days after each
May 15 beginning with the May 15
following the date of this Indenture,
and for so long as Notes remain
outstanding, the Trustee shall mail
to the Holders of the Notes a brief
report dated as of such reporting
date that complies with TIA
Section 313(a) (but if no event
described in TIA Section 313(a) has
occurred within the twelve months
preceding the reporting date, no
report need be transmitted). The
Trustee also shall comply with TIA
Section 313(b)(2). The Trustee shall
also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at
the time of its mailing to the
Holders of Notes shall be mailed to
the Company and filed with the SEC
and each stock exchange on which the
Notes are listed in accordance with
TIA Section 313(d). The Company
shall promptly notify the Trustee
when the Notes are listed on any
stock exchange.
Section 7.07. Compensation and
Indemnity.
The Company and the
Guarantors shall pay to the Trustee
from time to time such compensation
for its acceptance of this Indenture
and services hereunder as the Company
and Trustee have separately agreed in
writing. The Trustee's compensation
shall not be limited by any law on
compensation of a trustee of an
express trust. The Company and the
Guarantors shall reimburse the
Trustee promptly upon request for all
reasonable disbursements, advances
and expenses incurred or made by it
in addition to the compensation for
its services. Such expenses shall
include the reasonable compensation,
disbursements and expenses of the
Trustee's agents and counsel.
The Company and the
Guarantors shall jointly and
severally indemnify the Trustee and
each of its officers, directors,
attorneys-in-fact and agents against
any and all losses, liabilities or
expenses incurred by it arising out
of or in connection with the
acceptance or administration of its
duties under this Indenture,
including the costs and expenses of
enforcing this Indenture against the
Company and the Guarantors (including
this Section 7.07) and defending
itself against any claim (whether
asserted by the Company, the
Guarantors or any Holder or any other
person) or liability in connection
with the exercise or performance of
any of its powers or duties
hereunder, except to the extent any
such loss, liability or expense may
be attributable to its negligence,
willful misconduct or bad faith. The
Trustee shall notify the Company and
the Guarantors promptly of any claim
for which it may seek indemnity.
Failure by the Trustee to so notify
the Company and the Guarantors shall
not relieve the Company and the
Guarantors of their obligations
hereunder. The Company and the
Guarantors shall defend the claim and
the Trustee shall cooperate in the
defense. The Trustee may have
separate counsel and the Company and
the Guarantors shall pay the
reasonable fees and expenses of such
counsel. The Company and the
Guarantors need not pay for any
settlement made without their
consent, which consent shall not be
unreasonably withheld.
The obligations of the
Company and the Guarantors under this
Section 7.07 shall survive the
satisfaction and discharge of this
Indenture.
To secure the Company's and
the Guarantors' payment obligations
in this Section, the Trustee shall
have a Lien prior to the Notes on all
money or property held or collected
by the Trustee, except that held in
trust to pay principal and interest
on particular Notes. Such Lien shall
survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs
expenses or renders services after an
Event of Default specified in
Section 6.01(8) or (9) hereof occurs,
the expenses and the compensation for
the services (including the fees and
expenses of its agents and counsel)
are intended to constitute expenses
of administration under any
Bankruptcy Law.
The Trustee shall comply
with the provisions of TIA
Section 313(b)(2) to the extent
applicable.
The Company's obligations
under this Section 7.07 and any lien
arising hereunder shall survive the
resignation or removal of the
Trustee, the discharge of the
Company's obligations pursuant to
Article 8 of this Indenture and any
rejection or termination of this
Indenture under Bankruptcy Law.
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.
The Trustee may resign in
writing at any time and be discharged
from the trust hereby created by so
notifying the Company. The Holders
of a majority in principal amount of
the then outstanding Notes may remove
the Trustee by so notifying the
Trustee and the Company in writing.
The Company may remove the Trustee
if:
(a) the Trustee fails to
comply with Section 7.10 hereof;
(b) the Trustee is adjudged
a bankrupt or an insolvent or an
order for relief is entered with
respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public
officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes
incapable of acting.
If the Trustee resigns or
is removed or if a vacancy exists in
the office of Trustee for any reason,
the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does
not take office within 60 days after
the retiring Trustee resigns or is
removed, the retiring Trustee, the
Company, or the Holders of at least
10% in principal amount of the then
outstanding Notes may petition any
court of competent jurisdiction for
the appointment of a successor
Trustee.
If the Trustee, after
written request by any Holder of a
Note who has been a Holder of a Note
for at least six months, fails to
comply with Section 7.10, such Holder
of a Note may petition any court of
competent jurisdiction for the
removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall
deliver a written acceptance of its
appointment to the retiring Trustee
and to the Company. Thereupon, the
resignation or removal of the
retiring Trustee shall become
effective, and the successor Trustee
shall have all the rights, powers and
duties of the Trustee under this
Indenture. The successor Trustee
shall mail a notice of its succession
to Holders of the Notes. The
retiring Trustee shall promptly
transfer all property held by it as
Trustee to the successor Trustee,
provided all sums owing to the
Trustee hereunder have been paid and
subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant
to this Section 7.08, the Company's
obligations under Section 7.07 hereof
shall continue for the benefit of the
retiring Trustee.
Section 7.09. Successor Trustee by
Merger, etc.
If the Trustee
consolidates, merges or converts
into, or transfers all or
substantially all of its corporate
trust business to, another
corporation, the successor corpora
tion without any further act shall be
the successor Trustee.
Section 7.10. Eligibility;
Disqualification.
There shall at all times be
a Trustee hereunder that is a
corporation organized and doing
business under the laws of the United
States of America or of any state
thereof that is authorized under such
laws to exercise corporate trustee
power, that is subject to supervision
or examination by federal or state
authorities and that has a combined
capital and surplus of at least $25
million as set forth in its most
recent published annual report of
condition.
This Indenture shall always
have a Trustee who satisfies the
requirements of TIA
Section 310(a)(1), (2) and (5). The
Trustee is subject to TIA
Section 310(b).
Section 7.11. Preferential
Collection of Claims
Against Company.
The Trustee is subject to
TIA Section 311(a), excluding any
creditor relationship listed in TIA
Section 311(b). A Trustee who has
resigned or been removed shall be
subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT
DEFEASANCE
Section 8.01. Option to Effect
Legal Defeasance or
Covenant Defeasance.
The Company may, at the
option of its Board of Directors
evidenced by a resolution set forth
in an Officers' Certificate, at any
time, elect to have either Section
8.02 or 8.03 hereof be applied to all
outstanding Notes upon compliance
with the conditions set forth below
in this Article 8.
Section 8.02. Legal Defeasance and
Discharge.
Upon the Company's exercise
under Section 8.01 hereof of the
option applicable to this Section
8.02, the Company and the Guarantors
shall, subject to the satisfaction of
the conditions set forth in Section
8.04 hereof, be deemed to have been
discharged from their obligations
with respect to all outstanding Notes
and Subsidiary Guarantees on the date
the conditions set forth below are
satisfied (hereinafter, "Legal
Defeasance"). For this purpose,
Legal Defeasance means that the
Company shall be deemed to have paid
and discharged the entire
Indebtedness represented by the
outstanding Notes, which shall
thereafter be deemed to be
"outstanding" only for the purposes
of Section 8.05 hereof and the other
Sections of this Indenture referred
to in (a) and (b) below, and to have
satisfied all its other obligations
under such Notes and this Indenture
(and the Trustee, on demand of and at
the expense of the Company, shall
execute proper instruments
acknowledging the same), except for
the following provisions which shall
survive until otherwise terminated or
discharged hereunder: (a) the rights
of Holders of outstanding Notes to
receive payments in respect of the
principal of and premium, interest
and Liquidated Damages, if any, on
such Notes when such payments are due
solely from the trust fund described
in Section 8.04 hereof, and as more
fully set forth in such Section,
(b) the Company's obligations with
respect to such Notes under Article 2
and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and
immunities of the Trustee hereunder
and the Company's obligations in
connection therewith and (d) this
Article 8. Subject to compliance
with this Article 8, the Company may
exercise its option under this
Section 8.02 notwithstanding the
prior exercise of its option under
Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise
under Section 8.01 hereof of the
option applicable to this Section
8.03, the Company and the Guarantors
shall, subject to the satisfaction of
the conditions set forth in Section
8.04 hereof, be released from their
obligations under the covenants
contained in Sections 4.03, 4.04,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.15, 4.16, 4.17, 4.18 and 5.01
hereof with respect to the
outstanding Notes on and after the
date the conditions set forth below
are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall
thereafter be deemed not
"outstanding" for the purposes of any
direction, waiver, consent or
declaration or act of Holders (and
the consequences of any thereof) in
connection with such covenants, but
shall continue to be deemed
"outstanding" for all other purposes
hereunder (it being understood that
such Notes shall not be deemed
outstanding for accounting purposes).
For this purpose, Covenant Defeasance
means that, with respect to the
outstanding Notes, the Company may
omit to comply with and shall have no
liability in respect of any term,
condition or limitation set forth in
any such covenant, whether directly
or indirectly, by reason of any
reference elsewhere herein to any
such covenant or by reason of any
reference in any such covenant to any
other provision herein or in any
other document and such omission to
comply shall not constitute a Default
or an Event of Default under Section
6.01 hereof, but, except as specified
above, the remainder of this
Indenture and such Notes shall be
unaffected thereby. In addition,
upon the Company's exercise under
Section 8.01 hereof of the option
applicable to this Section 8.03
hereof, subject to the satisfaction
of the conditions set forth in
Section 8.04 hereof, Sections 6.01(4)
through 6.01(7) hereof shall not
constitute Events of Default.
Section 8.04. Conditions to Legal
or Covenant Defeasance.
