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UNITED HOMES, INC.,
As Issuer
AND
NATIONAL CITY BANK OF MINNEAPOLIS,
As Trustee
--------------------------------
INDENTURE
Dated as of October ___, 1997
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___ % Mandatory Redemption Debentures Due March 15, 2005
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TABLE OF CONTENTS
PAGE
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 . . . . . . . . . . . 11
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 113. Immunity of Incorporators, Stockholders, Officers
and Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE TWO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
DEBENTURE FORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE THREE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
THE DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 301. Title and Terms Generally. . . . . . . . . . . . . . . . . . 23
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . 24
SECTION 304. Temporary Debentures . . . . . . . . . . . . . . . . . . . . 24
SECTION 305. Registration, Transfer, and Exchange . . . . . . . . . . . . 25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures . . . . . . 26
i
SECTION 307. Payments of Principal and Interest; Rights Preserved . . . . 27
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . 28
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . 28
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . . . 41
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . 42
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . 42
SECTION 604. Not Responsible for Recitals or Issuance of
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 605. Trustee May Hold Debentures. . . . . . . . . . . . . . . . . 43
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . 44
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . 44
ii
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . . . 44
SECTION 609. Trustee Required; Eligibility. . . . . . . . . . . . . . . . 49
SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . 49
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . . . 51
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 613. Preferential Collection of Claims Against Company. . . . . . 51
SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . . . 55
ARTICLE SEVEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
DEBENTUREHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . . . . . 58
SECTION 701. Company to Furnish Trustee Names and Addresses of
Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 702. Preservation of Information; Communications to
Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 703. Reports by the Company . . . . . . . . . . . . . . . . . . . 59
SECTION 704. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE EIGHT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE . . . . . . . . . . . . . 63
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . . . . 63
SECTION 802. Successor Substituted. . . . . . . . . . . . . . . . . . . . 64
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 901. Supplemental Indentures Without Consent of
Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 902. Supplemental Indentures with Consent of
Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . 66
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . . . 66
SECTION 905. Reference in Debentures to Supplemental Indentures . . . . . 66
ARTICLE TEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1001. Payment of Principal and Interest . . . . . . . . . . . . . 68
SECTION 1002. Maintenance of Office or Agency.. . . . . . . . . . . . . . 68
SECTION 1003. Money for Debenture Payments to be Held in Trust. . . . . . 68
SECTION 1004. Maintenance of Corporate Existence, Licensing and
Rights; Existing Business. . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1005. Payment of Taxes and Assessments. . . . . . . . . . . . . . 70
iii
SECTION 1006. Maintenance of Properties, Insurance; Books and
Records; Compliance with Law . . . . . . . . . . . . . . . . . . . . 70
SECTION 1007. Limitation on Additional Indebtedness . . . . . . . . . . . 71
SECTION 1008. Limitations on Restricted Payments. . . . . . . . . . . . . 72
SECTION 1009. Limitation on Transactions with Affiliate Loans . . . . . . 72
SECTION 1010. Limitation on Dividends and Other Payment
Restrictions Affecting a Subsidiary. . . . . . . . . . . . . . . . . 73
SECTION 1011. Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1012. Limitations on Compensation . . . . . . . . . . . . . . . . 73
SECTION 1013. Limitations on Investments. . . . . . . . . . . . . . . . . 74
SECTION 1014. Additional Liens; Negative Pledges. . . . . . . . . . . . . 74
SECTION 1015. Payments on Subordinated Debt . . . . . . . . . . . . . . . 75
SECTION 1016. Waiver of Certain Covenants . . . . . . . . . . . . . . . . 75
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
MANDATORY AND OPTIONAL REDEMPTION OF DEBENTURES. . . . . . . . . . . . . . . . 77
SECTION 1101. Mandatory Redemption. . . . . . . . . . . . . . . . . . . . 77
SECTION 1102. Optional Redemption . . . . . . . . . . . . . . . . . . . . 77
SECTION 1103. Applicability of Article. . . . . . . . . . . . . . . . . . 77
SECTION 1104. Election to Redeem; Notice to Trustee.. . . . . . . . . . . 78
SECTION 1105. Selection by Trustee of Debentures to Be Redeemed . . . . . 78
SECTION 1106. Notice of Redemption. . . . . . . . . . . . . . . . . . . . 78
SECTION 1107. Deposit of Redemption Price . . . . . . . . . . . . . . . . 79
SECTION 1108. Debentures Payable on Redemption Date . . . . . . . . . . . 79
iv
INDENTURE
THIS INDENTURE, dated as of October ___, 1997, between United Homes,
Inc., an Illinois corporation (the "Company"), having its principal office at
0000 Xxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxxxx, XX 00000-0000 and National City
Bank of Minneapolis, a national banking association with trust powers (the
"Trustee"), having its principal office at 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000.
