EXHIBIT 4.2
XXXXXX INVESTMENT CORPORATION
AND
American Bank National Association,
As Trustee
-----------------------------
INDENTURE
Dated as of January 12, 1995
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TABLE OF CONTENTS
Page
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INDENTURE......................................................................1
RECITALS.......................................................................1
ARTICLE ONE....................................................................2
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...................2
SECTION 101. Definitions..........................................2
SECTION 102. Compliance Certificates and Opinions................11
SECTION 103. Form of Documents Delivered to Trustee..............12
SECTION 104. Acts of Debentureholders............................12
SECTION 105. Notices, etc., to Trustee and Company...............13
SECTION 106. Notice to Debentureholders; Waiver..................13
SECTION 107. Effect of Headings and Table of Contents............14
SECTION 108. Successors and Assigns..............................14
SECTION 109. Separability Clause.................................14
SECTION 110. Benefits of Indenture...............................14
SECTION 111. Governing Law.......................................14
SECTION 112. Legal Holidays......................................15
ARTICLE TWO...................................................................16
DEBENTURE FORMS..........................................................16
SECTION 201. Form Generally......................................16
SECTION 202. Form of Face of Debentures..........................16
SECTION 203. Form of Reverse Side of Debenture...................19
SECTION 204. Form of Certificate of Authentication and Form of
Assignment..........................................22
ARTICLE THREE.................................................................24
THE DEBENTURES...........................................................24
SECTION 301. Title and Terms Generally...........................24
SECTION 302. Denominations.......................................25
SECTION 303. Execution, Authentication, Delivery and Dating......25
SECTION 304. Temporary Debentures................................25
SECTION 305. Registration, Transfer and Exchange.................26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures....27
SECTION 307. Payment of Interest; Interest Rights Preserved......27
SECTION 308. Persons Deemed Owners...............................29
SECTION 309. Cancellation........................................29
SECTION 310. Computation of Interest.............................29
SECTION 311. Authentication and Delivery of Original Issue.......29
ARTICLE FOUR..................................................................30
SATISFACTION AND DISCHARGE...............................................30
SECTION 401. Satisfaction and Discharge of Indenture.............30
SECTION 402. Application of Trust Money..........................31
ARTICLE FIVE..................................................................32
REMEDIES.................................................................32
SECTION 501. Events of Default...................................32
SECTION 502. Acceleration of Maturity; Rescission and Annulment..33
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee..............................34
SECTION 504. Trustee May File Proofs of Claim....................35
SECTION 505. Trustee May Enforce Claims Without Possession of
Debentures..........................................36
SECTION 506. Application of Money Collected......................36
SECTION 507. Limitation on Suits.................................37
SECTION 508. Unconditional Right of Debentureholders to Receive
Principal, Premium and Interest.....................38
SECTION 509. Restoration of Rights and Remedies..................38
SECTION 510. Rights and Remedies Cumulative......................38
SECTION 511. Delay or Omission Not Waiver........................38
SECTION 512. Control by Debentureholders.........................38
SECTION 513. Waiver of Past Defaults.............................39
SECTION 514. Undertaking for Costs...............................39
SECTION 515. Waiver of Stay or Extension Laws....................39
ARTICLE SIX...................................................................40
THE TRUSTEE..............................................................40
SECTION 601. Certain Duties and Responsibilities.................40
SECTION 602. Notice of Defaults..................................41
SECTION 603. Certain Rights of Trustee...........................41
SECTION 604. Not Responsible for Recitals or Issuance of
Debentures..........................................42
SECTION 605. Trustee May Hold Debentures.........................42
SECTION 606. Money Held in Trust.................................42
SECTION 607. Compensation and Reimbursement......................43
SECTION 608. Disqualification; Conflicting Interests.............43
SECTION 609. Trustee Required; Eligibility.......................48
SECTION 610. Resignation and Removal; Appointment of Successor...48
SECTION 611. Acceptance of Appointment by Successor..............49
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business.........................................50
SECTION 613. Preferential Collection of Claims Against Company...50
SECTION 614. Appointment of Authenticating Agent.................54
ARTICLE SEVEN.................................................................56
DEBENTUREHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY...............56
SECTION 701. Company to Furnish Trustee Names and Addresses of
Debentureholders....................................56
SECTION 702. Preservation of Information; Communications to
Debentureholders....................................56
SECTION 703. Reports by the Company..............................57
SECTION 704. Reports by Trustee..................................58
ARTICLE EIGHT.................................................................61
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.....................61
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms...............................................61
SECTION 802. Successor Substituted...............................62
SECTION 803. Effect of Change in Control.........................62
ARTICLE NINE..................................................................63
SUPPLEMENTAL INDENTURES..................................................63
SECTION 901. Supplemental Indentures Without Consent of
Debentureholders....................................63
SECTION 902. Supplemental Indentures with Consent of
Debentureholders....................................63
SECTION 903. Execution of Supplemental Indentures................64
SECTION 904. Effect of Supplemental Indentures...................64
SECTION 905. Reference in Debentures to Supplemental
Indentures..........................................64
SECTION 906. Effect on Senior Debt...............................65
ARTICLE TEN...................................................................66
COVENANTS................................................................66
SECTION 1001. Payment of Principal and Interest...................66
SECTION 1002. Maintenance of Office or Agency.....................66
SECTION 1003. Money for Debenture Payments to be Held in Trust....66
SECTION 1004. Maintenance of Corporate Existence, Licensing
and Rights..........................................67
SECTION 1005. Payment of Taxes and Assessments....................68
SECTION 1006. Maintenance of Properties, Insurance; Books and
Records; Compliance with Law........................68
SECTION 1007. Limitation on Additional Indebtedness...............69
SECTION 1008. Limitations on Restricted Payments..................69
SECTION 1009. Limitation on Transactions with Affiliates..........70
SECTION 1010. Limitation on Dividends and Other Payment
Restrictions Affecting a Subsidiary/Restricted
Subsidiary..........................................70
SECTION 1011. Intentionally Omitted...............................70
SECTION 1012. Net Worth...........................................71
SECTION 1013. Waiver of Certain Covenants.........................71
ARTICLE ELEVEN................................................................72
REDEMPTION OF DEBENTURES.................................................72
SECTION 1101. Optional Redemption.................................72
SECTION 1102. Mandatory Redemptions...............................72
SECTION 1103. Applicability of Article............................73
SECTION 1104. Election to Redeem; Notice to Trustee...............73
SECTION 1105. Selection by Trustee of Debentures to Be Redeemed...73
SECTION 1106. Notice of Redemption................................74
SECTION 1107. Deposit of Redemption Price.........................74
SECTION 1108. Debentures Payable on Redemption Date...............74
SECTION 1109. Debentures Redeemed in Part.........................75
ARTICLE TWELVE................................................................76
SUBORDINATION OF DEBENTURES..............................................76
SECTION 1201. Agreement to Subordinate............................76
SECTION 1202. Distribution of Assets, Etc.........................76
SECTION 1203. No Payment to Debentureholders if Senior Debt
is in Default.......................................76
SECTION 1204. Subrogation.........................................77
SECTION 1205. Obligation of Company Unconditional.................77
SECTION 1206. Payments on Debentures Permitted....................78
SECTION 1207. Effectuation of Subordination by Trustee............78
SECTION 1208. Knowledge of Trustee................................78
SECTION 1209. Rights of Holders of Senior Debt Not Impaired.......78
SECTION 1210. Trustee Not Fiduciary for Holders of Senior Debt....79
SECTION 1211. Rights of Trustee as Holder of Senior Debt..........79
SECTION 1212. Article Applicable to Paying Agents.................79
SECTION 1213. Rights and Obligations Subject to Power of Court....79
ARTICLE THIRTEEN..............................................................80
REDEMPTION AT OPTION OF HOLDER...........................................80
SECTION 1301. Redemption Option Upon Death of Holder..............80
SECTION 1302. Redemption of Debentures............................81
SECTION 1303. Debentures Redeemed in Part.........................82
ARTICLE FOURTEEN..............................................................83
KEY-MAN INSURANCE........................................................83
SECTION 1401. Delivery and Maintenance of Policy..................83
SECTION 1402. Insurance Proceeds..................................83
SECTION 1403. Distribution of Insurance Proceeds..................83
INDENTURE
THIS INDENTURE, dated as of January 12, 1995, between Xxxxxx Investment
Corporation, a Minnesota corporation (the "Company"), having its principal
office at 00 Xxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000 and
American Bank National Association, a national banking association having trust
powers (the "Trustee"), having its principal office at 000 Xxxx Xxxxx Xxxxxx,
Xx. Xxxx, Xxxxxxxxx 00000.
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized an issue of its Senior Subordinated Debentures (the "Debentures") in
the aggregate principal amount of up to Three Million Dollars ($3,000,000), to
be issued as fully registered Debentures without coupons, to be authenticated by
the Trustee, to be payable and to be redeemable all as hereinafter provided; and
WHEREAS, the Trustee has power to enter into this Indenture and to
accept and execute the trusts herein created; and
WHEREAS, the Company represents that all acts and things necessary to
make the Debentures, when executed by the Company, authenticated and delivered
by the Trustee as in this Indenture provided and issued, the valid, binding and
legal obligations of the Company, and to constitute this instrument a valid
indenture and agreement according to its terms, have been done and performed,
and the execution of this Indenture and the issue hereunder of the Debentures
have in all respects been duly authorized, and the Company, in the exercise of
each and every right and power in it vested, executes this Indenture and
proposes to make, execute, issue and deliver the Debentures.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, in order to provide
for the payment of the principal of, premium, if any, and interest on the
Debentures issued under this Indenture according to their tenor and effect and
the performance and observance of each and all of the covenants and conditions
herein and therein contained, for and in consideration of the premises and of
the purchase and acceptance of the Debentures by the respective purchasers
thereof and for other good and valuable consideration, the receipt whereof is
hereby acknowledged, the Company has executed and delivered this Indenture in
trust for the equal and proportionate benefit, security and protection of all of
the Debentureholders issued or to be issued under and secured by this Indenture,
without preference, priority or distinction as to lien or otherwise of any of
the Debentures over any of the others;
THIS INDENTURE FURTHER WITNESSETH, that the Company has agreed and covenanted
with the respective Debentureholders from time to time as follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act of 1939, as amended (the "TIA") either directly or by reference
therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) 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.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Without limiting the generality of the foregoing, at the date of this
Indenture, the "Affiliates" of the Company include any Subsidiary.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Debentures.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the city in which the
principal office of the Trustee is located are authorized or obligated by law or
executive order to close.
"Capitalized Lease Obligation" means any lease or other agreement for
the use of property which, in accordance with GAAP, should be capitalized on the
lessee's or user's balance sheet.
2
"Cash Equivalents" means, with respect to any person at any date of
determination, any of the following held by such person on a consolidated basis
(other than those held by Restricted Subsidiaries), (i) any evidence of
Indebtedness with a maturity of 180 days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit
or acceptances with a maturity of 180 days or less of, or a savings account in,
any financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $25,000,000;
(iii) commercial paper with a maturity of 180 days or less issued by a
corporation (except any Affiliate of the Company) organized under the laws of
any state of the United States of America or the District of Columbia and rated
at least A-1 by Standard & Poor's Corporation or at least P-1 by Xxxxx'x
Investors Service, Inc.; (iv) repurchase agreements and reverse repurchase
agreements relating to marketable obligations issued or unconditionally
guaranteed by the United States of America or issued by any agency thereof and
backed by the full faith and credit of the United States of America, in each
case maturing within one year from the date of acquisition; provided, however,
that the terms of such agreements comply with the guidelines set forth in the
Federal Financial Agreements of Depository Institutions with Securities Dealers
and Others, as adopted by the Comptroller of the Currency; (v) instruments
backed by letters of credit issued by financial institutions satisfying the
conditions of (ii) above; and (vi) mutual funds or similar securities, not less
than 80% of the assets of which are invested in securities of the type referred
to in clauses (i) through (v).
"Certificate of Independent Public Accountants" means a certificate
signed by Deloitte & Touche LLP, Minneapolis, Minnesota, or any other
independent public accountant or firm of independent public accountants (who may
be the independent public accountants regularly retained by the Company). Such
accountant or firm shall be entitled to rely upon any Opinion of Counsel as to
the interpretation of any legal matters relating to such certificate. The
acceptance by the Trustee of, or its actions on, such a certificate shall be
sufficient evidence that such accountant is reasonably acceptable to the
Trustee. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
Independent.
