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Exhibit 10.2
SERVICO, INC.
As Issuer,
LODGIAN, INC.
and
WILMINGTON TRUST COMPANY
As Trustee
7% Convertible Junior Subordinated Debentures Due 2010
First Supplemental Indenture
Dated as of June 17, 1998
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITION OF TERMS..............................................................2
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.01. DESIGNATION AND PRINCIPAL AMOUNT................................................11
SECTION 2.02. MATURITY........................................................................12
SECTION 2.03. FORM AND PAYMENT................................................................12
SECTION 2.04. GLOBAL DEBENTURE................................................................12
SECTION 2.05. INTEREST........................................................................16
ARTICLE 3
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.01. TRUST SPECIAL EVENT REDEMPTION..................................................17
SECTION 3.02. OPTIONAL REDEMPTION.............................................................17
SECTION 3.03. DEPOSIT OF REDEMPTION PRICE; PAYMENT OF INTEREST ON
CONVERTIBLE DEBENTURES TO BE REDEEMED...........................................19
SECTION 3.04. REDEMPTION OF LESS THAN ALL CONVERTIBLE DEBENTURES..............................19
SECTION 3.05. NOTICE OF REDEMPTION............................................................20
SECTION 3.06. NO SINKING FUND.................................................................20
ARTICLE 4
OPTIONAL REPURCHASE
SECTION 4.01. REPURCHASE OF CONVERTIBLE DEBENTURES UPON NON-
COMPLETION OF MERGER............................................................21
ARTICLE 5
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 5.01. EXTENSION OF INTEREST PAYMENT PERIOD............................................24
SECTION 5.02. NOTICE OF EXTENSION.............................................................25
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ARTICLE 6
EXPENSES
SECTION 6.01. PAYMENT OF EXPENSES.............................................................26
SECTION 6.02. PAYMENT UPON RESIGNATION OR REMOVAL.............................................27
ARTICLE 7
COVENANTS
SECTION 7.01. COVENANTS AS TO THE TRUST.......................................................27
ARTICLE 8
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 8.01. CONVERSION RIGHTS...............................................................28
SECTION 8.02. CONVERSION PROCEDURES...........................................................28
SECTION 8.03. CERTAIN CONVERSION PRICE ADJUSTMENTS............................................31
SECTION 8.04. MERGER, CONSOLIDATION, OR SALE OF ASSETS........................................39
SECTION 8.05. SPECIAL PROVISIONS REGARDING ADJUSTMENT OF CONVERSION
PRICE OR OTHER PROVISIONS.......................................................40
SECTION 8.06. CERTAIN ADDITIONAL RIGHTS.......................................................41
SECTION 8.07. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION
PRICE OR ADJUSTMENTS............................................................42
SECTION 8.08. DEFEASANCE......................................................................42
ARTICLE 9
EVENTS OF DEFAULT
SECTION 9.01. EVENTS OF DEFAULT...............................................................42
ARTICLE 10
FORM OF CONVERTIBLE DEBENTURE
SECTION 10.01. FORM OF CONVERTIBLE DEBENTURE..................................................43
ARTICLE 11
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 11.01. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.......................................43
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ARTICLE 12
MISCELLANEOUS
SECTION 12.01. RATIFICATION OF BASE INDENTURE; SUPPLEMENTAL INDENTURE
CONTROLS.......................................................................43
SECTION 12.02. TRUSTEE NOT RESPONSIBLE FOR RECITALS...........................................44
SECTION 12.03. GOVERNING LAW..................................................................44
SECTION 12.04. SEPARABILITY...................................................................44
SECTION 12.05. COUNTERPARTS...................................................................44
SECTION 12.06. MERGER.........................................................................44
ANNEX I
FORM OF CONVERTIBLE DEBENTURE........................................................A-1
FORM OF FACE OF CONVERTIBLE DEBENTURE................................................A-1
FORM OF CERTIFICATE OF AUTHENTICATION................................................A-7
FORM OF REVERSE OF DEBENTURE.........................................................A-8
FORM OF ELECTION TO CONVERT.........................................................A-15
ASSIGNMENT FORM.....................................................................A-16
FORM OF SCHEDULE FOR ENDORSEMENTS ON
GLOBAL DEBENTURES TO REFLECT CHANGES
IN PRINCIPAL AMOUNT.................................................................A-19
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of June 17, 1998 (the
"SUPPLEMENTAL INDENTURE"), is between SERVICO, INC., a Florida corporation (the
"COMPANY"), LODGIAN, INC., a Delaware corporation ("LODGIAN") and WILMINGTON
TRUST COMPANY, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, the Company has executed and delivered the Base Indenture (as
defined herein) to the Trustee to provide for the issuance of the Company's
Securities from time to time in one or more series as might be determined by the
Company under the Base Indenture, in an unlimited aggregate principal amount as
may be authenticated and delivered as provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its 7% Convertible Junior Subordinated Debentures Due 2010 (the
"CONVERTIBLE DEBENTURES"), the form and substance of such Convertible
Debentures, and the terms, provisions and conditions thereof to be set forth as
provided in the Base Indenture and this Supplemental Indenture;
WHEREAS, Lodgian Capital Trust I, a Delaware statutory business trust
(the "TRUST"), intends to issue up to $175,000,000 aggregate liquidation amount
of its 7% Convertible Redeemable Equity Structured Trust Securities ("CRESTS")
(and may issue up to an additional $26,250,000 aggregate liquidation amount of
CRESTS solely to cover over-allotments) and $5,412,400 aggregate liquidation
amount of common securities, having a liquidation amount of $50 per security and
designated the 7% Common Securities of the Trust (and may issue up to an
additional $811,850 aggregate liquidation amount of Common Securities if
additional CRESTS are issued) (the "TRUST COMMON SECURITIES" and, together with
the CRESTS, the "TRUST SECURITIES"), representing undivided beneficial ownership
interests in the assets of the Trust; and
WHEREAS, the Trust proposes to purchase Convertible Debentures in an
aggregate principal amount equal to the aggregate liquidation amount of the
Trust Securities issued;
NOW, THEREFORE, in consideration of the purchase of the Convertible
Debentures by the Trust, and for the purpose of setting forth, as provided in
the Base Indenture, the form and substance of the Convertible Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITION OF TERMS. For all purposes of this
Supplemental Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(a) unless otherwise defined herein, the capitalized terms used herein
that are defined in the Base Indenture have the same meanings when used in this
Supplemental Indenture;
(b) the terms defined in this Article 1 have the meanings assigned to
them in this Article 1 and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act. either directly or by reference therein, have the meanings
assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" with
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of America
at the date of such computation;
(e) a reference to a Section or Article (or subdivision thereof) or
the Recitals is to a Section or Article (or subdivision thereof) or the Recitals
of this Supplemental Indenture;
(f) the words "HEREIN", "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not affect
interpretation;
(h) the following terms have the meanings given to them in the
Declaration: (i) "AUTHORIZED NEWSPAPER"; (ii) "BOARD OF DIRECTORS"; (iii)
"BUSINESS DAY"; (iv) "CLOSING DATE"; (v) "COMMON STOCK"; (vi) "DATE OF
NON-COMPLETION"; (vii) "DELAWARE TRUSTEE"; (viii) "DISTRIBUTION"; (ix)
"GUARANTEE"; (x) "INVESTMENT COMPANY EVENT"; (xi) "MERGER"; (xii) "MERGER
AGREEMENT"; (xiii) "NASDAQ"; (xiv) "NO RECOGNITION OPINION"; (xv)
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"PROPERTY TRUSTEE"; (xvi) "REDEMPTION TAX OPINION"; (xvii) "RESTRICTED
SECURITY"; and (xviii) "TAX EVENT";
(i) the terms defined as follows shall have the meanings assigned to
them as follows:
"ADJUSTED INTEREST RATE," with respect to any Reset Transaction, means
the rate per annum that is the arithmetic average of the rates quoted by two
Reference Dealers selected by the Company or its successor as the rate that the
Convertible Debentures should bear so that the fair market value, expressed in
dollars, of a Convertible Debenture immediately after the later of (i) public
announcement of such Reset Transaction and (ii) public announcement of a change
in dividend policy in connection with such Reset Transaction, but without giving
effect to the provisions of Section 8.03 applicable to such Reset Transaction,
shall equal the greater of (i) the average Trading Price of CRESTS or, if the
Convertible Debentures have been distributed in liquidation of the Trust, a
Convertible Debenture for the 20 Trading Days immediately preceding the date of
public announcement of such Reset Transaction and (ii) the sum of (A) the fair
market value of a Convertible Debenture immediately after such public
announcement and (B) the amount of the decrease, if any, in the fair market
value of a Convertible Debenture solely attributable to the increase in the
Dividend Yield (excluding the effect of any change in the Trading Price of the
common stock into which the Convertible Debentures are convertible that is
attributable solely to the increase in the Dividend Yield); PROVIDED that the
Adjusted Interest Rate shall not be less than 7% per annum.
"ADJUSTMENT TRIGGER DATE" has the meaning specified in Section
8.03(A)(III).
"ADMINISTRATIVE ACTION" means an official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations.
"APPLICABLE PRICE" means (i) in the event of a Non-Stock Fundamental
Change in which the holders of the Common Stock receive only cash, the amount of
cash received by a holder of one share of Common Stock and (ii) in the event of
any other Fundamental Change, the average of the daily Closing Prices of one
share of Common Stock during the 10 Trading Days immediately prior to the record
date for the determination of the holders of Common Stock entitled to receive
cash, securities, property or other assets in connection with such Fundamental
Change or, if there is no such record date, prior to the date upon which the
holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets, but the adjustment shall be based upon the
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consideration that the holders of Common Stock received in the transaction or
event as a result of which more than 50% of the Common Stock shall have been
exchanged for, converted into or acquired for, or shall constitute solely the
right to receive, such cash, securities, property or other assets.
"APPLICABLE RATE" means (i) from the Closing Date to but not including
the effective date of the first Reset Transaction, if any, 7% per annum and (ii)
from the effective date of any Reset Transaction (the "APPLICABLE RESET
TRANSACTION") to but not including the earlier of (x) the effective date of any
succeeding Reset Transaction or (y) the Maturity Date, the Adjusted Interest
Rate in respect of the Applicable Reset Transaction.
"BASE INDENTURE" means that Indenture dated as of even date hereof
between the Company, Lodgian and the Trustee, as it may be amended, restated,
supplemented and/or modified from time to time.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or any
other day on which banking institutions in New York, New York or Wilmington,
Delaware are permitted or required by any applicable law to close.
"CERTIFICATE OF INCORPORATION" means the Company's Articles of
Incorporation, as amended from time to time.
"CLOSING PRICE" of any class of common stock of any Person on any date
of determination means (i) the closing sale price (or, if no closing price is
reported, the last reported sale price) of such common stock (regular way) on
the NYSE on such date, (ii) if such common stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which such common stock is so
listed, (iii) if such common stock is not so listed on a United States national
or regional securities exchange, as reported by the NASDAQ Stock Market, (iv) if
such common stock is not so reported, the last quoted bid price for such common
stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, (v) if such common stock is not so quoted, the
average of the mid-point of the last bid and ask prices for such common stock
from at least three nationally recognized investment banking firms selected by
the board of directors of such Person or (vi) if not so available in such
manner, as otherwise determined in good faith by the Board.
"COMMON SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Trust Common Security substantially in the form
of Exhibit B to the Declaration.
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"COMMON STOCK FUNDAMENTAL CHANGE" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the board of
directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market System; PROVIDED, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) the Company
continues to exist after the occurrence of such Fundamental Change and the
outstanding Convertible Debentures continue to exist as outstanding Convertible
Debentures or (ii) the outstanding Convertible Debentures continue to exist as
Convertible Debentures and are convertible into shares of the common stock of
the corporation succeeding to the business of the Company. The Merger shall be
deemed a Common Stock Fundamental Change.
"COMPANY" has the meaning specified in the first paragraph hereof.
"COMPOUNDED INTEREST" has the meaning specified in Section 5.01.
"CONVERSION AGENT" means the Property Trustee acting as Conversion
Agent for a Holder.
"CONVERSION DATE" has the meaning specified in Section 8.02(B).
"CONVERSION NOTICE" has the meaning specified in Section 8.02(A).
"CONVERSION PRICE" means $21.42, as of the date of this Supplemental
Indenture, as adjusted from time to time as set forth in Article 8.
"CONVERTIBLE DEBENTURES" has the meaning specified in the Recitals.
"CRESTS" has the meaning specified in the Recitals.
"CRESTS CERTIFICATE" means a certificate representing CRESTS
substantially in the form of Exhibit A to the Declaration.