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized an issue of its ___% Mandatory Redemption Debentures (the
"Debentures") in the aggregate principal amount of up to Seven Million
Dollars ($7,000,000), to be issued as fully registered Debentures without
coupons, to be authenticated by the Certificate of 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 and 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 Holders of Debentures 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.
"Adjusted Consolidated Tangible Net Worth" means, with respect to any
Person at any date of determination, such Person's Consolidated Tangible Net
Worth less any loans to Affiliates (other than Subsidiaries).
"Adjusted Total Liabilities" means, Total Liabilities less non-interest
bearing trade payables, non-interest bearing accrued cost of construction and
deposits from home buyers.
"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.
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"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.
"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, (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 Ernst & Young, LLP, or any other independent public accountant or
firm of independent public accountants (who may be the independent public
accountants regularly retained by the Company) reasonably acceptable to the
Trustee. 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.
"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
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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 United Homes, Inc., an Illinois 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.
"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 Net Income" means, with respect to any Person for any
period, the aggregate of the net income of such Person and its 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 intangible assets as determined in accordance with GAAP.
-4-
"Corporate Trust Office," when used with respect to the Trustee means
the principal office of the Trustee in Minneapolis, 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 Xxxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, or the office of any successor Trustee.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 305.
"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.
"Debentures" means the ___% Mandatory Redemption Debentures issued
pursuant to this Indenture.
"Default" means any event which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Defaulted Principal" 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.
-5-
"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, 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 GAAP, 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 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.
"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
-6-
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.
"Initial Amortization Date" means the date of the eighth (8th) Interest
Payment Date.
"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.
"Investments" means the acquisition, purchase, making or holding of any
stock or other security, any loan, advance, contribution to capital,
extension of credit (except for trade and customer accounts receivable for
inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms), any acquisitions of real
or personal property (other than real and personal property acquired in the
ordinary course of business) and any purchase or commitment or option to
purchase stock or other debt or equity securities of or any interest in
another Person or any integral part of any business or the assets comprising
such business or part thereof.
"Issue Date" means the date on which the Debentures are originally
issued in accordance with the terms of this Indenture.
"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, whether arising by
agreement or operation of law. 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.
"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 of Directors, Chief Executive Officer, President, Chief Financial
Officer, or Executive Vice President of the Company, and delivered to the
Trustee.
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"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 who shall be acceptable to the Trustee.
"Original Interest Accrual Date" as to any Debenture, means the date
from which interest shall begin to accrue in connection with the original
issuance of such Debenture, which shall be October ___, 1997, or with respect
to any Debenture sold after any quarterly Interest Payment Date, the most
recent Interest Payment Date.
"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 (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of 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.
"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
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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.
"Principal Payment Date" means the Maturity of the principal on the
Debentures.
"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, and "Regular Record Date"
for the principal payable on any Principal Payment Date means the fifteenth
day (whether or not a Business Day) of the calendar month next preceding such
Principal 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
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), or (ii) the purchase, redemption or other acquisition or retirement
for value of any capital stock of the Company or any 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, or (b) purchases of common stock of a Wholly-Owned Subsidiary
of the Company.
"S Corp Tax Dividends" means, for any taxable year during which the
Company is an S corporation (within the meaning of the Code), those dividends
declared by the Company's Board of Directors in an amount necessary to enable
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the Company's shareholders to pay their S corporation tax burden, provided
such amount shall not exceed 100% of the amount the Company would be required
to pay in taxes if the Company were a C corporation (within the meaning of
the Code) for tax purposes.
"Special Record Date" for the payment of any Defaulted Interest or
Defaulted Principal 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 such Debenture is due and payable or such
installment of interest on such Debenture is due and payable.
"Subordinated 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 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 it is 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 of the Company). "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.
"Total Liabilities" means, at the time of any determination, the amount,
on a consolidated basis, of all items of the Company and its Subsidiaries
that would constitute "liabilities" for balance sheet purposes in accordance
with GAAP.
"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.
"Vice President" when used with respect to the Trustee or the Company,
means any vice president, whether or not designated by a word or words added
before or after the title "vice president."
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"Wholly-Owned" when used in connection with any Subsidiary, means a
Subsidiary of which all of the issued and outstanding shares of voting 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, such
individual has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(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
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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.
