Exhibit 3.01
BROOKE CREDIT CORPORATION
and
THE FIRST NATIONAL BANK AND TRUST XXXXXXXXXXXX, XX 00000
Trustee,
-----------------------------
INDENTURE
Dated as of July 31, 1997
-----------------------------
Bonds
Initial Series, 1997A; 1997B; 1997C
TABLE OF CONTENTS
PAGE
PARTIES
Form of Bonds
Form of Trustee's Certificate
Form of Reverse Side of Subordinated Bond
ARTICLE ONE
DEFINITIONS
1.01. Definitions of Certain Terms............................................................................5
1.02. Definitions of Other Terms..............................................................................8
1.03. Compliance Certificates and Opinions....................................................................8
ARTICLE TWO.
FORM, EXECUTION, DELIVERY, REGISTRATION AND EXCHANGE OF BONDS
2.01. Execution of Bonds......................................................................................8
2.02. Authentication: Denominations...........................................................................9
2.03. Principal Amount of Bonds Unlimited; No Preference as Between Bonds.....................................9
2.04. Registration, Exchange, and Transfer; Who Treated as Owners.............................................9
2.05. No Gain or Loss in Interest............................................................................10
2.06. Mutilated, Lost, Stolen or Destroyed Bonds.............................................................10
2.07. Intentionally left blank...............................................................................10
2.08. Issuance of Additional Bonds...........................................................................10
ARTICLE THREE
(INTENTIONALLY LEFT BLANK)......................................................................................11
ARTICLE FOUR
COVENANTS OF THE COMPANY AND GRANT OF SECURITY INTEREST
4.01. To Pay Principal and Interest on Bonds.................................................................11
4.02. Restrictions on Dividends and Redemption of Stock......................................................11
4.03. Presentation of Bonds..................................................................................11
4.04. Grant of Security Interest.............................................................................11
4.05. Not to Extend Time of Payment of Interest..............................................................11
4.06. Further Assurance......................................................................................12
4.07. Certificates to Trustee................................................................................12
4.08. All Funds Held in Trust................................................................................12
ARTICLE FIVE
REDEMPTION BY THE COMPANY
5.01. Redemption of Bonds....................................................................................12
5.02. When Interest Ceases on Bonds..........................................................................12
Article Six
INTENTIONALLY LEFT BLANK........................................................................................13
ARTICLE SEVEN
BONDHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
7.01. Company to Furnish Trustee Information as to Names and Addresses of Bondholders........................13
7.02. Preservation...........................................................................................13
7.03. Reports to be Filed by Company.........................................................................14
ARTICLE EIGHT
REMEDIES OF TRUSTEE AND BONDHOLDERS ON DEFAULT
8.01. Events of Default......................................................................................15
8.02. Rights of Trustee......................................................................................16
8.03. Application of Moneys Collected by Trustee.............................................................17
8.04. Further Remedies of Trustee on Default.................................................................17
8.05. Restoration of Rights on Abandonment of Proceedings....................................................18
8.06. Limitation on Suits by Bondholders.....................................................................18
8.07. Unconditional Rights of Bondholders to Xxx for Principal and Interest When Due on Notes................18
8.08. Holders of Majority in Amount of Bonds Outstanding May Direct Proceedings by Trustee and Waive
Certain Defaults.......................................................................................18
8.09. Trustee to Give Notice of Default but may Withhold Under Certain Circumstances.........................19
8.10. Powers and Remedies Given Trustee and Bondholders Cumulative...........................................19
8.11. Right of Court to Require Filing of Undertaking to Pay Costs...........................................19
ARTICLE NINE
CONCERNING THE TRUSTEE
9.01. Duties of Trustee Prior to and After Default...........................................................19
9.02. Certain Rights of Trustee..............................................................................20
9.03. Trustee Not Responsible for Recitals Hereof Nor Accountable for Application of Proceeds on Bonds.......21
9.04. Trustee May Become Owner or Pledgee of Bonds...........................................................21
9.05. Moneys Held by Trustee Constitute Trust Funds..........................................................21
9.06. Compensation and Reimbursement of Trustee: Lien on Funds Held..........................................22
9.07. Certificates of Proof..................................................................................22
9.08. Conflicting Interest of Trustee........................................................................22
9.09. Eligibility of Trustee.................................................................................26
9.10. Resignation and Removal of Trustee and Appointment of Successor. (a) The trustee may at any
time resign by giving written notice to the Company....................................................26
9.11. Acceptance of Trust by Successor Trustee...............................................................27
9.12. Corporation Into Which Trustee Merged, Converted or Consolidated to be Successor Trustee...............28
9.13. If Trustee as a Creditor of the Company Improves Its Creditor Position Within Four Months Prior
to Default or Thereafter It Shall Account to and Share with Bondholders................................28
9.14. Trustee to Advise Company of Notice, Presentation or Demand............................................31
ARTICLE TEN
CONCERNING THE BONDHOLDERS
10.01. Evidence of Action Taken by Bondholders................................................................31
10.02. Proof of Execution of Demands and Other Instruments and of Holding of Bonds............................31
10.03. Registered Holder of Registered Bond may be Treated as Owner...........................................32
10.04. Bonds Owned by Company Deemed not Outstanding..........................................................32
10.05. Right of Revocation of Action Taken....................................................................32
ARTICLE ELEVEN
BONDHOLDERS' MEETING
11.01. Purposes for Which Bondholders' Meetings May Be Called.................................................32
11.02. Call of Meetings by Trustee............................................................................33
11.03. Rights of Company and Holders of Bonds to Call Meeting.................................................33
11.04. Persons Entitled to Vote at Meetings...................................................................33
11.05. Provisions for Determining Voting Rights and Conduct of Meetings: Adjournment of Meeting...............33
11.06. Requirements for Counting Vote and Recording Action of Meeting.........................................34
11.07. Call of Meeting not to affect Rights of Trustee or Bondholders.........................................34
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
12.01. Purposes for Which Supplemental Indentures may be Executed Without Consent of Bondholders..............34
12.02. Modification of Indenture by Supplemental Indenture Executed with Consent of Bondholders...............35
12.03. Notation on Bonds in Respect of Supplemental Indentures................................................36
ARTICLE THIRTEEN
CONSOLIDATION, MERGER AND SALE
13.01. Consolidation, Merger, Sale and Lease by Company Permitted Under Certain Circumstances,
Assumption of Bonds and Indenture by Successor Corporation.............................................36
13.02. Opinion of Counsel to be Given to Trustee..............................................................36
ARTICLE FOURTEEN
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
14.01. Satisfaction and Discharge of Indenture................................................................37
14.02. Application by Trustee of Funds Deposited for Payment of Bonds.........................................37
14.03. Repayment of Moneys Held by Paying Agent...............................................................37
14.04. Return of Moneys Held by Trustee and Unclaimed after Six Years.........................................37
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, DIRECTORS AND OFFICERS
15.01. Personal Immunity from Liability of Incorporators, Stockholders, Directors and Officers................37
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
16.01. Benefits of Indenture Restricted to Parties and Holders of Bonds.......................................38
16.02. Notices and Demands on Company and on Trustee..........................................................38
16.03. Default Waived as Permitted by Indenture Deemed to have been Cured.....................................38
16.04. Conflict of any Provision of Indenture with Trust Indenture Act of 1939................................38
16.05. Time for Certain Payments and Conversions Extended if Nominal Date is a Sunday.........................38
16.06. Laws of Kansas to Govern...............................................................................38
16.07. Officers' Certificates and Opinions of Counsel to be Furnished.........................................38
16.08. Counterparts; Acceptance of Trust by Trustee...........................................................39
TESTIMONIUM
*This Table of Contents shall not be deemed to be any part of the Indenture
THIS INDENTURE, dated as of July 31, 1997, between Brooke Credit
Corporation, a corporation duly organized and existing under the laws of the
State of Kansas (hereinafter called the "Company"), having its principal offices
in Phillipsburg, Kansas, party of the first part, and First National Bank and
Trust of Phillipsburg, a national banking association having its principal
corporate trust office at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxx 00000,
authorized to accept and execute trusts, (hereinafter sometimes called the
"Trustee"), party of the second part.
WITNESSETH:
WHEREAS, the Company has the corporate power and authority to borrow
money from time to time for its corporate purposes and to issue therefor its
bonds and other obligations, and, for its corporate purposes, the Company has
determined to make and issue its bonds (herein called the "Bonds"), as
hereinafter provided; and
WHEREAS, the Bonds are to be dated as of such date or dates, to bear
such rate of interest, to mature at such time or times, to bear such
designation, and to contain such other specification and provisions as are
hereinafter in this Indenture provided or permitted; and
WHEREAS, the execution of the Indenture has been duly authorized by the
directors of the Company and all other things necessary to constitute this
Indenture a valid instrument have been done and performed, and the creation,
execution and delivery of this Indenture, and the creation, execution and issue
of the Bonds to be initially issued hereunder, have in all respects been duly
authorized; and
WHEREAS, the Bonds created under this Indenture are to be known as
"Bond Series 1997A, Series 1997B and 1997C" (herein collectively referred to as
"Bond Series 1997") and to consist of Bonds in fully registered form only; and
WHEREAS, the Bonds, and the Trustee's certificate to be endorsed on all
Bonds are to be substantially in the following forms, respectively:
NO._____ $5,000.00
BROOKE CREDIT CORPORATION
10.0% BOND SERIES 1997A DUE JANUARY 1, 2001
BROOKE CREDIT CORPORATION, A CORPORATION DULY ORGANIZED AND EXISTING UNDER THE
LAWS OF THE STATE OF KANSAS (HEREINAFTER REFERRED TO AS THE "COMPANY"), FOR
VALUE RECEIVED, HEREBY PROMISES TO PAY TO THE REGISTERED HOLDER HEREOF, THE
PRINCIPAL SUM OF
FIVE THOUSAND DOLLARS ($5,000.00)
ON THE 1ST DAY OF JANUARY, 2001, IN SUCH COIN OR CURRENCY OF THE UNITED STATES
OF AMERICA AS AT THE TIME OF PAYMENT SHALL BE LEGAL TENDER FOR THE PAYMENT OF
PUBLIC AND PRIVATE DEBTS, AND TO PAY INTEREST THEREON AT THE LAST KNOWN ADDRESS
OF THE REGISTERED HOLDER FROM THE DATE HEREOF AT THE RATE OF TEN PERCENT (10%)
PER ANNUM, SEMIANNUALLY ON JANUARY 1ST AND JULY LST OF EACH YEAR, COMMENCING ON
JANUARY 1, 1998 OR THE NEXT PAYMENT DATE FOLLOWING ISSUE IF ISSUED THEREAFTER.
THIS BOND IS ONE OF A DULY AUTHORIZED ISSUE OF BONDS OF THE COMPANY
LIMITED TO THE AGGREGATE PRINCIPAL AMOUNT OF $3,000,000.00 ISSUED OR TO BE
ISSUED. THE COMPANY COVENANTS NOT TO PAY DIVIDENDS TO ITS STOCKHOLDERS; EXCEPT
AS TO BONDHOLDERS, NOT VOLUNTARILY SECURE OR OTHERWISE ENCUMBER COMPANY'S
ASSETS; NOT TO ISSUE ANY BONDS DEBENTURES OR NOTES SENIOR TO THIS ISSUE,
ALTHOUGH IT MAY ISSUE BONDS OF EQUAL SENIORITY; NOT HOLD ASSETS ACQUIRED THROUGH
FORECLOSURE FOR MORE THAN THIRTY-SIX (36) MONTHS; AND NOT USE BONDS PROCEEDS FOR
ANY PURPOSE OTHER THAN FUNDING LOANS OR PURCHASING ACCOUNTS
AND COMMISSIONS RECEIVABLES, NOR TO REDEEM STOCK OF THE COMPANY. PRINCIPAL SHALL
NOT BE PAID UNTIL MATURITY AND ARE NOT, THEREFORE, CALLABLE BY THE COMPANY AND
ARE NOT PUTTABLE BY THE HOLDER.
