XXXXXXXX BROS. CONSTRUCTION, INC.
and
NATIONAL CITY BANK OF MINNEAPOLIS,
NATIONAL ASSOCIATION
As Trustee
--------------
INDENTURE
Dated as of ________ ___, 1996
--------------
$3,000,000
Senior Subordinated Debentures, Series 11%
Due 2004
Minimum Purchase: $2,000
TABLE OF CONTENTS
ARTICLE/SECTION PAGE
1. DFINITIONS AND OTHER PROVISION OF GENERAL
APPLICATION 1
1.1. Definitions. 1
1.2. Compliance Certificates and Opinions. 10
1.3. Form of Documents Delivered to Trustee. 10
1.4. Acts of Debentureholders. 11
1.5. Notices, etc., to Trustee and Company. 12
1.6. Notices to Debentureholders; Waiver. 12
1.7. Effect of Headings and Table of Contents. 12
1.8. Successors and Assigns. 13
1.9. Separability Clause. 13
1.10. Benefits of Indenture. 13
1.11. Governing Law. 13
1.12. Legal Holidays. 13
2. DEBENTURE FORMS 13
2.1. Forms Generally. 13
2.2. A. Form of Face of Debenture. 14
2.3. B. Form of Reverse of Debenture. 16
2.4. Form of Trustee's Certificate of Authentication. 19
3. THE DEBENTURES 20
3.1. Title and Terms. 20
3.2. Denominations. 21
3.3. Execution, Authentication and Delivery and
Dating. 21
3.4. Temporary Debentures. 21
3.5. Registration, Transfer and Exchange. 22
3.6. Mutilated, Destroyed, Lost and Stolen
Debentures. 23
3.7. Payment of Interest; Interest Rights Preserved. 23
3.8. Persons Deemed Owners. 25
3.9. Cancellation. 25
3.10. Authentication and Delivery of Original Issue. 26
3.11. Computation of Interest. 26
4. SATISFACTION AND DISCHARGE 26
4.1. Satisfaction and Discharge of Indenture. 26
4.2. Application of Trust Money. 27
5. REMEDIES 27
5.1. Events of Default. 27
5.2. Acceleration of Maturity; Recision and
Annulment. 29
5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee 30
5.4. Trustee May File Proofs of Claim. 31
5.5. Trustee May Enforce Claims Without Possession of
Debentures. 32
5.6. Application of Money Collected. 32
5.7. Limitation on Suits. 32
5.8. Unconditional Right of Debentureholder to
Receive Principal, Premium and Interest. 33
5.9. Restoration of Rights and Remedies. 33
5.10. Rights and Remedies Cumulative. 34
5.11. Delay or Omission Not Waiver. 34
5.12. Control by Debentureholders. 34
5.13. Waiver of Past Defaults. 34
5.14. Undertaking for Costs. 35
5.15. Waiver of Stay or Extension Laws. 35
6. THE TRUSTEE 36
6.1. Certain Duties and Responsibilities. 36
6.2. Notice of Defaults. 37
6.3. Certain Rights of Trustee. 37
6.4. Not Responsible for Recitals or Issuance of
Debentures. 38
6.5. May Hold Debentures. 38
6.6. Money Held in Trust. 38
6.7. Compensation and Reimbursement. 38
6.8. Disqualification; Conflicting Interests. 39
6.9. Trustee Required; Eligibility. 44
6.10. Resignation and Removal; Appointment of
Successor. 45
6.11. Acceptance of Appointment by Successor. 46
6.12. Merger, Conversion or Succession to Business. 46
6.13. Preferential Collection of Claims against
Company. 47
7. DEBENTUREHOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY 51
7.1. Company to Furnish Trustee Names and Addresses
of Debentureholders. 51
7.2. Preservation of Information; Communications to
Debentureholders. 51
7.3. Reports by Company. 53
8. CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE 54
8.1. Company May Consolidate, Etc., on Certain Terms. 54
8.2. Successor Corporation Substituted. 55
8.3. Effect of Change in Control. 55
9. SUPPLEMENTAL INDENTURES 55
9.1. Supplemental Indentures without Consent of
Debentureholders. 55
9.2. Supplemental Indentures with Consent of
Debentureholders. 56
9.3. Execution of Supplemental Indentures. 57
9.4. Effect of Supplemental Indentures. 57
9.5. Reference in Debentures to Supplemental
Indentures. 57
9.6. Effect on Senior Indebtedness. 58
10. COVENANTS 58
10.1. Payment of Principal, Premium and Interest. 58
10.2. Maintenance of Office or Agency. 58
10.3. Money for Debenture Payments to be Held in
Trust. 58
10.4. Payment of Taxes and Other Claims. 60
10.5. Maintenance of Properties. 60
10.6. Statement as to Compliance. 60
10.7. Corporate Existence; Existing Business. 60
10.8. Insurance. 61
10.9. Restrictions on Dividends, Redemptions, etc. 62
10.10. Limitation on Issuance of Certain Securities. 63
10.11. Indebtedness to Affiliates. 63
10.12. Transactions with Affiliates. 64
10.13. Particular Covenants as to Certain of
Company's Affairs. 65
10.14. Certain Covenants as to Subsidiaries. 65
10.15. Limitations on Additional Funded Debt. 65
10.16. Minimum Net Worth. 66
10.17. Waiver of Certain Covenants. 67
11. REDEMPTION OF DEBENTURES 67
11.1. Right of Redemption. 67
11.2. Applicability of Article. 68
11.3. Election to Redeem; Notice to Trustee. 68
11.4. Selection by Trustee of Debentures to be
Redeemed. 68
11.5. Notice of Redemption. 68
11.6. Deposit of Redemption Price. 69
11.7. Debentures Payable on Redemption Date. 69
11.8. Debentures Redeemed in Part. 70
12. SUBORDINATION OF DEBENTURES 70
12.1. Agreement to Subordinate. 70
12.2. Distribution of Assets, Etc. 70
12.3. No Payment to Debentureholders if Senior
Indebtedness is in Default. 71
12.4. Subrogation. 71
12.5. Obligation of Company Unconditional. 71
12.6. Payments on Debentures Permitted. 72
12.7. Effectuation of Subordination by Trustee. 72
12.8. Knowledge of Trustee. 73
12.9. Rights of Holders of Senior Indebtedness Not
Impaired. 73
12.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness. 73
12.11. Rights of Trustee as Holder of Senior
Indebtedness. 73
12.12. Article Applicable to Paying Agents. 73
12.13. Rights and Obligations Subject to Power of
Court. 73
13. REPAYMENT AT OPTION OF HOLDER IN CERTAIN
CIRCUMSTANCES 74
13.1. Repayment Option Upon Death of Holder. 74
13.2. Repayment of Debentures. 75
13.3. Debentures Repaid in Part. 76
14. IMMUNITY OF STOCKHOLDERS, OFFICERS AND DIRECTORS 76
14.1. Personal Immunity of Stockholders, Etc. 76
THIS INDENTURE, dated as of _________ [ ], 1996, between Xxxxxxxx Bros.
Construction, Inc., a Minnesota corporation, having its principal office at 000
Xxxx Xxxxxxx Xxxx., Xxxxxxx, Xxxxxxxxx 00000 (the "COMPANy"), and National City
Bank of Minneapolis, National Association, as Trustee (the "TRUSTEE") having its
corporate trust office and place of business at Minneapolis, Minnesota 55402.
RECITALS OF THE COMPANY
The Company is duly authorized to borrow money for its corporate purposes
and to issue debentures or other obligations therefor. For its corporate
purposes, the Company has duly authorized the creation of an issue of its
debentures, to be known as its Senior Subordinated Debentures, Series 11% Due
2004 (the "DEBENTURES"), of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Debentures, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
The Debentures created by this Indenture are to consist of Debentures in
fully registered form only, in the maximum aggregate principal amount of
$3,000,000.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debentures, as follows:
ARTICLE
1.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
1.1. 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, either directly or by reference therein,
have the meanings assigned to them therein, although this
cross-reference shall not be construed to mean that this
Indenture is intended to comply with the Trust Indenture Act;
and
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles.
(4) "THIS 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.
(5) All references in this instrument to designated "ARTICLES",
"SECTIONS" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed. 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 6, are defined in that
Article.
"ACT" when used with respect to any Debentureholder has the meaning
specified in Section 1.4.
"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, Affiliates of the
Company shall include Xxxxxxxx Bros. of Stillwater, Inc. and Brushmasters, Inc.
and all officers, directors and shareholders of the Company and its
Subsidiaries, and all family members of such natural Persons.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation in the
relevant area, printed in the English language and customarily published on each
business day, whether or not published on Saturdays, Sundays or holidays.
Whenever successive weekly publications in an Authorized Newspaper are required
hereunder they may be made (unless otherwise expressly provided herein) on the
same or different days of the week and in the same or in different Authorized
Newspapers.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day upon which banking institutions in the City of
Minneapolis or the City of Saint Xxxx, Minnesota, are authorized or required by
law to close.
"BUY-SELL DEBT OBLIGATION" has the meaning specified in Section 10.9.
"CHANGE OF CONTROL" means (i) any sale, transfer or other disposition of
more than twenty-five percent (25%) or more of the voting Equity Securities of
the Company Outstanding in one transaction or in a series of transactions
occurring within a twelve-month period (except for the redemption or repurchase
by the Company of shares of voting Equity Securities owned by Xxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx or Xxxxxxx X. Xxxxx, or a transfer of
ownership as a result of the death of a shareholder of the Company); and (ii)
the issuance of additional voting Equity Securities of the Company in one
transaction or in a series of transactions occurring within a twelve-month
period which results in a Person acquiring, directly or indirectly, more than
forty percent (40%) of the voting power of the Company.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it, then the body performing such
duties on such date 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 which are not subject to
redemption by 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 the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"COMPANY REQUEST", "COMPANY ORDER" and "COMPANY CONSENT" mean,
respectively, a written request, order or consent signed in the name of the
Company by its President and delivered to the Trustee.
"CONSOLIDATED" when used with reference to Indebtedness or Net Income
means the sum of the Indebtedness or Net Income, as the case may be, of the
Company and its Consolidated Subsidiaries, as consolidated in accordance with
generally accepted accounting principles, after the elimination of intercompany
items.
"CONSOLIDATED INDEBTEDNESS" means all Indebtedness of the Company and
its Consolidated Subsidiaries (excluding intercompany items and all Shareholders
Subordinated Debt), after making appropriate deductions for any minority
interests.
"CONSOLIDATED NET INCOME" for any period shall mean the amount of
consolidated net income (or loss) of the Company and its Consolidated
Subsidiaries for such period determined on a consolidated basis in accordance
with generally accepted accounting principles, after eliminating all
intercompany items and portions of earnings properly attributable to minority
interests, if any, in the Consolidated Subsidiaries; provided, however, that
there shall not be included in Consolidated Net Income any net income (or net
loss) of a Consolidated Subsidiary for any period during which it was not a
Consolidated Subsidiary, or any net income (or net loss) of any business,
properties or assets acquired (by way of merger, consolidation, purchase or
otherwise) by the Company or any Consolidated Subsidiary for any period prior to
the acquisition thereof.
"CONSOLIDATED SUBSIDIARY" means a Subsidiary of the Company whose
financial statements are included in the most recent annual consolidated
financial statements of the Company and its Subsidiaries.
