1
Exhibit 10.1
================================================================================
INDENTURE
AMONG
SERVICO, INC.
AS ISSUER,
LODGIAN, INC.
AND
WILMINGTON TRUST COMPANY
AS TRUSTEE
DATED AS OF JUNE 17, 1998
SUBORDINATED DEBENTURES
================================================================================
2
TABLE OF CONTENTS(1)
----------------------
PAGE
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS......................................................................1
SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS............................................10
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE..........................................11
SECTION 1.04. ACTS OF HOLDERS.................................................................12
SECTION 1.05. NOTICE, ETC., TO TRUSTEE, COMPANY AND LODGIAN...................................15
SECTION 1.06. NOTICE TO HOLDERS OF DEBENTURES; WAIVER.........................................15
SECTION 1.07. LANGUAGE OF NOTICES, ETC........................................................16
SECTION 1.08. CONFLICT WITH TRUST INDENTURE ACT...............................................16
SECTION 1.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS........................................16
SECTION 1.10. SUCCESSORS AND ASSIGNS..........................................................16
SECTION 1.11. SEPARABILITY CLAUSE.............................................................16
SECTION 1.12. BENEFITS OF INDENTURE...........................................................16
SECTION 1.13. GOVERNING LAW...................................................................17
SECTION 1.14. COUNTERPARTS....................................................................17
SECTION 1.15. LEGAL HOLIDAYS..................................................................17
SECTION 1.16. IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS,
DIRECTORS AND EMPLOYEES.........................................................17
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF
DEBENTURES
SECTION 2.01. DESIGNATION, TERMS, AMOUNT AUTHENTICATION AND DELIVERY
OF DEBENTURES...................................................................18
SECTION 2.02. FORM OF DEBENTURE AND TRUSTEE'S CERTIFICATE.....................................20
SECTION 2.03. DATE AND DENOMINATIONS OF DEBENTURES AND PROVISIONS FOR
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST......................................20
SECTION 2.04. EXECUTION OF DEBENTURES.........................................................22
SECTION 2.05. EXCHANGE OF DEBENTURES..........................................................23
SECTION 2.06. TEMPORARY DEBENTURES............................................................25
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.................................25
--------
(1) Note: This table of contents shall not, for any purpose be deemed
to be part of the Indenture.
3
PAGE
----
SECTION 2.08. CANCELLATION OF SURRENDERED DEBENTURES..........................................26
SECTION 2.09. PROVISIONS OF INDENTURE AND DEBENTURES FOR SOLE BENEFIT OF
PARTIES AND DEBENTUREHOLDERS....................................................27
SECTION 2.10. APPOINTMENT OF AUTHENTICATING AGENT.............................................27
SECTION 2.11. GLOBAL DEBENTURE................................................................27
SECTION 2.12. CUSIP NUMBERS...................................................................29
ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.01. SATISFACTION AND DISCHARGE OF INDENTURE.........................................29
SECTION 3.02. APPLICATION OF TRUST MONEY......................................................30
SECTION 3.03. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE......................................................................31
SECTION 3.04. DISCHARGE AND DEFEASANCE........................................................31
SECTION 3.05. COVENANT DEFEASANCE.............................................................31
SECTION 3.06. CONDITIONS TO DEFEASANCE........................................................32
ARTICLE 4
REMEDIES
SECTION 4.01. EVENTS OF DEFAULT...............................................................35
SECTION 4.02. ACCELERATION OF MATURITY; RECISSION AND ANNULMENT...............................37
SECTION 4.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.........................................................................39
SECTION 4.04. TRUSTEE MAY FILE PROOFS OF CLAIM................................................40
SECTION 4.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
DEBENTURES......................................................................41
SECTION 4.06. APPLICATION OF MONEY COLLECTED..................................................42
SECTION 4.07. LIMITATION ON SUITS.............................................................42
SECTION 4.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST............................................................43
SECTION 4.09. RESTORATION OF RIGHTS AND REMEDIES..............................................43
SECTION 4.10. RIGHTS AND REMEDIES CUMULATIVE..................................................43
SECTION 4.11. DELAY OR OMISSION NOT WAIVER....................................................44
SECTION 4.12. CONTROL BY HOLDERS OF DEBENTURES................................................44
SECTION 4.13. WAIVER OF PAST DEFAULTS.........................................................44
SECTION 4.14. UNDERTAKING FOR COSTS...........................................................45
SECTION 4.15. WAIVER OF STAY OR EXTENSION LAWS................................................46
ii
4
PAGE
----
ARTICLE 5
THE TRUSTEE
SECTION 5.01. DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT;
PRIOR TO DEFAULT................................................................46
SECTION 5.02. CERTAIN RIGHTS OF TRUSTEE.......................................................47
SECTION 5.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES..........................49
SECTION 5.04. MAY HOLD DEBENTURES.............................................................49
SECTION 5.05. MONEY HELD IN TRUST.............................................................49
SECTION 5.06. COMPENSATION AND REIMBURSEMENT..................................................49
SECTION 5.07. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...............................50
SECTION 5.08. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR..........................................52
SECTION 5.09. DISQUALIFICATION; CONFLICTING INTERESTS.........................................53
SECTION 5.10. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.........................................54
SECTION 5.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............................54
SECTION 5.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS........................................................................54
SECTION 5.13. NOTICE OF DEFAULTS..............................................................54
ARTICLE 6
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 6.01. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS..........................55
SECTION 6.02. REPORTS BY TRUSTEE..............................................................56
SECTION 6.03. REPORTS BY COMPANY..............................................................56
ARTICLE 7
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 7.01. COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS..................................56
SECTION 7.02. SUCCESSOR CORPORATION SUBSTITUTED...............................................57
SECTION 7.03. MERGER WITH IMPAC...............................................................57
SECTION 7.04. OPINION OF COUNSEL TO TRUSTEE...................................................58
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS..............................58
SECTION 8.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.................................59
SECTION 8.03. EXECUTION OF SUPPLEMENTAL INDENTURES............................................61
SECTION 8.04. EFFECT OF SUPPLEMENTAL INDENTURES...............................................61
SECTION 8.05. CONFORMITY WITH TRUST INDENTURE ACT.............................................61
iii
5
PAGE
----
SECTION 8.05. CONFORMITY WITH TRUST INDENTURE ACT.............................................61
SECTION 8.06. REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES..............................61
ARTICLE 9
COVENANTS
SECTION 9.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST......................................62
SECTION 9.02. MAINTENANCE OF OFFICE OR AGENCY.................................................62
SECTION 9.03. MONEY FOR DEBENTURES PAYMENTS TO BE HELD IN TRUST...............................62
SECTION 9.04. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES...........................64
SECTION 9.05. COVENANTS AS TO LODGIAN CAPITAL TRUST...........................................64
SECTION 9.06. EXISTENCE.......................................................................65
SECTION 9.07. STATEMENT BY OFFICERS AS TO DEFAULT.............................................65
SECTION 9.08. FINANCIAL INFORMATION; SEC REPORTS..............................................65
ARTICLE 10
REDEMPTION OF DEBENTURES
SECTION 10.01. APPLICABILITY OF ARTICLE.......................................................66
SECTION 10.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE..........................................66
SECTION 10.03. SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED..............................67
SECTION 10.04. NOTICE OF REDEMPTION...........................................................68
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE....................................................69
SECTION 10.06. DEBENTURES PAYABLE ON REDEMPTION DATE..........................................69
SECTION 10.07. DEBENTURES REDEEMED IN PART....................................................69
ARTICLE 11
SINKING FUNDS
SECTION 11.01. APPLICABILITY OF ARTICLE.......................................................70
SECTION 11.02. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBENTURES..........................70
SECTION 11.03. REDEMPTION OF DEBENTURES FOR SINKING FUND......................................71
ARTICLE 12
CONVERSION OF DEBENTURES
SECTION 12.01. APPLICABILITY OF ARTICLE.......................................................71
SECTION 12.02. EXERCISE OF CONVERSION PRIVILEGE...............................................71
SECTION 12.03. NO FRACTIONAL SHARES...........................................................73
SECTION 12.04. ADJUSTMENT OF CONVERSION PRICE.................................................73
SECTION 12.05. RESERVATION OF SHARES OF COMMON STOCK..........................................74
SECTION 12.06. PAYMENT OF CERTAIN TAXES UPON CONVERSION.......................................74
SECTION 12.07. NONASSESSABILITY...............................................................74
iv
6
PAGE
----
SECTION 12.08. EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION
PRIVILEGE......................................................................74
SECTION 12.09. DUTIES OF TRUSTEE REGARDING CONVERSION.........................................75
SECTION 12.10. REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.....................................75
ARTICLE 13
SUBORDINATION OF DEBENTURES
SECTION 13.01. DEBENTURES SUBORDINATE TO SENIOR INDEBTEDNESS..................................75
SECTION 13.02. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.................................76
SECTION 13.03. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.................................77
SECTION 13.04. PAYMENT PERMITTED IN CERTAIN SITUATIONS........................................78
SECTION 13.05. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS........................78
SECTION 13.06. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS....................................78
SECTION 13.07. TRUSTEE TO EFFECTUATE SUBORDINATION............................................79
SECTION 13.08. NO WAIVER OF SUBORDINATION PROVISIONS..........................................79
SECTION 13.09. NOTICE TO TRUSTEE..............................................................79
SECTION 13.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT..........................................................................80
SECTION 13.11. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.......................81
SECTION 13.12. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS,
PRESERVATION OF TRUSTEE'S RIGHTS...............................................81
SECTION 13.13. ARTICLE APPLICABLE TO PAYING AGENTS............................................81
SECTION 13.14. CERTAIN CONVERSIONS DEEMED PAYMENT.............................................81
v
7
INDENTURE, dated as of June 17, 1998, among Servico Inc. (the
"COMPANY"), Lodgian, Inc. ("LODGIAN") and Wilmington Trust Company, as Trustee
(the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its secured or
unsecured subordinated debentures, notes or other evidences of indebtedness (the
"DEBENTURES"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures or of a series thereof,
as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(d) a reference to a Section or Article is to a Section or Article of
this Indenture.
"ACT," when used with respect to any Holder of a Debenture, has the
meaning specified in Section 1.04.
8
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 2.10 to act on behalf of the Trustee to authenticate
Debentures of one or more series.
"AUTHORIZED NEWSPAPER" means a newspaper, in the English language or in
an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place, in connection with which the term is
used, or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debentures,
means any day other than a Saturday, Sunday or any other day on which banking
institutions in that Place of Payment or other location are permitted or
required by any applicable law to close.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON SECURITIES" means undivided beneficial interests in the assets
of the Lodgian Capital Trust that rank PARI PASSU with Preferred Securities
issued by such Lodgian Capital Trust; PROVIDED, that upon the occurrence of an
Event of Default, the rights of holders of Common Securities to payment in
respect to distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights of holders of Preferred Securities.
2
9
"COMMON STOCK" includes any stock of any class of the Company that has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and that is not subject to redemption by the Company. Subject to the
anti-dilution provisions of any convertible Debenture, however, shares of Common
Stock of the Company issuable on conversion of a Debenture shall include only
shares of the class designated as Common Stock of the Company at the date of any
supplemental indenture, Board Resolution or other instrument authorizing such
Debenture or shares of any class or classes resulting from any reclassification
or reclassifications thereof that have no preference in respect of the payment
of dividends or the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and that are not subject
to redemption by the Company; PROVIDED, that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion that the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all classes resulting from all such reclassifications.
"COMPANY" means the Person named as the "COMPANY" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"COMPANY" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by the Chairman of the Board of Directors or
the President or any Executive Vice President or any Vice President and by the
Treasurer or the Secretary or any Assistant Treasurer or any Assistant Secretary
of the Company and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"CORPORATION" means a corporation, association, company, joint-stock
company or business trust.
"COVENANT DEFEASANCE" has the meaning specified in Section 3.05.
"DEBENTURE REGISTER" has the meaning specified in Section 2.05.
"DEBENTURE REGISTRAR" has the meaning specified in Section 2.05.
3
10
"DEBENTURES" has the meaning stated in the first recital of this
Indenture and more particularly means any Debentures authenticated and delivered
under this Indenture.
"DECLARATION," with respect to a Lodgian Capital Trust, means the
Amended and Restated Declaration of Trust of such Lodgian Capital Trust.
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEFEASANCE" has the meaning specified in Section 3.04.
"DEPOSITARY" means, with respect to the Debentures of any series for
which the Company shall determine that such Debentures will be issued as a
Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"EVENT OF DEFAULT" has the meaning specified in Section 4.01.
"GLOBAL DEBENTURE" means, with respect to any series of Debentures, a
Debenture executed by the Company and authenticated and made available for
delivery by the Trustee to the Depositary, or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depositary or its nominee.