"Change of Control" means an event or series of events occurring after
the date of this Indenture by which:
(i) the Company sells, conveys, transfers or leases,
directly or indirectly, 35% or more of the Company's
assets as reflected on the Company's most recent
audited balance sheet other than Contracts and
Mortgages Receivable (determined on a consolidated
basis) to any Person or group (as such term is used
in Section 13(d) and 14(d) of the Exchange Act);
(ii) Xxxxxx Xxxxxx, his spouse and children shall cease to
be the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or
indirectly, of securities representing at least 51%
of the combined voting power of the Company's voting
stock (including in a merger or consolidation
3
pursuant to which the Company's voting stock is
exchanged for or changed into cash, securities or
other property);
(iii) during any period of twenty-four consecutive months,
individuals who at the beginning of such period
constituted the Company's Board of Directors
(together with any new or replacement directors whose
election by the Company's Board of Directors, or
whose nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of the directors then still in office who
were either directors at the beginning of such period
of whose election or nomination for election was
previously so approved) cease for any reason to
constitute a majority of the directors then in
office; or
(iv) either of Four Seasons Realty of Minnesota, Inc. or
Four Seasons Realty of Wisconsin, Inc. ceases to be a
Consolidated Subsidiary of the Company in accordance
with GAAP, provided, however, it shall not constitute
a Change in Control if either subsidiary ceases to be
a Consolidated Subsidiary of the Company because it
is merged into the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Stock" means the Company's Common Stock, no par value,
authorized at the date this Indenture is executed, whether voting or non-voting,
and shares of any class or classes resulting from any reclassification or
reclassifications thereof which have 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 also shall include stock of the
Company of any other class, whether now or hereafter authorized, which ranks, or
is entitled to a participation, as to assets or dividends, substantially on a
parity with such Common Stock or other class of stock into which such Common
Stock may have been changed; provided however, that warrants or other rights to
purchase Common Stock will not be deemed to be Common Stock.
"Company" means Xxxxxx Investment Corporation, a Minnesota corporation,
until a successor Person shall have become such pursuant to the provisions of
this Indenture and thereafter "Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its President or any Vice
President, and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, and delivered to the Trustee.
4
"Company 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 of the Company and to be in full force and effect on the
date of such certification and delivered to the Trustee.
"Consolidated" when used in conjunction with any other defined term
means the aggregate amount of the items included within the defined term of the
Company on a consolidated basis in accordance with GAAP, eliminating
inter-company items.
"Consolidated Earnings Before Interest and Taxes plus Depreciation and
Amortization" or "Consolidated EBITDA" means with respect to any Person for any
period, without duplication and without inclusion of items attributable to
Restricted Subsidiaries, the sum of (i) income of such Person on a Consolidated
basis, determined in accordance with GAAP before provision for United States
Federal, state and foreign income taxes of such Person paid or accrued in
accordance with GAAP and increased by depreciation and amortization, (ii)
Consolidated Interest Expense, and (iii) one-third of operating lease rental
expense (excluding the interest portion of operating lease rental expense
included in the definition of Consolidated Interest Expense).
"Consolidated Interest Expense" means with respect to any Person for
any period, without duplication and without inclusion of items attributable to
Restricted Subsidiaries, all cash and non-cash interest expenses incurred for
Indebtedness of such Person, including the interest portion of rental expense of
such Person and its Subsidiaries, on a consolidated basis determined in
accordance with GAAP, net of deferred financing fees of such Person and its
Subsidiaries.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the net income of such Person and its Subsidiaries,
other than Restricted Subsidiaries, for such period, on a Consolidated basis,
determined in accordance with GAAP, provided that extraordinary gains and losses
(determined in accordance with GAAP) shall be excluded.
"Consolidated Tangible Net Worth" means, with respect to any Person at
any date of determination, the Consolidated stockholders' equity represented by
the shares of such Person's capitalized stock (other than Disqualified Stock)
outstanding at such date, as determined on a Consolidated basis in accordance
with GAAP less any portion of such stockholders' equity attributable to (i)
intangible assets as determined in accordance with GAAP or (ii) assets of
Restricted Subsidiaries.
"Contracts and Mortgages Receivable" means those receivables which
result from the sale of land or land and structures as reflected on the
Company's balance sheet in accordance with GAAP excluding such receivables of
Restricted Subsidiaries.
"Corporate Trust Office," when used with respect to the Trustee means
the principal office of the Trustee in St. Xxxx, Minnesota, at which at any
particular time its corporate trust business shall be administered, which office
is on the date of this Indenture located at 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000, or said office of any successor Trustee.
"Debentureholder" means a Person in whose name a Debenture is
registered on the Debenture Register, or the beneficial owner of such Debentures
if record ownership is held by a nominee.
5
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 305.
"Debentures" means the Senior Subordinated Debentures issued pursuant
to this Indenture.
"Defaulted Interest" has the meaning specified in Section 307.
"Disqualified Stock" means, with respect to any Person, any capital
stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness, or is redeemable
at the option of the holder thereof, in whole or in part, in each case on or
prior to the Stated Maturity of the Debentures.
"Dividends" means payments in respect of the Company's Common Stock in
either cash or property, but shall not include payments solely in Common Stock
or distributions in the form of rights to acquire Common Stock.
"Eligible Person" means an employee or agent of the Company.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financial Statements" means the statement of operations, balance
sheet, and/or statement of cash flows of any Person prepared in accordance with
GAAP.
"GAAP" means generally accepted accounting principles consistently
applied.
"Guaranty" by any Person means any obligations, including letters of
credit, both standby and irrevocable in nature, other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection
guaranteeing any Indebtedness, dividend, or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through an agreement,
contingent or otherwise, by such Person (i) to purchase such Indebtedness or
obligation or any property or assets constituting security therefor; (ii) to
advance or supply funds for the purchase or payment of such Indebtedness or
obligation, or to maintain working capital or other balance sheet condition, or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness or obligation; (iii) to lease property or to purchase securities or
other property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation; or (iv) otherwise to assure the owner
of the Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this definition, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
equal to the principal amount of such Indebtedness which has been guaranteed,
6
and a Guaranty in respect of any other obligation, liability, or dividend shall
be deemed to be equal to the maximum aggregate amount of such obligation,
liability or dividend.
"Holder" when used with respect to any Debenture means a
Debentureholder.
"Indebtedness" means, with respect to any Person at any date, without
duplication, all items of indebtedness which, in accordance with generally
accepted accounting principles, would be included in determining total
liabilities as shown on the liabilities side of a balance sheet of such Person
at such date, and in addition shall include (i) Guaranties by such Person, (ii)
all Capitalized Lease Obligations of such Person, and (iii) all indebtedness
secured by any mortgage, lien, pledge, charge or encumbrance upon property owned
by such Person, whether or not the indebtedness so secured has been assumed by
such Person. For the purpose of computing the "Indebtedness" of any Person,
there shall be excluded (i) any particular Indebtedness to the extent that, upon
or prior to the maturity thereof, there shall have been deposited with the
proper depository in trust the necessary funds, securities, or evidences of such
Indebtedness, if permitted by the instrument creating such Indebtedness, for the
payment, redemption, or satisfaction of such Indebtedness; and thereafter such
funds and evidences of Indebtedness so deposited shall not be included in any
computation of the assets of such Person, and (ii) Indebtedness of a Restricted
Subsidiary of such Person, which is not guaranteed by such Person.
"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.
"Independent" when used with respect to any specified Person means such
a Person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company or in any
other obligor upon the Debentures or in any Affiliate of the Company or of such
other obligor, and (iii) is not connected with the Company or such other obligor
or any Affiliate of the Company or of such other obligor, as an officer,
employee, promoter, organizer, underwriter, trustee, partner, director or Person
performing similar functions. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be furnished to the Trustee,
such Person shall be appointed by a Company Order, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Debentures.
"Inventory" means, with respect to any Person, all assets of such
Person classified as inventory on a Consolidated basis in accordance with GAAP
excluding all such assets of Restricted Subsidiaries of such Person.
"Issue Date" means the date on which the Debentures are originally
issued in accordance with the terms of this Indenture.
7
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, hypothecation, assignment for security or other security
agreement of any kind or nature whatsoever. For purposes of this Indenture, a
Person shall be deemed to own subject to a Lien any property which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease Obligation or other title retention
agreement relating to Indebtedness of such Person.
"Long-Term Debt" means, with respect to any Person and any date, all
Indebtedness classified as "long-term debt" in accordance with GAAP.
"Maturity" when used with respect to any Debenture, means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity thereof or by declaration of
acceleration, call for redemption or otherwise.
"Net Income" means, with respect to any Person for any period, the net
income or loss of such Person determined in accordance with GAAP.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, Chief Executive Officer, President, Executive Vice President or any
Vice President, and by the Treasurer, an Assistant Treasurer, Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Original Interest Accrual Date" means January 1, 1995 or the most
recent Interest Payment Date, whichever is later.
"Opinion of Counsel" means a written opinion of counsel, who may be
(except as otherwise expressly provided in this Indenture) counsel for the
Company, and shall be acceptable to the Trustee.
"Outstanding," when used with respect to Debentures, means, as of the
date of determination, all Debentures theretofore authenticated and delivered
under this Indenture, except: (i) Debentures theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation; (ii) Debentures for whose
payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent 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 such Debentures, provided that if such Debentures are
to be redeemed notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; (iii)
Debentures in exchange for or in lieu of which other Debentures have been
authenticated and delivered pursuant to this Indenture; provided, however, that
in determining whether the Debentureholders of the requisite principal amount of
the Outstanding Debentures have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Debentures owned by the Company
or any other obligor upon the 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, only
Debentures which the Trustee knows to be so owned shall be so disregarded.
Debentures so owned which 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 the Debentures or any Affiliate of
the Company or of such other obligor.
8
"Parity Debt" means any and all Indebtedness of the Company created,
incurred, assumed, or guaranteed by the Company before, at, or after the date of
execution of the Indenture which (a) matures by its terms, or is renewable at
the option of the Company to a date, more than one year after the date of the
original creation, incurrence, assumption, or guaranty of such Indebtedness by
the Company, (b) contains covenants, conditions and restrictions on the Company
which are not inconsistent with nor violate any of the covenants, conditions and
restrictions in this Indenture, and (c) is neither Senior Debt nor Subordinated
Debt but in no event shall Parity Debt include deferred taxes.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debentures on behalf of
the Company. Unless otherwise specified in a Company Order, the Paying Agent
shall initially be the Trustee.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture. For purposes of this definition, any
Debenture authenticated and delivered under Section 306 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.
"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.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the fifteenth day (whether or not a Business Day) of the calendar
month next preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any executive vice president, any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, or any other employee of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of such
person's knowledge of and familiarity with the particular subject.
"Restricted Payment" means: (i) the declaration or payment of any
dividend or any other distribution on the capital stock of the Company or any
9
Subsidiary of the Company or any payment made to the direct or indirect holders
(in their capacities as such) of the capital stock of the Company or any
Subsidiary of the Company (other than (x) dividends or distributions payable
solely in capital stock or in options, warrants or other rights to purchase
capital stock, and (y) in the case of any Subsidiary of the Company, dividends
or distributions payable to the Company or to a Subsidiary of the Company), (ii)
the purchase, redemption or other acquisition or retirement for value of any
capital stock of the Company or any Subsidiary or (iii) payments to, investments
in, or transfers of any value to any Restricted Subsidiary. If a Restricted
Payment is made in other than cash, the value of any such payment shall be
determined in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Company Resolution to be filed with the Trustee.
For purposes of this definition, "Restricted Payment" shall not include (a)
payments made in the form of the Company's common stock, (b) mandatory
repurchase obligations by the Company with respect to shares issued by any
employee stock ownership plan of the Company, or (c) purchases of common stock
of a Wholly-Owned Subsidiary of the Company that is not a Restricted Subsidiary.
"Restricted Subsidiary" and "Restricted Subsidiaries" have the meaning
specified in Section 1010.
"Senior Debt" means the principal of, premium (if any) and interest on
(i) the Indebtedness of the Company evidenced by the Credit Agreement, dated
November 18, 1986, by and between the Company and National Business Credit,
Inc., as amended by Amendment to Credit Agreement, dated June 2, 1993, by and
between the Company and Diversified Business Credit, Inc.; and (ii) any and all
Indebtedness of the Company (other than the Debentures, Parity Debt and
Subordinated Debt) incurred in connection with the borrowing of money from or
guaranteed to banks, trust companies, insurance companies and other financial
institutions, including all Indebtedness to such institutions and
seller-financed land acquisitions to the extent it is secured by real estate
and/or assets of the Company, evidenced by bonds, debentures, mortgages, notes
or other securities or other instruments, incurred, assumed or guaranteed by the
Company before, at or after the date of execution of this Indenture, and (iii)
all renewals, extensions and refundings thereof; provided that any Indebtedness
shall not be Senior Debt if the instrument creating or evidencing any such
Indebtedness or pursuant to which such Indebtedness is outstanding, provides
that such Indebtedness, or such renewal, extension or refunding thereof, is
junior or is not superior in right of payment to the Debentures.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Debenture or any
installment of interest thereon, means the date specified in such Debenture as
the fixed date on which the principal of such Debenture or such installment of
interest is due and payable.
"Subordinated Debt" means any and all Indebtedness of the Company (but
not of any Subsidiary) created, incurred, assumed or guaranteed by the Company
before, at or after the date of execution of this Indenture which, by the terms
of the instrument (or any supplemental instrument) creating or evidencing such
Indebtedness or pursuant to which such Indebtedness is outstanding, (a) it is
10
provided that such Indebtedness, or any renewal, extension, or refunding
thereof, is expressly subordinate and junior in right of payment to the
Debentures (whether or not subordinated to any other Indebtedness or the
Company) or (b) it is not, by its terms, Senior Debt or Parity Debt.
