Exhibit 4(a)
VALLEY RESOURCES, INC.
and
MELLON BANK, N.A.
Trustee
INDENTURE
Dated as of September 1, 1997
____________________________________________________
$7,000,000
____% Debentures
Due September 1, 2027
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310 (a) (1) 8.10
(a) (2) 8.10
(a) (3) 8.12
(a) (4) N.A.
(a) (5) 8.10
(b) 8.08; 8.10; 11.02
(c) N.A.
311 (a) 8.11
(b) 8.11
(c) N.A.
312 (a) 2.05
(b) 11.03
(c) 11.03
313 (a) 8.06
(b) (1) N.A.
(b) (2) 8.06
(c) 8.06; 11.02
(d) 8.06
314 (a) 5.02; 5.08; 11.02
(b) N.A.
(c) (1) 11.04
(c) (2) 11.04
(c) (3) N.A.
(d) N.A.
(e) 11.05
(f) N.A.
315 (a) 8.01(b)
(b) 8.05; 11.02
(c) 8.01(a)
(d) 8.01(c)
(e) 7.11
316 (a) (last sentence) 2.09
(a) (1) (A) 7.05
(a) (1) (B) 7.04
(a) (2) N.A.
(b) 7.07
(c) 7.14
I.
317 (a) (1) 7.08
(a) (2) 7.09
(b) 2.04
318 (a) 11.01
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any
purpose, be deemed to be a part of the Indenture.
II.
TABLE OF CONTENTS
Article Section Heading Page
1 DEFINITIONS AND INCORPORATION
BY REFERENCE......................... 1
1.01 Definitions.......................... 1
1.02 Other Definitions.................... 5
1.03 Incorporation by Reference of
Trust Indenture Act................ 5
1.04 Rules of Construction................ 5
2 THE DEBENTURES....................... 7
2.01 Form and Dating...................... 7
2.02 Execution and Authentication......... 7
2.03 Registrar and Paying Agent........... 8
2.04 Paying Agent to Hold Money in
Trust.............................. 8
2.05 Debentureholder Lists................ 8
2.06 Transfer and Exchange................ 9
2.07 Replacement Debentures............... 9
2.08 Outstanding Debentures............... 10
2.09 Treasury Debentures.................. 10
2.10 Temporary Debentures................. 10
2.11 Cancellation......................... 11
2.12 Defaulted Interest................... 11
2.13 Persons Deemed Owners................ 11
3 REDEMPTION OF DEBENTURES AT
CORPORATION'S OPTION................. 12
3.01 Redemption Right at
Corporation's Option............... 12
3.02 Notices to Trustee................... 12
3.03 Selection of Debentures to be
Redeemed........................... 12
3.04 Notice of Redemption................. 12
3.05 Effect of Notice of Redemption....... 13
3.06 Deposit of Redemption Price.......... 13
3.07 Debentures Redeemed in Part.......... 13
4 REDEMPTION OF DEBENTURES AT
DEBENTUREHOLDER'S OPTION............. 14
4.01 Redemption Right at Debenture-
holder's Option.................... 14
III.
5 COVENANTS............................ 14
5.01 Payment of Debentures................ 14
5.02 Reporting............................ 14
5.03 Corporate Existence.................. 15
5.04 Payment of Taxes and Other
Claims............................. 15
5.05 Limitation on Certain Funded
Indebtedness....................... 15
5.06 Limitations on Dividends and
Other Payments on Stock............. 15
5.07 Limitation on Secured Indebtedness.... 16
5.08 Compliance Certificate................ 17
5.09 Default Certificate................... 18
6 SUCCESSORS............................ 18
6.01 When Corporation May Merge, etc....... 18
7 DEFAULTS AND REMEDIES................. 18
7.01 Events of Default..................... 18
7.02 Acceleration.......................... 20
7.03 Other Remedies........................ 21
7.04 Waiver of Past Defaults............... 21
7.05 Control by Majority................... 21
7.06 Limitation on Suits................... 22
7.07 Rights of Holders to Receive
Payment............................. 22
7.08 Collection Suit by Trustee............ 23
7.09 Trustee May File Proofs of
Claim............................... 23
7.10 Priorities............................ 23
7.11 Undertaking for Costs................. 24
7.12 Waiver of Stay or Extension
Laws................................ 24
7.13 Restoration of Rights and
Remedies............................ 24
7.14 Record Date for Vote of
Debentureholders.................... 24
8 TRUSTEE............................... 25
8.01 Duties of Trustee..................... 25
8.02 Rights of Trustee..................... 26
8.03 Individual Rights of Trustee.......... 26
8.04 Trustee's Disclaimer.................. 26
8.05 Notice of Defaults.................... 27
8.06 Reports by Trustee to Holders......... 27
IV.