"CURRENT MARKET PRICE" shall mean, with respect to any class of common
stock of the Company, the average of the daily Closing Prices of a share of such
common stock during the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later than, the
date in question; provided, however, that (i) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Sections 8.03(A)(II)
through
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8.03(A)(V) occurs on or after the 20th Trading Day prior to the day in question
and prior to the "ex" date for the issuance or distribution requiring such
computation, the Closing Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a result
of such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Sections 8.03(A)(II) through 8.03(A)(V)
occurs on or after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event,
and (iii) if the "ex" date for the issuance or distribution requiring such
computation is on or prior to the day in question, after taking into account any
adjustment required pursuant to clause (ii) of this proviso, the Closing Price
for each Trading Day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value on the day in question
(as determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 8.03(A)(III) or 8.03(A)(IV))
of the evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of the applicable class of common stock of
the Company as of the close of business on the day before such "ex" date. For
purposes of this definition, the term "ex" date, with respect to any class of
common stock of the Company, (i) when used with respect to any issuance or
distribution, means the first date on which such common stock trades regular way
on such exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance or distribution, (ii) when
used with respect to any subdivision or combination of shares of such common
stock, means the first date on which such common stock trades regular way on
such exchange or in such market after the time at which such subdivision or
combination becomes effective, and (iii) when used with respect to any tender or
exchange offer means the first date on which such common stock trades regular
way on such exchange or in such market after the expiration time of such tender
or exchange offer.
"DECLARATION" means the Amended and Restated Declaration of Trust of
the Trust, dated as of June 17, 1998, as it may be amended, restated,
supplemented and/or modified from time to time.
"DEFERRED INTEREST" has the meaning specified in Section 5.01.
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"DEPOSITARY" means a clearing agency registered under the Securities
Exchange Act of 1934 that is designated as Depositary for the Convertible
Debentures.
"DISSOLUTION EVENT" means that, as a result of the occurrence and
continuation of a Trust Special Event, the Trust is to be dissolved in
accordance with the Declaration, and the Convertible Debentures held by the
Property Trustee are to be distributed to the holders of the Trust Securities
issued by the Trust PRO RATA in accordance with the Declaration.
"DIVIDEND YIELD," on any security for any period, means the dividends
paid or proposed to be paid pursuant to an announced dividend policy on such
security for such period divided by, if with respect to dividends paid on such
security, the average Closing Price of such security during such period and, if
with respect to dividends so proposed to be paid on such security, the Closing
Price of such security on the effective date of the related Reset Transaction.
"EXCESS PURCHASE PAYMENT" means the excess, if any, of (A) the
aggregate of the cash and the value (as determined by the Board of Directors) of
all other consideration paid by the Company or any of its Subsidiaries with
respect to the shares of the class of Common Stock acquired in a tender or
exchange offer, respectively, over (B) the product of the Current Market Price
per share of such common stock times the number of shares of such Common Stock
acquired in such tender or exchange offer.
"EXERCISE TRIGGER DATE" has the meaning specified in Section
8.03(A)(III).
"EXTENSION PERIOD" has the meaning specified in Section 5.01.
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
or series of transactions or events pursuant to which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); PROVIDED, in the case of any such series of transactions or events,
for purposes of adjustment of the Conversion Price, such Fundamental Change
shall be deemed to have occurred when substantially all of the Common Stock
shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets.
"GLOBAL DEBENTURE" has the meaning specified in Section 2.04.
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"IDC" means Interactive Data Corporation.
"INTEREST PAYMENT DATE" has the meaning specified in Section 2.05.
"LODGIAN" has the meaning specified in the first paragraph hereof.
"MATURITY DATE" means the date on which the Convertible Debentures
mature and on which the principal shall be due and payable, together with any
accrued and unpaid interest thereon, including Compounded Interest, if any.
"MINISTERIAL ACTION" has the meaning specified in Section 3.01.
"90-DAY PERIOD" has the meaning specified in Section 3.01.
"NON-COMPLETION OFFER" has the meaning specified in Section 4.01.
"NON-COMPLETION PAYMENT" has the meaning specified in Section 4.01.
"NON-COMPLETION PAYMENT DATE" has the meaning specified in Section
4.01.
"NON-COMPLETION PAYMENT NOTICE" has the meaning specified in Section
4.01.
"NON-STOCK FUNDAMENTAL CHANGE" means any Fundamental Change other than
a Common Stock Fundamental Change.
"NYSE" means the New York Stock Exchange, Inc. or any successor
thereto.
"OID" means original issue discount.
"PAYING AGENT" means any Paying Agent with respect to the Convertible
Debentures under the Base Indenture.
"PRICE TRIGGER DATE" has the meaning specified in Section 8.03(A)(III).
"PURCHASE DATE" shall have the meaning specified in Section 8.03(A)(V).
"PURCHASE AGREEMENT" means the Purchase Agreement dated June 9, 1998,
among NationsBanc Xxxxxxxxxx Securities LLC, the Trust and the Company, as it
may be amended, restated, supplemented and/or modified from time to time.
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"PURCHASER STOCK PRICE" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Prices for one share of the
common stock received by holders of Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of Common Stock entitled to receive
such common stock or, if there is no such date, prior to the date upon which the
holders of Common Stock shall have the right to receive such common stock.
"REDEMPTION PRICE" has the meaning specified in Section 3.02.
"REFERENCE DEALER" means a dealer engaged in the trading of convertible
securities.
"REFERENCE MARKET PRICE" initially means $11.22 and, in the event of
any adjustment to the Conversion Price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the Conversion Price after giving effect to any
such adjustment shall always be the same as the ratio of the initial Reference
Market Price to the initial Conversion Price of $21.42 per share.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated the date hereof, among the Company, Lodgian, NationsBanc
Xxxxxxxxxx Securities LLC and the Trust for the benefit of themselves and the
Holders, as the same may be amended from time to time in accordance with the
terms thereof.
"REGULAR RECORD DATE" has the meaning specified in Section 2.05(A).
"REGULAR TRUSTEE" means the Regular Trustee of the Trust.
"RESALE RESTRICTION TERMINATION DATE" has the meaning specified in
Section 2.04.
"RESET TRANSACTION" means (i) a merger, consolidation or statutory
share exchange to which the Person that is the issuer of the common stock into
which the Convertible Debentures are then convertible is a party, (ii) a sale of
all or substantially all assets of such Person, (iii) a recapitalization of such
common stock or a distribution described in Section 8.03(A)(III) or (iv) the
election by the Person that is the issuer of the common stock into which the
Convertible Debentures are then convertible to be a real estate investment trust
(as defined in Section 856 of the Internal Revenue Code of 1986, as amended),
after the effective date of which transaction or distribution or election
described in clauses (i) through (iv) above the Convertible Debentures are
convertible into shares of a
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Person (x) the common stock of which had a Dividend Yield for the four fiscal
quarters of such Person immediately preceding the public announcement thereof
which was, or (y) that announces a dividend policy prior to the effective date
thereof which policy, if implemented, would result in a Dividend Yield on such
common stock for the next four fiscal quarters of such Person which would be,
more than 250 basis points higher than the Dividend Yield on the common stock
into which the Convertible Debentures are convertible prior to such transaction,
distribution or election for the four fiscal quarters immediately preceding the
public announcement of such transaction or distribution or election.
"SECURITIES" has the meaning set forth in Section 8.03(A)(III).
"SPECIAL EVENT REDEMPTION PRICE" has the meaning specified in Section
3.01.
"STATED MATURITY" has the meaning specified in the Base Indenture.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture, business trust or similar entity, at least a
majority of whose outstanding partnership or similar interests shall at the time
be owned by such Person or by one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.
"SUPPLEMENTAL INDENTURE" has the meaning specified in the first
paragraph hereof.
"TRADING DAY" means, with respect to any class of common stock of any
Person, any day on which such common stock is traded on the NYSE, or if such
common stock is not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which such common stock is listed or admitted,
or if not listed or admitted to trading on any national securities exchange, on
the NASDAQ Stock Market, or if such common stock is not quoted on the NASDAQ
Stock Market, in the applicable securities market in which such common stock is
traded.
"TRADING PRICE" of a security on any date of determination means (i)
the closing sale price (or, if no closing price is reported, the last reported
sale price) of a security (regular way) on the NYSE on such date, (ii) if such
security is not listed for trading on the NYSE on any such date, as reported in
the composite
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transactions for the principal United States securities exchange on which such
security is so listed, (iii) if such security is not so listed on a United
States national or regional securities exchange, as reported by the NASDAQ Stock
Market, (iv) if such security is not so reported, the price quoted by IDC for
such security or, if IDC is not quoting such price, a similar quotation service
selected by the Company, (v) if such security is not so quoted, the average of
the mid-point of the last bid and ask prices for such security from at least two
dealers recognized as market-makers for such security, or (vi) if such security
is not so quoted, the average of the last bid and ask prices for such security
from a Reference Dealer.
"TRUST" has the meaning specified in the first paragraph hereof.
"TRUST COMMON SECURITIES" has the meaning specified in the Recitals.
"TRUSTEE" has the meaning specified in the Recitals.
"TRUST SECURITIES" has the meaning specified in the Recitals.
"TRUST SPECIAL EVENT" means a Tax Event or an Investment Company
Event.
"VOTING STOCK", as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.01. DESIGNATION AND PRINCIPAL AMOUNT. There is hereby
authorized a series of Debentures designated the 7% Convertible Junior
Subordinated Debentures Due 2010, limited in aggregate principal amount to the
sum of (a) $180,412,400 and (b) such aggregate principal amount (which may not
exceed $207,474,300 aggregate principal amount) of Convertible Debentures as
shall be purchased by the Trust as a consequence of the exercise of an
over-allotment option in accordance with the terms of the Purchase Agreement,
except for Convertible Debentures authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Convertible Debentures
under the terms of this Supplemental Indenture and the Base Indenture, which
amount
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shall be as set forth in one or more Company Orders for the
authentication and delivery of Convertible Debentures pursuant to Section 2.04
of the Base Indenture.
SECTION 2.02. MATURITY. The Maturity Date is June 30, 2010.
SECTION 2.03. FORM AND PAYMENT. Except as provided in Section 2.04, the
Convertible Debentures shall be issued in fully registered certificated form
without Coupons with appropriate legends as set forth on Annex I hereto, in
denominations of $50 and integral multiples thereof. Principal, premium, if any,
and interest on the Convertible Debentures issued in certificated form shall be
payable, the transfer of such Convertible Debentures shall be registrable, and
such Convertible Debentures shall be exchangeable for Convertible Debentures
bearing identical terms and provisions, at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the Holder of any
Convertible Debentures is the Property Trustee, the payment of the principal of,
premium, if any, and interest (including Compounded Interest, if any) on such
Convertible Debentures held by the Property Trustee shall be made at such place
and to such account as may be designated by the Property Trustee.
SECTION 2.04. GLOBAL DEBENTURE. (a) So long as Convertible Debentures
are eligible for book-entry settlement with the Depositary, or unless otherwise
required by law, all Convertible Debentures that are so eligible shall be
represented by one or more global Convertible Debentures ("GLOBAL DEBENTURES").
The transfer and exchange of beneficial interests in any such Global Debenture
shall be effected through the Depositary in accordance with the Indenture and
the procedures of the Depositary therefor. If distributed to holders of CRESTS
in connection with the involuntary or voluntary dissolution, winding-up, or
liquidation of the Trust as a result of the occurrence of a Trust Special Event,
the Convertible Debentures shall be issued in the form of one or more global
certificates registered in the name of the Depositary or its nominee. If the
Convertible Debentures are so distributed to holders of CRESTS in liquidation of
such holders' interests in the Trust, the Depositary shall act as securities
depositary for the Convertible Debentures.
None of the Company, the Trust, the Property Trustee, any Paying Agent
and any other agent of the Company or the Trustee shall have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Debenture for such
Convertible Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
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Beneficial owners of a Convertible Debenture represented by a Global
Debenture shall not be entitled to have certificates registered in their names,
shall not receive or be entitled to receive physical delivery of certificates in
definitive form and shall not be considered Holders of such Convertible
Debenture.