Any certificate or opinion of an officer of the Company or any Opinion
of Counsel may be based, insofar as it relates to accounting matters, upon a
certificate, statement or opinion of an accountant or firm of accountants,
unless such officer or counsel, as the case may be, knows or in the exercise
of reasonable prudence should know that the certificate, statement or opinion
with respect to the accounting matters upon which such certificate or opinion
is based is 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 HOLDERS.
(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. Except as therein 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
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 such witness, notary
public or other officer 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.
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(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 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.
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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 Holders 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.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Principal 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,
Principal Payment Date, Redemption Date, or at the Stated Maturity; provided
that no interest shall accrue for the period from and after any such Interest
Payment Date, Principal Payment Date, Redemption Date or Stated Maturity, as
the case may be.
SECTION 113. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.
No recourse shall be had for the payment of the principal of, or the
premium, if any, or interest on, any Debenture, or for any claim based
thereon or otherwise in respect thereof or of the indebtedness represented
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thereby, or upon any obligation, covenant or agreement of this Indenture,
against any incorporator, stockholder, employee, officer or director, as
such, past, present or future, of the Company, either directly or through the
Company, whether by virtue of any constitutional provision, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise. It
is expressly agreed and understood that this Indenture and the Debentures are
solely corporate obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company, either directly
or through the Company, because of the incurring of the indebtedness hereby
authorized or under or by reason of any of the obligations, covenants,
promises or agreements contained in this Indenture or in any of the
Debentures or to be implied herefrom or therefrom. All liability, if any, of
that character against every such incorporator, stockholder, officer and
director, by the acceptance of the Debentures and as a condition of, and as
part of the consideration for the execution of this Indenture and the issue
of the Debentures, is expressly waived and released.
END OF ARTICLE ONE.
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ARTICLE TWO
DEBENTURE FORM
SECTION 201. FORM GENERALLY.
The Debentures and the Trustee's Certificate of Authentication shall be
in substantially the form 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 other 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.
UNITED HOMES, INC.
Incorporated Under the Laws of Illinois
___% MANDATORY REDEMPTION DEBENTURE
Registered No.: Registered Principal
_______________ Amount: $_____
Original Interest Accrual CUSIP:________
Date: ___________________
United Homes, Inc., a corporation created under the laws of the State of
Illinois (herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ______________________ or registered assigns, the
principal sum of ______________ Thousand Dollars ($______) on March 15, 2005
(the "Final Maturity Date") and to pay interest hereon 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, beginning
on March 15, 1998 ("Initial Interest Payment Date") and on the 15th day of
each March, June, September, and December thereafter until fully paid (each
such date being an "Interest Payment Date"), at the rate of ____ percent
(___%) per annum, until the principal hereof is paid or made available for
payment. The principal hereof is subject to optional and mandatory
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redemption, in whole but not in part, as provided in the Indenture, and if
not so redeemed, shall be due and payable in full on the Final Maturity Date
(any date set for principal payment is the "Principal Payment Date"). The
principal and interest so payable and punctually paid or duly provided for on
any Principal Payment Date or Interest Payment Date, as provided in the
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 Record Date for such principal or interest, which
shall be the fifteenth day (whether or not a Business Day) of the calendar
month next preceding such Principal Payment Date or Interest Payment Date.
Any such principal or 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 Principal or Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to
Debentureholders 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 the 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 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 in United States
dollars by check mailed to the address of the Person entitled thereto as such
address shall appear in the Debenture Register. THE HOLDER MUST PRESENT THIS
DEBENTURE TO COLLECT PRINCIPAL; AND WHEN FULLY PAID, THE DEBENTURE SHALL BE
SURRENDERED AND CANCELLED.
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.
No recourse shall be had for the payment of the principal or interest of
this Debenture against any Company stockholder, officer, director, employee
or agent by virtue of any statute or by enforcement of any assessment or
otherwise; and any and all liability of stockholders, directors, officers,
employees and agents of the Company being released hereby.
IN WITNESS WHEREOF, the Company has caused this ___% Mandatory
Redemption Debenture to be signed in its name by the manual or facsimile
signature of its President and attested to by the manual or facsimile
signature of its Secretary.
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Dated: _____________ UNITED HOMES, INC.
By ____________________________
, President
Attest:
_____________________________________
, Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
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SECTION 203. FORM OF REVERSE SIDE OF DEBENTURE.