The following shall be the
conditions to the application of
either Section 8.02 or 8.03 hereof to
the outstanding Notes:
In order to exercise either
Legal Defeasance or Covenant
Defeasance:
(a) the Company
must irrevocably deposit with
the Trustee, in trust, for the
benefit of the Holders, cash in
United States dollars,
non-callable Government
Securities, or a combination
thereof, in such amounts as
will be sufficient, without
reinvestment, in the opinion of
a nationally recognized firm of
independent public accountants,
to pay the principal of and
premium, interest and
Liquidated Damages, if any, on
the outstanding Notes on the
stated maturity or on the
applicable redemption date, as
the case may be, and the
Company must specify whether
the Notes are being defeased to
maturity or to a particular
redemption date;
(b) in the case
of an election under Section
8.02 hereof, the Company shall
have delivered to the Trustee
an Opinion of Counsel in the
United States reasonably
acceptable to the Trustee
confirming that (A) the Company
has received from, or there has
been published by, the Internal
Revenue Service a ruling or (B)
since the date of this
Indenture, there has been a
change in the applicable
federal income tax law, in
either case to the effect that,
and based thereon such Opinion
of Counsel shall confirm that,
the Holders of the outstanding
Notes will not recognize
income, gain or loss for
federal income tax purposes as
a result of such Legal
Defeasance and will be subject
to federal income tax on the
same amounts, in the same
manner and at the same times as
would have been the case if
such Legal Defeasance had not
occurred;
(c) in the case
of an election under Section
8.03 hereof, the Company shall
have delivered to the Trustee
an Opinion of Counsel in the
United States reasonably
acceptable to the Trustee
confirming that the Holders of
the outstanding Notes will not
recognize income, gain or loss
for federal income tax purposes
as a result of such Covenant
Defeasance and will be subject
to federal income tax on the
same amounts, in the same
manner and at the same times as
would have been the case if
such Covenant Defeasance had
not occurred;
(d) no Default
or Event of Default shall have
occurred and be continuing on
the date of such deposit (other
than a Default or Event of
Default resulting from the
borrowing of funds to be
applied to such deposit) or
insofar as Sections 6.01(8) or
6.01(9) hereof is concerned, at
any time in the period ending
on the 91st day after the date
of deposit;
(e) such Legal
Defeasance or Covenant
Defeasance shall not result in
a breach or violation of, or
constitute a default under, any
material agreement or
instrument (other than this
Indenture) to which the Company
or any of its Subsidiaries is a
party or by which the Company
or any of its Subsidiaries is
bound;
(f) the Company
shall have delivered to the
Trustee an opinion of counsel
to the effect that after the
91st day following the deposit,
the trust funds will not be
subject to the effect of any
applicable bankruptcy,
insolvency, reorganization or
similar laws affecting
creditors' rights generally;
(g) the Company
shall have delivered to the
Trustee an Officers'
Certificate stating that the
deposit was not made by the
Company with the intent of
preferring the Holders of Notes
over the other creditors of the
Company with the intent of
defeating, hindering, delaying
or defrauding creditors of the
Company or others; and
(h) the Company
shall have delivered to the
Trustee an Officers'
Certificate and an Opinion of
Counsel, each stating that all
conditions precedent provided
for or relating to the Legal
Defeasance or the Covenant
Defeasance have been complied
with.
Section 8.05. Deposited Money and
Government Securities to
be Held in Trust; Other
Miscellaneous Provisions.
Subject to Section 8.06
hereof, all money and non-callable
Government Securities (including the
proceeds thereof) deposited with the
Trustee (or other qualifying trustee,
collectively for purposes of this
Section 8.05, the "Trustee") pursuant
to Section 8.04 hereof in respect of
the outstanding Notes shall be held
in trust and applied by the Trustee,
in accordance with the provisions of
such Notes and this Indenture, to the
payment, either directly or through
any Paying Agent (including the
Company acting as Paying Agent) as
the Trustee may determine, to the
Holders of such Notes of all sums due
and to become due thereon in respect
of principal, premium, interest and
Liquidated Damages, if any, but such
money need not be segregated from
other funds except to the extent
required by law.
The Company and the
Guarantors shall pay and indemnify
the Trustee against any tax, fee or
other charge imposed on or assessed
against the cash or non-callable
Government Securities deposited
pursuant to Section 8.04 hereof or
the principal and interest received
in respect thereof other than any
such tax, fee or other charge which
by law is for the account of the
Holders of the outstanding Notes.
Anything in this Article 8
to the contrary notwithstanding, the
Trustee shall deliver or pay to the
Company from time to time upon the
request of the Company any money or
non-callable Government Securities
held by it as provided in
Section 8.04 hereof which, in the
opinion of a nationally recognized
firm of independent public
accountants expressed in a written
certification thereof delivered to
the Trustee (which may be the opinion
delivered under Section 8.04(a)
hereof), are in excess of the amount
thereof that would then be required
to be deposited to effect an
equivalent Legal Defeasance or
Covenant Defeasance.
Section 8.06. Repayment to
Company.
Any money deposited with
the Trustee or any Paying Agent, or
then held by the Company, in trust
for the payment of the principal of,
premium or Liquidated Damages, if
any, or interest on any Note and
remaining unclaimed for two years
after such principal, and premium or
Liquidated Damages, if any, or
interest has become due and payable
shall be paid to the Company on its
request or (if then held by the
Company) shall be discharged from
such trust; and the Holder of such
Note shall thereafter, as a secured
creditor, look only to the Company
for payment thereof, and all
liability of the Trustee or such
Paying Agent with respect to such
trust money, and all liability of the
Company as trustee thereof, shall
thereupon cease; provided, however,
that the Trustee or such Paying
Agent, before being required to make
any such repayment, may at the
expense of the Company cause to be
published once, in the New York Times
and The Wall Street Journal (national
edition), notice that such money
remains unclaimed and that, after a
date specified therein, which shall
not be less than 30 days from the
date of such notification or
publication, any unclaimed balance of
such money then remaining will be
repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying
Agent is unable to apply any United
States dollars or non-callable
Government Securities in accordance
with Section 8.02 or 8.03 hereof, as
the case may be, by reason of any
order or judgment of any court or
governmental authority enjoining,
restraining or otherwise prohibiting
such application, then the
obligations of the Company and the
Guarantors under this Indenture, the
Notes and the Subsidiary Guarantees
shall be revived and reinstated as
though no deposit had occurred
pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee
or Paying Agent is permitted to apply
all such money in accordance with
Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that,
if the Company or any Guarantor makes
any payment of principal of, premium
or Liquidated Damages, if any, or
interest on any Note following the
reinstatement of its obligations, the
Company or such Guarantor shall be
subrogated to the rights of the
Holders of such Notes to receive such
payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of
Holders of Notes.
Notwithstanding Section
9.02 of this Indenture, the Company,
the Guarantors and the Trustee may
amend or supplement this Indenture or
the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity,
defect or inconsistency;
(b) to provide for
uncertificated Notes in addition
to or in place of Certificated
Notes;
(c) to provide for the
assumption of the Company's or any
Guarantor's obligations to the
Holders of the Notes in the case
of a merger or consolidation
pursuant to Article 5 or Article
11 hereof, as applicable;
(d) to provide for the
addition of a Guarantor pursuant
to Section 4.16 of this Indenture;
(e) to make any change that
would provide any additional
rights or benefits to the Holders
of the Notes or that does not
adversely affect the legal rights
hereunder of any Holder of the
Note; or
(f) to comply with
requirements of the SEC in order
to effect or maintain the
qualification of this Indenture
under the TIA.
Upon the request of the
Company accompanied by a resolution
of the Board of Directors of the
Company and each of the Guarantors,
as the case may be, authorizing the
execution of any such amended or
supplemental Indenture, and upon
receipt by the Trustee of the
documents described in Section 7.02
hereof, the Trustee shall join with
the Company and the Guarantors in the
execution of any amended or supple
mental Indenture authorized or
permitted by the terms of this
Indenture and to make any further
appropriate agreements and
stipulations that may be therein
contained, but the Trustee shall not
be obligated to enter into such
amended or supplemental Indenture
that affects its own rights, duties
or immunities under this Indenture or
otherwise.
Section 9.02. With Consent of
Holders of Notes.
Except as provided below in
this Section 9.02, the Company, the
Guarantors and the Trustee may amend
or supplement this Indenture
(including Sections 3.09, 4.10 and
4.15 hereof) and the Notes with the
consent of the Holders of at least a
majority in principal amount of the
Notes then outstanding (including
consents obtained in connection with
a tender offer or exchange offer for
the Notes), and, subject to Sections
6.04 and 6.07 hereof, any existing
Default or Event of Default (other
than a Default or Event of Default in
the payment of the principal of and
premium, interest and Liquidated
Damages, if any, on the Notes, except
a payment default resulting from an
acceleration that has been rescinded)
or compliance with any provision of
this Indenture or the Notes may be
waived with the consent of the
Holders of a majority in principal
amount of the then outstanding Notes
(including consents obtained in
connection with a tender offer or
exchange offer for the Notes).
Without the consent of at least 75%
in aggregate principal amount of the
Notes then outstanding (including
consents obtained in connection with
a tender offer or exchange offer for
such Notes), no waiver or amendment
to this Indenture may make any change
in the provisions of Article 10
hereof that adversely affects the
rights of any Holder of Notes.
Upon the request of the
Company accompanied by a resolution
of the Board of Directors of the
Company and each of the Guarantors,
as the case may be, authorizing the
execution of any such amended or
supplemental Indenture, and upon the
filing with the Trustee of evidence
satisfactory to the Trustee of the
consent of the Holders of Notes as
aforesaid, and upon receipt by the
Trustee of the documents described in
Section 7.02 hereof, the Trustee
shall join with the Company and the
Guarantors in the execution of such
amended or supplemental Indenture
unless such amended or supplemental
Indenture affects the Trustee's own
rights, duties or immunities under
this Indenture or otherwise, in which
case the Trustee may in its
discretion, but shall not be
obligated to, enter into such amended
or supplemental Indenture.
It shall not be necessary
for the consent of the Holders of
Notes under this Section 9.02 to
approve the particular form of any
proposed amendment or waiver, but it
shall be sufficient if such consent
approves the substance thereof.
After an amendment,
supplement or waiver under this
Section becomes effective, the
Company shall mail to the Holders of
Notes affected thereby a notice
briefly describing the amendment,
supplement or waiver. Any failure of
the Company to mail such notice, or
any defect therein, shall not,
however, in any way impair or affect
the validity of any such amended or
supplemental Indenture or waiver.
Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in
aggregate principal amount of the
Notes then outstanding may waive
compliance in a particular instance
by the Company or any Guarantor with
any provision of this Indenture or
the Notes. However, without the
consent of each Holder affected, an
amendment or waiver may not (with
respect to any Notes held by a non-
consenting Holder):
(a) reduce the
principal amount of Notes whose
Holders must consent to an
amendment, supplement or
waiver;
(b) reduce the
principal or Accreted Value
(including by way of a change
to the definition thereof) of
or change the fixed maturity of
any Note or alter the
provisions with respect to the
redemption of the Notes (except
as provided above with respect
to Sections 4.10 and 4.15
hereof);
(c) reduce the rate
of or change the time for
payment of interest or
Liquidated Damages on any Note;
(d) waive a Default
or Event of Default in the
payment of principal of or
premium interest or Liquidated
Damages on the Notes (except a
rescission of acceleration of
the Notes by the Holders of at
least a majority in aggregate
principal amount of the Notes
and a waiver of the payment
default that resulted from such
acceleration);
(e) make any Note
payable in money other than
that stated in the Notes;
(f) make any change
in the provisions of this
Indenture relating to waivers
of past Defaults or the rights
of Holders of Notes to receive
payments of principal of or
premium, interest or Liquidated
Damages on the Notes;
(g) waive a
redemption payment with respect
to any Note (except as provided
above with respect to Sections
4.10 and 4.15 hereof);
(h) make any change
in the foregoing amendment and
waiver provisions.
Section 9.03. Compliance with
Trust Indenture Act.
Every amendment or
supplement to this Indenture or the
Notes shall be set forth in a amended
or supplemental Indenture that
complies with the TIA as then in
effect.
Section 9.04. Revocation and
Effect of Consents.