THIS BOND MAY BE REGISTERED AS TO PRINCIPAL, IN THE HOLDER'S NAME, ON
THE BOOKS OF THE COMPANY, AT ITS OFFICE SUCH REGISTRATION BEING NOTED HEREON,
AFTER WHICH NO TRANSFER HEREOF SHALL BE VALID UNLESS MADE AT THE COMPANY'S
OFFICE BY THE REGISTERED HOLDER HEREOF, OR BY THE HOLDER'S ATTORNEY-IN-FACT DULY
AUTHORIZED IN WRITING AND SIMILARLY NOTED HEREON.
PAYMENT TO THE REGISTERED HOLDER HEREOF OF PRINCIPAL OR INTEREST SHALL
BE A COMPLETE DISCHARGE OF THE COMPANY'S LIABILITY WITH RESPECT TO SUCH PAYMENT.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF, OR
INTEREST, UPON THIS BOND, OR FOR ANY CLAIM BASED THEREON OR OTHERWISE AGAINST
ANY INCORPORATOR, SHAREHOLDER, OFFICER, DIRECTOR OR ATTORNEY, PAST, PRESENT OR
FUTURE, OF THE COMPANY, WHETHER BY VIRTUE OF ANY CONSTITUTION, STATUTE, RULE OF
LAW, ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR BY REASON OF ANY MATTER PRIOR
TO THE DELIVERY OF THIS NOTE OR OTHERWISE, ALL SUCH LIABILITY, BY THE ACCEPTANCE
HEREOF AND AS A PART OF THE CONSIDERATION OF THE ISSUE HEREOF, BEING EXPRESSLY
WAIVED.
THIS BOND IS ONE OF AN AUTHORIZED ISSUE OF BONDS OF THE COMPANY, ALL
ISSUED AND TO BE ISSUED UNDER AN INDENTURE EXECUTED BY THE COMPANY TO THE FIRST
NATIONAL BANK & TRUST COMPANY, PHILLIPSBURG, KANSAS, AS TRUSTEE, DATED AS OF
JULY 31, 1997, TO WHICH INDENTURE REFERENCE IS HEREBY MADE FOR A DESCRIPTION OF
THE RIGHTS, OBLIGATIONS, DUTIES AND IMMUNITIES THEREUNDER OF THE TRUSTEE AND THE
RIGHTS AND LIMITATIONS OF RIGHTS THEREUNDER OF THE BONDHOLDERS, AND THE RIGHTS
AND OBLIGATIONS THEREUNDER OF THE COMPANY. AS PROVIDED IN THE INDENTURE, SAID
BONDS WILL BE ISSUED IN DENOMINATIONS OF $5,000, MAY BEAR INTEREST AT DIFFERENT
RATES AND HAVE DIFFERENT MATURITY DATES.
THIS BOND HAS NOT BEEN REGISTERED UNDER FEDERAL OR STATE SECURITIES LAWS AND
WAS ISSUED PURSUANT TO CERTAIN EXEMPTIONS THEREUNDER. THIS BOND HAS NOT BEEN
APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
AGENCY, AND NO REGULATORY BODY HAS PASSED UPON OR ENDORSED THE ACCURACY,
ADEQUACY OR COMPLETENESS OF THIS BOND. THIS BOND MAY NOT BE SOLD,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL TO
THE COMPANY, AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND STATE SECURITIES LAWS IS AVAILABLE.
IN WITNESS WHEREOF, THE COMPANY HAS SIGNED AND SEALED THIS BOND ON THIS ______
DAY OF _________________, 1997
BROOKE CREDIT CORPORATION
BY:
----------------------------
SEAL PRESIDENT
ATTEST:
----------------------------
SECRETARY
THE FIRST NATIONAL BANK & TRUST CO., PHILLIPSBURG, KANSAS, HEREBY AUTHENTICATES
THIS BOND AS ONE OF THE BONDS DESCRIBED IN THE WITHIN MENTIONED INDENTURE
BY:
----------------------------
AUTHORIZED OFFICER
NO._____ $5,000.00
BROOKE CREDIT CORPORATION
10.25% BOND SERIES 1997B DUE JANUARY 1, 2002
BROOKE CREDIT CORPORATION, A CORPORATION DULY ORGANIZED AND EXISTING UNDER THE
LAWS OF THE STATE OF KANSAS (HEREINAFTER REFERRED TO AS THE "COMPANY"), FOR
VALUE RECEIVED, HEREBY PROMISES TO PAY TO THE REGISTERED HOLDER HEREOF, THE
PRINCIPAL SUM OF
2
FIVE THOUSAND DOLLARS ($5,000.00)
ON THE 1ST DAY OF JANUARY, 2002, IN SUCH COIN OR CURRENCY OF THE UNITED STATES
OF AMERICA AS AT THE TIME OF PAYMENT SHALL BE LEGAL TENDER FOR THE PAYMENT OF
PUBLIC AND PRIVATE DEBTS, AND TO PAY INTEREST THEREON AT THE LAST KNOWN ADDRESS
OF THE REGISTERED HOLDER FROM THE DATE HEREOF AT THE RATE OF TEN AND TWENTY-FIVE
HUNDREDTHS PERCENT (10.25%) PER ANNUM, SEMIANNUALLY ON JANUARY 1ST AND JULY LST
OF EACH YEAR, COMMENCING ON JANUARY 1, 1998 OR THE NEXT PAYMENT DATE FOLLOWING
ISSUE IF ISSUED THEREAFTER.
THIS BOND IS ONE OF A DULY AUTHORIZED ISSUE OF BONDS OF THE COMPANY
LIMITED TO THE AGGREGATE PRINCIPAL AMOUNT OF $3,000,000.00 ISSUED OR TO BE
ISSUED. THE COMPANY COVENANTS NOT TO PAY DIVIDENDS TO ITS STOCKHOLDERS; EXCEPT
AS TO BONDHOLDERS, NOT VOLUNTARILY SECURE OR OTHERWISE ENCUMBER COMPANY'S
ASSETS; NOT TO ISSUE ANY BONDS DEBENTURES OR NOTES SENIOR TO THIS ISSUE,
ALTHOUGH IT MAY ISSUE BONDS OF EQUAL SENIORITY; NOT HOLD ASSETS ACQUIRED THROUGH
FORECLOSURE FOR MORE THAN THIRTY-SIX (36) MONTHS; AND NOT USE BONDS PROCEEDS FOR
ANY PURPOSE OTHER THAN FUNDING LOANS OR PURCHASING ACCOUNTS AND COMMISSIONS
RECEIVABLES, NOR TO REDEEM STOCK OF THE COMPANY. PRINCIPAL SHALL NOT BE PAID
UNTIL MATURITY AND ARE NOT, THEREFORE, CALLABLE BY THE COMPANY AND ARE NOT
PUTTABLE BY THE HOLDER.
THIS BOND MAY BE REGISTERED AS TO PRINCIPAL, IN THE HOLDER'S NAME, ON
THE BOOKS OF THE COMPANY, AT ITS OFFICE SUCH REGISTRATION BEING NOTED HEREON,
AFTER WHICH NO TRANSFER HEREOF SHALL BE VALID UNLESS MADE AT THE COMPANY'S
OFFICE BY THE REGISTERED HOLDER HEREOF, OR BY THE HOLDER'S ATTORNEY-IN-FACT DULY
AUTHORIZED IN WRITING AND SIMILARLY NOTED HEREON.
PAYMENT TO THE REGISTERED HOLDER HEREOF OF PRINCIPAL OR INTEREST SHALL
BE A COMPLETE DISCHARGE OF THE COMPANY'S LIABILITY WITH RESPECT TO SUCH PAYMENT.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF, OR
INTEREST, UPON THIS BOND, OR FOR ANY CLAIM BASED THEREON OR OTHERWISE AGAINST
ANY INCORPORATOR, SHAREHOLDER, OFFICER, DIRECTOR OR ATTORNEY, PAST, PRESENT OR
FUTURE, OF THE COMPANY, WHETHER BY VIRTUE OF ANY CONSTITUTION, STATUTE, RULE OF
LAW, ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR BY REASON OF ANY MATTER PRIOR
TO THE DELIVERY OF THIS NOTE OR OTHERWISE, ALL SUCH LIABILITY, BY THE ACCEPTANCE
HEREOF AND AS A PART OF THE CONSIDERATION OF THE ISSUE HEREOF, BEING EXPRESSLY
WAIVED.
THIS BOND IS ONE OF AN AUTHORIZED ISSUE OF BONDS OF THE COMPANY, ALL
ISSUED AND TO BE ISSUED UNDER AN INDENTURE EXECUTED BY THE COMPANY TO THE FIRST
NATIONAL BANK & TRUST COMPANY, PHILLIPSBURG, KANSAS, AS TRUSTEE, DATED AS OF
JULY 31, 1997, TO WHICH INDENTURE REFERENCE IS HEREBY MADE FOR A DESCRIPTION OF
THE RIGHTS, OBLIGATIONS, DUTIES AND IMMUNITIES THEREUNDER OF THE TRUSTEE AND THE
RIGHTS AND LIMITATIONS OF RIGHTS THEREUNDER OF THE BONDHOLDERS, AND THE RIGHTS
AND OBLIGATIONS THEREUNDER OF THE COMPANY. AS PROVIDED IN THE INDENTURE, SAID
BONDS WILL BE ISSUED IN DENOMINATIONS OF $5,000, MAY BEAR INTEREST AT DIFFERENT
RATES AND HAVE DIFFERENT MATURITY DATES.
THIS BOND HAS NOT BEEN REGISTERED UNDER FEDERAL OR STATE SECURITIES
LAWS AND WAS ISSUED PURSUANT TO CERTAIN EXEMPTIONS THEREUNDER. THIS BOND HAS NOT
BEEN APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
AGENCY, AND NO REGULATORY BODY HAS PASSED UPON OR ENDORSED THE ACCURACY,
ADEQUACY OR COMPLETENESS OF THIS BOND. THIS BOND MAY NOT BE SOLD, HYPOTHECATED
OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND APPLICABLE STATE
SECURITIES LAWS OR, IN THE OPINION OF COUNSEL TO THE COMPANY, AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND STATE SECURITIES LAWS IS
AVAILABLE.
IN WITNESS WHEREOF, THE COMPANY HAS SIGNED AND SEALED THIS BOND ON THIS ______
DAY OF _________________, 1997
BROOKE CREDIT CORPORATION
BY:
-----------------------------------
SEAL PRESIDENT
ATTEST:
-----------------------------------
SECRETARY
THE FIRST NATIONAL BANK & TRUST CO., PHILLIPSBURG, KANSAS, HEREBY AUTHENTICATES
THIS BOND AS ONE OF THE BONDS DESCRIBED IN THE WITHIN MENTIONED INDENTURE
3
BY:
-----------------------------------
AUTHORIZED OFFICER
NO._____ $5,000.00
BROOKE CREDIT CORPORATION
10.5% BOND SERIES 1997C DUE JANUARY 1, 2003
BROOKE CREDIT CORPORATION, A CORPORATION DULY ORGANIZED AND EXISTING UNDER THE
LAWS OF THE STATE OF KANSAS (HEREINAFTER REFERRED TO AS THE "COMPANY"), FOR
VALUE RECEIVED, HEREBY PROMISES TO PAY TO THE REGISTERED HOLDER HEREOF, THE
PRINCIPAL SUM OF
FIVE THOUSAND DOLLARS ($5,000.00)
ON THE 1ST DAY OF JANUARY, 2003, IN SUCH COIN OR CURRENCY OF THE UNITED STATES
OF AMERICA AS AT THE TIME OF PAYMENT SHALL BE LEGAL TENDER FOR THE PAYMENT OF
PUBLIC AND PRIVATE DEBTS, AND TO PAY INTEREST THEREON AT THE LAST KNOWN ADDRESS
OF THE REGISTERED HOLDER FROM THE DATE HEREOF AT THE RATE OF TEN AND FIVE TENTHS
PERCENT (10.5%) PER ANNUM, SEMIANNUALLY ON JANUARY 1ST AND JULY LST OF EACH
YEAR, COMMENCING ON JANUARY 1, 1998 OR THE NEXT PAYMENT DATE FOLLOWING ISSUE IF
ISSUED THEREAFTER.