"GUARANTEE" means any Guarantee that the Guarantor may enter into with
Wilmington Trust Company or other Persons that operates directly or indirectly
for the benefit of holders of Trust Securities of a Lodgian Capital Trust.
"GUARANTOR" means the Company in its capacity as guarantor under any
Guarantees.
"HOLDER", when used with respect to any Debenture, means the Person in
whose name the Debenture is registered in the Debenture Register.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
4
11
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of Debentures of any series established as
contemplated by Section 2.01.
"INTEREST," when used with respect to an Original Issue Discount
Debenture that by its terms bears interest only at Maturity, means interest
payable at Maturity.
"INTEREST PAYMENT DATE," when used with respect to any Debenture, means
the Stated Maturity of an installment of interest on such Debenture.
"LODGIAN" has the meaning stated in the first paragraph of this
Indenture.
"LODGIAN CAPITAL TRUST" means Lodgian Capital Trust I, a Delaware
statutory business trust, or any permitted successor thereto, or any
substantially similar Delaware statutory business trust sponsored by the Company
for the purpose of issuing Debentures hereunder.
"MATURITY," when used with respect to any Debenture, means the date on
which the principal of such Debenture or an installment of such principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, notice of
option to elect repayment or otherwise.
"MERGER" has the meaning specified in Section 7.03.
"NOTICE OF DEFAULT" has the meaning specified in Section 4.01.
"NYSE" means the New York Stock Exchange, Inc. or any successor
thereto.
"OFFICERS' CERTIFICATE" means, in the case of the Company, signed in
the name of the Company by its Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer, any Vice President
(whether or not designated by a number or word or words added before or after
the title Vice President), or Treasurer or an Assistant Treasurer, and by its
Secretary or an Assistant Secretary, or its Comptroller or an Assistant
Comptroller, as the case may be, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be an
employee of or counsel for the Company and who shall be acceptable to the
Trustee.
5
12
"ORIGINAL ISSUE DISCOUNT DEBENTURE" means any Debenture that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 4.02.
"OUTSTANDING," when used with respect to Debentures of any series,
means, as of the date of determination, all Debentures of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures of such series theretofore canceled by the
Trustee or any Paying Agent or delivered to the Trustee for
cancellation or that have previously been canceled;
(ii) Debentures of such series for whose payment or redemption
of which money or United States Government Obligations in the necessary
amount has been theretofore deposited in accordance with Article 3 with
the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the Holders of Debentures of such
series; PROVIDED, if Debentures of such series or portions of
Debentures of such series are to be redeemed prior to the Maturity
thereof, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Debentures of such series that have been paid pursuant
to Section 2.07 or in exchange for or in lieu of which other Debentures
of such series have been authenticated and delivered pursuant to this
Indenture, other than any Debentures of such series in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that Debentures of such series are held by a bona fide purchaser in
whose hands Debentures of such series are valid obligations of the
Company; and
(iv) Debentures of such series as to which Defeasance has been
effected pursuant to Section 3.04;
PROVIDED, that in determining whether the Holders of the requisite aggregate
principal amount of the Outstanding Debentures of such series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
or whether a quorum is present at a meeting of Holders of Debentures of such
Series (A) the principal amount of an Original Issue Discount Debenture of such
series that shall be deemed to be Outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof pursuant to Section
4.02, (B) the principal amount of a Debenture of such series denominated in a
foreign currency or
6
13
currencies shall be the U.S. dollar equivalent, determined on the date of
original issuance of such Debenture, of the principal amount (or, in the case of
an Original Issue Discount Debenture of such series, the U.S. dollar equivalent
on the date of original issuance of such Debenture of the amount determined as
provided in (A) above) of such Debenture, and (C) Debentures of such series
owned by the Company or any other obligor upon such Debentures, or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, or upon any such determination as to the presence of
a quorum, only Debentures of such series that a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Debentures of
such series so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debentures and that the pledgee
is not the Company or any other obligor upon such Debentures or any Affiliate of
the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of and any premium and interest on any Debentures on behalf of the
Company.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"PLACE OF PAYMENT," when used with respect to the Debentures of any
series, means the place or places where, subject to the provisions of Section
9.02, the principal of and any premium and interest on Debentures of such series
are payable as specified as contemplated by Section 2.01.
"PREDECESSOR DEBENTURE" of any Debenture of any series means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such Debenture; and, for the purposes of this definition, any
Debenture of any series authenticated and delivered under Section 2.07 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Debenture.
"PREFERRED SECURITIES" means undivided beneficial interests in the
assets of Lodgian Capital Trust that rank PARI PASSU with Common Securities
issued by such Lodgian Capital Trust; PROVIDED, that upon the occurrence of an
Event of Default, the rights of holders of Common Securities to payment in
respect of
7
14
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"REDEMPTION DATE," when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE," when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REPRESENTATIVE" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"RESALE RESTRICTION TERMINATION DATE" means the first date on which the
Preferred Securities, the Guarantee, the Debentures and any Common Stock issued
or issuable upon the conversion or exchange thereof (other than (i) such
securities acquired by the Company or any Affiliate thereof and (ii) Common
Stock issued upon the conversion or exchange of any such security described in
clause (i) above) may be sold pursuant to Rule 144(k).
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
vice president, any assistant vice president or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and assigned to the Corporate Trust Administration
department of the Trustee and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"RULE 144(K)" means Rule 144(k) under the Securities Act or any
successor rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute.
8
15
"SENIOR INDEBTEDNESS" shall mean, with respect to the Company, the
principal of, premium, if any, and interest on (i) all indebtedness of the
Company, whether outstanding on the date hereof or hereafter created, incurred
or assumed, which is for money borrowed, or evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets, including securities (other than trade accounts in the ordinary
course of business), (ii) any indebtedness of others of the kinds described in
the preceding clause (i) for the payment of which the Company is responsible or
liable (directly or indirectly, contingently or otherwise) as guarantor or
otherwise and (iii) amendments, renewals, extensions and refundings of any such
indebtedness, unless in any instrument or instruments evidencing or securing
such indebtedness or pursuant to which the same is outstanding, or in any such
amendment, renewal, extension or refunding, it is expressly provided that such
indebtedness is not superior in right of payment to the Debentures of any
series. The Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the provisions of Article 13 irrespective of any
amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
"STATED MATURITY," when used with respect to any Debenture or any
installment of principal thereof or interest thereon, means the date specified
in such Debenture as the fixed date on which the principal of such Debenture or
such installment of principal or interest is due and payable.
"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.
"TRUSTEE" means the Person named as the "TRUSTEE" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"TRUSTEE" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "TRUSTEE" as used with
respect to the Debentures of any series shall mean the Trustee with respect to
Debentures of that series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; PROVIDED, that in the
event the Trust Indenture Act of 1939 is amended after such date, "TRUST
INDENTURE
9
16
ACT" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939 as so amended.
"TRUST SECURITIES" means Common Securities and Preferred Securities of
a Lodgian Capital Trust.
"UNITED STATES" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States that, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
U.S. Government Obligations or a specific payment of principal of or interest on
any such U.S. Government Obligations held by such custodian for the account of
the holder of such depository receipt; PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligations or the specific payment
of principal of or interest on the U.S. Government Obligations evidenced by such
depository receipt.
"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.
"YIELD TO MATURITY" means the yield to maturity on Debentures of any
series, calculated at the time of issuance of such series, or, if applicable, at
the most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise
expressly provided by this Indenture, upon any application or request by the
Company to the Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
10
17
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 9.07, shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
the individual has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
11
18
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. ACTS OF HOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "ACT" of the Holders signing such instrument
or instruments and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy, or of the holding
by any Person of a Debenture of any series, shall be sufficient for any purpose
of this Indenture and (subject to Section 5.02) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to the execution thereof. Where such
execution is by a signer acting in a capacity other than the signer's individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of the signer's authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Debentures of any
series held by any Person, and the date of holding the same, shall be proved by
the Debenture Register.
12
19
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Debenture of any series shall bind
every future Holder of the same Debenture and the Holder of every Debenture
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(e) With respect to the Debentures of any series, upon receipt by the
Trustee of (i) any written notice directing the time, method or place of
conducting any proceeding or exercising any trust or power pursuant to Section
4.01 with respect to Debentures of such series or (ii) a request by the Company
pursuant to a resolution of its Board of Directors or any written demand,
request or notice with respect to any matter on which the Holders of Debentures
of such series are entitled to act under this Indenture, in each case from
Holders of less than, or proxies representing less than, 25% of the aggregate
principal amount or, if a higher percentage is specified pursuant to this
Indenture, the requisite principal amount of Outstanding Debentures of such
series entitled to give such demand, request or notice, the Trustee shall
establish a record date for determining Holders of Outstanding Debentures of
such series entitled to join in such demand, request or notice, which record
date shall be the close of business on the day the Trustee received such demand,
request or notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such demand,
request or notice whether or not such Holders remain Holders after such record
date; PROVIDED, that unless the Holders of the requisite principal amount of
Outstanding Debentures of such series shall have joined in such demand, request
or notice prior to the day that is the ninetieth day after such record date,
such demand, request or notice shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, (i) after the expiration
of such 90-day period, a new demand, request or notice identical to a demand,
request or notice that has been canceled pursuant to the proviso to the
preceding sentence or (ii) during any such 90-day period, a new demand, request
or notice that has been canceled pursuant to the proviso to the preceding
sentence or (iii) during any such 90-day period, a new demand, request or notice
contrary to or different from such demand, request or notice, in either of which
events a new record date shall be established pursuant to the provisions of this
clause.
(f) The Persons entitled to vote a majority in principal amount of the
Outstanding Debentures of a series shall constitute a quorum for a meeting of
Holders of Debentures of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Debentures of such series, be dissolved.
In
13
20
any other case, the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
meeting. Subject to the foregoing, at the reconvening of any such further
adjourned meeting, the Persons entitled to vote 40% in aggregate principal
amount of the Outstanding Debentures of such series shall constitute a quorum
for the taking of any action set forth in the notice of the original meeting.
Notice of the reconvening of an adjourned meeting which was adjourned for lack
of a quorum shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Debentures of such series which shall
constitute a quorum.
Except as limited by Sections 4.13 and 8.02, and subject to the
provisions described in the next succeeding paragraph, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the lesser of (i) the
Holders of a majority in principal amount of the Outstanding Debentures of that
series and (ii) 662/3% in principal amount of Outstanding Debentures of such
series represented and voting at such meeting or adjourned meeting; PROVIDED,
HOWEVER, that any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage which is less than a majority in principal amount of the Outstanding
Debentures of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative vote
of the lesser of (i) the Holders of such specified percentage in principal
amount of the Outstanding Debentures of that series and (ii) a majority in
principal amount of Debentures of such series represented and voting at such
meeting or adjourned meeting. Any resolution passed or decision taken at any
meeting of Holders of Debentures of any series duly held in accordance with this
Section shall be binding on all the Holders of Debentures of such series whether
or not present or represented at the meeting.
With respect to any consent, waiver or other action which this
Indenture expressly provides may be given by the Holders of a specified
percentage of Outstanding Debentures of all series affected thereby (acting as
one class), only the principal amount of Outstanding Debentures of any series
represented at a meeting or adjourned meeting duly reconvened at which a quorum
is present, held in accordance with this Section, and voting in favor of such
action, shall be counted for purposes of calculating the aggregate principal
amount of Outstanding Debentures of all series affected thereby favoring such
action. Notwithstanding
14
21
the foregoing or the Trust Indenture Act, the Company shall not set a record
date for, and the provisions of this clause shall not apply with respect to, any
action to be given or taken by Holders pursuant to Section 4.01, 4.02 or 4.12.
SECTION 1.05. NOTICE, ETC., TO TRUSTEE, COMPANY AND LODGIAN. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company or Lodgian shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Telecopy No.: 000-000-0000, Attention: Corporate
Trust Administration, or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company or Lodgian
addressed to it at 0000 Xxxxxxxxx Xxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, Telecopy
No.: 000- 000-0000, to the attention of the Chief Executive Officer, or at any
other address previously furnished in writing to the Trustee by the Company.
SECTION 1.06. NOTICE TO HOLDERS OF DEBENTURES; WAIVER. Except as
otherwise expressly provided herein, where this Indenture provides for notice to
Holders of Debentures of any event, such notice shall be sufficiently given to
Holders of any series if in writing and mailed, first-class postage prepaid, to
each Holder of a Debenture affected by such event, at the address of such Holder
as registered in the books of the Company, not earlier than the earliest date,
and not later than the latest date, prescribed for the giving of such notice;
PROVIDED, that any notice of redemption of Debentures required to be given to
all Holders shall also be given by release made by the Company to Reuters
Economic Services and Bloomberg Business News not earlier than the earliest
date, and not later than the latest date, prescribed for the giving of such
notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Debentures by mail, then such notification as shall be made with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder. In any case where notice to Holders of Debentures is
given by mail, neither the failure to mail such notice, nor any defect in any
notice mailed to any particular Holder of a Debenture shall affect the
sufficiency of such notice with respect to other Holders of Debentures.