8.07 Compensation and Indemnity............ 27
8.08 Replacement of Trustee................ 28
8.09 Successor Trustee by Merger, etc...... 29
8.10 Eligibility; Disqualification......... 29
8.11 Preferential Collection of
Claims Against Corporation.......... 29
8.12 Appointment of Co-Trustee............. 29
9 DISCHARGE OF INDENTURE................ 31
9.01 Termination of Corporation's
Obligations......................... 31
9.02 Application of Trust Money............ 32
9.03 Repayment to Corporation.............. 32
10 AMENDMENTS, SUPPLEMENTS AND
WAIVERS............................. 32
10.01 Without Consent of Holders............ 32
10.02 With Consent of Holders............... 33
10.03 Compliance with Trust Indenture
Act................................. 33
10.04 Revocation and Effect of
Consents............................ 33
10.05 Notation on or Exchange of
Debentures.......................... 34
10.06 Trustee Protected..................... 34
11 MISCELLANEOUS......................... 34
11.01 Trust Indenture Act Controls.......... 34
11.02 Notices............................... 34
11.03 Communication by Holders with
Other Holders....................... 35
11.04 Certificate and Opinion as to
Conditions Precedent................ 35
11.05 Statements Required in Certifi-
cate or Opinion..................... 35
11.06 Rules by Trustee and Agent............ 36
11.07 Legal Holidays........................ 36
11.08 No Recourse Against Others............ 36
11.09 Duplicate Originals................... 36
11.10 Governing Law......................... 37
11.11 Table of Contents, Headings, etc...... 37
SIGNATURES................................................................ 37
EXHIBIT A -- FORM OF GLOBAL SECURITY...................................... A-38
EXHIBIT B -- FORM OF DEBENTURE............................................ B-48
V.
INDENTURE dated as of September 1, 1997, between VALLEY RESOURCES, INC., a
Rhode Island corporation ("Corporation"), and Mellon Bank, N.A., a
corporation organized and existing under the laws in the State of _____________
("Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Corporation's ____% Debentures
Due September 1, 2027 ("Debentures"):
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Corporation.
"Agent" means any Registrar, Paying Agent or coregistrar or agent for
service of notices and demands. See Section 2.03.
"Board of Directors" means the Board of Directors of the Corporation or any
authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the Corporate
Secretary of the Corporation to have been duly adopted by the Board of Directors
and to be in full force and effect.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock.
"Common Stock" means the common stock, $1.00 par value per share, of the
Corporation as the same exists at the date of this Indenture or as such stock
shall be constituted from time to time.
"Consolidated", when used in connection with any accounting terms, means
the Corporation and its Subsidiaries, the financial statements of which are
consolidated in accordance with generally accepted accounting principles.
"Consolidated Funded Indebtedness" means the outstanding Funded
Indebtedness of the Corporation and its Consolidated Subsidiaries (excluding in
all cases Funded Indebtedness owing to the Corporation or Consolidated
Subsidiaries); provided, however, that if the Corporation owns, directly or
indirectly, less than all of the voting stock of a Consolidated Subsidiary, only
that portion of the Funded Indebtedness of such Consolidated Subsidiary equal to
the proportion of its outstanding voting stock owned by the Corporation shall be
included in determining Consolidated Funded Indebtedness.