THIS BOND IS ONE OF A DULY AUTHORIZED ISSUE OF BONDS OF THE COMPANY
LIMITED TO THE AGGREGATE PRINCIPAL AMOUNT OF $3,000,000.00 ISSUED OR TO BE
ISSUED. THE COMPANY COVENANTS NOT TO PAY DIVIDENDS TO ITS STOCKHOLDERS; EXCEPT
AS TO BONDHOLDERS, NOT VOLUNTARILY SECURE OR OTHERWISE ENCUMBER COMPANY'S
ASSETS; NOT TO ISSUE ANY BONDS DEBENTURES OR NOTES SENIOR TO THIS ISSUE,
ALTHOUGH IT MAY ISSUE BONDS OF EQUAL SENIORITY; NOT HOLD ASSETS ACQUIRED THROUGH
FORECLOSURE FOR MORE THAN THIRTY-SIX (36) MONTHS; AND NOT USE BONDS PROCEEDS FOR
ANY PURPOSE OTHER THAN FUNDING LOANS OR PURCHASING ACCOUNTS AND COMMISSIONS
RECEIVABLES, NOR TO REDEEM STOCK OF THE COMPANY. PRINCIPAL SHALL NOT BE PAID
UNTIL MATURITY AND ARE NOT, THEREFORE, CALLABLE BY THE COMPANY AND ARE NOT
PUTTABLE BY THE HOLDER.
THIS BOND MAY BE REGISTERED AS TO PRINCIPAL, IN THE HOLDER'S NAME, ON
THE BOOKS OF THE COMPANY, AT ITS OFFICE SUCH REGISTRATION BEING NOTED HEREON,
AFTER WHICH NO TRANSFER HEREOF SHALL BE VALID UNLESS MADE AT THE COMPANY'S
OFFICE BY THE REGISTERED HOLDER HEREOF, OR BY THE HOLDER'S ATTORNEY-IN-FACT DULY
AUTHORIZED IN WRITING AND SIMILARLY NOTED HEREON.
PAYMENT TO THE REGISTERED HOLDER HEREOF OF PRINCIPAL OR INTEREST SHALL
BE A COMPLETE DISCHARGE OF THE COMPANY'S LIABILITY WITH RESPECT TO SUCH PAYMENT.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF, OR
INTEREST, UPON THIS BOND, OR FOR ANY CLAIM BASED THEREON OR OTHERWISE AGAINST
ANY INCORPORATOR, SHAREHOLDER, OFFICER, DIRECTOR OR ATTORNEY, PAST, PRESENT OR
FUTURE, OF THE COMPANY, WHETHER BY VIRTUE OF ANY CONSTITUTION, STATUTE, RULE OF
LAW, ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR BY REASON OF ANY MATTER PRIOR
TO THE DELIVERY OF THIS NOTE OR OTHERWISE, ALL SUCH LIABILITY, BY THE ACCEPTANCE
HEREOF AND AS A PART OF THE CONSIDERATION OF THE ISSUE HEREOF, BEING EXPRESSLY
WAIVED.
THIS BOND IS ONE OF AN AUTHORIZED ISSUE OF BONDS OF THE COMPANY, ALL
ISSUED AND TO BE ISSUED UNDER AN INDENTURE EXECUTED BY THE COMPANY TO THE FIRST
NATIONAL BANK & TRUST COMPANY, PHILLIPSBURG, KANSAS, AS TRUSTEE, DATED AS OF
JULY 31, 1997, TO WHICH INDENTURE REFERENCE IS HEREBY MADE FOR A DESCRIPTION OF
THE RIGHTS, OBLIGATIONS, DUTIES AND IMMUNITIES THEREUNDER OF THE TRUSTEE AND THE
RIGHTS AND LIMITATIONS OF RIGHTS THEREUNDER OF THE BONDHOLDERS, AND THE RIGHTS
AND OBLIGATIONS THEREUNDER OF THE COMPANY. AS PROVIDED IN THE INDENTURE, SAID
BONDS WILL BE ISSUED IN DENOMINATIONS OF $5,000, MAY BEAR INTEREST AT DIFFERENT
RATES AND HAVE DIFFERENT MATURITY DATES.
THIS BOND HAS NOT BEEN REGISTERED UNDER FEDERAL OR STATE SECURITIES LAWS AND
WAS ISSUED PURSUANT TO CERTAIN EXEMPTIONS THEREUNDER. THIS BOND HAS NOT BEEN
APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
AGENCY, AND NO REGULATORY BODY HAS PASSED UPON OR ENDORSED THE ACCURACY,
ADEQUACY OR COMPLETENESS OF THIS BOND. THIS BOND MAY NOT BE SOLD,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL TO
THE COMPANY, AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND STATE SECURITIES LAWS IS AVAILABLE.
IN WITNESS WHEREOF, THE COMPANY HAS SIGNED AND SEALED THIS BOND ON THIS ______
DAY OF _________________, 1997
4
BROOKE CREDIT CORPORATION
BY:
-----------------------------------
SEAL PRESIDENT
ATTEST:
-----------------------------------
SECRETARY
THE FIRST NATIONAL BANK & TRUST CO., PHILLIPSBURG, KANSAS, HEREBY AUTHENTICATES
THIS BOND AS ONE OF THE BONDS DESCRIBED IN THE WITHIN MENTIONED INDENTURE
BY:
-----------------------------------
AUTHORIZED OFFICER
AND WHEREAS, all Bonds of other series which may be issued under this
Indenture are to be in substantially the same form as the form hereinabove set
forth, subject to such variations, additions, omissions and substitutions as are
provided for or permitted by the terms of this Indenture, or any supplement
thereto.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Bonds
are authenticated, issued and delivered, and in consideration of the premises,
of the purchase and acceptance of the Bonds by the holders thereof and of the
sum of Ten Dollars at the execution of these presents, the receipt whereof is
hereby acknowledged, the Company covenants and agrees with the Trustee, for the
equal and proportionate benefit of the respective holders without preference of
any one over another by reason of priority in the preference of any one over
another by reason of priority in the time of issue, sale or negotiation thereof
or otherwise except as otherwise expressly provided in this Indenture, as
follows:
ARTICLE ONE.
Definitions
1.01. DEFINITIONS OF CERTAIN TERMS. The terms defined in this 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this 1.01. All other
terms used in this Indenture which are defined in the Trust Indenture Act of
1939, as amended, or which are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in such Securities Act as
in force at the date of the execution of this Indenture.
Authorized Newspaper:
"Authorized Newspaper" shall mean a newspaper printed in the English
language and customarily published and of general circulation in Phillipsburg,
Kansas, at least once on each week.
5
Business Day:
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday,
and Friday, which is not a legal holiday for banking institutions in
Phillipsburg, Kansas.
Certificate of the Company:
"Certificate of the Company" shall mean a Certificate signed by the
President or a Vice President and by the Secretary or an Assistant Secretary of
the Company.
Company:
"Company" shall mean Brooke Credit Corporation, a Kansas corporation,
and its successors, including any New Company, as such term is defined in
Article Thirteen.
Event of Default:
"Event of Default" shall mean any event specified in 8.01, continuing
for the period of time, if any, therein designated.
Indenture:
"Indenture" shall mean this instrument as originally executed, or, if
amended or supplemented, as so amended or supplemented.
Issue Date:
"Issue Date" shall mean the date shown on the front side of a Bond as
its issue date.
Bond:
"Bond" or "Bonds" shall mean any Bond or Bonds, Notes or Debentures, as
the case may be, authenticated and delivered under the Indenture.
Bondholder:
"Bondholder", "holder of Bonds", or other similar term, shall mean any
person who shall at the time be the holder of any registered Bond, Note or
Debenture registered in its name.
Bond Register and Bond Registrar:
"Bond Register" and "Bond Registrar" shall have the respective meanings
specified in 2.04.
Opinion of Counsel:
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who shall be satisfactory to the Trustee and who may be an employee of
or counsel to the Company.
6
Outstanding:
"Outstanding" when used with reference to Bonds, shall mean, as of any
particular time, all Bonds authenticated and delivered by the Trustee under this
Indenture, except
(a) Bonds theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Bonds for the payment or redemption of which moneys in the
necessary amount shall have been deposited in trust with the Trustee or
with any Paying Agent (other than the Company or any other obligor on
the Bonds) or shall have been set aside and segregated in trust by the
Company or any other obligor on the Bonds (if the Company or any other
obligor on the Bonds shall act as its own paying agent), and
(c) Bonds in lieu of and in substitution for which other Bonds shall
have been authenticated and delivered pursuant to 2.04 or 2.06;
provided, however, that in determining whether the holders of the requisite
principal amount of Bonds outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Bonds owned by
the Company or any other obligor upon the Bonds 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 bonds which the Trustee knows to be so owned
shall be so disregarded. Bonds 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 pledgor's right so to act with respect to such Bonds and that
the pledgee is not the Company or any other obligor upon the Bonds.
Paying Agent:
"Paying Agent" shall mean any Person authorized by the company to pay
the principal of (and premium, if any) or interest on any Bond on behalf of the
Company.
Person:
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Principal Corporate Trust Office:
"Principal Corporate Trust Office" means the principal corporate trust
office of the Trustee at the location set forth in the first paragraph of this
Indenture, or at such other location in Kansas, as the Trustee may from time to
time designate by written notice to the Company.
Registered Holder:
"Registered Holder" or "Registered Owner" shall mean the person or
person in whose name or names a particular registered Bond shall be registered
on the Bond Register of the Company kept for that purpose in accordance with the
terms of the Indenture.
7
Resolution of the Board:
"Resolution of the Board" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company under its corporate
seal to have been duly adopted (and still in full force and effect) by the Board
of Directors of the Company (or by the Executive Committee of the Company, if
such officer shall certify that it is authorized to act in the premises), either
at a meeting thereof duly called and held and at which a quorum was present, or
by a statement of unanimous consent signed by the Directors or the Executive
Committee adopting said resolution.
Responsible Officer:
"Responsible Officer" when used with respect to the Trustee shall mean
the Chairman of the Board of Directors, the Chairman of the Executive Committee,
the President, the Secretary, any Trust Officer, or any other officer or
assistant officer of the Trust Department of the Trustee customarily performing
function similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
Senior Debt:
"Senior Debt" shall mean all indebtedness of the Company for money
borrowed which is not expressed to be subordinate or junior in right of payment
in any respect to any other indebtedness of the Company for money borrowed.
Subsidiary:
"Subsidiary" shall mean any corporation of which the Company at the
time owns or controls, directly and/or through any intervening medium, more than
fifty per cent (50%) of the outstanding stock having ordinary voting power.
Trustee:
"Trustee" shall mean First National Bank and Trust Company of
Phillipsburg, a national banking association located in Phillipsburg, Kansas,
and, subject to the provision of Article Nine, shall also include its successors
and assigns.
Trust Indenture Act of 1939:
The term "Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939, as amended and in force at the date of execution of the Indenture
as originally executed.
1.02. DEFINITIONS OF OTHER TERMS. Certain other terms are defined in
Article Nine.
1.03. COMPLIANCE CERTIFICATES AND OPINIONS. Each certificate or opinion
provided for in the Indenture and delivered to the Trustee with respect to
compliance with a condition or covenant provided for in the Indenture shall
include (a) a statement that the person making such certificate or opinion has
read such covenant or condition; (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (c) a statement that, in the
opinion of such person, he has made such examinations or investigation as is
8
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (d) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
ARTICLE TWO.