This Debenture is one of a duly authorized issue of % Mandatory
Redemption Debentures of the Company designated as its % Mandatory
Redemption Debentures (the "Debentures") in the maximum aggregate principal
amount of up to $7,000,000, issued and to be issued under an Indenture, dated
as of October ___, 1997 (the "Indenture"), between the Company and National
City Bank of Minneapolis, 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, 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 Debentures are subject to redemption (either at the option of the
Company or upon call by the Trustee) in whole at any time or in part from
time to time. Beginning on the Initial Amortization Date and semiannually
thereafter until final maturity, the Trustee shall redeem a portion of the
Outstanding Debentures, chosen by lot, at a Redemption Price equal to par,
plus interest accrued to the date of redemption. The Company may, at its
option, at any time on or after December 15, 1997, redeem the Debentures
either as a whole or from time to time in part in a minimum aggregate
principal amount of $100,000, chosen by lot, at the following Redemption
Prices (expressed in percentages of the principal amount thereof), together
with interest accrued and unpaid thereon to the Redemption Date (which shall
be an Interest Payment Date), if redeemed during the twelve month period
beginning December 15, in each of the following years:
2002 and
1997 1998 1999 2000 2001 thereafter
---- ---- ---- ---- ---- ----------
Redemption Price:......... 105% 104% 103% 102% 101% 100%
Notice of redemption will be mailed at least 30 days, but not more than
60 days, before the Redemption Date to the Holder at the registered address
thereof.
If this Debenture shall be redeemed by call for redemption, and payment
be duly provided therefor as specified in the Indenture, interest shall cease
to accrue on this Debenture.
Interest installments whose Stated Maturity is on or before the
Redemption Date will be payable to the Holders of such Debentures, or one or
more of the 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.
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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 Holders of a majority in principal amount of the
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 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 Holders of all of
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 Holders
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
interest (and premium, if any) 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.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 or any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the
Debentures are exchangeable for a like aggregate principal amount of
Debentures of a different authorized denomination, as requested by the Holder
surrendering the same; and, 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
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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. 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]
National City Bank of Minneapolis, as Trustee, certifies that this
Debenture is one of the % Mandatory Redemption Debentures issued by
United Homes, Inc., an Illinois corporation, referred to in the
within-mentioned Indenture.
Dated: _________________ NATIONAL CITY BANK OF
MINNEAPOLIS, as Trustee
By _________________________
Authorized Signature
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[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)
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)
Social Security
or Other Identifying
Number of Transferee: ______________________________
Signature Guaranteed:
END OF ARTICLE TWO.
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ARTICLE THREE
THE DEBENTURES
SECTION 301. TITLE AND TERMS GENERALLY.
The aggregate principal amount of Debentures which may be authenticated
and delivered under this Indenture is limited to $7,000,000, except for
Debentures authenticated and delivered upon transfer of, or in exchange for,
or in lieu of other Debentures pursuant to Section 304, 305, 306, or 905.
Forthwith upon the execution and delivery of this Indenture, or from time to
time thereafter, Debentures up to a maximum aggregate principal amount of
$7,000,000 may be executed by the Company and delivered to the Trustee for
authentication, and shall thereupon be authenticated and delivered by the
Trustee upon Company Order, without any further action by the Company.
The Debentures shall be known and designated as the % Mandatory
Redemption Debentures of the Company. The Stated Maturity of the Debentures
shall be March 15, 2005, and each Debenture shall bear interest at the rate
of % per annum on the outstanding balance, until the principal thereof
is paid or made available for payment.
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 December 15, March 15,
June 15 and December 15, commencing on March 15, 1998, until the principal
thereof is paid or made available for payment.
The Debentures shall be subject to mandatory redemption as provided in
Article Eleven.
The Debentures shall be redeemable at the option of the Company as
provided in Article Eleven.
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
Minneapolis, Minnesota (initially the principal corporate trust office of the
Trustee), or in any other city or cities as the Company may maintain
additional such offices or agencies pursuant to Section 1002, maintained for
such purpose, provided that, at the option of the Company, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Debenture Register.
The Debentures are unsecured obligations of the Company.
The Debentures shall be senior in right of payment to all Subordinated
Debt.
The Debentures are an obligation of the Company but not of any Affiliate.
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SECTION 302. DENOMINATIONS.
The Debentures shall be issuable only in registered form without coupons
and in denominations of $1,000 or 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 October ___,
1997, 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.
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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 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 denomination, 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 entitle 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.
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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 or 905 not involving any
transfer.
The Company shall not be required to issue or register the transfer of
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.
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.
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.
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SECTION 307. PAYMENTS OF PRINCIPAL AND INTEREST; RIGHTS PRESERVED.
Any installment of interest or interest and principal under any
Debenture which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date or Principal Payment Date, as the case may be,
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 installment.