Until an amendment,
supplement or waiver becomes
effective, a consent to it by a
Holder of a Note is a continuing
consent by the Holder of a Note and
every subsequent Holder of a Note or
portion of a Note that evidences the
same debt as the consenting Holder's
Note, even if notation of the consent
is not made on any Note. However,
any such Holder of a Note or
subsequent Holder of a Note may
revoke the consent as to its Note if
the Trustee receives written notice
of revocation before the date the
waiver, supplement or amendment
becomes effective. An amendment,
supplement or waiver becomes
effective in accordance with its
terms and thereafter binds every
Holder.
Section 9.05. Notation on or
Exchange of Notes.
The Trustee may place an
appropriate notation about an
amendment, supplement or waiver on
any Note thereafter authenticated.
The Company in exchange for all Notes
may issue and the Trustee shall
authenticate new Notes that reflect
the amendment, supplement or waiver.
Failure to make the
appropriate notation or issue a new
Note shall not affect the validity
and effect of such amendment,
supplement or waiver.
Section 9.06. Trustee to Sign
Amendments, etc.
The Trustee shall sign any
amended or supplemental Indenture
authorized pursuant to this Article
Nine if the amendment or supplement
does not adversely affect the rights,
duties, liabilities or immunities of
the Trustee. Neither the Company nor
any Guarantor may sign an amendment
or supplemental indenture until its
respective Board of Directors
approves it. In executing any
amended or supplemental indenture,
the Trustee shall be entitled to
receive and (subject to Section 7.01)
shall be fully protected in relying
upon, an Officer's Certificate and an
Opinion of Counsel stating that the
execution of such amended or
supplemental indenture is authorized
or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to
Subordinate.
The Company agrees, and
each Holder of Notes by accepting a
Note agrees, that the Subordinated
Obligations (as defined in Section
10.02) are subordinated in right of
payment, to the extent and in the
manner provided in this Article, to
the prior payment in full in cash of
all Obligations with respect to
Senior Debt of the Company (whether
outstanding on the date hereof or
hereafter created, incurred, assumed
or guaranteed), and that the
subordination is for the benefit of
the holders of Senior Debt.
Section 10.02. Certain Definitions.
"Bank Lenders" means the
lenders and creditors under the Bank
Credit Agreements.
"Insolvency or Liquidation
Proceeding" means, with respect to
any Person, (i) any insolvency or
bankruptcy or similar case or
proceeding, or any reorganization,
receivership, liquidation,
dissolution or winding up of such
person, whether voluntary or
involuntary, or (ii) any assignment
for the benefit of creditors or any
other marshalling of assets and
liabilities of such Person.
"Post-Petition Interest"
means, with respect to any
Indebtedness of any Person, all
interest accrued or accruing on such
Indebtedness after the commencement
of any Insolvency or Liquidation
Proceeding against such Person in
accordance with and at the contract
rate (including, without limitation,
any rate applicable upon default)
specified in the agreement or
instrument creating, evidencing or
governing such Indebtedness, whether
or not, pursuant to applicable law or
otherwise, the claim for such
interest is allowed as a claim in
such Insolvency or Liquidation
proceeding.
"Representative" means,
with respect to any Senior Debt, the
agent or other representative(s), if
any, of holders of such Senior Debt.
"Senior Bank Debt" means
all Obligations outstanding under the
Bank Credit Agreements.
"Stock Collateral" means
any Equity Interests in any
Subsidiary of the Company.
"Subordinated Obligations"
means all Indebtedness and other
Obligations of the Company or any of
its Subsidiaries, contingent or
otherwise, now or hereafter existing
under or in respect of the Notes
(pursuant to the terms thereof or any
other agreement or instrument
relating thereto) or this Indenture,
other than payments and other
distributions made from any
defeasance trust created pursuant to
Article 8 hereof, which obligations
shall not constitute Subordinated
Obligations.
Section 10.03. Liquidation;
Dissolution; Bankruptcy.
Upon any distribution of
cash, securities or other property to
creditors of the Company in a
liquidation or dissolution of the
Company or in a bankruptcy,
reorganization, insolvency,
receivership or similar proceeding
relating to the Company or its
property, in an assignment for the
benefit of creditors or any
marshalling of the Company's assets
and liabilities;
(1) holders of
Senior Debt of the Company
shall be entitled to receive
payment in full in cash of all
Obligations due in respect of
such Senior Debt before Holders
of the Notes shall be entitled
to receive any payment with
respect to the Notes (except
that Holders may receive (i)
securities that are
subordinated to at least the
same extent as the Notes to (a)
Senior Debt of the Company and
(b) any securities issued in
exchange for Senior Debt of the
Company and (ii) payments and
other distributions made from
any defeasance trust created
pursuant to Article 8 hereof);
and
(2) until all
Obligations with respect to
Senior Debt of the Company (as
provided in subsection (1)
above) are paid in full in
cash, any distribution to which
Holders of Notes would be
entitled but for this Article
shall be made to holders of
such Senior Debt (except that
Holders may receive (i)
securities that are
subordinated to at least the
same extent as the Notes to (a)
Senior Debt of the Company and
(b) any securities issued in
exchange for Senior Debt of the
Company and (ii) payments and
other distributions made from
any defeasance trust created
pursuant to Article 8 hereof),
as their interests may appear.
Section 10.04. Default on Senior
Debt; No Stock Collateral.
The Company may not make
any payment or distribution to the
Trustee or any Holder in respect of
Obligations with respect to the Notes
and may not acquire from the Trustee
or any Holder any Notes for cash or
property (other than (i) securities
that are subordinated to at least the
same extent as the Notes to (a)
Senior Debt of the Company and (b)
any securities issued in exchange for
Senior Debt of the Company and (ii)
payments and other distributions made
from any defeasance trust created
pursuant to Article 8 hereof) until
all principal and other Obligations
with respect to such Senior Debt have
been paid in full in cash if:
(i) a default in the
payment of the principal of or
premium or interest on Senior
Debt of the Company occurs and
in continuing; or
(ii) a default, other
than a payment default, under
the agreement, indenture, or
other document governing
Designated Senior Debt occurs
and is continuing that permits
holders of the Designated
Senior Debt as to which such
default relates to accelerate
its maturity and the Trustee
receives a notice of such
default (a "Payment Blockage
Notice") from the Senior Agent.
If the Trustee receives any
such Payment Blockage Notice,
no subsequent Payment Blockage
Notice shall be effective for
purposes of this Section unless
until at least 360 days shall
have elapsed since the
effectiveness of the
immediately prior Payment
Blockage Notice. No nonpayment
default that existed or was
continuing on the date of
delivery of any Payment
Blockage Notice to the Trustee
shall be, or made, the basis
for a subsequent Payment
Blockage Notice.
The Company may and shall
resume payments on and distributions
in respect of the Notes and it may
acquire them upon:
(1) in the case of a
default referred to in Section
10.04(i) hereof, the date upon
which such default is cured or
waived, or
(2) in the case of a
default referred to in Section
10.04(ii) hereof, the earlier
of the date upon which the
default is cured or waived or
179 days after the date on
which the applicable Payment
Blockage Notice is received,
unless the maturity of such
Senior Debt has been
accelerated,
if this Article otherwise permits the
payment, distribution or acquisition
at the time of such payment or
acquisition.
The Company agrees that it
will not, directly or indirectly,
transfer or pledge or grant any
security interests in any Stock
Collateral for any of the
Subordinated Obligations, and the
Trustee and the Holders agree that
neither the Trustee nor any Holder
will demand or accept any such Stock
Collateral, and should any transfer
or pledge of or security interest in
any Stock Collateral at any time be
made to or received by the Trustee or
any such Holder, such Stock
Collateral shall be held for the
benefit of the holders of Senior Debt
of the Company and, upon request,
delivered and transferred to the
Senior Agent for the benefit of the
holders of such Senior Debt.
Section 10.05. Acceleration of Notes.
If payment of the Notes is
accelerated because of an Event of
Default, the Company shall promptly
notify holders of Senior Debt of the
Company of the acceleration.
Section 10.06. When Distribution Must
Be Paid Over.
In the event that the
Trustee or any Holder of Notes
receives any payment of any
Obligations with respect to the Notes
at a time when a Responsible Officer
of the Trustee or such Holder, as
applicable, has actual knowledge that
such payment is prohibited by Section
10.04 hereof, such payment shall be
held by the Trustee or such Holder,
in trust for the benefit of, and
shall be paid forthwith over and
delivered, upon written request, to
the holders of Senior Debt of the
Company as their interests may appear
under the indenture or other
agreement (if any) pursuant to which
such Senior Debt may have been
issued, as their respective interests
may appear as set forth in a writing
provided to the Trustee and consented
to by all Representatives of the
holders of Senior Debt of the
Company, for application to the
payment of all Obligations with
respect to such Senior Debt remaining
unpaid to the extent necessary to pay
such Obligations in full in
accordance with their terms, after
giving affect to any concurrent
payment or distribution to or for the
holders of such Senior Debt.
With respect to the holders
of Senior Debt of the Company, the
Trustee undertakes to perform only
such obligations on the part of the
Trustee as are specifically set forth
in this Article 10, and no implied
covenants or obligations with respect
to the holders of such Senior Debt
shall be read into this Indenture
against the Trustee. The Trustee
shall not be deemed to owe any
fiduciary duty to the holders of
Senior Debt of the Company, and shall
not be liable to any such holders if
the Trustee shall pay over or
distribute to or on behalf of Holders
of Notes of the Company or any other
Person money or assets to which any
holders of such Senior Debt shall be
entitled by virtue of this Article
10, except if such payment is made at
a time when a Responsible Officer has
actual knowledge that the terms of
this Article 10 prohibit such
payment.
Section 10.07. Notice.
The Company shall promptly
notify the Trustee and the Paying
Agent in writing of any facts known
to the Company that would cause a
payment of any Obligations with
respect to the Notes to violate this
Article, but failure to give such
notice shall not affect the
subordination of the Notes to the
Senior Debt of the Company as
provided in this Article.
Section 10.08. Subrogation.
After all Senior Debt of
the Company is paid in full in cash
and until the Notes are paid in full,
Holders of Notes shall be subrogated
(equally and ratably with all other
Indebtedness pari passu with the
Notes) to the rights of holders of
such Senior Debt to receive
distributions applicable to such
Senior Debt to the extent that
distributions otherwise payable to
the Holders have been applied to the
payment of such Senior Debt. A
distribution made under this Article
to holders of Senior Debt of the
Company that otherwise would have
been made to Holders of Notes is not,
as between the Company and Holders of
Notes, a payment by the Company on
the Notes.
Section 10.09. Relative Rights.
This Article defines the
relative rights of Holders of Notes
and holders of Senior Debt of the
Company. Nothing in this Indenture
shall:
(1) impair, as
between the Company and Holders
of Notes, the obligation of the
Company, which is absolute and
unconditional, to pay principal
of and premium, interest and
Liquidated Damages, if any, on
the Notes in accordance with
their terms;
(2) affect the
relative rights of Holders of
Notes and creditors of the
Company other than their rights
in relation to holders of such
Senior Debt; or
(3) prevent the
Trustee or any Holder of Notes
from exercising its available
remedies upon a Default or
Event of Default, subject to
the rights of holders of owners
of such Senior Debt to receive
distributions and payments
otherwise payable to Holders of
Notes.