15
22
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Debentures shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.07. LANGUAGE OF NOTICES, ETC.. Any request, demand,
authorization, direction, notice, consent or waiver required or permitted under
this Indenture shall be in the English language, except that any published
notice may be in an official language of the country of publication.
SECTION 1.08. CONFLICT WITH TRUST INDENTURE ACT. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture that is required to be included in this
Indenture by any of Sections 310 to 318, inclusive, of the Trust Indenture Act,
such required provision shall control.
SECTION 1.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.10. SUCCESSORS AND ASSIGNS. Subject to Section 7.03, all
covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not; PROVIDED that the Company
shall have the right at all times to assign any of its respective rights or
obligations under this Indenture to a direct or indirect wholly owned subsidiary
of the Company; PROVIDED, FURTHER that, in the event of any such assignment, the
Company will remain liable for all of their respective obligations. Except as
provided in this Section 1.10, this Indenture may not otherwise be assigned by
the parties thereto.
SECTION 1.11. SEPARABILITY CLAUSE. In case any provision in this
Indenture or the Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.12. BENEFITS OF INDENTURE. Nothing in this Indenture or the
Debentures, express or implied, shall give to any Person, other than the parties
hereto, any Authenticating Agent, any Paying Agent, any Debentures Registrar and
their successors hereunder, the holders of Trust Securities, the Holders of
Debentures, and the holders of Senior Indebtedness, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
16
23
SECTION 1.13. GOVERNING LAW. This Indenture and the Debentures shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflict of laws principles thereof.
SECTION 1.14. COUNTERPARTS. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 1.15. LEGAL HOLIDAYS. In any case where any Interest Payment
Date, Redemption Date, sinking fund payment date, Maturity or Stated Maturity of
any Debenture of any series shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Debentures
other than a provision in the Debentures of any series that specifically states
that such provision shall apply in lieu of this Section) payment of interest or
principal (and premium, if any) will be made on the next succeeding Business Day
at such Place of Payment; PROVIDED, that no interest shall accrue on the amount
so payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to such succeeding Business Day and
except that, if such Business Day is in the next succeeding calendar year, then
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.
SECTION 1.16. IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS,
DIRECTORS AND EMPLOYEES. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of a Debenture of any series, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer, director or employee, as such, past, present
or future, of the Company or of any successor corporation, either directly or
through the Company, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations of the Company, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, shareholders, officers, directors or employees, as such, of the
Company or of any successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations
or agreements contained in this Indenture or in any of the Debentures or implied
therefrom; and that any and all such personal liability, either at common law or
in equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, shareholder, officer, director or
employee, as such, because of the creation of the indebtedness hereby
authorized, or under of by reason of the obligations or agreements contained in
this Indenture or in any of the Debentures or implied
17
24
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of such
Debentures.
All payments of interest and other amounts, if any, to be made by the
Trustee hereunder shall be made only from the money deposited with the Trustee
and only to the extent that the Trustee shall have sufficient income or proceeds
to make such payments in accordance with the terms of this Indenture, and each
Holder thereof, by its acceptance of a Debenture, agrees that it will look
solely to the income and proceeds deposited with the Trustee to the extent
available for distribution to such Holder as provided and that the Trustee is
not personally liable in any manner to such Holder for any amounts payable or
any liability under this Indenture or any Debenture.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND
EXCHANGE OF DEBENTURES
SECTION 2.01. DESIGNATION, TERMS, AMOUNT AUTHENTICATION AND DELIVERY OF
DEBENTURES. The aggregate principal amount of Debentures that may be
authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto:
(a) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other Debentures);
(b) any limit upon the aggregate principal amount of the
Debentures of that series that may be authenticated and delivered under
this Indenture (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Debentures of that series);
(c) the date or dates on which the principal of the Debentures
of the series is payable;
18
25
(d) the rate or rates at which the Debentures of the series
shall bear interest or the manner of calculation of such rate or rates,
if any;
(e) the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest will be payable or
the manner of determination of such Interest Payment Dates and the
record date for the determination of Holders to whom interest is
payable on any such Interest Payment Dates;
(f) the right, if any, to extend or defer the interest payment
periods and the duration of such extension;
(g) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debentures of the
series may be redeemed, in whole or in part, at the option of the
Company;
(h) the obligation, if any, of the Company to redeem or
purchase Debentures of the series pursuant to any sinking fund or
analogous provisions (including payments made in cash in anticipation
of future sinking fund obligations) or at the option of a Holder
thereof and the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debentures of the
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(i) any exchangeability, conversion or prepayment provisions
of the Debentures;
(j) the form of the Debentures of the series including the
form of the certificate of authentication for such series;
(k) if other than denominations of $50 or any integral
multiple thereof, the denominations in which the Debentures of the
series shall be issuable;
(l) any and all other terms with respect to such series (which
terms shall not be inconsistent with the terms of this Indenture);
(m) whether the Debentures are issuable as a Global Debenture
and, in such case, the identity of the Depositary for such series; and
(n) If the Debentures of such series are to be deposited as
trust assets in a Lodgian Capital Trust the name of the applicable
Lodgian
19
26
Capital Trust (which shall distinguish such Lodgian Capital Trust from
all other Lodgian Capital Trusts) into which the Debentures of such
series are to be deposited as trust assets and the date of its
Declaration.
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 2.02. FORM OF DEBENTURE AND TRUSTEE'S CERTIFICATE. The
Debentures of any series and the Trustee's certificate of authentication to be
borne by such Debentures shall be substantially of the tenor and purport as set
forth in one or more indentures supplemental hereto or as provided in a Board
Resolution and as set forth in an Officers' Certificate, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Debentures of that series may be listed, or to conform to
usage.
SECTION 2.03. DATE AND DENOMINATIONS OF DEBENTURES AND PROVISIONS FOR
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Debentures shall be issuable as
registered Debentures and in the denominations of $50 or any integral multiple
thereof, subject to Section 2.01(k). The Debentures of a particular series shall
bear interest payable on the dates and at the rate specified with respect to
that series. The principal of and the interest on the Debentures of any series,
as well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America that at
the time is legal tender for public and private debt, at the office or agency of
the Company maintained for that purpose in the City of Wilmington, State of
Delaware, or any other place designated by the Company; PROVIDED that in the
event the Debentures are issued in definitive form, interest may be paid at the
option of the Company by check mailed to the address of the holder entitled
thereto. Each Debenture shall be dated the date of its authentication. Interest
on the Debentures shall be computed on the basis of a 360-day year composed of
twelve 30-day months.
20
27
The interest installment on any Debenture that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. Except as
provided below, accrued but unpaid interest shall not be paid in cash on
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
Debentures at the close of business on a regular record date shall be entitled
to receive the interest payable on such Debentures (except that holders of
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 Debentures following such regular
record date and prior to such Interest Payment Date. However, 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 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 Debentures on such Interest Payment Date. A Holder
of Debentures on a regular record date who (or whose transferee) tenders any
such Debentures for conversion into shares of Common Stock on such Interest
Payment Date shall receive the interest payable by the Company on such
Debentures on such date, and the converting Holder need not include payment of
the amount of such interest upon surrender of Debentures for conversion. The
Company shall make no payment or allowance for dividends on the shares of Common
Stock issued upon conversion.
Any interest on any Debenture that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same series (herein called "DEFAULTED INTEREST") shall forthwith cease to be
payable to the registered Holder on the relevant regular record date by virtue
of having been such Holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of
21
28
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest, which shall not be more than 15 nor less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first class postage
prepaid, to each Debentureholder at his or her address as it appears in
the Debenture Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest
and the special record date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names
such Debentures (or their Predecessor Debentures) are registered on
such special record date and shall be no longer payable pursuant to the
following clause (b).
(b) The Company may make payment of any Defaulted Interest on
any Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for such series shall mean the fifteenth day preceding
such Interest Payment Date, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debenture.
SECTION 2.04. EXECUTION OF DEBENTURES. The Debentures shall be signed
on behalf of the Company by the Chairman or Vice Chairman of its Board of
Directors or its President or one of its Vice Presidents. The signature of the
22
29
Chairman, Vice Chairman, President or a Vice President upon the Debentures, may
be in the form of a manual or facsimile signature of a present or any future
Chairman, Vice Chairman, President or Vice President and may be imprinted or
otherwise reproduced on the Debentures and for that purpose the Company may use
the manual or facsimile signature of any person who shall have been a Chairman,
Vice Chairman, President or Vice President notwithstanding the fact that at the
time the Debentures shall be authenticated and delivered or disposed of such
person shall have ceased to be the Chairman, Vice Chairman, President or a Vice
President of the Company, as the case may be.
Only such Debentures as shall bear thereon a certificate of
authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and made available for delivery hereunder and that the
Holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or any Vice President and its Treasurer or any Assistant Treasurer,
and the Trustee in accordance with such written order shall authenticate and
make available for delivery such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 5.01) shall be
fully protected in relying upon that the form and terms thereof have been
established in conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.05. EXCHANGE OF DEBENTURES. (a) Debentures of any series
may be exchanged upon presentation thereof at the office or agency of the
Company designated for such purpose in the Borough of Manhattan, The City and
State of
23
30
New York, or such other location designated by the Company for such purpose for
other Debentures of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, all as provided in this Section
2.05. In respect of any Debentures so surrendered for exchange, the Company
shall execute, the Trustee shall authenticate and such office or agency shall
make available for delivery in exchange therefor the Debenture or Debentures of
the same series that the Debentureholder making the exchange shall be entitled
to receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the City of Wilmington, State of Delaware,
or such other location designated by the Company a register or registers (herein
referred to as the "DEBENTURE REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Company shall register the Debentures and
the transfers of Debentures as in this Article provided and that at all
reasonable times shall be open for inspection by the Trustee. The registrar for
the purpose of registering Debentures and transfer of Debentures as herein
provided shall be appointed as authorized by Board Resolution (the "DEBENTURE
REGISTRAR").
Upon surrender for transfer of any Debenture at the office or agency of
the Company designated for such purpose in the City of Wilmington, State of
Delaware, or such other location designated by the Company, the Company shall
execute, the Trustee shall authenticate and such office or agency shall make
available for delivery in the name of the transferee or transferees a new
Debenture or Debentures of the same series as the Debenture presented for a like
aggregate principal amount.
All Debentures presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied by a written
instrument or instruments of transfer, in form satisfactory to the Company or
the Debenture Registrar, duly executed by the registered Holder or by his duly
authorized attorney in writing.
(c) No service charge shall be made for any exchange or registration
of transfer of Debentures, or issue of new Debentures in case of partial
redemption of any series, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than exchanges pursuant to Section 2.06, Section 8.06 and Section 10.07
not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the opening
of
24
31
business 15 days before the day of the mailing of a notice of redemption of less
than all the outstanding Debentures of the same series and ending at the close
of business on the day of such mailing, nor (ii) to register the transfer of or
exchange any Debentures of any series or portions thereof called for redemption.
The provisions of this Section 2.05 are, with respect to any Global Debenture,
subject to Section 2.11 hereof.
SECTION 2.06. TEMPORARY DEBENTURES. Pending the preparation of
definitive Debentures of any series, the Company may execute, and the Trustee
shall authenticate and make available for delivery, temporary Debentures of any
authorized denomination, and substantially in the form of the definitive
Debentures in lieu of which they are issued, but with such omissions, insertions
and variations as may be appropriate for temporary Debentures, all as may be
determined by the Company. Every temporary Debenture of any series shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Debentures of such series. Without unnecessary delay the Company will
execute and will furnish definitive Debentures of such series and thereupon any
or all temporary Debentures of such series may be surrendered in exchange
therefor (without charge to the Holders), at the office or agency of the Company
designated for the purpose in the City of Wilmington, State of Delaware, or such
other location designated by the Company, and the Trustee shall authenticate and
such office or agency shall make available for delivery in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case
any temporary or definitive Debenture shall become mutilated or be destroyed,
lost or stolen, the Company (subject to the next succeeding sentence) shall
execute, and upon its request the Trustee (subject as aforesaid) shall
authenticate and make available for delivery, a new Debenture of the same series
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Debenture, or in lieu of and in substitution for the Debenture
so destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the ownership
thereof. The Trustee may authenticate
25
32
any such substituted Debenture and make available for delivery the same upon the
written request or authorization of any officer of the Company. Upon the
issuance of any substituted Debenture, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. In case any Debenture that has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and to
the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture that is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. CANCELLATION OF SURRENDERED DEBENTURES. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the Trustee, shall be
canceled by it, and no Debentures shall be issued in lieu thereof except as
expressly required or permitted by any of the provisions of this Indenture. On
written request of the Company, the Trustee shall deliver to the Company
canceled Debentures held by the Trustee. If the Company shall otherwise acquire
any of the Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
SECTION 2.09. PROVISIONS OF INDENTURE AND DEBENTURES FOR SOLE BENEFIT
OF PARTIES AND DEBENTUREHOLDERS. Nothing in this Indenture or in the Debentures,
26
33
express or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the Holders, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the Holders.