Form, Execution, Delivery, Registration and Exchange of Bonds
2.01. EXECUTION OF BONDS. All Bonds to be issued hereunder shall be
signed on behalf of the Company by the President or a Vice President of the
Company, manually or in facsimile, and a facsimile of its corporate seal shall
be imprinted thereon and attested by the manual or facsimile signature of its
Secretary or an Assistant Secretary. Bonds may be signed by the facsimile
signatures of the appropriate officers of the Company, present or future, and
the Company may use for the purpose of signature and attestation the facsimile
signature of any person who shall have been such an officer, notwithstanding
that he may not have been such officer at the date of such Bond or at the time
when such Bond shall be authenticated, delivered or issued.
2.02. AUTHENTICATION; DENOMINATIONS. All Bonds when executed by the
Company, shall be delivered to the Trustee, to be authenticated by it, and the
Trustee shall authenticate and deliver the same only as provided in the
Indenture. Only such Bonds as shall bear thereon the certificate of
authentication of the Trustee, duly signed, shall be entitled to any benefit
hereunder, and such certificate of authentication of the Trustee upon any such
Bond executed on behalf of the Company shall be conclusive evidence and the only
evidence that the Bond so authenticated has been duly issued hereunder and is
entitled to the benefits of the trust hereby created.
Definitive Bonds may be engraved, printed or lithographed or produced
by a combination of engraving, printing or lithography.
The Bonds, Series 1997A, 1997B and 1997C will be registered Bonds
without coupons in minimum denomination of $5,000. The Bonds shall be numbered
in such manner as may be determined by the Company and approved by the Trustee.
The Bonds of any series which may be issued hereunder shall be
substantially in the same form as the form hereinbefore set forth. The Bonds of
any series may (1) be of such authorized denomination or denominations, (2) bear
such rate of interest, payable on such interest payment dates, (3) mature at
such time, and in the case of Bonds of serial maturities, at such times, (4) be
registered Bonds without coupons, (5) be payable and/or subject to registration
and transfer at such place or places, (6) contain such provisions as to payment
of, or payment without deduction for, or reimbursement for, any tax or taxes,
(7) be payable upon such terms, (8) be payable in such currency or currencies,
and (9) contain such other provisions not inconsistent with the terms of this
Indenture, all as may be specified in such Bonds and in the supplemental
indenture creating such series.
2.03. PRINCIPAL AMOUNT OF BONDS UNLIMITED: NO PREFERENCE AS BETWEEN
BONDS. The aggregate principal amount of Bonds which may be executed by the
Company and authenticated and delivered by the Trustee and be entitled to the
benefits of this Indenture is unlimited except as may be otherwise provided
herein and in any indenture supplemental hereto. No series of Bonds issued
hereunder shall have any preference over any other series of Bonds issued or to
be issued hereunder, and no Bond of any series shall have any preference over
any other Bond of the same or any other series: provided, however, that no Bonds
of other series shall have any interest in or benefit from any sinking,
amortization or other
9
analogous fund or funds established for the exclusive benefit of any one or more
particular series of Bonds.
2.04. REGISTRATION, EXCHANGE AND TRANSFER; WHO TREATED AS OWNERS. The
company shall cause to be kept at the Principal Corporate Trust Office of the
Trustee a register (herein sometimes referred to as the "Bond Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Bonds and transfers of all Bonds issued
hereunder. The Trustee is hereby initially appointed "Bond Registrar" for the
purpose of registering Bonds and transfers of Bonds as herein provided.
Whenever a Bond or bonds shall be surrendered for exchange to the
Company then upon request, the Company will execute, and the Trustee shall
authenticate and deliver to the Company in exchange therefor a like principal
amount of Bonds, having the same terms and conditions, including date of issue,
of the surrendered Bond or Bonds, in such authorized denomination or
denominations as the holder of the Bond or bonds so surrendered shall request.
All or any bonds so surrendered for exchange shall forthwith be canceled by the
Trustee and delivered to the Company.
No transfer of the registered Bonds issued hereunder shall be valid
unless made on the Bond Register of the Company by the registered holder in
person or by his duly authorized attorney, accompanied by the surrender and
cancellation of the Bonds. A new registered Bond of equal aggregate face amount,
bearing the same rate of interest and the same Interest Payment Date and
maturing on the same date, will be issued to the transferee.
The Company and the Trustee may consider and treat the person in whose
name any Bond issued hereunder shall be registered on the Bond Register of the
Company as the absolute owner thereof for all purposes whatsoever, and neither
the Company nor the Trustee shall be affected by any notice to the contrary.
Payment of the principal of or interest on any Bond to the registered holder
thereof or upon his order, shall fully discharge the Company with respect
thereto to the extent of the sum so paid.
2.05. NO GAIN OR LOSS IN INTEREST. Each Bond delivered pursuant to any
provision of the Indenture in exchange or substitution for the whole or any
part, as the case may be, of one or more other Bonds shall carry all of the
rights to interest accrued and unpaid, and to accrue, which were carried by the
whole or such part, as the case may be, of such one or more other Bonds, and
shall bear such date so that neither gain nor loss in interest shall result from
such exchange or substitution.
2.06. MUTILATED, LOST, STOLEN OR DESTROYED BONDS. In case any Bond
issued hereunder shall be mutilated, lost, stolen or destroyed, the Company may
in its discretion execute and the Trustee shall authenticate and deliver a new
bond of like tenor and date in exchange and substitution for and upon
cancellation of the mutilated Bond or in lieu of and substitution for the Bond
to the Company and the Trustee of the ownership of such Bond and of the loss,
theft or destruction of such Bond, and upon receipt also of indemnity
satisfactory to each of them. Any Bond delivered pursuant to this 2.06 shall
constitute original, additional contractual obligations on the part of the
Company and shall rank equally and ratably with all other Bonds issued
hereunder.
2.07. Intentionally left blank.
2.08. ISSUANCE OF ADDITIONAL BONDS. Additional Bonds of series other
than 1997A, 1997B and 1997C, may at any time and from time to time be executed
by the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said bonds upon the written
10
order of the Company hereinafter mentioned, not exceeding such aggregate
principal amount as may be authorized in the Resolution of the Board hereinafter
mentioned, upon receipt by the Trustee of the following:
(a) A written order of the Company, signed by its President or a Vice
President under its corporate seal, attested by its Secretary or an Assistant
Secretary, requesting the authentication and delivery of a specified principal
amount of Bonds of any designated series, and specifying the persons to whom the
same are to be delivered;
(b) A resolution of the Board authorizing the authentication and
delivery of Bonds of such designated series in a principal amount not less than
the principal amount specified in such written order of the Company;
(c) The supplemental indenture;
(d) A Certificate of the Company, complying with the provisions of
1.03, stating that the Company is not in default in the performance of any of
the terms or covenants of the Indenture and that all conditions precedent to the
issue of said Bonds have been complied with; and
(e) An Opinion of counsel, complying with the provisions of 1.03,
stating that in the opinion of such counsel (I) the written order of the
Company, the Resolution of the Board and Certificate of the Company so delivered
conform to the requirements of this 2.08, and (II) all condition precedent to
the issue of said Bonds have been complied with.
ARTICLE THREE.
(Intentionally left blank)
ARTICLE FOUR.
Covenants of the Company and Grant of Security Interest
The Company covenants and agrees as follows:
4.01. TO PAY PRINCIPAL AND INTEREST ON BONDS. The Company will duly and
punctually pay the principal of and interest on the Bonds at the times and place
and in the manner specified in the Bonds. The interest on the Bonds shall be
payable only to or upon the written order of the Registered holders thereof.
4.02. RESTRICTIONS ON DIVIDENDS AND REDEMPTION OF STOCK. The Company
will not, except as provided in this Section, (a) declare or pay any dividend or
make any distribution on its Common Stock or to such stockholders, or (b)
purchase, redeem or otherwise acquire for value any shares of its Common Stock,
except shares acquired upon the conversion thereof into other shares of Common
Stock of the Company, or (c) secure or otherwise encumber the company's assets
other than to bondholders; (d) issue any bonds, debentures on notes that are
senior to these Bonds, although the Company may issue additional bonds with
seniority equal to these Bonds; (e) hold assets acquired through foreclosure for
more than 136 months; (f) use proceeds from these Bonds for any purpose other
than funding loans or purchasing accounts and commissions receivables; (g) above
shall not prohibit the Company from
11
declaring or paying dividends or making distributions on its Common Stock or to
such stockholders if such dividends or distributions are payable solely in
shares of its Common Stock.
4.03. PRESENTATION OF BONDS. Notices, presentations and demands to or
upon the Company in respect of the Bonds and this Indenture may be given or made
at any place where the principal of or interest on any of the Bonds shall then
be payable.
4.04. GRANT OF SECURITY INTEREST. The Company hereby grants the Trustee
a security interest in any future promissory notes and receivables payable to
the Company and representing loans to insurance agents, insurance agencies and
their policyholders and to fund the purchase of accounts and commissions
receivables of such insurance agents and insurance agencies. Such security
interest shall be perfected by the Trustee by assuming possession of such
promissory notes until payment in full by the obligor thereof and by UCC filing,
if required. The company shall provide regular accountings to the trustee
representing the status of such loans.
4.05. NOT TO EXTEND TIME OF PAYMENT OF INTEREST. In order to prevent
any accumulation of claims for interest after maturity thereof the Company will
not directly or indirectly extend or consent to the extension of the time for
the payment of any claim for interest on any of the Bonds and will not directly
or indirectly be a party to or approve any such arrangement by the purchase or
funding of said claims for interest or in any other manner. No claim for
interest, the time of payment of which shall have been so extended or which
shall have been so purchased or funded shall be entitled in case of an Event of
Default hereunder to the benefit of this Indenture except after the prior
payment in full of the principal of all the Bonds and of all claims for interest
not so extended, purchased or funded; provided, however, that this Section shall
not apply in any case where an extension shall be pursuant to a plan proposed by
the Company to the holders of all the bonds then outstanding.
4.06. FURTHER ASSURANCE. From time to time whenever reasonably demanded
by the Trustee the Company will make, execute and deliver or cause to be made,
executed and delivered any and all such further and other instruments and
assurances as may be reasonably necessary or proper to carry out the terms and
intent of this Indenture or to provide for the rights and remedies hereunder of
the holders of the Bonds.
4.07. CERTIFICATES TO TRUSTEE. During January, 1998, and during March
in each year thereafter, there shall be filed with the Trustee a statement,
signed by the President and by the Treasurer or the Secretary of the Company,
stating that in the course of the performance by the signers of their duties as
such officers of the Company they would normally obtain knowledge of any default
by the Company in the performance or fulfillment of any covenant, agreement or
condition contained herein, stating whether or not they have obtained knowledge
of any such default during the twelve months' period ending on the preceding
December 31, and, if so, specifying each such default of which the signers have
knowledge and the nature thereof.
4.08. ALL FUNDS HELD IN TRUST. (a) The Company will cause any paying
agent which it may appoint, other than the Trustee, to execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section and of Article Three,
(1) that it will hold all sums held by it as such agent for the payment
of the principal of and premium (if any) or interest on the Bonds
(whether such sums have been paid to it by the Company or by any other
obligor on the Bonds) in trust for the benefit of the holders of the
12
Bonds, or of the Trustee, as the case may be, and will notify the
Trustee of the receipt of sums to be so held, and
(2) that it will upon default give the trustee notice of any failure by
the Company (or by any other obligor on the Bonds) to make any payment
of the principal of and premium (if any) or interest on the Bonds when
the same shall be due and payable
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal or interest on the Bonds, set aside,
segregate and hold in trust for the benefit of the holders of the Bonds a sum
sufficient to pay such principal interest becoming due. The company will
promptly notify the Trustee of any failure to take such action or the failure by
any other obligor on the Bonds to make payment of the principal or interest on
the Bonds when the same shall be due and payable.