"Subordinated Debt" shall include any Indebtedness of the Company to Affiliates
of the Company and any Indebtedness incurred by the Company under any agreement
to redeem or repurchase any securities of the Company.
"Subsidiary" means any corporation, more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors or trustees,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Trust Estate" means all rights, interest and property which has been
collaterally assigned to the Trustee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of the Indenture, and thereafter "Trustee"
shall mean such successor Trustee.
"Wholly-Owned" when used in connection with any Subsidiary, means a
Subsidiary of which all of the issued and outstanding shares of stock, except
shares required as directors' qualifying shares, are owned by the Company and/or
one or more of its Wholly-Owned Subsidiaries. For purposes of this definition,
"voting stock" shall have the same meaning as in the definition of Subsidiary.
SECTION 102. Compliance Certificates and Opinions.
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 upon request 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 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 with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
11
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. 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 prudence 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 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 prudence 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 be consolidated and form one
instrument.
SECTION 104. Acts of Debentureholders.
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Debentureholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Debentureholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Debentureholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(2) 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
12
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 him the execution thereof. Where such
execution is by a signer acting in a capacity other than such person's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such person'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 which the Trustee deems sufficient.
(3) The ownership of Debentures shall be proved by the Debenture
Register.
(4) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Debenture 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.
SECTION 105. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Debentureholders or other document provided or permitted by this
Indenture to be made upon, given or furnished to or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, specified in the first paragraph of
this instrument, or
(2) 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 addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 106. Notice to Debentureholders; Waiver.
Where this Indenture or any Debenture provides for notice to
Debentureholders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder, or if the terms herein provide for notice to
less than all Debentureholders, then to such Debentureholders as to whom notice
may be required to be sent, at each such Holder's address as it appears on the
Debenture Register, not later than the latest date and not earlier than the
earliest date prescribed for the giving of such notice. In any case where notice
to Debentureholders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Debentureholders. 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
13
notice by Debentureholders 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.
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 by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute notification for every purpose hereunder.
SECTION 107. 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 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in 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 110. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Debentureholders of Debentures, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
This Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the State of Minnesota, without giving effect to the
conflict of laws principles thereof.
14
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Debentures) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date, Redemption Date, or at the Stated Maturity; provided
that no interest shall accrue for the period from and after any such Redemption
Date or Stated Maturity and, provided further, that no interest shall be paid
for the period from and after any such Interest Payment Date to the actual
payment date until the next succeeding Interest Payment Date.
15
ARTICLE TWO
DEBENTURE FORMS
SECTION 201. Form Generally.
The Debentures and the certificate of authentication thereon shall be
in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Debentures,
as evidenced by their execution of the Debentures. Any portion of the text of
any Debenture may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Debenture.
The definitive Debentures shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
or market on which the Debentures may be listed or included, all as determined
by the officers executing such Debentures, as evidenced by their execution of
such Debentures.
SECTION 202. Form of Face of Debentures.
XXXXXX INVESTMENT CORPORATION
SENIOR SUBORDINATED DEBENTURE
Registered No.: Registered Principal
_______________ Amount: $___________
Original Interest Accrual CUSIP: _____________
Date: ___________________
Xxxxxx Investment Corporation, a Minnesota corporation (herein called
the "Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________________________ or registered assigns, the principal sum of
__________________ Dollars on ___________, and to pay interest thereon from the
Original Interest Accrual Date set forth above, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, on each April
1, July 1, October 1, and January 1, commencing on _________, 1995, at the rate
of __________ (____%) per annum, until the principal hereof is paid or made
available for payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date, as provided in such Indenture, will
be paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered (the "Holder") at the close of business on the Regular
16
Record Date for such interest, which shall be the fifteenth day (whether or not
a Business Day) of the calendar month next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Debentureholders of Debentures not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the applicable requirements of any securities
exchange or market on which the Debentures may be listed or included, and upon
such notice as may be required by such exchange or market, all as more fully
provided in said Indenture. Payment of the principal of and interest (and
premium, if any) on this Debenture will be made at the office or agency
maintained by the Company for such purpose in St. Xxxx or Minneapolis,
Minnesota, or in such other office or agency as may be selected by the Company
in accordance with the Indenture, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts, provided, however, that at the option of the Company payment of
interest may be made by United States dollar check mailed to the address of the
Person entitled thereto as such address shall appear in the Debenture Register.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee referred to on the reverse hereof by manual signature,
this Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
17
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
in its name by the manual or facsimile signature of its President and attested
by the manual or facsimile signature of its Secretary.
Dated:_______________
XXXXXX INVESTMENT CORPORATION
By
---------------------------
President
Attest:
-------------------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
18
SECTION 203. Form of Reverse Side of Debenture.
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its Senior Subordinated Debentures (the "Debentures") in
the maximum aggregate principal amount of up to $3,000,000, issued and to be
issued under an Indenture, dated as of January 12, 1995 (the "Indenture"),
between the Company and American Bank National Association, as Trustee (the
"Trustee"), which term includes any successor Trustee under the Indenture).
Reference is hereby made to the Indenture and all indentures supplemental
thereto for a statement of the respective rights, limitation of rights, duties
and immunities thereunder of the Company, the Trustee and the Debentureholders
of the Debentures, and for a statement of the terms upon which the Debentures
are, and are to be, authenticated and delivered. Capitalized and certain other
terms used herein and not otherwise defined have the meanings set forth in the
Indenture.
The Debentures are general unsecured obligations of the Company. The
payment of the principal of (and premium, if any) and interest on this Debenture
is expressly subordinated, as provided in the Indenture, to the payment of all
Senior Debt, as defined in the Indenture, and, by the acceptance of this
Debenture, the Holder hereof agrees, expressly for the benefit of the present
and future holders of Senior Debt, to be bound by the provisions of the
Indenture relating to such subordination and authorizes and appoints as such
Holder's attorney-in-fact the Trustee to take such action on such Holder's
behalf as may be necessary or appropriate to effectuate such subordination.
The Debentures may not be redeemed at the option of the Company prior
to January 1, 1998. Thereafter the Company may, at its option, redeem either in
whole from time to time or in part, at a Redemption Price (expressed as a
percentage of the principal amount redeemed) set forth below for each maturity
plus interest accrued to the Redemption Date, if redeemed during the
twelve-month period beginning January 1 of each of the following years:
Maturity 1998 1999 2000 2001 2002 2003 2004
-------- ---- ---- ---- ---- ---- ---- ----
Jan. 1, 2001 102% 101% Par --- --- --- ---
Jan. 1, 2002 103% 102% 101% Par --- --- ---
Jan. 1, 2003 104% 103% 102% 101% Par --- ---
Jan. 1, 2004 105% 104% 103% 102% 101% Par ---
Jan. 1, 2005 106% 105% 104% 103% 102% 101% Par
In the event of redemption of this Debenture in part only, a new
Debenture for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation of this Debenture.
In the event a Change of Control (as defined in the Indenture) occurs
at any time during the term of the Debentures, the Company shall immediately
redeem the Debentures in whole at a Redemption Price (expressed as a percentage
of the principal amount redeemed) set forth below for each maturity plus
interest accrued to the Redemption Date, if redeemed during the periods
beginning January 1 of each of the following years:
19
1995
through
Maturity 1998 1999 2000 2001 2002 2003 2004
-------- ---- ---- ---- ---- ---- ---- ----
Jan. 1, 2001 102% 101% Par --- --- --- ---
Jan. 1, 2002 103% 102% 101% Par --- --- ---
Jan. 1, 2003 104% 103% 102% 101% Par --- ---
Jan. 1, 2004 105% 104% 103% 102% 101% Par ---
Jan. 1, 2005 106% 105% 104% 103% 102% 101% Par
Notice of redemption will be mailed at least 30 days, but not more than
60 days before the Redemption Date to each Holder at the registered address
thereof.
If this Debenture, or a portion hereof, shall be redeemed by call for
redemption or shall be accepted for repayment upon the death of the Holder, and
payment be duly provided therefore as specified in the Indenture, interest shall
cease to accrue on this Debenture or such portion hereof, as the case may be.
Interest installments whose Stated Maturity is on or before the
Redemption Date or Repayment Date will be payable to the Holders of such
Debentures, or one or more of Predecessor Debentures, of record at the close of
business on the relevant Record Date referred to on the face hereof, all as
provided in the Indenture. In the event of redemption or repayment of this
Debenture in part only, a new Debenture or Debentures for the unredeemed or
unrepaid portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default as defined in the Indenture shall occur and be
continuing, the principal of all the Debentures may be declared due and payable
in the manner and with the effect provided in the Indenture. The Company shall
pay all costs of collection, whether or not judicial proceedings are instituted,
in the manner provided in the Indenture. The Indenture provides that such
declaration and its consequences may, in certain events, be annulled by the
Holders of a majority in principal amount of the Debentures Outstanding.
If less than all of the Debentures are to be redeemed, the Debentures
to be redeemed shall be selected by the Trustee in inverse order of maturity. If
less than all of the Debentures within a particular maturity are to be redeemed,
the particular Debentures to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Debentures
within the maturity not previously called for redemption, either by lot or in
any manner deemed by the Trustee to be proper. In case there are outstanding
Debentures of a denomination greater than $1,000, for the purpose of determining
by lot the portions of a Debenture to be redeemed, the Trustee may assign
numbers to the units of $1,000 represented by such Outstanding Debentures, or
may draw by lot the portions of such Debentures to be redeemed in such other
manner as it may determine.
20
If an Event of Default as defined in the Indenture shall occur and be
continuing, the outstanding principal of all the Debentures may be declared due
and payable in the manner and with the effect provided in the Indenture. The
Company shall pay all costs of collection, whether or not judicial proceedings
are instituted, in the manner provided in the Indenture. The Indenture provides
that such declaration and its consequences may, in certain events, be annulled
by the Debentureholders of a majority in principal amount of Debentures
Outstanding.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Debentureholders of the Debentures under the
Indenture at any time by the Company and the Trustee with the consent of the
Debentureholders of two-thirds in aggregate principal amount of the Debentures
at the time Outstanding. The Indenture also contains provisions permitting the
Debentureholders of specified percentages in aggregate principal amount of the
Debentures at the time Outstanding, on behalf of the Debentureholders of all the
Debentures, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Debenture shall be conclusive
and binding upon such Holder and upon all future Debentureholders of this
Debenture and of any Debenture issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture or amendment or modification hereof or thereof shall alter
or impair the obligation of the Company to pay the principal of (and premium, if
any) and interest on this Debenture at the times, place and rate and in the coin
or currency herein prescribed.
In the event of a consolidation or merger of the Company into, or of
the transfer of its assets substantially as an entirety to, a successor
corporation in accordance with the Indenture, such successor corporation shall
assume payment of the Debentures and the performance of every covenant of the
Indenture on the part of the Company, and in the event of any such transfer, the
predecessor corporation shall be discharged from all obligations and covenants
in respect of the Debentures and the Indenture and may be dissolved and
liquidated, all as more fully set forth in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registerable in the Debenture
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Debenture are payable, duly endorsed by or accompanied by a written
instrument of transfer in the form printed on this Debenture or in another form
satisfactory to the Company and the Debenture Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Debentures, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
21
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Debenture shall be governed by and construed in accordance with
the laws of the State of Minnesota.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Certificate of Authentication and Form of Assignment.
[Form of Certificate of Authentication]
This is one of the Debentures referred to in the within-mentioned
Indenture.
Dated: __________
--------------------------------,
By
-----------------------------
Authorized Signature
[Form of Assignment]
(To be executed by the registered holder if such holder desires to
transfer this Debenture)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
(Please print name and address of transferee)
22
this Debenture, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint __________, as Attorney, to transfer
the within Debenture on the books kept for registration thereof, with full power
of substitution.
Dated: ____________________
Signature:
-------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Debenture)
(Insert Social Security
or Other Identifying
Number of Transferee)
Signature Guaranteed:
23
ARTICLE THREE
THE DEBENTURES
SECTION 301. Title and Terms Generally.
The Debentures shall be known and designated as the Senior Subordinated
Debentures of the Company. The maximum aggregate principal amount of Debentures
to be authenticated and delivered under this Indenture is $3,000,000, excluding
accrued interest, except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debentures
pursuant to Sections 304, 305, 306, 905 or 1109 hereof.
The Debentures shall be dated as provided in Section 303 hereof, shall
bear interest from the Original Interest Accrual Date of such Debenture, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable on each April 1, July 1, October 1 and
January 1, commencing on April 1, 1995, until the principal thereof is paid or
made available for payment, and shall mature on the dates set forth below:
Maturity Principal Amount
-------- ----------------
January 1, 2001 $600,000
January 1, 2002 600,000
January 1, 2003 600,000
January 1, 2004 600,000
January 1, 2005 600,000
The Debentures shall bear interest at the rate per annum specified in
the prospectus (as defined in the Securities Act of 1933) (as such prospectus
shall have been amended or supplemented) pursuant to which such Debentures are
sold.