SECTION 2.10. APPOINTMENT OF AUTHENTICATING AGENT. So long as any of
the Debentures of any series remain outstanding there may be an Authenticating
Agent for any or all such series of Debentures, which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf
of the Trustee to authenticate Debentures of such series issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series
except for authentication upon original issuance or pursuant to Section 2.07
hereof. Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation that has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and that is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease to be eligible
in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. GLOBAL DEBENTURE. (a) If the Company shall establish
pursuant to Section 2.01 that the Debentures of a particular series are to be
issued as one or more Global Debentures, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and make available
for delivery, one or more Global Debentures, which shall represent, and shall be
denominated in an aggregate amount equal to the aggregate principal amount of,
27
34
all of the Outstanding Debentures of such series, shall be registered in the
name of the Depositary or its nominee, shall be made available for delivery by
the Trustee to the Depositary or pursuant to the Depositary's instruction and
shall bear a legend substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Debenture may be transferred, in
whole but not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global
Debenture of a series may be transferred, in whole but not in part and in the
manner provided in Section 2.05, only to another nominee of the Depositary for
such series, or to a successor Depositary for such series selected or approved
by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depositary for such
series or if at any time the Depositary for such series shall no longer be
registered or in good standing under the Exchange Act, or other applicable
statute or regulation and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Debentures of such series and the Company will
execute and, subject to Section 2.05, the Trustee will authenticate and make
available for delivery Debentures of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debentures of such series in
exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures of any series shall no longer be represented by
one or more Global Debentures and that the provisions of this Section 2.11 shall
no longer apply to the Debentures of such series. In such event the Company will
execute and, subject to Section 2.05, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
make available for delivery Debentures of such series in definitive registered
form without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debentures of such series in
exchange for such Global Debentures. Upon the exchange of the Global Debentures
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debentures shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debentures pursuant to this Section 2.11 shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The
28
35
Trustee shall make available for delivery such Debentures to the Depositary for
delivery to the persons in whose names such Debentures are so registered.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and the Trustee shall use CUSIP
numbers in notices of redemption or exchange as a convenience to
Debentureholders and no representation shall be made as to the correctness of
such numbers either as printed on the Debentures or as contained in any notice
of redemption or exchange and any such redemption or exchange shall not be
affected by any defect in or omission of such numbers. The Company will promptly
notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.01. SATISFACTION AND DISCHARGE OF INDENTURE. Except as
otherwise specified as contemplated by Section 2.01, this Indenture shall upon
Company Request cease to be of further effect (except as to any surviving rights
of registration of transfer or exchange of Debentures herein expressly provided
for), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when:
(a) either,
(i) all Debentures theretofore authenticated and
delivered and have been delivered to the Trustee for
cancellation; or
(ii) all such Debentures not theretofore delivered to
the Trustee for cancellation,
(A) have become due and payable, or
(B) will become due and payable at their
Stated Maturity within one year, or
(C) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
29
36
and the Company, in the case of (A), (B) or (C)
above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose,
an amount sufficient to pay and discharge the entire
indebtedness on such Debentures not theretofore
delivered to the Trustee for cancellation, for
principal (and premium, if any) and any interest to
the date of such deposit (in the case of Debentures
that have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 5.06, the obligations of
the Company to any Authenticating Agent under Section 2.10 and, if money shall
have been deposited with the Trustee pursuant to clause 3.01(a)(ii) of this
Section, the obligations of the Trustee under Section 3.02 and the last
paragraph of Section 9.03 shall survive.
SECTION 3.02. APPLICATION OF TRUST MONEY. Subject to the provisions of
the last paragraph of Section 9.03, all money and U.S. Government Obligations
deposited with the Trustee pursuant to Section 3.01 or 3.03 and all money
received by the Trustee in respect of such U.S. Government Obligations shall be
held in trust and applied by it, in accordance with the provisions of the
Debentures and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent), to the
Persons entitled thereto, of the principal (and premium, if any) and any
interest for whose payment such money and U.S. Government Obligations have been
deposited with or received by the Trustee. Money deposited pursuant to this
Section not in violation of this Indenture shall not be subject to claims of the
holders of Senior Indebtedness under Article 13. All moneys deposited with the
Trustee pursuant to Section 3.04 for the payment of Debentures subsequently
converted shall be returned to the Company upon Company Request; PROVIDED, that
the Company shall have furnished to the Trustee such security or indemnity as
the Trustee may require.
SECTION 3.03. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE. If applicable to Debentures of any series, the Company may elect, at
30
37
its option at any time, to have Section 3.04 or Section 3.05 applied to any such
series of Debentures or any Debentures of such series, as the case may be,
designated pursuant to Section 2.01 as being defeasible pursuant to such Section
3.04 or 3.05, in accordance with any applicable requirements provided pursuant
to Section 2.01 and upon compliance with the conditions set forth below in this
Article. Any such election shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 2.01 for such Debentures.
SECTION 3.04. DISCHARGE AND DEFEASANCE. If this Section 3.04 is
specified, under the terms of Section 2.01, to be applicable to Debentures of
any series, then notwithstanding Section 3.01 and upon compliance with the
applicable conditions set forth in 3.06: (1) the Company shall be deemed to have
paid and discharged the entire indebtedness on all the Outstanding Debentures of
any such series ("DEFEASANCE") and (2) the provisions of this Indenture as it
relates to such Outstanding Debentures shall no longer be in effect (except (i)
as to the rights of Holders of Debentures of such series to receive, solely from
the trust fund described in Section 3.06, payment of (a) the principal of (and
premium, if any) and any installment of principal of (and premium, if any) or
interest on Debentures of such series on the Stated Maturity of such principal
(and premium, if any) or installment of principal (and premium, if any) or
interest or upon optional redemption and/or (b) any mandatory sinking fund
payments or analogous payments applicable to the Debentures of such series on
that day on which such payments are due and payable in accordance with the terms
of the Indenture and of Debentures of such series, (ii) the Company's
obligations with respect to Debentures of such series under Sections 2.06, 2.05,
2.07, 9.02, 9.03, and 9.04 and (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including those under Section 5.08 hereof).
SECTION 3.05. COVENANT DEFEASANCE. If this Section 3.05 is specified,
as contemplated by Section 2.01, to be applicable to any series of Debentures or
any Debentures of such series, as the case may be, (a) the Company shall be
released from its obligations under Sections 9.04 through 9.07, inclusive, and
any covenants provided pursuant to Section 2.01(l) or 8.01(b) for the benefit of
the Holders of Debentures of such series that pursuant to the terms of such
Debentures of such series are defeasible pursuant to this Section 3.05 and (b)
the occurrence of any event specified in Sections 4.01(d) (with respect to any
of Sections 9.03 through 9.07, inclusive, and any such covenants provided
pursuant to Sections 2.01(l), 8.01(b) or 8.01(d) and 4.01(g) (if pursuant to the
terms of such Debentures this Section 3.05 is applicable to any such event
specified in Section 4.01(g)) shall be deemed not to be or result in an Event of
Default, in each case with respect to Debentures of such series as provided in
this Section on and after the date the conditions set forth in Section 3.06 are
satisfied (hereinafter called "COVENANT DEFEASANCE"). For this purpose, such
Covenant Defeasance means
31
38
that, with respect to Debentures of such series, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such specified Section (to the extent so specified in the case
of Section 4.01(d) and 4.01(g)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Debentures shall be unaffected thereby.
SECTION 3.06. CONDITIONS TO DEFEASANCE. The following shall be the
conditions to the application of Section 3.04 or Section 3.05 to any applicable
series of Debentures or any Debentures of such series, as the case may be
(a) either
(i) with respect to all Outstanding Debentures of
such series or such Debentures of such Series, as the case may
be, with reference to this Section 3.06, the Company has
deposited or caused to be deposited with the Trustee, under
the terms of an escrow trust agreement satisfactory to the
Trustee, irrevocably (but subject to the provisions of Section
3.02 and the last paragraph of Section 9.03), as trust funds
in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of the Debentures of
such series, (A) lawful money of the United States in an
amount, or (B) U.S. Government Obligations that through the
payment of interest and principal in respect thereof in
accordance with their terms will provide not later than the
opening of business on the due dates of any payment referred
to in clause (A) or (B) of this subparagraph (a)(i) lawful
money of the United States in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge (1) the principal of (and premium, if any) and each
installment of principal (and premium, if any) and interest on
such Debentures the Stated Maturity of such principal or
installment of principal or interest or upon optional
redemption and (2) any mandatory sinking fund payments or
analogous payments applicable to the Debentures of such series
on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of the
Debentures of such series; or
32
39
(ii) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as
contemplated by Section 2.01, to be applicable to the
Debentures of such series;
(b) the Company has paid or caused to be paid all other sums
payable with respect to the Debentures of such series;
(c) such deposit for the benefit of Holders of Debentures of
such series will not result in a breach or violation of, or constitute
a default under, this Indenture, any material indenture, or any other
agreement or instrument to which the Company or its subsidiaries or any
of their properties is a party or by which any of them is bound;
(d) no Event of Default or event (including such deposit) that
with the giving of notice or lapse of time, or both, would become an
Event of Default with respect to the Debentures of such series shall
have occurred and be continuing on the date of such deposit and no
Event of Default under Section 4.01(e) or Section 4.01(f) or event
that, with the giving of notice or lapse of time, or both, would become
an Event of Default under Section 4.01(e) or Section 4.01(f), shall
have occurred and be continuing on the 91st day after such date;
(e) in the event of an election to have Section 3.04 apply to
the Debentures of any series, the Company has delivered to the Trustee
(i) an Opinion of Counsel satisfactory to the Trustee to the effect, or
(ii) an Internal Revenue Service ruling satisfactory to the Trustee to
the effect, that the Holders of Debentures of such series shall not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge had not occurred;
(f) in the event of an election to have Section 3.05 apply to
Debentures of any series, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of
Debentures of such series will not recognize gain or loss for federal
income tax purposes as a result of the deposit and Covenant Defeasance
to be effected with respect to the Debentures of such series and will
be subject to United States federal income tax on the same amount, in
the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur;
33
40
(g) if the Debentures of such series are then listed on any
domestic or foreign securities exchange, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that such
deposit, defeasance and discharge will not cause the Debentures of such
series to be delisted;
(h) no default in the payment of the principal (and premium,
if any) or any interest on any Senior Indebtedness beyond any
applicable grace period shall have occurred and be continuing;
(i) no other default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in the
acceleration of such Senior Indebtedness; and
(j) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the Defeasance or Covenant
Defeasance with respect to Debentures of such series have been complied
with and an Opinion of Counsel to the effect that either (i) as a
result of such deposit and the related exercise of the Company's option
under this Article, registration is not required under the Investment
Company Act of 1940, as amended, by the Company, the trust funds
representing such deposit or the Trustee or (ii) all necessary
registrations under said Act have been effected.
Any deposits with the Trustee referred to in Section 3.06(a)(i) shall
be irrevocable and shall be made under the terms of an escrow/trust agreement in
form and substance satisfactory to the Trustee. If any Outstanding Debentures of
such series are to be redeemed prior to their Stated Maturity, whether pursuant
to any optional redemption provisions or in accordance with any mandatory
sinking fund requirement, the applicable escrow trust agreement shall provide
therefor and the Company shall make such arrangements as are satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
Upon Defeasance with respect to all the Debentures of any series, the
terms and conditions of the Debentures of such series, including the terms and
conditions with respect thereto set forth in this Indenture, shall no longer be
binding upon, or applicable to, the Company; PROVIDED, that the Company shall
not be discharged from any payment obligations in respect of Debentures of such
series that are deemed not to be Outstanding under clause (iii) of the
definition thereof if such obligations continue to be valid obligations of the
Company under applicable law.