If the Company fails
because of this Article to pay
principal of or premium, interest or
Liquidated Damages, if any, on a Note
on the due date, the failure is still
a Default or Event of Default.
Section 10.10. Subordination May Not
Be Impaired by Company.
(a) No right of any holder
of Senior Debt of the Company to
enforce the subordination of the
Indebtedness evidenced by the Notes
shall be impaired by any act or
failure to act by the Company or any
Holder or the failure of the Company
or any Holder to comply with this
Indenture.
(b) Without in any way
limiting Section 10.10(a), the
holders of any Senior Debt of the
Company may, at any time and from
time to time, without the consent of
or notice to any Holders, without
incurring any liabilities to any
Holder and without impairing or
releasing the subordination and other
benefits provided in this Indenture
or the Holders' obligations to the
holders of such Senior Debt, even if
any Holder's right of reimbursement
or subrogation or other right or
remedy is affected, impaired or
extinguished thereby, but subject to
the proviso contained in the first
sentence, and to the second sentence,
of the definition of "Senior Debt,"
do any one or more of the following:
(i) amend, renew, exchange, extend,
modify, increase or supplement in any
manner such Senior Debt or any
instrument evidencing or guaranteeing
or securing such Senior Debt or any
agreement under which such Senior
Debt is outstanding (including, but
not limited to, changing the manner,
place or terms of payment or changing
or extending the time of payment of,
or renewing, exchanging, amending,
increasing, releasing, terminating or
altering, (1) the terms of such
Senior Debt, (2) any security for, or
any guarantee of, such Senior Debt,
(3) any liability of any obligor on
such Senior Debt (including any
guarantor) or any liability incurred
in respect of such Senior Debt); (ii)
sell, exchange, release, surrender,
realize upon, enforce or otherwise
deal with in any manner and in any
order any property pledged, mortgaged
or otherwise securing such Senior
Debt or any liability of any obligor
thereon, to such holder, or any
liability incurred in respect
thereof; (iii) settle or compromise
any such Senior Debt or any other
liability of any obligor of such
Senior Debt to such holder or any
security therefor or any liability
incurred in respect thereof and apply
any sums by whomsoever paid and
however realized to any liability
(including, without limitation,
payment of any Senior Debt) in any
manner or order; and (iv) release,
terminate or otherwise cancel, or
fail to take or to record or
otherwise perfect, for any reason or
for no reason, any lien or security
interest securing such Senior Debt by
whomsoever granted, exercise or delay
in or refrain from exercising any
right or remedy against any obligor
or any guarantor or any other Person,
elect any remedy and otherwise deal
freely with any obligor and any
security for such Senior Debt or any
liability of any obligor to the
holders of such Senior Debt or any
liability incurred in respect to such
Senior Debt.
Section 10.11. Distribution or Notice
to Representative.
Whenever a distribution is
to be made or a notice given to
holders of Senior Debt of the
Company, the distribution may be made
and the notice given to their
Representative.
Upon any payment or
distribution of assets of the Company
referred to in this Article 10, the
Trustee and the Holders of Notes
shall be entitled to rely upon any
order or decree made by any court of
competent jurisdiction or upon any
certificate of such Representative or
of the liquidating trustee or agent
or other Person making any
distribution to the Trustee or to the
Holders of Notes for the purpose of
ascertaining the Persons entitled to
participate in such distribution, the
holders of the Senior Debt and other
Indebtedness of the Company, the
amount thereof or payable thereon,
the amount or amounts paid or
distributed thereon and all other
facts pertinent thereto or to this
Article 10.
Section 10.12. Rights of Trustee and
Paying Agent.
Neither the Trustee nor any
Paying Agent shall at any time be
charged with the knowledge of the
existence of any facts that would
prohibit the making of any payment to
or by the Trustee or Paying Agent
under this Article 10, unless and
until the Trustee or Paying Agent
shall have received written notice
thereof from the Company, the Senior
Agent, one or more holders of Senior
Debt of the Company or a
Representative of any holders of
Senior Debt of the Company; and,
prior to the receipt of any such
written notice, the Trustee or Paying
Agent shall be entitled to assume
conclusively that no such facts
exist. The Trustee shall be entitled
to rely on the delivery to it of
written notice by a Person
representing itself to be a holder of
Senior Debt (or a Representative
thereof) to establish that such
notice has been given. In the event
that the Trustee or Paying Agent
determines in good faith that further
evidence is required with respect to
the right of any Person as a holder
of Senior Debt to participate in any
payment or distribution pursuant to
this Article 10, the Trustee or
Paying Agent may request such Person
to furnish evidence to the reasonable
satisfaction of the Trustee or Paying
Agent as to the amount of Senior Debt
held by such Person, the extent to
which such Person is entitled to
participate in such payment or
distribution and any other facts
pertinent to the rights of such
Person under this Article 10, and if
such evidence is not furnished, the
Trustee or Paying Agent may defer any
payment to such Person pending
judicial determination as to the
right of such Person to receive such
payment. Only the Company, a
Representative or a holder of Senior
Debt of the Company that has no
Representative may give the notice.
Nothing in this Article 10 shall
impair the claims of, or payments to,
the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its
individual or any other capacity may
hold Senior Debt with the same rights
it would have if it were not Trustee.
Any Agent may do the same with like
rights.
Section 10.13. Authorization to
Effect Subordination.
Each Holder of Notes by the
Holder's acceptance thereof
authorizes and directs the Trustee on
the Holder's behalf to take such
action as may be necessary or
appropriate to effectuate the
subordination as provided in this
Article 10, and appoints the Trustee
to act as the Holder's attorney-in-
fact for any and all such purposes.
If the Trustee does not file a proper
proof of claim or proof of debt in
the form required in any proceeding
referred to in Section 6.09 hereof at
least 30 days before the expiration
of the time to file such claim, the
Senior Agent is hereby authorized to
file an appropriate claim for and on
behalf of the Holders of the Notes.
Section 10.14. Payment.
For all purposes of this
Article 10, a "payment or
distribution on account of
Subordinated Obligations" shall
include, without limitation, any
direct or indirect payment or
distribution on account of the
purchase, prepayment, redemption,
retirement, defeasance (other than
payments and other distributions made
from any defeasance trust created
pursuant to Article 8 hereof) or
acquisition of any Note, any recovery
by the exercise of any right of set-
off, any direct or indirect payment
of principal, premium or interest
with respect to or in connection with
any mandatory or optional redemption
or purchase provisions, any direct or
indirect payment or distribution
payable or distributable by reason of
any other Indebtedness or Obligation
being subordinated or any
Subordinated Obligations, and any
direct or indirect payment or
recovery on any claim (including
claims for Liquidated Damages)
relating to or arising out of this
Indenture, any Note or the issuance
of the Notes.
Section 10.15. Defeasance of this
Article 10.
The subordination of the
Notes provided by this Article 10 is
expressly made subject to the
provisions for defeasance in Article
8 hereof and, anything herein to the
contrary notwithstanding, upon the
effectiveness of any such defeasance
(provided that any deposit pursuant
to Article 8 was not prohibited by
this Article 10 or any other
instrument or agreement governing any
Senior Debt of the Company and did
not constitute a default under any
such instrument or agreement), the
Notes then outstanding shall
thereupon cease to be subordinated
pursuant to this Article 10;
provided, however, that if the
Company's obligations under this
Indenture and the Notes are revived
and reinstated in accordance with the
terms of Section 8.07 hereof, the
subordination provisions of this
Article 10 shall be revived and
reinstated with respect to all
Subordinated Obligations.
Section 10.16. No Claims Against
Subsidiaries.
The Company and the Holders
acknowledge and agree as follows:
(a) the Notes are an obligation of
the Company only, and the Holders
have and will have no claim, right or
demand against any Subsidiary of the
Company or any assets or properties
of any Subsidiary of the Company on
or in respect of the Notes except to
the extent that any Subsidiary is a
Guarantor; (b) the Company is, and is
capitalized as, a separate legal
entity such that any claim, right or
demand by the Holders with respect to
the assets and properties of any
Subsidiary of the Company would be
solely as a creditor of a direct or
indirect shareholder of such
Subsidiary except to the extent that
any Subsidiary is a Guarantor, and
that such arrangement has been relied
upon by and is for the benefit of
holders of Senior Debt of the
Company; (c) the Company's direct and
indirect Subsidiaries have no
obligation to pay dividends to or to
make investments in the Company, for
the purpose of funding payment
obligations of the Company to the
Holders or otherwise; (d) the Bank
Credit Agreements permit Subsidiaries
of the Company to pay dividends to or
to make investments in the Company
only in limited amounts and under
specified circumstances; and (e) the
Bank Credit Agreements restrict the
amendment of this Indenture and the
Notes without the consent of certain
of the Bank Lenders.
Section 10.17. Amendments.
The provisions of this
Article 10 shall not be amended or
modified without the written consent
of the holders of all Senior Debt of
the Company.
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01. Subsidiary
Guarantees.
Each of the Guarantors
hereby, jointly and severally,
unconditionally guarantee to each
Holder of a Note authenticated and
delivered by the Trustee and to the
Trustee and its successors and
assigns, irrespective of the validity
and enforceability of this Indenture,
the Notes or the obligations of the
Company hereunder or thereunder,
that: (a) the principal of and
premium, interest and Liquidated
Damages, if any, on the Notes will be
promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest
on the overdue principal of, premium
and interest and Liquidated Damages
on the Notes, if any, if lawful, and
all other obligations of the Company
to the Holders or the Trustee
hereunder or thereunder will be
promptly paid in full or performed,
all in accordance with the terms
hereof and thereof; and (b) in case
of any extension of time of payment
or renewal of any Notes or any of
such other obligations, that same
will be promptly paid in full when
due or performed in accordance with
the terms of the extension or
renewal, whether at stated maturity,
by acceleration or otherwise.
