INDENTURE OF TRUST
BETWEEN
ROTARY POWER INTERNATIONAL, INC.
AND
SENTINEL TRUST COMPANY,
AS TRUSTEE
DATED AS OF DECEMBER 1, 1997
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 Definitions........................................................1
SECTION 1.02 Rules of Construction..............................................3
ARTICLE TWO
THE BONDS
SECTION 2.01 Form and Dating....................................................4
SECTION 2.02 Execution and Authentication.......................................4
SECTION 2.03 Registrar and Paying Agent.........................................4
SECTION 2.04 Paying Agent to Hold Money in Trust................................4
SECTION 2.05 Bond Holder Lists..................................................5
SECTION 2.06 Transfer and Exchange..............................................5
SECTION 2.07 Replacement Bonds..................................................5
SECTION 2.08 Outstanding Bonds..................................................5
SECTION 2.09 Cancellation.......................................................6
SECTION 2.10 Uncertified ownership of Bonds.....................................6
ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee.................................................6
SECTION 3.02 Selection of Bonds to be Redeemed..................................6
SECTION 3.03 Notice of Redemption...............................................6
SECTION 3.04 Effect of Notice of Redemption.....................................7
SECTION 3.05 Deposit of Redemption Price........................................7
SECTION 3.06 Bonds Redeemed in Part.............................................7
ARTICLE FOUR
ESTABLISHMENT OF FUNDS
AND APPLICATION THEREOF
SECTION 4.01 The Pledge and Lien Effected by the Indenture......................7
SECTION 4.02 Establishment of Funds.............................................7
SECTION 4.03 Payments into the Project Fund; Disbursements......................7
SECTION 4.04 Payments into the Debt Service Fund; Disbursements.................8
SECTION 4.05 Payments into the Bond Reserve Fund; Disbursements.................9
ARTICLE FIVE
COVENANTS
SECTION 5.01 Payment of Bonds...................................................9
SECTION 5.02 SEC Reports........................................................9
SECTION 5.03 Compliance Certificate.............................................9
SECTION 5.04 Insurance..........................................................9
SECTION 5.05 Application of Insurance Proceeds..................................9
SECTION 5.06 Deposit and Pledge of Funds for Certain Payments;
Investment of Funds...............................................10
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01 When Company may Merge, etc.......................................10
ARTICLE SEVEN
DEFAULTS AND REMEDIES
SECTION 7.01 Events of Default.................................................11
SECTION 7.02 Acceleration......................................................11
SECTION 7.03 Other Remedies....................................................11
SECTION 7.04 Waiver of Past Defaults...........................................11
SECTION 7.05 Control by Majority...............................................12
SECTION 7.06 Limitation on Suits...............................................12
SECTION 7.07 Rights of Holders to Receive Payment..............................12
SECTION 7.08 Collection Suit by Trustee........................................13
SECTION 7.09 Trustee May File Proofs of Claim..................................13
SECTION 7.10 Priorities........................................................13
ARTICLE EIGHT
TRUSTEE
SECTION 8.01 Duties of Trustee.................................................13
SECTION 8.02 Rights of Trustee.................................................14
SECTION 8.03 Individual Rights of Trustee......................................14
SECTION 8.04 Trustee s Disclaimer..............................................15
SECTION 8.05 Notice of Event of Default........................................15
SECTION 8.06 Compensation and Indemnity........................................15
SECTION 8.07 Replacement of Trustee............................................15
SECTION 8.08 Successor Trustee by Merger, etc..................................16
SECTION 8.09 Eligibility, Disqualification.....................................16
SECTION 8.10 Indemnification...................................................16
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01 Termination of Company's Obligations..............................16
SECTION 9.02 Application of Trust Money........................................17
SECTION 9.03 Repayment to Company..............................................17
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01 Without Consent of Holders........................................17
SECTION 10.02 With Consent of Holders...........................................17
SECTION 10.03 Execution of Supplemental Indentures..............................18
SECTION 10.04 Revocation and Effect of Consents.................................18
SECTION 10.05 Notation on or Exchange of Bonds..................................18
SECTION 10.06 Trustee to Sign Amendments, etc...................................18
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01 Notices...........................................................19
SECTION 11.02 Certificate and Opinion as to Conditions Precedent................19
SECTION 11.03 Statements Required in Certificate or Opinion.....................19
SECTION 11.04 When Treasury Bonds Disregarded...................................20
SECTION 11.05 Rules by Trustee and Agents.......................................20
SECTION 11.06 Legal Holiday.....................................................20
SECTION 11.07 Governing Law.....................................................20
SECTION 11.08 Successors........................................................20
SECTION 11.09 Counterparts......................................................20
INDENTURE OF TRUST, dated as of December 1, 1997 (the
"Indenture"), between Rotary Power International, Inc., a Delaware corporation,
having its principal place of business at 00 Xxxxxxx Xxxxxx, Xxxx-Xxxxx, Xxx
Xxxxxx 00000 (the "Company"), and Sentinel Trust Company, a Tennessee
corporation, having its principal place of business at 0000 Xxxxxx Xxxxx Xxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 (the "Trustee")
W I T N E S S E T H :
WHEREAS, the Company desires to issue its 10.412% Bonds due
December 15, 2007 (the "Bonds") in order to (i) optionally redeem all
outstanding Series 1992 Bonds, (ii) repay certain promissory notes of the
Company, including accrued interest thereon, which were issued to fund the
interest on the Series 1992 Bonds payable on December 1, 1997, (iii) provide
working capital for the Company and (iv) pay certain costs of issuance and
certain costs and expenses associated with the foregoing (collectively, the
"Project"); and
WHEREAS, all acts and things have been done and performed
which are necessary to make the Bonds, when executed and issued by the Company,
authenticated by the Trustee and delivered, the valid and legally binding
obligations of the Company in accordance with their terms;
NOW, THEREFORE, in consideration of the premises, of the
acceptance by the Trustee of the trust hereby created, and of the purchase and
acceptance of the Bonds by the Holders (as hereinafter defined) thereof, and to
fix and declare the terms and conditions upon which the Bonds are to be issued,
authenticated, delivered, secured and accepted by all persons who shall from
time to time be or become Holders thereof, and to secure the payment of all the
Bonds at any time issued and outstanding hereunder according to their tenor,
purport and effect, and to secure the performance and observance of all of the
covenants, agreements and conditions therein and herein contained, the Company
by these presents does grant, bargain, sell, release, convey, assign, transfer
and pledge unto the Trustee the Trust Estate (as hereinafter defined), and any
additional property that may from time to time, by delivery or writing of any
kind, be subjected to the lien hereof by the Company or by anyone on its behalf;
and the Trustee is hereby authorized to receive the same at any time as
additional security hereunder, subject to such permitted encumbrances under the
Indenture as may be superior (by operation of law or otherwise) to the lien
hereof.
To have and hold all of the Trust Estate, whether now owned or
hereafter acquired, unto the Trustee and its successors and assigns forever for
the equal and ratable benefit of the Holders from time to time of all the Bonds
authenticated hereunder and issued by the Company and outstanding without any
priority as to the Trust Estate of any one Bond over any other (except as
expressly provided in or permitted by the Indenture), upon the trusts and
subject to the covenants and conditions hereinafter set forth.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS. Unless the context otherwise
requires, the following terms shall have the meanings set forth below. Certain
other terms are defined elsewhere in this Indenture.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company or any committee of that Board duly authorized to act for it hereunder.
"BOND PROCEEDS" means the amount paid to the Company by the
Purchasers as the purchase price of the Bonds.
"BOND RESERVE FUND" means the fund established pursuant to
Section 4.02 hereof.
"BONDS" means the Bonds described in the Recitals above and
issued under this Indenture and "Bond" means any one of such Bonds.
"BUSINESS DAY" means a day that is not a Legal Holiday,
Saturday or Sunday.