Any installment of interest or principal and 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") or on any
Principal Payment Date (herein called "Defaulted Principal"), as the case may
be, shall forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
or Defaulted Principal, as the case may be, 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 or
Defaulted Principal 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 or Defaulted
Principal, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest or
Defaulted Principal 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 Defaulted Principal 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 or Defaulted
Principal as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest or Defaulted
Principal 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 or Defaulted Principal and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of an affected Debenture at such Holder's address as it appears in the
Debenture Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest or Defaulted
Principal and the Special Record Date therefor having been so mailed, such
Defaulted Interest or Defaulted Principal 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 or Defaulted
Principal in any other lawful manner not inconsistent with the requirements
of any securities exchange or market on which the Debentures may be listed or
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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 and the Trustee shall have sent written notification to the
Company to such effect.
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
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.
Holders must present and surrender the Debentures to collect the
principal of such Debentures.
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 (subject to Section 307) of principal of (and premium, if any) and
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
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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 comprised 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
$7,000,000 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.
END OF ARTICLE THREE.
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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; and
(3) 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.
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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 (including the Company acting as its own 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.
END OF ARTICLE FOUR.
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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 interest upon any Debenture when it
becomes due and payable and continuance of such default for a period of 15
days; or
(2) default in the payment of the principal of or premium, if any, on
any Debenture at its Maturity; or
(3) breach of a covenant of the Company contained in Sections 1007,
1008, 1011 or 1012 hereof and the continuance of such breach for a period of
15 days after the due date for filing of the report pursuant to section
703(5) which reports such breach, provided, however, that no Event of Default
shall exist if, prior to the expiration of the 15 day period referred to
above, the Company shall have filed with the Trustee a certification of Ernst
& Young, 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
Holders 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 Holders 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
GAAP), 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 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 30 days after
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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 $250,000 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 Holders of not less than 25% in principal amount of
the Outstanding Debentures may, and the Trustee upon request of the Holders
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
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immediately, by notice in writing to the Company (and to the Trustee if given
by Holders), 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.
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 Holders 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 15 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Debenture at its Maturity,
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the Company will upon demand of the Trustee or Holders of not less than [25%] in
aggregate principal amount of the Outstanding Debentures, pay to the Trustee,
for the benefit of all the Holders 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 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
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
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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 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 Holders 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 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 Holders 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 Holders 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 Holders 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
within 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 (subject to Section 307) of
the principal of (and premium, if any) and 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 been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee and
the 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
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(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(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 Holders, 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
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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.
END OF ARTICLE FIVE.
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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
(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 willful 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
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believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(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;
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(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 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;
(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; and
(7) the Trustee shall have no duty to inquire as to the performance of
the Company's covenants in Article Ten. 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.
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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.
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.
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(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
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 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%
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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 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
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(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.
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.
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(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.
(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;
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(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.
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, and (b) have a
combined capital and surplus of at least $25,000,000, subject to supervision
or examination by Federal or State authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such 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.
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(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
(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 Holders 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.
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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.
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
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(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;
(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 preexisting 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
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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 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;
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(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.
(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
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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 II of the United States Code.
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.
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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.
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:
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"This is one of the Debentures described in the within mentioned
Indenture."
______________________________________
As Trustee
By ___________________________________
As Authenticating Agent
By ___________________________________
Authorized Signature
END OF ARTICLE SIX.
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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, if not
already provided 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, 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
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(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
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 by such
applicants of 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"),
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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.
(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 or 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
1998, the Trustee shall transmit by mail to all Debentureholders, as
hereafter provided for, a brief report
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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 such Section, a
written statement to such effect;
(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
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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
market upon which the Debentures are listed, with the Commission, if
required, and with the Company. The Company will notify the Trustee when the
Debentures are listed on any stock exchange.
END OF ARTICLE SEVEN.