(b) Each Global Debenture and Convertible Debentures not represented
by a Global Debenture that constitutes a Restricted Security shall bear the
following legend on the face thereof until two years after the later of the date
of original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Convertible Debentures (or any predecessor
thereto) (the "RESALE RESTRICTION TERMINATION DATE"), unless otherwise agreed by
the Company and the Holder thereof:
THIS SECURITY, THE COMMON STOCK ISSUABLE UPON CONVERSION THEREOF, THE
GUARANTEE AND THE CRESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAW. NEITHER THESE SECURITIES NOR ANY INTEREST OR PARTICIPATION IN
THESE SECURITIES MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITIES, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF SUCH
SECURITIES (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS SUCH SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT
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PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING SUCH SECURITIES FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, OR AS FIDUCIARY FOR THE ACCOUNT OF ONE OR MORE TRUSTS, EACH
OF WHICH IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a) (7) OF RULE 501 UNDER THE SECURITIES ACT, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT UPON THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY,
SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THESE SECURITIES BEING
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY. EACH
PURCHASER OR HOLDER OF THE SECURITY EVIDENCED HEREBY WILL BE DEEMED TO
HAVE REPRESENTED EITHER THAT (A) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO PART 4 OF SUBTITLE B OF TITLE 1 OF ERISA OR A PLAN DESCRIBED
IN SECTION 4975 OF THE CODE OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN OR (B) BY
REASON OF THE APPLICATION OF ONE OR MORE STATUTORY OR ADMINISTRATIVE
EXEMPTIONS FROM THE PROHIBITED TRANSACTION RULES OF SECTION 406 OF
ERISA AND SECTION 4975 OF THE CODE, ITS PURCHASE AND HOLDING OF CRESTS
WILL NOT CONSTITUTE, CAUSE OR RESULT IN THE OCCURRENCE OF A NON-EXEMPT
PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
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OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO BE
BOUND BY THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT RELATING
TO THE SECURITIES.
(c) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a successor Depositary selected
or approved by the Company or to a nominee of such successor Depositary.
Any Convertible Debentures (or security issued in exchange or
substitution therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms may, upon surrender of such Convertible
Debentures for exchange to the Trustee in accordance with the provisions of this
Section 2.04(B), be exchanged for new Convertible Debentures of like tenor and
aggregate liquidation amount, which shall not bear the restrictive legend
required by this Section 2.04(B).
Upon any sale or transfer of any Restricted Security (including any
interest in a Global Debenture) (i) that is effected pursuant to an effective
registration statement under the Securities Act or (ii) in connection with which
the Trustee receives certificates and other information (including an opinion of
counsel, if requested) reasonably acceptable to the Company and the Trustee to
the effect that such security shall no longer be subject to the resale
restrictions under federal and state securities laws, then (A) in the case of a
Restricted Security in definitive form the Trustee shall permit the holder
thereof to exchange such Restricted Security for a security that does not bear
the legend set forth in Section 2.04(B), and shall rescind any such restrictions
on transfer and (B) in the case of Restricted Securities represented by a Global
Debenture, such Convertible Debentures shall no longer be subject to the
restrictions contained in the legend set forth in Section 2.04(B) (but still
subject to the other provisions hereof). In addition, any Convertible Debentures
(or security issued in exchange or substitution therefor) as to which the
restrictions on transfer described in the legend set forth in Section 2.04(B)
have expired by their terms, may, upon surrender thereof (in accordance with
terms of this Indenture) together with such certifications and other information
(including an opinion of counsel having substantial experience in practice under
the Securities Act and otherwise reasonably acceptable to the Company, addressed
to the Company and the Trustee and in form acceptable to the Company, to the
effect that the transfer of such Restricted Security may be made in compliance
with Rule 144(k) or such successor provision) acceptable to the Company and the
Trustee as either of them may reasonably require, be
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exchanged for a new Convertible Debenture or Convertible Debentures of like
tenor and aggregate principal amount, which shall not bear the restrictive
legends set forth in Section 2.04(B).
SECTION 2.05. INTEREST. (a) Each Convertible Debenture shall bear
interest at the Applicable Rate per annum from and including the Closing Date
until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Applicable Rate,
compounded quarterly, payable (subject to the provisions of Article 5) quarterly
in arrears on March 31, June 30, September 30 and December 31, of each year
(each, an "INTEREST PAYMENT DATE"), commencing September 30, 1998 to the Holder
of such Convertible Debenture, at the close of business on the record date for
such Interest Payment Date, which record date (the "REGULAR RECORD DATE"), (i)
shall be the close of business on the Business Day next preceding that Interest
Payment Date, in respect of (A) Convertible Debentures of which the Property
Trustee is the only Holder and the related CRESTS are in book-entry only form or
(B) a Global Debenture, and (ii) shall be any date selected by the Company but
in any event at least one Business Day before that Interest Payment Date in
respect of Convertible Debentures other than as set forth in (i).
(b) The amount of interest payable for any full quarterly interest
period shall be computed on the basis of a 360-day year of twelve 30-day months.
Except as provided in the following sentence, the amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
shall be computed on the basis of 30-day months and, for periods of less than a
month, on the basis of the actual number of days elapsed. In the event that any
date on which interest is payable on the Convertible Debentures is not a
Business Day, then payment of interest payable on such date shall be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
ARTICLE 3
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.01. TRUST SPECIAL EVENT REDEMPTION. If a Trust Special Event
has occurred and is continuing and (a) the Company has received a Redemption Tax
Opinion or (b) the Regular Trustees have been informed by independent tax
counsel experienced in such matters that, for substantive reasons, it cannot
deliver
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a No Recognition Opinion to the Trust, then, notwithstanding Sections 3.02 and
3.03, the Company shall have the right upon not less than 30 days' nor more than
60 days' notice to the Holders of the Convertible Debentures to redeem the
Convertible Debentures, in whole or in part, for cash, within 90 days following
the occurrence of such Trust Special Event (the "90-DAY PERIOD"), at a
redemption price equal to 100% of the principal amount to be redeemed, together
with accrued and unpaid interest (including Compounded Interest, if any) thereon
to, but excluding, the date of such redemption (the "SPECIAL EVENT REDEMPTION
PRICE"), PROVIDED that, if at the time there is available to the Company or the
Trust the opportunity to eliminate, which elimination shall be complete within
the 90- Day Period, such Trust Special Event by taking some ministerial action
(such as filing a form or making an election, or pursuing some other similar
reasonable measure) that has no adverse effect on the Company, the Trust or the
Holders of the Trust Securities, or does not subject any of them to more than DE
MINIMIS regulatory requirements ("MINISTERIAL ACTION"), the Company or the Trust
shall pursue such Ministerial Action in lieu of redemption. and, provided,
further, that the Company shall have no right to redeem the Convertible
Debentures while the Trust is pursuing any Ministerial Action pursuant to its
obligations under the Declaration; provided such Ministerial Action can
eliminate such Trust Special Event during the 90-Day Period. On the date notice
of redemption is given by mail pursuant to Section 3.05, the Company shall issue
a press release announcing such redemption and that such redemption shall result
in the redemption of the CRESTS. The Special Event Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date fixed by the Company for
such redemption or at such earlier time as the Company determines, provided that
the Company shall deposit with the Trustee an amount sufficient to pay the
Special Event Redemption Price by 10:00 a.m., New York time, on the date such
Special Event Redemption Price is to be paid.
SECTION 3.02. OPTIONAL REDEMPTION. (a) Subject to the provisions of
Section 3.03 and Section 3.04 of this Supplemental Indenture and to the
provisions of Article 10) of the Base Indenture, the Company shall have the
right to redeem the Convertible Debentures, in whole or in part, for cash, from
time to time on and after July 3, 2002, upon not less than 30 days' nor more
than 60 days' notice to the Holders, at the following prices (expressed as
percentages of the principal amount of the Convertible Debentures) (the
"REDEMPTION PRICE"), together with any accrued and unpaid interest (including
Compounded Interest, if any) thereon to, but excluding, the date of such
redemption, if redeemed during the period beginning July 3, 2002 and ending on
June 27, 2003, the redemption price shall be 104.2% and if redeemed thereafter
during the 12-month period beginning on June 30 of the following years:
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YEAR REDEMPTION PRICE
---- ----------------
2003 103.5%
2004 102.8%
2005 102.1%
2006 101.4%
2007 100.7%
2008 and thereafter 100.0%
The Company may exercise its redemption right pursuant to this Section
3.02 provided that the redemption price (other than the portion thereof
consisting of accrued and unpaid interest (including Compounded Interest, if
any)) is payable solely out of the sale proceeds of other equity securities of
the Company, and from no other source. For purposes of the preceding sentence,
"EQUITY SECURITIES" means (i) any equity securities, including common stock and
preferred stock, of the Company, (ii) any securities, which by their terms, are
mandatorily convertible or exchangeable for, or require the purchase of, such
common stock or preferred stock and (iii) preferred securities issued by a
business trust, partnership or limited liability company, all of the common
equity of which is owned, directly or indirectly by, the Company and the sole
assets of which are subordinated debt securities with interest payments
deferrable at the Company's option.
On the date notice of redemption pursuant to this Section 3.02(A) is
given by mail pursuant to Section 3.05, the Company shall issue a press release
announcing such redemption which shall set forth the aggregate principal amount
of Convertible Debentures that the Company intends to redeem and, if the
Property Trustee is the Holder of the Debentures, that such redemption shall
result in the redemption of an equal liquidation amount of CRESTS.
(b) Subject to the provisions of Section 3.03 and Section 3.04 of this
Supplemental Indenture and to the provisions of Article 10 of the Base
Indenture, the Company shall have the right to redeem the Convertible
Debentures, in whole or in part, for cash from time to time after July 3, 2002,
upon not less than 30 days' nor more than 60 days' notice to the Holders, at a
redemption price equal to 100% of the principal amount of the Convertible
Debentures to be redeemed, together with any accrued and unpaid interest
(including Compounded Interest, if any) thereon to, but excluding the date of
such redemption. The Company may exercise its redemption right pursuant to this
Section 3.02(B) by notice given on any date only (i) if for 20 Trading Days
within any period of 30 consecutive Trading Days ending on such date, including
the last day of such period, the Closing Price of the shares of Common Stock
exceeds $25.71 per share, subject to adjustment, under the circumstances
described in Section 8.03, with respect to the Conversion Price and (ii) on or
prior to the date of the notice of redemption required by Section 3.05, the
Company shall have entered into an agreement,
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subject to customary terms and conditions, with a nationally recognized
investment banking firm pursuant to which such firm shall have agreed to
purchase from the Company such number of whole shares of Common Stock as would
have been issuable upon conversion of Convertible Debentures that are not
surrendered for conversion prior to the close of business on the redemption
date. To exercise its redemption right pursuant to this Section 3.02(B), the
Company shall issue a press release announcing the redemption prior to the
opening of business on the second Trading Day after the conditions described in
the preceding sentences have, from time to time, been met but shall not issue
such press release prior to July 3, 2002. Such press release shall announce the
redemption and set forth the aggregate principal amount of Convertible
Debentures that the Company intends to redeem and, if the Property Trustee is
the holder of the Debentures, that such redemption shall result in the
redemption of an equal liquidation amount of CRESTS.
SECTION 3.03. DEPOSIT OF REDEMPTION PRICE; PAYMENT OF INTEREST ON
CONVERTIBLE DEBENTURES TO BE REDEEMED. The redemption price of Debentures to be
redeemed, together with any accrued and unpaid interest (including Compounded
Interest, if any) thereon required to be paid, shall be paid prior to 12:00
noon, New York time, on the date fixed by the Company for redemption or at such
earlier time as the Company determines, PROVIDED that the Company shall deposit
with the Trustee an amount sufficient to pay such redemption price, plus such
accrued and unpaid interest, by 10:00 a.m., New York time, on the date such
redemption price is to be paid; PROVIDED, FURTHER, that if Convertible
Debentures are redeemed pursuant to this Article 3 on March 31, June 30,
September 30, or December 31, accrued and unpaid interest (including Compounded
Interest, if any) shall be payable to Holders on the relevant record date. The
Company may not redeem any Convertible Debentures unless all accrued and unpaid
interest (including Compounded Interest, if any) has been paid on all of the
outstanding Convertible Debentures for all quarterly interest periods
terminating on or prior to the last Interest Payment Date before the date of
redemption.
SECTION 3.04. REDEMPTION OF LESS THAN ALL CONVERTIBLE DEBENTURES. If
the Convertible Debentures are only partially redeemed, the Convertible
Debentures shall be redeemed pro rata by the Trustee.
SECTION 3.05. NOTICE OF REDEMPTION. Notice of any redemption of the
Convertible Debentures shall be given by the Company by mail to each Holder of
Convertible Debentures to be redeemed not fewer than 30 nor more than 60 days
before the date fixed for redemption of the Convertible Debentures, provided
that notice of redemption by mail pursuant to Section 3.02(B) shall be given on
the date on which the Company issues the press release referred to in Section
3.02(B). If the Convertible Debentures have been distributed to Holders in
liquidation of
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the Trust, notice of any redemption shall also be given by
publication made once a week for two successive weeks commencing not less than
30 nor more than 60 days prior to the redemption date in an Authorized
Newspaper.