"Consolidated Net Utility Fixed Assets" means the aggregate value of
Utility Fixed Assets of the Corporation and its Consolidated Subsidiaries less
accumulated depreciation, determined on a consolidated basis in accordance with
generally accepted accounting principles applied in a manner consistent with the
most recent audited financial statements included in reports delivered to the
Trustee pursuant to Section 5.02; provided, however, that if the Corporation
owns, directly or indirectly, less than all of the outstanding voting stock of a
Consolidated Subsidiary, only that portion of the Utility Fixed Assets of such
Consolidated Subsidiary equal to the proportion of its outstanding voting stock
owned by the Corporation shall be included in determining Consolidated Net
Utility Fixed Assets.
"Consolidated Tangible Net Worth" means an amount equal to the
stockholders' ownership of the Corporation and its Consolidated Subsidiaries
(including capital stock, capital in excess of par value and retained earnings,
but eliminating any unpaid amounts due for sale of stock) less intangible assets
other than amounts recoverable from future rate payers in accordance with Rhode
Island Public Utilities Commission rate treatment, all determined on a
consolidated basis in accordance with generally accepted accounting principles
applied in a manner consistent with the most recent audited financial statements
included in reports delivered to the Trustee pursuant to Section 5.02.
"Corporate Trust Office" means the office of the Trustee located in
__________, at which at any time its corporate trust business shall be
principally administered, which office at the date of execution of this
Indenture is located at _______________.
"Corporation" means the party named as such above until a successor
replaces it pursuant to the applicable provisions of the Indenture and
thereafter means the successor.
"Current Indebtedness" of a Person means, as of the date of determination
thereof, all Indebtedness maturing on demand or not more than one year after the
date as of which such determination is made (excluding any Indebtedness
renewable or extendible at the option of the debtor, absolutely or
conditionally, for a period or periods ending more than one year after the date
of such determination, whether or not theretofore extended or renewed), fixed
sinking fund payments (except to the extent that funds for the payment thereof
shall have been deposited with a trustee for the application thereof) and other
prepayments required to be made with respect to any Indebtedness not more than
one year after such date, and all other items (including taxes accrued as
estimated) which in accordance with generally
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accepted accounting principles would be included as current indebtedness.
"Debenture" means the Debentures described above issued under this
Indenture.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Depository" means The Depository Trust Company in the City of New York and
any successor to such Person.
"Exchange Act" means the Securities Exchange Act of 1934, as from time to
time amended.
"Funded Indebtedness" means all Indebtedness other than Current
Indebtedness.
"Global Security" means a security evidencing all of the Debentures issued
to the Depository or its nominee and registered in the name of the Depository or
its nominee.
"Holder" or "Debentureholder" means a person in whose name a Debenture is
registered; provided, however, that for purposes of Sections 7.06 and 7.07
hereof, such terms shall also include the Beneficial Owner (as defined in the
Debentures) of any Debenture.
"Indebtedness" of a Person means (i) all items of indebtedness or liability
which in accordance with generally accepted accounting principles would be
included in determining total liabilities as shown on the liability side of a
balance sheet as at the date as of which indebtedness is to be determined, (ii)
indebtedness upon which the Person whose indebtedness is being determined
customarily pays interest charges and indebtedness secured by any mortgage,
pledge or lien existing on property owned by such Person, whether or not the
indebtedness secured thereby shall have been assumed but, if (a) any such
indebtedness shall not have been assumed or guaranteed by such Person, (b) such
Person customarily does not pay any interest thereon, and (c) such mortgage,
pledge or lien was created by others upon lands over which such Person has an
easement or right of way, such indebtedness shall not be deemed to be
Indebtedness of such Person except to the extent of the larger of the fair value
or cost to such Person of such property (including any improvements thereon)
covered by such mortgage, pledge or lien, and (iii) guaranties, endorsements
(other than for purposes of collection in the ordinary course of business) and
other contingent obligations in respect of, or to purchase or otherwise acquire,
indebtedness of others.
"Indenture" means this Indenture as amended from time to time.
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"Interest Payment Date" means March 1 and September 1 of each year
commencing March 1, 1998 through and including September 1, 2027.
"Lien" means any lien, mortgage, pledge, security interest, charge or other
encumbrance of any kind.
"Officer" means the principal executive officer, principal financial
officer, principal accounting officer, treasurer or President of the
Corporation.