Failing payment when due of any
amount so guaranteed or any perform
ance so guaranteed for whatever
reason, the Guarantors will be
jointly and severally obligated to
pay the same immediately. The
Guarantors hereby agree that their
obligations hereunder shall be
unconditional, irrespective of the
validity, regularity or
enforceability of the Notes or this
Indenture, the absence of any action
to enforce the same, any waiver or
consent by any Holder of the Notes
with respect to any provisions hereof
or thereof, the recovery of any
judgment against the Company, any
action to enforce the same or any
other circumstance which might
otherwise constitute a legal or
equitable discharge or defense of a
guarantor. Each Guarantor hereby
waives diligence, presentment, demand
of payment, filing of claims with a
court in the event of insolvency or
bankruptcy of the Company, any right
to require a proceeding first against
the Company, protest, notice and all
demands whatsoever and covenant that
this Subsidiary Guarantee will not be
discharged except by complete
performance of the obligations
contained in the Notes and this
Indenture. If any Holder of Notes or
the Trustee is required by any court
or otherwise to return to the Company
or Guarantors, or any Custodian,
trustee, liquidator or other similar
official acting in relation to either
the Company or Guarantors, any amount
paid by either to the Trustee or such
Holder, this Subsidiary Guarantee, to
the extent theretofore discharged,
shall be reinstated in full force and
effect. Each Guarantor agrees that
it shall not be entitled to any right
of subrogation in relation to the
Holders of Notes in respect of any
obligations guaranteed hereby until
payment in full of all obligations
guaranteed hereby. Each Guarantor
further agrees that, as between the
Guarantors, on the one hand, and the
Holders and the Trustee, on the other
hand, (x) the maturity of the
obligations guaranteed hereby may be
accelerated as provided in Article 6
for the purposes of this Subsidiary
Guarantee, notwithstanding any stay,
injunction or other prohibition
preventing such acceleration in
respect of the obligations guaranteed
hereby and (y) in the event of any
declaration of acceleration of such
obligations as provided in Article 6,
such obligations (whether or not due
and payable) shall forthwith become
due and payable by the Guarantors for
the purpose of this Subsidiary
Guarantee. The Guarantors shall have
the right to seek contribution from
any non-paying Guarantor so long as
the exercise of such right does not
impair the rights of the Holders
under the Subsidiary Guarantees.
Section 11.02. Execution and
Delivery of Subsidiary
Guarantees.
To evidence its Subsidiary
Guarantee set forth in Section 11.01,
each Guarantor hereby agrees that a
notation of such Subsidiary Guarantee
substantially in the form of
Exhibit D (executed by the manual or
facsimile signature of one of its
Officers) shall be endorsed by an
officer of such Guarantor on each
Note authenticated and delivered by
the Trustee and that this Indenture
shall be executed on behalf of such
Guarantor by its President or one of
its Vice Presidents and attested to
by an Officer.
Each Guarantor hereby
agrees that its Subsidiary Guarantee
set forth in Section 11.01 shall
remain in full force and effect
notwithstanding any failure to
endorse on each Note a notation of
such Subsidiary Guarantee.
If an Officer whose
signature is on this Indenture or on
the Subsidiary Guarantee no longer
holds that office at the time the
Trustee authenticates the Note on
which a Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee
shall be valid nevertheless.
The delivery of any Note by
the Trustee, after the authentication
thereof hereunder, shall constitute
due delivery of the Subsidiary
Guarantee set forth in this Indenture
on behalf of the Guarantors.
Section 11.03. Guarantors May
Consolidate, etc., on
Certain Terms.
(a) Except as set forth in
Articles 4 and 5, nothing contained
in this Indenture or in any of the
Notes shall prevent any consolidation
or merger of a Guarantor with or into
the Company or shall prevent any sale
or conveyance of the property of a
Guarantor as an entirety or
substantially as an entirety, to the
Company.
(b) Subject to the
provisions set forth in Articles 4
and 5, no Guarantor shall consolidate
with or merge with or into (whether
or not such Guarantor is the
surviving Person) another
corporation, Person or entity,
whether or not affiliated with such
Guarantor, unless (i) subject to the
provisions of the following
paragraph, the Person formed by or
surviving any such consolidation or
merger (if other than such Guarantor)
assumes all of the Obligations of
such Guarantor, pursuant to a
supplemental indenture in form and
substance reasonably satisfactory to
the Trustee, under the Notes and this
Indenture; (ii) immediately after
giving effect to such transaction, no
Default or Event of Default exists;
(iii) such Guarantor, or any Person
formed by or surviving any such
consolidation or merger, would have
Consolidated Net Worth (immediately
after giving effect to such
transaction) equal to or greater than
the Consolidated Net Worth of such
Guarantor immediately preceding the
transaction; and (iv) the Company
would be permitted by virtue of the
Company's pro forma Fixed Charge
Coverage Ratio, immediately after
giving effect to such transaction, to
incur at least $1.00 of additional
Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth
in Section 4.09 hereof; provided,
however, that this provision shall
not prohibit any merger or
consolidation among the Company or
one or more Wholly Owned Restricted
Subsidiaries that are Guarantors.
Subject to Section 11.04 of this
Indenture, in the event of a sale or
other disposition of all of the
assets of any Guarantor, by way of
merger, consolidation or otherwise,
or a sale or other disposition of all
of the Capital Stock of any
Guarantor, such Guarantor (in the
event of a sale or other disposition,
by way of such a merger,
consolidation or otherwise, of all of
the Capital Stock of such Guarantor)
or the corporation acquiring the
property (in the event of a sale or
other disposition of all of the
assets of such Guarantor) will be
released and relieved of any
Obligations under its Subsidiary
Guarantee; provided that such sale
would be permitted under Section 4.10
hereof and the Net Proceeds of such
sale or other disposition are applied
in accordance with the applicable
provisions in Section 4.10 hereof.
Section 11.04. Releases Following
Sale of Assets.
In the event (i) of a sale
or other disposition of all of the
assets of any Guarantor, by way of
merger, consolidation or otherwise,
or a sale or other disposition of all
of the Capital Stock of any Guarantor
or (ii) that a Guarantor is properly
designated by the Board of Directors
of the Company as an Unrestricted
Subsidiary in accordance with the
provisions of this Indenture, then
such Guarantor (in the event of a
sale or other disposition, by way of
such a merger, consolidation or
otherwise, of all of the Capital
Stock of such Guarantor or the proper
designation of such Guarantor as an
Unrestricted Subsidiary in accordance
with the provisions of this
Indenture) or the corporation
acquiring the property (in the event
of a sale or other disposition of all
of the assets of such Guarantor),
shall be released and relieved of its
obligations under its Subsidiary
Guarantee or Section 11.03 hereof, as
the case may be; provided that in the
event of an Asset Sale, such Asset
Sale would be permitted under Section
4.10 hereof and the Net Proceeds from
such sale or other disposition are
treated in accordance with the
provisions of Section 4.10 hereof.
Upon delivery by the Company to the
Trustee of an Officers' Certificate
and an Opinion of Counsel to the
effect that such sale or other
disposition was made by the Company
in accordance with the provisions of
this Indenture, including without
limitation Section 4.10 hereof, the
Trustee shall execute any documents
reasonably required in order to
evidence the release of any Guarantor
from its obligations under its
Subsidiary Guarantee. Any Guarantor
not released from its obligations
under its Subsidiary Guarantee shall
remain liable for the full amount of
principal of, and premium, interest
and Liquidated Damages, if any, on,
the Notes and for the other
obligations of any Guarantor under
this Indenture as provided in this
Article 11. The release of any
Guarantor pursuant to this Section
shall be effective whether or not
such release shall be noted on any
Note then outstanding or thereafter
authenticated and delivered. Upon
release of any Guarantor, the Company
shall mail notice of such release to
the Holders of the Notes.
Section 11.05. Limitation on
Guarantor Liability.
For purposes hereof, each
Guarantor's liability will be that
amount from time to time equal to the
aggregate liability of such Guarantor
thereunder, but shall be limited to
the lesser of (i) the aggregate
amount of the Obligations of the
Company under the Notes and this
Indenture and (ii) the amount, if
any, which would not have (A)
rendered such Guarantor "insolvent"
(as such term is defined in the
federal Bankruptcy Law and in the
Debtor and Creditor Law of the State
of New York) or (B) left it with
unreasonably small capital at the
time its Guarantee of the Notes was
entered into, after giving effect to
the incurrence of existing
Indebtedness immediately prior to
such time; provided that it shall be
a presumption in any lawsuit or other
proceeding in which such Guarantor is
a party that the amount guaranteed
pursuant to its Guarantee is the
amount set forth in clause (i) above
unless any creditor, or
representative of creditors of such
Guarantor, or debtor in possession or
trustee in bankruptcy of such
Guarantor, otherwise proves in such a
lawsuit that the aggregate liability
of such Guarantor is limited to the
amount set forth in clause (ii). In
making any determination as to the
solvency or sufficiency of capital of
a Guarantor in accordance with the
previous sentence, the right of such
Guarantor to contribution from other
Guarantors and any other rights such
Guarantor may have, contractual or
otherwise, shall be taken into
account.
Section 11.06. Subordination of
Subsidiary Guarantee.
The obligations of each
Guarantor under its Subsidiary
Guarantee pursuant to this Article 11
shall be junior and subordinated to
the Senior Debt of such Guarantor on
the same basis as the Notes are
junior and subordinated to Senior
Debt of the Company. For the
purposes of the foregoing sentence,
the Trustee and the Holders shall
have the right to receive and/or
retain payments by any of the
Guarantors in respect of any
Subsidiary Guarantee only at such
times as they may receive and/or
retain payments in respect of the
Notes pursuant to this Indenture,
including Article 10 hereof.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act
Controls.
If any provision of this
Indenture limits, qualifies or
conflicts with the duties imposed by
TIA Section318(c), the duties imposed
by the TIA shall control.
Section 12.02. Notices.
Any notice or communication
by the Company, the Guarantors or the
Trustee to the others is duly given
if in writing and delivered in Person
or mailed by first class mail (regis
tered or certified, return receipt
requested), telex, telecopier or
overnight air courier guaranteeing
next day delivery, to the others'
address:
If to the Company or any
Guarantors:
American Skiing
Company
Sunday River Access
Road
Bethel, ME 04217
Telecopier No.: (207)
824-2111
Attention: Thomas M.
Richardson
With a copy to:
Pierce Atwood
One Monument Square
Portland, ME 04101-
1110
Telecopier No.: (207)
773-3419
Attention:
Christopher E. Howard
If to the Trustee:
United States Trust
Company of New York
114 West 47th Street
New York, NY 10036
Telecopier No.: (212)
852-1625
Attention: Corporate
Trust Administration
The Company, any Guarantor
or the Trustee, by notice to the
others may designate additional or
different addresses for subsequent
notices or communications.
All notices and
communications (other than those sent
to Holders) shall be deemed to have
been duly given: at the time
delivered by hand, if personally
delivered; five Business Days after
being deposited in the mail, postage
prepaid, if mailed; when answered
back, if telexed; when receipt
acknowledged, if telecopied; and the
next Business Day after timely
delivery to the courier, if sent by
overnight air courier guaranteeing
next day delivery.
Any notice or communication
to a Holder shall be mailed by first
class mail, certified or registered,
return receipt requested, or by
overnight air courier guaranteeing
next day delivery to its address
shown on the register kept by the
Registrar. 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. Failure to mail
a notice or communication to a Holder
or any defect in it shall not affect
its sufficiency with respect to other
Holders.
If a notice or
communication is mailed in the manner
provided above within the time
prescribed, it is duly given, whether
or not the addressee receives it.
If the Company mails a
notice or communication to Holders,
it shall mail a copy to the Trustee
and each Agent at the same time.
Section 12.03. Communication by
Holders of Notes with
Other Holders of Notes.
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 Guarantors,
the Trustee, the Registrar and anyone
else shall have the protection of TIA
Section 312(c).