(c) Anything in this Section to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it or any paying agent as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provision of 14.03 and 14.04 hereof.
ARTICLE FIVE.
Redemption by the Company
5.01. REDEMPTION OF BONDS. The Bonds are redeemable, as a whole, only
upon maturity.
5.02. WHEN INTEREST CEASES ON BONDS. Bonds shall become due and payable
on the date of maturity and on and after said date such Bonds being redeemed
shall cease to bear interest.
All moneys deposited by the Company with the Trustee under the
provisions of this Article for the redemptions of Bonds shall, subject to the
provisions of 14.04 hereof, be held in trust for account of the holders of the
Bonds so to be redeemed, and shall be paid to them respectively, upon
presentation and surrender of said Bonds.
ARTICLE SIX.
Intentionally left Blank
ARTICLE SEVEN.
Bondholders' Lists and Reports by the Company and the Trustee
7.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND ADDRESSES
OF BONDHOLDERS. The company covenants and agrees that it will semiannually
furnish or cause to be furnished to the Trustee between March 31 and April 30
and between September 30 and October 31 in each year and at such other times as
the Trustee may request in writing, within thirty days after receipt by the
Company of any such request, a list in such form as the Trustee may reasonably
require containing all the information in the possession or control of the
Company, or any of its paying agents other than the Trustee, as to the
13
names and addresses of the holders of Bonds obtained since the date as of which
the next previous list, if any, was furnished. Any such list may be dated as of
a date not more than fifteen days prior to the time such information is
furnished and need not include information received after such date, except
that, so long as the Trustee is Bond Registrar, no such list need be furnished.
7.02. PRESERVATION, AVAILABILITY AND DISCLOSURE OF INFORMATION BY
TRUSTEE. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Bonds (1) contained in the most recent list furnished to it as provided in 7.01
hereof, (2) received by it in the capacity of paying agent (if so acting)
hereunder.
The Trustee may (1) destroy any list furnished to it as provided in
7.01 hereof upon receipt of a new list so furnished, (2) destroy any information
received by it as paying agent (if so acting) hereunder, upon delivering to
itself as Trustee, not earlier than forty-five (45) days after an interest
payment date of the Bonds, a list containing the names and addresses of the
holders of Bonds obtained from such information since the delivery of the next
previous list, if any, (3) destroy any list delivered to itself as Trustee which
was compiled from information received by it as paying agent (if so acting)
hereunder, upon the receipt of a new list so delivered, and (4) destroy any
information filed with it upon redemption of all bonds.
(b) In case three or more holders of Bonds (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 Bond 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 Bonds
with respect to their rights under this Indenture or under the Bonds, and such
application 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, as its election, either
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a)
of this Section; or
(2) inform such applicants as to the approximate number of holders of
Bonds whose names and addresses appear in the information preserved at
the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section, and as to the approximate cost of
mailing to such Bondholders 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 Bondholder whose name and address appears in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section, 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 expense of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Securities and Exchange Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the holders
of Bonds, or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If said 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 objection, said Commission
shall find, after notice and opportunity for a hearing that all the objections
so sustained have met, and shall enter an order so declaring, the Trustee
14
shall mail copies of such material to all such Bondholders 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) The disclosure of information under subsection (b) of this Section
as to the names and addresses of the Indenture security holders in accordance
with the provisions of this Section, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law, or any law hereafter enacted which does not specifically refer to the Trust
Indenture Act, The Trustee shall not be held accountable by reason of the
mailing of any material pursuant to any requests made under subsection (b) of
this Section.
7.03. REPORTS TO BE FILED BY COMPANY. The Company covenants:
(a) to file with the Trustee within 120 days after the end of the
fiscal year, copies of the annual reviewed financial statements prepared by an
independent certified public accountant;
(b) to file with the Trustee quarterly unaudited financial statements;
and
(c) to transmit to the holders of Bonds within thirty days after the
filing thereof with the Trustee, copies of the reports provided in subsection
(a) of 7.03 hereof, and upon written request, reports pursuant to subsection (b)
of said 7.03.
(d) Reports pursuant to subsection (a) of 7.03 shall be transmitted by
first-class mail to all Registered Holders of Bonds, as the names and addresses
of such holders appear upon the Bond Register of the Company. Reports provided
in subsection (b) of 7.03 shall be transmitted by first-class mail to the
Bondholders requesting same.
(e) a copy of each such report shall, at the time of such transmission
to Bondholders, be retained by the Trustee until redemption of all Bonds.
ARTICLE EIGHT.
Remedies of Trustee and Bondholders on Default
8.01. EVENTS OF DEFAULT. In case one or more of the following Events of
Default shall have occurred and be continuing, that is to say:
(a) default in the payment of any installment of interest upon any of
the Bonds as and when the same shall become due and payable, and continuance of
such default for a period of 30 days; or
(b) default in the payment of the principal on any of the Bonds as and
when the same shall become due and payable at maturity; or
(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Bonds or
in this Indenture contained and written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the Trustee
or by the holders of at least ten (10%) in aggregate principal amount of the
Bonds at the time outstanding and such failure shall have continued unremedied
for a period of 90 days after the Company's receipt of such notice; or
15
(d) a decree by order of a court having jurisdiction in the premises
shall have been entered adjudging the Company bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the Company
under the National Bankruptcy Act or any other similar applicable Federal or
State law, and such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of the Company or of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have continued undischarged and unstayed
for a period of 60 days; or
(e) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under the National Bankruptcy Act or any other similar applicable Federal or
State law, or shall consent to the filing of any such petition, or shall consent
to the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they become due;
then and in each and every such case, unless the principal of all the Bonds
shall have already become due and payable, either the Trustee or the holders of
not less than a majority in aggregate principal amount of the Bonds then
outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Bondholders), may declare the principal of all the Bonds to be due
and payable immediately and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Bonds
contained to the contrary notwithstanding. This provision, however, is subject
to the condition that if, at any time after the principal shall have been
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Bonds and the principal on any and
all Bonds which shall have become due otherwise than by acceleration (with
interest upon such principal, if to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest specified in the Bonds, to the date of such
payment or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents, attorneys and counsel, and all other
expenses and liabilities incurred and all advances made by the Trustee except as
a result of its negligence or bad faith, and any and all defaults under the
Indenture, other than the non-payment of the principal of Bonds which shall have
become due by acceleration, shall have been remedied then and in every such case
the holders of a majority in aggregate principal amount of the Bonds then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
8.02. RIGHTS OF TRUSTEE. The Company covenants that (a) in case default
shall be made in the payment of any installment of interest on any of the Bonds
when such interest shall have become due and payable and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of the principal on any of the Bonds when the same shall have become due
and payable, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Bonds, the whole amount that then
shall have become due and payable on all such Bonds for principal or interest,
or both, as the case may be, with interest upon the overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate borne by the Bonds, and , in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee,
its agents, attorneys
16
and counsel and any expenses or liabilities incurred, and all advances made, by
the Trustee hereunder without negligence or bad faith.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Bonds to the Registered Holders.
In case the Company shall fail forthwith to pay such amount upon such
demand, the Trustee, in its own name and as Trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and paid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Bonds and
collect in the manner provided by law, out of the property of the company or
other obligor upon the Bonds wherever situated the moneys adjudged or decreed to
be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company or
such other obligor, or in case of any other judicial proceedings relative to the
Company or other obligor upon the Bonds, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of the Bonds 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 pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the bonds, 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 reasonable compensation to the Trustee, its agent, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred and all
advances made, by the Trustee except as a result of its negligence or bad faith)
and of the Bondholders allowed in any judicial proceedings relative to the
Company or other obligor upon the Bonds or to the creditors or property of the
Company or such other obligor, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Bondholders and of the
Trustee on their behalf; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Bondholders to make payments
to the Trustee and, in the event that the Trustee shall consent to the making of
payments directly to the Bondholders, to pay to the Trustee such amount as shall
be sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of its negligence or bad faith;
provided, that nothing contained in this Indenture shall be deemed to give to
the Trustee any right to accept or consent to any plan or reorganization, or
otherwise, by action of character in any other proceeding, to waive or chance in
any way any right of any Bondholder.
All rights of action and of asserting claims under this Indenture or
under any of the Bonds may be enforced by the Trustee without the possession of
any of the bonds or the production thereof on any trial or other proceedings
relative thereto, and any such suit or proceedings instituted by the Trustee
shall be brought in its name as trustee of an express trust, and any recovery of
judgment shall be for the ratable benefit of the holders of the Bonds, except
for any amount payable to the Trustee pursuant to the provisions of 9.06. In any
proceedings brought by the Trustee (and also any proceedings involving the
interpretation of any provision of this Indenture to which the Trustee shall be
a party) the Trustee shall be held to represent all the holders of the Bonds,
and it shall not be necessary to make any holders of the Bonds parties to any
such proceedings.
17
8.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys collected
by the Trustee pursuant to 8.02 shall be applied in the order following, at the
date or dates fixed by the Trustee and, in the case of the distribution of such
moneys on account of principal or premium (if any) or interest, upon
presentation of the several Bonds, and stamping thereon the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of costs and expenses, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel and all
expenses, liabilities and advances made or incurred by the Trustee
without negligence or bad faith;
Second: In case the principal of the Bonds shall not have become and be
then due and payable, to the payment of the interest in default, in the
order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the
Trustee) on the overdue installments at the rate borne by the Bonds,
such payments to be made ratably to the persons entitled thereto,
without discrimination or preference;
Third: In case the principal of any outstanding Bonds shall have become
and shall be then due and payable, to the payment of the whole amount
then owing and unpaid upon all the Bonds for principal and interest,
with interest on the overdue principal and (to the extent that such
interest has been collected by the Trustee) upon overdue installments
of interest at the rate borne by the Bonds; and in case such moneys
shall be insufficient to pay in full the whole amount so owing and
unpaid upon all the Bonds, then to the payment of such principal and
interest, without preference or priority of principal over interest, or
of interest over principal, or of any installment of interest over any
other installment of interest ratably to the aggregate of such
principal and accrued and unpaid interest, except as provided in 4.05
hereof.
8.04. FURTHER REMEDIES OF TRUSTEE ON DEFAULT. In case of an Event of
Default hereunder the Trustee may in its discretion proceed to protect and
enforce its rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law. This includes the right to foreclose on its
security interest in loans of the company and to collect payments made thereon
by the Company's borrowers.
8.05. RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In case the
Trustee shall have proceeded to enforce any right under this Indenture, and such
proceedings shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to the Trustee, then and in every such case the
Company and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company, the
Trustee and the holders of Bonds shall continue as though no such proceedings
had been taken.
8.06. LIMITATION ON SUITS BY BONDHOLDERS. No holder of any Bond shall
have any right by virtue or by availing of any provision of this Indenture to
institute any action or proceedings at law or in equity or in bankruptcy or
otherwise, upon or under or with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such holder previously shall have given to the Trustee written notice of default
and of the continuance thereof, as herein before provided, and unless also the
holders of not less than 25% in aggregate principal amount of the Bonds then
outstanding shall
18
have made written request upon the Trustee to institute such action or
proceedings in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceedings and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to 8.08;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Bond with every other taker and holder and the Trustee, that
no one or more holders of Bonds shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Bonds, or to obtain or seek to
obtain priority over or preference to any other such holder or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Bonds. For the protection
and enforcement of the provisions of this Section, each and every Bondholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
8.07. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO XXX FOR PRINCIPAL AND
INTEREST WHEN DUE ON NOTES. Notwithstanding any other provision in this
Indenture, the right of any holder of any Bond to receive payment of the
principal of and interest on such Bond on or after the respective due dates
expressed in such Bond, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such holder.