"Officers' Certificate" means a certificate signed by two Officers of the
Corporation. See Sections 11.04 and 11.05.
"Opinion of Counsel" means a written opinion from legal counsel who may be
an employee of or counsel to the Corporation or the Trustee and who is
acceptable to the Trustee. See Sections 11.04 and 11.05.
"Person" means any individual, corporation, partnership, joint venture,
association, jointstock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal" of the Debenture means the principal of the Debenture plus the
premium, if any, on the Debenture.
"Qualified Institution" means a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company located in the United States.
"Record Date" means April 15 and August 15.
"Redemption Date" when used with respect to any Debenture to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Debenture to be redeemed
means the price at which it is to be redeemed pursuant to this Indenture and the
Debenture.
"SEC" means the Securities and Exchange Commission.
"Special Record Date" means the date set by the Corporation for
determination of Debentureholders of record for purposes of paying any defaulted
interest.
"Subsidiary" means a corporation at least the majority of whose voting
stock is owned by the Corporation or a Subsidiary.
4
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa77bbbb)
as in effect on the date shown above except as provided in Section 10.03.
"Trustee" means the party named as such above until a successor replaces it
pursuant to the applicable provisions of the Indenture and thereafter means the
successor.
"Trust Officer" means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"United States" means the United States of America.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof.
"Utility Fixed Assets" means all physical property owned by the Corporation
and any Consolidated Subsidiaries and used or useful to the Corporation in the
business of furnishing or distributing gas service, the cost of which is charged
and properly chargeable to plant or plant addition account on the books of the
Corporation or such Consolidated Subsidiary in accordance with sound accounting
practices and generally accepted accounting principles. Utility Fixed Assets
need not consist of a specific or complete accession, addition or improvement or
complete new property, but may include construction work in progress or any work
such as is carried in fixed property accounts in accordance with sound
accounting practices and generally accepted accounting principles, whether
capable of complete description and identification or not.
5
Section 1.02. Other Definitions.
Term Defined in Section
"Bankruptcy Law" 7.01
"Custodian" 7.01
"Event of Default" 7.01
"Legal Holiday" 11.07
"Paying Agent" 2.03
"Registrar" 2.03
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Debentures.
"indenture securityholder" means a Debentureholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Corporation.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
6
(5) provisions apply to successive events and transactions; and
(6) "Section" shall refer to a Section of this Indenture.
ARTICLE 2 THE DEBENTURES
Section 2.01. Form and Dating.
The form of the Debentures to be originally issued as a Global Security
shall be substantially in the form of Exhibit A, which is part of this
Indenture. The form of the Debentures to be issued in exchange for a Global
Security shall be substantially in the form of Exhibit B, which is part of this
Indenture. The terms of such Exhibits A and B are hereby incorporated herein by
reference. The Debentures may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Debenture shall be dated the date of
its authentication.
Section 2.02. Execution and Authentication.
Two Officers shall sign the Debentures for the Corporation by manual or
facsimile signature. The Corporation's seal shall be reproduced on the
Debentures.
If an Officer whose signature is on a Debenture no longer holds that Office
at the time the Debenture is authenticated, the Debenture shall nevertheless be
valid.
A Debenture shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Debenture
has been authenticated under this Indenture.
The Trustee shall authenticate Debentures for original issue up to the
aggregate principal amount of $7,000,000 upon a written order of the Corporation
signed by two Officers. The aggregate principal amount of Debentures outstanding
at any time may not exceed that amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Corporation to authenticate Debentures. An authenticating agent may authenticate
Debentures whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the
Corporation or an Affiliate.
7
Section 2.03. Registrar and Paying Agent.
The Corporation shall maintain an office or agency where Debentures may be
presented for registration or transfer or for exchange ("Registrar"), an office
or agency where Debentures may be presented for payment ("Paying Agent") and an
office or agency where notices and demands to or upon the Corporation in respect
of the Debentures and this Indenture may be served. The Registrar shall keep a
register of the Debentures and of their transfer and exchange. The Corporation
may appoint one or more coregistrars and one or more additional paying agents.