"CONSOLIDATED TANGIBLE NET WORTH" means the dollar amount of:
(a) the tangible assets of the Company and its Consolidated
Subsidiaries (excluding intercompany items) after deducting for
minority interests and adequate reserves in each case where, in
accordance with generally accepted accounting principles, a
reserve is proper, in excess of
(b) the aggregate amount of Consolidated Indebtedness, and
Shareholders Subordinated Debt;
provided, however, that (i) inventory shall be taken into account on the basis
of the cost or current market value, whichever is lower, (ii) in no event shall
there be included as such tangible assets (a) any assets typically classified as
intangible assets, including but not limited to patents, trademarks, trade
names, copyrights, licenses, goodwill and debt issuance costs, or (b) treasury
stock or any securities or Indebtedness of the Company or a Consolidated
Subsidiary, or any other equity, convertible or unsecured debt securities unless
the same are readily marketable in the United States of America or entitled to
be used as a credit against Federal income tax liabilities, and (iii) securities
included as such tangible assets shall be taken into account at their current
market price or cost, whichever is lower, and (iv) any write-up in the book
value of any assets subsequent to December 31, 1995, shall not be taken into
account. The Consolidated Tangible Net Worth as of December 31, 1995 was
$5,979,000.
"DATE OF ISSUE", as to any Debenture, means the date as of which such
Debenture shall be dated when it is originally issued by the Company to the
initial purchaser (whether or not an underwriter), which date shall be the date
upon which it was originally purchased by such initial purchaser as designated
in the written confirmation of purchase thereof delivered to the Company
(evidenced by the "trade date" set forth in such confirmation of purchase),
subject to any agreements with respect thereto as the Company may enter into in
connection with the sale of the Debentures, and, otherwise, the Date of Issue
shall be as designated in the Company Order requesting authentication and
delivery thereof.
"DEBENTUREHOLDER" means a Person in whose name a Debenture is registered
in the Debenture Register, or the beneficial owner of such Debenture if record
ownership is held by a nominee.
"DEBENTURE REGISTER" and "DEBENTURE REGISTRAR" have the respective
meanings specified in Section 3.5.
"DEBT RESTRICTED CASH" means the unborrowed portion of any land
development loans to the Company held in restricted bank accounts under
financing arrangements substantially similar to such loans made to the Company
in the past.
"EQUITY SECURITIES" means shares of Common Stock or of any other class
or classes of capital stock of the Company, and any other securities of the
Company other than debt securities (whether or not such debt securities are
convertible into other securities of the Company).
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"FUNDED DEBT" shall mean the sum of Senior Indebtedness, the Debentures
Outstanding, Parity Indebtedness and Subordinated Indebtedness (except
Shareholders Subordinated Debt) less Debt Restricted Cash.
"GAAP" means generally accepted accounting principles consistently
applied.
"HOLDER" when used with respect to any Debenture means a
Debentureholder.
"INDEBTEDNESS" with respect to any person at any date means and includes
all items of indebtedness which, in accordance with generally accepted
accounting principles, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet of such person at such date,
and in addition shall include (i) all indebtedness guaranteed or endorsed (other
than for purposes of collection in the ordinary course of business), directly or
indirectly, in any manner by such person, and contingent obligations of such
person in respect of, or to purchase or otherwise acquire, indebtedness of
others, (ii) all lease obligations of such person required under generally
accepted accounting principles to be capitalized and reflected as a liability on
the balance sheet 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.
"INDEPENDENT" when used with respect to any specified Person means such
a Person who (1) is in fact independent, (2) 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 (3) is not connected with the Company or such other obligor
or any Affiliate of the Company or of such other obligor, as an officer,
employee, promoter, 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 approved by the Trustee in the exercise of
reasonable care, 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 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 18, 1996, or with respect to
any Debenture sold after any quarterly Interest Payment Date, the most recent
Interest Payment Date.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Debentures.
"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 or by declaration of
acceleration, call for redemption or otherwise.
"OFFICERS' CERTIFICATE" means a certificate signed by the President or a
Vice President and delivered to the Trustee. Wherever this Indenture requires
that an Officers' Certificate be signed also by a engineer or an accountant or
other expert, such engineer, accountant or other expert (except as otherwise
expressly provided in this Indenture) may be in the employ of the Company, and
shall be reasonably acceptable to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may (except
as otherwise expressly provided in this Indenture) be counsel for the Company,
and shall be reasonably acceptable to the Trustee.
"OUTSTANDING" when used with respect to Debentures means, as of the date
of determination, all Debentures theretofore authenticated and delivered under
this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Debentures for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent (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; and
(iii) Debentures in exchange for or in lieu of which other Debentures
have been authenticated and delivered pursuant to this Indenture;
provided, however, that solely for purposes of determining whether the Holders
of the requisite principal amount of Debentures Outstanding have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Debentures owned, of record or beneficially, by the Company or any other obligor
upon the Debentures or any Affiliate of the Company or 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, after due inquiry 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 such other obligor.
"PARITY INDEBTEDNESS" means any and all Indebtedness of the Company
created, incurred, assumed, or guaranteed by the Company before, at, or after
the date of execution of the Indenture which (a) matures by its terms, or is
renewable at the option of the Company to a date, more than one year after the
date of the original creation, incurrence, assumption, or guaranty of such
Indebtedness by the Company, (b) contain covenants, conditions and restrictions
on the Company which are not inconsistent with nor violate any of the covenants,
conditions and restrictions in this Indenture, and (c) is neither Senior
Indebtedness nor Subordinated Indebtedness. Parity Indebtedness shall include,
without limitation, the Senior Subordinated Debentures, Series 10%, Due 2003.
"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.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivisions thereof.
"PLACE OF PAYMENT" means a city or any political subdivision thereof
designated as such in Section 3.1.
"PREDECESSOR DEBENTURES" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"REDEMPTION DATE" when used with respect to any Debenture to be redeemed
means the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE" when used with respect to any Debenture to be
redeemed means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR DIVIDEND" means a dividend declared by the Board of Directors
to be payable to all holders of a class (or a series of a class) of Equity
Securities of the Company as part of a program established by the Board of
Directors to provide regular and continuous dividends to such holders (subject
to the right of the Board of Directors to increase, decrease and omit such
regular dividends), and shall not include special dividends or other
distributions with respect to such Equity Securities not intended to be regular
and continuous.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date means the date specified in Article 3.
"REPAYMENT DATE" when used with respect to any Debenture to be repaid
pursuant to Article 13 means the earlier of (i) the date of repayment of the
principal of and interest on the Debenture (or portion thereof) as repaid in
accordance with the provisions of Article 13 or (ii) 30 days after receipt by
the Company or the Trustee of a request for repayment of the Debenture (or
portion thereof) by the Holder thereof or his duly authorized legal
representative in accordance with the provisions of Article 13.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means the
Chairman or Vice-Chairman of the Board of Directors, the Chairman or
Vice-Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, the Controller and any Assistant
Controller or any other officer 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 his knowledge of and familiarity with
the particular subject.
"SENIOR INDEBTEDNESS" means the principal of, premium (if any) and
interest on any and all Indebtedness of the Company (other than the Debentures,
Parity Indebtedness and Subordinated Indebtedness) incurred in connection with
(i) the borrowing of money (whether secured or unsecured) from or guaranteed to
banks, trust companies, insurance companies and other financial institutions,
(ii) all Indebtedness to specialized industry lenders to the extent it is
secured by real estate and/or assets of the Company (including the cash value of
life insurance) evidenced by bonds, debentures, mortgages, notes or other
securities or other instruments, (iii) obligations under capitalized leases as
determined by GAAP, and (iv) other non-recourse obligations to third parties in
connection with the acquisition of land (but excluding option agreements or
contingent purchase agreements which the Company has the right to terminate
unilaterally) incurred, assumed or guaranteed by the Company before, at or after
the date of execution of this Indenture, and all renewals, extensions and
refundings thereof, unless in the instrument creating or evidencing any such
Indebtedness or pursuant to which such Indebtedness is outstanding, it is
provided that such Indebtedness, or such renewal, extension or refunding
thereof, is junior or is not superior in right of payment to the Debentures.
"SHAREHOLDERS SUBORDINATED DEBT" means any borrowing by the Company from
its shareholders which is evidenced by a note or other instrument and expressly
made Subordinated Indebtedness as required by Section 10.11 and which has a
stated maturity which is later than the Stated Maturity of the Debentures.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest (as
defined in Section 3.7) means a date fixed by the Trustee pursuant to Section
3.7.
"STATED MATURITY" when used with respect to any Debenture or any
installment of interest thereon means the date specified in such Debenture as
the fixed date on which the principal of such Debenture or such installment of
interest is due and payable.
"SUBORDINATED INDEBTEDNESS" means any and all Consolidated 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
Consolidated Indebtedness or pursuant to which such Indebtedness is outstanding,
(a) it is provided that such Consolidated 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) or (b) it is not, by its terms, Senior Indebtedness or Parity
Indebtedness. For purposes of Section 10.11, Indebtedness to Affiliates shall be
considered Subordinated Indebtedness only if such Indebtedness, and any renewal,
extension or refunding thereof, is subordinate in right of payment to the
Debentures in substantially the same manner and upon substantially the same
terms as the Debentures are subordinate in right of payment to Senior
Indebtedness as provided in Article 12.
"SUBSIDIARY" means any corporation of which at least a majority of the
outstanding voting stock is owned, at the time, directly or indirectly, by the
Company, or by one or more Subsidiaries of the Company. For purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"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 this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is at the
time, directly or indirectly, owned by the Company, or by one or more
Wholly-Owned Subsidiaries. For purposes of this definition "voting stock" shall
have the same meaning as in the definition of Subsidiary.
1.2. 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 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 Person 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 Person, he has
made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion, or, 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, in
so far as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, a copy of which shall be attached to any such
certificate or opinion of any such officer unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, in so far 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 care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
1.4. Acts of Debentureholders.
(a) 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 agent duly appointed in
writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Debentureholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a
witness of such execution or by the certificate of any notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution
thereof. Where such execution is by an officer of a corporation
or a member of a partnership, on behalf of such corporation or
partnership, such certificate or affidavit shall also constitute
sufficient proof of his 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.
(c) The ownership of Debentures shall be proved by the Debenture
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Debenture shall bind
every future Holder of the same Debenture and the Holder of
every Debenture issued upon the transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done 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.
1.5. 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 Debentureholder 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 principal
corporate trust office, or
(2) the Company by the Trustee or by any Debentureholder 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.
1.6. Notices 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 or in such Debenture expressly provided) if in writing and
mailed, first-class postage prepaid, to each Debentureholder affected by such
event, at his address as it appears in 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 such notice
so mailed, to any particular Debentureholder 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 publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in an Authorized Newspaper or Authorized Newspapers
required by this Indenture, then such method of publication or notification as
shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
1.7. 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.
1.8. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
1.9. 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.
1.10. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Debentureholders, any
benefit of any legal or equitable right, remedy or claim under this Indenture.
1.11. 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.
1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture shall not be a Business Day at any Place of Payment
then (notwithstanding any other provision of this Indenture or of the Debenture)
payment of interest or principal (and premium, if any) of the Debentures need
not be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE
2.