For purposes of the calculation of the date of redemption and the dates
on which notices are given pursuant to this Section 3.05, a notice shall be
deemed to be given on the day such notice is first mailed by first-class mail,
postage prepaid, or by such other means suitable to assure delivery of such
written notice, to Holders of Convertible Debentures. Each notice given by mail
shall be addressed to the Holders of Convertible Debentures at the address of
each such Holder appearing in the books and records of the Company. No defect in
the notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder. Any notice which was mailed in the manner herein provided
shall be conclusively presumed to have been duly given on the date mailed
whether or not the holder receives the notice. Each notice, whether given by
mail or publication, shall state, as appropriate: (A) the redemption date; (B)
the aggregate principal amount of Convertible Debentures to be redeemed,
including CUSIP numbers, and, if less than all the Convertible Debentures held
by such Holder are to be redeemed, the aggregate principal amount of such
Convertible Debentures to be redeemed from such Holder; (C) the redemption price
to be paid in respect of the redemption; (D) the then current Conversion Price
and, if any event then known to the Company shall result in an adjustment to the
Conversion Price on or prior to the redemption date, such adjusted conversion
price and the date of such adjustment; (E) the last date on which the
Convertible Debentures may be converted prior to the redemption date; (F) any
Holder who wishes to convert his or her Convertible Debentures must comply with
and satisfy all the terms, conditions and requirements for conversion as set
forth in the Convertible Debentures and the Supplemental Indenture; (G) that
interest on the Convertible Debentures to be redeemed shall cease to accrue on
the redemption date; and (H) a place for the Convertible Debentures to be
redeemed.
SECTION 3.06. NO SINKING FUND. The Convertible Debentures are not
entitled to the benefit of any sinking fund.
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ARTICLE 4
OPTIONAL REPURCHASE
SECTION 4.01. REPURCHASE OF CONVERTIBLE DEBENTURES UPON NON- COMPLETION
OF MERGER. (a) If the Merger Agreement is terminated or the Merger has not been
consummated by December 31, 1998, the Company shall make an offer (the
"NON-COMPLETION OFFER") to each Holder of Convertible Debentures to repurchase
all or any part (equal to $50 or an integral multiple thereof) of such Holder's
Convertible Debentures at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase (the "NON-COMPLETION PAYMENT").
(b) Within 20 days following the Date of Non-Completion, the Company
shall mail a notice to each Holder of Convertible Debentures stating:
(i) that a Non-Completion Offer is being made pursuant to
Section 4.01 and that all Convertible Debentures properly tendered
shall be accepted for payment;
(ii) the purchase price and the purchase date, which shall be
no earlier than 30 days nor later than 60 days from the date such
notice is mailed (the "NON-COMPLETION PAYMENT DATE");
(iii) that any Convertible Debentures not properly tendered
shall continue to accrue interest in accordance with the terms of this
Supplemental Indenture and the Base Indenture;
(iv) that, unless the Company defaults in the payment of the
Non- Completion Payment, all Convertible Debentures accepted for
payment pursuant to a Non-Completion Offer shall cease to accrue
interest after the Non-Completion Payment Date;
(v) that Holders of Convertible Debentures electing to have
any Convertible Debentures purchased pursuant to a Non-Completion Offer
shall be required to surrender the Convertible Debentures, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
such Convertible Debentures completed, or transfer by book-entry, to
the Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the
Non-Completion Payment Date;
(vi) that Holders of Convertible Debentures shall be entitled
to withdraw their election if the Paying Agent receives, not later than
the
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close of business on the third Business Day prior to the Non-Completion
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
Convertible Debentures delivered for purchase, and a statement that
such Xxxxxx is withdrawing his election to have such Convertible
Debentures purchased; and
(vii) that Holders of Convertible Debentures whose Convertible
Debentures are being purchased only in part shall be issued new
Convertible Debentures equal in principal amount to the unpurchased
portion of the Convertible Debentures surrendered, which unpurchased
portion must be equal to $50 in principal amount or an integral
multiple thereof.
(c) A Holder may exercise its rights specified in Section 4.01(A) by
complying with the terms of the notice in Section 4.01(B) or upon (1) delivery
to any Paying Agent of a written notice (a "NON-COMPLETION PAYMENT NOTICE") at
any time prior to the close of business on the Non-Completion Payment Date,
stating (A) the certificate number of the Convertible Debenture that the Holder
shall deliver to be purchased and (B) the portion of the principal amount of the
Convertible Debenture that the Holder shall deliver to be purchased, which
portion must be $50 or an integral multiple thereof and (2) delivery of such
Convertible Debenture to such Paying Agent at such office prior to, on or after
the Non-Completion Payment Date (together with all necessary endorsements), such
delivery being a condition to receipt by the Holder of the Non-Completion
Payment therefor. If a Holder has elected to deliver to the Company for purchase
a portion of a Convertible Debenture, and if the principal amount of such
portion is $50 or an integral multiple of $50, the Company shall purchase such
portion from the Holder thereof pursuant to Section 4.01. Provisions of this
Supplemental Indenture and the Base Indenture that apply to the purchase of all
of a Convertible Debenture also apply to the purchase of a portion of such
Convertible Debenture. Each Paying Agent shall promptly notify the Company of
the receipt by the former of any and all Non-Completion Payment Notices and any
and all written notices of withdrawal thereof.
(d) Upon receipt by any Paying Agent of a Non-Completion Payment
Notice, the Holder of the Convertible Debenture in respect of which such Non-
Completion Payment Notice was given shall thereafter be entitled to receive
solely the Non-Completion Payment with respect to such Convertible Debenture
(unless such Non-Completion Payment Notice is withdrawn pursuant to Section
4.01(I)). Such Non-Completion Payment shall be paid to such Holder promptly
following the later of the Business Day following the Non-Completion Payment
Date (provided the conditions in Section 4.01(C) have been satisfied) and the
time
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of delivery of such Convertible Debenture to the relevant Paying Agent at
the office of such Paying Agent by the Holder thereof in the manner required by
Section 4.01(B).
(e) On or prior to the Non-Completion Payment Date, the Company shall,
to the extent lawful, (i) accept for payment all Convertible Debentures or
portions thereof properly tendered pursuant to a Non-Completion Offer, (ii)
deposit with the Paying Agent an amount of money in same-day funds (or New York
Clearing House funds if such deposit is made prior to the Non-Completion
Payment Date) sufficient to pay the Non-Completion Payment with respect to all
the Convertible Debentures or portions thereof so tendered and (iii) deliver or
cause to be delivered to the Trustee the Convertible Debentures so tendered
together with a certification setting forth the aggregate principal amounts of
Convertible Debentures or portions thereof being purchased by the Company.
(f) Upon a Non-Completion Payment Notice having been given as
aforesaid, Convertible Debentures to be purchased shall, on the Non-Completion
Payment Date, become due and payable at the Non-Completion Payment and from and
after such date (unless the Company shall default in the payment of the Non-
Completion Payment) such Convertible Debentures shall cease to bear interest.
Upon surrender of any such Convertible Debenture for purchase in accordance with
the foregoing provisions, such Convertible Debenture shall be purchased by the
Company for an amount equal to the Non-Completion Payment with respect to such
Convertible Debenture. If any Convertible Debenture tendered for purchase shall
not be so paid upon surrender thereof, the principal thereof (and premium, if
any, thereon) shall, until paid, bear interest from the Non-Completion Payment
Date at the rate borne by such Convertible Debenture.
(g) Any Convertible Debenture that is to be purchased only in part
shall be surrendered to a Paying Agent at the office of such Paying Agent (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Xxxxxx's attorney duly authorized in
writing), and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Convertible Debenture, without service charge, one
or more new Convertible Debentures of any authorized denomination as requested
by such Holder in an aggregate principal amount equal to, and in exchange for,
the portion of the principal amount of the Convertible Debenture so surrendered
that is not purchased; PROVIDED that each such new Convertible Debenture shall
be in a principal amount of $50 or an integral multiple thereof.
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(h) The Company shall comply with applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, in connection with a Non-
Completion Offer and may modify a Non-Completion Offer to so comply.
(i) A Non-Completion Payment Notice may be withdrawn before or after
delivery by the Holder to the relevant Paying Agent at the office of such Paying
Agent of the Convertible Debenture to which such Non-Completion Payment Notice
relates, by means of a written notice of withdrawal (by facsimile transmission
or letter) received by such Paying Agent at such office not later than three
Business Days prior to the Non-Completion Payment Date, specifying, as
applicable:
(i) the certificate number of the Convertible Debenture in
respect of which such notice of withdrawal is being submitted;
(ii) the principal amount of the Convertible Debenture with
respect to which such notice of withdrawal is being submitted; and
(iii) the principal amount, if any, of the Convertible
Debenture that remains subject to the original Non-Completion Payment
Notice and that has been or shall be delivered for purchase by the
Company.
Each Paying Agent shall promptly return to the prospective Holders
thereof any Convertible Debentures with respect to which a Non-Completion
Payment Notice has been withdrawn in compliance with this Indenture.
ARTICLE 5
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 5.01. EXTENSION OF INTEREST PAYMENT PERIOD. As long as an Event
of Default under Section 4.01(a) of the Base Indenture shall not have occurred
and be continuing, the Company shall have the right, at any time and from time
to time during the term of the Convertible Debentures, to defer payments of
interest by extending the interest payment period of such Convertible Debentures
for a period not exceeding 20 consecutive quarters nor extending beyond the
Stated Maturity of the Convertible Debentures (an "EXTENSION PERIOD"), during
which Extension Period no interest shall be due and payable on the Convertible
Debentures. To the extent permitted by applicable law, interest, the payment of
which has been deferred during an Extension Period, shall bear interest thereon
at the Applicable Rate compounded quarterly for each quarter of the Extension
Period ("COMPOUNDED INTEREST"). Before the termination of any such Extension
Period the Company may further extend such Extension Period, provided that such
Extension
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Period, together with all such previous and further extensions thereof, shall
not exceed 20 consecutive quarterly periods, or extend beyond the Maturity Date.
At the end of the Extension Period, the Company shall pay all interest accrued
and unpaid on the Convertible Debentures, including any Compounded Interest
(together, "DEFERRED INTEREST") that shall be payable to the Holders of
Convertible Debentures in whose names the Convertible Debentures are registered
in the Debenture Register on the first record date after the termination of the
Extension Period. Upon the termination of any Extension Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof, but the
Company may pay at any time all or any portion of the interest accrued during an
Extension Period.
SECTION 5.02. NOTICE OF EXTENSION. (a) If the Property Trustee shall be
the only Holder of the Convertible Debentures at the time the Company selects an
Extension Period, the Company shall give written notice to the Regular Trustees,
the Property Trustee and the Trustee of its selection of such Extension Period
one Business Day before the earlier of (i) the date on which Distributions on
the Trust Securities are payable and (ii) the date the Regular Trustees are
required to give notice of the record date or the date such Distributions are
payable to any national stock exchange or other organization on which the CRESTS
may be listed or quoted, if any, or to holders of CRESTS, but in any event at
least one Business Day before such record date or such payment date.
(b) If the Property Trustee shall not be the Holder of the Convertible
Debentures at the time the Company selects an Extension Period, the Company
shall give the Holders of Convertible Debentures written notice of its selection
of such Extension Period at least 10 Business Days before the earlier of (i) the
Interest Payment Date for the first quarter of such Extension Period and (ii)
the date the Company is required to give notice of the record date or the date
of such interest payment to Holders of Convertible Debentures.
(c) The quarter in which any notice is given pursuant to subsections
(a) or (b) of this Section 5.02 shall be, and shall be counted as, one of the 20
quarters permitted in the maximum Extension Period permitted under Section 5.01.
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ARTICLE 6
EXPENSES
SECTION 6.01. PAYMENT OF EXPENSES. Because the Trust is being formed
solely to facilitate an investment in the Convertible Debentures, the Company,
in its capacity as borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale,
issuance and/or exchange of the Convertible Debentures and the Trust
Securities, including fees payable pursuant to the Purchase Agreement
and compensation, expenses and indemnification of the Trustee under the
Base Indenture in accordance with the provisions of Section 5.06 of the
Base Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust, the fees and expenses of the
Regular Trustees, Property Trustee and the Delaware Trustee and the
fees and expenses of the Guarantee Trustee under the Guarantee, the
costs and expenses relating to the operation of the Trust, including,
without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and
other telecommunications expenses and costs and expenses incurred in
connection with the acquisition, financing, and disposition of Trust
assets);
(c) pay all costs and expenses related to the enforcement by
the Property Trustee of its rights as a Holder of Convertible
Debentures;
(d) be responsible for all debts and obligations of the Trust
(other than with respect to the Trust Securities);
(e) pay any and all taxes, duties, assessments or governmental
charges of whatever nature (other than United States withholding taxes)
directly imposed on the Trust, in its capacity as a legal entity or as
a holder of the Convertible Debentures, by the United States, or any
other taxing authority;
so that the net amounts received and retained by such Trust and the
Property Trustee after paying such taxes, duties, assessments, governmental
charges, expenses, debts and obligations shall be equal to the amounts such
Trust and the Property Trustee would have received had no such taxes, duties,
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assessments, governmental charges, expenses, debts and obligations been incurred
by or imposed on such Trust.