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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 (and 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 an Adjusted
Consolidated Tangible Net Worth equal to or greater than the amount required
by Section 1011 hereof;
(4) the Company, or the surviving entity, as the case may be,
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 an Adjusted Consolidated Tangible Net Worth equal to
or greater than the Company's Adjusted Consolidated Tangible Net Worth
immediately before giving effect to such transaction or series of
transactions;
(5) in case the Company shall consolidate with or merge into United
Development Management Company, an Illinois corporation (together with any
successor or assign, the "Corporate Parent") or the Corporate Parent shall
merge into the Company, all Indebtedness of the Corporate Parent
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incurred in connection with or in respect of the transaction, shall be
subordinated to payment in full of the Debentures and all Corporate Parent
Indebtedness from any Affiliate or any Indebtedness incurred by Corporate
Parent for the benefit of any Affiliate shall be unsecured and pari passu to
the Debentures; provided however (i) if an Event of Default occurs and notice
is provided to the Company pursuant to Section 502, or (ii) the Company fails
to make any payment of principal or interest in a timely manner, without
giving effect to any cure periods or notice requirements, or (iii) if the
Company breaches the covenants contained in Section 1011, the Company shall
not make any payment of principal, interest or any other payment in any other
form, on such Indebtedness, until such Event of Default has been cured, or
payment of Principal and interest has been made; and (iv) upon the occurrence
of any bankruptcy, reorganization or similar proceedings, the Company shall
not make any payment of principal, interest or any other payment in any form
on such Indebtedness, nor shall any affiliate have the right to receive such
payment until the Debentures have been paid in full. It being the intent of
the Company and Trustee, upon the occurrence of any bankruptcy,
reorganization, or similar proceeding, the Debentures will be paid in full
before any further payments are made on such Indebtedness. The Corporate
Parent covenants and agrees that it will notify every Affiliate of the
Company's agreement under this Section 801(5), and the Corporate Parent shall
obtain an agreement from every Affiliate or other person loaning money to
Corporate Parent for the Benefit of Affiliates, to the effect that such
Affiliate or person agrees, upon the occurrence of a bankruptcy,
reorganization or similar event, that the Affiliate or person shall be
prohibited from receiving any payment with respect to any Indebtedness,
whether principal or interest, until the Debentures shall have been
indefensibly paid in full, in the form and substance satisfactory to the
Trustee and counsel to the Trustee.
(6) 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
(7) 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.
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 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.
END OF ARTICLE EIGHT.
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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 two-thirds 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
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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
(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 1012, 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.
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
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prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Debentures.
END OF ARTICLE NINE.
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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, 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,
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.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any) or
interest on any of the Debentures, segregate and hold in trust for the
benefit of the persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action.
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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
Debentures, 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:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debentures 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 Debentures) in the making of any payment of principal (and
premium, if any) or interest on the Debentures; 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
Debenture 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 Debenture 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, 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
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publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. MAINTENANCE OF CORPORATE EXISTENCE, LICENSING AND RIGHTS;
EXISTING BUSINESS.
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. The Company shall not change
(and the Company shall not allow any Subsidiary to change) its fundamental
line of business from land development and the design, construction and sale
of homes to any other line of business.
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 or any Subsidiary 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 or any
Subsidiary, as the case may be) 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
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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 good faith judgment of the Board of Directors 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.
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 and disclosed
in writing to the Trustee;
(3) Indebtedness (plus interest, premium, fees and other obligations
associated therewith) that, immediately after giving PRO FORMA effect to the
incurrence thereof, does not cause the ratio of Adjusted Total Liabilities to
Adjusted Consolidated Tangible Net Worth to exceed 7:1; or
(4) any deferrals, renewals, extensions, replacements, refinancings or
refundings of, or amendments, modifications or supplements to, Indebtedness
incurred under clause (2) or 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
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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; provided, however, that the
Company may make S Corp Tax Dividends if at the time of such action no
Default or Event of Default exists or would result therefrom; and provided
further that the Company may make such additional Restricted Payments:
(1) if at the time of such action no Default or Event of Default exists
or would result therefrom; and
(2) if at the time, upon giving effect to such Restricted Payment, the
Company could incur at least $1.00 of Indebtedness pursuant to paragraph (3)
of Section 1007 hereof; and
(3) if, immediately after giving effect to such Restricted Payment, 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") does not exceed the sum of 50% of the Consolidated Net Income
(or in the event Consolidated Net Income is a deficit, minus 100% of such
deficit) during the Base Period and 100% of the aggregate net proceeds
received by the Company from the issue or sale during the Base Period of
capital stock of the Company.
SECTION 1009. LIMITATION ON TRANSACTIONS WITH AFFILIATES; SUBORDINATION OF
AFFILIATE LOANS.