34
41
Notwithstanding the cessation, termination and discharge of all
obligations, covenants and agreements (except as provided above in this Section
3.06) of the Company under this Indenture with respect to the Debentures of any
series, the obligations of the Company to the Trustee under Section 5.06, and
the obligations of the Trustee under Section 3.02 and the last paragraph of
Section 9.03 shall survive with respect the Debentures of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in this Section 3.06
with respect to Debentures of any series that, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to Debentures of such
series.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to this Section 3.06 or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Debentures.
ARTICLE 4
REMEDIES
SECTION 4.01. EVENTS OF DEFAULT. "EVENT OF DEFAULT," wherever used
herein with respect to Debentures of any series, unless otherwise provided the
applicable supplemental indenture, means any one or more of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest upon any Debenture
of such series when it becomes due and payable, and continuance of such
default for a period of 30 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Debentures of such series, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "NOTICE OF DEFAULT"
hereunder (whether or not such payment is
35
42
prohibited by the subordination provisions set forth in Article 13);
PROVIDED, that a valid extension of an interest payment period by the
Company in accordance with the terms of any indenture supplemental
hereto, shall not constitute a default in the payment of interest for
this purpose; or
(b) default in the payment of the principal of (or premium, if
any, on) any Debenture of such series as and when the same shall become
due and payable whether at maturity, upon redemption, by declaration or
otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series (whether or not such payment is
prohibited by the subordination provisions set forth in Article 13);
PROVIDED, that a valid extension of the maturity of the Debentures of
such series in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of principal or
premium, if any; or
(c) if the Debentures of such series are convertible or
exchangeable into or for shares of Common Stock of the Company or other
securities, cash or other property pursuant to any supplemental
indenture, Board Resolution or other instrument authorizing Debentures
of such series, failure by the Company to convert such Debentures
(whether or not conversion or exchange is prohibited by the
subordination provisions set forth in Article 13); or
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or that has expressly been
included in this Indenture solely for the benefit of any series of
Debentures other than such series), and continuance of such default or
breach for a period of 90 days after a Notice of Default; or
(e) the entry by a court having jurisdiction in the premises
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
36
43
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the consent
by it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidation, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors; or
(g) in the event Debentures of any series are issued to a
Lodgian Capital Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such Lodgian Capital Trust, such
Lodgian Capital Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Debentures of such
series to holders of Trust Securities in liquidation of their interest
in such Lodgian Capital Trust, (ii) the redemption or conversion of all
of the outstanding Trust Securities of such Lodgian Capital Trust or
(iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such Lodgian Capital Trust;
(h) an event of default under any mortgage, indenture, loan
agreement or other instrument under which the Company has or shall
hereafter have outstanding indebtedness of borrowed money in excess of
$10,000,000 which has become due and payable by its terms and has not
been paid of whose maturity has been accelerated and such payment
default has not been cured or such acceleration has not been annulled
within 30 days after a Notice of Default has been given; or
(i) any other Event of Default provided pursuant to Section
2.01 with respect to Debentures of such series.
SECTION 4.02. ACCELERATION OF MATURITY; RECISSION AND ANNULMENT. If an
Event of Default described in clause (a), (b), (c), (d), (g), (h) or (i) (if the
Event of Default under clause (d) is with respect to less than all series of
Debentures then Outstanding) of Section 4.01 above occurs and is continuing,
then, and in each and every such case, unless the principal of all of the
Debentures of such series
37
44
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Debentures of such series
then Outstanding hereunder (each such series voting as a separate class), by
notice in writing to the Company (and to the Trustee if given by the Holders of
Debentures of such series), may declare the entire principal (or, if the
Debentures of such series are Original Issue Discount Debentures, such portion
of the principal amount as may be specified in the terms of such series) of all
Debentures of such series and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described under clause (e)
or (f) of Section 4.01 shall occur and be continuing, then the entire principal
(or, if any Debentures are Original Issue Discount Debentures such portion of
the principal as may be specified in the terms thereof) of all Debentures of all
series then Outstanding and interest accrued thereon, if any, shall be and
become immediately due and payable, without notice or demand. If an Event of
Default described in clause (d) (if the Event of Default under clause (d)
relates to all series of Debentures then Outstanding), of Section 4.01 occurs
and is continuing, then and in each and every such case, unless the principal of
all the Debentures of all series shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of all the Debentures of all series then Outstanding hereunder (treated
as one class), by notice in writing to the Company (and to the Trustee if given
by Holders of Debentures), may declare the entire principal (or, if any
Debentures are Original Issue Discount Debentures such portion of the principal
as may be specified in the terms thereof) of all Debentures of all series then
Outstanding and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if any Debentures are Original Issue
Discount Debentures, such portion of the principal as may be specified in the
terms thereof) of the Debentures of any series (or of all the Debentures of all
series, as the case may be) then Outstanding shall have been so declared due and
payable, and before any judgment or decree for the payment of such moneys shall
have been obtained or entered as hereinafter provided, the Company shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured installments
of interest upon all the Debentures of such series (or of all Debentures of all
series, as the case may be) and the principal of (and premium, if any on)
Debentures of such series (or of all Debentures of all series, as the case may
be) that shall have become due otherwise than by acceleration (with interest
upon such principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest or Yield to Maturity (in the case of Original
Issue Discount Debentures) specified in the Debentures of
38
45
such series (or at the respective rates of interest or Yields to Maturity of
all Debentures of all series, as the case may be) to the date of such payment or
deposit) and such amount as shall be sufficient to cover reasonable compensation
to the Trustee, and each predecessor Trustee, their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and if any and all Events of Default under the
Indenture, other than the non-payment of the principal of Debentures of such
series (or, if any Debentures are Original Issue Discount Debentures, such
portion of the principal as may be specified in the terms thereof) that shall
have become due by acceleration, shall have been cured, waived or otherwise
remedied as provided herein -- then and in every such case the Holders of a
majority in aggregate principal amount of all the Debentures of such series,
each series voting as a separate class (or of all Debentures of all series, as
the case may be, voting as a single class), then Outstanding, by written notice
to the Company and to the Trustee, may waive all such defaults with respect to
the Debentures of such series (or with respect to all Debentures of all series,
as the case may be) and rescind and annul such declaration and its consequence,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of such series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
SECTION 4.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if:
(a) default is made in the payment of any interest on any
Debenture of any series, or any payment required by any sinking or
analogous fund established with respect to Debentures of such series as
and when the same shall have become due and payable and such default
continues for a period of 30 days (provided that a valid extension of
the interest payment period permitted by the terms of the supplemental
indenture or Board Resolutions setting forth the terms of the
Debentures of such series shall not constitute a default in the payment
of interest), or
39
46
(b) default is made in the payment of the principal of (or
premium, if any, on) any Debenture of any series when the same shall
have become due and payable, whether upon maturity of the Debentures of
such series or upon redemption or upon declaration or otherwise,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of Debentures of such series, the whole amount then due and payable on
such Debentures of such series and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable under applicable law,
interest on any overdue principal and on the premium, if any, and overdue
interest, at the rate or rates prescribed therefor in Debentures of such series
and, if the Debentures of such series are held by a Lodgian Capital Trust or a
trustee of such trust, without duplication of any other amounts paid by such
Lodgian Capital Trust or trustee in respect thereof, upon overdue installments
of interest at the rate per annum expressed in the Debentures of such series;
and in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
under Section 5.06.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon Debentures of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon Debentures of
such series, wherever situated.
If an Event of Default with respect to Debentures of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Debentures of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, either at law or in equity or in
bankruptcy or otherwise whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 4.04. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Debentures of any series or the
property of the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Debentures of such series shall
then
40
47
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal and any premium and interest owing and unpaid in respect of
the Debentures of any series and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders of Debentures of such series, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Debentures of such series to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Debentures of such series, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 5.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Debenture of any series, any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures of such series or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of Debentures of any series in any such proceeding.
SECTION 4.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
DEBENTURES. All rights of action and claims under this Indenture or under any of
the terms established with respect to the Debentures of any series may be
prosecuted and enforced by the Trustee without the possession of any of the
Debentures of such series or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel due under
Section 5.06, be for the ratable benefit of the Holders of the Debentures of
such series in respect of which such judgment has been recovered.
41
48
SECTION 4.06. APPLICATION OF MONEY COLLECTED. Any money collected by
the Trustee pursuant to this Article with respect to Debentures of any series
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Debentures of such series,
or both, as the case may be, and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 5.06;
SECOND: To the payment of all Senior Indebtedness of the
Company and to the extent required by Article 13:
THIRD: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Debentures of such
series in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on Debentures of such series
for principal and any premium and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the
Company.
SECTION 4.07. LIMITATION ON SUITS. No Holder of any Debenture of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless;
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Debentures
of such series and of the continuance thereof with respect to the
Debentures of such series specifying such Event of Default, as
hereinbefore provided;
(b) the Holders of not less than 25% in principal amount of
the Outstanding Debentures of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
42
49
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60 day period by the Holders of a
majority in principal amount of the Outstanding Debentures of such
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 4.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, but
subject to Article 13 of this Indenture, the Holder of any Debenture of any
series shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 2.03)
interest on Debenture of such series on the Stated Maturity or Maturities
expressed in Debentures of such series (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 4.09. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder of Debentures of any series has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders of Debentures of such
series shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 4.10. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debentures in the last paragraph of Section 2.07, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Debentures is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy
43
50
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 4.11. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Debenture to exercise any right or remedy
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Subject to the provisions of Section 4.07,
every right and remedy given by this Article or by law to the Trustee or to the
Holders of Debentures may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders of Debentures, as the case
may be.
SECTION 4.12. CONTROL BY HOLDERS OF DEBENTURES. The Holders of a
majority in aggregate principal amount of the Outstanding Debentures of any
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debentures of such
series; PROVIDED, that
(a) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(b) the Trustee may take any other action deemed proper by the
Trustee; PROVIDED, that such direction shall not be in conflict with
any rule of law or with this Indenture or be unduly prejudicial to the
rights of Holders of Debentures of any other series at the time
Outstanding. Subject to the provisions of Section 5.02, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers of
the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability.
SECTION 4.13. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in principal amount of the Outstanding Debentures of any series may on
behalf of the Holders of all the Debentures of such series waive any past
default hereunder with respect to the Debentures of such series and its
consequences, except a default
(a) in the payment of the principal of (or premium, if any) or
any interest on any Debenture of such series as and when the same shall
become due by the terms of Debentures of such series otherwise than by
acceleration (unless such default has been cured and sums sufficient to
pay
44
51
all matured installments of interest and principal and any premium has
been deposited with the Trustee (in accordance with Section 4.02)), or
(b) in respect of a covenant or provision hereof that under
Article 8 cannot be modified or amended without the consent of the
Holder of each Outstanding Debenture of such series affected;
PROVIDED, that if the Debentures of such series are held by a Lodgian Capital
Trust or a trustee of such trust, such waiver or modification to such waiver
shall not be effective until the holders of a majority of the aggregate
liquidation amount of Trust Securities of the applicable Lodgian Capital Trust
shall have consented to such waiver or modification to such waiver; PROVIDED
FURTHER, that where a consent under this Indenture would require the consent of
Holders of more than a majority of the principal amount of Outstanding
Debentures of such series, such waiver shall not be effective until the holders
of at least the same proportion in aggregate liquidation amount of the Trust
Securities of the applicable Lodgian Capital Trust shall have consented to such
waiver; PROVIDED FURTHER, that a default in respect of any covenant or provision
contained in Article 12 may only be waived by the Holders affected thereby.
Upon any such waiver, the default covered thereby shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture and the Company, the Trustee and the Holders
of the Debentures of such series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 4.14. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Debentures of
any series, or to any suit instituted by any Holder of any Debenture for the
enforcement of the payment of the principal of or any premium or interest on
such Debenture on or after the Stated Maturity or
45
52
Maturities expressed in such Debenture (or, in the case of redemption, on or
after the Redemption Date).
SECTION 4.15. WAIVER OF STAY OR EXTENSION LAWS. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 5
THE TRUSTEE
SECTION 5.01. DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any series of
Debentures issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Debentures of a such series and after the curing or
waiving of all Events of Default that may have occurred with respect to
Debentures of such series, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default with respect to the Debentures of such series has occurred (which has
not been cured or waived), the Trustee shall exercise with respect to the
Debentures of such series such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with
respect to the Debentures of any series and after the curing or waiving
of all such Events of Default with respect to the Debentures of such
series that may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Debentures of such series shall be determined
solely by the
46
53
express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee: and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statement,
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that such Responsible Officers
of the Trustee were negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 4.12 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or Power conferred upon the
Trustee, under this Indenture.