8.08. HOLDERS OF MAJORITY IN AMOUNT OF BONDS OUTSTANDING MAY DIRECT
PROCEEDINGS BY TRUSTEE AND WAIVE CERTAIN DEFAULTS. The holders of a majority of
the principal amount of the Bonds at the time outstanding 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, however, that subject to the provisions of 9.01 hereof,
the Trustee shall have the right to decline to follow any such direction if the
Trustee shall be advised by counsel that the action so directed may not lawfully
be taken, or if the Trustee in good faith shall be advised by a responsible
officer or officers that they have determined that the action so directed would
be unjustly prejudicial to the holders of the Bonds not taking part in such
direction. Prior to the declaration of the maturity of the Bonds as provided in
8.01 hereof, the holders of a majority in aggregate principal amount of the
Bonds at the time outstanding determined in accordance with the provisions of
10.04 may on behalf of the holders of all of the Bonds waive any past default or
Event of Default hereunder and its consequences, except a default or an event of
Default in the payment of interest on or the principal on any of the Bonds. In
the case of any such waiver, the Company, the Trustee and the holders of the
Bonds shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
8.09. TRUSTEE TO GIVE NOTICE OF DEFAULT BUT MAY WITHHOLD UNDER CERTAIN
CIRCUMSTANCES. The Trustee shall, within 90 days after the occurrence of a
default, give to the Bondholders, in the manner and to the extent provided in
subsection (d) of 7.03 hereof with respect to reports pursuant to subsection (a)
of said 7.03, notice of all defaults known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "default" or
"defaults" for the purposes of this section being hereby defined to be any event
or events, as the case may be, specified in subsections (a), (b), (c), (d) and
(e) of 8.01 hereof, not including periods of grace, if any, provided for therein
and irrespective of the giving of the written notice specified in subsection (c)
of said 8.01); provided that, except in the case of default in the payment of
the principal of or interest on any of the Bonds, the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Bondholders.
19
8.10. POWERS AND REMEDIES GIVEN TRUSTEE AND BONDHOLDERS CUMULATIVE, NOT
EXCLUSIVE. All powers and remedies given by this Article to the Trustee or to
the Bondholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any thereof or of any other powers and remedies available to
the Trustee or the holders of the Bonds, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained in this Indenture.
No delay or omission of the Trustee or of any holder of any of the
Bonds to exercise any right or power accruing upon an Event of Default occurring
and continuing as aforesaid, shall impair any such right or power, or shall be
construed to be a waiver of any such Event of Default or any acquiescence
therein; and, subject to the provisions of 8.06, every power and remedy given by
this Article or by law to the Trustee or to the Bondholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Bondholders.
8.11. RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY COSTS. All
parties to this Indenture agree, and each holder of any Bond 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 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 Bondholder or group of Bondholders holding not less than 10%
in aggregate principal amount of the Bonds outstanding, or to any suit
instituted by any Bondholder for the enforcement of the payment of the principal
of (or premium, if any) or interest on any Bond on or after the due date
expressed in such Bond.
ARTICLE NINE.
Concerning the Trustee
9.01. DUTIES OF TRUSTEE PRIOR TO AND AFTER DEFAULT. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured) the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing
of all Events of Default which may have occurred;
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
20
(2) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any 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 requirement of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
holders of not less than a majority in aggregate principal amount of the Bonds
at the time outstanding, determined as provided in 10.04, 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.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
9.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in 9.01
hereof
(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, consent, order, bond, debenture, note, coupon or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an instrument signed in the name of
the Company by the President or a Vice President and the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it here under in good faith and in accordance with
such Opinion of Counsel;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Bondholders, pursuant to the provisions of this
Indenture, unless such Bondholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred therein or thereby;
(e) The Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any investigation into the
fact or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
00
xxxx, xxxxxxxxx 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;
(g) The Trustee may execute any of the trust or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) The Trustee shall be under no responsibility for the approval of
any expert for any of the purposes provided for in this Indenture.
9.03. TRUSTEE NOT RESPONSIBLE FOR RECITALS HEREOF NOR ACCOUNTABLE FOR
APPLICATION OF PROCEEDS ON BONDS. The recitals contained herein and in the Bonds
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Bonds. The Trustee shall not be accountable for the use or application by the
Company of any of the Bonds or of the proceeds thereof.
9.04. TRUSTEE MAY BECOME OWNER OR PLEDGEE OF BONDS. Subject to the
provisions of 9.08 and 9.13, the Trustee may buy, own, hold and sell any of the
Bonds or any other evidences of indebtedness or other securities of the Company
or any Subsidiary or affiliate of the Company, and may engage or be interested
in any financial or other transaction with the Company or any Subsidiary or
affiliate, and may maintain any and all other general banking and business
relations with the Company and any parent or Subsidiary or affiliate with like
effect and in the same manner as if the Trustee were not a party to this
Indenture; and no implied covenant shall be read into this Indenture against the
Trustee in respect of such matters.
9.05. MONEYS HELD BY TRUSTEE CONSTITUTE TRUST FUNDS. Subject to the
provision of 14.04 hereof, all moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which they
were received, but 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
moneys received by it hereunder except such as it may agree with the Company to
pay thereon. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time to
time upon the written order of the Company, signed by its President or a Vice
President or its Treasurer or an Assistant Treasurer.
9.06. COMPENSATION AND REIMBURSEMENT OF TRUSTEE; LIEN ON FUNDS HELD.
The Company covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. If any
property other than cash shall, at any time, be subject to the lien of this
Indenture, the Trustee if and to the extent authorized by a receivership or
bankruptcy court of competent jurisdiction or by the supplemental instrument
subjecting such property to such lien, shall be entitled to make advances for
the purpose of preserving such property or of discharging tax liens or other
prior liens or encumbrances thereon. The
22
Company also covenants to indemnify the Trustee, 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 of liability in the premises. The
obligations of the Company under this Section to compensate the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Bonds upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the benefit
of the holders of particular Bonds.
9.07. CERTIFICATES OF PROOF. Except as otherwise provided in 9.01
hereof, whenever, in the administration of the provisions of this Indenture, the
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by a certificate signed by the
Assistant Secretary or the Treasurer or an Assistant Treasurer of the Company
and delivered to the Trustee, and such certificate, in the absence of negligence
or bad faith on the part of the Trustee, shall be full warranty to the Trustee
for any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
9.08. CONFLICTING INTEREST OF TRUSTEE. (a) If the Trustee has or shall
acquire any conflicting interest, as defined in this Section, the Trustee shall,
within ninety days after ascertaining that it has such conflicting interest,
either eliminate such conflicting interest or resign in the manner and with the
effect specified in 9.10 hereof.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, the Trustee shall, within ten days
after the expiration of such ninety day period, transmit notice of such failure
to the Bondholders, in the manner and to the extent provided in subsection (c)
of 7.03 hereof with respect to reports pursuant to subsection (a) of said 7.03.
(c) Subject to the provisions of 8.11, any Bondholder who has been a
bona fide holder of a Bond or Bonds 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
if the Trustee fails, after written request therefor by such holder, to comply
with the provisions of subsection (a) of this Section.
(d) 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, other than the Bonds
described in this Indenture, unless such other indenture is a
collateral trust indenture, under which the only collateral consists of
Bonds issued under this Indenture, provided that there shall be
excluded from the operation of this paragraph another indenture or
indentures under which other securities of the Company are outstanding
if (A) 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 of 1939, unless the Securities
and Exchange Commission shall have found and declared by order pursuant
to subsection (b) of Section 305 or subsection (c) of Section 307 of
the Trust Indenture Act of 1939 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
23
other indenture or indentures, or (B) the Company shall have sustained
the burden of proving, on application to the Securities and Exchange
Commission and after opportunity for hearing thereon, that the
trusteeship under this Indenture and such indenture 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
obligor upon the bonds or an underwriter for the Company;
(3) the Trustee, directly or indirectly, controls or is directly or
indirectly controlled by or under direct or indirect common control
with the Company or 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 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 (1) of this subsection (d), to act as trustee,
whether under an indenture or otherwise;
(5) ten per centum or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or twenty per centum or more of such voting
securities is beneficially owned, collectively, by any two or more of
such persons; or ten per centum 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 thereof, or is
beneficially owned collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds a collateral
security for, an obligation which is in default, (A) five per centum or
more of the voting securities or ten per centum or more of any class of
security of the Company, not including the Bonds issued under this
Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (B) ten per centum 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, five per centum or
more of the voting securities of a person who, to the knowledge of the
Trustee, owns ten per centum or more of the voting securities of, or
controls directly or indirectly or is under direct or indirect control
with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, ten per centum or more
of any class of security of any person who, to the knowledge of the
Trustee, owns fifty per centum or more of the voting securities of the
Company; or
(9) the Trustee owns, on May 15th in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar capacity,
an aggregate of twenty-five per centum or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7), or (8) of this
subsection (d). 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
24
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 twenty-five per centum
of such voting securities or twenty-five per centum of any such class
of security. Promptly after May 15th in each calendar year, the Trustee
shall make a check of its holdings of such securities in any of the
above mentioned capacities as of such May 15th. If the Company fails to
make payment in full of principal or interest on any of the Bonds when
and as the same shall become due and payable, and such failure
continues for thirty 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 thirty-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 (d).
The specifications of percentages in paragraphs (5) to (9), inclusive,
of this subsection (d) shall not be construed as indicating that the ownership
of such percentages 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 (d).
For the purposes of paragraphs (6), (7), (8), and (9) of this
subsection (d) only, (A) 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 certificates of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in default in payment of principal shall have continued for thirty days or
more and shall not have been cured; and (C) the Trustee shall not be deemed to
be the owner or holder of (I) any security which it holds as collateral security
(as trustee otherwise) for an obligation which is not in default as defined in
clause (B) above, or (II) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (III) any
security which it holds as agent for collection, or as custodian, escrow agent,
or depositary, or in any similar representative capacity.
Except as provided above, the word "security" or "securities" as used
in this Indenture shall mean any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest or instrument commonly known as a "security" or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
(e) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the Company
shall mean every person who, within three years 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.
25
(2) The term "director" shall mean any director of a corporation or any
individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only
a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean 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" shall mean any obligor upon the Bonds.
(6) The term "executive officer" shall mean 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 percentages of voting securities and other securities specified
in this Section shall be calculated in accordance with the following
provisions:
(A) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this
Section (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting
securities of such person as entitled the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the
direction or management of the affairs of such person.
(B) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of
securities of the class outstanding.
(C) The term "amount," when used in regard to securities,
means the principal amount if relating to evidences of
indebtedness, the number of shares if relating to capital
shares, and the number of units if relating to any other kind
of security.
(D) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not
be deemed outstanding within the meaning of this definition:
(I) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same
class;
(II) securities of an issuer held in a sinking fund
relating to another class of securities of the
issuer, if the obligation evidenced by such other
class of securities is not in default as to principal
or interest or otherwise;
26
(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;
(IV) securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, that any voting securities of an issuer
shall be deemed outstanding if any person other than the
issuer is entitled to exercise the voting rights thereof.
(E) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or
holders thereof substantially the same rights and privileges;
provided, however, that, in the case of secured evidences of
indebtedness, all of which are issued under a single
indenture, differences in the interest rates or maturity dates
of various series thereof shall not be deemed sufficient to
constitute such series different classes, and provided
further, that in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity
dates thereof shall not be deemed sufficient to constitute
them securities of different classes, whether or not they are
issued under a single indenture.
9.09. ELIGIBILITY OF TRUSTEE. There shall at all times be a trustee
hereunder which shall be a corporation organized and doing business under laws
of the United States or any State, authorized under such laws to exercise
corporate trust powers, having its principal office and place of business in the
United States, having a combined capital and surplus of at least two million
dollars, and subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining authority
above referred to, 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. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in 9.10 hereof.