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. Any
loans to the Company or any Subsidiary from any Affiliate, incurred after
Issue Date whether by deferrals, renewals, extensions, replacements,
refinancings, refunding, amendments, modifications, supplements, or the like,
shall be unsecured and pari-passu to the Debentures; provided however, (i) if
an Event of Default occurs and notice is provided to the Company pursuant to
Section 502, or (ii) the Company fails to make any payment of principal or
interest in a timely manner, without giving effect to any cure periods or
notice requirements, or (iii) if the Company breaches the covenants contained
in Section 1011, the Company shall not make any payment of principal,
interest or any other payment in any other form, on such loans, until such
Event of Default has been cured; and (iv) upon the occurence of any
bankruptcy, reorganization or similar proceeding, including if an Event of
Default occurs under Section 501 subdivision (6) or subdivision (7), the
Company shall not make any payment of principal, interest or any other
payment in any form on such loans, nor shall any Affiliate making any such
loans have the right to receive any such payment, until the Debentures have
been paid in full. It being the intent of the Company and Trustee, upon the
occurrence of any bankruptcy, reorganization or similar proceeding, the
Debentures will be paid in full before any further payments are made on such
loans to Affiliates. The Company covenants and agrees that it will notify
every Affiliate who makes a loan to the Company after the Issue Date of the
Company's agreement under this Section 1009, and the Company shall obtain an
agreement from every Affiliate making a loan to the Company to the effect
that such Affiliate agrees, upon the occurrence of a bankruptcy,
reorganization or similar event, that the Affiliate shall be prohibited from
receiving any payments with respect to any loan, whether principal or
interest, until the Debentures shall have been indefensibly paid in full, in
form and substance satisfactory to the Trustee and counsel to the Trustee.
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SECTION 1010. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING A SUBSIDIARY.
The Company shall not, and shall not permit, cause or suffer any
Subsidiary of the Company to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective or enter 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.
SECTION 1011. NET WORTH.
The Company will at all times during the term of the Debentures keep and
maintain Adjusted Consolidated Tangible Net Worth, determined as of the last
day of each quarter, at an amount not less than Six Million Dollars ($6,000,000)
plus 50% of positive Consolidated Net Income earned after September 30,
1997. Compliance with this covenant shall be measured on the last day of
March, June, September and December of each year, and the Company shall
provide the Trustee with a detailed calculation of the Adjusted Consolidated
Tangible Net Worth as of each quarter within 45 days of each calendar quarter
except December 31 for which the Company shall have 90 days to provide the
calculation. In the event of any non-compliance with this covenant, the
Company shall deliver to the Trustee a certificate from the Company's
independent public accountants as to subsequent compliance to cure any such
default.
SECTION 1012. LIMITATIONS ON COMPENSATION.
The Company will not pay salary compensation (excluding bonuses or other
performance based or incentive compensation) to Xxxxxx X. Xxxxxx in excess of
$500,000 in any calendar year. The Company will not pay salary compensation
excluding bonuses or other performance based or incentive compensation to
Xxxxxx X. Xxxxxx in excess of $325,000 in any calendar year. The Company
will not pay, and will not permit any Subsidiary to pay, salary compensation
bonuses or other performance based or incentive compensation to
any other employee in excess of amounts paid to similar employees by other
reputable Persons engaged in the same or similar business and similarly
situated, and all bonuses or other performance based or incentive
compensation paid shall be in conformance with existing bonus plans on the
Issue Date. The Company or any Subsidiary shall not pay bonuses or other
performance-based or incentive compensation
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to Xxxxxx X. Xxxxxx in excess of $125,000 in any calendar year and to Xxxxxx
X. Xxxxxx in excess of $81,250 in any calendar year.
SECTION 1013. LIMITATIONS ON INVESTMENTS.
The Company will not, and will not permit any Subsidiary to, acquire for
value, make, have or hold any Investments, except:
(1) Investments existing on the Issue Date and disclosed in the
Company's audited financial statements.
(2) Property to be used in the ordinary course of business consistent
with past practice.
(3) Current assets arising from the sale of goods and services in the
ordinary course of business.
(4) Investments in readily marketable direct obligations issued or
guaranteed by the United States or any agency thereof and supported by the
full faith and credit of the United States.
(5) Certificates of deposit or bankers' acceptances issued by any
commercial bank organized under the laws of the United States or any State
thereof which has combined capital and surplus of at least $100,000,000.
(6) Commercial paper given the highest rating by a nationally
recognized rating service and maturing not more than one year from the date
of acquisition thereof.
SECTION 1014. ADDITIONAL LIENS; NEGATIVE PLEDGES.
The Company will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to exist any Lien, or enter into, or make any
commitment to enter into, any arrangement for the acquisition of any property
through conditional sale, lease-purchase or other title retention agreements,
with respect to any property now owned or hereafter acquired by the Company
or a Subsidiary, except:
(1) Liens existing on the Issue Date and disclosed in the Company's
audited financial statements.
(2) Deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of the Company or a
Subsidiary.
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(3) Liens for taxes, fees, assessments and governmental charges not
delinquent or to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 1005.