The principal of (and premium, if any) and interest on the Debentures
shall be payable at the office or agency maintained by the Company in St. Xxxx
or Minneapolis, Minnesota, (initially the principal corporate trust office of
the Trustee) pursuant to Section 1002, maintained for such purpose.
The Debentures shall be redeemable as provided in Article Eleven.
The Debentures are unsecured obligations of the Company and shall be
subordinated in right of payment to Senior Debt of the Company as provided in
Article Twelve.
The Debentures shall be equal in right of payment to certain
Indebtedness of the Company defined as Parity Debt.
The Debentures shall be senior in right of payment to all Subordinated
Debt.
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The Debentures are an obligation of the Company but not of any
affiliate.
SECTION 302. Denominations.
The Debentures shall be issuable only in registered form without
coupons and in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Debentures shall be executed on behalf of the Company by its
President or any Vice President and attested by its Secretary or Assistant
Secretary. The signature of any of these officers on the Debentures may be
manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Debentures. The Trustee in accordance with
such Company Order shall authenticate and deliver such Debentures as in this
Indenture provided and not otherwise.
Upon the initial issuance, each Debenture shall be dated January 1,
1995, and thereafter, Debentures issued hereunder shall be dated the date of
their authentication.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder and is entitled to
the benefits of the Indenture.
SECTION 304. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Debentures which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Debentures, in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Debentures may determine, as evidenced by their
execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at any office
or agency of the Company designated pursuant to Section 1002, without charge to
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the Holder. Upon surrender for cancellation of any one or more temporary
Debentures, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Debentures of
authorized denominations. Until so exchanged the temporary Debentures shall in
all respects be entitled to the same benefits under this Indenture as definitive
Debentures.
SECTION 305. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office or any other office
or agency pursuant to Section 1002 being herein sometimes referred to as the
"Debenture Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Debentures and of
transfers of Debentures. The Trustee is hereby appointed "Debenture Registrar"
for the purpose of registering Debentures and transfers of Debentures as herein
provided.
Upon surrender for registration of transfer of any Debenture at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Debentures of any authorized denominations, of a like aggregate principal
amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Debentures
which the Holder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be valid obligations of the Company, evidencing the same debt
and entitled to the same benefits under this Indenture as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer
or for exchange shall be duly endorsed for transfer (if so required by the
Company or the Trustee), or shall be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debenture Registrar duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Section 304, 905 or 1109 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Debenture during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Debentures selected for redemption pursuant to Section 1106 and ending at the
close of business on the day of such mailing or (ii) to register the transfer of
or exchange any Debenture so selected for redemption in whole or in part, except
the unredeemed portion of any Debenture being redeemed in part.
26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures.
If any mutilated Debenture is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Debenture of like series, tenor and principal amount and bearing
a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Debenture and
(ii) such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that such
Debenture has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Debenture, a new Debenture of like series, tenor
and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion, may
instead of issuing a new Debenture, may pay such Debenture.
Upon the issuance of any new Debenture under this Section, 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.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Debenture (or one or more Predecessor Debentures) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
27
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in paragraph (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the 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 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 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 be not more than 15 days and not 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 Holder at such Holder's address as it appears in the Debenture Register,
not less than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following Paragraph (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
or market on which the Debentures may be listed or included and, upon such
notice as may be required by such exchange or market 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.
If any installment of interest whose Stated Maturity is on or prior to
the Redemption Date for any Debentures called for redemption pursuant to Article
Eleven is not paid or duly provided for on or prior to the Redemption Date in
accordance with the foregoing provisions of this Section, such interest shall be
payable as part of the Redemption Price of such Debentures.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest accrued
and unpaid and to accrue which were carried by such other Debenture.
All payments of interest on the Debentures to the person entitled
thereto, whether made by the Company, the Trustee or any Paying Agent, as
28
authorized pursuant to this Indenture, shall be made (subject to collection) by
check mailed to the address of the person entitled thereto as such address shall
appear on the Debenture Register, unless the Trustee determines such methods to
be inappropriate in the circumstances.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Debenture for registration of transfer,
the Company, the Trustee, the Debenture Registrar and any agent of the Company
or the Trustee may treat the Person in whose name such Debenture is registered
as the owner of such Debenture for the purpose of receiving payment of principal
of (and premium, if any) and (subject to Section 307) interest on such Debenture
and for all other purposes whatsoever, whether or not such Debenture be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Debentures surrendered for payment, redemption, registration of
transfer or exchange if surrendered to any Person other than the Trustee, shall
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Debentures
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Debentures so delivered shall be
promptly cancelled by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Debentures held
by the Trustee shall be disposed of and a destruction certificate shall be
delivered to the Company.
SECTION 310. Computation of Interest.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 311. Authentication and Delivery of Original Issue.
Forthwith upon the execution and delivery of this Indenture, or from
time to time thereafter, Debentures up to the aggregate principal amount of
$3,000,000 may be executed by the Company and delivered to the Trustee for
authentication and delivered by the Trustee upon Company Order, without any
further action by the Company.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall 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, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(a) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Debentures for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter paid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(b) all such Debentures not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will become
due and payable at their Stated Maturity within one year, or (iii) 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; and the Company, in the case of this subsection
(b)(i), (ii) or (iii) 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
interest to the date of such deposit (in the case of Debentures which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel to the effect that such deposit does not
violate (a) the provisions of Article Twelve hereof or (b) any provisions of any
Senior Debt; and
(4) 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 607 shall survive, and,
if the money shall have been deposited with the Trustee pursuant to subclause
(b) of clause (1) of this Section, the obligations of the Trustee under Section
402 and the last paragraph of Section 1003 shall survive.
30
SECTION 402. Application of Trust Money.
All money deposited with the Trustee pursuant to Section 401 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 as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee.
31
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein, means any one 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):
(1) default in the payment of any installment interest upon any
Debenture when it becomes due and payable and continuance of such default for a
period of 10 days (whether or not such payment is prohibited under the
provisions of Article Twelve); or
(2) default in the payment of the principal of or premium, if any, on
any Debenture at its Stated Maturity (whether or not such payment is prohibited
under the provisions of Article Twelve); or
(3) breach of a covenant of the Company contained in Sections 1007,
1008 or 1012 hereof and the continuance of such breach for a period of fifteen
(15) days after the due date for filing of the report pursuant to section 703(5)
which reports such breach, provided, however, that prior to the expiration of
the fifteen (15) day period referred to above, the Company shall have filed with
the Trustee a certification of Deloitte and Touche LLP, or such other certified
independent public auditor, certifying that such breach has been cured; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach 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 Debentureholders of at
least 25% in principal amount of the Outstanding Debentures, a written notice
(and the Trustee shall give such written notice to the Company upon the request
of the Debentureholders of at least 25% in principal amount of the Outstanding
Debentures) specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence of
Indebtedness of the Company or any Subsidiary (including obligations under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles), or a default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness of the Company or Subsidiary, (including
such leases), whether such indebtedness now exists or shall hereafter be
created, which default shall have resulted in such indebtedness in excess of
$100,000 becoming or being declared due and payable prior to the date on which
it would otherwise have become due and payable or such obligations in excess of
$100,000 being accelerated, without such acceleration having been rescinded or
annulled or such Indebtedness shall not have been discharged within a period of
32
30 days after such default or acceleration; provided, however, that this Section
501(5) shall not apply to (a) a default under any purchase money obligation of
the Company if, and so long as, the Company is in good faith and in the exercise
of its reasonably prudent business judgment, contesting its obligations
thereunder in accordance with a reasonable interpretation of the documentation
of such obligation; or (b) a default in a contractual obligation not otherwise
constituting Indebtedness if and so long as, the Company is in good faith
contesting such obligation and has posted a bond sufficient to pay such
obligation in the event it is determined to be due and payable; or
(6) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary,
under Federal bankruptcy law, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary 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 unstayed and in effect for a period of
sixty (60) consecutive days; or
(7) the commencement by the Company or any Subsidiary of a voluntary
case under Federal bankruptcy law, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency, or other similar law, or the
consent by it to the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under Federal bankruptcy law or any other applicable
Federal or State law, or the consent by it to the filing of such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or any Subsidiary or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company or any
Subsidiary in furtherance of any such action; or
(8) the rendering of a final judgment or judgments (not subject to
appeal) for the payment of money against the Company or any Subsidiary not fully
insured against in an aggregate amount in excess of $100,000 by a court or
courts of competent jurisdiction, which judgment or judgments remain unsatisfied
for a period of 30 days after the right to appeal all such judgments has expired
or otherwise terminated.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Debentureholders of not less than 25% in principal
amount of the Outstanding Debentures may, and the Trustee upon request of the
Debentureholders of not less than 25% in principal amount of the Outstanding
Debentures shall, declare the principal of all the Debentures to be due and
payable immediately, by notice in writing to the Company (and to the Trustee if
given by Debentureholders), and upon any such declaration such entire principal
amount and all interest shall become immediately due and payable. Collection
actions or judicial proceedings may be commenced as set forth in Section 503.
33
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Debentureholders of a
majority in principal amount of the Outstanding Debentures, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(a) all overdue installments of interest on all Debentures,
(b) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Debentures,
(c) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne by the
Debentures, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and the Holders and their agents and counsel if such
Holders have initiated action in accordance with this Section 502; and
(2) all Events of Default, other than the non-payment of the principal
of Debentures which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Debenture when such interest becomes due and payable and such default
continues for a period of 10 days, or
(2) default is made in the payment of the principal (or premium, if
any) of any Debenture at its Stated Maturity,
the Company will, subject to the provisions of Article Twelve, upon demand of
the Trustee or Debentureholders of not less than 25% in aggregate principal
amount of the Outstanding Debentures, pay to the Trustee, for the benefit of all
the Debentureholders of such Debentures, the whole amount then due and payable
on such Debentures for principal, premium, if any, and interest, with interest
upon the overdue principal (and premium, if any) and, to the extent that payment
34
of such interest shall be legally enforceable, upon overdue installments of
interest, at the rate borne by the Debentures 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 or the Holders as set forth
herein, their agents and counsel, as the case may be, whether or not judicial
proceedings are commenced.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, or the Holders of
not less than 25% in principal amount of the Debentures Outstanding, on behalf
of all Holders, 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
the Debentures 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 the Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Debentureholders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in and of
the exercise of any power granted herein, or to enforce any other proper remedy.
Holders of not less than 25% in principal amount of Debentures Outstanding, on
behalf of all Holders, may initiate such appropriate judicial proceedings in the
same manner as the Trustee. The Trustee or the Holders initiating action
hereunder, as the case may be, shall be reimbursed for the costs of collection
incurred as provided for above in this Section 503.
SECTION 504. 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 or the property of the Company or of such other obligor, the Trustee
(irrespective of whether the principal of the Debentures shall then 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,
(1) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Debentures 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 Debentureholders allowed in such judicial proceeding,
and
(2) 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
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each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Debentureholders, 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 607 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Debentures.
All rights of action and claims under this Indenture or the Debentures
may be prosecuted and enforced by the Trustee without the possession of any of
the Debentures 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, be for the
ratable benefit of the Debentureholders of the Debentures in respect of which
such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee or the Holders directly or the
Holders directly pursuant to this Article 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 interest, upon
presentation of the Debentures 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 607
hereof;
SECOND: to the payment of the amounts then due and unpaid for costs of
collection, principal, premium, if any, and interest on the Debentures 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 such Debentures for principal, premium, if any, and interest,
respectively; and
THIRD: to the payment of the remainder, if any, to the Company or any
other person lawfully entitled thereto.
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SECTION 507. Limitation on Suits.
(a) Prior to the declaration of acceleration provided for in Section
502 hereof, no Holder of any Debenture 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
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(2) the Debentureholders of not less than 25% in principal amount of
the Outstanding Debentures 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;
(3) such Holder or Debentureholders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 30-day period by the Debentureholders of a majority
in principal amount of the Outstanding Debentures;
it being understood and intended that no one or more Debentureholders 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
Debentureholders, or to obtain or to seek to obtain priority or preference over
any other Debentureholders or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all the
Debentureholders.
(b) After the declaration of acceleration provided for in
Section 502 hereof, Holders of 5% or more in principal amount of Outstanding
Debentures may institute judicial proceedings in respect to such Event of
Default which triggers the declaration of acceleration in their own name in the
manner provided in Section 503 if the Trustee has not instituted such
proceedings which 60 days after such declaration, it being understood that such
Holders shall not have any right in any manner whatever by virtue of, or by
availing of, any provision of the Indenture to affect, disturb or prejudice the
rights of any other Holders of Debentures, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any rights under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Holders of Debentures.
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SECTION 508. Unconditional Right of Debentureholders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture shall have the right to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest on such Debenture on the
Stated Maturity thereof (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 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding shall have been
discontinued or abandoned for any reason or shall have 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
Debentureholders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Debentureholders shall continue as though no such proceeding had been
instituted.