"COLLATERAL" shall have the meaning given thereto in the
Security Agreement.
"COMPANY" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable provision hereof and
thereafter means the successor.
"CONSOLIDATED NET WORTH" means the consolidated stockholders'
equity of the Company and its Subsidiaries, or if the Company merges with, or
transfers all or substantially all of its assets to, another Person in
accordance with Section 6.01 hereof, the consolidated stockholders' equity of
such Person and its subsidiaries, in each case determined in accordance with
generally accepted accounting principles, consistently applied.
"DEBT SERVICE FUND" means the fund established pursuant to
Section 4.02 hereof.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"EVENT OF DEFAULT" shall have the meaning given thereto in
Section 7.01 hereof.
"HOLDER" or "BOND HOLDER" means the person in whose name a
Bond is registered on the Registrar's books.
"INDENTURE" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"OFFICER" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers, at least one of whom must be the Chairman of the Board, the President
or a Vice President; provided, however, that if there is only one Officer of the
Company, the certificate shall only be signed by such officer.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who may be counsel for the Company or other counsel who is not
unacceptable to the Trustee.
"PERSON" means any individual, corporation, partnership, joint
venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"PRINCIPAL" of the Bonds means, as of any date, 100% of the
accredited value thereof as of such date, as determined in accordance with the
procedures described in Exhibit A to the Bonds.
"PROJECT" shall have the meaning given in the recitals hereto.
"PROJECT FUND" means the fund established pursuant to Section
4.02 hereof.
"PURCHASERS" means the purchasers of the Bonds from the
Company.
"REDEMPTION PRICE" means, as of any date of redemption, 100%
of the accredited value of each Bond as of such date of redemption as determined
in accordance with the procedures described in Exhibit A attached to each Bond.
"REQUISITION FORM" means the form of requisition required by
Section 4.03(B) as a condition precedent to the disbursement of moneys from the
Project Fund.
"RESPONSIBLE OFFICER" when used with respect to the Trustee
means any officer of the Trustee assigned by the Trustee to administer its
corporate trust business.
"SEC" means the United States Securities and Exchange
Commission.
"SECURITY AGREEMENT" means the Security Agreement between the
Company, as debtor, and the Trustee, as secured party, dated as of December 1,
1997.
"SERIES 1992 BONDS" means the New Jersey Economic Development
Authority Federally Taxable Revenue Bonds, Series 1992 (Rotary Power
International, Inc. Project) currently outstanding in the aggregate principal
amount of $6,740,000.
"SUBSIDIARY" means each entity of which the Company or another
Subsidiary may now or hereafter control or own more than 50% of the capital or
equity.
"TRUST ESTATE" means, subject only to the provisions of the
Indenture permitting the application thereof for the purposes and on the terms
and conditions set forth in the Indenture (i) the proceeds of the sale of the
Bonds and (ii) all amounts on deposit in the Project Fund, the Bond Reserve Fund
and the Debt Service Fund established by the Indenture including the
investments, if any, thereof, to the extent held by the Trustee.
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces it and thereafter means the successor.
"UNITED STATES" means the United States of America.
SECTION 1.02 RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(1) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles;
(2) "or" is not exclusive; and
(3) words in the singular include the plural, and
words in the plural include the singular.
ARTICLE TWO
THE BONDS
SECTION 2.01 FORM AND DATING. The Bonds and the Trustee's
certificate of authentication shall be substantially in the form set forth in
Exhibit A, which is incorporated in and forms a part of this Indenture. The
Bonds are issuable in the denomination of $5,000 aggregate principal payable at
maturity or any integral multiple of $5,000 in excess thereof. The Bonds may
have notations, legends or endorsements required by law or usage. The Company
shall approve the form of the Bonds and any notation, legend or endorsement on
them and its execution shall constitute conclusive evidence of its approval.
Each Bond shall be dated the date of its authentication.
SECTION 2.02 EXECUTION AND AUTHENTICATION. One Officer, who
shall be the President of the Company, shall execute the Bonds for the Company
by manual signature.
If an Officer whose signature is on a Bond no longer holds
that office at the time the Trustee authenticates the Bond, the Bond shall be
valid nevertheless.
A Bond shall not be valid for any purpose until a Responsible
Officer of the Trustee manually signs the certificate of authentication on the
Bond. The signature of such Responsible Officer shall be conclusive evidence
that the Bond has been authenticated under this Indenture.
The Trustee shall authenticate Bonds for original issue in the
aggregate principal payable at maturity of up to $10,000,000 upon a written
order of the Company signed by an Officer, who shall be the President of the
Company. The order shall specify the amount of Bonds to be authenticated and the
date on which the original issue of Bonds is to be authenticated.
SECTION 2.03 REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Bonds may be presented for registration of
transfer or for exchange ("Registrar") and office or agency where Bonds may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Bonds and of their transfer and exchange and such register shall
conclusively prove and evidence ownership of the Bonds for all purposes. The
Company may have one or more co-Registrars and one or more additional paying
agents, each of whom shall be reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional paying agent. The Company or any
Subsidiary may act as Paying Agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and
Paying Agent and the Trustee accepts such appointment in accordance with the
terms of this Indenture.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. Each Paying
Agent
shall hold in trust for the benefit of the Bond Holders or the Trustee all
moneys held by the Paying Agent for the payment of Principal or Redemption Price
of the Bonds, and shall notify the Trustee immediately of any Default by the
Company in making any such payment. While any such Default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee. Upon such payment to
the Trustee, the Paying Agent shall have no further liability for the money.
SECTION 2.05 BOND HOLDER LISTS. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Bond Holders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee at such times as the Trustee
may request in writing a list in such form and as of such date as the Trustee
may reasonably require, of the names and addresses of Bond Holders.
SECTION 2.06 TRANSFER AND EXCHANGE. Subject to the transfer
restrictions set forth in the Bonds, where a Bond is presented to the Registrar
or a co-Registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements of the Trustee and/or the
Company for such transaction are met. Where Bonds are presented to the Registrar
or a co-Registrar with a request to exchange them for an equal Principal of
Bonds of other denominations, the Registrar shall make the exchange as requested
if the requirements of the Trustee and/or the Company for such transaction are
met. To permit transfers and exchanges, the Trustee shall authenticate Bonds at
the Registrar's request. Any exchange or transfer shall be without charge to the
Bond Holder, the Registrar, the Paying Agent or the Trustee, except that the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto. The Registrar need
not transfer or exchange any Bond or portion of a Bond selected for redemption,
or transfer or exchange any Bonds for a period of 15 days before a selection of
Bonds to be redeemed. Prior to any transfer or exchange pursuant to this Section
2.06, the Trustee shall receive an Officers' Certificate stating the Company's
requirements for the transfer or exchange of the Bonds and that such
requirements have been satisfied.
SECTION 2.07 REPLACEMENT BONDS. If the Holder of a Bond claims
that the Bond has been lost, mutilated, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Bond if the
requirements of the Company or the Trustee for such transaction are met. The
Bond Holder shall provide indemnity satisfactory to the Trustee (which may
include a surety bond) against any and all claims arising out of or otherwise
related to the issuance of a replacement Bond. Any indemnity bond must be
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Bond is replaced. The Company may charge for its expenses in replacing a Bond.
Every replacement Bond is a substitute obligation of the Company. In the case of
a mutilated Bond, the Bond Holder shall surrender the Bond to the Trustee for
cancellation. In the case of a lost, stolen or destroyed Bond, the Bond Holder
shall provide evidence satisfactory to the Trustee of the ownership of the
affected Bond and the loss, theft or destruction thereof.
SECTION 2.08 OUTSTANDING BONDS. Bonds outstanding at any time
are all Bonds authenticated by the Trustee except for those cancelled by it and
those described in this Section 2.08. A Bond does not cease to be outstanding
because the Company or one of its Subsidiaries holds the Bond.