(4) Liens of carriers, warehousemen, mechanics and materialmen, and
other like Liens arising in the ordinary course of business, for sums not due
or to the extent that payment therefor shall not at the time be required to
be made in accordance with the provisions of Section 1005.
(5) Liens incurred or deposits or pledges made or given in connection
with, or to secure payment of, indemnity, performance or other similar bonds.
(6) Encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of real property and landlord's
Liens under leases on the premises rented, which do not materially detract
from the value of such property or impair the use thereof in the business of
the Company or a Subsidiary.
(7) The interest of any lessor under any Capitalized Lease entered into
after the Issue Date or purchase money Liens on property acquired after the
Issue Date; provided, that, (i) the Indebtedness secured thereby is otherwise
permitted by this Indenture and (ii) such Liens are limited to the property
acquired and do not secure Indebtedness other than the related Capitalized
Lease Obligations or the purchase price of such property.
Further, the Company will not, and will not permit any Subsidiary to,
enter into any agreement, bond, note or other instrument with or for the
benefit of any Person other than the Debentureholders which would (i)
prohibit the Company or such Subsidiary from granting, or otherwise limit the
ability of the Company or such Subsidiary to grant, to the Debentureholders
any Lien on any assets or properties of the Company or such Subsidiary, or
(ii) require the Company or such Subsidiary to xxxxx x Xxxx to any other
Person if the Company or such Subsidiary grants any Lien to the
Debentureholders.
SECTION 1015. PAYMENTS ON SUBORDINATED DEBT.
The Company shall not (and the Company shall not permit any Subsidiary
to) make any payment or repurchase of any part or all of any Subordinated
Debt or take any other action or omit to take any other action in respect of
any Subordinated Debt, except in accordance with any subordination agreement
relative thereto.
SECTION 1016. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with the
covenants set forth in Section 1004 through 1015, inclusive, if before the
time for such compliance the Holders 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
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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.
END OF ARTICLE TEN.
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ARTICLE ELEVEN
MANDATORY AND OPTIONAL
REDEMPTION OF DEBENTURES
SECTION 1101. MANDATORY REDEMPTION.
The Debentures shall be subject to mandatory redemption beginning
September 15, 1999. On or before September 15, 1999 and on each September 15
and March 15 thereafter through September 15, 2004, the Company will pay the
Trustee cash sufficient to redeem on each redemption date a principal amount
equal to 8.33% of the original principal amount of the Debentures issued,
rounded up to a number divisible by the par value of a Debenture. On or
before March 15, 2005, the Company shall pay to the Trustee cash sufficient
to redeem all remaining outstanding Debentures.
The particular Debentures to be redeemed on a Redemption Date shall be selected
as provided in Section 1105.
SECTION 1102. OPTIONAL REDEMPTION.
The Company may, at its option, at any time on or after December 15,
1997, redeem the Debentures either as a whole or from time to time or in part
in a minimum aggregate principal amount of $100,000, at the following
Redemption Prices (expressed in percentages of the principal amount thereof),
together with interest accrued and unpaid thereon to the Redemption Date
(which shall be an Interest Payment Date), if redeemed during the twelve
month period beginning December 15, in each of the following years:
1997 1998 1999 2000 2001 2002 and
thereafter
---------------------------------------------
Redemption
Price: 105% 104% 103% 102% 101% 100%
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.
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SECTION 1104. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Debentures pursuant to Section
1102 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 particular
Debentures to be redeemed shall be selected not more than 60 days prior the
Redemption Date by the Trustee, from the Outstanding Debentures not
previously called for redemption, by lot or in any manner deemed by the
Trustee to be proper. The Trustee shall promptly notify the Company in
writing of the distinctive numbers of the Debentures which have been selected
for redemption.
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 (which shall be an Interest Payment Date),
(2) the Redemption Price,
(3) if less than all the Outstanding Debentures are to be redeemed, the
identification 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 shall be given by the
Company or, upon Company Request, by the Trustee in the name and at the
expense of the Company.
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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 (or, if the Company is acting as its own
Paying Agent, the Company will segregate and hold in trust as provided in
Section 1003) 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 such 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 Holders of such Debentures, or one or more
Predecessor Debentures, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
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.
END OF ARTICLE ELEVEN.
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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.
UNITED HOMES, INC.,
as Issuer
By __________________________________
, President
Attest:
____________________________________
, Secretary
NATIONAL CITY BANK OF MINNEAPOLIS,
as Trustee
By __________________________________
Its __________________________________
Attest:
_________________________________
Trust Officer
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