SECTION 510. 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 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Debentureholders 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 hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. 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 shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Debentureholders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
Debentureholders, as the case may be.
SECTION 512. Control by Debentureholders.
The Holders of a majority in principal amount of the Outstanding
Debentures 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, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
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(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Debentures may on behalf of the Holders of all the Debentures
waive any past default hereunder and its consequences, provided that a default
in the payment of the principal of, premium, if any, or interest on any
Debenture, or in respect of certain other covenants or provisions hereof cannot
be modified or amended except as set forth in Section 902 hereof.
Upon any such waiver, such default shall cease to exist and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture
by such Holder's 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, 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.
The provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Debentureholders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Debentures, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of, premium, if any, or interest on any Debenture on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date).
SECTION 515. 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.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(1) Except during the continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture, but in the case of
any such certificates or opinions which 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.
(2) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(3) 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) this Subsection shall not be construed to limit the effect
of Subsection (1)(a) of this Section;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(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 of a majority in principal amount of the Outstanding
Debentures 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; and
(d) no provision of this Indenture shall require the Trustee
to expend 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.
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(4) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
Within 60 days after the occurrence of any default hereunder, the
Trustee shall transmit by mail to all Debentureholders, as their names and
addresses appear in the Debenture Register, notice of such default hereunder
known to a Responsible Officer of Trustee, unless such default shall have been
cured or waived, provided that (i) except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any Debenture,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Debentureholders, and (ii) in the case
of any default of the character specified in Section 501(4), no such notice to
Debentureholders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the board of directors of the Company may be sufficiently evidenced by a
Company Resolution;
(3) 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,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel (who may be counsel to the
Company) 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;
(5) 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
41
any of the Debentureholders pursuant to this indenture, unless such
Debentureholders shall have offered to the Trustee reasonable indemnity against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction; and
(6) prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default, 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 or other paper or document unless requested to do
so by the Holders of not less than a majority in aggregate principal amount of
the Debentures then outstanding, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, provided that if the payment within a reasonable time to the Trustee
of the costs, expenses and liabilities likely to be incurred in the making of
such investigation is not, in the opinion of the Trustee, reasonably assured to
the Trustee by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expense or liability as a condition to so proceeding.
(7) the Trustee shall have no duty to inquire as to the performance of
the Company's covenants in Article Ten or Section 1102 hereof. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of
Default, except (i) any Default or Event of Default occurring pursuant to
Section 501(1), 501(2) or 1001, or (ii) any Default or Event of Default of which
the Trustee shall have received written notification or obtained actual
knowledge.
SECTION 604. 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 assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be accountable for the use
or application by the Company of Debentures or the proceeds thereof.
SECTION 605. Trustee May Hold Debentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar 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
612, may otherwise deal with the Company with the same rights it would have it
if were not Trustee, Authenticating Agent, Paying Agent, Debenture Registrar or
such other agent.
SECTION 606. 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.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation 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);
(2) except as otherwise expressly provided for herein, to reimburse the
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 reasonable 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
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, 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.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Debentures upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of, premium, if any or interest on
Debentures.
SECTION 608. Disqualification; Conflicting Interests.
(1) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 608, then, within 90 days after ascertaining that it has
such conflicting interest, and if the default (as defined in Section 608(3)) to
which such conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, the Trustee shall
either eliminate such conflicting interest or resign in the manner and with the
effect hereinafter specified in this Article.
(2) In the event that the Trustee shall fail to comply with the
provisions of Subsection (1) of this Section, within ten (10) days after the
expiration of such 90-day period, the Trustee shall transmit by mail to all
Debentureholders, as their names and addresses appear in the Debenture Register,
notice of such failure.
(3) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest if:
(a) the Trustee is trustee under another indenture under which
any other securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Debentures issued under this Indenture, provided that there shall be excluded
43
from the operation of this paragraph any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or
indentures are wholly unsecured and such other indenture or indentures are
hereafter qualified under the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section 306(b) or Section 307(1) of
the Trust Indenture Act that differences exist between the provisions of this
Indenture and the provisions of such other indenture or indentures which are so
likely to involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the Trustee
from acting as such under this Indenture and such other indenture or indentures,
or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture and such other indenture or
indentures is not so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under one of such indentures;
(b) the Trustee or any of its directors or executive officers
is an underwriter for the Company;
(c) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common control with
an underwriter for the Company;
(d) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the Company
who is currently engaged in the business of underwriting, except that (i) one
individual may be a director or an executive officer, or both, of the Trustee
and a director or an executive officer, or both, of the Company but may not be
at the same time an executive officer of both the Trustee and the Company; (ii)
if and so long as the number of directors of the Trustee in office is more than
nine, one additional individual may be a director or an executive officer, or
both, of the Trustee and a director of the Company; and (iii) the Trustee may be
designated by the Company or by any underwriter for the Company to act in the
capacity of transfer agent, registrar, custodian, paying agent, fiscal agent,
escrow agent or depositary, or in any other similar capacity or, subject to the
provisions of paragraph (a) of this Subsection, to act as trustee, whether under
an indenture or otherwise;
(e) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director or executive officer
thereof, or 20% or more of such voting securities is beneficially owned,
collectively, by any two or more of such persons; or 10% or more of the voting
securities of the Trustee is beneficially owned either by an underwriter for the
Company or by any director, partner or executive officer of any such
underwriter, or is beneficially owned, collectively, by any two or more such
persons;
(f) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter in
44
this Subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security of the Company not including the Debentures
issued under this Indenture and securities issued under any other indenture
under which the Trustee is also trustee, or (ii) 10% or more of any class of
security of an underwriter for the Company;
(g) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter in
this Subsection defined), 5% or more of the voting securities of any person who,
to the knowledge of the Trustee, owns 10% or more of the voting securities of,
or controls directly or indirectly or is under direct or indirect common control
with the Company;
(h) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter in
this Subsection defined), 10% or more of a class of security of any person who,
to the knowledge of the Trustee, owns 50% or more of the voting securities of
the Company;
(i) the Trustee owns, on the date of default upon the
Debentures or on any anniversary of such default while the default upon the
Debentures remains outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or conservator, or in
any other similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the beneficial ownership
of a specified percentage of which would have constituted a conflicting interest
under paragraph (f), (g) or (h) of this Subsection. As to any such securities of
which the Trustee acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which included them, the provisions of the
preceding sentence shall not apply, for a period of two years from the date of
such acquisition, to the extent that such securities included in such estate do
not exceed 25% of such voting securities or 25% of any such class of security.
Promptly after the date of any such default and annually each succeeding year
that the Debentures remain in default, the Trustee shall make a check of its
holdings of such securities in any of the above-mentioned capacities as of such
dates. If the Company fails to make payment in full of the principal of (or
premium, if any) or interest on any of the Debentures when and as the same
becomes due and payable, and such failure continues for 30 days thereafter, the
Trustee shall make a prompt check of its holdings of such securities in any of
the above-mentioned capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing provisions of this
paragraph, all such securities so held by the Trustee, with sole or joint
control over such securities vested in it, shall, but only so long as such
failure shall continue, be considered as though beneficially owned by the
Trustee for the purposes of paragraphs (f), (g) and (h) of this Subsection; or
(j) except under the circumstances described in paragraphs
(1), (3), (4), (5) or (6) of Section 311(b) of the Trust Indenture Act, the
Trustee shall be or become a creditor of the Company.
The specification of percentages in paragraphs (e) to (i), inclusive,
of this Subsection shall not be construed as indicating that the ownership of
such percentage of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (c) or (g) of this Subsection.
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For the purposes of paragraphs (f), (g), (h) and (i) of this Subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed to be "in default"
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (iii) the Trustee shall not be deemed to be
the owner or holder of (A) any security which it holds as collateral security,
as trustee or otherwise, for an obligation which is not in default as defined in
clause (ii) above, or (B) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (C) any security
which it holds as agent for collection, or as custodian, escrow agent or
depositary, or in any similar representative capacity.
(4) For the purposes of this Section:
(a) The term "underwriter," when used with reference to the
Company means every person who, within one year prior to the time as of which
the determination is made, has purchased from the Company with a view to, or has
offered or sold for the Company in connection with, the distribution of any
security of the Company outstanding at such time, or has participated or has had
a direct or indirect participation in any such undertaking, or has participated
or has had a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest was limited
to a commission from an underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission.
(b) The term "director" means any director of a corporation or
any individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(c) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an unincorporated
organization or a government or political subdivision thereof. As used in this
paragraph, the term "trust" shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are evidenced by a security.
(d) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or management of
the affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(e) The term "Company" means any obligor upon the Debentures.
(f) The term "executive officer" means the president, every
vice president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing similar
functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of directors.
46
(g) The term "default" shall mean an Event of Default or an
event which with notice or passage of time, or both, would constitute an Event
of Default.
(5) The percentages of voting securities and other securities specified
in this Section shall be calculated in accordance with the following provisions:
(a) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section (each of
whom is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate votes which the
holders of all the outstanding voting securities of such person are entitled to
cast in the direction or management of the affairs of such person.
(b) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of the class
outstanding.
(c) The term "amount," when used in regard to securities,
means the principal amount if relating to evidences of indebtedness, the number
of shares if relating to capital shares and the number of units if relating to
any other kind of security.
(d) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof, provided, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to exercise
the voting rights thereof.
(e) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges, provided, that, in the case of
secured evidences of indebtedness, all of which are issued under a single
indenture, differences in the interest rates or maturity dates of various series
thereof shall not be deemed sufficient to constitute such series different
classes and provided, further, that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity dates thereof shall
not be deemed sufficient to constitute them securities of different classes,
whether or not they are issued under a single indenture.
47
SECTION 609. Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall (a) be a
corporation or trust company organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, (b) have a
combined capital and surplus of at least $25,000,000, and [(c) either have an
office in Minneapolis or Saint Xxxx, Minnesota or appoint an agent in
Minneapolis or Saint Xxxx, Minnesota to conduct any activities which the Trustee
is required under the Indenture to conduct in Saint Xxxx or Minneapolis]. If
such corporation 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
corporation 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 hereinafter specified
in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(1) 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 under Section 611.
(2) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee 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
jurisdiction for the appointment of a successor Trustee. Such court may
thereupon after such notice, if any, as it may deem proper and prescribe, remove
the Trustee and appoint a successor Trustee.
(3) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Debentures, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(4) If at any time:
(a) the Trustee shall fail to comply with Section 608(1) after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Debenture for at least six months, or
(b) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Debenture for at least six months,
or
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(c) the Trustee shall become incapable of acting or shall be
adjudged a 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, (i) the Company by a
Company Resolution may remove the Trustee, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Debenture for at least six months,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(5) 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, the
Company, by a Company Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Debentureholders of a majority in principal amount of the Outstanding Debentures
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed, forthwith upon its acceptance of such appointment, shall become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Debentureholders and accepted appointment in the manner hereinafter provided,
any Holder who has been a bona fide holder of a Debenture for at least six
months, on behalf of himself and all others similarly situated, may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(6) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to all
Debentureholders as their names and addresses appear in the Debenture Register.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder 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 request of the Company or the
successor Trustee, such retiring Trustee, upon payment of its charges, shall
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, subject nevertheless to its lien, if any,
provided for in Section 607. Upon 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.
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.
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SECTION 612. 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 that
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 613. Preferential Collection of Claims Against Company.
(1) Subject to Subsection (2) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection (3) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Debentures and the holders of other indenture securities, as defined in
Subsection (3) of this Section:
(a) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three-month period and valid as
against the Company and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in paragraph (2) of
this Subsection, or from the exercise of any right of set off which the Trustee
could have exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(b) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in satisfaction or
composition thereof or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property if disposed of,
subject, however, to the rights, if any, of the Company and its other creditors
in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(i) to retain for its own account (A) payments made
on account of any such claim by any Person (other than the Company) who is
liable thereon, (B) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (C) distributions made in cash, securities or
other property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law;
50
(ii) to realize for its own account upon any property
held by it as security for any such claim, if such property was so held prior to
the beginning of such three-month period;
(iii) to realize for its own account but only to the
extent of the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the beginning of
such three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain the
burden of proving that at the time such property was so received the Trustee had
no reasonable cause to believe that a default, as defined in Subsection (3) of
this Section, would occur within three months; or
(iv) to receive payment on any claim referred to in
paragraph (ii) or (iii), against the release of any property held as security
for such claim as provided in paragraph (ii) or (iii), as the case may be, to
the extent of the fair value of such property.
For the purposes of paragraphs (ii), (iii) and (iv), property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution, to the extent of the fair value of
the property released, shall have the same status as the property released and,
to the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Debentureholders and the holders of other indenture securities
in such manner that the Trustee, the Debentureholders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Debentureholders and the holders of other indenture securities dividends on
claims filed against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or applicable State
law, but after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special account. As
used in this paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceedings for reorganization is pending shall
have jurisdiction (i) to apportion among the Trustee, the Debentureholders and
the holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee and the Debentureholders and the
51
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such three-month period, it shall be
subject to the provisions of this Subsection if and only if the following
conditions exist: (i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and (ii) such
receipt of property or reduction of claim occurred within three months after
such resignation or removal.