No provision of this Indenture shall require the Trustee to extend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
SECTION 5.02. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
47
54
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Debentures of any series pursuant
to this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction, including such reasonable advances as may be
requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to
48
55
be authorized or within the discretion or rights or powers conferred
upon it by this Indenture, unless the Trustee was negligent in
ascertaining the pertinent facts; and
(i) the Trustee shall not be deemed to have notice of any
default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Debentures and this Indenture.
SECTION 5.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The recitals contained herein and in the Debentures (except the Trustee's
certificates of authentication) shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of any Debentures. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Debentures or the proceeds thereof.
SECTION 5.04. MAY HOLD DEBENTURES. The Trustee, any Authenticating
Agent, any Paying Agent, or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Debentures and, subject
to Section 5.09 and 5.11, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
or such other agent.
SECTION 5.05. MONEY HELD IN TRUST. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 5.06. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(a) to pay to the Trustee or any successor Trustee from time
to time such compensation as shall be agreed in writing between the
Company and the Trustee for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee or any predecessor Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any provision of this Indenture
(including the
49
56
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim,
liability or expense, including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 4.01(e) or Section 4.01(f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar laws.
The Trustee shall have a lien prior to the Debentures as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 5.06, except with respect to
unclaimed funds held in trust for the benefit of the Holders of particular
Debentures.
The provisions of this Section 5.06 shall survive the termination of
this Indenture.
SECTION 5.07. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 5.08.
(b) The Trustee may resign at any time with respect to the Debentures
of one or more series by giving written notice thereof to the Company, or so
long as no Event of Default shall have occurred or be continuing, be removed
with respect to the Debentures of one or more series by the Company by a Board
Resolution, a copy of which shall be delivered to the Trustee and the Holders of
such series. If the instrument of acceptance by a successor Trustee required by
Section 5.08 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent
50
57
jurisdiction for the appointment of a successor Trustee with respect to the
Debentures of such series.
(c) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of a majority in principal amount
of the Outstanding Debentures of such series delivered to the Trustee and to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 5.08 shall not have been delivered to the Trustee within 30 days after
the delivery of such Act of removal, the Trustee being removed may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Debentures of such series.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the Company
or by any Holder of a Debenture who has been a bona fide Holder of a
Debenture for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.10
and Section 310(a) of the Trust Indenture Act and shall fail to resign
after written request therefor by the Company or by any such Holder of
a Debenture who has been a bona fide Holder of Debenture for at least
six months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
(A) the Company by a Board Resolution may remove the Trustee with respect to all
Debentures, or
(B) subject to Section 4.14 any Holder of a Debenture who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Debentures and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debentures of one or more series, the Company, by a Board
51
58
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debentures of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Debentures of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Debentures of any particular series) and shall comply with the
applicable requirements of Section 5.08. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Debentures of any series shall be
appointed by Act of the Holders of a majority in principal amount of Outstanding
Debentures of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 5.08,
become the successor Trustee with respect to the Debentures of such series and
to that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Debentures of any series shall have been
so appointed by the Company or the Holders of Debentures of such series and
accepted appointment in the manner required by Section 5.08, any Holder of a
Debenture of such series who has been a bona fide Holder of a Debenture of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debentures of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debentures of any series and each appointment
of a successor Trustee with respect to the Debentures of any series in the
manner provided in Section 1.06. Each notice shall include the name of the
successor Trustee with respect to the Debentures of such series and the address
of its Corporate Trust Office.
SECTION 5.08. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of
the appointment hereunder of a successor Trustee with respect to all Debentures,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but on the written request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
52
59
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Debentures of
such series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and that (i) shall contain
such provisions as shall be necessary or desirable to transfer and conform to,
and to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of such series to which
the appointment of such successor Trustee relates, (ii) if the retiring Trustee
is not retiring with respect to all Debentures, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of such
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of such series to which
the appointment of such successor Trustee relates; but, on the written request
of the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Debentures of such
series to which the appointment of such successor Trustee relates.
(c) Upon the written request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 5.09. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee
has or shall acquire a conflicting interest within the meaning of Section 310(b)
of the Trust Indenture Act, the Trustee and the holder of Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in
53
60
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 5.10. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall be
at all times a Trustee hereunder, which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and (a) has a combined
capital and surplus of at least $50,000,000 or (b) has a combined capital and
surplus of at least $10,000,000 and is a wholly-owned subsidiary of a
corporation having a combined capital and surplus of at least $50,000,000, and
in each case subject to supervision by Federal, State or District of Columbia
authority. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect hereunder
specified in this Article.
SECTION 5.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Debentures), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 5.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Debentures shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Debentures so authenticated with the same effect
as if such successor Trustee had itself authenticated such Debentures.
SECTION 5.13. NOTICE OF DEFAULTS. If a default occurs hereunder with
respect to Debentures of any series, the Trustee shall give the Holders of
Debentures of such series notice of such default as and to the extent provided
by the Trust Indenture Act; provided, that in the case of any default of the
character specified in Section 4.01(d) with respect to Debentures of such
series, no such
54
61
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to Debentures of such series.
ARTICLE 6
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 6.01. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Debentures (i) contained in
the most recent list furnished to the Trustee as provided in Section 312(a) of
the Trust Indenture Act, (ii) received by the Trustee in its capacity as
Debenture Registrar and (iii) filed with it within the two preceding years
pursuant to Section 313(c)(2) of the Trust Indenture Act.
(b) If three or more Holders of Debentures of any series (herein
referred to as "APPLICANTS") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Debenture of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Debentures of such series with respect to
their rights under this Indenture or under the Debentures of such series and is
accompanied by a copy of the form of proxy or other communication that such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 6.01(a), or
(ii) inform such applicants as to the approximate number of
Holders of Debentures of such series whose names and addresses appear
in the information preserved at the time by the Trustee in accordance
with Section 6.01(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
55
62
of Debentures in accordance with Section 6.01(b), regardless of the source from
which such information was derived and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 6.01(b).
SECTION 6.02. REPORTS BY TRUSTEE. The Trustee shall in each year
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within sixty days after each May 15 following
the date of this Indenture deliver to Holders a brief report, dated as of such
May 15, which complies with the provisions of Section 313(a). The trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 6.03. REPORTS BY COMPANY. The Company shall file with the
Trustee such documents, reports and information as required by Section 314 (if
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. The Company shall transmit information to the
Holders of the Debentures as required by Section 313(c) of the Trust Indenture
Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).
ARTICLE 7
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 7.01. COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. The
Company shall not merge or consolidate with any other corporation or sell or
convey all or substantially all of its assets to any Person, unless (a) either
the Company shall be the continuing corporation, or the successor corporation
(if other than the Company) shall be a corporation organized under the laws of
the United States of America or any State thereof and shall expressly assume the
due and punctual payment of the principal of and interest on all the Debentures,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed or
observed by the Company, by supplemental indenture satisfactory to the Trustee,
executed
56
63
and delivered to the Trustee by such corporation, and (b) the Company or such
successor corporation, as the case may be, shall not, immediately after such
merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition.
SECTION 7.02. SUCCESSOR CORPORATION SUBSTITUTED. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein. Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company prior to such succession any or
all of the Debentures issuable hereunder that theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall make available for delivery any securities that
previously shall have been signed and delivered by the officers of the Company,
to the Trustee for authentication, and any Debentures that such successor
corporation thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All of the Debentures so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debentures theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Debentures had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance by
way of lease) the Company or any successor corporation that shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Indenture and the Debentures and
may be liquidated and dissolved.
SECTION 7.03. MERGER WITH IMPAC. If the merger (the "MERGER")
contemplated pursuant to the Agreement and Plan of Merger dated as of March 20,
1998 among Lodgian, the Company, Impac Hotel Group, L.L.C., SHG-S Sub, Inc. and
SHG-I Sub, L.L.C. is consummated, then, upon the assumption by Lodgian of the
Company's obligations under this Indenture and the Debentures as contemplated by
Section 7.01, Servico, Inc. shall be discharged from all obligations and
covenants under this Indenture and the Debentures.
57
64
SECTION 7.04. OPINION OF COUNSEL TO TRUSTEE. The Trustee may receive an
Opinion of Counsel, prepared in accordance with Section 1.02, as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Debentures, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Debentures; or
(b) to add to the covenants of the Company for the benefit of
the Holders of Debentures of all or any series (and if such covenants
are to be for the benefit of Debentures of less than all series,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(c) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the Trust
Indenture Act;
(d) to add any additional Events of Default (and if such
Events of Default are to be for the benefit of Debentures of less than
all series, stating that such Events of Default are expressly being
included solely for the benefit of such series); or
(e) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Debenture Outstanding of any series
created prior to the execution of such supplemental indenture that is
entitled to the benefit of such provision; or
58
65
(f) to establish the form or terms of Debentures of any series
as permitted by Sections 2.01; or
(g) to evidence and provide for the acceptance of appointment
thereunder by a successor Trustee with respect to the Debentures of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 5.08(b); or
(h) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article 12, including providing
for the conversion of the Debentures into any security or property
(other than the Common Stock of the Company); or
(i) to cure any ambiguity, to correct or supplement any
provision herein that may be inconsistent with any other provision
herein, to make any change to the form or term of the Debentures of any
series or to make other changes to this Indenture; PROVIDED, that such
action shall not have a material adverse effect on the interests of the
Holders of Debentures of any series.
SECTION 8.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority in aggregate principal amount
of the Outstanding Debentures of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Debentures of such series under this Indenture; PROVIDED, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debenture of any
series, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or reduce
the amount of the principal of an Original Issue Discount Debenture
that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 4.02 or change the coin or
currency in which any Debenture or any premium or interest thereon is
payable, or change any Place of Payment where any Debenture is payable,
or impair the right to
59
66
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(b) reduce the percentage in principal amount of the
Outstanding Debentures of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of certain defaults hereunder and
their consequences provided for in this Indenture, or
(c) modify any of the provisions of this Section or Section
4.13, except to increase the percentage of Outstanding Debentures of
any series the consent of the Holders of which is required pursuant to
such provisions or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Debenture affected thereby, or
(d) make any change that adversely affects the right to
convert any Debenture of any series as provided in Article 12 or
pursuant to Section 2.01 (except as permitted by Section 8.01) or
decrease the conversion rate or increase the conversion price of any
such Debenture of such series, or
(e) change the obligation of the Company, with respect to
Outstanding Debentures of a series, to maintain an office or agency in
the places and for the purposes specified in Section 9.02 for such
series; or
(f) if the Debentures of any series are secured, change the
terms and conditions pursuant to which the Debentures of such series
are secured in a manner adverse to the Holders of the secured
Debentures of such series, or
(g) make any change in Article 13 that adversely affects the
rights of any Holders of Outstanding Debentures of such series.
If the Debentures of such series are held by a Lodgian Capital Trust or
a trustee of such trust, such supplemental indenture shall not be effective
until the holders of 662/3% of the aggregate liquidation amount of Trust
Securities of the applicable Trust shall have consented to such supplemental
indenture; PROVIDED, where a consent under this Indenture would require the
consent of Holders of more than 662/3% of the principal amount of Outstanding
Debentures of such series, such supplemental indenture shall not be effective
until the holders of at least the same proportion in aggregate liquidation
amount of the Trust Securities
60
67
of the applicable Lodgian Capital Trust shall have consented to such
supplemental indenture.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of Debentures of one or more particular series, or that modifies the
rights of the Holders of Debentures of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Debentures of any other series.
It shall not be necessary for any Act of Holders of Debentures of any
series under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 8.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
5.02) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 8.04. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Debentures theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 8.05. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act of 1939, as amended, in effect on such date.
SECTION 8.06. REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and made available for delivery by the
Trustee in exchange for Outstanding Debentures of such series.
61
68
ARTICLE 9
COVENANTS
SECTION 9.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees for the benefit of Debentures of any series that it will
duly and punctually pay the principal of and any premium and interest on the
Debentures of such series in accordance with the terms of the Debentures of such
series and this Indenture.
SECTION 9.02. MAINTENANCE OF OFFICE OR AGENCY. So long as any series of
the Debentures remain outstanding, the Company agrees to maintain an office or
agency in the City of Wilmington, State of Delaware, with respect to each such
series and at such other location or locations as may be designated as provided
in this Section 9.02, where (i) Debentures of that series may be presented for
payment, (ii) Debentures of that series may be presented as herein above
authorized for registration of transfer and exchange, and (iii) notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or a Vice President and delivered to the Trustee, designate some
other office or agency for such purposes or any of them. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
SECTION 9.03. MONEY FOR DEBENTURES PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent with respect to Debentures
of any series, it will, on or before each due date of the principal of and any
premium or interest on any of the Debentures of such series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and any premium or interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure to act.