DEBENTURE FORMS
2.1. Forms Generally.
The Debentures and the certificates of authentication thereon shall be
in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may be
required to comply with the rules of any securities exchange, or as may,
consistently herewith, be determined by the officers executing such Debentures,
as evidenced by their execution of the Debentures. Any portion of the text of
any Debenture may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Debenture.
The definitive Debentures shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange,
all as determined by the officers executing such Debentures, as evidenced by
their execution of such Debentures.
2.2. A. Form of Face of Debenture.
XXXXXXXX BROS. CONSTRUCTION, INC.
SENIOR SUBORDINATED DEBENTURE, SERIES 11%
DUE 2004
Register No.: ___________ Registered Principal Amount:$____________
Initial Interest
Accrual Date: ___________ CUSIP: __________
XXXXXXXX BROS. CONSTRUCTION, INC., a Minnesota corporation (herein
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ________________ , or registered assigns, the principal sum of _____________
Dollars on October 1, 2004, and to pay interest thereon from the Initial
Interest Accrual Date (as defined in said Indenture) on each January 1, April 1,
July 1 and October 1, commencing the first of such dates following the Initial
Interest Accrual Date, at the rate of 11% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture hereinafter referred to, be paid to the person in
whose name this Debenture (or one or more Predecessor Debentures, as defined in
said Indenture) is registered at the close of business on the Regular Record
Date for such interest, which shall be the 15th day (whether or not a Business
Day) of the calendar month next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Registered Holder on such Regular Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a Special Record Date for the payment
of such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to the Holders not less than ten days prior to such Special Record Date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payments of the principal of (and premium, if any)
and interest on this Debenture will be made at the office or agency of the
Company maintained for that purpose in Minneapolis or Saint Xxxx, Minnesota, or
in such other office or agency as may be established by the Company pursuant to
said 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 (subject to collection) by check mailed to the address of the person
entitled thereto as such address shall appear on the Debenture Register.
Reference is hereby made to the further provisions of this Debenture set
forth on the reverse side hereof and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee under the Indenture.
IN WITNESS WHEREOF, XXXXXXXX BROS. CONSTRUCTION, INC. has caused this
Debenture to be signed in its name by the manual or facsimile signature of its
President or one of its Vice Presidents and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries.
Dated: __________________, 1996 XXXXXXXX BROS
CONSTRUCTION, INC.
By
---------------------------------
Its
---------------------------------
ATTEST:
--------------------------------
Secretary
2.3. B. Form of Reverse of Debenture.
XXXXXXXX BROS. CONSTRUCTION, INC.
SENIOR SUBORDINATED DEBENTURE SERIES 11%
DUE 2004
This Debenture is one of a duly authorized issue of the Debentures of
the Company designated as its Senior Subordinated Debentures, Series 11%, Due
2004 (herein called the "Debentures"), limited in aggregate principal amount to
$3,000,000 issued and to be issued under an Indenture dated as of October 18,
1996 (herein called the "Indenture"), between the Company and National City Bank
of Minneapolis, National Association, as Trustee (herein called the "Trustee,"
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made of a
statement of the respective rights thereunder of the Company, the Trustee and
the Holders of the Debentures, and the terms upon which the Debentures are, and
are to be, authenticated and delivered.
The Debentures are general unsecured obligations of the Company. The
payment of the principal of (and premium, if any) and interest on this Debenture
is expressly subordinated, as provided in the Indenture, to the payment of all
Senior Indebtedness, as defined in the Indenture, and, by the acceptance of this
Debenture, the Holder hereof agrees, expressly for the benefit of the present
and future holders of Senior Indebtedness, to be bound by the provisions of the
Indenture relating to such subordination and authorizes and appoints as his
attorney-in-fact the Trustee to take such action in his behalf as may be
necessary or appropriate to effectuate such subordination.
The Debentures may not be redeemed prior to October 31, 1998.
Thereafter, the Company may, at its option, at any time on or after October 31,
1998, redeem the Debentures, either as a whole or from time to time in part, at
the following Redemption prices (expressed in percentages of the principal
amount thereof), together with interest accrued and unpaid thereon to the
Redemption Date, if redeemed during the twelve month period beginning October
31, in each of the following years:
1998 1999 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
Redemption Price: 105% 104% 103% 102% 101% 100%
Notice of redemption shall be mailed to the registered Holders of the Debentures
designated for redemption at their addresses as the same shall appear on the
Debenture Register not less than thirty days prior to the Redemption Date,
subject to all the conditions and provisions of the Indenture.
The Debenture shall also be subject to a mandatory redemption by the
Company in the event of a "Change of Control" as defined in the Indenture.
Under certain circumstances and to the extent and subject to the
limitations provided in the Indenture and upon request, the Company will, upon
the death of the Holder of this Debenture, repay the principal amount of this
Debenture, together with interest accrued to the Repayment Date, within thirty
days following a request therefore from the Holder's authorized representative,
in accordance with the provisions of the Indenture, if (i) this Debenture has
been registered in the Xxxxxx's name since its date of Issue or for at least six
months prior to the Holder's death, whichever is less, (ii) the principal amount
of Debentures to be repaid as the result of the deceased Xxxxxx's death does not
exceed $25,000, (iii) either the Company or the Trustee has been notified in
writing of the request for repayment within 180 days after the Holder's death,
and (iv) not more than $200,000 principal amount of Debentures (including those
subject to the particular redemption request) have been redeemed from Holders in
the past twelve months.
If this Debenture, or a portion hereof, shall be redeemed by call for
redemption or shall be accepted for repayment upon the death of the Holder, and
payment be duly provided therefore as specified in the Indenture, interest shall
cease to accrue on this Debenture or such portion hereof, as the case may be.
Interest installments whose Stated Maturity is on or before the
Redemption Date or Repayment Date will be payable to the Holders of such
Debentures, or one or more Predecessor Debentures, of record at the close of
business on the relevant Record Date referred to on the face hereof, all as
provided in the Indenture. In the event of redemption or repayment of this
Debenture in part only, a new Debenture or Debentures for the unredeemed or
unrepaid portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default as defined in the Indenture shall occur and be
continuing, the principal of all the Debentures may be declared due and payable
in the manner and with the effect provided in the Indenture. The Company shall
pay all costs of collection, whether or not judicial proceedings are instituted,
in the manner provided in the Indenture. The Indenture provides that such
declaration and its consequences may, in certain events, be annulled by the
Holders of a majority in principal amount of the Debentures Outstanding.
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 Holders of the Debentures under the Indenture at
any time by the Company with the consent of the Holders of 66-2/3% in aggregate
principal amount of the Debentures at the time Outstanding, as defined in the
Indenture. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Debentures at the
time Outstanding, as defined in the Indenture, on behalf of the Holders of all
the Debentures, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Debenture shall
be conclusive and binding upon such Holder and upon all future 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 provisions of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debenture at the time, places and rate, and in the coin and
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable on the Debenture Register of the
Company, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company to be maintained for that purpose in Minneapolis
or Wayzata, Minnesota, or at such other office or agency as may be established
by the Company for such purpose pursuant to the Indenture (initially the
principal corporate trust office of the Trustee in Minneapolis, Minnesota), duly
endorsed by, or accompanied by written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Debentures are issuable only in registered form, without coupons, in
denominations of $1,000 and any integral multiple of thereof, as provided in the
Indenture and subject to certain limitations therein set forth. Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such 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.
Certain terms used in this Debenture which are defined in the Indenture
have the meanings set forth therein.
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.
2.4. Form of Trustee's Certificate of Authentication.
This is one of the Debentures referred to in the within mentioned
Indenture.
NATIONAL CITY BANK OF MINNEAPOLIS,
NATIONAL ASSOCIATION,
as Trustee
By
----------------------------------
Authorized Signature
[Form of Assignment]
(To be executed by the registered holder if such holder desires to
transfer this Debenture.)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Please print name and address of transferee)
this Debenture, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ______________________, as Attorney,
to transfer the within Debenture on the books kept for registration thereof,
with full power of substitution.
Dated:_______________________________
Signature:___________________________
(Signature must conform
in all respects to name of
holder as specified on the
face of the Debenture)
(Insert Social Security or other Identifying Number of Transferee)
_______________________________
Signature Guaranteed:
ARTICLE
3.
THE DEBENTURES
3.1. Title and Terms.
The aggregate principal amount of Debentures which may be authenticated
and delivered under this Indenture is limited to $3,000,000 except for
Debentures authenticated and delivered upon transfer of, or in exchange for, or
in lieu of other Debentures pursuant to Section 3.4, 3.5, 3.6, 9.5, 11.8 and
13.3. Forthwith upon the execution and delivery of this Indenture, or from time
to time thereafter, Debentures up to a maximum aggregate principal amount of
$3,000,000 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 Senior Subordinated
Debentures, Series 11% Due 2004 of the Company. Their Stated Maturity shall be
October 1, 2004. The Debentures shall bear interest at the rate per annum as
specified in the title of the Debentures, from the Initial Interest Accrual
Date, payable on each January 1, April 1, July 1 and October 1, commencing the
first of such dates following the Initial Interest Accrual Date, until the
principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the Debentures
shall be payable at the office or agency of the Company maintained for such
purpose (Place of Payment) in Minneapolis or Wayzata, Minnesota (initially the
principal corporate trust office of the Trustee in Minneapolis, Minnesota),
pursuant to Section 10.2; provided, however, that, at the option of the Company,
payment of interest may 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.
The Debentures shall be redeemable as provided in Article 11.
The Debentures shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article 12.
The Debentures shall be equal in right of payment to certain
Indebtedness of the Company, defined as Parity Indebtedness.
The Debentures shall be senior in right of payment to all Subordinated
Indebtedness of the Company and to any Management Bonuses as provided for in
Section 10.12.
The Debentures shall be repayable prior to their Stated Maturity as
provided in Article 13.
The Debentures are an obligation of the Company but not of any
Affiliate.
3.2. Denominations.
The Debentures shall be issuable only in fully registered form, without
coupons, and in denominations of $1,000 and any integral multiple thereof.
3.3. Execution, Authentication and Delivery and Dating.
The Debentures shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents and attested
by its Secretary or one of its Assistant Secretaries. 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; and the Trustee shall authenticate and deliver
such Debentures as in this Indenture provided and not otherwise.
All Debentures authenticated for original issuance by the Company to the
initial purchaser thereof shall be dated as of their respective Dates of Issue.
All Debentures authenticated for any other purpose 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.
3.4. 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 denomination, substantially of the tenor of the
definitive Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Debentures may determine, as evidenced by their execution of such
Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company in a Place of Payment, 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.
3.5. Registration, Transfer and Exchange.
The Company shall cause to be kept at the principal corporate trust
office of the Trustee a register (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 the
office or agency of the Company in a Place of Payment, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Debentures of any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, and 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 Debentureholder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the 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 transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or 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 his
attorney duly authorized in writing.
No service charge shall be made for any 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
transfer or exchange of Debentures, other than exchanges pursuant to Section 3.4
or Section 9.5 or Section 11.8 or Section 13.3 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of, or exchange any Debenture during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Debentures selected for redemption under Section 11.04 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer or
exchange of any Debenture so selected for redemption in whole or in part, except
the unredeemed portion of any Debenture being redeemed in part.
3.6. Mutilated, Destroyed, Lost and Stolen Debentures.
If (i) any mutilated Debenture is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Debenture, and (ii) there is delivered to the
Company and the Trustee 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 exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Debenture, a new Debenture of like tenor and principal amount, 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, pay such Debenture.