The Corporation or any Subsidiary may act as Registrar or Paying Agent. The term
"Paying Agent" includes any additional paying agent.
The Corporation shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. If the Corporation fails to maintain
a Registrar, Paying Agent or agent for service of notices and demands or fails
to give the foregoing notice, the Trustee shall act as such.
The Corporation initially appoints __________ as Registrar, Paying Agent
and agent for service of notices and demands.
Section 2.04. Paying Agent to Hold Money in Trust.
The Corporation shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Debentureholders or the Trustee all money held by the Paying Agent for the
payment of Principal or interest on the Debentures, and will notify the Trustee
of any Default by the Corporation in making any such payment. While any such
Default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Corporation at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent shall have no further liability for the money. If the Corporation
(or any Subsidiary) acts as Paying Agent, it shall segregate and hold as a
separate trust fund all money held by it as Paying Agent.
Section 2.05. Debentureholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Debentureholders. If the Trustee is not the Registrar, the Corporation shall
furnish to the Trustee on or before each Interest Payment Date and at such other
times as the Trustee may request in writing a list of the names and addresses of
Debentureholders in such form and as of such date as the Trustee may reasonably
require.
8
Section 2.06. Transfer and Exchange.
When Debentures are presented to the Registrar or a coregistrar with a
request to register the transfer or to exchange them for an equal principal
amount of Debentures of other denominations, the Registrar shall register the
transfer or make the exchange, provided that every Debenture presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
be accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by the Holder thereof or by his attorney duly authorized
in writing. To permit registrations of transfer and exchanges, the Trustee shall
authenticate Debentures at the Registrar's written request (which written
request may be waived by the Trustee so long as the Trustee and Registrar are
one and the same). No service charge shall be made for any registration of
transfer or exchange of Debentures to the Debentureholders, but the Corporation
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, other than exchanges pursuant to
Section 2.10 or 3.07.
A Global Security shall be exchangeable pursuant to this Section for
Debentures registered in the names of Persons other than the Depository or its
nominee only as provided in this paragraph. A Global Security shall be
exchangeable pursuant to this Section if (i) such Depository notifies the
Corporation that it is unwilling or unable to continue as Depository for such
Debentures or at any time ceases to be a clearing agency registered as such
under the Exchange Act, (ii) the Corporation executes and delivers to the
Trustee an Officers' Certificate providing that such Global Security shall be so
exchangeable, or (iii) there shall have occurred and be continuing an Event of
Default. Debentures so issued in exchange for a Global Security shall be of like
tenor, in authorized denominations of $1,000 or integral multiples thereof and
in the aggregate having the same principal amount as the Global Security to be
exchanged, and shall be registered in such names as the Depository shall direct.
Notwithstanding any other provision of this Section, a Global Security may
not be transferred except as a whole by the Depository to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository.
Section 2.07. Replacement Debentures.
If the Holder of a Debenture claims that the Debenture has been lost,
destroyed or wrongfully taken, the Corporation shall issue and the Trustee shall
authenticate a replacement Debenture if the Trustee's requirements are met. If
required by the Trustee or the Corporation, an indemnity bond must be obtained
9
and be sufficient in the judgment of both to protect the Corporation, the
Trustee, any Agent or any authenticating agent from any loss which any of them
may suffer if a Debenture is replaced. The Corporation and the Trustee may
charge for their expenses in replacing a Debenture.
Every replacement Debenture is an additional obligation of the Corporation.
Section 2.08. Outstanding Debentures.
The Debentures outstanding at any time are all the Debentures authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.
If a Debenture is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Debenture is held by a bona fide purchaser.
If Debentures are considered paid under Section 5.01, they cease to be
outstanding and interest on them ceases to accrue.
Except with the limitations set forth in Section 2.09, a Debenture does not
cease to be outstanding because the Corporation or an Affiliate holds the
Debenture.
Section 2.09. Treasury Debentures.
In determining whether the Holders of the required principal amount of
Debentures have concurred in any direction, waiver or consent, Debentures owned
by the Corporation or an Affiliate shall be disregarded, except for purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent. Only Debentures which the Trustee knows are so
owned shall be disregarded.
