Exhibit 99.3
DEFEASANCE TRUST AND SECURITY AGREEMENT
Trust and Security Agreement dated as of June 13, 1997 among
Xxxxxx Industries, Inc., a Delaware Corporation (the "Company"),
Bank One, N.A. (formerly known as Bank One, Columbus, N.A.), as
Trustee (the "Trustee"), and Bank One, N.A., as Custodian (the
"Custodian").
WITNESSETH:
WHEREAS, pursuant to the Indenture (the "Indenture") dated
as of October 15, 1993 between the Company and the Trustee, the
Company issued 12 1/4% Senior Discount Debentures Due 2005 (the
"Debentures") in the aggregate principal amount of $126,555,000,
$2,239,000 of which remains outstanding, and which Debentures are
repayable in accordance with Schedule A; and
WHEREAS, in order to permit the Company to exercise Covenant
Defeasance (as defined in the Indenture) under and in accordance
with Section 8.04 of the Indenture, the Company will advance the
sums required to create an irrevocable trust to acquire and hold
certain securities which shall be used for the purpose of
satisfying the Company's obligations in respect of the
Debentures; and
WHEREAS, the Trustee has full power and authority to execute
this Agreement and to accept the trust imposed upon it;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties
hereto agree as follows:
ARTICLE 1
APPOINTMENT OF TRUSTEE AND CUSTODIAN
Section 1.01. Appointment of Trustee and Custodian. The
Company hereby appoints Bank One, N.A., a national banking
association, as Trustee hereunder, and the Trustee accepts the
trust created by this Agreement upon the terms and conditions
hereof. The Company hereby appoints Bank One, N.A., a national
banking association, as Custodian hereunder, and the Custodian
accepts the custodianship created by this Agreement upon the
terms and conditions hereof.
ARTICLE 2
THE TRUST ESTATE
Section 2.01. Assignment of Rights and Interests. There is
hereby created and established with the Trustee an irrevocable
trust (the "Trust") to be held by the Trustee separate and apart
from all other assets of the Company or the Trustee. The Company
hereby irrevocably transfers and assigns to the Trustee all the
Company's right, title and interest in the U.S. Government
Securities (as defined in Section 2.03) described in Schedule B
hereto and the right to receive payments of interest thereon and
payments of the principal thereof at maturity, such transfer to
be effected by (i) the crediting of such U.S. Government
Securities to a Participant's Securities Account, within the
meaning of 31 C.F.R. Section 357.2, of the Custodian maintained
at a Federal Reserve Bank as part of the Treasury/Reserve
Automated Debt Entry System and (ii) the crediting by the
Custodian of such U.S. Government Securities to the Collateral
Account (as defined below). The Custodian hereby agrees to
maintain in a Participant's Securities Account of the Custodian
maintained at a Federal Reserve Bank a credit of U.S. Government
Securities corresponding to each of the U.S. Government
Securities credited from time to time to the Collateral Account
and to treat the Trustee as entitled to exercise all rights in
connection with such U.S. Government Securities. The securities
held in trust hereunder and said payments as received by the
Trustee or as thereafter invested by the Trustee are hereinafter
referred to as the "Trust Estate."
Section 2.02. Purpose of Trust. The Trust is established
for the purpose of securing the Company's obligations in respect
of the Debentures. The Trust Estate will be used to pay when due
the principal of, the premium (if any) and interest on all
outstanding Debentures in accordance with Schedule A hereto.
Except as provided in this Article or in Section 4.02, the Trust
Estate shall not be used for any other purposes.
Section 2.03. Administration of Trust Estate. As part of
the Trust Estate there shall be established by the Custodian a
collateral account (the "Collateral Account") in the name of the
Trustee to which there shall be credited as and when received by
the Custodian on behalf of the Trustee, U.S. Government
Securities and interest on the securities in the Trust Estate and
payments of the principal amount of such securities upon their
maturity. Moneys so deposited in the Collateral Account shall be
applied by the Trustee in the following order:
(a) Timely transmittal to Bank One, N.A., or its
successors, as paying agent, of funds in accordance with Schedule
A hereto. Said transmittals will be made to the paying agent at
its office at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, in good
funds on the interest and principal payment dates.