Upon the issuance of any new Debenture under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.
3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Debenture (or one or more Predecessor Debentures) is registered
at the close of business on the Regular Record Date for such interest specified
in Article 3.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of having been such Holder;
and, except as hereinafter provided, such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause 3.7(1) or Clause
3.7(2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close
of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to
be mailed, first class postage prepaid, to each Debentureholder
at his address as it appears in the Debenture Register, not less
than 10 days prior to such Special Record Date. The Trustee may,
in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in
an Authorized Newspaper in each Place of Payment, but such
publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed by the Trustee as
aforesaid, such Defaulted Interest shall be paid from the
amounts so deposited by the Company to the Persons in whose
names the Debentures (or their respective Predecessor
Debentures) are registered on such Special Record Date and shall
no longer be payable pursuant to the following Clause 3.7(2).
(2) The Company may make payment of any Defaulted Interest on the
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures
may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such payment
shall be deemed practicable by the Trustee.
If any installment of interest whose Stated Maturity is on or prior to
the Redemption Date for any Debentures called for redemption pursuant to Article
11 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.
If any installment of interest whose Stated Maturity is on or prior to
the Repayment Date for any Debentures repaid pursuant to Article 13 is not paid
or duly provided for on or prior to the Repayment Date in accordance with the
foregoing provisions of this Section, such interest shall be repayable at the
Repayment Date together with the repayment of such Debentures.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon 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.
The Regular Record Date referred to in this Section for the payment of
interest payable, and punctually paid or duly provided for, on any Interest
Payment Date shall be the 15th day (whether or not a Business Day) of the
calendar month next preceding such Interest Payment Date.
3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of (and premium, if
any), and (subject to Section 3.7) 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.
3.9. Cancellation.
All Debentures surrendered for payment, redemption, registration of
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and, if not already cancelled, shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Debentures previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Debentures
so delivered shall be promptly cancelled by the Trustee. No Debentures shall be
authenticated in lieu of or in exchange for any Debentures cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Debentures held by the Trustee shall be disposed of as directed by a Company
Order.
3.10. Authentication and Delivery of Original Issue.
Forthwith upon the execution and delivery of this Indenture, or from
time to time thereafter, Debentures up to the aggregate principal amount of
$3,000,000 may by 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.
3.11. Computation of Interest.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE
4.
SATISFACTION AND DISCHARGE
4.1. 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 3.6, and (ii) Debentures for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee cancelled or for cancellation; or
(B) all such Debentures not theretofore delivered to the
Trustee cancelled or 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 (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
cancelled or 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, including sums payable to the Trustee
under Section 6.7 hereof; 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; and
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that such deposit
does not violate (a) the provisions of Article 12 hereof or (b) any
provisions of any Senior Indebtedness.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7 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
4.2 and the last paragraph of Section 10.3 shall survive.
4.2. Application of Trust Money.
All money deposited with the Trustee pursuant to Section 4.1 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; but such money need not be segregated from other funds except
to the extent required by law.
ARTICLE
5.
REMEDIES
5.1. 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 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 30 days (whether or not such payment is prohibited
under the provisions of Article 12 hereof); or
(2) default in the payment of the principal of (or premium, if any,
on) any Debenture at its Maturity, and continuance of such
default for a period of 30 days (whether or not such payment is
prohibited under the provisions of Article 12 hereof); or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant
or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 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 10% in principal amount of the
Outstanding Debentures, a written notice specifying such default
or breach and requiring it to be remedied and stating that such
notice is a "NOTICE OF DEFAULT" hereunder; or
(4) breach of any covenant of the Company contained in Sections
10.15 and 10.16 hereof and the continuance of such breach for a
period of 30 days after the due date for filing of the report
pursuant to Section 7.3(5) which reports such breach, unless
prior to the expiration of the 30 day period referred to above,
the Company shall have filed with the Trustee a certificate of
Coopers and Xxxxxxx, LLP, or such other certified independent
public auditor, certifying that such breach has been cured; or
(5) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the
Company under the Federal Bankruptcy Code or any other
applicable Federal or State law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the institution by the Company of proceedings to be adjudicated
a bankrupt or insolvent, 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 the Federal Bankruptcy Code or
any other applicable Federal or State law, or the consent by it
to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of
its property, or the making by it of an assignment for the
benefit of creditors, or 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 in furtherance of any
such action;
(7) if any event of default, as defined in any bond, debenture,
note, mortgage, indenture or instrument under which there may be
issued, or by which there may be secured or evidenced, any
Indebtedness of the Company (including obligations under
capitalized leases), shall happen and shall result in such
Indebtedness in excess of the lesser of (i) $250,000 or (ii) the
amount set forth in the Company's principal credit facility for
such default in other Indebtedness, becoming or being declared
due and payable prior to the date on which it would otherwise
become due and payable, and such acceleration shall not be
rescinded or annulled, or such Indebtedness shall not have been
discharged, within a period of sixty days after such
Indebtedness has been so accelerated; or
(8) the rendering of any final judgment, decree or order in excess
of the lesser of (i) $250,000 or (ii) the amount set forth in
the Company's principal credit facility for such default in
other Indebtedness, which remains unsatisfied for any period of
30 days without a stay of execution.
5.2. Acceleration of Maturity; Recision 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
Debentures Outstanding may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Debentureholders), and upon any such declaration such
entire principal amount and all interest shall become immediately due and
payable. Collection actions or judicial proceedings may be commenced as set
forth in Section 5.3.
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 Debentures Outstanding, 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 5.2; and
(2) all Events of Default, other than the non-payment of the
principal amount of Debentures which have become due solely by such
acceleration, have been cured, or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
5.3. Collection of Indebtedness and Suits for Enforcement by Trustee
The Company covenants that if
(1) default occurs 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 30 days thereafter, or
(2) default occurs in the payment of the principal of (or premium,
if any, on) any Debenture at its Maturity thereof and such
default continues for a period of 30 days thereafter,
the Company will, upon demand of the (i) Trustee or (ii) Holders of not less
than 10% in principal amount of the Debentures Outstanding, pay to the Trustee,
for the benefit of the Holders of such Debentures, the whole amount then due and
payable on such Debentures for principal (and 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 (i) the Trustee or (ii) such Holders as set forth
herein, and their respective agents and counsel, as the case may be, whether or
not judicial proceedings are commenced.
If the Company fails to pay such amount forthwith upon such demand, (i)
the Trustee, in its own name and as trustee of an express trust, or (ii) Holders
of not less than 25% in principal amount of the Debentures Outstanding, on
behalf of all Holders, may institute judicial proceedings for the collection of
the sums so due and unpaid, and 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. The Trustee or the Holders of
not less than 25% in principal amount of the Debentures Outstanding may also
elect at any time to accelerate the entire principal amount pursuant to Section
5.2 and then may institute judicial proceedings or amend its existing judicial
proceedings for the collection of the entire amount due and owing as set forth
herein.
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 aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Holders of not less than 25% in principal amount of the 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.
5.4. 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 or their
creditors, 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,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and
unpaid in respect of the Debentures and to file such
other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Debentureholders allowed
in such judicial proceeding, and
(ii) 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 proceedings is hereby authorized by
each Debentureholder 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 to 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 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder 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 Debentureholder in any such proceeding.
5.5. 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 removed.
5.6. 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 premium, if any) 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 6.7;
SECOND: To the payment of the amounts then due and unpaid upon the
Debentures for costs of collection, principal (and premium, if any) and
interest, 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 (and 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.
5.7. Limitation on Suits.
(a) Prior to the declaration of acceleration provided for in Section
5.2 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, consistent with typical
arrangements with other similar indenture trustees,
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 proceedings; 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 Holders of
Debentures 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 Holders of
Debentures, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of Debentures.
(b) After the declaration of acceleration provided for in Section
5.2 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 5.3 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.
5.8. Unconditional Right of Debentureholder to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, but subject to
the provisions of Article 12, the Holder of any Debenture shall have the right
which is absolute and unconditional to receive payment of the principal of (and
premium, if any) and (subject to Section 3.7) interest on such Debenture on the
respective Stated Maturities expressed in such Debenture (or, in the case of
redemption, on the Redemption Date), or in the case of repayment pursuant to
Article 13, on the Repayment Date, and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder.
5.9. Restoration of Rights and Remedies.
If the Trustee or any Debentureholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Debentureholder, then and in every such case, the
Company, the Trustee and the Debentureholders shall, subject to any
determination in such proceeding, 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.
5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debentures in the last paragraph of
Section 3.6, 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.
5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debenture to
exercise any right or remedy accruing upon any Event of Default 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.
5.12. Control by Debentureholders.
The Holders of a majority in principal amount of the Outstanding
Debentures shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
5.13. Waiver of Past Defaults.
The Holders of not less than 66-2/3% in principal amount of the
Debentures Outstanding specified in Article 5 may on behalf of the Holders of
all the Debentures waive any past default hereunder and its consequences, except
a default:
(1) in the payment of the principal of (or premium, if any) or
interest on any Debenture (provided, however, that Holders of
not less than 80% in principal amount of Debentures Outstanding
may consent to a postponement of any interest payment for a
period not exceeding two years from its due date), or
(2) in respect of a covenant or provision hereof which under Article
9 cannot be modified or amended without the consent of the
Holder of each Outstanding Debenture affected.
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.
5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture by
his acceptance thereof shall be deemed to have agreed, that any court may, in
its discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may,
in its discretion, assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee; to any suit instituted by any Debentureholder, or group of
Debentureholders, holding in the aggregate more than (i) 25% in principal amount
of the Outstanding Debentures if commenced prior to acceleration or (ii) 5% in
principal amount of Outstanding Debentures if commenced after acceleration; or
to any suit instituted by any Debentureholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Debenture on or
after the respective Stated Maturities expressed in such Debenture (or, in the
case of redemption, on or after the Redemption Date), or in the case of
repayment pursuant to Article 13, on the Repayment Date.
5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time thereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE
6.
THE TRUSTEE
6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform its duties hereunder
in good faith, but 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 the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by
any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
(b) In any 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 man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) 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
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) 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 such Responsible Officer
was negligent in ascertaining the pertinent facts;
(3) 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
(4) 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 power, if it shall have good faith belief that
repayment of such funds or adequate indemnity as
required under this Indenture against such risk or
liability is not reasonably assured to it.
(d) 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.
6.2. Notice of Defaults.
Within 10 days after the occurrence of any default hereunder, the
Trustee shall mail to the Underwriters, as defined in Section 7.1 hereof, a
notice of such default hereunder known to the Trustee unless such default shall
have been cured or waived. Within 90 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 the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest on any Debenture or in the
payment of any sinking or purchase fund installment, 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 and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Debentureholders; and provided, further, that
in the case of any default of the character specified in Section 5.1(3) 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.
6.3. Certain Rights of Trustee.
Except as otherwise provided in Section 6.1:
(a) 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 or other paper or
document reasonably believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) 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 may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely
upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request
or direction of any of the Debentureholders pursuant to this
Indenture, unless such Debentureholders shall have offered to
the Trustee reasonable indemnity, consistent with typical
arrangements with other similar indenture trustees against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction; and
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or
document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company,
personally or by agent or attorney.
6.4. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the
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.
6.5. May Hold Debentures.
The Trustee, any Paying Agent, 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 6.11, if operative, may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Debenture Registrar or such other agent.