If a Bond is replaced pursuant to Section 2.07, it ceases to
be outstanding.
If the Paying Agent holds on a redemption date or maturity
date money sufficient to pay Bonds payable on that date, then, notwithstanding
that any of the Bonds so called for redemption shall not have been surrendered,
on and after that date such Bonds shall be deemed to be no longer outstanding
and there shall be no further accretion of the Principal of the Bonds.
SECTION 2.09 CANCELLATION. The Company at any time may deliver
Bonds to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Bonds surrendered to them for transfer, exchange,
payment or cancellation. The Trustee and no one else shall cancel and destroy
all Bonds surrendered for transfer, exchange, payment or cancellation and
deliver the cancelled Bonds to the Company. The Company may not issue new Bonds
to replace Bonds that it has paid or delivered to the Trustee for cancellation.
SECTION 2.10. UNCERTIFICATED OWNERSHIP OF BONDS. Any
registered Bond Holder may deliver Bond certificates to the Registrar and have
record ownership held in uncertificated, book-entry form.
ARTICLE THREE
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE. If the Company elects to
redeem Bonds pursuant to the provisions of the Bonds, it shall notify the
Trustee of the redemption date, the Principal of Bonds to be redeemed and the
Redemption Price.
The Company shall give the notice provided for in this Section
3.01 at least 60 days before the redemption date, except that the Trustee may
waive such notice period at any time.
SECTION 3.02 SELECTION OF BONDS TO BE REDEEMED. If less than
all the Bonds are to be redeemed, the Trustee shall select the Bonds to be
redeemed by lot. The Trustee shall make the selection from Bonds outstanding and
not previously called for redemption. Provisions of this Indenture that apply to
Bonds called for redemption also apply to portions of Bonds called for
redemption.
SECTION 3.03 NOTICE OF REDEMPTION. At least 30 days but not
more than 60 days before a redemption date, the Company shall mail a notice of
redemption by first-class mail to each Holder of Bonds to be redeemed. Failure
to give notice of redemption or any defect therein shall not affect the validity
of any proceedings for the redemption of Bonds.
The notice shall identify the Bonds to be redeemed and shall
state:
(1) the redemption date;
(2) the Principal of the Bonds to be redeemed;
(3) the Redemption Price;
(4) the name and address of the Paying Agent;
(5) that Bonds called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
and
(6) that the redemption contemplated shall be
conditioned upon immediately available funds to pay the Redemption
Price being on deposit with the Paying Agent.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Bonds called for redemption become due and payable on the
redemption date and at the Redemption Price. Upon surrender to the Paying Agent,
such Bonds shall be paid at the Redemption Price.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE. Before the
redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the Redemption Price of all Bonds to be redeemed on that date.
SECTION 3.06 BONDS REDEEMED IN PART. Upon surrender of a Bond
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder a new Bond equal in Principal to the unredeemed
portion of the Principal of the Bond surrendered.
ARTICLE FOUR
ESTABLISHMENT OF FUNDS
AND APPLICATION THEREOF
SECTION 4.01 THE PLEDGE AND LIEN EFFECTED BY THE INDENTURE.
(a) The Trust Estate is hereby pledged for, and the Company hereby grants the
Trustee a continuing security interest in the Trust Estate for the purpose of
securing the payment of the Principal and Redemption Price of the Bonds in
accordance with their terms and the provisions of the Indenture, subject only to
the provisions of the Indenture permitting the application thereof for the
purposes and on the terms and conditions set forth in the Indenture.
(b) The Trust Estate shall immediately be subject to the lien
of this pledge without any physical delivery thereof or further act, and the
lien of this pledge shall be valid and binding as against all parties having
claims of any kind in tort, contract or otherwise against the Company,
irrespective of whether such parties have notice thereof.
(c) As additional security for the payment of the Principal
and Redemption Price of the Bonds in accordance with their terms and the
provisions of the Indenture, the Company has, pursuant to the Security
Agreement, granted a security interest in the Collateral to the Trustee as
provided in the Security Agreement.
SECTION 4.02 ESTABLISHMENT OF FUNDS. The Company hereby
establishes and creates the Project Fund, the Bond Reserve Fund and the Debt
Service Fund, which shall be special funds held by the Trustee.
SECTION 4.03 PAYMENTS INTO THE PROJECT FUND; DISBURSEMENTS.
(a) At the time of the issuance and delivery of the Bonds, the Bond Proceeds
shall be deposited in the Project Fund.
(b) The Trustee is authorized to make disbursement of Bond
Proceeds from the Project Fund in accordance with the provisions of this Section
4.03(B). Each disbursement shall
be disbursed only after delivery to the Trustee of the following:
(1) a Requisition Form (attached as Exhibit B) signed
by an Officer. The Requisition Form shall state: (i) the
requisition number; (ii) the name and address of the person to
whom payment is to be made by the Trustee, which may be the
Company in the case of a requisition for working capital; (iii)
the amounts to be paid; (iv) that each obligation for which
payment is sought is unpaid or unreimbursed, and has not been the
basis of any previously paid requisition; (v) that no Event of
Default has occurred under the Indenture or Security Agreement;
and (vi) the Company has received no written notice of any lien,
right to lien or attachment upon, or other claim affecting the
right to receive payment of, any of the moneys payable under such
Requisition Form to any of the persons named therein or, if any of
the foregoing has been received, it has been released or
discharged or will be released or discharged upon payment of the
Requisition Form;
(2) except in the case of a requisition by the Company
for working capital, a copy of each invoice, xxxx, statement or
pay-off letter for which the requisition is submitted;
(3) such additional documents, affidavits,
certificates and opinions as the Trustee may reasonably require;
but the Trustee shall have no obligation to require any such
additional items; and
(4) if such requisition is for working capital, a
statement from the Company that it intends to use such amount for
working capital.
(c) Nothing contained herein or in any documents and
agreements contemplated hereby shall impose upon the Trustee any obligation to
see to the proper application of such disbursements by the Company or any other
recipient thereof, and, in making such disbursements from the Project Fund, the
Trustee may rely on such Requisition Forms and proof delivered to it. The
Trustee shall be relieved of any liability with respect to making such
disbursements in accordance with the foregoing.
SECTION 4.04 PAYMENTS INTO THE DEBT SERVICE FUND;
DISBURSEMENTS. (a) At least five Business Days prior to any redemption date, the
Company shall deposit into the Debt Service Fund the amount required so that
amounts on deposit in the Debt Service Fund and the Bond Reserve Fund are
sufficient to pay the Redemption Price of the Bonds payable on such date. At
least five Business Days prior to the maturity date of the Bonds, the Company
shall deposit into the Debt Service Fund the amount required so that amounts of
deposit in the Debt Service Fund and the Bond Reserve Fund are sufficient to pay
the Principal of the Bonds payable on such date. In addition, the Trustee shall
deposit in the Debt Service Fund money transferred from the Bond Reserve Fund to
the Debt Service Fund pursuant to Section 4.05 hereof.
(b) The Trustee shall pay out of the Debt Service Fund to the
Paying Agent (i) on or before the maturity date of the Bonds, the amount
required for the payment of the Principal of the Bonds; and (ii) on or before
any redemption date for the Bonds, the amount required for the payment of the
Redemption Price of the Bonds.
(c) Any amounts remaining in the Debt Service Fund after
payment or provision for payment in full of the Bonds, the fees, charges and
expenses of the Trustee and all other amounts required to be paid hereunder
shall be paid to the Company upon the expiration of, or upon the sooner
termination of, this Indenture.