The foregoing obligations of the Company are for the benefit of, and
shall be enforceable by, any person to whom any such fees, debts, obligations,
costs, expenses, taxes, duties, assessments or other governmental charges are
owed (each a "CREDITOR") whether or not such Creditor has received notice
thereof. Any Creditor may enforce such obligations of the Company directly
against the Company, and the Company irrevocably waives any right or remedy to
require that any such Creditor take any action against the Trust or any other
person before proceeding against the Company. The Company shall execute such
additional agreements as may be necessary or desirable to give full effect to
the foregoing.
SECTION 6.02. PAYMENT UPON RESIGNATION OR REMOVAL. Upon termination of
this Supplemental Indenture or the Base Indenture or the removal or resignation
of the Trustee pursuant to Section 5.07 of the Base Indenture, the Company shall
pay to the Trustee all amounts owed to the Trustee accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or
removal or resignation of the Delaware Trustee or the Property Trustee, as the
case may be, pursuant to Section 6.06 of the Declaration or the Guarantee
Trustee pursuant to the Guarantee, the Company shall pay to the Delaware
Trustee, the Property Trustee or the Guarantee Trustee, and their respective
counsel, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE 7
COVENANTS
SECTION 7.01. COVENANTS AS TO THE TRUST. If the Property Trustee is the
Holder of the Convertible Debentures, the Company shall (a) maintain, directly
or indirectly, ownership of all of the Trust Common Securities; PROVIDED,
however, that any permitted successor of the Company under the Base Indenture
may succeed to the Company's ownership of the Trust Common Securities, (b) cause
the Trust to remain a statutory business trust, except in connection with a
distribution of Convertible Debentures to the holders of Trust Securities, the
redemption or conversion of all of the Trust Securities, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and not
to voluntarily dissolve, wind-up, liquidate or to be terminated, except as
permitted by the Declaration, (c) use its commercially reasonable efforts to
ensure that the Trust shall not be an "investment company" for purposes of the
Investment Company Act of 1940, as amended, and (d) take no action that would be
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reasonably likely to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
ARTICLE 8
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 8.01. CONVERSION RIGHTS. (a) Subject to and upon compliance
with the provisions of this Article 8, the Convertible Debentures are
convertible, at the option of the Holder thereof, at any time beginning 90 days
following the last date of original issuance of any CRESTS and prior to the
close of business, New York time, on June 28, 2010 (or earlier as provided in
Section 8.01(B)) into that number of fully paid and nonassessable shares of
Common Stock obtained by dividing the principal amount of the Convertible
Debentures to be converted by the Conversion Price (as in effect on the date
provided for in Section 8.02(B)). The initial Conversion Price is $21.42 per
share of Common Stock. The Conversion Price is subject to adjustment as
described in this Article 8.
(b) The right to convert Convertible Debentures shall terminate prior
to the close of business (i) on June 28, 2010 or (ii) in the case of Convertible
Debentures called for redemption, on the second Business Day prior to the
related redemption date, unless the Company shall default in making payment of
any moneys or shares of Common Stock payable upon such redemption under Article
3.
SECTION 8.02. CONVERSION PROCEDURES. (a) In order to convert all or a
portion of the Convertible Debentures, the Holder thereof shall (i) sign and
deliver to the Conversion Agent an irrevocable notice of election to convert
("CONVERSION NOTICE") setting forth the principal amount of Convertible
Debentures to be converted (which shall equal $50 or any integral multiple
thereof), together with the name or names, if other than the Holder, in which
the shares of Common Stock should be issued upon conversion together with any
payment required by the following paragraph, (ii) if such Convertible Debentures
are definitive Convertible Debentures, surrender to the Conversion Agent the
Convertible Debentures to be converted, with such endorsements or transfer
documents as requested by the Conversion Agent, and (iii) pay any transfer or
similar tax, if required. In addition, a holder of Trust Securities may exercise
its right under the Declaration to convert such Trust Securities into Common
Stock by delivering to the Conversion Agent an irrevocable conversion request
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (A) to exchange such Trust Securities for a portion of the
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Convertible Debentures held by the Trust (at an exchange rate of $1 of principal
amount of Convertible Debentures for each $1 liquidation amount of Trust
Securities) and (B) to immediately convert such Convertible Debentures, on
behalf of such holder, into Common Stock pursuant to this Article 8 and, if such
Trust Securities are in definitive form, surrendering such Convertible Preferred
Security Certificates or Common Security Certificates, as the case may be, duly
endorsed or assigned to the Trust or in blank. So long as any CRESTS are
outstanding, the Trust shall not convert any Convertible Debentures except
pursuant to a conversion request delivered to the Conversion Agent by a holder
of Trust Securities.
Except as provided below, accrued but unpaid interest shall not be paid
in cash on Convertible Debentures that are converted by a Holder into Common
Stock, nor shall such accrued interest be converted into additional shares of
Common Stock. Holders of Convertible Debentures at the close of business on a
Regular Record Date shall be entitled to receive the interest payable on such
Convertible Debentures (except that holders of Convertible Debentures called for
redemption on a redemption date between such Regular Record Date and the
Interest Payment Date shall not be entitled to receive such interest on such
Interest Payment Date) on the corresponding Interest Payment Date
notwithstanding the conversion of such Convertible Debentures following such
Regular Record Date and prior to such Interest Payment Date. However,
Convertible Debentures surrendered for conversion during the period between the
close of business on any Regular Record Date and the opening of business on the
corresponding Interest Payment Date (except Convertible Debentures called for
redemption on a redemption date during such period) shall be accompanied by
payment of an amount equal to the interest payable on such Convertible
Debentures on such Interest Payment Date. A Holder of Convertible Debentures on
a Regular Record Date who (or whose transferee) tenders any such Convertible
Debentures for conversion into shares of Common Stock on such Interest Payment
Date shall receive the interest payable by the Company on such Convertible
Debentures on such date, and the converting Holder need not include payment of
the amount of such interest upon surrender of Convertible Debentures for
conversion. The Company shall make no payment or allowance for dividends on the
shares of Common Stock issued upon conversion.
(b) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the day on which the Conversion Notice was
received (the "CONVERSION DATE") by the Conversion Agent from the Holder or from
a holder of the Trust Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such Common Stock as
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of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Conversion Notice, a certificate
or certificates for the number of full shares of Common Stock and any other
shares of common stock of the Company issuable upon such conversion, together
with the cash payment, if any, in lieu of any fraction of any share to the
Person or Persons entitled to receive the same. The Conversion Agent shall
deliver such certificate or certificates to such Person or Persons.
(c) The Company's delivery upon conversion of the fixed number of
shares of Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at the
Maturity Date of the portion of Convertible Debentures so converted and any
unpaid interest (including Compounded Interest, if any) accrued on such
Convertible Debentures at the time of such conversion.
(d) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the Convertible Debentures.
Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of the Convertible Debentures, the
Company shall pay to the Conversion Agent an amount in cash (and the Conversion
Agent in turn shall pay such cash amount to the Holder of such Convertible
Debentures or the holder of the Trust Securities so converted, as appropriate)
based upon the Closing Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one Convertible Debenture shall
be surrendered for conversion at any one time by the same Holder, the number of
full shares of Common Stock issuable upon conversion thereof shall be computed
on the basis of the aggregate principal amount of Convertible Debentures so
surrendered.
(e) In the event of the conversion of any Convertible Debenture in
part only, a new Convertible Debenture or Convertible Debentures for the
unconverted portion thereof shall be issued in the name of the Holder thereof
upon the cancellation thereof in accordance with Section 12.02 of the Base
Indenture.
(f) In effecting the conversion transactions described in this Section
8.02, the Conversion Agent is acting as agent of the holders of Trust Securities
(in the exchange of Trust Securities for Convertible Debentures) and as agent of
the Holders of Convertible Debentures (in the conversion of Convertible
Debentures into Common Stock), as the case may be. The Conversion Agent is
hereby authorized (i) to exchange Convertible Debentures held by the Trust from
time to time for Trust Securities in connection with the conversion of such
Trust
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Securities in accordance with this Article 8 and (ii) to convert all or a
portion of the Convertible Debentures into Common Stock and thereupon to deliver
such shares of Common Stock of the Company in accordance with the provisions of
this Article 8 and to deliver to the Trust a new Convertible Debenture or
Convertible Debentures for any resulting unconverted principal amount.
SECTION 8.03. CERTAIN CONVERSION PRICE ADJUSTMENTS. (a) The
Conversion Price per share of Common Stock shall be adjusted from time to time
as follows:
(i) If the Company shall after the date on which Convertible
Debentures are initially issued (A) pay a dividend or make a
distribution on any class of its capital stock in shares of Common
Stock, (B) subdivide the outstanding Common Stock into a greater number
of shares or (C) combine the outstanding Common Stock into a smaller
number of shares, then the Conversion Price in effect at the opening of
business on the day next following the date fixed for the determination
of stockholders entitled to receive such dividend or distribution or at
the opening of business on the day next following the day on which such
subdivision or combination becomes effective, as the case may be, shall
be adjusted so that the Holder of any Convertible Debenture thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock that such Holder would have owned or have been
entitled to receive after the happening of any of the events described
above had such Convertible Debenture been converted immediately prior
to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision or combination. An
adjustment made pursuant to this Section 8.03(A)(I) shall become
effective immediately after the opening of business on the day next
following the record date (except as provided in Section 8.03) below)
in the case of a dividend or distribution and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision or combination.
(ii) If the Company shall issue after the date on which
Convertible Debentures are initially issued rights, options or warrants
(other than any rights, options or warrants referred to in Section
8.03(A)(III) below) to all holders of Common Stock entitling them (for
a period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase Common Stock at a price per share less
than the Current Market Price per share of Common Stock on the record
date for the determination of stockholders entitled to receive such
rights, options or warrants, then the Conversion Price in effect at the
opening of business on
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the day next following such record date shall be adjusted to equal the
price determined by multiplying (A) the Conversion Price in effect
immediately prior to the opening of business on the day next following
the date fixed for such determination by (B) a fraction, the numerator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination and (2) the number of shares that the aggregate proceeds
to the Company from the exercise of such rights, options or warrants
for Common Stock would purchase at such Current Market Price, and the
denominator of which shall be the sum of (x) the number of shares of
Common Stock outstanding on the close of business on the date fixed for
such determination and (y) the number of additional shares of Common
Stock offered for subscription or purchase pursuant to such rights,
options or warrants. Such adjustment shall become effective immediately
after the opening of business on the day next following such record
date (except as provided in Section 8.03(E)). In determining whether
any rights, options or warrants entitle the holders of Common Stock to
subscribe for or purchase shares of Common Stock at less than the
Current Market Price thereof, there shall be taken into account any
consideration received by the Company upon issuance and upon exercise
of such rights, options or warrants, the value of such consideration,
if other than cash, to be determined by the Board of Directors.
(iii) If the Company shall distribute to all holders of the
Common Stock any shares of capital stock (other than common stock of
the Company), evidences of indebtedness, cash or other assets of the
Company (including securities, but excluding (w) any dividend or
distribution referred to in Section 8.03(A)(I), (x) any rights, options
or warrants referred to in Section 8.03(A)(II)) or in the second
paragraph of this Section 8.03(A)(III), (y) any dividend or
distribution paid exclusively in cash or (z) any stocks, securities or
other property received as a result of a transaction referred to in
Section 8.04) (any of the foregoing being hereinafter referred to in
this Section 8.03(A)(III) as the "SECURITIES"), then in each such case
the Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying (I) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by
(II) a fraction, the numerator of which shall be the Current Market
Price per share of Common Stock on the record date mentioned below less
the then fair market value (as determined by the Board of Directors) of
the portion of the Securities so distributed to one share of Common
Stock, and the denominator of which shall be the Current Market Price
per share of Common Stock on the record date mentioned below.
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Such adjustment shall become effective immediately at the opening of
business on the day next following the record date for the
determination of stockholders entitled to receive such distribution
(except as provided in Section 8.03(E)).
In case the Company shall distribute rights or warrants to
purchase Common Stock pro rata to all holders of Common Stock which
rights, options or warrants are not at such time immediately
exercisable but, upon the occurrence of a specified event or events
("EXERCISE TRIGGER DATE") shall become exercisable and once they become
exercisable shall entitle, or upon the occurrence of an additional
specified event or events ("PRICE TRIGGER DATE") shall entitle, the
Holder thereof to purchase Common Stock at a price per share of Common
Stock less than the Current Market Price of the Common Stock on the
Trading Day next succeeding the later of the Exercise Trigger Date or
the Price Trigger Date ("ADJUSTMENT TRIGGER DATE") and there shall have
occurred such Adjustment Trigger Date, thus permitting the holders of
such rights, options or warrants irrevocably to exercise any exchange,
subscription or purchase rights conferred by such rights, options or
warrants at a price per share of Common Stock less than such Current
Market Price, then the Conversion Price in effect at the opening of
business on the Adjustment Trigger Date shall be adjusted by
multiplying (I) such Conversion Price by (II) a fraction, the numerator
of which shall be equal to the Current Market Price per share of the
Common Stock on the Trading Day immediately prior to the Adjustment
Trigger Date less an amount equal to the quotient of (x) the aggregate
fair market value on the Adjustment Trigger Date of the rights, options
or warrants so distributed (as determined by the Board of Directors)
divided by (y) the number of shares of Common Stock outstanding on such
day prior to the Adjustment Trigger Date and the denominator of which
shall be equal to such Current Market price per share of the Common
Stock. Such adjustment shall become effective immediately after the
opening of business on the day next following such Adjustment Trigger
Date.