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(b) At any time during the existence of the Trust created
hereby, such part of the property held hereunder which is cash
and which is not at the time needed for the making of any
payments in accordance with this Agreement shall, to the extent
practicable, be invested by the Trustee in U.S. Government
Securities as directed in writing by the Company which provide
for payments in respect of interest thereon and the principal
thereof at such times and in such amounts as, together with the
scheduled payments of interest on and principal of any other
property held by the Trustee hereunder, will enable the Trustee
to make the payments to be made by the Trustee in accordance with
this Agreement; provided that, if the Trustee is unable to make
any such investment, the Trustee may hold such property in the
form of cash until needed for the making of payments hereunder.
The Trustee shall have no liability with respect to any loss
arising from investments made in accordance with this Section
2.03(b).
"U.S. Government Securities" means non-redeemable Treasury
bonds, bills and notes (including without limitation, STRIPS), or
securities entitlements in respect thereof, that are book-entry
securities, within the meaning of 31 C.F.R. Section 357.2, and
are credited to a Participant's Security Account (as defined in
31 C.F.R. Section 357.2) of the Custodian at a Federal Reserve
Bank, which Participant's Security Account is part of the
Treasury/Reserve Automated Debt Entry System.
Section 2.04. Securities Intermediary's Jurisdiction. The
Company, the Custodian and the Trustee hereby agree that for all
purposes hereof (including for purposes of 31 C.F.R. Section
357.11(b) and Section 8-110(e) of Revised Article 8 (as defined
in 31 C.F.R. Section 357.2) the "securities intermediary's
jurisdiction" (within the meaning of such Section 8-110(e)) in
respect of the Collateral Account is the State of New York. The
Trustee and the Custodian each hereby represents that it has not
entered into, and hereby agrees that it will not enter into, any
agreement specifying any jurisdiction other than the State of New
York as its jurisdiction for purposes of 31 C.F.R. Section 357.11
or Revised Article 8 (as defined in 31 C.F.R. Section 357.2) in
connection with the Collateral Account.
Section 2.05. Transfer for Value. The parties hereto
intend that the transfer of the U.S. Government Securities by the
Company to the Trustee contemplated by Section 2.01 constitutes a
completed transfer for value and, accordingly, that the
transferred U.S Government Securities are intended no longer to
be an asset of the Company. In case, however, it should be
determined that such an outright transfer is not effected, the
Company hereby assigns and pledges to the Trustee for the benefit
of the holders from time to time of the Debentures, and grants to
the Trustee for the benefit of the holders from time to time of
the Debentures, security interests in the U.S. Government
Securities transferred by the Company to the Trustee pursuant to
Section 2.01, all other U.S. Government Securities transferred to or
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acquired by the Trustee hereunder, all cash, securities or other
property from time to time held in the Collateral Account and all
of its rights and privileges with respect thereto, and all income
and profits thereon, and all interest, dividends and other
distributions with respect thereto, and all proceeds of the
foregoing.
ARTICLE 3
THE TRUSTEE AND THE CUSTODIAN
Section 3.01. Limitations on Liability. (a) The duties and
obligations of the Trustee and the Custodian shall be determined
solely by the express provisions of this Agreement, and neither
the Trustee nor the Custodian shall be liable except for the
performance of such duties and obligations as are specifically
set forth in this Agreement. The liability of the Trustee for
the payment of the principal of and interest on the Debentures
shall be limited to the application of the securities (including
the interest thereon), cash and other property in the Trust
Estate. This Agreement does not substitute the Trustee as the
obligor on the Debentures.
(b) Each of the Trustee and the Custodian may rely, and
shall be protected in acting or refraining from acting in
reliance, upon any direction, certificate, statement or other
paper or document believed by it to be genuine and to have been
signed or presented by the proper person or persons.
(c) Each of the Trustee and the Custodian may consult with
counsel or other experts and any opinion of such counsel or other
experts shall be full and complete authorization and protection
with respect to any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such opinion of
counsel or other experts.