6.6. 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 with the Company.
6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay 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 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, upon final adjudication of the right
to such indemnification from the Company.
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 (and premium, if any) or interest on
Debentures.
6.8. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 6.8, then, within 90 days after
ascertaining that it has such conflicting interest, and if the
default (as defined in Section 6.8 (c)) to which such
conflicting interest related 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.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) 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.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest if:
(1) 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 3.6(b) or Section
3.7(l) 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;
(2) the Trustee or any of its directors or executive
officers is an underwriter for the Company;
(3) 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;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee,
appointee or representative of the Company, or of an
underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of
underwriting, except that (i) one individual may be a
director or an executive officer, or both, of the
Trustee and a director or an executive officer, or both,
of the Company but may not be at the same time an
executive officer of both the Trustee and the Company;
(ii) if and so long as the number of directors of the
Trustee in office is more than nine, one additional
individual may be a director or an executive officer, or
both, of the Trustee and a director of the Company; and
(iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity
of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent or depositary, or in any
other similar capacity or, subject to the provisions of
paragraph (a) of this Subsection, to act as trustee,
whether under an indenture or otherwise;
(5) Ten percent (10%) or more of the voting securities of
the Trustee is beneficially owned either by the Company
or by any director or executive officer thereof, or 20%
or more of such voting securities is beneficially owned,
collectively, by any two or more of such persons; or 10%
or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the
Company or by any director, partner or executive officer
of any such underwriter, or is beneficially owned,
collectively, by any two or more such persons;
(6) 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;
(7) 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;
(8) 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;
(9) 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
specify percentage of which would have constituted a
conflicting interest under paragraph (6), (7) or (8) 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 (6), (7) and
(8) of this Subsection; or
(10) except under the circumstances described in paragraphs
(1), (3), (4), (5) or (6) of Section 3.11(b) of the
Trust Indenture Act, the Trustee shall be or become a
creditor of the Company.
The specification of percentages in paragraphs (5) to (9), 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 (3) or (7)
of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) 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) an security
which it holds as agent for collection, or as custodian, escrow agent or
depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) 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.
(2) The term "director" means any director of a corporation
or any individual performing similar functions with
respect to any organization, whether incorporated or
unincorporated.
(3) The term "person" means an individual, a corporation,
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.
(4) 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.
(5) The term "Company" means any obligor upon the
Debentures.
(6) 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.
(7) 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.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with
the following provisions:
(1) 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.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of
securities of the class outstanding.
(3) 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.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities
shall not be deemed outstanding within the meaning of
this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same
class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the
issuer, if the obligation evidenced by such
other class of securities is not in default as
to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in
default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof, provided, that any voting
securities of an issuer shall be deemed
outstanding if any person other than the issuer
is entitled to exercise the voting rights
thereof.
(5) 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 the securities of
different classes, whether or not they are issued under
a single indenture.
6.9. Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall (a) be a
corporation or trust company organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, (b) have a
combined capital and surplus of at least $25,000,000, and (c) either have an
office in Minneapolis or St. Xxxx, Minnesota or appoint an agent in Minneapolis
or St. Xxxx, Minnesota to conduct any activities which the Trustee is required
under the Indenture to conduct in St. Xxxx or Minneapolis. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor
Trustee under Section 6.9.
(b) 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.
(c) 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, or by action of the
Company upon reasonable cause, provided that the Company is not
or has not been in default in the past twelve months under this
Indenture, and provided further that the Company has engaged a
substitute corporate trustee which is qualified to act as
Trustee under the Trust Indenture Act of 1939, as amended.
(d) If at any time 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 Board Resolution may remove the Trustee, or (ii)
subject to Section 5.14, any Debentureholder who has been a bona
fide Holder of a Debenture for at least six months may, on
behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board 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 shall, forthwith upon its
acceptance of such appointment, 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 Debentureholder who has been a bona
fide Holder of a Debenture or at least six months may, on behalf
of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor
Trustee.
(f) 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 the Holders of Debentures 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 principal corporate trust office.
6.11. 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 shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 6.7. 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.
6.12. Merger, Conversion 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 of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, to the extent operative, 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 Debenture.
6.13. Preferential Collection of Claims against Company.
(a) Subject to Subsection (b) 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 (c) 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 (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect
of principal or interest, effected after the beginning
of such three month period and valid as against the
Company and its other creditors, except any such
reduction resulting from the receipt or disposition of
any property described in paragraph (2) of this
Subsection, or from the exercise of any right of set-off
which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Company upon
the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or
in satisfaction or composition thereof, after the
beginning of such three months 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 it other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made
on account of any such claim by any Person
(other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of
any such claim by the Trustee to a third person,
and (iii) 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;
(B) 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 months period;
(C) 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 months 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 has no reasonable cause to believe
that a default as defined in Subsection (c) of
this Section would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any
property held as security for such claims as
provided in paragraph (B) or (C), as the case
may be, to the extent of the fair value of such
property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three months period for
property held as security at the time of such substitution
shall, to the extent of the fair value of the property released,
have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose
of repaying or refunding any pre-existing claim of the Trustee
as such creditor, such claim shall have the same status as such
pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof
shall be apportioned between the Trustee, the Debentureholders
and the holders of other indenture securities in such manner
that the Trustee, the Debentureholders and the holders of other
indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed
against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim
of the Trustee anything on account of the receipt by it from the
Company of the funds and property in such special account and
before crediting to the respective claims of the Trustee and the
Debentureholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law, but after
crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other
than from such dividends and from the funds and property so held
in such special accounts. 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 between the
Trustee and 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 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 months 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 months' 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 months period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such
resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from
(1) 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;
(2) 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;
(3) 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 similar capacity;
(4) 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 (c) of this Section;
(5) 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; or
(6) 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 (c) of
this Section.
(c) For the purposes of this Section only:
(1) 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 becomes due and
payable.
(2) 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.
(3) The term "CASH TRANSACTION" means any transaction in
which full payment for goods and 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.
(4) The term "SELF-LIQUIDATING PAPER" means any draft, bill
of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the
goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor
relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
(5) The term "COMPANY" means any obligor upon the
Debentures.
(6) The term "FEDERAL BANKRUPTCY ACT" means the Bankruptcy
Act or Title 11 of the United States Code.
ARTICLE
7.
DEBENTUREHOLDERS' LISTS AND
REPORTS BY TRUSTEE AND COMPANY
7.1. Company to Furnish Trustee Names and Addresses of Debentureholders.
The Company will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Debentures
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 15 days prior to the time such list is furnished.
The Company and/or the Trustee, within 30 days of receipt of their
request, will furnish or cause to be furnished to Xxxxxx & Xxxxxxxxx Financial,
Inc. and Offerman & Company (the "UNDERWRITERS") the names and addresses of
Holders of the Debentures as of a date not more than 15 days prior to the date
such list is furnished to the Underwriters. The Trustee may not forward this
list to any other party without prior notice to the Underwriters and the prior
written consent of the Company.
7.2. Preservation of Information; Communications to Debentureholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of
Debentures contained in the most recent list furnished to the
Trustee as provided in Section 7.1 and the names and addresses
of Holders of Debentures received by the Trustee in its capacity
as Debenture Registrar. The Trustee may destroy any list
furnished to it as provided in Section 7.1 upon receipt of a new
list so furnished.
(b) If three or more Holders of Debentures (hereinafter 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 Holders of
Debentures 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:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 7.2(a); or
(2) inform such applicants as to the approximate number of
Holders of Debentures whose names and addresses appear
in the information preserved at the time by the Trustee
in accordance with Section 7.2(a), 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 Debentureholder whose name and
address appear in the information preserved at the time by the
Trustee in accordance with Section 7.2(a), 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 interests of the Holders of Debentures 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, shall enter an order refusing to
sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all
the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such
material to all such Debentureholders with reasonable promptness
after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company
nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses
of the Holders of Debentures in accordance with Section 7.2(b),
regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under
Section 7.2(b).
7.3. Reports by Company.
The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the
annual reports and of the information, documents and other
reports (or copies of such portions of any 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 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to
either of said Sections, then it will file with the Trustee and
the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and
registered on a National Securities Exchange as may be
prescribed from time to time in such rules and regulations;
(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) 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, such summaries of any
information, documents and 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, or, if the Company is not required to
send Debentureholders such information by Commission rules, then
it will transmit by mail to them an annual report containing the
consolidated financial statements which have been audited by a
nationally or regionally recognized firm of independent public
accountants and will furnish to any Debentureholder who makes a
written request upon the Company or the Trustee, copies of any
filing of Form 10-K, Form 10-Q or Form 8-K made with the
Commission; and
(4) furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or
her knowledge of the Company's compliance with all conditions
and covenants under this Indenture, without regard to any period
of grace or requirement of notice provided under this Indenture.
(5) File with the Trustee within 45 days after the end of each of
the Company's first three fiscal quarters and within 90 days of
the end of each fiscal year a certificate of the Chief Executive
Officer Chief Operating Office or the Chief Financial Officer of
the Company stating that the Company is in compliance with
Article 10, 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 such annual reports, information, documents and other
reports with the Trustee as the Trustee may reasonably require.
(7) furnish to the Underwriters, copies of all reports, financial
statements and certificates provided for in paragraphs (1), (2),
(3), (4) (5) and (6) above.
ARTICLE
8.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
8.1. Company May Consolidate, Etc., on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets as, or
substantially as, an entirety to any Person, and the Company shall not permit
any Person to consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company
unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company substantially
as an entirety shall be a corporation organized and existing
under the laws of the United States of America or any State or
the District of Columbia, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory 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, no Event of
Default, and no event which, after notice or lapse of time, or
both, would become an Event of Default, shall have happened and
be continuing;
(3) immediately after giving effect to such transaction, the
corporation formed by such consolidation or into which the
Company is merged or the Person who acquired by conveyance or
transfer all or substantially all of the properties and assets
of the Company shall have a Consolidated Tangible Net Worth of
not less than the Minimum Section 10.16 Consolidated Tangible
Net Worth required of the Company pursuant to Section 10.16 as
of such date, unless such transaction otherwise shall have been
approved by the Holders of 66 2/3% of the Debentures
Outstanding, by Act of such Holders; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel as required by Section 1.2
each stating that such consolidation, merger, conveyance or
transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transaction have been complied with, provided
that such Opinion of Counsel may rely upon a certificate of the
Company's auditors as to the Consolidated Tangible Net Worth
determinations.
8.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any conveyance, transfer or lease
of the properties and assets of the Company as, or substantially as an entirety
to any person in accordance with Section 8.1, the successor corporation formed
by such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein; provided, however, that, except in the case of a lease to another
Person, no such conveyance or transfer shall have the effect of releasing the
Person named as the "Company" in the first paragraph of this instrument or any
successor corporation which shall theretofore have become such in the manner
prescribed in this Article from its liability as obligor and maker on any of the
Debentures.
8.3. Effect of Change in Control.
The provisions of this Article 8 shall not affect the operation of
Section 11.1 regarding redemption of the Debentures upon a Change of Control. In
the event any transaction entered into pursuant to this Article 8 shall
constitute a Change of Control, Section 11.1 shall control.
ARTICLE
9.