(iv) If the Company shall, by dividend or otherwise, at any
time distribute to all holders of the Common Stock cash (excluding any
cash that is distributed as part of a distribution requiring a
Conversion Price adjustment pursuant to Section 8.03(A)(III) and cash
that is distributed in a merger or consolidation to which Section 8.05
applies) in an aggregate amount that, together with (A) the aggregate
amount of any other distributions to all holders of the Common Stock
made exclusively in cash (to which this Section 8.03(A)(IV) would
otherwise apply) within the 12 months preceding the date of payment of
such distribution and in respect
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of which no Conversion Price adjustment has been made and (B) all
Excess Purchase Payments in respect of each tender offer or exchange
offer for Common Stock concluded by the Company or any of its
Subsidiaries within the 12 months preceding the date of payment of such
distribution and in respect of which no Conversion Price adjustment has
been made, exceeds an amount equal to 10% of the product of the Current
Market Price per share of Common Stock on the date fixed for
determination of holders of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on
such date, then the Conversion Price shall be adjusted so that it shall
equal the price determined by multiplying (I) such Conversion Price in
effect immediately prior to the Conversion Price adjustment
contemplated by this Section 8.03(A)(IV) by (II) a fraction the
numerator of which shall be the Current Market Price per share of the
Common Stock on the date fixed for determination of holders of Common
Stock entitled to receive such distribution less the combined amount of
such cash and such Excess Purchase Payments so distributed applicable
to one share of Common Stock and the denominator of which shall be such
Current Market Price per share of the Common Stock on such date of
determination. Such adjustment shall become effective immediately prior
to the opening of business on the day next following the date fixed for
such determination.
(v) In case a tender offer or exchange offer (other than an
odd-lot offer) made by the Company or any of its Subsidiaries for all
or any portion of the Common Stock shall be consummated, if the
aggregate amount of any Excess Purchase Payment, together with (A) the
aggregate amount of any distributions made to all holders of Common
Stock made exclusively in cash (excluding any cash that is distributed
as part of a distribution requiring a Conversion Price adjustment
pursuant to Section 8.03(A)(III) and cash that is distributed in a
merger or consolidation to which Section 8.04 applies) within the 12
months preceding the consummation of such tender or exchange offer and
in respect of which no Conversion Price adjustment has been made, and
(B) all other Excess Purchase Payments in respect of each tender or
exchange offer for Common Stock concluded by the Company or any of its
Subsidiaries within the 12 months preceding the consummation of such
tender or exchange offer and in respect of which no Conversion Price
adjustment has been made, exceeds an amount equal to 10% of the product
of the Current Market Price per share of Common Stock on the
consummation date of such tender or exchange offer (any such date, the
"PURCHASE DATE") times the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on such Purchase Date,
then the Conversion Price shall be adjusted so that it shall equal the
price
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determined by multiplying (I) such Conversion Price in effect
immediately prior to such Purchase Date by (II) a fraction, the
numerator of which shall be the Current Market Price per share of the
Common Stock on such Purchase Date less the combined amount of Excess
Purchase Payments and such cash so distributed applicable to one share
of Common Stock and the denominator of which shall be such Current
Market Price per share on such Purchase Date. Such adjustment shall
become effective immediately prior to the opening of business on the
day next following such Purchase Date.
(vi) The Company from time to time may reduce the Conversion
Price by any amount for any period of at least 20 Business Days (or
such other period as may then be required by applicable law), provided
that the Board of Directors shall have determined that such reduction
is in the best interests of the Company. No reduction in the Conversion
Price pursuant to this Section 8.03(A)(VI) shall become effective
unless the Company shall have mailed a notice, at least 15 days prior
to the date on which such reduction is scheduled to become effective,
to each Holder of Convertible Debentures and to each holder of the
Trust Securities. Such notice shall be given by first class mail,
postage prepaid, at such Xxxxxx's address as the same appears on the
records of the Company. Such notice shall state the amount per share by
which the Conversion Price shall be reduced and the period for which
such reduction shall be in effect.
(vii) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 8.03(A)(I) through
8.03(A)(V), as the Board determines to be necessary in order that any
event treated for Federal income tax purposes as a dividend of stock or
stock rights shall not be taxable to the recipients; PROVIDED that any
such reduction shall not be effective until written evidence of the
action of the Board authorizing such reduction shall be filed with the
Secretary of the Company and notice thereof shall have been given by
first class mail, postage prepaid, to each Holder of Convertible
Debentures and to each holder of the Trust Securities at such Xxxxxx's
address as the same appears on the stock transfer books of the Company.
(b) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of this
Section 8.03(B) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the provisions
of this Article 8 (other than this Section 8.03(B)) not later than such time as
may be
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required in order to preserve the tax-free nature of a distribution to
the holders of shares of Common-Stock into which Convertible Debentures are
convertible. Notwithstanding any other provisions of this Article 8, the Company
shall not be required to make any adjustment of any Conversion Price established
hereunder for the issuance of any shares of common stock of the Company
(including Common Stock) pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this Article 8 shall be made to the nearest 1/100 of a cent
(with $.00005 being rounded upward) or to the nearest 1/10,000 of a share (with
.00005 of a share being rounded upward), as the case may be.
(c) The reclassification of Common Stock into which Convertible
Debentures are then convertible into securities which include securities other
than Common Stock (other than any reclassification upon a consolidation or
merger to which Section 8.04 applies), shall be deemed to involve (i) a
distribution of such securities other than Common Stock to all holders of such
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution") and (ii) a subdivision or combination, as the case may be,
of the number of shares of such Common Stock outstanding immediately prior to
such reclassification into the number of shares of such Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be the effective date of such subdivision or combination).
(d) If:
(i) the Company takes any action that would require an
adjustment of the Conversion Price pursuant to this Section 8.03 or
8.04; or
(ii) there shall be any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required; or
(iii) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Company; or
(iv) the Company or any of its Subsidiaries shall commence a
tender offer or exchange offer for all or a portion of the outstanding
shares of Common Stock (or shall amend any such tender or exchange
offer),
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then the Company shall cause to be filed with the Trustee and the transfer agent
for the CRESTS and the Convertible Debentures, and shall cause to be mailed to
the Holders of Convertible Debentures and the holders of the Trust Securities at
their addresses as shown on the securities transfer records of the Company, as
promptly as possible, but at least 15 days prior to the earliest applicable date
hereinafter specified, a notice stating, as applicable, (A) the proposed record
date for a dividend or distribution or the proposed effective date of a
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up,
(B) the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities or
other property, if any, deliverable upon such consolidation, merger, sale,
transfer, liquidation, dissolution or winding up or (C) the date on which such
tender or exchange offer is scheduled to expire unless extended, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto). Failure to give or receive such notice or any
defect therein shall not affect the legality or validity of the related
transaction.
(e) In any case in which Section 8.03(A) provides that an adjustment
shall become effective on the day next following a record date for an event, the
Company may defer until the occurrence of such event (i) issuing to the holder
of any Convertible Debenture converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the number of shares of Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction thereof pursuant to Section 8.02(D).
(f) For purposes of this Article 8, the number of shares of Common
Stock at any time outstanding shall not include any shares of Common Stock or
such other common stock then owned or held by or for the account of Company. The
Company shall not pay a dividend or make any distribution on, or issue any
rights or warrants in respect of, shares of Common Stock held in the treasury of
the Company.
(g) The Company shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
shares of Common Stock or its issued shares of Common Stock held in its
treasury, for the purpose of effecting conversion of the Convertible Debentures,
the full number of shares of Common Stock deliverable upon the conversion of all
the Convertible Debentures then outstanding and not theretofore converted. Any
shares of Common Stock of the Company issued upon conversion of the Convertible
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Company shall deliver the shares of Common Stock received
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upon conversion of the Convertible Debentures to the converting Holder free and
clear of all liens. charges, security interests and encumbrances, except for
United States withholding taxes. The Company shall endeavor to list the shares
of Common Stock to be delivered upon conversion of the Convertible Debentures,
prior to such delivery, upon each national securities exchange or with each
national securities association, if any, upon which the outstanding Common Stock
is listed at the time of such delivery. Prior to the delivery of any securities
that the Company shall be obligated to deliver upon conversion of Convertible
Debentures, the Company shall endeavor to comply with all federal and state laws
and regulations thereunder requiring the registration of such securities with,
or any approval of or consent to the delivery thereof by, any governmental
authority. For purposes of this Section 8.03(G), the number of shares of Common
Stock that shall be deliverable upon the conversion of all outstanding
Convertible Debentures shall be computed as if at the time of computation all
such outstanding Convertible Debentures were held by a single Holder.
(h) The Company shall pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock or other securities or property on conversion of Convertible
Debentures pursuant hereto; provided, however, that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issue or delivery of shares of Common Stock or other securities or
property in a name other than that of the holder of such shares to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company the amount of any such
tax or established, to the reasonable satisfaction of the Company, that such tax
has been paid.
(i) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Property Trustee for the Trust an officer's
certificate setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment, which
certificate shall be prima facie evidence of the correctness of such adjustment.
Promptly after delivery of such certificate, the Company shall prepare a notice
of such adjustment of the Conversion Price setting forth the adjusted Conversion
Price and the effective date of such adjustment and shall send such notice of
such adjustment of the Conversion Price by first class mail, postage prepaid, to
the Holders of the Convertible Debentures, at such Holders' address as the same
appears on the records of the Company.
SECTION 8.04. MERGER, CONSOLIDATION, OR SALE OF ASSETS. (a) In the
event that the Company shall be a party to any Fundamental Change, then
appropriate provision shall be made as part of the terms of such transaction
whereby
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the Holder of each Convertible Debenture then outstanding shall have the
right thereafter to convert such Convertible Debenture only into:
(i) in the case of any such transaction that does not
constitute a Common Stock Fundamental Change and subject to funds being
legally available for such purpose under applicable law at the time of
such conversion, the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Common Stock issuable
upon conversion of such Convertible Debenture immediately prior to such
recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the Conversion Price
in accordance with Section 8.04(C)(I); and
(ii) in the case of any such transaction that constitutes a
Common Stock Fundamental Change, common stock of the kind received by
holders of Common Stock as a result of such Common Stock Fundamental
Change in an amount determined in accordance with Section 8.04(C)(II).
(b) The company formed by such consolidation or resulting from such
merger or that acquires such assets or that acquires the Company's shares, as
the case may be, shall enter into a supplemental indenture with the Trustee,
satisfactory in form to the Trustee and executed and delivered to the Trustee,
the provisions of which shall establish such conversion right specified in
Section 8.04(A). Such supplemental indenture shall provide for adjustments that,
for events subsequent to the effective date of such supplemental indenture,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article. The above provisions shall similarly apply to successive
transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
shall be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Non-Stock Fundamental Change shall be the lower of (A) the
Conversion Price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to Section 8.03, and (B) the product of
the greater of the Applicable Price and the then applicable Reference
Market Price and a
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fraction, the numerator of which is $50 and the denominator of which is
(x) the amount of the Optional Redemption Price set forth in Section
3.02 for $50 in principal amount of Convertible Debentures if the
redemption date were the date of such Non- Stock Fundamental Change
(or, for the period commencing June 17, 1998 and ending June 29, 1999,
and the twelve-month periods beginning June 30, 1999 and June 30, 2000
and the period beginning June 30, 2001 and ending July 2, 2002, the
product of 107%, 106.3%, 105.6% and 104.9 % respectively), times $50
plus (y) any then-accrued and unpaid interest on $50 principal amount
of Convertible Debentures; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Common Stock Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant to
Section 8.03, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price and the denominator of which is the Applicable
Price; PROVIDED, that in the event of a Common Stock Fundamental Change
in which (A) 100% of the value of the consideration received by a
holder of Common Stock is common stock of the successor, acquirer or
other third party (and cash, if any, paid with respect to any
fractional interests in such common stock resulting from such Common
Stock Fundamental Change) and (B) all of the Common Stock (other than
treasury shares and shares held by subsidiaries of the Company) shall
have been exchanged for, converted into or acquired for, common stock
of the successor, acquirer or other third party (and any cash with
respect to fractional interests in such common stock resulting from
such Common Stock Fundamental Change), the Conversion Price of the
Convertible Debentures immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change multiplied by a fraction,
the numerator of which is one (1) and the denominator of which is the
number of shares of common stock of the successor, acquirer or other
third party received by a holder of one share of Common Stock as a
result of such Common Stock Fundamental Change.