(2) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
(a) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(b) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture for the purpose of preserving any
property which shall at any time be subject to the lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances thereon, if notice of
such advances and of the circumstances surrounding the making thereof is given
to the Debentureholders at the time and in the manner provided in this
Indenture;
(c) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar capacity;
(d) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (3) of this
Section;
(e) the ownership of stock or other securities of a
corporation organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, which is directly or indirectly a creditor of the
Company; and
(f) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (3) of this
Section.
52
(3) For the purposes of this Section only:
(a) the term "default" means any failure to make payment in
full of the principal of or interest on any of the Debentures or upon the other
indenture securities when and as such principal or interest become due and
payable;
(b) the term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under which a
default exists at the time of the apportionment of the funds and property held
in such special account;
(c) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand;
(d) the term "self-liquidating paper" means any draft, xxxx of
exchange, acceptance or obligation which is made, drawn, negotiated or incurred
by the Company for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, xxxx of exchange,
acceptance or obligation;
(e) the term "Company" means any obligor upon the Debentures;
and
(f) the term "Federal Bankruptcy Act" means the Bankruptcy Act
or Title 11 of the United States Code.
53
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Debentures remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents which shall be authorized to act
on behalf of the Trustee to authenticate Debentures issued upon original
issuance, exchange, registration of transfer or partial redemption thereof or
pursuant to Section 307, 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. Wherever reference is
made in this Indenture to the authentication and delivery of Debentures by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $10,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of such supervising or examining authority, for
the purposes of this Section, the combined capital and surplus of such
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Debentureholders
as their names and addresses appear in the Debenture Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent herein. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
54
If an appointment is made pursuant to this Section, the Debentures may
have endorsed thereon, in lieu of the form of certificate of authentication set
forth in Section 204, a certificate of authentication in the following form:
"This is one of the Debentures described in the within
mentioned Indenture."
------------------------------------
As Trustee
By
---------------------------------
As Authenticating Agent
By
---------------------------------
Authorized Signature
55
ARTICLE SEVEN
DEBENTUREHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Debentureholders.
The Company will furnish or cause to be furnished to the Trustee:
(1) quarterly, not later than first day of the month in which an
Interest Payment Date occurs, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Debentureholders as of such Regular
Record Date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than fifteen (15) days prior to the time
such list is furnished;
provided, however, that such list need not be furnished so long as the Trustee
is the Debenture Registrar.
The Trustee shall furnish, and the Company shall cause the Trustee to
furnish, to Xxxxxx & Xxxxxxxxx Financial Services, Inc. or its successor
("Xxxxxx & Xxxxxxxxx") at such times as Xxxxxx & Xxxxxxxxx may reasonably
request in writing, within 30 days of the receipt by the Trustee of such
request, a list of the names and addresses of the Debentureholders as of a date
not more than 15 days prior to the time such list is furnished.
SECTION 702. Preservation of Information; Communications to
Debentureholders.
(1) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Debentureholders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Debentureholders received by the Trustee in its capacity as
Debenture Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(2) If three or more Debentureholders (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 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 Debentureholders
with respect to their rights under this Indenture or under the Debentures and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five business
days after the receipt of such application, at its election, either
(a) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(1), or
(b) inform such applicants as to the approximate number of
Debentureholders whose names and addresses appear in the information
56
preserved at the time by the Trustee in accordance with Section 702(1)
and as to the approximate cost of mailing to such Debentureholders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appears in the information preserved
at the time by the Trustee in accordance with Section 702(1) a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the
Debentureholders or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed and, on notice to the Trustee, shall enter an order refusing to sustain
any of such objections or if, after the entry of an order sustaining one or more
of such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such applicants respecting their applications.
(3) 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
Debentureholders in accordance with Section 702(2), 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 702(2).
SECTION 703. Reports by the Company.
The Company shall:
(1) File with the Trustee, within 15 days after the Company is required
to file the same with the Commission or to mail the same to its shareholders,
copies of the quarterly reports, annual reports and the information, documents
and other reports (or copies of such portions of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 12 or 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), or to
mail to its shareholders pursuant to Section 14(a) thereof. The Company agrees
to make all filings with the Commission required by Section 15(d) of the 1934
Act without regard to the number of holders of record of the Debentures.
(2) File with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations.
57
(3) Within 15 days after the date on which the Company is required to
file reports with the Commission under the 1934 Act, or within 15 days after
such date would have occurred had the Company been required to file reports
under the 1934 Act, the Company shall transmit copies of such reports by mail to
all Debentureholders, as their names and addresses appear on the Debenture
Register, without cost to such Debentureholders.
(4) Transmit by mail to all Debentureholders, as their names and
addresses appear in the Debenture Register, within 30 days after the filing
thereof with the Trustee (unless some other time shall be fixed by the
Commission) (a) any annual report filed with the Trustee pursuant to paragraph
(1) of this Section; (b) summaries, including a balance sheet and income
statement, of the quarterly reports filed with the Trustee pursuant to paragraph
(1) of this Section, provided, however, that, if requested by a Debentureholder,
the Company shall transmit to such Debentureholder, within 15 days after such
request, a copy of the Company's quarterly report as filed with the Commission;
and (c) any other information, documents or reports required to be filed by the
Company pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.
(5) File with the Trustee within 45 days after the end of each of the
Company's fiscal quarters a certificate of the Chief Executive Officer and the
Controller of the Company stating that the Company is in compliance with Article
Ten, setting forth the calculations supporting such certification, where
applicable, and attaching the unaudited financial statements of the Company, and
file a supplemental certificate to the same effect attaching the audited
financial statements of the Company promptly after such statements become
available.
(6) File with the Trustee, within 90 days after the end of each fiscal
year of the Company ending after the date hereof, a certificate of the Chief
Executive Officer and Controller of the Company as to such person's knowledge of
the Company's compliance with all conditions and covenants under this Indenture,
such compliance to be determined without regard to any period of grace
requirement of notice provided under this Indenture.
SECTION 704. Reports by Trustee.
(1) Within sixty (60) days of May 15 each year commencing with the year
1995, the Trustee shall transmit by mail to all Debentureholders, as hereafter
provided for, a brief report with respect to the following, provided that no
report need be transmitted if no event requiring to be disclosed in the report
has occurred:
(a) any change to its eligibility under Section 609 and its
qualifications under Section 608, or in lieu thereof, if to the best of its
knowledge it has continued to be eligible and qualified under said Section, a
written statement to such effect;
58
(b) the creation of or any material change to a relationship
specified in paragraphs (e) through (f) of subsection (3) of Section 608;
(c) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on the trust estate or any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if the unpaid aggregate of such
advances does not exceed 1/2 of 1% of the principal amount of the Debentures
Outstanding on the date of such report;
(d) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the Debentures) to
the Trustee in its corporate capacity, on the date of such report, with a brief
description of any property held as collateral security therefor, except an
indebtedness based upon a creditor relationship arising in any manner described
in Section 612(2)(b), (c), (d) or (f);
(e) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(f) any additional issue of Debentures which the Trustee has
not previously reported; and
(g) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its opinion
materially affects the Debentures, except action in respect of a default, notice
of which has been or is to be withheld by the Trustee in accordance with Section
602.
(2) The Trustee shall transmit by mail to all Debentureholders, as
their names and addresses appear in the Debenture Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (1) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Debentures, on property or funds held or collected by it as Trustee and
which it has not previously reported pursuant to this subsection, except that
the Trustee shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of the Debentures Outstanding at such time, such report to be
transmitted within 90 days after such time.
(3) Reports pursuant to this Section 704 shall be transmitted by mail
to all Debentureholders, as the names and addresses of such Debentureholders
appear upon the Debenture Register.
(4) A copy of each such report, at the time of such transmission to
Debentureholders, shall be filed by the Trustee with each stock exchange or
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market upon which the Debentures are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Debentures are listed on
any stock exchange.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or any Subsidiary or convey, transfer
or lease its properties and assets substantially as an entirety to the Company
or any Subsidiary, unless:
(1) in case the Company shall consolidate with or merge into another
corporation, trust or entity, the Person formed by such consolidation or into
which the Company is merged shall be a trust, corporation or other entity
organized and existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee and counsel to the Trustee, the due and punctual payment of the
principal of, premium, if any, and interest on all the Debentures and the
performance of every covenant of this Indenture on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction, and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, with the passage of time or the giving of notice, would become an Event
of Default, shall have occurred and be continuing;
(3) the Company, or the surviving entity, as the case may be,
immediately before and immediately after giving effect to such transaction or
series of transactions (including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in respect of such
transaction or series of transactions) shall have a Consolidated Tangible Net
Worth equal to or greater than the amount required by Section 1012 hereof;
(4) immediately after giving effect to such transaction or series of
transactions, the Company or the surviving entity, as the case may be, could
incur $1.00 of Indebtedness pursuant to paragraph (3) of Section 1007 hereof;
and
(5) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
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SECTION 802. Successor Substituted.
Upon any consolidation or merger of the Company with or into any other
corporation, trust or other entity in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter the predecessor Person shall be relieved
of all obligations and covenants under this Indenture and the Debentures.
SECTION 803. Effect of Change in Control.
The provisions of this Article Eight shall not affect the operation of
Section 1102 regarding redemption of the Debentures upon a Change of Control. In
the event any transaction entered into pursuant to this Article Eight shall
constitute a Change of Control, Section 1102 shall control.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Debentureholders.
Without the consent of any Debentureholders, the Company, when
authorized by a Company 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:
(1) to evidence the succession of another trust, corporation or other
entity to the Company and the assumption by any such successor of the covenants
of the Company herein and in the Debentures; or
(2) to add to the covenants of the Company for the benefit of the
Debentureholders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for acceptance of appointment of a
successor trustee; or
(4) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
provided that such action pursuant to this paragraph (5) shall not adversely
affect the interests of the Debentureholders.
SECTION 902. Supplemental Indentures with Consent of Debentureholders.
With the consent of the Holders of not less than 66-2/3% aggregate
principal amount of the Outstanding Debentures, by Act of such Debentureholders
delivered to the Company and the Trustee, the Company, when authorized by a
Company 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 Debentureholders under this Indenture,
provided that without the consent of the Holder of each Outstanding Debenture
affected thereby, no such supplemental indenture shall,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Debenture, or any premium payable on the redemption thereof,
or reduce the principal amount thereof or the rate of interest thereon, or
change the place of payment where, or the coin or currency in which, any
Debenture or the interest thereon is payable, or impair the right to 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
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(2) reduce the percentages in principal amount of the Outstanding
Debentures, the consent of whose Debentureholders is required for any such
supplemental indenture, or the consent of whose Debentureholders is required for
any waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513, or
Section 1013, except to increase any such percentage 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
(4) modify any of the provisions of this Indenture relating to the
subordination of the Debentures in a manner adverse to the Debentureholders.
It shall not be necessary for any Act of Debentureholders 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 903. 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 601) 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
(except to the extent required in the case of a supplemental indenture entered
into under Section 901(4)) be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, 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 905. Reference in Debentures to Supplemental Indentures.
Debentures 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 so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Debentures.
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SECTION 906. Effect on Senior Debt.
No supplemental indenture shall adversely affect the rights of any
holder of Senior Debt under Article Twelve without the consent of such holder.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of, premium, if
any, and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in Minneapolis or in St. Xxxx, Minnesota, an
office or agency where Debentures may be presented or surrendered for payment,
where Debentures may be surrendered for registration of transfer or exchange,
and where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location and any change in the location, of
such office or agency. Until otherwise designated by the Company in a written
notice to the Trustee, and if at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee its agent to receive such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations,
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in Minneapolis or St.
Xxxx, Minnesota, for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee set forth in the first paragraph of this instrument as an agency of
the Company.
SECTION 1003. Money for Debenture Payments to be Held in Trust
Whenever the Company shall have one or more Paying Agents, on or prior
to each due date of the principal of (and premium, if any) or interest on any
Notes, it will deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal (and premium, if any)
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent 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:
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(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Notes 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;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal (and premium,
if any) or interest on the Notes; and
(3) 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. 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.
Unless otherwise required by applicable law, 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 premium, if any) or interest on any Note and
remaining unclaimed for two years after such principal (and premium, if any) 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.
The Holder of such Note 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, shall thereupon cease, provided that the Trustee or
such Paying Agent, before being required to make any such repayment, at the
expense of the Company, may cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in Minneapolis or Saint Xxxx, Minnesota, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than thirty (30) days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. Maintenance of Corporate Existence, Licensing and Rights.
Subject to Article Eight hereof, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect the
corporate existence of the Company and each Subsidiary, and all material rights,
certificates, authorities, licenses, permits and approvals of any of them, and
shall conduct its business in conformity with the requirements of such rights,
certificates, authorities, licenses, permits and approvals provided that the
Company shall not be required to preserve any such right, certificate,
authority, license or permit if the Board of Directors of the Company shall
reasonably and in good faith determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company or of its
Subsidiaries and that the loss thereof is not disadvantageous in any material
respect to the Debentureholders.