SECTION 4.05 PAYMENTS INTO THE BOND RESERVE FUND;
DISBURSEMENTS. On or prior to December 31, 2000, the Company shall deposit into
the Bond Reserve Fund an amount equal to at least 50% of the Principal amount of
Bonds outstanding on such date. At least five Business Days prior to the
maturity date of the Bonds or any redemption date of any Bond, the Trustee, at
the direction of the Company, shall transfer moneys in the Bond Reserve Fund to
the Debt Service Fund in such amounts as is necessary to pay the Principal or
Redemption Price of the Bonds due and payable on such maturity date or
redemption date in accordance with the provisions hereof.
ARTICLE FIVE
COVENANTS
SECTION 5.01 PAYMENT OF BONDS. The Company shall pay the
Principal and Redemption Price of the Bonds on the dates and in the manner
provided in the Bonds. The Principal and Redemption Price shall be considered
paid on the date due if the Trustee or Paying Agent (other than the Company or a
Subsidiary) holds on that date immediately available funds designated for and
sufficient to pay such Principal or Redemption Price.
SECTION 5.02 SEC REPORTS. Within 15 days after the Company
files with the SEC copies of its annual reports and other information, documents
and reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which it is required to file with the SEC
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
including, without limitation, Form 10-KSB and Form 10-QSB, the Company shall
file the same with the Trustee. Any failure by the Company to file such reports,
information and documents in a timely manner in accordance with the rules and
regulations of the SEC shall not be an Event of Default hereunder.
SECTION 5.03 COMPLIANCE CERTIFICATE. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating whether or not the signers know of any Default
or Event of Default by the Company in performing any of its obligations under
this Indenture. If they do know of such a Default or Event of Default, the
Officers' Certificate shall describe such Default or Event of Default and its
status.
SECTION 5.04 INSURANCE. The Company may, in its discretion
when funds become available, carry and maintain such insurance of the types and
in amounts which are customarily carried by other persons operating business of
a similar nature to the Company, including, but not limited to appropriate
insurance on the Collateral. If the Company decides to purchase such insurance,
the Trustee shall be named as loss payee and additional insured under each such
policy of insurance. Such policies shall provide that the Trustee shall receive
not fewer than 30 days written notice prior to any cancellation or termination
thereof. If the Company decides to purchase such insurance, by no later than
June 30 of each year in which any of the Bonds are outstanding, the Company
shall deliver to the Trustee a certificate executed by the President of the
Company stating that the Company is in compliance with the requirements of this
Section 5.04.
SECTION 5.05 APPLICATION OF INSURANCE PROCEEDS. The proceeds
of any insurance payable to the Company, paid on account of the damage or
destruction of any useful portion of any Collateral shall be paid over to the
Trustee and held by the Trustee in the Debt Service Fund. Such proceeds shall be
applied to the payment of the Principal or Redemption Price of the Bonds as
provided in Article Four hereof.
SECTION 5.06 DEPOSIT AND PLEDGE OF FUNDS FOR CERTAIN PAYMENTS;
INVESTMENT OF FUNDS. (a) Upon the issuance of the Bonds under this Indenture,
the Company will deposit or cause to be deposited with the Trustee irrevocably
as trust moneys in trust, specifically pledged as security for the benefit of
the Holders of the Bonds, the Trust Estate.
(b) Any trust moneys held by the Trustee pursuant to paragraph
(A) of this Section 5.06 shall be invested or reinvested by the Trustee, to the
extent permitted by law, at the request of the Company, in any of the following
qualified investments (referred to herein as "Permitted Investments"):
(i) U.S. Government obligations or bonds, debentures
or notes issued by the Federal National Mortgage Association,
Government National Mortgage Association, Federal Home Loan Bonds,
Federal Land Banks, Federal Financing Bank or any other comparable
federal agency hereafter created;
(ii) Certificates of Deposit or time deposits with any
banking institution having, at the time of such investment, a
combined capital and surplus in excess of $100,000,000;
(iii) prime commercial paper bearing a rating, at the
time of such investment, by Xxxxx'x Investors Service, Inc. of
"A-1" or by Standard & Poor's Corporation of "P-1"; or
(iv) any money market fund investing wholly in
Permitted Investments of the character described in (i), (ii) and
(iii) above.
In the event the Company does not request which Permitted
Investments are to be made, the Trustee shall invest any trust moneys held by
the Trustee in the investments specified in Section 5.06(B) (iv) hereof.
Unless otherwise provided in this Indenture, the Trustee shall
sell, or present for redemption, any Permitted Investment so acquired whenever
it shall be requested to do so by the Company. The Trustee shall not be liable
or responsible for making any such investment or sale in the manner provided
above or for any loss resulting from any such investment.
The Trustee may make any and all such Permitted Investments
through its own bond department or the bond department of any bank or trust
company under common control with the Trustee. Such Permitted Investments shall
be made so as to mature or be subject to redemption at the option of the holder
thereof prior to (or in the case of Permitted Investments for which the Trustee
is the obligor) the date or dates on which the Company anticipates that moneys
therefrom will be required. Such Permitted Investments shall be registered in
the name of the Trustee.
The Trustee shall deposit into the Debt Service Fund any
interest or similar distributions paid on such Permitted Investments and such
moneys shall be applied as provided in Article Four hereof.
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01 WHEN COMPANY MAY MERGE. ETC. The Company shall
not
consolidate with or merge into, or transfer all or substantially all of its
assets to, any other person unless (i) such other person is a corporation
organized or existing under the laws of the United States or a State thereof,
(ii) such person expressly assumes by supplemental indenture all the obligations
of the Company under the Bonds, this Indenture and the Security Agreement, (iii)
such person has a Consolidated Net Worth immediately after such transaction at
least equal to the Consolidated Net Worth of the Company immediately prior to
such transaction, and (iv) immediately after such transaction no Default or
Event of Default exists. Thereafter all such obligations of the predecessor
corporation shall terminate. Upon any such consolidation, merger or transfer,
the Trustee shall receive an Officers' Certificate certifying that the Company
has complied with this Section 6.01.
ARTICLE SEVEN
DEFAULTS AND REMEDIES
SECTION 7.01 EVENTS OF DEFAULT. An "Event of Default" occurs
if there occurs an event of default as defined in the Bonds.
SECTION 7.02 ACCELERATION. If an Event of Default occurs and
is continuing, the Principal of the Bonds shall automatically be due and payable
or the Trustee by written notice to the Company, or the Holders of a majority in
Principal of the outstanding Bonds by written notice to the Company and the
Trustee, may declare the Principal of all the Bonds to be due and payable
immediately as provided in the Bonds. Upon such automatic acceleration or such
declaration, the Principal shall be due and payable immediately. The Holders of
a majority in Principal of the outstanding Bonds by written notice to the
Trustee may rescind an acceleration and its consequences if all existing Events
of Default have been cured or waived, except nonpayment of Principal that has
become due solely because of the acceleration, and if the rescission would not
conflict with any judgment or decree.
SECTION 7.03 OTHER REMEDIES. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at law
or in equity to collect the payment of Principal of the Bonds or to enforce the
performance of any provision of the Bonds or this Indenture. In any such
proceeding brought by the Trustee, the Trustee shall be deemed to represent all
of the Bond Holders and it shall not be necessary to make any Bond Holder a
party to the proceeding.
The Trustee may maintain a proceeding, including a proceeding
involving the interpretation of any provision of this Indenture to which the
Trustee is a party, even if it does not possess any of the Bonds or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any
Bond Holder in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative.
SECTION 7.04 WAIVER OF PAST DEFAULTS. Subject to Section 10.02
hereof, the Holders of a majority in Principal of the outstanding Bonds by
written notice to the Trustee may waive or rescind a past Event of Default and
its consequences provided, however, that there shall not be waived any act of
bankruptcy, insolvency proceedings, liquidation, dissolution, or reorganization,
unless prior to such waiver or rescission, all expenses of the Trustee in
connection with such Event of Default shall have been paid or provided for. In
case of any such waiver or rescission, or if any proceeding taken by the Trustee
on account of any such Event of Default shall have been discontinued or
abandoned or determined adversely, then and in every
such case the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder, respectively, but no such waiver or
rescission shall extend to any subsequent or other Event of Default, or impair
any right consequent thereon. The Trustee shall not have any discretion to waive
any Event of Default hereunder and its consequences except in the manner and
subject to the terms expressed above.