SECTION 8.05. SPECIAL PROVISIONS REGARDING ADJUSTMENT OF CONVERSION
PRICE OR OTHER PROVISIONS. In the event that the provisions of this Article 8
specifying the methods by which the Conversion Price or other provisions are
adjusted would require an adjustment that is determined in good faith by the
Board of Directors to be inconsistent with the purposes of the provisions hereof
providing for Conversion Price or other adjustments (generally, to place the
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holders of the Convertible Debenture and the Trust Securities in a position
equivalent to the position they were in prior to the event requiring an
adjustment to the Conversion Price or other adjustments), the Board of Directors
may make an adjustment (in lieu of that required pursuant to such provisions)
that it determines in good faith to place the Holders of the Convertible
Debentures in a position at least equivalent to the position they were in prior
to such event, which determination shall be described in a Board Resolution.
There shall be no adjustment of the Conversion Price in case of the issuance of
any stock of the Company in a reorganization, acquisition or other similar
transaction except as specifically set forth in this Article 8. If any action or
transaction would require adjustment of any Conversion Price established
hereunder pursuant to more than one paragraph of this Article 8, only the
adjustment which would result in the largest reduction of such Conversion Price
shall be made.
SECTION 8.06. CERTAIN ADDITIONAL RIGHTS. In case the Company shall, by
dividend or otherwise, declare or make a distribution on the Common Stock
referred to in Section 7.01(C) or 7.01(D), the Holder of the Convertible
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which the Convertible Debentures are converted, the
portion of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock; provided, that, at the election of the Company
(whose election shall be evidenced by a resolution of the Board of Directors)
with respect to all Holders so converting, the Company may, in lieu of
distributing to such Holder any portion of such distribution not consisting of
cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors). If any conversion of Convertible Debentures
described in the immediately preceding sentence occurs prior to the payment date
for a distribution to holders of Common Stock that the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due bill for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled; provided, that such due bill (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the
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date of payment or delivery thereof to holders of shares of Common Stock
receiving such distribution.
SECTION 8.07. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE
OR ADJUSTMENTS. Neither the Trustee nor any Conversion Agent shall at any time
be under any duty or responsibility to any Holder of any Convertible Debenture
to determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or whether this supplemental
indenture need be entered into. Neither the Trustee nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind of
account) of any shares of Common Stock or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Convertible
Debenture; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property upon the surrender of any
Convertible Debenture for the purpose of conversion.
SECTION 8.08. DEFEASANCE. The Convertible Debentures are subject to
Section 3.04 of the Base Indenture. If the Company exercises its right of
defeasance in accordance with Section 3.04 of the Base Indenture, the conversion
rights of the Holders of the Convertible Debentures under the Base Indenture and
the Supplemental Indenture and the holders of the Trust Securities under the
Declaration shall survive until the Convertible Debentures are no longer
outstanding.
ARTICLE 9
EVENTS OF DEFAULT
SECTION 9.01. EVENTS OF DEFAULT. A default in the payment of Liquidated
Damages Amounts (as defined in the Registration Rights Agreement) shall be a
default under Section 4.01(b) of the Base Indenture. Notwithstanding any other
provision to the contrary, a valid extension of the interest payment period of
the Convertible Debentures pursuant to Section 5.01 shall not constitute a
default in the payment of an installment of interest under Section 4.01(a) of
the Base Indenture.
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ARTICLE 10
FORM OF CONVERTIBLE DEBENTURE
SECTION 10.01. FORM OF CONVERTIBLE DEBENTURE. The Convertible
Debentures and the Trustee's Certificate of Authentication to be endorsed
thereon shall be substantially in the form set forth as Annex I to this
Supplemental Indenture.
ARTICLE 11
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 11.01. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES. Convertible
Debentures in the aggregate principal amount of up to the sum of (a)
$180,412,400 and (b) such aggregate principal amount (which may not exceed
$207,474,250 aggregate principal amount) of Convertible Debentures as shall be
purchased by the Trust as a consequence of the exercise of an over-allotment
option in accordance with the terms of the Purchase Agreement, may, upon or
following execution of this Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Convertible Debentures to or
upon the written order of the Company, signed by its Chairman, its Vice
Chairman, its President, or any Vice President, without any further action by
the Company.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. RATIFICATION OF BASE INDENTURE; SUPPLEMENTAL INDENTURE
CONTROLS. The Base Indenture, as supplemented by this Supplemental Indenture, is
in all respects ratified and confirmed, and this Supplemental Indenture shall be
deemed part of the Base Indenture in the manner and to the extent herein and
therein provided. The provisions of this Supplemental Indenture shall supersede
the provisions of the Base Indenture to the extent the Base Indenture is
inconsistent herewith.
SECTION 12.02. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
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SECTION 12.03. GOVERNING LAW. This Supplemental Indenture and each
Convertible Debenture shall be deemed to be a contract made under the internal
laws of the State of New York, and for all purposes shall be construed in
accordance with the laws of said State.
SECTION 12.04. SEPARABILITY. In case any one or more of the provisions
contained in this Supplemental Indenture or in the Convertible Debentures shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Supplemental Indenture or of the Convertible Debentures, but
this Supplemental Indenture and the Convertible Debentures shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 12.05. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
SECTION 12.06. MERGER. The provisions of Article 7 of the Base
Indenture shall govern the obligations of Servico, Inc. and Lodgian following
the Merger.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
SERVICO, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and Secretary
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ X. Xxxxxxxxxxx Xxxxxxxxxx
-----------------------------------
Name: X. Xxxxxxxxxxx Xxxxxxxxxx
Title: Senior Financial Services Officer
LODGIAN, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and Secretary
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ANNEX I
FORM OF CONVERTIBLE DEBENTURE
FORM OF FACE OF CONVERTIBLE DEBENTURE
THIS SECURITY, THE COMMON STOCK ISSUABLE UPON CONVERSION THEREOF, THE
GUARANTEE AND THE CRESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAW. NEITHER THESE SECURITIES NOR ANY INTEREST OR PARTICIPATION IN
THESE SECURITIES MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITIES, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF SUCH
SECURITIES (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS SUCH SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR' WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS
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ACQUIRING SUCH SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, OR AS FIDUCIARY FOR THE
ACCOUNT OF ONE OR MORE TRUSTS, EACH OF WHICH IS AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (7) OF RULE 501 UNDER
THE SECURITIES ACT, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UPON THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY, SUBJECT IN EACH OF THE FOREGOING CASES, TO
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THESE SECURITIES BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
COMPANY. EACH PURCHASER OR HOLDER OF THE SECURITY EVIDENCED HEREBY WILL
BE DEEMED TO HAVE REPRESENTED EITHER THAT (A) IT IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO PART 4 OF SUBTITLE B OF TITLE 1 OF ERISA OR A
PLAN DESCRIBED IN SECTION 4975 OF THE CODE OR AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER
PLAN OR (B) BY REASON OF THE APPLICATION OF ONE OR MORE STATUTORY OR
ADMINISTRATIVE EXEMPTIONS FROM THE PROHIBITED TRANSACTION RULES OF
SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE, ITS PURCHASE AND
HOLDING OF CRESTS WILL NOT CONSTITUTE, CAUSE OR RESULT IN THE
OCCURRENCE OF A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE
HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION RIGHTS
AGREEMENT RELATING TO THE SECURITIES.
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UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF.
No. CUSIP No. 000000XX0
SERVICO, INC.
7% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
DUE 2010
Servico, Inc., a Florida corporation (the "COMPANY", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Wilmington Trust Company, as
Property Trustee for Lodgian Capital Trust I, or registered assigns, the
principal sum set forth on Schedule A hereto on June 30, 2010, and to pay
interest on said principal sum from June 17, 1998, or from the most recent date
on which interest has been paid to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "INTEREST PAYMENT
DATE") commencing September 30, 1998, at the rate of Applicable Rate per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and
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premium, if any, and overdue installment of interest at the same rate per annum
compounded quarterly (without duplication and to the extent that payment of such
interest is enforceable under applicable law). The amount of interest payable on
any Interest Payment Date for any full quarterly interest period shall be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed shall
be computed on the basis of 30-day months and, for periods of less than a month,
on the basis of the actual number of days elapsed. In the event that any date on
which interest is payable on this Convertible Debenture is not a Business Day,
then payment of interest payable on such date shall be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in the Indenture
(referred to on the reverse hereof), be paid to the person in whose name this
Convertible Debenture is registered on the Regular Record Date for such interest
installment. Any such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holders on such
Regular Record Date and may be paid to the Person in whose name this Convertible
Debenture is registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted interest, notice whereof
shall be given to the registered Holders of the Convertible Debentures not less
than 10 days prior to such special record date, or may be paid at anytime in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Convertible Debentures may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. The principal of (and premium, if any) and the interest on this
Convertible Debenture shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Debenture Register. Notwithstanding the foregoing, so
long as the Holder of this Convertible Debenture is the Property Trustee, the
payment of the principal of (and premium, if any) and interest on this
Convertible Debenture shall be made at such place and to such account as may be
designated by the Property Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness, and this Convertible
Debenture is
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issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Convertible Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such Holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed by
or on behalf of the Trustee. The provisions of this Convertible Debenture are
continued on the reverse side hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
SERVICO, INC.
By:
--------------------------------
Name:
Title:
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series of Convertible
Debentures issued under the within-mentioned Indenture.
Dated:
Wilmington Trust Company,
as Trustee
By:
------------------------------
Authorized Signatory
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[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series of
Securities of the Company specified in the Indenture, all issued or to be issued
in one or more series under and pursuant to an Indenture (the "BASE INDENTURE"),
dated as of June 17, 1998, duly executed and delivered between the Company and
Wilmington Trust Company, as Trustee (the "TRUSTEE"), as supplemented by the
Supplemental Indenture dated as of June 17, 1998, between the Company and the
Trustee (the "SUPPLEMENTAL INDENTURE" and such Supplemental Indenture, as it
supplements the Base Indenture, the "INDENTURE"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of Convertible Debentures. By the
terms of the Indenture, the Securities are issuable thereunder in series that
may vary as to amount, date of maturity, rate of interest and in other respects
as provided in the Indenture. This series of Securities is limited in aggregate
principal amount as specified in said Supplemental Indenture and is herein
sometimes referred to as the "CONVERTIBLE DEBENTURES."
Because of the occurrence and continuation of a Trust Special Event, in
certain circumstances, this Convertible Debenture may become due and payable, in
whole or in part, at 100% of the principal amount to be redeemed together with
any interest accrued thereon, including Compounded Interest, if any, to, but
excluding, the redemption date.
In addition, the Company shall have the right to redeem this
Convertible Debenture at the option of the Company, upon not less than 30 nor
more than 60 days notice, in whole or in part, for cash at any time on and after
July 30, 2002 at the following prices (expressed as percentages of the principal
amount of the Convertible Debentures), together with accrued and unpaid interest
(including Compounded Interest, if any) thereon to, but excluding, the
redemption date, if redeemed during the period beginning July 30, 2002 and
ending on June 27, 2003, the redemption price shall be 104.2% and if redeemed
thereafter during the 12- month period beginning on June 30 of the following
years:
YEAR REDEMPTION PRICE
---- ----------------
2003 103.5%
2004 102.8%
2005 102.1%
2006 101.4%
2007 100.7%
2008 and thereafter 100.0%
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58
The Company may exercise its redemption right provided that the
redemption price (other than the portion thereof consisting of accrued and
unpaid interest (including Compounded Interest, if any)) is payable solely out
of the sale proceeds of other equity securities of the Company, and from no
other source. For purposes of the preceding sentence, "equity securities" means
(i) any equity securities, including common stock and preferred stock, of the
Company, (ii) any securities. which by their terms, are mandatory convertible or
exchangeable for, or require the purchase of, such common stock or preferred
stock and (iii) preferred securities issued by a business trust, partnership or
limited liability company, all of the common equity of which is owned, directly
or indirectly by, the Company and the sole assets of which are subordinated debt
securities with interest payments deferrable at the Company's option.