Section 2.10. Temporary Debentures.
Until definitive Debentures are ready for delivery, the Corporation may
prepare and the Trustee shall authenticate temporary Debentures. Temporary
Debentures shall be substantially in the form of definitive Debentures but may
have variations that the Corporation considers appropriate for temporary
Debentures. Without unreasonable delay, the Corporation shall cause to be issued
and the Trustee shall authenticate definitive Debentures in exchange for
temporary Debentures.
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Section 2.11. Cancellation.
The Corporation at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Debentures surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Debentures surrendered for registration of
transfer, exchange or payment and shall dispose of cancelled Debentures as the
Corporation directs. The Corporation may not issue new Debentures to replace
Debentures that it has paid for or delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Corporation defaults in a payment of interest on the Debentures, it
shall pay the defaulted interest in any lawful manner. It may pay the defaulted
interest, plus any interest payable on the defaulted interest, to the Persons
who are Debentureholders on a subsequent Special Record Date. The Corporation
shall fix the Special Record Date and payment date in a manner satisfactory to
the Trustee. At least 15 days before the Special Record Date, the Corporation
shall mail to Debentureholders a notice that states the Special Record Date, the
payment date and the amount of interest to be paid.
Section 2.13. Persons Deemed Owners.
Prior to due presentment of a Debenture for registration of transfer, the
Corporation, the Trustee and any Agent of the Corporation or the Trustee may
treat the Person in whose name such Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of Principal of and (subject to
Section 2.12) interest, if any, on such Debenture and for all other purposes
whatsoever, whether or not such Debenture be overdue, and neither the
Corporation, the Trustee nor any Agent of the Corporation or the Trustee shall
be affected by notice to the contrary. All such payments so made to any such
Person, or upon such Person's order, shall be valid, and, to the extent of the
sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Debenture.
Except to the extent provided in Sections 7.06 and 7.07 hereof, no holder
of any beneficial interest in any Global Security held on its behalf by a
Depository shall have any rights under this Indenture with respect to such
Global Security, and such Depository may be treated by the Corporation, the
Trustee, and any Agent of the Corporation or the Trustee as the owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall impair, as between a Depository and such holders of
11
beneficial interests, the operation of customary practices governing the
exercise of the rights of the Depository as Holder of any Debenture.
ARTICLE 3 REDEMPTION OF DEBENTURES AT
CORPORATION'S OPTION
Section 3.01. Redemption Right at Corporation's Option.
The Corporation has the right to redeem the Debentures at its sole option,
in whole or in part, at any time and from time to time on or after September 1,
2002, at the Redemption Prices specified in paragraph 5 of the Debenture,
subject to the terms and conditions set forth in this Article 3. The election of
the Corporation to redeem any Debenture shall be evidenced by a Board
Resolution.
Section 3.02. Notices to Trustee.
If the Corporation wishes to redeem Debentures pursuant to paragraph 5 of
the Debenture, it shall notify the Trustee in writing of the Redemption Date and
the principal amount of Debentures to be redeemed. The Corporation shall give
the notice provided for in this Section not less than 60 days prior to the
Redemption Date or such shorter time as may be satisfactory to the Trustee.
Section 3.03. Selection of Debentures to be Redeemed.
If less than all the Debentures are to be redeemed, the Trustee shall
select the Debentures to be redeemed by lot. The Trustee shall, not less than 45
days before the Redemption Date or such shorter time as may be mutually
satisfactory to the Trustee and the Corporation, inform the Corporation in
writing of those specific Debentures selected for redemption. The Trustee may
select for redemption portions of the principal of Debentures that have
denominations larger than $1,000. Debentures and portions of Debentures that the
Trustee selects shall be in amounts of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Debentures called for redemption also
apply to portions of Debentures called for redemption.
Section 3.04. Notice of Redemption.
At least 30 days before a Redemption Date, the Corporation shall mail
notice of redemption to each Holder whose Debentures are to be redeemed. A copy
of each such notice shall be mailed to the Trustee.