SUPPLEMENTAL INDENTURES
9.1. Supplemental Indentures without Consent of Debentureholders.
Without the consent of the Holders of any Debentures, the Company, when
authorized by a board resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the
covenants of the Company herein and in the Debentures contained;
or
(2) to add to the covenants of the Company, for the benefit of the
Holders of the Debentures, or to surrender any right or power
herein conferred upon the Company; or
(3) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become
effective only when there is no Debenture Outstanding created
prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(4) to secure the Debentures; 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
such action shall not adversely affect the interest of the
Holders of the Debentures.
9.2. Supplemental Indentures with Consent of Debentureholders.
With the consent of the Holders of not less than 66 2/3% in principal
amount of the Outstanding Debentures, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a board resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of the Debentures under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any such Debenture, or reduce the
principal amount thereof or the interest thereon or any premium
payable upon the redemption thereof, or change any Place of
Payment where, or the coin or currency in which, any Debenture
or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or in the case of
repayment pursuant to Article 13, on or after the Repayment Date
(2) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders 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 or Section 5.13,
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 Debenture
affected thereby, or
(4) subordinate the indebtedness evidenced by the Debentures to any
Indebtedness of the Company other than Senior Indebtedness, as
provided in Article 12, or
(5) impair or restrict the rights of the Holders of the Debentures
to repayment of the Debentures prior to the Stated Maturity
thereof under the circumstances set forth in, and in accordance
with the provisions of, Article 13.
Notwithstanding the provisions set forth above in this Section 9.2, with
the consent of the Holders of not less than a majority of principal amount of
the Outstanding Debentures, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a resolution of its board and its
shareholders, and the Trustee may enter into a supplemental indenture to modify
the provisions of Section 10.9 to permit the Company to elect to be taxed as a
"S" corporation under the Internal Revenue Code of 1986, as amended from time to
time, and to make the necessary and appropriate changes to the restrictions on
dividends and distributions to provide sufficient funds to the Company's
shareholders to pay the state and federal income tax liabilities on the income
of the Company passed through to such shareholders as a result of the Company's
election to be treated as a "S" corporation.
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.
9.3. 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 6.1) 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 9.1(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.
9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
9.5. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article shall 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, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures.
9.6. Effect on Senior Indebtedness.
No supplemental indenture shall adversely affect the rights of any
holder of Senior Indebtedness under Article 12 without the consent of such
holder.
ARTICLE
10.
COVENANTS
10.1. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and premium,
if any) and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
10.2. Maintenance of Office or Agency.
The Company will maintain an office or agency in each Place of Payment
where Debentures may be presented or surrendered for payment, where Debentures
may be surrendered for 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
of any change in the location, of such office or agency. If at any time the
Company shall fail to maintain such 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 principal corporate trust office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from 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,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain a office or agency in each Place of
Payment 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.
10.3. 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 or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or before each due date of the principal of (and premium, if any) or interest
on, any Debentures, 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 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 such
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 names trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Debenture and remaining unclaimed for six 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; and 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, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
each Place of Payment, notice that such money remains unclaimed and that, after
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
10.4. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or upon its income, profits or
property, and (2) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon its property; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
10.5. Maintenance of Properties.
The Company will cause all its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation and maintenance of any of its
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business and not disadvantageous in any material respect
to the Debentureholders.
10.6. Statement as to Compliance.
The Company will deliver to the Trustee, within 90 days after the end of
each fiscal year, a written statement signed by the President or a Vice
President of the Company, stating, as to each signer thereof, that:
(1) a review of the activities of the Company during such year and
of performance under this Indenture has been made under his
supervision; and
(2) to the best of his knowledge, based on such review, the Company
has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default
known to him and the nature and status thereof.
10.7. Corporate Existence; Existing Business.
Subject to Article 8, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any right or franchise or any minor
business activity if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Debentureholders. The Company shall also not change its
fundamental line of business from land development and the design, construction
and sale of single family homes to other line of business.
10.8. Insurance.
(a) Subject to the right to sell, abandon or otherwise dispose of
any building or property whenever in the opinion of the Board of
Directors the retention thereof is inadvisable or not necessary
to the business of the Company and its Subsidiaries, the Company
will at all times cause all buildings, plants, equipment and
other insurable properties owned or operated by it or any
Subsidiary to be properly insured and kept insured with
responsible insurance carriers, against loss or damage by fire
and other hazards, to the extent that such properties are
usually insured by corporations owning or operation plants and
properties or a similar character in the same localities;
provided, however, that nothing in this Section shall prevent
the Company or any Subsidiary from maintaining any
self-insurance program covering minor risks if adequate reserves
are maintained in connection with such program.
(b) The Company shall obtain and deliver to the Trustee, for the
benefit of the Debentureholders during the term of the
Debentures, a life insurance policy from an insurer acceptable
to the Trustee insuring in the amount of the lesser of (i)
$1,000,000 or (ii) the maximum amount of insurance that can be
maintained with an annual premium of Seven Thousand Five Hundred
Dollars ($7,500) on the life of Xxxxx Xxxxxx, on which the
Debentureholders are the primary beneficiaries and payees (the
"Key-man Insurance"). The Company shall be named as a secondary
beneficiary in accordance with the distribution provisions set
forth below. The Company shall maintain such Key-man Insurance
in full force and effect throughout the term of the Debentures
and this Indenture.
In the event of the death of Xxxxx Xxxxxx, the proceeds of such policy
shall be held by the Trustee for the benefit of the Debentureholders. Pending
their distribution, the Trustee shall hold such proceeds in a segregated account
and may invest such proceeds in money markets or mutual funds investing only in
direct obligations of the United States of America. Such proceeds and any
interest earned thereon are referred to as the "Insurance Proceeds."
The Insurance Proceeds will be used and distributed only as follows:
(1) In the event that payment of the Debenture is accelerated under
Section 5.2, the Trustee shall immediately distribute the
Insurance Proceeds to the Debentureholders on a pro rata basis.
(2) Upon payment in full of the principal of, premium, if any, and
interest upon all of the Debentures, the Trustee shall
distribute any Insurance Proceeds, not otherwise distributed in
accordance with Section 10.8(b)(1) hereof, to the Company.
10.9. Restrictions on Dividends, Redemptions, etc.
(a) The Company will not (1) declare or pay any dividend or make any
other distribution on any Equity Securities of the Company,
except dividends or distributions payable in Equity Securities
of the Company, or (2) purchase, redeem or otherwise acquire or
retire for value any Equity Securities of the Company, except
(and provided all other covenants of this Indenture are complied
with) Equity Securities acquired upon conversion thereof into
other Equity Securities of the Company or pursuant to an
insurance funded buy-sell agreement covering the death or
disability of a shareholder of the Company, or pursuant to a
buy- sell agreement during the life time of a shareholder of the
Company if purchased under a debt obligation which is
Subordinated Indebtedness of the Company with a minimum term of
five years with equal annual payments (a "Buy-Sell Debt
Obligation"), or (3) permit a Subsidiary to purchase, redeem or
otherwise acquire or retire for value any Equity Securities of
the Company, if, upon giving effect to such dividend, purchase,
redemption or the acquisition, the aggregate amount expended for
all such purposes subsequent to December 31, 1995 would exceed
the sum of
(1) 50% of the Consolidated Net Income accumulated
subsequent to December 31, 1995;
(2) the aggregate of the net proceeds received by the
Company or a Wholly-Owned Subsidiary from the sale or
issuance after December 31, 1995 (other than to a
Subsidiary or upon the Conversion of Equity Securities
or Indebtedness or the Company or a Wholly-Owned
Subsidiary) of Equity Securities of the Company, said
net proceeds being deemed for the purposes of this
Section to equal the aggregate of (a) the cash, if any,
received by the Company or a Wholly-Owned Subsidiary
from such sale or issue, plus (b) the value of any
consideration, other than cash, received by the Company
or a Wholly-Owned Subsidiary from such sale or issue, as
determined by resolution of the Board of Directors; and
(3) the net proceeds (as above defined) received by the
Company or a Wholly-Owned Subsidiary from the issuance
or sale (other than to the Company or a Subsidiary) of
any convertible Indebtedness of the Company which
Indebtedness has been converted into Equity Securities
of the Company after December 31, 1995.
(b) The Company will not (1) declare or pay any dividend or make any
other distribution, other than a Regular Dividend, on any Equity
Securities of the Company, except dividends or distributions
payable in Equity Securities of the Company, or (2) purchase,
redeem or otherwise acquire or retire for value any Equity
Securities of the Company, except Equity Securities acquired
upon conversion thereof into other Equity Securities of the
Company or pursuant to an insurance funded buy-sell agreement
covering the death or disability of a shareholder of the
Company, or pursuant to a Buy-Sell Debt Obligation, (3) or,
except as permitted by Section 10.9(b)(2) herein, permit a
Subsidiary to purchase, redeem or otherwise acquire or retire
for value any Equity Securities of the Company, if, upon giving
effect to such dividend, distribution, purchase, redemption or
other acquisition, the Consolidated Tangible Net Worth of the
Company would be reduced to less than an amount equal to 150% of
the aggregate principal amount of Debentures and all Parity
Indebtedness then outstanding.
(c) The provisions of this Section 10.9 shall not prevent (1) the
payment of annual year-end bonuses to key employees, executive
officers and shareholder employees of the Company pursuant to
the bonus plan described in and consistent with the restrictions
in Section 10.12 hereof, (2) the payment of any dividend within
60 days after the date of declaration thereof, if at such date
such declaration complied with the foregoing provisions,
although the dividends so paid shall be considered in
determining subsequent restrictions under this Section or (3)
the acquisition or retirement of any Equity Securities of the
Company by exchange for, or upon conversion of, or out of the
proceeds of the substantially concurrent sale (other than to a
Subsidiary) of, other Equity Securities of the Company, and no
effect shall be given to any such acquisition or retirement or
the proceeds of any sale, conversion or exchange in any
computation made under this Section 10.9(c)(3). A certificate of
a firm of independent certified public accountants shall be
conclusive evidence of the amount of accumulated Consolidated
Net Income and the amount of Consolidated Tangible Net Worth.
10.10. Limitation on Issuance of Certain Securities.
From and after the date of this Indenture as originally executed and for
so long as any of the Debentures are Outstanding, the Company will not publicly
offer for sale or publicly sell any of its long-term Indebtedness in connection
with the borrowing of money, which Indebtedness, by the terms of the instrument
creating or evidencing such Indebtedness, is pari passu or subordinated in right
of payment to the Debentures of the Company, if such Indebtedness has a stated
maturity for payment of principal, (exclusive of reasonable payments of
principal through the operation of a sinking fund), earlier than the Stated
Maturity for payment of principal of the Debentures.
However, nothing in this Section 10.10, or in this Indenture as a whole
shall limit the Company in the issuance and sale of Equity Securities, Senior
Indebtedness, or a Subordinated Indebtedness, regardless of amount, if such
securities otherwise comply with the covenants, conditions and restrictions, if
any, imposed upon such securities by this Indenture.
10.11. Indebtedness to Affiliates.
Except for the existing office lease from Glenbrook Office Building
Partnership, which shall not be Subordinated Indebtedness, the Company will
cause any and all Indebtedness of the Company to any Affiliate of the Company,
other than a Subsidiary, to be expressly Subordinated Indebtedness, and to be
subordinate and junior in right of payment of the Debentures, according to the
terms of the instrument (or any supplemental instrument) creating or evidencing
such Indebtedness or pursuant to which such Indebtedness is outstanding, and
otherwise pursuant to written agreement by such Affiliate. Nothing in this
section shall restrict the Company from making any payments due on such
Subordinated Indebtedness if there has been no default hereunder as defined in
Section 6.2 hereof.