Section 12.04. Certificate and
Opinion as to Conditions
Precedent.
Upon any request or
application by the Company or any
Guarantor to the Trustee to take any
action under this Indenture, the
Company or such Guarantor, as the
case may be, shall furnish to the
Trustee:
(a) an Officers' Certificate
in form and substance reasonably
satisfactory to the Trustee (which
shall include the statements set
forth in Section 12.05 hereof)
stating that, in the opinion of
the signers, all conditions
precedent and covenants, if any,
provided for in this Indenture
relating to the proposed action
have been satisfied; and
(b) an Opinion of Counsel in
form and substance reasonably
satisfactory to the Trustee (which
shall include the statements set
forth in Section 12.05 hereof)
stating that, in the opinion of
such counsel, all such conditions
precedent and covenants have been
satisfied.
Section 12.05. Statements Required
in Certificate or
Opinion.
Each certificate or opinion
with respect to compliance with a
condition or covenant provided for in
this Indenture (other than a
certificate provided pursuant to TIA
Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e)
and shall include:
(a) a statement that the
Person making such certificate or
opinion has read such covenant or
condition;
(b) a brief statement as to
the nature and scope of the
examination or investigation upon
which the statements or opinions
contained in such certificate or
opinion are based;
(c) a statement that, in the
opinion of such Person, he or she
has made such examination or
investigation as is necessary to
enable him to express an informed
opinion as to whether or not such
covenant or condition has been
satisfied; and
(d) a statement as to
whether or not, in the opinion of
such Person, such condition or
covenant has been satisfied.
Section 12.06. Rules by Trustee and
Agents.
The Trustee may make
reasonable rules for action by or at
a meeting of Holders. The Registrar
or Paying Agent may make reasonable
rules and set reasonable requirements
for its functions.
Section 12.07. "Trustee" to Include
Paying Agent.
In case at any time any
Paying Agent other than the Trustee
shall have been appointed by the
Company and be then acting hereunder,
the term "Trustee" as used in this
Article 11 shall in such case (unless
the context shall otherwise require)
be construed as extending to and
including such Paying Agent within
its meaning as fully and for all
intents and purposes as if such
Paying Agent were named in this
Article 11 in place of the Trustee.
Section 12.08. No Personal
Liability of Directors,
Officers, Employees or
Shareholders.
No director, officer,
employee, incorporator or shareholder
of the Company, and no director,
officer, employee or incorporator of
any Guarantor, as such, shall have
any liability for any Obligations of
the Company under the Notes or this
Indenture or of any Guarantor under
its Subsidiary Guarantee or this
Indenture or for any claim based on,
in respect of, or by reason of, such
Obligations or their creation. Each
Holder of Notes by accepting a Note
waives and releases all such
liability. The waiver and release are
part of the consideration for
issuance of the Notes. Such waiver
may not be effective to waive
liabilities under the federal
securities laws and it is the view of
the SEC that such a waiver is against
public policy.
Section 12.09. Governing Law.
THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE
NOTES AND THE SUBSIDIARY GUARANTEES.
Section 12.10. No Adverse
Interpretation of Other
Agreements.
This Indenture may not be
used to interpret any other
indenture, loan or debt agreement of
the Company or its Subsidiaries or of
any other Person. Any such
indenture, loan or debt agreement may
not be used to interpret this
Indenture and the Subsidiary
Guarantees.
Section 12.11. Successors.
All agreements of the
Company and each Guarantor in this
Indenture and the Notes shall bind
its respective successors. All
agreements of the Trustee in this
Indenture shall bind its successors.
Section 12.12. Severability.
In case any provision in
this Indenture or in the Notes shall
be invalid, illegal or unenforceable,
the validity, legality and
enforceability of the remaining
provisions shall not in any way be
affected or impaired thereby.
Section 12.13. Counterpart
Originals.
The parties may sign any
number of copies of this Indenture.
Each signed copy shall be an
original, but all of them together
represent the same agreement.
Section 12.14. 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 of this
Indenture and shall in no way modify
or restrict any of the terms or
provisions hereof.
[Signatures on following page]
<PAGE>
SIGNATURES
Dated as of June 28, 1996
AMERICAN SKIING
COMPANY
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER SKIWAY
CORPORATION
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER LTD.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
PERFECT TURN, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
LBO HOLDING, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUNDAY RIVER
TRANSPORTATION, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUGARBUSH RESORT
HOLDINGS, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUGARBUSH LEASING
COMPANY
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUGARBUSH RESTAURANTS,
INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
CRANMORE, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
MOUNTAIN WASTEWATER
TREATMENT, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
LBO HOTEL CO.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
S-K-I LIMITED
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
KILLINGTON LTD.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
MOUNT SNOW LTD.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
WATERVILLE VALLEY SKI
AREA, LTD.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUGARLOAF MOUNTAIN
CORPORATION
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
KILLINGTON
RESTAURANTS, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
DOVER RESTAURANTS,
INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
RESORTS TECHNOLOGIES,
INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
RESORT SOFTWARE
SERVICES, INC.
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
MOUNTAINSIDE
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
SUGARTECH
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
DEERFIELD OPERATING
COMPANY
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
PICO SKI AREA
MANAGEMENT COMPANY
Attest:/s/ Christopher E. Howard By:
/s/ Leslie B. Otten
Name:
Title:
Dated as of June 28, 1996
UNITED STATES TRUST COMPANY
OF NEW YORK
Trustee
Attest: By:/s/ United States Trust
Company of New York
Name:
Title:
<PAGE>
Exhibit A
(Face of Note)
13 3/4% Series A Subordinated
Discount Notes due 2007
CUSIP
______
No. $__________
AMERICAN SKIING COMPANY
promises to pay to
________________________
or registered assigns, the
principal sum of ___________________
Dollars on January 15, 2007.
Interest Payment Dates: January
15 and July 15
Record Dates: January 1 and
July 1
Dated: _______________
AMERICAN SKIING COMPANY
By:______________________________
Name:
Title:
This is one of the Notes
referred to in the
within-mentioned Indenture:
UNITED STATES TRUST COMPANY OF
NEW YORK
as Trustee
By:__________________________________
<PAGE>
(Back of Note)
13 3/4% Series A Subordinated
Discount Notes due 2007
[Unless and until it is
exchanged in whole or in part for
Notes in definitive form, this Note
may not be transferred except as a
whole by the Depositary to a nominee
of the Depositary or by a nominee of
the Depositary to the Depositary or
another nominee of the Depositary or
by the Depositary or any such nominee
to a successor Depositary or a
nominee of such successor Depositary.
Unless this certificate is presented
by an authorized representative of
The Depository Trust Company (55
Water Street, New York, New York)
("DTC"), to the issuer or its agent
for registration of transfer,
exchange or payment, and any
certificate issued is registered in
the name of Cede & Co. or such other
name as may be requested by an
authorized representative of DTC (and
any payment is made to Cede & Co. or
such other entity as may be requested
by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede
& Co., has an interest herein.](F1)
[FN]
F1 To be included only if the Note is
issued in Global form.
"THE SECURITY (OR ITS
PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF
THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. THE
HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY
(1) (a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A
TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR
(d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE
SECURITY EVIDENCE HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."
Capitalized terms used
herein shall have the meanings
assigned to them in the Indenture
referred to below unless otherwise
indicated.
1. Interest. American
Skiing Company, a Maine corporation
(the "Company"), promises to pay
interest on the Notes at a rate of 13
3/4% per annum commencing July 15,
2001 and shall pay the Liquidated
Damages payable pursuant to Section 5
of the Registration Rights Agreement
referred to below. The Company will
pay interest and Liquidated Damages
semi-annually on January 15 and July
15 of each year, or if any such day
is not a Business Day, on the next
succeeding Business Day (each an
"Interest Payment Date"). 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 15, 2001;
provided that the first Interest
Payment Date for the purposes of the
payment of Liquidated Damages shall
be January 15, 1997 and the first
Interest Payment Date for the
purposes of the payment of interest
shall be January 15, 2002. The
Company shall pay interest (including
Post-Petition Interest in any
proceeding under any Bankruptcy Law)
on overdue principal (including
overdue payments of the Accreted
Value of the Notes) and premium, if
any, from time to time on demand at a
rate that is 1% per annum in excess
of the rate then in effect; it shall
pay interest (including Post-Petition
Interest in any proceeding under any
Bankruptcy Law) on overdue
installments of interest and
Liquidated Damages (without regard to
any applicable grace periods) from
time to time on demand at the same
rate to the extent lawful. Interest
will be computed on the basis of a
360-day year consisting of twelve
30-day months.
2. Method of Payment. The
Company will pay interest and
Liquidated Damages, if any, on the
Notes (except defaulted interest and
Liquidated Damages) to the Persons
who are registered Holders of Notes
at the close of business on the
January 1 or July 1 next preceding
the Interest Payment Date, even if
such Notes are cancelled after such
record date and on or before such
Interest Payment Date, except as
provided in Section 2.12 of the
Indenture with respect to defaulted
interest and Liquidated Damages. The
Notes will be payable as to
principal, premium, interest and
Liquidated Damages at the office or
agency of the Company maintained for
such purpose within or without the
City and State of New York, or, at
the option of the Company, payment of
interest and Liquidated Damages may
be made by check mailed to the
Holders at their addresses set forth
in the register of Holders; provided
that all payments with respect to
Global Notes and Certificated Notes
the Holders of which have given wire
transfer instructions to the Company
will be required to be made by wire
transfer of immediately available
funds to the accounts specified by
the Holders thereof. Such payment
shall be in such coin or currency of
the United States of America as at
the time of payment is legal tender
for payment of public and private
debts.
3. Paying Agent and
Registrar. Initially, United States
Trust Company of New York, the
Trustee under the Indenture, will act
as Paying Agent and Registrar. The
Company may change any Paying Agent
or Registrar without notice to any
Holder. The Company, any Guarantor
or any other of its Subsidiaries may
act in any such capacity.
4. Indenture. The Company
issued the Notes under an Indenture
dated June 28, 1996 (the "Indenture")
among the Company, the Guarantors and
the Trustee. The terms of the Notes
include those stated in the Indenture
and those made part of the Indenture
by reference to the Trust Indenture
Act of 1939, as amended (15 U.S.
Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms,
and Holders are referred to the
Indenture and such Act for a
statement of such terms. The Notes
are unsecured obligations of the
Company limited to $39,132,000 in
aggregate principal amount.
5. Optional Redemption.
(a) The Notes will not be
redeemable at the Company's option
prior to July 15, 2001. Thereafter,
the Notes will be subject to
redemption at the option of the
Company, in whole or in part, upon
not less than 30 nor more than 60
days' notice, at the redemption
prices (expressed as percentages of
principal amount) set forth below
plus accrued and unpaid interest and
Liquidated Damages, if any, thereon
to the applicable redemption date, if
redeemed during the twelve-month
period beginning on July 15 of the
years indicated below:
Year
Percentage
2001 106.875%
2002 105.156%
2003 103.438%
2004 101.719%
2005 and
thereafter 100.000%
(b) Notwithstanding
the provisions of clause (a) of this
Paragraph 5, on or prior to July 15,
1999, the Company may redeem the
Notes, in whole or in part, at a
redemption price of 113.75% of the
Accreted Value thereof, plus accrued
and unpaid Liquidated Damages, if
any, thereon to the redemption date,
with the net proceeds of one or more
Equity Offerings; provided that
notice of each such redemption shall
have been given within 30 days after
the date of the closing of such
Equity Offering.