Whenever the Company shall have one or more Paying Agents for
Debentures of any series it will, prior to each due date of the principal of and
any premium or interest on any Debentures of such series, deposit with a Paying
Agent a sum sufficient to pay the principal and any premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the
62
69
Trustee) the Company will promptly notify the Trustee of its action or failure
to act.
The Company will cause each Paying Agent for Debentures of any series
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of and any premium or interest on Debentures of such series in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Debentures of such series) in the making of
any payment of principal of and any premium or interest on the
Debentures of such series;
(c) comply with the provisions of the Trust Indenture Act
applicable to it as Paying Agent; and
(d) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and any premium or
interest on any Debenture of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of the Debenture of
such series shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money and all liability of the Company as
trustee thereof
63
70
shall thereupon cease; PROVIDED, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company
cause to be published once, in an Authorized Newspaper in each Place of Payment,
notice that such money remains unclaimed and that after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 9.04. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES. If
Debentures of any series are issued to a Lodgian Capital Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such Lodgian
Capital Trust and (a) there shall have occurred any event that would constitute
an Event of Default, (b) the Guarantor shall be in default with respect to its
payment of any obligations under the Guarantee relating to such Lodgian Capital
Trust, or (c) the Company shall have given notice of its election to defer
payments of interest on Debentures of such series by extending the interest
payment period as provided herein and such period, or any extension thereof,
shall be continuing, then the Company shall not, and shall not permit any
Subsidiary to, (x) declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock or (y) make any payment of principal of,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank on a parity with or junior in interest to
the Debentures of that series or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any Subsidiary of the Company
if such guarantee ranks on a parity with or junior in interest to the Debentures
of that series (other than (a) dividends or distributions in common stock of the
Company, (b) payments under the Guarantee relating to such Lodgian Capital
Trust, (c) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, and
(d) purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans).
SECTION 9.05. COVENANTS AS TO LODGIAN CAPITAL TRUST. In the event
Debentures are issued to a Lodgian Capital Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such Lodgian Capital Trust,
for so long as such Trust Securities remain outstanding, the Company will (a)
maintain directly or indirectly ownership of all of the Common Securities of
such Lodgian Capital Trust; PROVIDED, that any permitted successor of the
Company under the Indenture may succeed to the Company's ownership of the Common
Securities, (b) cause such Lodgian Capital Trust to remain a statutory business
trust, except in connection with a distribution of Debentures of such series to
the holders of Trust Securities in liquidation of such Lodgian Capital Trust,
the redemption of all of the Trust Securities of such Trust, or certain mergers,
64
71
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
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.
SECTION 9.06. EXISTENCE. Subject to Article 7, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; PROVIDED,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 9.07. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate signed by its
principal executive officer, principal financial officer or principal accounting
officer stating whether or not to the best knowledge of the signer thereof the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture, and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
The Company shall file with the Trustee written notice of the
occurrence of any default relating to an Event of Default of the type described
in clause (e), (f) or (g) of Section 4.01 or any Event of Default within five
Business Days of its becoming aware of any such default or Event of Default.
SECTION 9.08. FINANCIAL INFORMATION; SEC REPORTS. The Company shall
file with the Trustee, within 15 days after it files any annual and quarterly
reports, information, documents and other reports with the Commission, copies of
its annual report and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) that the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act.
If at any time, the Company is not required to file any such reports
with the Commission, the Company will deliver to the Trustee (a) as soon as
available and in any event within 90 days after the end of each fiscal year of
the Company
65
72
(i) a consolidated balance sheet of the Company and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of operations,
stockholders' equity and cash flows for such fiscal year, all reported on by an
independent public accountant of nationally recognized standing and (ii) a
report containing a management's discussion and analysis of the financial
condition and results of operations and a description of the business and
properties of the Company and (b) as soon as available and in any event within
45 days after the end of each of the first three quarters of each fiscal year of
the Company (i) an unaudited consolidated financial report for such quarter and
(ii) a report containing a management's discussion and analysis of the financial
condition and results of operations of the Company; PROVIDED, that the foregoing
shall not be required for any fiscal year or quarter, as the case may be, with
respect to which the Company files or expects to file with the Trustee an annual
report or quarterly report, as the case may be, pursuant to the second paragraph
of this Section 9.08.
With respect to Debentures originally issued in an offering not
registered pursuant to the Securities Act, if prior to the Resale Restriction
Termination Date, the Company is neither subject to Section 13 or 15(d) of the
Exchange Act, the Company shall at the request of any Holder provide to such
Holder and any prospective purchaser designated by such Holder such information,
if any, required by Rule 144A(d)(4) under the Securities Act.
ARTICLE 10
REDEMPTION OF DEBENTURES
SECTION 10.01. APPLICABILITY OF ARTICLE. Debentures of any series that
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
2.01 for Debentures of any series) in accordance with this Article.
SECTION 10.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem Debentures of any series shall be evidenced by an
Officers' Certificate. In the case of any redemption, at the election of the
Company, the Company shall, upon not less than 30 nor more than 60 days prior to
the Redemption Date fixed by the Company, notify the Trustee of such Redemption
Date and of the principal amount of Debentures of such series to be redeemed. In
the case of any redemption of Debentures of such series (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures of such series or elsewhere in this Indenture, or (b) pursuant to an
election of the Company that is subject to a condition specified in the terms of
66
73
Debentures of such series, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction or condition.
SECTION 10.03. SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED. If
less than all the Debentures of any series and of like tenor are to be redeemed,
the particular Debentures of such series to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Debentures of such series and of like tenor not previously called
for redemption. If the Outstanding Debentures have not been distributed to the
Holders of Trust Securities upon a dissolution of the Lodgian Capital Trust
(where applicable), the Debentures to be redeemed may be selected by such method
as the Trustee shall deem fair and appropriate and that may provide for the
selection of portions (equal to the minimum authorized denomination for
Debentures of such series or any integral multiple thereof) of the principal
amount of Registered Debentures of such series of a denomination larger than the
minimum authorized denomination for Debentures of such series. If the
Outstanding Debentures have been distributed to the Holders of Trust Securities,
then the Trustee must redeem the Outstanding Debentures PRO RATA.
If Debentures of any series selected for partial redemption are
converted in part before termination of the conversion right with respect to the
portion of the Debenture of such series so selected, the converted portion of
the Debentures of such series shall be deemed (so far as may be) to be the
portion selected for redemption. Debentures (or portions thereof) that have been
converted during a selection of Debentures of such series to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection. In
any case where more than one Debenture of such series is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Debenture of such series.
The Trustee shall promptly notify the Company in writing of the
Debentures of such series selected for redemption and, in the case of any
Debentures of such series selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures of such series
of such series shall relate, in the case of any Debentures of such series
redeemed or to be redeemed only in part, to the portion of the principal amount
of the Debentures of such series that has been or is to be redeemed.
67
74
SECTION 10.04. NOTICE OF REDEMPTION. Notice of redemption shall be
given in the manner provided in Section 1.06 to the Holders of Debentures to be
redeemed not less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall identify the Debentures (including the
CUSIP number) to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Debentures of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Debentures of such
series to be redeemed, and a statement to the effect that on or after
the Redemption Date upon surrender of such Debenture a new Debenture of
such series in the principal amount equal to the unredeemed portion
will be issued;
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture of such series to be
redeemed and, if applicable, that interest thereon will cease to accrue
on and after said date;
(e) the place or places where such Debentures of such series,
maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the
case; and
(g) if applicable, the conversion rate or price, the date on
which the right to convert the Debentures of such series to be redeemed
will terminate and the place or places where such Debentures may be
surrendered for conversion.
A notice of redemption published as contemplated by Section 1.06 need
not identify particular Registered Debentures of such series to be redeemed.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
68
75
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 A.M., New
York time, on any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 9.03) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Debentures that
are to be redeemed on that date.
If any Debenture called for redemption is converted into Common Stock
of the Company, any money deposited with the Trustee or with any Paying Agent or
so segregated and held in trust for the redemption of such Debenture shall
(subject to any right of the Holder of such Debenture or any Predecessor
Debenture to receive interest as provided in Section 2.03) be paid to the
Company upon Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 10.06. DEBENTURES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Debentures so to be redeemed
shall on the Redemption Date become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Debentures shall cease to bear interest. Upon surrender of any such Debenture
for redemption in accordance with said notice maturing after the Redemption
Date, such Debenture shall be paid by the Company at the Redemption Price
together with accrued interest to the Redemption Date; PROVIDED, that, unless
otherwise specified as contemplated by Section 2.01, installments of interest on
Registered Debentures whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Debentures or one or more
Predecessor Debentures, registered as such at the close of business on the
relevant record dates according to their terms and the provisions of Section
2.03.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
SECTION 10.07. DEBENTURES REDEEMED IN PART. Any Registered Debenture of
any series that is to be redeemed only in part shall be surrendered at a Place
of Payment therefor (with 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 his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Debenture without service charge, a new
Registered Debenture or Debentures of such series and of like tenor of any
authorized denomination as
69
76
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Debenture of such series so
surrendered.
ARTICLE 11
SINKING FUNDS
SECTION 11.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Debentures of any
series except as otherwise specified as contemplated by Section 2.01 for
Debentures of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "MANDATORY SINKING
FUND PAYMENT," and any payment in excess of such minimum amount provided for by
the terms of Debentures of any series is herein referred to as an "OPTIONAL
SINKING FUND PAYMENT." If provided for by the terms of Debentures of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 11.02. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of such series.
SECTION 11.02. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBENTURES.
The Company (a) may deliver Outstanding Debentures of any series (other than any
previously called for redemption (b) an may apply as a credit Debentures of such
series that have been redeemed either at the election of the Company pursuant to
the terms of the Debentures of such series or through the application of
permitted optional sinking fund payments pursuant to the terms of the
Debentures, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of such series required to be made
pursuant to the terms of the Debentures of such series; PROVIDED, that the
Debentures of such series have not been previously so credited. The Debentures
shall be received and credited for such purpose by the Trustee at the Redemption
Price specified in the Debentures of such series for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 11.03. REDEMPTION OF DEBENTURES FOR SINKING FUND. Not less than
60 days prior to each sinking fund payment date for Debentures of any series,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for such series pursuant to the
70
77
terms of such series, the portion thereof, if any, that is to be satisfied by
payment of cash and the portion thereof, if any, that is to be satisfied by
delivering and crediting Debentures of such series pursuant to Section 11.02 and
will also deliver to the Trustee any Debentures of such series to be so
delivered. Not less than 45 days before each such sinking fund payment date the
Trustee shall select the Debentures of such series to be redeemed upon such
sinking fund payment date in the manner specified in Section 10.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 10.04. Such notice having been
duly given, the redemption of such Debentures of such series shall be made upon
the terms and in the manner stated in Sections 10.06 and 10.07.
ARTICLE 12
CONVERSION OF DEBENTURES
SECTION 12.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Debentures of any series that are convertible into
shares of Common Stock of the Company, and the issuance of such shares of Common
Stock upon the conversion of Debentures of such series, except as otherwise
specified as contemplated by Section 2.01 for the Debentures of such series. The
terms and provisions applicable to the conversion of Debentures of any series
into securities of the Company (other than Common Stock) shall, if applicable,
be set forth in an Officers' Certificate or established in one or more
indentures supplemental hereto, prior to the issuance of Debentures of such
series in accordance with Section 2.01.
SECTION 12.02. EXERCISE OF CONVERSION PRIVILEGE. In order to exercise a
conversion privilege, the Holder of a Debenture of any series with such a
privilege shall surrender such Debenture to the Company at the office or agency
maintained for that purpose pursuant to Section 1.02, accompanied by written
notice to the Company that the Holder elects to convert such Debenture or a
specified portion thereof. Such notice shall also state, if different from the
name and address of such Holder, the name or names (with address) in that the
certificate or certificates for shares of Common Stock that shall be issuable on
such conversion shall be issued. Debentures of such series surrendered for
conversion shall (if so required by the Company or the Trustee) be duly endorsed
by or accompanied by instruments of transfer in forms satisfactory to the
Company and the Trustee duly executed by the registered Holder or its attorney
duly authorized in writing. As promptly as practicable after the receipt of such
notice and of any payment required pursuant to a Board Resolution and, subject
to Section 2.01, set forth, or determined in the manner provided, in an
Officers' Certificate, or established in
71
78
one or more indentures supplemental hereto setting forth the terms of Debentures
and the surrender of such Debentures in accordance with such reasonable
regulations as the Company may prescribe, the Company shall issue and shall
deliver, at the office or agency at which such Debenture is surrendered, to such
Holder or on its written order, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such Debenture (or
specified portion thereof), in accordance with the provisions of such Board
Resolution, Officers' Certificate or supplemental indenture, and cash as
provided therein in respect of any fractional share of such Common Stock
otherwise issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the date on which
such notice and such payment, if required, shall have been received in proper
order for conversion by the Company and such Debenture shall have been
surrendered as aforesaid (unless such Holder shall have so surrendered such
Debenture and shall have instructed the Company to effect the conversion on a
particular date following such surrender and such Holder shall be entitled to
convert such Debenture on such date, in which case such conversion shall be
deemed to be effected immediately prior to the close of business on such date)
and at such time the rights of the Holder of such Debenture as such Debenture
Holder shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock of the Company shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby. Except as set forth above
and subject to Section 2.03, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Debentures of such series
surrendered for conversion or on account of any dividends on the Common Stock of
the Company issued upon such conversion. Debentures surrendered for conversion
on or after any regular record date and prior to the next succeeding Interest
Payment Date (other than a Debenture or a portion of a Debenture called for
redemption on a Redemption Date occurring after such regular record date and on
or prior to such Interest Payment Date) shall be accompanied by payment equal to
the amount of interest payable on such Debenture on such Interest Payment Date.