9.10. RESIGNATION AND REMOVAL OF TRUSTEE AND APPOINTMENT OF SUCCESSOR.
(a) The trustee may at any time resign by giving written notice to the Company.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within thirty days
after the mailing of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee or any Bondholder who has been a bona fide holder of a Bond or bonds for
at least six months, subject to the provision of 8.11 hereof, on behalf of
himself and all other similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) The Trustee shall fail to comply with the provision of subsection
(c) of 9.08 hereof after written request therefor by the Company or by
any Bondholder who has been a bona fide holder of a Bond or Bonds for
at least six months, or
27
(2) The Trustee shall cease to be eligible in accordance with the
provision of 9.09 hereof and shall fail to resign after written request
therefor by the Company or by any such Bondholder, or
(3) 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
for control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or any such Bondholder
may, subject to the provision of 8.11 hereof, 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. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Bonds at the time outstanding may at any time remove the Trustee and appoint a
successor trustee by the delivery to the Trustee so removed, to the successor
trustee and to the Company of the evidence provided for in 10.01 of the action
in that regard taken by the Bondholders.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
9.11 hereof.
(e) 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 Bondholders as
their names and addresses appear in the Bond Register. Each notice shall include
the name of the Successor Trustee and the address of its Principal Corporate
Trust Office.
9.11. ACCEPTANCE OF TRUST BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in 9.10 hereof shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties, and obligations of its predecessor hereunder, with like effect
as if originally named as trustee herein; but, nevertheless, on the written
request of the Company or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property or
funds held or collected by such trustee to secure any amounts then due it
pursuant to the provision of 9.06 hereof.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of 9.08 hereof and eligible under the provisions
of 9.09 hereof.
28
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall mail or publish in an authorized newspaper
notice of the succession of such trustee. If the Company fails to mail or
publish such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed or
published at the expense of the Company.
9.12. CORPORATION INTO WHICH TRUSTEE MERGED, CONVERTED OR CONSOLIDATED
TO BE SUCCESSOR TRUSTEE. 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 the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation is qualified under the provision of 9.09 hereof, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trust created by this Indenture, and any of the Bonds shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such Bonds
so authenticated; and in case at that time any of the Bonds shall not have been
authenticated, any successor to the Trustee may authenticate such Bonds either
in the name of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Bonds or in this Indenture provided that the certificate
of the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Bonds
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
9.13. IF TRUSTEE AS A CREDITOR OF THE COMPANY IMPROVES ITS CREDITOR
POSITION WITHIN FOUR MONTHS PRIOR TO DEFAULT OR THEREAFTER IT SHALL ACCOUNT TO
AND SHARE WITH BONDHOLDERS. (a) Subject to the provisions of subsection (b) of
this Section, if the Trustee shall be or shall become a creditor; directly or
indirectly, secured or unsecured, of the Company or of any other obligor on the
Bonds within four 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 Bonds
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 four months' 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, or otherwise, after the beginning of such four
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 its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the rights of the
Trustee
29
(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 proceeding 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 four 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 four 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 had no reasonable cause to believe that a
default as defined in subsection (c) of this Section would occur within
four months; or
(D) to receive payment of any claim referred to in paragraphs (B) or
(C) of this subsection (a), against the release of any property held as
security for such claim as provided in such paragraphs (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) of this subsection (a),
property substituted after the beginning of such four 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 preexisting 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 Bondholders and the holders of other indenture
securities in such manner that the Trustee, the Bondholders, and the holders of
other indenture securities realize, as a result of payment 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 Laws 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, the Bondholders 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 Laws or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Law 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 proceeding for reorganization is
pending shall have jurisdiction (I) to apportion between the Trustee, the
Bondholders 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 the proceed thereof, or (II) in lieu of such apportionment, in whole
or in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee,
30
the Bondholders and the holder 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
mathematics formula.
Any Trustee who has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this subsection (a) 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
four months' period; and
(II) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section of 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-thereof, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Bondholders 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 other 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 of other securities of a corporation
organized under the provision 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 and obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
(c) As used in this Section:
31
(1) The term "default" shall mean any failure to make payment in full
of the principal of or interest upon any of the Bonds or upon the other
indenture securities when and as such principal or interest becomes due
and payable.
(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act
of 1939) outstanding under any other indenture (A) under which the
Trustee is also trustee, (B) which contains provisions substantially
similar to the provisions of subsection (a) of this Section, and (C)
under which a default exists at the time of the apportionment of the
funds and property held in said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, xxxx of
exchange, acceptance or obligation which is made, drawn, negotiated, or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, 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 form the making,
drawing, negotiating or incurring of the draft, xxxx of exchange,
acceptance or obligation.
(5) The term "Company" shall mean any obligor upon the Bonds.
9.14. TRUSTEE TO ADVISE COMPANY OF NOTICE, PRESENTATION OR DEMAND. The
Trustee shall promptly advise the Company of any notice, presentation or demand,
other than presentation of Bonds or this Indenture received by the Trustee
pursuant to 4.03 hereof.
ARTICLE TEN.
Concerning the Bondholders
10.01. EVIDENCE OF ACTION TAKEN BY BONDHOLDERS. Whenever in this
Indenture it is provided that the holders of a specified percentage in aggregate
principal amount of the Bonds may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the taking of
any other action) the fact that at the time of taking any such action the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar tenor executed by
Bondholders in person or by agent or proxy appointed in writing, or (b) by the
record of the holders of Bonds voting in favor thereof at any meeting of
Bondholders duly called and held in accordance with the provisions of Article
Eleven hereof, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Bondholders.
10.02. PROOF OF EXECUTION OF DEMANDS AND OTHER INSTRUMENTS AND OF
HOLDING OF BONDS. Subject to the provisions of 9.01, 9.02, and 11.05 hereof,
proof of the execution of any instrument by a Bondholder or his agent or proxy,
and proof of the holding by any person of any of the bonds shall be sufficient
if made in the following manner:
32
The fact and date of the execution by any such person of any instrument
may be proved by the certificate of any notary public or other officer of any
jurisdiction within the United States of America authorized to take
acknowledgments of deeds to be recorded in such jurisdiction that the person
executing such instrument acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such notary or
other such officer.
The ownership of Bonds shall be proved by the Bond Register or by a
certificate of the registrar thereof.
The Trustee may require such additional proof of any matter referred to
in this Section as it shall deem necessary.
The record of any Bondholders' meeting shall be proved in the manner
provided in 11.06.
10.03. REGISTERED HOLDER OF REGISTERED BOND MAY BE TREATED AS OWNER.
The Company, the Trustee, any paying agent, and any Bond registrar may deem and
treat the person in whose name any Bond shall be registered upon the books of
the Company as the absolute owner of such Bond (whether or not such Bond shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Company or any Bond registrar) for the
purpose of receiving payment of or on account of the principal of and premium
(if any) and interest on such Bond and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any Bond registrar shall be
affected by any notice to the contrary. All such payments so made to any such
registered holder for the time being, or upon his order, shall be valid, and to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable on any such Bond.
10.04. BONDS OWNED BY COMPANY DEEMED NOT OUTSTANDING. In determining
under this Indenture whether the holders of the requisite aggregate principal
amount of Bonds have concurred in any direction, consent or waiver or whether
any Bonds are entitled to be voted or whether a quorum is present, Bonds which
are owned by the company or any other obligor on the Bonds or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Bonds shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Bonds which the Trustee knows are so owned shall be so disregarded. Bonds 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 notes and that the pledgee is not the Company or
any other obligor upon the Bonds.
10.05. RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior to (but
not after) the evidencing to the Trustee, as provided in 10.01 hereof, of the
taking of any action by the holders of the percentage in aggregate principal
amount of the Bonds specified in this Indenture in connection with such action,
any holder of a Bond the serial number of which is shown by the evidence to be
included in the Bonds the holders of which have consented to such action may, by
filing written notice with the Trustee at its principal office and upon proof of
holding as provided in 10.02 hereof, revoke such action so far as concerns such
Bond. Except as aforesaid any such action taken by the holder of any bond shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Bond and of any Bonds issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Bond. Any action taken by the holders of the percentage in aggregate
principal amount of Bonds specified in this Indenture in connection with such
action shall be conclusively binding upon the Company, the Trustee and the
holders of all the Bonds.
33
ARTICLE ELEVEN.
Bondholders' Meeting
11.01. PURPOSES FOR WHICH BONDHOLDERS' MEETINGS MAY BE CALLED. A
meeting of Bondholders may be called at any time and from time to time pursuant
to the provisions of this Article for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to waive any default hereunder and its
consequences, or to take any other action authorized to be taken by Bondholders
pursuant to any of the provisions of Article Eight hereof;
(b) to remove the Trustee and appoint a successor trustee pursuant to
the provisions of 9.10 hereof;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of 12.02 hereof; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of the Bonds under any
other provision of this Indenture or under applicable law.
11.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a
meeting of the holders of outstanding Bonds to take any action specified in
11.01 hereof, to be held at such time and at such place in the City of
Phillipsburg, State of Kansas, as the Trustee shall determine. Notice of every
meeting of Bondholders, setting forth the time and the place of such meeting and
the purpose of such meeting in reasonable detail shall be mailed to the
Bondholders by first-class mail not less than twenty nor more than one hundred
and eighty days prior to the date fixed for the meeting.
11.03. RIGHTS OF COMPANY AND HOLDERS OF BONDS TO CALL MEETING. In case
at any time the Company, pursuant to a resolution of the Board of Directors, or
the holders of at least 51% in aggregate principal amount of the Bonds then
outstanding, shall have requested the Trustee to call a meeting of the
Bondholders to take any action authorized in 11.01 setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or the holders of the Bonds in the amount above
specified may determine the time and the place in said City of Phillipsburg,
State of Kansas, for such meeting and may call such meeting to take any action
authorized in 11.01 hereof, by mailing notice thereof as provided in 11.02
hereof.
11.04. PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to vote at
any meeting of Bondholders a person shall (a) be a registered holder of one or
more Bonds; or (b) a person appointed by an instrument in writing as proxy by a
registered holder of one or more Bonds. The only persons who shall be entitled
to be present or to speak at any meeting of Bondholders shall be the persons
entitled to vote at such meeting and any representatives of the Company and its
counsel.
11.05. PROVISIONS FOR DETERMINING VOTING RIGHTS AND CONDUCT OF
MEETINGS; ADJOURNMENT OF MEETING. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Bondholders, in regard to proof of the holders of
Bonds and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of
34
votes, the submission and examination of proxies, certificates and other
evidences of the right to vote, and such other matters concerning the conduct of
the meeting as it shall think fit. Except as otherwise permitted or required by
any such regulations, the holder of Bonds shall be proved in the manner
specified in 10.02 hereof and the appointment of any proxy shall be proved in
the manner specified in said 10.02 or by having the signature of the person
executing the proxy witnessed or guaranteed by any bank, banker or trust company
satisfactory to the Trustee wherever situated or by a firm having membership in
the New York Stock Exchange.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Bondholders as provided in 11.03 hereof, in which case the Company
or the Bondholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Bonds represented at the meeting and entitled to vote.
Subject to the provision of 10.04 hereof, at any meeting, each
Bondholder or proxy shall be entitled to on vote for each $5000 principal amount
of Bonds held or represented by it; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Bond challenged as not
outstanding and ruled by the chairman of the meeting to be outstanding. The
chairman of the meeting shall have no right to vote except as a Bondholder or
proxy. At any meeting of Bondholders duly called pursuant to the provisions of
11.02 may be adjourned from time to time by vote of persons representing a
majority in aggregate principal amount of the Bonds represented at the meeting
and entitled to vote, and the meeting may be held as so adjourned without
further notice.
11.06. REQUIREMENTS FOR COUNTING VOTE AND RECORDING ACTION OF MEETING.
The vote upon resolution submitted to any meeting shall be by written ballots on
which shall be subscribed the signatures of the Bondholders or proxies and the
serial number or numbers of the Bonds held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed or published as provided in 11.02 hereof. The record shall be signed and
verified by the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
11.07. CALL OF MEETING NOT TO AFFECT RIGHTS OF TRUSTEE OR BONDHOLDERS.
Nothing in this Article contained shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Bondholders or any expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Bondholders under any of the provisions of this Indenture or the Bonds.