(d) Neither the Trustee nor the Custodian shall be liable
for any actions taken, suffered or omitted by it and believed by
it to be authorized or within its duties or powers conferred upon
it by this Agreement so long as the Trustee or the Custodian, as
the case may be, is not acting in bad faith or with gross
negligence. The Company agrees to indemnify the Trustee and the
Custodian and hold them harmless from and against any and all
costs, expenses or liabilities (including, without limitation,
reasonable counsel fees and settlement costs) they may suffer or
incur in connection with this Agreement, except for those caused
by its own gross negligence or bad faith. The obligations of the
Company to indemnify the Trustee and the Custodian pursuant to
this paragraph shall survive the termination of this Agreement.
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(e) The Trustee may execute any of the trusts or powers
hereunder and perform any duty hereunder and exercise any right
hereunder either directly or by or through its agents or
attorneys. The Custodian may execute any of the powers hereunder
and perform any duty hereunder and exercise any right hereunder
either directly or by or through its agents or attorneys.
(f) Neither the Trustee nor the Custodian shall have any
duty with respect to amounts payable to it in respect of the
Trust Estate other than to receive them and to apply the amounts
actually received in accordance with this Agreement. Neither the
Trustee nor the Custodian shall be obliged to take legal action
to enforce the payment obligations of the issuers of the
securities in the Trust Estate or of the obligors in respect of
any investment made by the Trustee in accordance with Section
2.03. Neither the Trustee nor the Custodian shall be liable for
any loss resulting from any investment made pursuant to this
Agreement in compliance with the provisions hereof. Neither the
Trustee nor the Custodian shall be liable for the accuracy of the
calculations as to the sufficiency of the Trust Estate to pay the
Debentures or for any resulting deficiencies in the amounts
available in the Trust Estate to pay the Debentures.
(g) It shall be no part of the duty of the Trustee or the
Custodian to see to any filing, recording or registration of this
Agreement or of any agreement amendatory or supplemental hereto
or of any instrument of assignment, conveyance or further
assurance, or to the payment of any taxes, fees or charges in
connection therewith, or to give any notice with respect thereto
or to inquire or see to the payment of, or be under any duty in
respect of, any tax or assessment or other governmental charge
which may be levied or assessed on the Trust Estate or any part
thereof or against the Company.
(h) Neither the Trustee nor the Custodian shall be required
to post any bond or other security in connection with its duties
hereunder.
Section 3.02. Resignation of Trustee and Custodian. Each of
the Trustee and the Custodian may at any time resign and be
discharged from the trust hereby created by giving notice to the
Company and the Company shall upon receipt of such notice of
resignation promptly appoint a successor trustee or custodian, as
the case may be. Each of the Trustee's and Custodian's
resignation shall take effect 30 days after the mailing of the
notice of resignation, unless previously a successor trustee or
custodian, as the case may be, shall have been appointed and
shall have accepted such appointment, in which event such
resignation shall take effect immediately upon the acceptance by
such successor trustee or custodian, as the case may be. Any
successor trustee or custodian appointed as provided in this
Section 3.02 shall execute, acknowledge and deliver to the
Company an instrument accepting such appointment hereunder, and
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thereupon such successor trustee or custodian shall
become vested with all the trusts, rights, titles, interests,
powers, duties and obligations with respect to the Trust Estate
of its predecessor hereunder, with like effect as if originally
named as trustee or custodian, as the case may be, herein; and
the trustee or custodian so ceasing to act shall duly assign,
convey and deliver to such successor trustee or custodian, as the
case may be, all of the Trust Estate held by the Trustee or the
Custodian so ceasing to act.
Section 3.03. Compensation of the Trustee and the Custodian.
In consideration of the services rendered by the Trustee under
this Agreement, the Company agrees to and shall pay to the
Trustee compensation as agreed from time to time between the
Trustee and the Company. In consideration of the services
rendered by the Custodian under this Agreement, the Company
agrees to and shall pay to the Custodian compensation as agreed
from time to time between the Custodian and the Company.