6. Mandatory Redemption.
Except as set forth in
paragraph 7 below, the Company shall
not be required to make mandatory
redemption or sinking fund payments
with respect to the Notes.
7. Repurchase at Option of
Holder.
(a) If there is a Change
of Control, each Holder of Notes
shall have the right to require the
Company to repurchase all or any part
(equal to $1,000 principal amount or
an integral multiple thereof) of such
Holder's Notes pursuant to the offer
described below (the "Change of
Control Offer") at an offer price in
cash equal to 101% of the Accreted
Value, plus accrued and unpaid
Liquidated Damages, if any, thereon
(if prior to July 15, 2001), or 101%
of the principal amount thereof, plus
accrued and unpaid interest and
Liquidated Damages, if any, thereon
(if on or after July 15, 2001), to
the date of repurchase (the "Change
of Control Payment"). Within 30 days
following any Change of Control, the
Company shall mail a notice to each
Holder setting forth the procedures
governing the Change of Control Offer
as required by the Indenture.
(b) If the Company or a
Restricted Subsidiary consummates any
Asset Sales, within five days of each
date on which the aggregate amount of
Excess Proceeds exceeds $10.0
million, the Company shall commence
an offer to all Holders of Notes (an
"Asset Sale Offer") pursuant to
Section 3.09 of the Indenture to
purchase the maximum principal amount
of Notes that may be purchased out of
the Excess Proceeds at an offer price
in cash in an amount equal to 100% of
the Accreted Value, plus accrued and
unpaid Liquidated Damages, if any,
thereon (if prior to July 15, 2001),
or 100% of the principal amount
thereof, plus accrued and unpaid
interest and Liquidated Damages, if
any, thereon (if on or after July 15,
2001), to the date fixed for the
closing of such offer in accordance
with the procedures set forth in the
Indenture. To the extent that the
aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the
Company (or such Restricted
Subsidiary) may use such deficiency
for general corporate purposes. If
the aggregate principal amount of
Notes surrendered by Holders thereof
exceeds the amount of Excess
Proceeds, the Trustee shall select
the Notes to be purchased on a pro
rata basis (in denominations of
$1,000 principal amount or integral
multiples thereof). Holders of Notes
that are the subject of an offer to
purchase will receive an Asset Sale
Offer from the Company prior to any
related purchase date and may elect
to have such Notes purchased by
completing the form entitled "Option
of Holder to Elect Purchase."
8. Notice of Redemption.
Notice of redemption will be mailed
at least 30 days but not more than 60
days before the redemption date to
each Holder whose Notes are to be
redeemed at its registered address.
Notes in denominations larger than
$1,000 principal amount may be
redeemed in part but only in whole
multiples of $1,000, unless all of
the Notes held by a Holder are to be
redeemed. On and after the
redemption date interest ceases to
accrue on Notes or portions thereof
called for redemption.
9. Denominations,
Transfer, Exchange. The Notes are in
registered form without coupons in
denominations of $1,000 principal
amount and integral multiples of
$1,000. The transfer of Notes may be
registered and Notes may be exchanged
as provided in the Indenture. The
Registrar and the Trustee may require
a Holder, among other things, to
furnish appropriate endorsements and
transfer documents and the Company
may require a Holder to pay any taxes
and fees required by law or permitted
by the Indenture. The Company need
not exchange or register the transfer
of any Note or portion of a Note
selected for redemption, except for
the unredeemed portion of any Note
being redeemed in part. Also, it
need not exchange or register the
transfer of any Notes for a period of
15 days before a selection of Notes
to be redeemed or during the period
between a record date and the
corresponding Interest Payment Date.
10. Persons Deemed
Owners. The registered Holder of a
Note may be treated as its owner for
all purposes.
11. Amendment, Supplement
and Waiver. Subject to certain
exceptions, the Indenture or the
Notes may be amended or supplemented
with the consent of the Holders of at
least a majority in principal amount
of the then outstanding Notes and any
existing Default or Event of Default
in respect of any provision of the
Indenture or the Notes may be waived
with the consent of the Holders of a
majority in principal amount of the
then outstanding Notes. Without the
consent of at least 75% in aggregate
principal amount of the Notes then
outstanding no waiver or amendment to
the Indenture may make any change in
the Subordination provisions
thereunder that adversely affects the
rights of any Holder of Notes.
Without the consent of any Holder of
a Note, the Indenture or the Notes
may be amended or supplemented to
cure any ambiguity, defect or
inconsistency, to provide for
uncertificated Notes in addition to
or in place of certificated Notes, to
provide for the assumption of the
Company's obligations to Holders of
the Notes in case of a merger or
consolidation of the Company or any
Guarantor, to provide for the
addition of a Guarantor to be bound
by the terms of the Indenture and the
Subsidiary Guarantee, to make any
change that would provide any
additional rights or benefits to the
Holders of the Notes or that does not
adversely affect the legal rights
under the Indenture of any such
Holder, or to comply with the
requirements of the SEC in order to
effect or maintain the qualification
of the Indenture under the Trust
Indenture Act.
12. Defaults and
Remedies. Events of Default include:
(i) default for 30 days in the
payment when due of interest on the
Notes (whether or not such payment is
prohibited by Article 10 of the
Indenture); (ii) default in payment
when due of the principal of or
premium or Liquidated Damages, if
any, on the Notes (whether or not
such payment is prohibited by the
provisions of Article 10 of the
Indenture), (iii) failure by the
Company to comply with Section 4.07,
4.09, 4.10 or 4.15 of the Indenture;
(iv) failure by the Company for 30
days after notice to comply with any
other agreements or covenants in the
Indenture or the Notes, other than
failure to comply with Section 4.11
of the Indenture; (v) occurrence of a
continuing default under any
mortgage, indenture or instrument
under which there may be issued or by
which there may be secured or
evidenced any Indebtedness for money
borrowed by the Company or any of its
Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists,
or is created after the date hereof,
which default (a) is caused by a
failure to pay principal of or
premium, if any, or interest on such
Indebtedness prior to the expiration
of the grace period provided in such
Indebtedness on the date of such
Payment Default or (b) results in the
acceleration of such Indebtedness
prior to its express maturity and, in
each case, the principal amount of
any such Indebtedness, together with
the principal amount of any other
such Indebtedness under which there
has been a Payment Default or the
maturity of which has been so
accelerated, aggregates $5.0 million
or more; (vi) failure by the Company
or any of its Restricted Subsidiaries
to pay final judgments aggregating in
excess of $5.0 million and either (a)
any creditor commences enforcement
proceedings upon any such judgment or
(b) such judgments are not paid,
discharged or stayed for a period of
60 days; (vii) any Subsidiary
Guarantee is held in any judicial
proceeding to be unenforceable or
invalid or ceases for any reason to
be in full force and effect or any
Guarantor, or any Person acting on
behalf of any Guarantor, denies or
disaffirms its obligations under its
Subsidiary Guarantee, except as
permitted by the Indenture; and
(viii) certain events of bankruptcy
or insolvency with respect to the
Company or any Restricted Subsidiary.
If any Event of Default occurs and is
continuing, the Trustee or the
Holders of at least 25% in principal
amount of the then outstanding Notes
may declare all the Notes to be due
and payable. Notwithstanding the
foregoing, in the case of an Event of
Default arising from certain events
of bankruptcy or insolvency, all
outstanding Notes will become due and
payable without further action or
notice. Holders may not enforce the
Indenture or the Notes except as
provided in the Indenture. Subject
to certain limitations, Holders of a
majority in principal amount of the
then outstanding Notes may direct the
Trustee in its exercise of any trust
or power. The Trustee may withhold
from Holders of the Notes notice of
any continuing Default or Event of
Default (except a Default or Event of
Default relating to the payment of
principal or interest) if it
determines that withholding notice is
in their interest. The Holders of a
majority in aggregate principal
amount of the Notes then outstanding
by notice to the Trustee may on
behalf of the Holders of all of the
Notes waive any existing Default or
Event of Default and its consequences
under the Indenture except a
continuing Default or Event of
Default in the payment of the
principal of, or premium, interest or
Liquidated Damages, if any, on, the
Notes. The Company and each
Guarantor is required to deliver to
the Trustee annually a statement
regarding compliance with the
Indenture and such Guarantor's
Subsidiary Guarantee, and the Company
is required upon becoming aware of
any Default or Event of Default, to
deliver to the Trustee a statement
specifying such Default or Event of
Default.
13. Subordination. Each
Holder by accepting a Note agrees
that the payment of principal of, and
premium and interest and Liquidated
Damages, if any, on each Note is
subordinated in right of payment, to
the extent and in the manner provided
in the Indenture, to the prior
payment in full of all Senior Debt of
the Company (whether outstanding on
the date of the Indenture or
thereafter created, incurred, assumed
or guaranteed), and that the
subordination is for the benefit of
the holders of such Senior Debt.
14. Trustee Dealings with
Company. The Trustee, in its
individual or any other capacity, may
become the owner or pledgee of Notes,
and may otherwise deal with the
Company, any Guarantor or any of
their respective Affiliates, as if it
were not the Trustee. However, in
the event that the Trustee acquires
any conflicting interest it must
eliminate such conflict within 90
days, apply to the SEC for permission
to continue as trustee or resign.
15. No Recourse Against
Others. No director, officer,
employee, incorporator or shareholder
of the Company, and no director,
officer, employee or incorporation of
any Guarantor, as such, shall have
any liability for any Obligations of
the Company under the Notes or the
Indenture or of any Guarantor under
the Subsidiary Guarantee or the
Indenture or for any claim based on,
in respect of, or by reason of, such
Obligations or their creation. Each
Holder of Notes by accepting a Note
waives and releases all such
liability. The waiver and release are
part of the consideration for
issuance of the Notes. Such waiver
may not be effective to waive
liabilities under the federal
securities laws and it is the view of
the SEC that such a waiver is against
public policy.
16. Authentication. This
Note shall not be valid until
authenticated by the manual signature
of the Trustee or an authenticating
agent.
17. Abbreviations.
Customary abbreviations may be used
in the name of a Holder or an
assignee, such as: TEN COM (=
tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (=
joint tenants with right of
survivorship and not as tenants in
common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors
Act).
18. Additional Rights of
Holders of Transfer Restricted
Securities. In addition to the
rights provided to Holders of Notes
under the Indenture, Holders of
Transferred Restricted Securities
shall have all the rights set forth
in the Registration Rights Agreement
dated June 28, 1996, between the
Company and the parties named on the
signature pages thereof (the
"Registration Rights Agreement").