When an Event of Default is waived, it is cured and ceases.
SECTION 7.05 CONTROL BY MAJORITY. The Holders of a majority in
Principal of outstanding Bonds may 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; provided, however:
(a) Such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) The Trustee shall not be required to determine whether the
action so directed would be unjustly prejudicial to the rights of any Holder not
taking part in such direction;
(c) The Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or if the Trustee in good faith
shall, by a Responsible Officer, determine that the proceedings so directed
would involve it in personal liability; or
(d) The Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 7.06 LIMITATION ON SUITS. A Bond Holder may not pursue
any remedy with respect to this Indenture or the Bonds unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in Principal of the
outstanding Bonds have made a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders have provided to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense,
including, but not limited to, reasonable legal fees;
(d) the Trustee has declined to comply with the request within
60 days after the receipt of the request and the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
Principal of the Bonds have not given the Trustee a direction inconsistent with
such request.
No Bond Holder may use this Indenture to prejudice the rights
of another Bond Holder or to obtain a preference or priority over another Bond
Holder.
SECTION 7.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture to the contrary, the right
of any Holder of a Bond to receive payment of Principal of the Bond, on or after
the due date expressed in the Bond, or to bring suit
for the enforcement of any such payment on or after such date, shall not be
impaired or affected without the consent of the Holder.
SECTION 7.08 COLLECTION SUIT BY TRUSTEE. If an Event of
Default in payment of Principal occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of Principal remaining unpaid.
SECTION 7.09 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and any predecessor Trustee
and the Bond Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property. Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Bond Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Bond Holder in any
such proceedings.
SECTION 7.10 PRIORITIES. If the Trustee collects any money
pursuant to this Article Seven, it shall pay out the money in the following
order:
FIRST: to the Trustee and any predecessor Trustee for amounts
due under Section 8.06 hereof , including, but not limited to the payment of any
reasonable costs and expenses of collection, including legal fees;
SECOND: to Bond Holders for amounts due and unpaid on the
Bonds for Principal , ratably, without preference or priority of any kind,
according to the amounts due and payable on the Bonds for Principal; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Bond Holders pursuant to this Section.
ARTICLE EIGHT
TRUSTEE
SECTION 8.01 DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Prior to the occurrence of an Event of Default, and after
the curing or waiving of all Events of Default which have occurred:
(1) The Trustee undertakes to perform such duties and
only such duties as are expressly and specifically set forth in
this Indenture. There shall be no implied duties or
responsibilities of the Trustee under this Indenture.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any Officers' Certificate, resolution, statement,
report, notice, request, consent, order, approval or opinion
furnished to the Trustee and conforming to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
grossly negligent action, its own grossly negligent failure to act or its own
willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 8.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be adjudicated that the Trustee was grossly negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 7.05 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 8.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) None of the provisions contained in this Indenture shall
require the Trustee or any of its officers or directors to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers.
(g) Money held in trust by the Trustee pursuant to this
Indenture need not be segregated from other funds except to the extent required
by law.
(h) The Trustee shall have no responsibility for effecting or
maintaining insurance for the Project or the payment of taxes of the Company.
SECTION 8.02 RIGHTS OF TRUSTEE. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) In the event the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such certificate or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or gross negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) All exculpations and immunities provided for the Trustee
in this Indenture shall extend and be applicable to all of its directors,
officers, employees and stockholders.
SECTION 8.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual
or any other capacity may become the owner or pledgee of Bonds and may otherwise
deal with the Company or its affiliates with the same rights or would have if it
were not Trustee. Any Agent may do the same with like rights. The Trustee,
however, must comply with Section 8.09.
SECTION 8.04 TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the Bonds; it
shall not be accountable for the Company's use of the proceeds from the Bonds;
and it shall not be responsible for (a) any statement in the Bonds other than
its certificate of authentication, or (b) any prospectus or other offering
material used in connection with the sale of such Bonds.
SECTION 8.05 NOTICE OF EVENT OF DEFAULT. If an Event of
Default occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Bond Holder notice of the Event of Default within 60 days
after it occurs. The Trustee shall not be deemed to have notice of an Event of
Default, other than a default in the payment of the Principal or Redemption
Price of the Bonds, unless a Responsible Officer of the Trustee has received
from the Company or a Bond Holder written notice of such Event of Default.
SECTION 8.06 COMPENSATION AND INDEMNITY. The Company shall pay
to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation for its services. The Trustee's compensation hereunder
shall not be limited by any law on compensation relating to the trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it. Such expenses shall include
the reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor Trustee
against any loss or liability, including reasonable expenses, incurred by it in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder. The Company need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee through the
Trustee's gross negligence or willful misconduct. The obligations of the Company
under this Section 8.06 to compensate the Trustee, to pay or reimburse the
Trustee for expenses, disbursements and advances, and to indemnify and hold
harmless the Trustee, shall survive the satisfaction and discharge of this
Indenture.
To secure the Company's payment obligations under this
Section, the Trustee shall have a lien prior to the Bonds on all money or
property held or collected by the Trustee.
SECTION 8.07 REPLACEMENT OF TRUSTEE. A resignation or removal
of the Trustee and the appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section 8.07. The Trustee may resign by so notifying the Company in writing. The
Holders of a majority in Principal of the outstanding Bonds may remove the so
notifying the Trustee and the Company in writing and may appoint a successor
Trustee with the Company's consent. So long as no Event of Default has occurred
and is continuing, the Company may remove the Trustee for any reason.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately thereafter,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the lien provided for in Section 8.06 hereof), the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Bond Holder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in Principal of the outstanding Bonds may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 8.09 hereof, any
Bond Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
SECTION 8.08 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into or transfers all or substantially all
of its corporate trust business to, another corporation, the successor
corporation without any further act shall be the successor Trustee.
SECTION 8.09 ELIGIBILITY. DISQUALIFICATION. The Trustee shall
at all times be a trust company or bank having trust power in good standing and
located within or without the State of New Jersey qualified and experienced in
the administrating corporate trust.
SECTION 8.10 INDEMNIFICATION. The Company agrees to pay, and,
to the extent permitted by law, to indemnify and save the Trustee harmless
against, any costs, expenses, losses and liabilities which it may incur in the
exercise and performance of its powers and duties hereunder, including, without
limitation, any liability relating to any environmental contamination or
hazardous discharge, and which are not due to the Trustee's gross negligence or
willful misconduct, except to the extent they have already been paid to the
Trustee or provision for the payment thereof, satisfactory to the Trustee, has
already been made.
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01 TERMINATION OF COMPANY'S OBLIGATIONS. All of the
Company's obligations under the Bonds and this Indenture shall be terminated if
all Bonds previously authenticated and delivered (other than destroyed, lost or
stolen Bonds which have been replaced or paid) have been delivered to the
Trustee for cancellation or if:
(a) The Company has irrevocably deposited in trust with the
Trustee immediately available funds or direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which guarantee or obligation the full faith and credit of the United
States is pledged, sufficient to pay Principal of the outstanding Bonds to
maturity or redemption, as the case may be. Immediately after making the
deposit, the Company or the Trustee on behalf of the Company shall give notice
of such event to the Bond Holders and shall provide the Trustee with an
Officers' Certificate certifying that such deposit is sufficient to pay the
Principal of the Bonds to maturity or redemption, as the case may be; and
(b) The Company has paid or caused to be paid all sums then
payable by the Company to the Trustee hereunder as of the date of such deposit,
including any amounts incurred by the Trustee as a result of its action under
this Article Nine; and
(c) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for herein have been complied with.
The Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 5.01, 8.06, 8.07 and 9.03, however, shall survive until the Bonds are no
longer outstanding. Thereafter, the Company's obligations in Sections 8.06 and
9.03 shall survive.
After a deposit pursuant to this Section 9.01, the Trustee
upon request shall acknowledge in writing the discharge of the Company's
obligations under the Bonds and this Indenture except for those surviving
obligations specified above.
SECTION 9.02 APPLICATION OF TRUST MONEY. The Trustee shall
hold in trust money deposited with it pursuant to Section 9.01 hereof. It shall
apply the deposited money through the Paying Agent and in accordance with this
Indenture to the payment of the Principal or Redemption Price of the Bonds.
SECTION 9.03 REPAYMENT TO COMPANY. The Trustee and the Paying
Agent shall pay to the Company without interest thereon upon request any money
held by them for the payment of Principal or Redemption Price that remains
unclaimed for seven years, or such shorter period as may be required under New
Jersey law, provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, shall at the expense of the Company
mail to each such Holder 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 mailing, any unclaimed balance of such money then remaining will be
repaid to the Company. After payment to the Company, Bond Holders entitled to
such money must look to the Company for payment as general creditors unless
applicable abandoned property law designates another person.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01 WITHOUT CONSENT OF HOLDERS. The Company, with
the consent of the Trustee, may amend or supplement this Indenture or the Bonds
without notice to or consent of any Bond Holders:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Section 6.01 hereof; or
(3) to make any other change that does not materially
adversely affect the rights of any Bond Holder.
SECTION 10.02 WITH CONSENT OF HOLDERS. Subject to the
provisions of Section 10.01 and this Section 10.02, the Company, with the
written consent of the Trustee, may amend or supplement this Indenture or the
Bonds without notice to any Bond Holder but with the written consent of the
Holders of at least a majority in Principal of the outstanding Bonds. The
Holders of a majority in Principal of the outstanding Bonds may waive compliance
by the Company with any provision of this Indenture or the Bonds without notice
to any Bond Holder. Without the consent of each Bond Holder affected, however,
no amendment, supplement or waiver, including a waiver pursuant to Section 7.04
hereof, may:
(1) reduce the Principal of Bonds whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the Principal of or extend the fixed
maturity of any Bond;
(3) change the amount or time of any payment required
by the Bonds;
(4) waive a default in the payment of the Principal
or Redemption Price of any Bond;
(5) make any Bond payable in money other than that
stated in the Bond; or
(6) make any change in Sections 7.04, 7.07 or 10.02.
After an amendment under this Section becomes effective, the
Company shall mail to the Holders a notice briefly describing the amendment.
It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 10.03 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 8.01) 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 which affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
SECTION 10.04 REVOCATION AND EFFECT OF CONSENTS. Until an
amendment, supplement or waiver becomes effective, a consent to an amendment,
supplement or waiver by a Holder of a Bond is a continuing consent by the Holder
and is binding on every subsequent Holder of a Bond or portion of a Bond that
evidences the same debt as the consenting Holder's Bond, even if notation of the
consent is not made on any Bond. Any such Holder or subsequent Holder, however,
may revoke the consent as to his Bond or portion of a Bond only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective. An amendment, supplement or waiver shall become
effective on receipt by the Trustee of written consents from the Holders of the
requisite percentage in Principal of the outstanding Bonds.
After an amendment, supplement or waiver becomes effective, it
shall bind every Bond Holder unless it makes a change described in any of
clauses (a) through (f) of Section 10.02. In that case the amendment, supplement
or waiver shall bind each Holder of a Bond who has consented to it and every
subsequent Holder of a Bond or portion of a Bond that evidences the same debt as
the consenting Holder's Bond.
SECTION 10.05 NOTATION ON OR EXCHANGE OF BONDS. If an
amendment, supplement or waiver changes the terms of a Bond, the Company may
request the Trustee to require the Holder of the Bond to deliver the Bond to the
Trustee. The Trustee may place an appropriate notation on the Bond about the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Bond shall issue and the
Trustee shall authenticate a new Bond that reflects the changed terms.
SECTION 10.06 TRUSTEE TO SIGN AMENDMENTS. ETC. The Trustee may
but need not sign any amendment, supplement or waiver authorized pursuant to
this Article if the
amendment, supplement or waiver adversely affects the rights of the Trustee. The
Company may not sign an amendment or supplement until the Board of Directors
approves it.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01 NOTICES. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by
first-class mail addressed as follows:
IF TO THE COMPANY:
Rotary Power International, Inc.
00 Xxxxxxx Xxxxxx
Xxxx-Xxxxx, Xxx Xxxxxx 00000
Attention: President
IF TO THE TRUSTEE:
Sentinel Trust Company
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 00
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Bond Holder shall be
mailed by first class mail to such Bond Holder at the address which appears on
the registration books of the Registrar and shall be sufficiently given to such
Bond Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Bond Holder or
any defect in it shall not affect its sufficiency with respect to other Bond
Holders. If a notice or communication is mailed in the manner provided above, it
is duly given, whether or not the addressee receives it. If the Company mails a
notice or communication to Bond Holders it shall mail a copy of such notice to
the Trustee and each Agent at the same time. All other notices or communications
shall be in writing.
SECTION 11.02 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, other than pursuant to Article Four hereof, the
Company shall furnish to the Trustee:
(a) An Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(b) An Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.03 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) A statement that the person making such certificate or
opinion has read such covenant or condition;
(b) A brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) A statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) A statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 11.04 WHEN TREASURY BONDS DISREGARDED. In determining
whether the Holders of the required Principal of Bonds have concurred in any
direction, waiver or consent, Bonds owned by the Company or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Bonds which the Trustee knows are so
owned shall be so disregarded.
SECTION 11.05 RULES BY TRUSTEE AND AGENTS. The Trustee may
make reasonable rules for action by, or at a meeting of, Bond Holders. The
Registrar or Paying Agent may make reasonable rules for its functions.
SECTION 11.06 LEGAL HOLIDAY. A "Legal Holiday" is a Saturday,
a Sunday or a day on which banking institutions are not required to be open in
The City of New York, in the State of New York or in the city in which the
Trustee administers its corporate trust business. If a payment date is a Legal
Holiday, payment may be made at the place on the next succeeding day that is not
a Legal Holiday, and no accretion of the Principal of the Bonds to be paid shall
occur during the intervening period.
SECTION 11.07 GOVERNING LAW. The laws of the State of New
Jersey, without regard to the principles of conflicts of law, shall govern this
Indenture and the Bonds.
SECTION 11.08 SUCCESSORS. All agreements of the Company in
this Indenture and the Bonds shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.09 COUNTERPARTS. This Indenture may be executed in
two or more counterparts, each of which shall be deemed the same document.
IN WITNESS WHEREOF, the Company and the Trustee have duly
executed and delivered this Indenture this 22nd day of December, 1997.
ROTARY POWER INTERNATIONAL, INC.
By: /s/ Xxx Xxxxx
-------------------
Name: Xxx Xxxxx
Title: President
Dated as of December 22, 1997
Attest:
/s/ Xxxx Xxxxxx
----------------
SENTINEL TRUST COMPANY
By: /s/ X.X. Xxxxx
-------------------
Name: X.X. Xxxxx
Title: President
Dated as of December 22, 1997
Attest:
/s/ illegible
----------------
EXHIBIT A
FORM OF BOND OF ROTARY POWER INTERNATIONAL. INC.
ROTARY POWER INTERNATIONAL, INC.
10.412% BOND
CUSIP NO. 00000XXX0
Wood-Ridge, New Jersey
December 22, 1997
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
REGISTERED UNDER ALL APPLICABLE SECURITIES LAW OR UNLESS
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE,
WHICH EXEMPTIONS SHALL BE ESTABLISHED TO THE REASONABLE
SATISFACTION OF THE COMPANY BY OPINION OF COUNSEL OR
OTHERWISE.