In the case of any Debenture of any series that is converted in part
only, upon such conversion the Company shall execute and the Trustee shall
authenticate and make available for delivery to or on the order of the Holder
thereof, at the expense of the Company, a new Debenture or Debentures of such
series, of authorized denominations, in aggregate principal amount equal to the
unconverted portion of such Debenture.
SECTION 12.03. NO FRACTIONAL SHARES. No fractional share of Common
Stock of the Company shall be issued upon conversions of Debentures of any
series. If more than one Debenture of such series shall be surrendered for
72
79
conversion at one time by the same Holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Debentures of such series (or specified portions thereof
to the extent permitted hereby) so surrendered. If, except for the provisions of
this Section 12.03, any Holder of a Debenture or Debentures of such series would
be entitled to a fractional share of Common Stock of the Company upon the
conversion of such Debenture or Debentures, or specified portions thereof, the
Company shall pay to such Holder an amount in cash equal to the current market
value of such fractional share based upon the (i) the closing sale price (or, if
no closing price is reported, the last reported sale price) of the Common Stock
(regular way) on the NYSE on the trading day immediately preceding the date of
conversion, (ii) if the 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 the Common Stock is so listed, (iii)
if the Common Stock is not so listed on a United States national or regional
securities exchange, as reported by the NASDAQ Stock Market, (iv) if the Common
Stock is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, (v) if the Common Stock is not so quoted, the average of the
mid-point of the last bid and ask prices for the Common Stock from at least
three nationally recognized investment banking firms selected by the Board of
Directors or (vi) if not so available in such manner, as otherwise determined in
good faith by the Board of Directors. For purposes of this Section, "trading
day" shall mean any day on which the Common Stock is traded on the NYSE, or if
the Common Stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which the 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 the Common Stock is not quoted on
the NASDAQ Stock Market, in the applicable securities market in which the Common
Stock is traded.
SECTION 12.04. ADJUSTMENT OF CONVERSION PRICE. The conversion price of
Debentures of any series that is convertible into Common Stock of the Company
shall be adjusted for any stock dividends, stock splits, reclassification,
combinations or similar transactions in accordance with the terms of the
supplemental indenture or Board Resolutions setting forth the terms of the
Debentures of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall forthwith
be filed at each office or agency maintained for the purpose of conversion of
73
80
Debentures of such series pursuant to Section 9.02 and, if different, with the
Trustee. The Company shall forthwith cause a notice setting forth the adjusted
conversion price to be mailed, first class postage prepaid, to each Holder of
Debentures of such series at its address appearing on the Debenture Register and
to any conversion agent other than the Trustee.
SECTION 12.05. RESERVATION OF SHARES OF COMMON STOCK. The Company shall
at all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock or treasury shares, for the purpose of
effecting the conversion of Debentures, the full number of shares of Common
Stock of the Company then issuable upon the conversion of all outstanding
Debentures of any series that has conversion rights.
SECTION 12.06. PAYMENT OF CERTAIN TAXES UPON CONVERSION. The Company
will pay any and all taxes that may be payable in respect of the issue or
delivery of shares of its Common Stock on conversion of Debentures pursuant
hereto. The Company shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issue and delivery of shares
of its Common Stock in a name other than that of the Holder of the Debenture or
Debentures to be converted, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Company the amount of
any such tax, or has established, to the satisfaction of the Company, that such
tax has been paid.
SECTION 12.07. NONASSESSABILITY. The Company covenants that all shares
of Common Stock that may be issued upon conversion of Debentures will upon issue
in accordance with the terms hereof be duly and validly issued and fully paid
and nonassessable.
SECTION 12.08. EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION
PRIVILEGE. With respect to Debentures of any series, in case of any
consolidation of the Company with, or merger of the Company into or with any
other Person, or in case of any sale of all or substantially all of the assets
of the Company or any other similar event, the conversion privilege shall be
modified in accordance with the terms of the supplemental indenture or Board
Resolutions setting forth the terms of the Debentures of such series.
SECTION 12.09. DUTIES OF TRUSTEE REGARDING CONVERSION. Neither the
Trustee nor any conversion agent shall at any time be under any duty or
responsibility to any Holder of Debentures of any series that is convertible
into Common Stock to determine whether any facts exist that 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, whether
74
81
herein or in any supplemental indenture (or whether a supplemental indenture
need be entered into), any resolutions of the Board of Directors or written
instrument executed by one or more officers of the Company provided to be
employed in making the same. Neither the Trustee nor any conversion agent shall
be accountable with respect to the validity or value (or the kind or amount) 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 Debentures 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 issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property upon the surrender
of any Debenture for the purpose of conversion or to comply with any of the
covenants of the Company contained in this Article 12 or in the applicable
supplemental indenture, resolutions of the Board of Directors or written
instrument executed by one or more duly authorized officers of the Company. All
Debentures delivered for conversion shall be delivered to the Trustee to be
canceled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 2.08.
SECTION 12.10. REPAYMENT OF CERTAIN FUNDS UPON CONVERSION. Any funds
that at any time shall have been deposited by the Company or on its behalf with
the Trustee or any other paying agent for the purpose of paying the principal
of, and premium, if any, and interest, if any, on any of the Debentures
(including funds deposited for the sinking fund referred to in Article 2 hereof)
and that shall not be required for such purposes because of the conversion of
such Debentures as provided in this Article 12 shall after such conversion be
repaid to the Company by the Trustee upon the Company's written request, subject
to Section 2.03 hereof.
ARTICLE 13
SUBORDINATION OF DEBENTURES
SECTION 13.01. DEBENTURES SUBORDINATE TO SENIOR INDEBTEDNESS. The
Company covenants and agrees, and each Holder of a Debenture, by the Holder's
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Debentures and the payment of the principal of (and premium, if any) and
interest on each and all of the Debentures are hereby expressly made subordinate
and junior in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of this Indenture
or thereafter incurred. No provision of this Article shall prevent the
occurrence of any default or Event of Default hereunder.
75
82
SECTION 13.02. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the
event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Company, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of its creditors or (iv) any
other marshalling of the assets of the Company, all Senior Indebtedness shall
first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made by the Company on account of the
Debentures. Any payment or distribution, whether in cash, securities or other
property (other than securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in the subordination provisions of
the Indenture with respect to the indebtedness evidenced by the Debentures, to
the payment of all Senior Indebtedness at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for such subordination provisions) be
payable or deliverable in respect of the Debentures shall be paid or delivered
directly to the holders of Senior Indebtedness in accordance with the priorities
then existing among such holders until all Senior Indebtedness shall have been
paid in full. No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the Debentures by any act or
failure to act on the part of the Company.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of the
Company, as the case may be, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety
76
83
to another Person upon the terms and conditions set forth in Article 7 shall not
be deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of the Company
for the purposes of this Section if the Person formed by such consolidation or
into which the Company is merged or the Person that acquires by conveyance or
transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article 7.
SECTION 13.03. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. In the
event that (i) the Company shall default in the payment of any principal, or
premium, if any, or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or
declaration or otherwise or (ii) an event of default occurs with respect to any
Senior Indebtedness permitting the holders thereof to accelerate the maturity
thereof and written notice describing such event of default is given to the
Company by the holders of Senior Indebtedness, then unless and until such
default in payment and event of default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the Debentures or any interest thereon or in respect of any
repayment, redemption, retirement, purchase or other acquisition of the
Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 13.03 such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 13.04. PAYMENT PERMITTED IN CERTAIN SITUATIONS. Nothing
contained in this Article or elsewhere in this Indenture or in any of the
Debentures shall prevent (a) the Company, at any time except during the pendency
of any dissolution, winding-up, liquidation or reorganization of the Company,
whether voluntary or involuntary or any bankruptcy, insolvency, receivership or
other proceedings of the Company referred to in Section 13.02 or under the
conditions described in Section 13.03, from making payments at any time of
principal of or premium, if any, or interest on the Debentures, or (b) the
application by the
77
84
Trustee of any money deposited with it hereunder to the payment of or on account
of the principal of, or premium, if any, or interest on the Debentures or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article.
SECTION 13.05. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Senior Indebtedness shall not be deemed to have been paid in full unless the
holders thereof shall have received cash, securities or other property, equal to
the amount of such Senior Indebtedness then outstanding. Subject to the payment
in full of all Senior Indebtedness, the rights of the Holders of Debentures
shall be subrogated to the rights of any holders of Senior Indebtedness to
receive any further payments or distributions applicable to the Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Debentures shall be paid in full, by reason of such subrogation, of cash,
property or securities which would be paid or distributed to the holders of
Senior Indebtedness, shall, as among the Company and its creditors other than
holders of Senior Indebtedness, on the one hand, and the Holders of Debentures,
on the other, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness and not on account of the Convertible
Debentures.
SECTION 13.06. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Debentures on the one hand and
the holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Debentures is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Debentures, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Indebtedness, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of Debentures the principal of (and premium, if any) and interest on the
Debentures as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of Debentures and creditors of the Company, as the case may be, other
than the holders of Senior Indebtedness; or (c) prevent the Trustee or the
Holder of any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
SECTION 13.07. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a
Debenture by such Holder's acceptance thereof authorizes and directs the Trustee
78
85
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee such Holder's attorney-in-fact for any and all such purposes.
SECTION 13.08. NO WAIVER OF SUBORDINATION PROVISIONS. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Debentures, without incurring responsibility to the Holders of Debentures and
without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of Debentures to the holders of Senior
Indebtedness do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 13.09. NOTICE TO TRUSTEE. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
that would prohibit the making of any payment to or by the Trustee in respect of
the Debentures pursuant to the provisions of this Article. Notwithstanding the
provisions of this Article or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 5.02, shall be entitled in all
respects to assume that no such facts exist; PROVIDED, that if the Trustee shall
have not received the notice provided for in this Section at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any
79
86
purpose (including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Debentures, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 5.02, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 13.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 5.02, and the
Holders of Debentures shall be entitled to conclusively rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Debentures, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 13.11. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture against the Trustee. Except with respect to Section
13.03, the Trustee
80
87
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders or creditors if it
shall in good faith pay over or distribute to Holders of Debentures or to the
Company or to any other Person cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 13.12. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS,
PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness that may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 5.06.
SECTION 13.13. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "TRUSTEE" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; PROVIDED, that this Section 13.13 shall not apply to
the Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
SECTION 13.14. CERTAIN CONVERSIONS DEEMED PAYMENT. For the purposes of
this Article only, (a) the issuance and delivery of junior securities (or cash
paid in lieu of fractional shares) upon conversion of Debentures in accordance
with Article 12, or pursuant to the terms set forth in an Officers' Certificate
or established in one or more indentures supplemental hereto in accordance with
Section 2.01, shall not be deemed to constitute a payment or distribution on
account of the principal of or premium or interest on Debentures or on account
of the purchase or other acquisition of Debentures, and (b) the payment,
issuance or delivery of cash, property or securities (other than junior
securities and cash paid in lieu of fractional shares) upon conversion of a
Debenture shall be deemed to constitute payment on account of the principal of
such Debenture. For the purposes of this Section, the term "junior securities"
means (i) shares of any stock of any class of the Company and (ii) securities of
the Company that are subordinated in right of payment to all Senior Indebtedness
that may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article. Nothing contained in this
Article or elsewhere in this
81
88
Indenture or in the Debentures is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of Debentures, the right, which is absolute and unconditional, of the Holder of
any Debenture to convert such Debenture in accordance with Article 12.
82
89
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed 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/ W. Xxxxxxxxxxx Xxxxxxxxxx
-------------------------------------
Name: W. Xxxxxxxxxxx Xxxxxxxxxx
Title: Senior Financial Services Officer
LODGIAN, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and Secretary
83