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SECTION 1005. Payment of Taxes and Assessments.
The Company and each of its Subsidiaries will cause to be paid and
discharged all lawful taxes, assessments and governmental charges or levies
imposed upon the Company or any Subsidiary or upon the income or profits of the
Company or any Subsidiary or upon property or any part thereof belonging to the
Company or any Subsidiary before the same shall be in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such property or any part thereof, provided that the Company
shall not be required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and for which
disputed amounts adequate reserves (in the good faith judgment of the Board of
Directors of the Company) have been established.
SECTION 1006. Maintenance of Properties, Insurance; Books and Records;
Compliance with Law.
(1) The Company and each of its Subsidiaries shall maintain insurance
in such amounts and covering such risks as are usually and customarily carried
with respect to similar facilities according to their respective locations.
(2) The Company and each of its Subsidiaries shall cause all its
properties (including leased properties) used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this subsection (2) shall
prevent the Company or any Subsidiary from discontinuing the operation and
maintenance of any of its properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and not disadvantageous
in any material respect to the Debentureholders.
(3) The Company and each of its Subsidiaries shall keep proper books of
record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company and each
Subsidiary, in accordance with GAAP consistently applied to the Company and its
Subsidiary taken as a whole.
(4) The Company and each of its Subsidiaries shall comply with all
statutes, laws, ordinances, or government rules and regulations, including
rules, regulations and orders of governmental agencies, decrees, orders,
injunctions, writs to which it is subject, noncompliance with which would
adversely affect the business, prospects, earnings, properties, assets or
condition (financial or otherwise) of the Company and its Subsidiary taken as a
whole.
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SECTION 1007. Limitation on Additional Indebtedness.
The Company shall not, and shall not permit any Subsidiary to, create,
incur, assume or issue, directly or indirectly, or guarantee or in any manner
become, directly or indirectly, liable for or with respect to the payment of any
Indebtedness, except for:
(1) Indebtedness under the Debentures and this Indenture;
(2) Indebtedness of the Company and any Subsidiary not otherwise
referred to in this Section 1007 outstanding on the Issue Date (specifically
including the full amount available to the Company or its Subsidiary pursuant to
the loan agreements referred to in clause (i) of the definition of "Senior Debt"
contained in Section 101 hereof);
(3) Indebtedness (plus interest, premium, fees and other obligations
associated therewith, that, immediately after giving pro forma effect to the
incurrence thereof, (i) does not cause the ratio of Indebtedness to Consolidated
Tangible Net Worth to exceed 4:1; (ii) does not cause the ratio of the sum of
(a) Debentures Outstanding plus (b) all Parity Debt to Consolidated Tangible Net
Worth to exceed 1:1; (iii) does not cause the ratio of cash and Cash Equivalents
plus Inventory plus Contracts and Mortgages Receivable to Senior Debt to be less
than 1.5:1; and (iv) does not cause the ratio of Consolidated Earnings Before
Interest and Taxes plus Depreciation and Amortization to Consolidated Interest
Expense plus the amount of principal payments on Indebtedness not secured by
land or Contracts and Mortgages Receivable for the immediately preceding four
full fiscal quarters or four times the most recent fiscal quarter for which
financial statements are available, whichever is greater, to be less than 1.5:1;
or
(4) any deferrals, renewals, extensions, replacements, refinancings or
refundings of, or amendments, modifications or supplements to, Indebtedness
incurred under clause (3) above, whether involving the same or any other lender
or creditor or group of lenders or creditors, provided that any such deferrals,
renewals, extensions, replacements, refinancings, refundings, amendments,
modifications or supplements (i) shall not provide for any mandatory redemption,
amortization or sinking fund requirement in an amount greater than or at a time
prior to the amounts and times specified in the Indebtedness being deferred,
renewed, extended, replaced, refinanced, refunded, amended, modified or
supplemented, (ii) shall not exceed the principal amount (plus accrued interest
and prepayment premium, if any) of the Indebtedness being renewed, extended,
replaced, refinanced or refunded and (iii) shall be subordinated to the
Debentures at least to the extent and in the manner, if at all, that the
Indebtedness being renewed, extended, replaced, refinanced or refunded is
subordinated to the Debentures.
SECTION 1008. Limitations on Restricted Payments.
The Company shall not make and shall not permit any Subsidiary to make,
directly or indirectly, any Restricted Payment:
(1) if at the time of such action an Event of Default shall have
occurred and be continuing or with the lapse of time will occur, after giving
effect to such Restricted Payment; or
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(2) if at the time, upon giving effect to such Restricted Payment, the
Company could not incur at least $1.00 of Indebtedness pursuant to paragraph (3)
of Section 1007 hereof; or
(3) if, immediately after giving effect to such Restricted Payment, (a)
the aggregate of all Restricted Payments made in fiscal 1995 exceeds $300,000,
or (b) the aggregate of all Restricted Payments declared or made from the date
of this Indenture, through and including the date of such Restricted Payment
(the "Base Period") exceeds 50% of the audited Consolidated Net Income
accumulated subsequent to December 31, 1994 as determined in accordance with the
Company's audited financial statements as of the end of each fiscal year.
SECTION 1009. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit, cause or suffer any
Subsidiary of the Company to, conduct any business or enter into any transaction
or series of transactions with or for the benefit of any Affiliate or any
Subsidiary of the Company, or any holder of 5% or more of any class of capital
stock of the Company (each an "Affiliate Transaction"), except in good faith and
on terms that are, in the aggregate, no less favorable to the Company or such
Subsidiary, as the case may be, than those that could have been obtained in a
comparable transaction on an arm's-length basis from a Person not an Affiliate
of the Company or such Subsidiary.
SECTION 1010. Limitation on Dividends and Other Payment Restrictions
Affecting a Subsidiary/Restricted Subsidiary.
If the Company or any Subsidiary of the Company, directly or
indirectly, creates or otherwise causes or suffers to exist or become effective
or enters into any agreement with any Person that would cause or create any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary of the Company to (a) pay dividends, in cash or otherwise, or make
any other distributions on its capital stock or any other interest or
participation in, or measured by, its profits owned by the Company or a
Subsidiary of the Company, (b) make any loans or advances to, or pay any
Indebtedness owed to, the Company or any Subsidiary of the Company or (c)
transfer any of its properties or assets to the Company or to any Subsidiary of
the Company, except, in each case, for such encumbrances or restrictions
existing under or contemplated by or by reason of (i) the Debentures or this
Indenture, (ii) any restrictions existing under agreements in effect on the
Issue Date, and (iii) any restrictions existing under any agreement that
refinances or replaces an agreement containing a restriction permitted by clause
(i) or (ii) above, provided that the terms and conditions of such restrictions
are not materially less favorable in the aggregate to the Debentureholders than
those under or pursuant to the agreement being replaced or the agreement
evidencing the Indebtedness being refinanced or replaced, such affected
Subsidiary shall be deemed a "Restricted Subsidiary" for purposes of this
Agreement.
SECTION 1011. Intentionally Omitted.
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SECTION 1012. Net Worth.
The Company will at all times during the term of the Debentures keep
and maintain Consolidated Tangible Net Worth at an amount not less than Four
Million Dollars ($4,000,000) plus 50% of positive Consolidated Net Income earned
after December 31, 1994.
SECTION 1013. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with the
covenants set forth in Section 1004 through 1012, inclusive, if before the time
for such compliance the Debentureholders of at least two-thirds in aggregate
principal amount of the Outstanding Debentures shall, by Act of such
Debentureholders, either waive such compliance in such instance or generally
waive compliance with such covenants, but no such waiver shall extend to or
affect such covenant except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of such covenant shall remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF DEBENTURES
SECTION 1101. Optional Redemption.
The Debentures may not be redeemed at the option of the Company prior
to January 1, 1998. Thereafter a minimum aggregate principal amount of $100,000
of Debentures may be redeemed at the option of the Company, in whole or in part,
at a Redemption Price (expressed as a percentage of the principal amount
redeemed) set forth below for each maturity plus interest accrued to the
Redemption Date, if redeemed during the twelve-month period beginning January 1
of each of the following years:
Maturity 1998 1999 2000 2001 2002 2003 2004
-------- ---- ---- ---- ---- ---- ---- ----
Jan. 1, 2001 102% 101% Par --- --- --- ---
Jan. 1, 2002 103% 102% 101% Par --- --- ---
Jan. 1, 2003 104% 103% 102% 101% Par --- ---
Jan. 1, 2004 105% 104% 103% 102% 101% Par ---
Jan. 1, 2005 106% 105% 104% 103% 102% 101% Par
SECTION 1102. Mandatory Redemptions.
(1) Except as provided in subsection (2) of this Section 1102, upon the
occurrence of a Change of Control at any time during the term of the Debentures,
the Company shall immediately redeem the Debentures in whole, at a Redemption
Price (expressed as a percentage of the principal amount redeemed) set forth
below for each maturity plus interest accrued to the Redemption Date, if
redeemed during the twelve month periods beginning January 1 of each of the
following years:
1995
through
Maturity 1998 1999 2000 2001 2002 2003 2004
-------- ---- ---- ---- ---- ---- ---- ----
Jan. 1, 2001 102% 101% Par --- --- --- ---
Jan. 1, 2002 103% 102% 101% Par --- --- ---
Jan. 1, 2003 104% 103% 102% 101% Par --- ---
Jan. 1, 2004 105% 104% 103% 102% 101% Par ---
Jan. 1, 2005 106% 105% 104% 103% 102% 101% Par
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SECTION 1103. Applicability of Article.
Redemption of Debentures at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, or any supplement
hereto shall be made in accordance with such provisions and this Article,
provided that no Redemption shall be made under this Article during any period
in which an Event of Default, or an event which, with notice or lapse of time or
both, would constitute an Event of Default, has occurred and is continuing.
SECTION 1104. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Debentures pursuant to
Section 1101 shall be evidenced by a Company Resolution. In case of any
redemption at the election of the Company of less than all the Debentures, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), the Company shall notify
the Trustee of such Redemption Date and of the aggregate principal amount of
Debentures to be redeemed and shall deliver to the Trustee such documentation
and records as shall enable the Trustee to select the Debentures to be redeemed
pursuant to Section 1105.
SECTION 1105. Selection by Trustee of Debentures to Be Redeemed.
If less than all the Debentures are to be redeemed, the Debentures to
be redeemed shall be selected by the Trustee in inverse order of maturity. If
less than all of the Debentures within a particular maturity are to be redeemed,
the particular Debentures to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Debentures
within a maturity not previously called for redemption, by lot or in any manner
deemed by the Trustee to be proper. In case there are Outstanding Debentures of
a denomination greater than $1,000, for the purpose of determining by lot the
portions of Debentures to be redeemed, the Trustee may assign numbers to the
units of $1,000 represented by such Outstanding Debentures, or may draw by lot
the portions of such Debentures to be redeemed in such other manner as it may
determine. The Trustee shall promptly notify the Company in writing of the
distinctive numbers of the Debentures which, or portions of which, have been
selected for redemption, and the principal amount thereof to be redeemed in the
case of Debentures of a denomination greater than $1,000.
The Trustee shall promptly notify the Company and each Debenture
Registrar in writing of the Debentures selected for redemption and, in the case
of any Debentures 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 shall relate,
in the case of any Debentures redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed.
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SECTION 1106. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Debentures to be redeemed, at the address appearing in
the Debenture Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Debentures are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts)
of the particular Debentures to be redeemed,
(4) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Debenture to be redeemed and that interest thereon
will cease to accrue on and after said date, and
(5) the place or places where such Debentures are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, upon Company Request, by the
Trustee in the name and at the expense of the Company.
SECTION 1107. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent in immediately available funds an amount of money
sufficient to pay the Redemption Price of all the Debentures which are to be
redeemed on that date.
SECTION 1108. Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall become, on the Redemption Date, due and payable at the
Redemption Price therein specified, and on 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, such Debenture
shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date, exclusive of installments of interest whose
Stated Maturity is on or prior to the Redemption Date, which shall be payable to
the Debentureholders 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 307.
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If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Debenture.
SECTION 1109. Debentures Redeemed in Part.
Any Debenture which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Debenture without service charge,
a new Debenture or Debentures, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debenture so surrendered.
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ARTICLE TWELVE
SUBORDINATION OF DEBENTURES
SECTION 1201. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Debentures by such
Holder's acceptance thereof (whether upon original issue or upon transfer or
assignment) likewise covenants and agrees, that 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 is hereby expressly subordinated, and
junior to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all Senior Debt.
SECTION 1202. Distribution of Assets, Etc.