FOR VALUE RECEIVED, the undersigned, Rotary Power
International, Inc. ("Company"), promises to pay to the order of
_________________ (the "Bond Holder") at ___________________ or such other place
as may be designated in writing by Bond Holder, the principal sum of
($___________) DOLLARS. The principal amount due hereunder shall be paid to the
Bond Holder in the following manner:
(a) The Company shall pay the Bond Holder in whose name this
Bond is registered upon the registry books maintained by Sentinel Trust Company,
(the "Trustee"), as trustee, the entire unpaid principal sum of this Bond on the
15th day of December, 2007.
(b) This Bond, issuable in the denomination of $5,000
aggregate principal payable at maturity or any integral multiple of $5,000 in
excess thereof, is one in a series of bonds in the aggregate principal amount of
$10,000,000 (collectively, the "Bonds") issued under and pursuant to the
Indenture of Trust, dated as of December 1, 1997 (the "Indenture"), between the
Company and the Trustee.
(c) This Bond is subject to redemption prior to maturity at
any time in whole or in part at the option of the Company at a redemption price
equal to l00% of the accreted value hereof, as determined in accordance with the
procedures described in Exhibit A attached hereto.
(d) This Bond is subject to mandatory redemption prior to
maturity in whole or in part at a redemption price equal to 100% of the accreted
value hereof, as determined in accordance with the provisions described in
Exhibit A attached hereto upon the sale of certain Collateral in accordance with
the provisions of the Security Agreement (as defined herein).
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption by first-class mail to each
Bond Holder to be redeemed. Failure to give notice of redemption or any defect
therein shall not affect the validity of any proceedings for the redemption of
Bonds.
The notice shall identify the Bonds to be redeemed and shall
state:
(1) the redemption date;
(2) the Principal of the Bonds to be redeemed;
(3) the Redemption Price;
(4) the name and address of the Paying Agent;
(5) that Bonds called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price; and
(6) that the redemption contemplated shall be
conditioned upon immediately available funds to pay the
Redemption Price being on deposit with the Paying Agent.
The Company and the Trustee have entered into a security
agreement dated as of December 1, 1997 (the "Security Agreement", and together
with the Indenture, the "Transaction Documents") pursuant to which a continuing
lien on and security interest in certain equipment, machinery, fixtures, tools,
work in progress, inventory, furniture and other personal property now owned or
hereafter acquired by the Company, but excluding therefrom the Company's
interest in certain assets and any intellectual property or other intangibles,
all as more fully described in the Security Agreement, is pledged to the Trustee
to secure the Company's obligations under the Indenture and this Bond.
Capitalized terms used herein and not otherwise defined shall
have the meanings given thereto in the Indenture.
SECTION 1. The Company represents and warrants to the Bond
Holder that:
(a) To the best of the Company's knowledge, the Company is a
corporation duly organized and validly existing under the laws of the state of
its incorporation and has all requisite corporate power and authority to own,
operate and lease its properties, to carry on its business as now being
conducted and to perform its obligations hereunder and under each of the
Indenture and the Security Agreement (collectively, the "Transaction
Documents").
(b) The execution, delivery and performance by the Company of
each of the Transaction Documents has been duly authorized by all requisite
corporate action on the part of the Company. No consent, license, approval,
authorization, registration, filing or similar requirement ("Permit") is
necessary in connection therewith, there are no pending or, to the Company's
knowledge, threatened investigations or legal proceedings ("Actions") which
question the transactions contemplated thereby and none of such transactions
will conflict with or result in any violation of or constitute a breach of or
default under the certificate of incorporation or by-laws of the Company or any
applicable laws, rules, regulations, agreements with governmental authorities
(together, "Laws"), orders, injunctions, judgments, awards or decrees (together,
"Orders") or other agreements, understandings, deeds, notes, mortgages or
licenses (together, "Contracts") by which the Company or its assets are affected
or will result in
the creation of any lien, charge or encumbrance (together, "Liens") (except the
Liens created by the Security Agreement) upon any of the assets of the Company
pursuant to any Contracts. Each such Transaction Document has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights or by
general equitable principles.
(c) The Security Agreement and the UCC-l financing statements,
each having been presented for filing to the appropriate office in each
jurisdiction in which the Collateral is located on or prior to the date hereof,
will be, upon the acceptance thereof for filing, effective to create in favor of
the Trustee, a legal, valid, enforceable, fully perfected security interest in
the Collateral described therein.
(d) The Company is not an "investment company", or a company
"controlled by an investment company", within the meaning of the Investment
Company Act of 1940, as amended.
(e) To the Company's knowledge, the Transaction Documents, the
Confidential Private Placement Memorandum dated December 22, 1997 and prepared
in connection with the issuance, sale and delivery of the Bonds (the "Private
Placement Memorandum") and the Exhibits thereto do not contain any untrue
statement of a material fact and do not omit to state a material fact necessary
in order to make the statements therein not false or misleading. There is no
additional fact (other than facts generally known to the public) of which the
Company is aware that has not been disclosed in the Private Placement Memorandum
that materially affects adversely or, so far as the Company can reasonably
foresee on the date hereof, will materially affect adversely the Financial
Condition of the Company and its Subsidiaries taken as a whole. As used herein
"Financial Condition" shall mean the business, operations, assets or financial
or other condition of an entity and "Subsidiary" shall mean each entity of which
the Company or another subsidiary may now or hereafter control or own more than
50~ of the capital or equity.
(i) The Indenture is not required to be qualified
under the Trust Indenture Act of 1939, as amended.
SECTION 2. Until the date on which the Bonds have been paid in
full, the Company shall:
(a) Use the proceeds received by it from the sale of the Bonds
substantially as described in the Confidential Private Placement Memorandum;
(b) Cause each Subsidiary to comply with the covenants set
forth in Section 2(a) and Section 2(f) (which covenants shall, for purposes of
this Section 2 (b) apply to each such Subsidiary as if it were the Company
referred to therein);
(c) File as soon as practicable any and all forms, statements,
reports or schedules required to be filed with the SEC pursuant to the
Securities Exchange Act of 1934;
(d) Provide to the Trustee prompt notice of:
(i) any Event of Default, as hereinafter defined;
(ii) any amendment of the certificate of
incorporation or By-Laws of the Company; or
(iii) (A) any material change since the date of this
Bond in the Financial Condition of the Company and its
Subsidiaries taken as a whole, or (B) the occurrence or
non-occurrence, since such date, of any event of which the
Company has knowledge, in either case, that has had or is
reasonably likely to have a materially adverse effect on the
Financial Condition of the Company and its Subsidiaries taken
as a whole;
SECTION 3. Each of the following shall constitute an Event of
Default under this Bond, whatever the reason for such event and whether it shall
be voluntary or involuntary or be affected by operation of laws or orders:
(a) The Company shall fail to make any payment of Principal or
Redemption Price on this Bond when due; or
(b) Any representation or warranty made hereunder or in any
document delivered to the Bond Holders with respect to this Bond shall at any
time prove to have been incorrect or misleading in any material respect when
made; or
(c) The Company shall cease to maintain its corporate
existence or shall default in any material respect in the performance or
observance of any term, covenant, condition or agreement contained herein, and
such default continues for the period and after the notice specified below; or
(d) The Company or any Subsidiary shall fail to pay, in
accordance with its terms and when due and payable, the principal of or interest
on any liability for borrowed money in excess of $25,000 or any other liability
in excess of $25,000 evidenced by bonds, debentures, bonds or similar
instruments ("Indebtedness") owed to any party or the maturity of any such
Indebtedness shall have been accelerated or been required to be prepaid prior to
the stated maturity thereof or any event shall have occurred and be continuing
which, with the passage of time or the giving of notice or both, would permit
the acceleration of such maturity; or
(e) (i) The Company or any Subsidiary shall, after the date of
issuance of the Bond, (A) commence a voluntary case under Federal bankruptcy
laws, (B) file a petition seeking to take advantage of any other laws relating
to bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts ("Bankruptcy"), (C) consent to or fail to contest in a
timely and appropriate manner any petition filed against it in any involuntary
case under such Bankruptcy laws or such other laws, (D) apply for or consent to,
or fail to contest in a timely and appropriate manner, the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator or the
like ("Receiver") of itself or of a substantial part of its property, (E) admit
in writing its inability to pay, or generally not be paying, its debts as they
become due, (F) make a general assignment for the benefit of creditors, or (G)
take any corporate action for the purpose of effecting any of the foregoing; or
(ii) A case or other proceeding shall be commenced against
the Company or any Subsidiary in any court of competent jurisdiction seeking (A)
relief under Federal bankruptcy laws or under any other laws relating to
Bankruptcy, or (B) the appointment of a Receiver of the Company or any
Subsidiary of all or any substantial part of the assets of the Company or any
Subsidiary and such case or proceeding shall continue undismissed or unstayed
for a period of 60 consecutive calendar days, or an order granting the relief
requested in such case or proceeding against the Company or any Subsidiary
(including, but not limited to, an order for relief under Bankruptcy laws) shall
be entered; or
(f) A judgment or order for the payment of money shall be
entered and become final against the Company or any Subsidiary which, together
with all other outstanding undischarged or unstayed judgments against the
Company and its Subsidiaries, exceeds $50,000 in the aggregate, and such
judgment or order shall continue undischarged or unstayed for 60 days provided
that for the purpose of calculating the $50,000 amount, judgments which are
covered by the Company's insurance shall not be included in such figure to the
extent so covered; or
(g) There shall be an Event of Default under any of the
Transaction Documents, as such term is defined in each of the Transaction
Documents, or the Transaction Documents shall be or become or shall be claimed
to be or to have become in any respect invalid or unenforceable or the Trustee
shall at any time cease to have a valid, fully perfected security interest in
the Collateral referred to in the Security Agreement.