10.12. Transactions with Affiliates.
The Company will not itself engage, and will not permit any Subsidiary
to engage, in any transaction of any kind or nature with any Affiliate of the
Company not otherwise subject to a contract already existing as of the date of
this Indenture, other than a Subsidiary, unless the Board of Directors has
determined by Board Resolution (a copy of which need not be delivered to the
Trustee unless and until requested) that (a) such transaction, or, in the case
of a course of related or similar transactions, or continuing transactions, such
course of transactions or continuing transactions is or are fair to the Company
or such Subsidiary, as the case may be, and (b) the terms of such transaction or
transactions are reasonably similar to, or more beneficial to the Company or
such Subsidiary than, the terms deemed likely to occur in similar transactions
with unrelated persons under the same circumstances.
The provisions of this Section shall not be applicable to any
pre-existing bonus plan to persons who are key employees, executive officers and
shareholder employees of the Company provided that any such bonus payment made
under such pre-existing bonus plan to any employee of the Company (whether an
executive officer or not) ("MANAGEMENT BONUSES") shall be expressly subordinate
and junior in right of payment to the Debentures and Parity Indebtedness and
shall not be paid if there exists any default in the payment of interest on or
any default on the payment of principal of (or premium, if any, on) any
Debenture, any other Senior Indebtedness or Parity Indebtedness and the
aggregate amount of such bonuses do not exceed 50% of income for the year then
ending before provision for income taxes and such bonuses for that year. The
Company shall deliver to the Trustee an Officers' Certificate certifying
compliance with the restrictions set forth herein prior to any payment under
such bonus plans.
The Company may increase the annual base salary of those persons who are
shareholders of the Company, and are eligible to participate in the bonus plan
described above from year to year by the greater of the following two
percentages (i) the increase from the previous calendar year in the Consumer
Price Index for all items for all United States urban areas as of January 1 of
such year, as published by the United Stated Bureau of Labor Statistics, or (ii)
the increase in the Company's Consolidated Tangible Net Worth for the fiscal
year just completed compared to the previous fiscal year's Consolidated Tangible
Net Worth. Furthermore, advances or loans made to such persons during the
current year prior to the determination of any bonuses pursuant to the bonus
plan set forth above shall be limited to an aggregate of $25,000 per individual.
10.13. Particular Covenants as to Certain of Company's Affairs.
The Company at all times will keep, and will cause each Subsidiary to
keep, true and complete books of record and account, all in reasonable detail,
with respect to all transactions between the Company or such Subsidiary, as the
case may be, and any Affiliate of the Company, other than a Subsidiary. The
Company shall furnish to the Trustee appropriate summaries of such transactions
as the same may reasonably be requested by the Trustee from time to time and
will permit the Trustee and its officers, employees and agents to visit any of
the properties of the Company and its Subsidiaries and inspect such records at
such reasonable times as the Trustee may desire.
10.14. Certain Covenants as to Subsidiaries.
The Company will not:
(1) sell any equity securities of a Subsidiary, or
(2) cause or permit any Subsidiary to sell any equity securities of
any other Subsidiary,
(3) cause or permit any Subsidiary to sell or issue its own equity
securities (other than directors' qualifying shares); or
(4) cause or permit any Subsidiary to sell, transfer or dispose of
any substantial portion of its assets, whether in one
transaction or a series of transactions:
to any Person except the Company or a Wholly-Owned Subsidiary; provided,
however, that this Section shall not prevent the Company or any
Subsidiary from: (i) selling all the outstanding equity securities or
assets of any Subsidiary owned by the Company and any Subsidiaries to
any Person if sold in a single transaction; or (ii) selling or issuing
any equity securities or assets of a Subsidiary organized under the laws
of and doing substantially all of its business in any country other than
the United States of America; unless such subsidiary constitutes a
substantial part of the consolidated assets or operations of the Company
and all Subsidiaries. For purposes of this Section, the term "equity
securities" shall have the same meaning applied to a Subsidiary as the
terms "Equity Securities" and "Redeemable Preferred Stock," inclusive,
as applied to the Company.
10.15. Limitations on Additional Funded Debt.
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 10.15 outstanding on the Date of
Issue (specifically including the full amount available to the
Company or its Subsidiary pursuant to the loan agreements
referred to in clauses (i) and (ii) of the definition of "Senior
Indebtedness" contained in Section 1.1 hereof);
(3) Indebtedness (plus interest, premium, fees and other obligations
associated therewith), that, immediately to the incurrence
thereof, does not cause the ratio of Funded Debt to Consolidated
Tangible Net Worth plus Shareholder Subordinated Debt to exceed
7:1; or
(4) any deferrals, renewals, extensions, replacements, refinancings
or refundings of, or amendments, modifications or supplements
to, Indebtedness incurred under clauses (2) or (3) above,
whether involving the same or any other lender or creditor or
group of lenders or creditors, provided that any such deferrals,
renewals, extensions, replacements, refinancings, refundings,
amendments, modifications or supplements (i) shall not provide
for any mandatory redemption, amortization or sinking fund
requirement in an amount greater than or at a time prior to the
amounts and times specified in the Indebtedness being deferred,
renewed, extended, replaced, refinanced, refunded, amended,
modified or supplemented, (ii) shall not exceed the principal
amount (plus accrued interest and prepayment premium, if any) of
the Indebtedness being renewed, extended, replaced, refinanced
or refunded and (iii) shall be subordinated to the Debentures at
least to the extent and in the manner, if at all, that the
Indebtedness being renewed, extended, replaced, refinanced or
refunded is subordinated to the Debentures.
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 Section 10.15 Funded Debt to
Consolidated Tangible Net Worth as of each quarter within 45 days of each
quarter except December 31 for which the Company shall have 75 days to provide
the calculation. Notwithstanding Section 5.1(3) of this Indenture, the Company
shall have 30 days to cure any default in this Funded Debt covenant, and the
Company shall be prohibited from incurring any additional Funded Debt from the
date of measurement until such default is cured. 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.
10.16. Minimum Net Worth.
The Company will maintain at all times until the Maturity of all
Debentures a Minimum Section 10.16 Consolidated Tangible Net Worth, determined
as of December 31 of each year, based upon the annual audited financial
statements, of at least Five Million and no/100 Dollars ($5,000,000) plus 50% of
the Consolidated Net Income earned after December 31, 1995, assuming for
purposes of this Net Worth calculation only that the maximum Management Bonuses
permitted pursuant to Section 10.12 are paid as of December 31 of each year and
taxes are then determined based upon the assumed Consolidated Net Income level.
Compliance with this covenant shall be determined quarterly but the net worth
utilized each calendar quarter in March, June and September shall be the
previous December 31 Net Worth Amount.
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 Trustees with a detailed calculation of the Minimum Section 10.16
Consolidated Tangible Net Worth as of each quarter within 45 days of each
calendar quarter except December 31 for which the Company shall have 75 days to
provide the calculation. Notwithstanding Section 5.1(3) of this Indenture, the
Company shall have 30 days to cure any default in this Minimum Section 10.16 Net
Worth covenant. 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.
10.17. Waiver of Certain Covenants.
Without limiting the rights of the Holders and the Company with respect
to waivers and amendments set forth in Section 5.13 and 9.2, the Company may
fail, in any particular instance, to comply with any covenant or condition set
forth in Section 1.8 to 10.15, which otherwise does not have a specific waiver
provision, if before or after the time for such compliance the Holders of at
least 66-2/3% in principal amounts of the Debentures Outstanding shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition 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 any such covenant or
condition shall remain in full force and effect.
ARTICLE
11.
REDEMPTION OF DEBENTURES
11.1. Right of Redemption.
The Company may, at its option, redeem (provided that at the time of
first publication of notice of redemption it is not in default in the payment of
any Senior Indebtedness and that at such time the making of such redemption
would not result in a default in any covenant contained in any indenture or
other instrument pursuant to which Senior Indebtedness is outstanding) the
Debentures, at any time as a whole or from time to time in part on or after
October 31, 1998, at Redemption Prices which shall consist of the applicable
percentage of the principal amount of the Debentures redeemed as set forth
below.
If redeemed during the twelve-month period beginning October 31, 1998:
1988 1999 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
Redemption Price: 105% 104% 103% 102% 101% 100%
plus in each case, any interest accrued on the Debentures so redeemed to the
Redemption Date, exclusive of installments of interest whose Stated Maturity is
on or prior to the Redemption Date, payment of which shall have been made or
duly provided for to the registered Holders of Debentures on the relevant Record
Dates in accordance with Section 3.7.
In the event of a Change of Control at any time prior to the maturity of
the Debentures, the Company shall immediately redeem all Debentures in whole at
the applicable Redemption Price set forth above plus accrued interest, provided
if such mandatory redemption occurs prior to 1998, the Redemption Price shall be
105% of the principal amount.
11.2. Applicability of Article.
Redemption of Debentures at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Debentures shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all of the Debentures, the Company shall, at least 45 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee) notify the Trustee of such Redemption Date and of
the principal amount of Debentures to be redeemed.
11.4. 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 to the
Redemption Date by the Trustee, from the Outstanding Debentures not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Debentures of a denomination larger than $1,000. The
portions of the principal of Debentures so selected for partial redemption shall
be equal to a multiple of $1,000 in excess of the minimum $1,000 amount;
provided, that the unredeemed portion of any such Debenture shall also be a
multiple of $1,000 in excess of the minimum $1,000 amount.
The Trustee shall promptly notify the Company in writing of the
Debentures selected for redemption and, in the case of any Debenture selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal of such Debenture which has been or is to be redeemed.
11.5. 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 his address appearing in
the Debenture Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Debentures are to be redeemed, the
identification (and, in the case of partial redemption, the
respective principal amounts) of the Debentures to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture (together with accrued
interest to the Redemption Date payable as provided on Section
3.7 and 11.7), and that interest thereon shall cease to accrue
from and after said date, and
(5) the place where such Debentures are to be surrendered for
payment of the Redemption Price, which shall be the office or
agency of the Company in each Place of Payment.
Notice of redemption of Debentures to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
11.6. Deposit of Redemption Price.
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,
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price of all the Debentures which are to be
redeemed on that date.
11.7. Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Debentures shall cease to bear interest. Upon surrender of such
Debentures for redemption in accordance with said notice, such Debentures shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date. Installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Debentures
registered as such on the relevant Record Dates according to their terms and the
provisions of Section 3.7.
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.
11.8. Debentures Redeemed in Part.
Any Debenture which is to be redeemed only in part shall be surrendered
at a Place of Payment (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Debenture without service charge,
a new Debenture or Debentures, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debenture so surrendered.
ARTICLE
12.
SUBORDINATION OF DEBENTURES
12.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Debentures by his
acceptance thereof (whether upon original issue or upon transfer or assignment)
likewise covenants and agrees, that the indebtedness represented by the
Debentures and the payment of the principal of (and premium, if any) and
interest on each and all of the Debentures is hereby expressly subordinated, and
junior to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all Senior Indebtedness.