35
ARTICLE TWELVE.
Supplemental Indentures
12.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURES MAY BE EXECUTED
WITHOUT CONSENT OF BONDHOLDERS. The Company, when authorized by a resolution of
the Board of Directors, and the Trustee, may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto in form satisfactory
to the Trustee for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by successor corporations of the
covenants, agreements and obligations of the Company pursuant to Article
Thirteen hereof;
(b) to add the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Board of Directors and the Trustee
shall consider to be for the protection of the holders of Bonds, and to make the
occurrence, or the occurrence and continuance of, a default in any of such
additional covenants, restrictions, conditions or provisions an additional Event
of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenants, restrictions, conditions or
provisions, such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such an additional Event of Default as may limit the remedies available to the
Trustee upon such additional Event of Default or may limit the right of the
holders of a majority in aggregate principal amount of the Bond to waive such
additional Event of Default;
(c) to comply with any federal or state law concerning indentures or
bonds or to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture or under any supplemental indenture as the Board of
Directors and the Trustee may deem necessary and which shall not be inconsistent
with the provisions of this Indenture or of any supplemental indenture and which
shall not materially adversely affect the interests of the holders of the Bonds;
(d) to recite an issuance of additional Bonds of any series or to
provide for the creation of any series of Bonds.
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 the provisions of 9.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Bonds at the time outstanding, notwithstanding any of the
provisions of 12.02 hereof.
12.02. MODIFICATION OF INDENTURE BY SUPPLEMENTAL INDENTURE EXECUTED
WITH CONSENT OF BONDHOLDERS. With the consent (evidenced as provided in 10.01
hereof) of the holders of not less than a
36
majority in aggregate principal amount of the Bonds at the time outstanding, the
Company, when authorized by a resolution of the Board of Directors, and the
Trustee may, from time to time and at any time, 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 any supplemental indenture or of modifying in any manner the rights of the
holders of the Bonds; provided, however, that no such supplemental indenture
shall (a) extend the fixed maturity of any Bond or reduce the interest rate
applicable to the bonds or extend the time of payment of interest thereon or
reduce the principal amount thereof so as to affect the Bonds adversely, or (b)
reduce the aforesaid percentage of Bonds, the holders of which are required to
consent to any such modification, without the consent of the holder of each Bond
so affected. Upon the request of the Company, accompanied by a copy of a
resolution of the Board of Directors certified by the Secretary or any Assistant
Secretary of the Company authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Bondholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affect the trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the Bondholders under this 12.02 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such consent shall approve the substance thereof.
12.03. NOTATION ON BONDS IN RESPECT OF SUPPLEMENTAL INDENTURES. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article may bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental indenture. If
the Company or the Trustee shall so determine, new bonds so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the Bonds then outstanding.
ARTICLE THIRTEEN.
Consolidation, Merger and Sale
13.01. CONSOLIDATION, MERGER, SALE AND LEASE BY COMPANY PERMITTED UNDER
CERTAIN CIRCUMSTANCES; ASSUMPTION OF BONDS AND INDENTURE BY SUCCESSOR
CORPORATION. Nothing contained in this Indenture or in any of the Bonds shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations, or successive consolidations or mergers to which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance or lease of the property of the Company as an
entirety or substantially as an entirety to any other corporation authorized to
acquire and operate the same; provided, however, and the Company hereby
covenants and agrees that, upon any such consolidation, merger, sale or
conveyance, or upon any such lease the term of which extends beyond the final
date of maturity of the Bonds, the due and punctual payment of the principal of
and interest on all of the Bonds according to their tenor and the due and
punctual performance of all the covenant and conditions of this Indenture to be
performed by the Company shall be expressly assumed by supplemental indenture,
satisfactory in form to the Trustee, by the corporation formed by such
consolidation, or into which the Company shall have been merged, or which shall
have acquired such property, or the lessee corporation; provided, however, that
no such lease shall have the effect of relieving the Company from any of its
obligations hereunder or on the Bonds.
37
In case of any such consolidation, merger, sale, lease or conveyance,
and upon any such assumption by the successor corporation the successor
corporation or lessee corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as the party of the
first part. Such successor corporation or lessee corporation thereupon may cause
to be executed, and may issue, either in its own name or in the name of the
Company, any or all of such Bonds issuable hereunder which theretofore shall not
have been executed by the Company and delivered to the Trustee; and, upon the
order of said successor corporation or lessee corporation, in lieu of the
Company, and subject to all the terms, conditions and limitations herein
prescribed, the Trustee shall authenticate and shall deliver any such Bonds
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Bonds which such successor
corporation or lessee corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Bonds so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Bonds
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of said Bonds had been issued at the date of the execution hereof.
13.02. OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE. The Trustee, subject
to the provision of 9.01 hereof, may receive an Opinion of Counsel as conclusive
evidence that any such assumption complies with the provisions of this Article.
ARTICLE FOURTEEN.
Satisfaction and Discharge of Indenture: Unclaimed Moneys
14.01. SATISFACTION AND DISCHARGE OF INDENTURE. If at any time (a) the
Company shall have delivered to the Trustee cancelled or for cancellation all
Bonds theretofore authenticated (other than any Bonds which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in 2.06), or (b) all such Bonds not theretofore delivered to the Trustee
cancelled or for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all such Bonds not theretofore delivered to the
Trustee cancelled or for cancellation, including principal and interest due or
to become due to such date of maturity or date fixed for redemption, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect, and the trustee, on demand of and at the cost and expense
of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture. The Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Bonds.
14.02. APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF BONDS.
All moneys deposited with the Trustee pursuant to 14.01 shall be held in trust
and applied by it to the payment, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular Bonds for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest and premium (if any).
14.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the
satisfaction and discharge of this Indenture, all moneys then held by any paying
agent under the provisions of this Indenture shall, upon demand of the Company,
be repaid to it or paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys.
38
14.04. RETURN OF MONEYS HELD BY TRUSTEE AND UNCLAIMED AFTER SIX YEARS.
Any moneys deposited with or paid to the Trustee pursuant to any provision of
this Article or of Article Five hereof and not applied, but remaining unclaimed
by the holders of Bonds for six years after the date upon which the principal
and or interest on such Bonds shall have become due and payable, shall be repaid
to the Company by the Trustee on demand; and the holder of any of the Bonds
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect.
ARTICLE FIFTEEN.
Immunity of Incorporators, Stockholders, Directors and Officers
15.01. PERSONAL IMMUNITY FROM LIABILITY OF INCORPORATORS, STOCKHOLDERS,
DIRECTORS AND OFFICERS. No recourse under or upon any obligation, covenant or
agreement contained in this Indenture or in any Bond, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, or
against any past, present, or future stockholder, officer or director, as such,
of the Company or of any successor corporation, either directly or through the
Company, whether by virtue of any constitution or statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood and agreed that this Indenture and the Bonds are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or directors
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 Bonds, or implied therefrom; and that any and all such personal liability
of, and any and all such rights and claims against, every such incorporator,
stockholder, officer or director, are hereby expressly waived as a condition of,
and as a consideration for, the execution of this Indenture and the issue of the
Bonds.
ARTICLE SIXTEEN.
Miscellaneous Provisions
16.01. BENEFITS OF INDENTURE RESTRICTED TO PARTIES AND HOLDERS OF
BONDS. Nothing in this Indenture, or in the Bonds, express or implied, shall
give or be construed to give any person, firm or corporation, other than the
parties hereto and the Bondholders, any legal or equitable right, remedy or
claim under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; and, subject to the provisions of Article Fifteen
and 12.02, all its covenants, conditions and provisions shall be for the sole
benefit of the parties hereto and of the holders of the Bonds.
16.02. NOTICES AND DEMANDS ON COMPANY AND ON TRUSTEE. Subject to the
provisions of 4.04 hereof, any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
holders of Bonds on the company may be given or served by delivering the same at
the office of the Company to the attention of the President of the Company at
000 X Xxxxxx, XX Xxx 000, Xxxxxxxxxxxx, Xxxxxx, until another address is filed
by the Company with the Trustee for the purpose of this Section. Any notice,
request of demand by any Bondholder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for the purposes, if given or made to the
Principal Corporate Trust Office of the Trustee.
16.03. DEFAULT WAIVED AS PERMITTED BY INDENTURE DEEMED TO HAVE BEEN
CURED. Whenever any Event of Default hereunder shall have been waived as
permitted by this Indenture, said Event of Default
39
shall for all purposes of the Bonds and this Indenture be deemed to have been
cured and to be not continuing.
16.04. CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT
OF 1939. If and to the extent that any provision of this Indenture limits,
qualifies, or conflicts with another provision of this Indenture required to be
included herein by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, such required provision shall control.
16.05. TIME FOR CERTAIN PAYMENTS AND CONVERSIONS EXTENDED IF NOMINAL
DATE IS A SUNDAY, HOLIDAY, ETC. In any case where the date of maturity of
interest on or principal of the Bonds or the date fixed for redemption of any
Bonds shall be a Sunday or a legal holiday or a date on which banking
institutions in the city in which the bonds are then payable are authorized by
law to close, then payment of interest or principal may be made on the next
succeeding business day with the same force and effect as if made on the nominal
date and in the case of payment no interest shall accrue for the period after
such nominal date.
16.06. LAWS OF KANSAS TO GOVERN. This Indenture and each Bond issued
hereunder shall for all purposes be construed in accordance with laws of the
State of Kansas.
16.07. OFFICERS' CERTIFICATES AND OPINIONS OF COUNSEL TO BE FURNISHED.
Upon any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent provided
for in this Indenture relating to the proposed action have been complied with
and Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relative to such
particular application or demand, no additional certificate or opinion need be
furnished.
16.08. COUNTERPARTS; ACCEPTANCE OF TRUST BY TRUSTEE. This Indenture may
be executed in any number of counterparts, each of which shall be an original
but such counterparts shall together constitute but one and the same instrument.
The First National Bank and Trust of Phillipsburg, Kansas, the party hereto of
the second part, hereby accepts the trusts in this Indenture declared and
provided, upon the terms and conditions hereinbefore set forth.
40
IN WITNESS WHEREOF, Brooke Credit Corporation, the party of the first
part, has caused this Indenture to be signed by its President and its corporate
seal to be affixed hereunto and attested by its Secretary, and First National
Bank and Trust of Phillipsburg, KS, the party of the second part, has caused
this Indenture to be signed by its President and its corporate seal to be
affixed hereunto and attested by its Cashier, all as of the day and year first
above written,
Brooke Credit Corporation
By /s/ Xxxxxxx Xxxx
------------------------------
President
(Corporate)
Attest:
/s/ Xxxxx X. Xxxx
-----------------------------
Secretary
The First National Bank and Trust
By /s/ Xxxxxxx X. Xxxxx
-------------------------------
(Corporate)
Attest:
/s/ Xxxxxx Xxxxxxxxx
------------------------------
Secretary
41
STATE OF KANSAS )
)ss.
COUNTY OF XXXXXXXX )
On this 29th day of August, 1997, before me personally came Xxxxxxx
Xxxx to me known, who, being by me duly sworn, did depose and say that he is
President of Brooke Credit Corp., the corporation described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation and that he
signed his name thereto by like order.
/s/ Xxx X. Xxx Xxxxxx
---------------------------------
Notary Public
My Commission Expires:
May 3, 2000
-----------------------------------
STATE OF KANSAS )
)ss.
COUNTY OF XXXXXXXX )
On this 5th day of September, 1997, before me personally came Xxxxxxx
X. Xxxxx, to me known, who, being by me duly sworn, did depose and say that he
is Chairman/CEO of the corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation and that he signed by his name
thereto by like authority.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Notary Public
My Commission Expires:
November 20, 2000
----------------------------
42