A default under clause (c), (d) or (f) hereof is not an Event
of Default until the Trustee or the Bond Holders of at least a majority in
principal amount of the then outstanding Bonds notify the Company in writing of
the default and the Company does not cure the default within 30 days after
receipt of the notice. The notice must specify the default, demand that it be
remedied and state that the notice is a "Notice of Default". If the Bond Holders
of a majority in principal amount of the outstanding Bonds request the Trustee
to give such written notice on their behalf, the Trustee shall do so.
The Company will deliver to the Trustee within 10 days after
the occurrence thereof written notice of any event which with the giving of
notice and the lapse of time would become an Event of Default under Section
3(g). The Trustee shall not be deemed to have knowledge of any default unless
either any officer of the Trustee assigned by the Trustee to administer its
corporate trust business has actual knowledge of such default or the Trustee
shall have received written notice thereof from the Company or a Bond Holder.
Upon the occurrence of any Event of Default described in
Sections 3 (e) (i) or 3(e) (ii) above, the entire unpaid principal amount of
this Bond (determined as described below) shall automatically be due and
payable. Upon the occurrence and during the continuance of any other Event of
Default, the Trustee by written notice to the Company, or the Bond Holders of a
majority in principal amount of the outstanding Bonds by written notice to the
Company and the Trustee, may declare the principal of all the Bonds (determined
as described below) to be immediately due and payable. No right or remedy herein
conferred is intended to be exclusive of any other rights or remedies and each
and every right or remedy shall be cumulative and shall be in addition to every
other right or remedy given hereunder or now or hereafter existing under the
Transaction Documents, if any, or by law or equity. No delay or omission in the
exercise of any right or power accruing upon the occurrence of any Event of
Default shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein. For the purpose
of receiving payment of the principal of this Bond if the principal is declared
immediately due and payable, the then current accreted value as of the date of
acceleration, as determined in accordance with the procedures described in
Exhibit A attached hereto, shall be deemed to be the principal amount of this
Bond. All amounts advanced by, or on behalf of, the Bond Holder or the Trustee
in exercising its rights hereunder. (including, but not limited to, reasonable
legal expenses and disbursements incurred in connection therewith), together
with interest thereon from the date of such advance, shall be payable by the
Company on demand to the party that advanced such amount.
The Bond Holder shall not, by any act, delay, omission or
otherwise be deemed to have waived any of his rights or remedies hereunder and
no waiver by the Bond Holder of his rights or remedies hereunder shall be valid
against Bond Holder unless in writing, signed by Bond Holder, and then only to
the extent therein set forth. The waiver by the Bond Holder of any right or
remedy hereunder upon any one occasion shall not be construed as a bar to any
right or remedy which he would otherwise have had on any further occasion.
The Company hereby waives presentment for payment, protest and
notice for non-payment of this Bond.
IN WITNESS WHEREOF, the Company has caused its seal to be
hereunto affixed and attested and these presents to be signed by its Officer
thereunto duly authorized.
ROTARY POWER INTERNATIONAL, INC.
By:
-----------------------------
Name: Xxx Xxxxx
Title: President and CEO
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the $10,000,000 principal amount of
l0.403% Bonds due December 15, 2007 described in the within-mentioned Indenture.
SENTINEL TRUST COMPANY
AS TRUSTEE
By:
-----------------------------
EXHIBIT A
ACCRETED VALUE TABLE
Valuation Date Accreted Value Per
-------------- $5,000 of Principal
Payable at Maturity
-------------------
Dated Date $1,815.63
6/15/98 1,906.39
12/15/98 2,005.63
6/15/99 2,110.04
12/15/99 2,219.89
6/15/00 2,335.45
12/15/00 2,457.03
6/15/01 2,584.94
12/15/01 2,719.51
6/15/02 2,861.08
12/15/02 3,010.03
6/15/03 3,166.73
12/15/03 3,331.58
6/15/04 3,505.02
12/15/04 3,687.48
6/15/05 3,879.45
12/15/05 4,081.41
6/15/06 4,293.88
12/15/06 4,517.42
6/15/07 4,752.59
12/15/07 5,000.00
As of any date other than a Valuation Date, the Accreted Value
shall be the sum of (a) the Accreted Value on the preceding Valuation Date and
(b) the product of (1) a fraction, the numerator of which is the number of days
having elapsed from the preceding Valuation Date and the denominator of which is
the number of days from such preceding Valuation Date to the next succeeding
Valuation Date, calculated based on the assumption that Accreted Value accrues
during any semi-annual period in equal daily amounts on the basis of a year of
twelve thirty-day months, and (2) the difference between the Accreted Values for
such Valuation Dates.
A-1
EXHIBIT B
TO: Sentinel Trust Company
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
REQUISITION NO.
The undersigned, an Officer of Rotary Power International,
Inc., (the "Company") pursuant to the Indenture of Trust by and between the
Company and dated as of December 1, 1997 (the "Indenture") makes the following
requisition for payment from the Project Fund established pursuant to the
Indenture entered into with regard to the Company's Project.
Payment to:
Amount:
Reason for Payment:
Such amount is based on an obligation properly incurred
pursuant to the provisions of the Indenture and has not been the basis of any
previous withdrawal. The Company is not in default under any provision of the
Indenture or the Security Agreement.
I further certify that no written notice of any lien, right to
lien, attachment upon or claim, affecting the right to receive payment of, any
of the monies payable under this requisition has been received, or if any notice
of any such lien, attachment or claim has been received, such lien, attachment
or claim has been released or discharged or will be released or discharged upon
payment of this requisition.
Capitalized terms used herein and not otherwise defined shall
have the meaning given thereto in the Indenture.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day
of _______________.
ROTARY POWER INTERNATIONAL, INC.
By:
------------------------------
Officer
B-1