12.2. Distribution of Assets, Etc.
Upon any distribution of assets of the Company upon any dissolution,
winding-up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Company or upon any acceleration or maturity or the Debentures or
otherwise:
(1) the holders of all Senior Indebtedness shall first be entitled
to receive payment in full of the principal thereof (and
premium, if any) and interest due thereon, or adequate
provisions shall be made for such payment, before the Holders or
the Debentures are entitled to receive any payment on account of
the principal of (or premium, if any) or interest on the
Indebtedness evidenced by the Debentures; and
(2) any payment by, or distribution of assets of, the Company of any
kind or character, whether in cash, property or securities, to
which the Holders of the Debentures or the Trustee would be
entitled except for the provisions of this Article 12 shall be
paid or delivered by the person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of
Senior Indebtedness which may have been issued, ratably
according to the aggregate amounts remaining unpaid on account
of the Senior Indebtedness hold or represented by each, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefore) to
the holders of such Senior Indebtedness.
12.3. No Payment to Debentureholders if Senior Indebtedness is in Default.
(a) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all principal thereof (and premium,
if any) and interest due thereon shall first be paid in full, or
such payment duly provided for in cash or in a manner
satisfactory to the holder or holders of such Senior
Indebtedness before any payment is made on account of the
principal of (or premium, if any) or interest on the debentures
or to acquire any of the Debentures.
(b) Upon the happening of an event of default with respect to any
Senior Indebtedness, as such event of default is defined therein
or in the instrument under which it is outstanding, permitting
the holders to accelerate the maturity thereof, and, if the
default is other than default in payment of the Principal of (or
premium, if any) or interest on such Senior Indebtedness, upon
written notice thereof given to the Company and the Trustee by
the holder or holders of such Senior Indebtedness or their
representative or representatives, then, unless and until such
event of default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with
respect to the principal (or premium, if any) or interest on the
Debentures or to acquire any of the Debentures.
12.4. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Debentures shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until all
amounts owning on the Debentures shall be paid in full, and, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Debentures, no such payment or distribution made to the holders
of Senior Indebtedness by virtue of this Article 12 which otherwise would have
been made to the Holders of the Debentures shall be deemed to be a payment by
the Company on account of the Senior Indebtedness, it being understood that the
provisions of this Article 12 are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debentures, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
12.5. Obligation of Company Unconditional.
Nothing contained in this Article 12 or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or affect the relative rights of the Holders of
the Debentures and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 12 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercises of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article 12, the Trustee and the Holders of the Debentures shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding-up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
liquidating trustee or agent or other person making any payment or distribution
to the Trustee or to the Holders of the Debentures for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other Indebtedness or
the Company, the amount thereof or payable thereon, the amount paid or
distributed thereon and all other facts pertinent thereto or to this Article 12.
12.6. Payments on Debentures Permitted.
Nothing contained in this Article 12 or elsewhere in this Indenture, or
in any of the Debentures, shall (a) affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the pendency
of any dissolution, winding-up, liquidation of reorganization proceeding, and
except during the continuance of any event of default specified in Section 12.3
(not cured or waived), payments at the time of principal of (or premium, if any)
or interest on the Debentures, or (b) prevent the application by the Trustee or
any Paying Agent of any moneys hold by the Trustee or such Paying Agent, in
trust for the benefit of the Holders of Debentures as to which notice of
redemption shall have been mailed or published at least once prior to the
happening of an event of default specified in Section 12.3, to the payment of or
on account of the principal or (and premium, if any) and interest on such
Debentures, or (c) prevent the application by the Trustee or any Paying Agent of
any moneys deposited prior to the happening of any event of default specified in
Section 12.3, with the Trustee or such Paying Agent in trust for the purpose of
paying a specified installment or installments or interest on the Debentures, to
the payment of such installments of interest on the Debentures.
12.7. Effectuation of Subordination by Trustee.
Each Holder of Debentures, by his acceptance thereof, authorizes and
directs the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 12 and
appoints the Trustee his attorney-in-fact for any and all such purposes.
12.8. Knowledge of Trustee.
Notwithstanding the provisions of this Article 12 or any other
provisions of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee, or the taking of any other action by the trustee,
unless and until the Trustee shall have received written notice thereof from the
Company, any Debentureholder, any paying agent or the holder or representative
or any class of Senior Indebtedness.
12.9. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
12.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders if it shall
in good faith pay over or distribute to the Holders of the Debentures, to the
Company or to any other Person cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
12.11. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
12.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that Section 12.10 and 12.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
12.13. Rights and Obligations Subject to Power of Court.
The rights of the holders of Senior Indebtedness and the obligations of
the Trustee and the Debentureholders set forth in this Article 12 are subject to
the power of a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in this Indenture upon the Senior Indebtedness
and the holders thereof with respect to the Debentures and the Holders thereof
by a plan or reorganization under applicable bankruptcy law.
ARTICLE
13.
REPAYMENT AT OPTION OF HOLDER
IN CERTAIN CIRCUMSTANCES
13.1. Repayment Option Upon Death of Holder.
Upon the death of any Holder of a Debenture or Debentures, the Company
shall be required to pay up to $25,000 principal amount of, together with
interest accrued to the Repayment Date on, all or such part in integral
multiples of $1,000 in excess of a minimum $1,000 of the Debentures held by the
deceased Holder of such Debentures at the date of such Xxxxxx's death, as
requested in the manner, and subject to the limitations, set forth below.
Repayment of such Debentures shall be made within 30 days following the receipt
by the Company or the Trustee of the following:
(1) a written request for repayment or the Debenture signed by a
duly authorized representative of the deceased Xxxxxx, which
request shall set forth the name of the deceased Xxxxxx, the
date of death of the deceased Xxxxxx and the principal amount of
the Debentures to be repaid;
(2) the certificates representing the Debentures to be repaid; and
(3) evidence satisfactory to the Trustee and the Company of the
death of such deceased Xxxxxx and the authority of the
representative to the extent as may be required by Trustee.
The Debentures held by the deceased Holder shall not be entitled to repayment
pursuant to this Section unless each of the following conditions are met:
(i) the Debentures to be repaid have been registered on the
Debenture Register in the deceased Xxxxxx's name since their
Date of Issue or for a period of at least six months prior to
the date of the deceased Xxxxxx's death, whichever is less;
(ii) either the Company or the Trustee has been notified in writing
of the request for repayment within 180 days after the date of
the deceased Xxxxxx's death; and
(iii) not more than $200,000 principal amount of Debentures (including
those subject to the particular redemption request) have been
redeemed from Holders in the past twelve months pursuant to the
Section 13.1.
Authorized representatives of a Holder shall include only the following:
executors, administrators or other legal representatives of an estate; trustee
of a trust; joint owners of Debentures owned in joint tenancy or tenancy by the
entirety; custodians; conservators; guardians; attorneys-in-fact; and other
persons generally recognized as having legal authority to act on behalf of
another.
For purposes of this Article 13 the death of a person owning a Debenture
in joint tenancy or tenancy by the entirety with another or others shall be
deemed the death of the Holder of the Debenture, and the entire principal amount
of the Debenture so held (up to $25,000) shall be subject to repayment in
accordance with the provisions of this Article 13. For purposes of this Article
13, the death of a person owning a Debenture by tenancy in common shall be
deemed the death of a Holder of a Debenture only with respect to the deceased
Xxxxxx's interest in the Debenture so held (up to $25,000) by tenancy in common;
except that in the event a Debenture is held by husband and wife as tenants in
common, the death of either shall be deemed the death of the Holder of the
Debenture, and the entire principal amount of the Debenture so held shall be
subject to repayment in accordance with the provisions of this Article 13. A
person who, during his or her lifetime, was entitled to substantially all of the
beneficial interest of ownership of a Debenture will, upon such person's death,
be deemed the Holder thereof for purposes of this Article 13, regardless of the
registered Holder, if such beneficial interest can be established to the
satisfaction of the Trustee. Such beneficial interest will be deemed to exist in
typical cases of street name or nominee ownership, ownership under the Uniform
Gifts to Minors Act, community property or other joint ownership arrangements
between a husband and wife, and trust arrangement where one person has
substantially all of the beneficial ownership interests in the Debenture during
his or her lifetime. Beneficial interests shall include the power to sell,
transfer or otherwise dispose of a Debenture and the right to receive the
proceeds therefrom, as well as interest and principal payable with respect
thereto.
13.2. Repayment of Debentures.
Within 30 days after the receipt by the Company or the Trustee of any
request for repayment of the Debentures (or any portion thereof) duly made
pursuant to Section 13.1, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 10.3) an amount of money sufficient to
repay the principal amount of all Debentures which are to be repaid, together
with interest accrued thereon to the Repayment Date, exclusive of installments
of interest with a Stated Maturity on or prior to the Repayment Date, payment of
which shall have been made or duly provided for to the registered Holders of the
Debentures on the relevant Record Dates in accordance with Section 3.7. The
Debentures so to be repaid shall become due and payable on the Repayment Date
with respect to each such Debenture at the amount to be repaid as provided above
and from and after the Repayment Date (unless the Company shall default in such
repayment) such Debenture shall cease to bear interest.
Immediately upon deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, upon segregation and holding in
trust) of the amounts as provided above with respect to each Debenture (or
portion thereof), the Company shall cause such Debenture (or portion thereof) to
be repaid. Installments of interest whose Stated Maturity is on or prior to the
Repayment Date shall be payable to the Holders of such Debentures registered as
such on the relevant Record Dates according to their terms and the provisions of
Section 3.7.
If any Debenture duly requested to be repaid shall not be repaid upon
the Repayment Date, the principal shall, until paid, bear interest from the
Repayment Date at the rate borne by the Debenture.
No premium shall be payable by the Company upon repayments of Debentures
pursuant to this Article 13.
If all or any portion of Debentures otherwise eligible for redemption
under this Article 13 are not so repurchased because of the $200,000 limitation
of Section 13.1, such unredeemed amount shall be subject to redemption in the
first month thereafter in which such Debentures would then be so eligible.
13.3. Debentures Repaid in Part.
The Company shall execute and the Trustee shall authenticate and
deliver, with respect to any Debenture surrendered pursuant to this Article 13
and to be repaid only in part, to the Holder of such debenture, without service
charge, a new Debenture or Debentures, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unrepaid portion of the principal of the Debenture so surrendered and
repaid in part. If required by the Company or the Trustee, such Xxxxxxxxx so
surrendered shall be duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by
the authorized representative of the Holder thereof or his attorney duly
authorized in writing.
ARTICLE
14.
IMMUNITY OF STOCKHOLDERS,
OFFICERS AND DIRECTORS
14.1. Personal Immunity of Stockholders, Etc.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Debenture, or for any claim based thereon or otherwise in
respect thereof, shall be had against any past, present, or future stockholder,
officer or director, as such, of the Company or of any successor corporation,
either directly or indirectly or through the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed that this Indenture and the
Debenture issued hereunder are corporate obligations and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
stockholders, officers or directors, as such of the Company, or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, or, and any and all such rights and claims
against, every such stockholder, officer or director, as such, because of the
creation of the indebtedness hereby authorized or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issue of such Debentures.
***
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all of 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 the Trustee has caused its corporate seal to be hereunto
affixed and attested, all as of the day and year first written above.
XXXXXXXX BROS. CONSTRUCTION, INC.
By
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Its
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Attest:
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Secretary
NATIONAL CITY BANK OF MINNEAPOLIS,
NATIONAL ASSOCIATION,
as Trustee
By
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Its
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