Upon any distribution of assets of the Company upon any dissolution,
winding-up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Company or upon any acceleration or maturity of the Debentures or
otherwise:
(1) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof (and premium, if any)
and interest due thereon, or adequate provisions shall be made for such
payment, before the Debentureholders of the Debentures are entitled to
receive any payment on account of the principal of (or premium, if any)
or interest on the Indebtedness evidenced by the Debentures; and
(2) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities, to
which the Debentureholders of the Debentures or the Trustee would be
entitled except for the provisions of this Article Twelve shall be paid
or delivered by the person making such payment or distribution, whether
a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Senior Debt which may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Debt held or represented by each, to the extent
necessary to make payment in full of all Senior Debt remaining unpaid
after giving effect to any concurrent payment or distribution (or
provision therefore) to the holders of such Senior Debt.
SECTION 1203. No Payment to Debentureholders if Senior Debt is in Default.
(a) Upon the maturity of any Senior Debt by lapse of time, acceleration
or otherwise, all principal thereof (and premium, if any) and interest due
thereon shall first be paid in full, or such payment duly provided for in cash
or in a manner satisfactory to the holder or holders of such Senior Debt before
any payment is made on account of the principal of (or premium, if any) or
interest on the Debentures or to acquire any of the Debentures.
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(b) Upon the happening of an event of default with respect to any
Senior Debt, as such event of default is defined therein or in the instrument
under which it is outstanding, permitting the holders to accelerate the maturity
thereof, and, if the default is other than default in payment of the principal
of (or premium, if any) or interest on such Senior Debt, upon written notice
thereof given to the Company and the Trustee by the holder or holders of such
Senior Debt or their representative or representatives, then, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist, no payment shall be made by the Company with respect to the principal (or
premium, if any) or interest on the Debentures or to acquire any of the
Debentures.
SECTION 1204. Subrogation.
Subject to the payment in full of all Senior Debt, the Holders of the
Debentures shall be subrogated to the rights of the holders of Senior Debt to
receive payments or distributions of cash, property or securities of the Company
applicable to the Senior Debt until all amounts owing on the Debentures shall be
paid in full, and, as between the Company, its creditors other than holders of
Senior Debt, and the Debentureholders of the Debentures, no such payment or
distribution made to the holders of Senior Debt by virtue of this Article Twelve
which otherwise would have been made to the Holders of the Debentures shall be
deemed to be a payment by the Company on account of the Senior Debt, it being
understood that the provisions of this Article Twelve are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Debentures, on the one hand, and the holders of Senior Debt, on the other hand.
SECTION 1205. Obligation of Company Unconditional.
Nothing contained in this Article Twelve or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the 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 affect the relative rights of the Holders of
the Debentures and creditors of the Company other than the holders of Senior
Debt, nor shall anything herein or exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article Twelve of the holders of Senior Debt in respect of cash,
property or securities of the Company received upon the exercises of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Twelve, the Trustee and the Debentureholders of the Debentures
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding-up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the liquidating trustee or agent or other person making
any payment or distribution to the Trustee or to the Debentureholders of the
Debentures for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of the Senior Debt and other
Indebtedness or the Company, the amount thereof or payable thereon, the amount
paid or distributed thereon and all other facts pertinent thereto or to this
Article Twelve.
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SECTION 1206. Payments on Debentures Permitted.
Nothing contained in this Article Twelve or elsewhere in this
Indenture, or in any of the Debentures, shall (a) affect the obligation of the
Company to make, or prevent the Company from making, at any time except during
the pendency of any dissolution, winding-up, liquidation of reorganization
proceeding, and except during the continuance of any event of default specified
in Section 1203 (not cured or waived), payments at the Stated Maturity of
principal of (or premium, if any) or interest on the Debentures, or (b) prevent
the application by the Trustee or any Paying Agent of any moneys held by the
Trustee or such Paying Agent, in trust for the benefit of the Debentureholders
of Debentures as to which notice of redemption shall have been mailed or
published at least once prior to the happening of an event of default specified
in Section 1203, to the payment of or on account of the principal of (and
premium, if any) and interest on such Debentures, (c) prevent the application by
the Trustee or any Paying Agent of any moneys deposited prior to the happening
of any event of default specified in Section 1203, with the Trustee or such
Paying Agent in trust for the purpose of paying a specified installment or
installments of interest on the Debentures, to the payment of such installments
of interest on the Debentures, or (d) prevent the application by the Trustee of
the proceeds of the Key-man Insurance in accordance with Sections 1402 and 1403.
SECTION 1207. Effectuation of Subordination by Trustee.
Each Holder of Debentures, by such Holder's acceptance thereof,
authorizes and directs the Trustee in such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve and appoints the Trustee such Holder's attorney-in-fact for
any and all such purposes.
SECTION 1208. Knowledge of Trustee.
Notwithstanding the provisions of this Article Twelve or any other
provisions of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee, or the taking of any other action by the Trustee,
unless and until the Trustee shall have received written notice thereof, within
one business day prior to the relevant payment date, from the Company, any
Holder, any Paying Agent or the holder or representative or any class of Senior
Debt.
SECTION 1209. Rights of Holders of Senior Debt Not Impaired.
No right of any present or future holder of any Senior Debt to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of 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.
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SECTION 1210. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it shall
in good faith pay over or distribute to the Debentureholders of the Debentures,
to the Company or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or otherwise.
SECTION 1211. Rights of Trustee as Holder of Senior Debt.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
SECTION 1212. 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 shall otherwise
require) 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.
SECTION 1213. Rights and Obligations Subject to Power of Court.
The rights of the holders of Senior Debt and the obligations of the
Trustee and the Debentureholders set forth in this Article Twelve are subject to
the power of a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in this Indenture upon the Senior Debt and the
holders thereof with respect to the Debentures and the Debentureholders thereof
by a plan or reorganization under applicable bankruptcy law.
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ARTICLE THIRTEEN
REDEMPTION AT OPTION OF HOLDER
IN CERTAIN CIRCUMSTANCES
SECTION 1301. Redemption Option Upon Death of Holder.
Upon the death of any Holder of a Debenture or Debentures, the Company
shall be required to redeem at par up to $20,000 principal amount of, together
with interest accrued to the Redemption Date on, all or such part (in integral
multiples of $1,000) of the Debentures held by the deceased Holder of such
Debentures at the date of such Holder's death, as requested in the manner, and
subject to the limitations, set forth below. Redemption of such Debentures shall
be made within 30 days following the receipt by the Company or the Trustee of
the following:
(1) a written request for redemption of the Debenture signed
by a duly authorized representative of the deceased Holder, which request shall
set forth the name of the deceased Holder, the date of death of the deceased
Holder and the principal amount of the Debentures to be redeemed;
(2) the certificates representing the Debentures to be
redeemed; and
(3) evidence satisfactory to the Trustee and the Company of
the death of such deceased Holder and the authority of the representative to the
extent as may be required by Trustee.
The Debentures held by the deceased Holder shall not be entitled to redemption
pursuant to this Section unless each of the following conditions are met:
(i) the debentures to be redeemed have been registered on the
Debenture Register in the deceased Holder's name since their Date of Issue or
for a period of at least six months prior to the date of the deceased Holder's
death, whichever is less;
(ii) either the Company or the Trustee has been notified in
writing of the request for redemption within 180 days after the date of the
deceased Holder's death; and
(iii) not more than $100,000 principal amount of Debentures
(including those subject to the particular redemption request) have been
redeemed from Holders in the past twelve months pursuant to this Section 1301.
Authorized representatives of a Holder shall include only the
following: executors, administrators or other legal representatives of an
estate; trustee of a trust; joint owners of Debentures owned in joint tenancy or
tenancy by the entirety; custodians; conservators; guardians; attorneys-in-fact;
and other persons generally recognized as having legal authority to act on
behalf of another.
For purposes of this Article Thirteen the death of a person owning a
Debenture in joint tenancy or tenancy by the entirety with another or others
shall be deemed the death of the Holder of the Debenture, and the entire
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principal amount of the Debenture so held (up to $20,000) shall be subject to
redemption in accordance with the provisions of this Article Thirteen. For
purposes of this Article Thirteen, the death of a person owning a Debenture by
tenancy in common shall be deemed the death of a Holder of a Debenture only with
respect to the deceased Holder's interest in the Debenture so held (up to
$20,000) by tenancy in common; except that in the event a Debenture is held by
husband and wife as tenants in common, the death of either shall be deemed the
death of the Holder of the Debenture, and the entire principal amount of the
Debenture so held shall be subject to redemption in accordance with the
provisions of this Article Thirteen. A Person who, during his or her lifetime,
was entitled to substantially all of the beneficial interest of ownership of a
Debenture will, upon such person's death, be deemed the Holder thereof for
purposes of this Article Thirteen, regardless of the registered Holder, if such
beneficial interest can be established to the satisfaction of the Trustee. Such
beneficial interest will be deemed to exist in typical cases of street name or
nominee ownership, ownership under the Uniform Gifts to Minors Act, community
property or other joint ownership arrangements between a husband and wife, and
trust arrangement where one person has substantially all of the beneficial
ownership interest in the Debenture during his or her lifetime. Beneficial
interests shall include the power to sell, transfer or otherwise dispose of a
Debenture and the right to receive the proceeds therefrom, as well as interest
and principal payment with respect thereto.
SECTION 1302. Redemption of Debentures.
Within 30 days after the receipt of the Company or the Trustee of any
request for redemption of the Debentures ( or any portion thereof) duly made
pursuant to section 1301, the Company shall deposit with the Trustee or with a
Paying Agent an amount of money sufficient to repay the principal amount of all
Debentures which are to be redeemed, together with interest accrued thereon to
the Redemption Date, exclusive of installments of interest with a Stated
Maturity on or prior to the Redemption Date, payment of which shall have been
made or duly provided for to the registered Holders of the Debentures on the
relevant Record Dates in accordance with Section 307. The Debentures so to be
redeemed shall become due and payable on the Redemption Date with respect to
each such Debenture at the amount to be repaid as provided above and from and
after the Redemption Date (unless the Company shall default in such repayment)
such Debenture shall cease to bear interest.
Immediately upon deposit with the Trustee or with a Paying Agent of the
amounts as provided above with respect to each Debenture (or portion thereof),
the Company shall cause such Debenture (or portion thereof) to be repaid.
Installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Debentures registered as such on
the relevant Record Dates according to their terms and the provisions of Section
307.
If any Debenture duly requested to be repaid shall not be repaid upon
the Redemption Date, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Debenture.
No premium shall be payable by the Company upon redemptions of
Debentures pursuant to this Article Thirteen.
If all or any portion of the Debentures otherwise eligible for
redemption under this Article Thirteen are not so repurchased because of the
$100,000 limitation of Section 1301, such unredeemed amount shall be subject to
redemption in the first month thereafter in which such Debentures would then be
so eligible.
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SECTION 1303. Debentures Redeemed in Part.
The Company shall execute and the Trustee shall authenticate and
deliver, with respect to any Debenture surrendered pursuant to this Article
Thirteen and to be repaid only in part, to the Holder of such Debenture, without
service charge, a new Debenture or Debentures, of any authorized denomination as
requested by such holder, in aggregate principal amount equal to and in exchange
for the unrepaid portion of the principal of the Debenture so surrendered and
repaid in part. If required by the Company or the Trustee, such Debenture so
surrendered shall be duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by
the authorized representative of the Holder thereof or his attorney duly
authorized in writing.
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ARTICLE FOURTEEN
KEY-MAN INSURANCE
SECTION 1401. Delivery and Maintenance of Policy.
The Company shall obtain and deliver to the Trustee, for the benefit of
the Debentureholders, a life insurance policy from an insurer acceptable to the
Trustee insuring the life of Xxxxxx Xxxxxx in the amount of $1,000,000 on which
the Debentureholders are the beneficiaries and payees (the "Key-man Insurance").
The Company shall maintain the Key-man Insurance in full force and effect
throughout the term of the Debentures and this Indenture.
SECTION 1402. Insurance Proceeds.
In the event of the death of Xxxxxx Xxxxxx, the proceeds of such policy
shall be held by the Trustee for the benefit of the Debentureholders. Pending
their distribution, the Trustee shall hold such proceeds in a segregated account
and may invest such proceeds in money markets or mutual funds investing only in
direct obligations of the United States of America. Such proceeds and any
interest earned thereon are referred to as the "Insurance Proceeds."
SECTION 1403. Distribution of Insurance Proceeds.
The Insurance Proceeds will be used and distributed only as follows:
(1) In the event that payment of the Debentures is accelerated under
Section 502, the Trustee shall immediately distribute the Insurance Proceeds to
the Debentureholders on a pro rata basis.
(2) Upon payment in full of the principal of, premium, if any, and
interest on all of the Debentures, the Trustee shall distribute any Insurance
Proceeds, not otherwise distributed in accordance with paragraph (1) hereof, to
the Company.
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This Indenture 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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective seals to be hereunto affixed and attested,
all as of the day and year first above written.
XXXXXX INVESTMENT CORPORATION
By
-------------------------------
Its President and
Chief Executive Officer
Attest:
-------------------------------
Secretary
AMERICAN BANK NATIONAL ASSOCIATION,
as Trustee
By
-------------------------------
Its
----------------------------
Attest:
-------------------------------
Trust Officer
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