In addition, the Company shall have the right to redeem the Convertible
Debentures, in whole or in part, for cash from time to time after July 3, 2002,
upon not less than 30 days' nor more than 60 days' notice to the Holders, at a
redemption price equal to 100% of the principal amount of the Convertible
Debentures to be redeemed, together with any accrued and unpaid interest
(including Compounded Interest, if any) thereon to, but excluding the date of
such redemption. The Company may exercise its redemption night only if (i) for
20 Trading Days within any period of 30 consecutive Trading Days, including the
last day of such period, the Closing Price of the shares of Common Stock exceeds
$25.71 per share, subject to adjustment, under the circumstances described in
the Supplemental Indenture with respect to the Conversion Price and (ii) on or
prior to the date of the notice of redemption required by Section 3.05 of the
Supplemental Indenture, the Company shall have entered into an agreement,
subject to customary terms and conditions, with a nationally recognized
investment banking firm pursuant to which such firm shall have agreed to
purchase from the Company such number of whole shares of Common Stock as would
have been issuable upon conversion of Convertible Debentures that are not
surrendered for conversion prior to the close of business on the redemption
date. To exercise such redemption right, the Company shall issue a press release
announcing the redemption prior to the opening of business on the second Trading
Day after the conditions described in the preceding sentences have, from time to
time, been met but shall not issue such press release prior to July 3, 2002.
The Company may not redeem any Convertible Debentures unless all
accrued and unpaid interest has been paid on all outstanding Convertible
Debentures for all quarterly interest payment periods terminating on or prior to
the last Interest Payment Date before the date of redemption. If Convertible
Debentures are redeemed on March 31, June 30, September 30 and December 31,
accrued and unpaid interest shall be payable to Holders on the relevant record
date for such interest payment date.
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59
If the Convertible Debentures are only partially redeemed by the
Company pursuant to an optional redemption, the Convertible Debentures shall be
redeemed PRO RATA.
In the event of redemption of this Convertible Debenture in part only,
a new Convertible Debenture or Convertible Debentures of this series for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
In the event that the Merger Agreement is terminated or the Merger has
not been consummated by December 31, 1998, the Company shall make an offer to
each Holder of Convertible Debentures to repurchase all or any portion of such
Holder's Convertible Debentures in integral multiples of $50 at a purchase price
in cash in an amount equal to 101% of the principal amount thereof plus accrued
and unpaid interest, if any, to the date of purchase.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Convertible Debentures of each series affected
at the time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Convertible Debentures of such series; PROVIDED, however, that no such
supplemental indenture shall (a) extend the stated maturity of any Convertible
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, or make any change that adversely affects
the right to convert any Convertible Debentures of any series or make any change
in the subordination provisions that adversely affects the rights of any Holders
of any Convertible Debentures of any series, without the consent of the Holder
of each Debenture so affected, or (b) reduce the aforesaid percentage in
aggregate principal amount of Convertible Debentures of such series, the Holders
of which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Convertible Debenture of any series then
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Convertible Debentures of any series at the time outstanding affected thereby,
on behalf of all of the Holders of the Convertible
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60
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any
Convertible Debentures of such series; PROVIDED that a failure to convert any
Convertible Debentures of such series in accordance with its terms may only be
waived by the Holders affected thereby. Any such consent or waiver by the
registered Holder of this Convertible Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Convertible Debenture and of any Convertible
Debenture issued in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture or of the Indenture, but subject to Article 13 of the Base
Indenture, shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Convertible Debenture at the time and place and at the rate and
in the money to the extent herein prescribed.
As long as an Event of Default under Section 4.01 of the Base Indenture
or Section 9.01 of the Supplemental Indenture shall not have occurred and be
continuing, the Company shall have the right, at any time and from time to time
during the term of the Convertible Debentures, to defer payments of interest by
extending the interest payment period of the Convertible Debentures for a period
not exceeding 20 consecutive quarterly periods (an "EXTENSION PERIOD") during
which Extension Period no interest shall be due and payable on the Convertible
Debentures; PROVIDED, that no Extension Period may extend beyond the Maturity
Date. To the extent permitted by applicable law, interest, the payment of which
has been deferred during an Extension Period, shall bear interest thereon at the
rate specified for these Convertible Debentures, compounded quarterly for each
quarter of the Extension Period ("COMPOUNDED INTEREST"). Before the termination
of any such Extension Period, the Company may further extend such Extension
Period, PROVIDED, that such Extension Period together with all such previous and
further extensions thereof shall not exceed 20 consecutive quarterly periods, or
extend beyond the Maturity Date. At the end of the Extension Period, the Company
shall pay all interest then accrued and unpaid on the Convertible Debentures,
including Compounded Interest, if any, that shall be payable to the Holders of
Convertible Debentures on the first record date after the termination of the
Extension Period. Upon the termination of any such Extension Period and upon the
payment of all accrued and unpaid interest (including Compounded Interest to the
extent permitted by applicable law), the Company may commence a
A-11
61
new Extension Period. The Company may pay at any time all or any portion of the
interest accrued during an Extension Period, subject to the requirements set
forth in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Debenture Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his or her attorney
duly authorized in writing, and thereupon one or more new Convertible Debentures
of authorized denominations and for the same aggregate principal amount and
series shall be issued to the designated transferee or transferees. No service
charge shall be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Debenture Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Debenture Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Debenture Registrar shall be affected by any notice to
the contrary. No recourse shall be had for the payment of the principal of or
the interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any in corporation, stockholder, officer or director, past, present or future,
as such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
Subject to and upon compliance with Article 8 of the Supplemental
Indenture, the Holder of this Convertible Debenture has the right, exercisable
at any time beginning 90 days following the last date of original issuance of
any CRESTS and prior to the close of business on (i) June 28, 2010 or (ii) in
the event this Convertible Debenture is called for redemption, the second
Business Day prior to the related redemption date, subject to limited exceptions
specified in the Supplemental Indenture, to convert the principal amount hereof
(or any portion thereof that is an integral multiple of $50) into that number of
fully paid and
A-12
62
nonassessable shares of Common Stock obtained by dividing the principal amount
of the Convertible Debentures to be converted by the Conversion Price in effect
on the Conversion Date. The initial Conversion Price is $21.42 per share of
Common Stock. The Conversion Price is subject to adjustment as described in the
Indenture. All Conversion Price and conversion provision calculations shall be
made to the nearest 1/100 of a cent (with $.00005 being rounded upward) or to
the nearest 1/10,000 of a share (with .00005 of a share being rounded upward),
as the case may be.
To convert all or a portion of this Convertible Debenture, a Holder
must (a) complete and sign an irrevocable notice of election to convert
substantially in the form attached hereto and deliver such Conversion Notice to
the Conversion Agent, together with any payment required by the fourth sentence
of this paragraph, (b) surrender the Convertible Debenture to the Conversion
Agent, (c) furnish appropriate endorsements or transfer documents if required by
the Conversion Agent and (d) pay any transfer or similar tax, if required.
Except as provided below, accrued but unpaid interest shall not be paid in cash
on Convertible Debentures that are converted by a Holder into Common Stock, nor
shall such accrued interest be converted into additional shares of Common Stock.
Holders of Convertible Debentures at the close of business on a Regular Record
Date shall be entitled to receive the interest payable on such Convertible
Debentures (except that holders of Convertible Debentures called for redemption
on a redemption date between such Regular Record Date and the Interest Payment
Date shall not be entitled to receive such interest on such Interest Payment
Date) on the corresponding Interest Payment Date notwithstanding the conversion
of such Convertible Debentures following such Regular Record Date and prior to
such Interest Payment Date. However, Convertible Debentures surrendered for
conversion during the period between the close of business on any Regular Record
Date and the opening of business on the corresponding Interest Payment Date
(except Convertible Debentures called for redemption on a redemption date during
such period) must be accompanied by payment of an amount equal to the interest
payable on such Convertible Debentures on such Interest Payment Date. A Holder
of Convertible Debentures on a Regular Record Date who (or whose transferee)
tenders any such Convertible Debentures for conversion into shares of Common
Stock on such Interest Payment Date shall receive the interest payable by the
Company on such Convertible Debentures on such date, and the converting Holder
need not include payment of the amount of such interest upon surrender of
Convertible Debentures for conversion. The Company shall make no payment or
allowance for dividends on the shares of Common Stock issued upon conversion.
No fractional shares shall be issued upon conversion but a cash payment
shall be made by the Company in lieu of such fractional interest. The
outstanding principal amount of any Convertible Debenture shall be reduced by
the principal
A-13
63
amount thereof converted into shares of Common Stock or other shares of common
stock of the Company.
The Company's delivery upon conversion of the fixed number of shares of
Common Stock or other shares of common stock of the Company into which the
Convertible Debentures are convertible (together with cash in lieu of fractional
shares) shall be deemed to satisfy the Company's obligation to pay the principal
amount at the Maturity Date of the portion of Convertible Debentures so
converted and any unpaid interest (including Compounded Interest) accrued on
such Convertible Debentures at the time of such conversion.
The Convertible Debentures of this series are issuable only in
registered form without coupons in denominations of $50 and any integral
multiple thereof. IF THE CONVERTIBLE DEBENTURE IS TO BE A GLOBAL DEBENTURE,
SUBSTITUTE THE FOLLOWING FOR THE PREVIOUS SENTENCE: This Global Debenture is
exchangeable for Convertible Debentures in definitive form only under certain
limited circumstances set forth in the Indenture. Convertible Debentures of this
series so issued are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Convertible
Debentures of this series are exchangeable for a like aggregate principal amount
of Convertible Debentures of this series of a different authorized denomination,
as requested by the Holder surrendering the same.
All terms used in this Convertible Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
A-14
64
FORM OF ELECTION TO CONVERT
To: [Servico, Inc.] [Lodgian, Inc.]
The undersigned Holder of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of [SERVICO, INC.] [LODGIAN, INC.](the "COMPANY"),
or any other class of common stock of the Company, as permitted by the Articles
of Incorporation of the Company, in accordance with the terms of the Indenture
referred to in this Convertible Debenture, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned shall pay all transfer taxes payable with respect thereto. However,
Convertible Debentures surrendered for conversion during the period between the
close of business on any Regular Record Date and the opening of business on the
corresponding Interest Payment Date (except Convertible Debentures called for
redemption on a redemption date during such period) must be accompanied by
payment of an amount equal to the interest payable on such Interest Payment
Date.
Date:
in whole in part
Portion of principal amount
of the Convertible Debenture
to be converted ($50 or
integral multiples thereof):
$
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
Signature Guarantee:(1)
--------
(1) The signature(s) should be guaranteed by an eligible guarantor
institution
(continued...)
A-15
65
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and
zip code)
(Insert assignee's soc. sec. or tax I.D.
No.)
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:
------------------------
Signature Guarantee:
------------------------
--------------------------------------------
(Signature must be guaranteed)(2)
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
-------------
(1) (...continued)
(banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to SEC Rule 17Ad-15.
(2) The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to SEC Rule 17Ad-15.
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66
1/ / acquired for the undersigned's own account, without transfer; or
2/ / transferred to the Company or a subsidiary thereof; or
3/ / transferred pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the "SECURITIES ACT"); or
4/ / for so long as the Securities are eligible for resale pursuant
to Rule 144A under the Securities Act, to a person the
undersigned reasonably believes is a "qualified institutional
buyer" as defined in Rule 144A that purchases for its own account
or for the account of a qualified institutional buyer to whom
notice is give that the transfer is being made in reliance on
Rule 144A; or
5/ / to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act, that is acquiring such securities for its own
account, or for the account of such an institutional Accredited
Investor, or as fiduciary for the account of one or more trusts,
each of which is an "accredited investor" within the meaning of
subparagraph (a)(7) of Rule 501 under the Securities Act, for
investment purposes and not with a view to, or for offer or sale
in connection with any distribution in violation of the
Securities Act; or
6/ / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee shall refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; PROVIDED, HOWEVER, that if box (6) is
checked, the Trustee or the Company may require, prior to registering any such
transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
------------------------------
Signature
Signature Guarantee:
A-17
67
--------------------------------- ------------------------------
(Signature must be guaranteed)(3) Signature
------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Convertible Debenture for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
------------------------
Dated:
--------
(3) The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to SEC Rule 17Ad-15.
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68
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Convertible Debenture purchased by the Company
pursuant to Section 4.01 of the Indenture, check the Box: / /
If you wish to have a portion of this Convertible Debenture purchased
by the Company pursuant to Section 4.01 of the Indenture, state the amount:
maturity): $______________.
Date:
---------------------
Your Signature:
------------------------------------------------------------
(Sign exactly as your name appears on
the other side of this Convertible Debenture)
Signature Guarantee:
-----------------------------------------
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69
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL
DEBENTURES TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Debentures
The initial principal amount of this Global Debenture shall be $[ ].
The following increases or decreases in the principal amount of this Global
Debenture have been made:
PRINCIPAL AMOUNT OF
SECURITIES BY WHICH
THIS GLOBAL DEBENTURE SIGNATURE
IS TO BE REDUCED OR OF
INCREASED, AND REASON REMAINING PRINCIPAL AUTHORIZED
FOR REDUCTION OR AMOUNT OF THIS OFFICIAL OF
DATE INCREASE GLOBAL DEBENTURE THE TRUSTEE
---- --------------------- ------------------- -----------
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