ARTICLE 4
MISCELLANEOUS
Section 4.01. Representations and Warranties. (a) The
Company represents and warrants that the execution and
consummation of this Agreement are within its corporate authority
and have been duly authorized by proper corporate proceedings,
and the compliance by the Company with all of the provisions of
this Agreement will not conflict with or violate any laws or
regulations to which the Company is subject or which apply to it,
or any agreement or instrument to which the Company is a party
(including, without limitation, the Indenture), or result in the
creation of imposition of any lien, charge or encumbrance upon
any of the assets of the Company other than the lien created
hereby, or result in the acceleration of maturity of any
obligation of the Company; and no consent, authorization or order
of any court or governmental agency (other than credits to a
Participant's Securities Account of the Custodian to be made by a
Federal Reserve Bank in connection with the transfer of U.S.
Government Securities and securities entitlements in respect
thereof) is required for the consummation of the transactions
contemplated hereby.
(b) Each of the Trustee and the Custodian represents and
warrants that the execution and consummation of this Agreement
are within its corporate authority and have been duly authorized
by proper corporate proceedings, and the compliance by the
Trustee or the Custodian, as the case may be, with all of the
provisions of this Agreement will not conflict with or violate
any laws or regulations to which the Trustee or the Custodian, as
the case may be, is subject or which apply to it, or any agreement
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or instrument to which the Trustee or the Custodian, as the case
may be, is a party (including, without limitation, the Indenture),
or result in the creation of imposition of any lien, charge or
encumbrance upon any of the assets of the Trustee or the Custodian,
as the case may be, or result in the acceleration of maturity of any
obligation of the Trustee or the Custodian, as the case may be;
and no consent, authorization or order of any court or
governmental agency (other than credits to a Participant's
Securities Account of the Custodian to be made by a Federal
Reserve Bank in connection with the transfer of U.S. Government
Securities and securities entitlements in respect thereof) is
required for the consummation of the transactions contemplated
hereby.
(c) The Custodian further represents and warrants that
(i) it is (A) a Participant (as defined in 31 C.F.R. Section 357.2)
in respect of Book-entry Securities (as so defined) held through the
Treasury/Reserve Automated Debt Entry System ("TRADES") (as so defined)
with a Participant's Securities Account (as so defined) at a Federal
Reserve Bank (the "FRB") and (B) a "securities intermediary" within the
meaning of 31 C.F.R. Section 357.2 and Revised Article 8 (as defined in
31 C.F.R. Section 357.2), and (ii) the Collateral Account is a
"securities account" within the meaning of Section 8-501(a) of Revised
Article 8.
Section 4.02. Termination. This Agreement shall terminate
upon receipt by the Trustee of evidence satisfactory to it that
the Company has discharged its obligations under the Indenture,
whether by payment in full of all of the Debentures or otherwise.
Upon termination of this Agreement, any securities or funds
remaining in the Trust Estate shall be promptly transferred to
the Company.
Section 4.03. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
Section 4.04. Notices. (a) All instructions, notices or
other communications shall be given by mail, addressed as
follows:
In the case of the Trustee:
Bank One, N.A.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Trust Administration
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In the case of the Custodian:
Bank One, N.A.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Trust Administration
In the case of the Company:
Xxxxxx Industries, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Treasurer
(b) At least 30 days but not more than 60 days prior to
October 15, 1998, the Trustee shall mail by first class mail to
each holder of the Debentures, at the Company's expense, a notice
of redemption pursuant to Section 3.03 of the Indenture.
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IN WITNESS WHEREOF, the parties hereto have each caused
this Agreement to be executed by their duly authorized officers
as of the date first above written.
XXXXXX INDUSTRIES, INC.
By: s/s Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
BANK ONE, N.A., A NATIONAL BANKING
ASSOCIATION, as
Trustee
By: s/s Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
BANK ONE, N.A., A NATIONAL BANKING
ASSOCIATION, as
Custodian
By: s/s Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
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Schedule A
Remit to: Bank One, N.A., or its successors, as paying agent
Ref: Xxxxxx Industries, Inc.
12-1/4% Senior Discount Debentures due 2005
Principal and Interest
Remit in "fed funds" the following amounts on October 15, 1998:
Face Amount $2,239,000.00
Redemption Premium 137,138.75
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Total $2,376,138.75
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Schedule B
Treasury Securities Purchased
Type: U.S. Treasury Coupon STRIPS
Maturity: 8/15/98
Face Amount: $2.4 million
Cusip #: 000000XX0