19. CUSIP Numbers.
Pursuant to a recommendation
promulgated by the Committee on
Uniform Security Identification
Procedures, the Company has caused
CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP
numbers in notices of redemption as a
convenience to Holders. No
representation is made as to the
accuracy of such numbers either as
printed on the Notes or as contained
in any notice of redemption and
reliance may be placed only on the
other identification numbers placed
thereon.
The Company will furnish to
any Holder upon written request and
without charge a copy of the
Indenture and/or the Registration
Rights Agreement. Requests may be
made to:
American Skiing
Company
Sunday River Access
Road
Bethel, ME 04217
Telecopier No.: (207)
824-2111
Attention: Thomas M.
Richardson
<PAGE>
Assignment Form
To assign this Security, fill in
the form below: (I) or (we) assign
and transfer this Security to
(Insert assignee's Social
Security or tax I.D. No.)
(Print or type assignee's name,
address and zip code)
and irrevocably appoint _____________
agent to transfer this Security on
the books of the Company. The agent
may substitute another to act for
him.
Date:
Your Signature:
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:*
Option of Holder to Elect
Purchase
If you want to elect to
have this Note purchased by the
Company pursuant to Section 3.09 or
4.15 of the Indenture, check the box
below:
___ Section 3.09 ___
Section 4.15
If you want to elect to
have only part of the Note purchased
by the Company pursuant to
Section 3.09 or Section 4.15 of the
Indenture, state the amount you elect
to have purchased: $___________
Date:
Your Signature:
(Sign exactly as your name appears on
the Security)
Tax Identification No.:
Signature Guarantee:*
SCHEDULE OF EXCHANGES OF
CERTIFICATED NOTE<F2>
The following exchanges of
a part of this Global Note for
Certificated Notes have been made:
<TABLE>
<CAPTION>
Date Amount Amount of Principal Signature of
of of increase in Amount of authorized
Exchan decrea Principal this Global officer of
ge se in Amount of Note Trustee or
Princi this Global following Note
pal Note such Custodian
Amount decrease (or
of increase)
this
Global
Note
<S> <C> <C> <C> <C>
<F2> To be included only if the Note
is issued in Global form.
</TABLE>
<PAGE>
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON
EXCHANGE OR REGISTRATION OF TRANSFER
OF NOTES
Re: 13 3/4% Subordinated Discount
Notes due 2007 of American Skiing
Company
This Certificate relates to
$_____ principal amount of Notes held
in * ________ book-entry or *_______
definitive form by ________________
(the "Transferor").
The Transferor*:
___ has requested the Trustee
by written order to deliver in
exchange for its beneficial interest
in the Global Note held by the
Depositary a Note or Notes in
definitive, registered form of
authorized denominations in an
aggregate principal amount equal to
its beneficial interest in such
Global Note (or the portion thereof
indicated above); or
___ has requested the Trustee
by written order to exchange or
register the transfer of a Note or
Notes.
In connection with such
request and in respect of each such
Note, the Transferor does hereby
certify that Transferor is familiar
with the Indenture relating to the
above captioned Notes and as provided
in Section 2.06 of such Indenture,
the transfer of this Note does not
require registration under the
Securities Act (as defined below)
because:*
___ Such Note is being acquired
for the Transferor's own account,
without transfer (in satisfaction of
Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
___ Such Note is being
transferred to a "qualified
institutional buyer" (as defined in
Rule 144A under the Securities Act of
1933, as amended (the "Securities
Act")) in reliance on Rule 144A (in
satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(i) or
Section 2.06(d)(i) (B) of the
Indenture) or pursuant to an
exemption from registration in
accordance with Rule 904 under the
Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture.)
*Check applicable box.
___ Such Note is being
transferred in accordance with Rule
144 under the Securities Act, or
pursuant to an effective registration
statement under the Securities Act
(in satisfaction of Section
2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
___ Such Note is being
transferred in reliance on and in
compliance with an exemption from the
registration requirements of the
Securities Act, other than Rule 144A,
144 or Rule 904 under the Securities
Act. An Opinion of Counsel to the
effect that such transfer does not
require registration under the
Securities Act accompanies this
Certificate (in satisfaction of
Section 2.06(a)(ii)(C) or Section
2.06(d)(i)(C) of the Indenture).
___________________________
[INSERT NAME OF TRANSFEROR]
By:
Date:
*Check applicable box.
<PAGE>
EXHIBIT C
GUARANTORS
1. Sunday River Skiway Corporation
2. Sunday River Ltd.
3 Perfect Turn, Inc.
4. LBO Holding, Inc.
5. Sunday River Transportation,
Inc.
6. Sugarbush Resort Holdings, Inc.
7. Sugarbush Leasing Company
8. Sugarbush Restaurant, Inc.
9. Cranmore, Inc.
10. S-K-I Limited
11. Killington Ltd.
12. Mount Snow Ltd.
13. Waterville Valley Ski Area, Ltd.
14. Sugarloaf Mountain Corporation
15. Killington Restaurants, Inc.
16. Dover Restaurants, Inc.
17. Resorts Technologies, Inc.
18. Resort Software Services, Inc.
19. Mountain Wastewater Treatment,
Inc.
20. LBO Hotel Co.
21. Mountainside
22. Sugartech
23. Deerfield Operating Company
24. Pico Ski Area Management Company
<PAGE>
EXHIBIT D
SUBSIDIARY GUARANTEE
Each of the Guarantors
hereby, jointly and severally,
unconditionally guarantee to each
Holder of a Note authenticated and
delivered by the Trustee and to the
Trustee and its successors and
assigns, irrespective of the validity
and enforceability of this Indenture,
the Notes or the obligations of the
Company hereunder or thereunder,
that: (a) the principal of and
premium, interest and Liquidated
Damages, if any, on the Notes will be
promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest
on the overdue principal of, premium
and interest and Liquidated Damages
on the Notes, if any, if lawful, and
all other obligations of the Company
to the Holders or the Trustee
hereunder or thereunder will be
promptly paid in full or performed,
all in accordance with the terms
hereof and thereof; and (b) in case
of any extension of time of payment
or renewal of any Notes or any of
such other obligations, that same
will be promptly paid in full when
due or performed in accordance with
the terms of the extension or
renewal, whether at stated maturity,
by acceleration or otherwise.
Failing payment when due of any
amount so guaranteed or any perform
ance so guaranteed for whatever
reason, the Guarantors will be
jointly and severally obligated to
pay the same immediately.
The obligations of the
Guarantors to the Holders of Notes
and to the Trustee pursuant to this
Subsidiary Guarantee and the
Indenture are expressly set forth in
Article 11 of the Indenture, and
reference is hereby made to such
Indenture for the precise terms of
this Subsidiary Guarantee. The terms
of Article 11 of the Indenture are
incorporated herein by reference.
This is a continuing Subsidiary
Guarantee and shall remain in full
force and effect and shall be binding
upon each Guarantor and its
respective successors and assigns to
the extent set forth in the Indenture
until full and final payment of all
of the Company's Obligations under
the Notes and the Indenture and shall
inure to the benefit of the
successors and assigns of the Trustee
and the Holders of Notes and, in the
event of any transfer or assignment
of rights by any Holder of Notes or
the Trustee, the rights and
privileges herein conferred upon that
party shall automatically extend to
and be vested in such transferee or
assignee, all subject to the terms
and conditions hereof. This a
Subsidiary Guarantee of payment and
not a guarantee of collection.
In certain circumstances more
fully described in the Indenture, any
Guarantor may be released from its
liability under this Subsidiary
Guarantee, and any such release will
be effective whether or not noted
hereon.
This Subsidiary Guarantee shall
not be valid or obligatory for any
purpose until the certificate of
authentication on the Note upon which
this Subsidiary Guarantee is noted
shall have been executed by the
Trustee under the Indenture by the
manual signature of one of its
authorized officers.
For purposes hereof, each
Guarantor's liability will be that
amount from time to time equal to the
aggregate liability of such Guarantor
hereunder, but shall be limited to
the lesser of (i) the aggregate
amount of the Obligations of the
Company under the Notes and the
Indenture and (ii) the amount, if
any, which would not have (A)
rendered such Guarantor "insolvent"
(as such term is defined in the
federal Bankruptcy Law and in the
Debtor and Creditor Law of the State
of New York) or (B) left it with
unreasonably small capital at the
time its Guarantee of the Notes was
entered into, after giving effect to
the incurrence of existing
Indebtedness immediately prior to
such time; provided that, it shall be
a presumption in any lawsuit or other
proceeding in which such Guarantor is
a party that the amount guaranteed
pursuant to its Subsidiary Guarantee
is the amount set forth in clause (i)
above unless any creditor, or
representative of creditors of such
Guarantor, or debtor in possession or
trustee in bankruptcy of such
Guarantor, otherwise proves in such a
lawsuit that the aggregate liability
of such Guarantor is limited to the
amount set forth in clause (ii). In
making any determination as to the
solvency or sufficiency of capital of
a Guarantor in accordance with the
previous sentence, the right of such
Guarantor to contribution from other
Guarantors and any other rights such
Guarantor may have, contractual or
otherwise, shall be taken into
account.
Capitalized terms used herein
have the same meanings given in the
Indenture unless otherwise
indicated.
SUNDAY RIVER SKIWAY CORPORATION
By:
Name:
Title:
SUNDAY RIVER LTD.
By:
Name:
Title:
PERFECT TURN, INC.
By:
Name:
Title:
LBO HOLDING, INC.
By:
Name:
Title:
SUNDAY RIVER TRANSPORTATION, INC.
By:
Name:
Title:
SUGARBUSH RESORT HOLDINGS, INC.
By:
Name:
Title:
SUGARBUSH LEASING COMPANY
By:
Name:
Title:
SUGARBUSH RESTAURANTS, INC.
By:
Name:
Title:
CRANMORE, INC.
By:
Name:
Title:
MOUNTAIN WASTEWATER TREATMENT, INC.
By:
Name:
Title:
LBO HOTEL CO.
By:
Name:
Title:
S-K-I LIMITED
By:
Name:
Title:
KILLINGTON LTD.
By:
Name:
Title:
MOUNT SNOW LTD.
By:
Name:
Title:
WATERVILLE VALLEY SKI AREA, LTD.
By:
Name:
Title:
SUGARLOAF MOUNTAIN CORPORATION
By:
Name:
Title:
KILLINGTON RESTAURANTS, INC.
By:
Name:
Title:
DOVER RESTAURANTS, INC.
By:
Name:
Title:
RESORTS TECHNOLOGIES, INC.
By:
Name:
Title:
RESORT SOFTWARE SERVICES, INC.
By:
Name:
Title:
MOUNTAINSIDE
By:
Name:
Title:
SUGARTECH
By:
Name:
Title:
DEERFIELD OPERATING COMPANY
By:
Name:
Title:
PICO SKI AREA MANAGEMENT COMPANY
By:
Name:
Title:
_______________________________
* Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor acceptable to the
Trustee).
* Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor acceptable to the
Trustee).