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The notice shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Debentures called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price;
(5) that interest on Debentures called for redemption ceases to
accrue on and after the Redemption Date (unless the Corporation
shall default in the payment of the Redemption Price); and
(6) if less than all of the Debentures outstanding are to be
redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the
Debentures to be redeemed.
At the Corporation's written request, the Trustee shall give notice of
redemption in the Corporation's name and at the expense of the Corporation.
Section 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed as provided in Section 3.04, Debentures
called for redemption become due and payable on the Redemption Date at the
Redemption Price, subject, however to the provisions of Section 3.08.
Section 3.06. Deposit of Redemption Price.
On or before the Redemption Date, the Corporation shall deposit with the
Paying Agent cash sufficient to pay the Redemption Price and accrued interest on
all Debentures to be redeemed.
Section 3.07. Debentures Redeemed in Part.
Upon surrender of a Debenture that is redeemed in part, the Trustee shall
authenticate for the Holder a new Debenture equal in principal amount to the
unredeemed portion of the Debenture surrendered.
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ARTICLE 4 REDEMPTION OF DEBENTURES AT
DEBENTUREHOLDER'S OPTION
Section 4.01. Redemption Right at Debentureholder's Option.
Representatives of deceased Debentureholders and, in the case of a Global
Security, representatives of deceased beneficial owners of such Global Security,
have certain optional redemption rights all as set forth in the forms of
Debenture attached hereto as Exhibits A and B.
ARTICLE 5 COVENANTS
Section 5.01. Payment of Debentures.
The Corporation shall pay the Principal of and interest on the Debentures
on the dates and in the manner provided in the Debentures. Principal and
interest shall be considered paid on the date due if the Trustee or any Paying
Agent holds on that date money sufficient to pay all Principal and interest then
due, provided that if Debentures are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
The Corporation shall pay interest on overdue principal at the rate borne
by the Debentures; it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
Section 5.02. Reporting.
The Corporation shall file with the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Corporation is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. The Corporation also shall comply with the other provisions of TIA Section
314(a).
Section 5.03. Corporate Existence.
Subject to Article 6, the Corporation will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (articles and statutory) of the Corporation; provided,
however, that the Corporation shall not be required to preserve any such right
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Corporation taken as a
whole and that the loss thereof is
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not, and will not be, adverse in any material respect to the Holders.
Section 5.04. Payment of Taxes and Other Claims.
The Corporation will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Corporation or any Subsidiary and (ii) all
material lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Corporation or any of its
Subsidiaries; provided, however, that the Corporation shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings.
Section 5.05. Limitation on Certain Funded Indebtedness.
Neither the Corporation nor a Subsidiary will create, issue, incur,
guarantee or assume any Funded Indebtedness which ranks prior to or on a parity
with the Debentures in right of payment unless immediately thereafter, and after
giving effect thereto and to the application of the proceeds thereof,
Consolidated Net Utility Fixed Assets shall be at least equal to Consolidated
Funded Indebtedness.
Section 5.06. Limitations on Dividends and Other
Payments on Stock.
The Corporation will not declare or pay any dividends or make any
distributions upon any Common Stock of the Corporation (other than dividends and
distributions payable only in shares of Common Stock of the Corporation) and
will not directly or indirectly apply any of the assets of the Corporation to
the redemption, retirement, purchase or other acquisition of any stock of the
Corporation of any class, except purchases or redemptions in compliance with any
mandatory sinking fund or purchase fund or redemption requirement in respect of
any preferred stock of the Corporation, whether now or hereafter authorized or
issued, unless after giving effect to such declaration, payment, distribution or
application of assets the Consolidated Tangible Net Worth of the Corporation
shall be at least equal to $20,000,000 as reflected on the Corporation's latest
available balance sheet, which in no event shall be as of a date more than three
months prior to the date of declaration of a dividend or application of assets.
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Section 5.07. Limitation on Secured Indebtedness
Neither the Corporation nor a Subsidiary will issue, assume or guarantee
any Indebtedness secured by a Lien on any property or asset at any time owned by
it, without effectively securing, prior to or concurrently with the issuance,
assumption or guarantee of any such Indebtedness, the Debentures equally and
ratably with (or, at the Corporation's option, in a prior position to) such
Indebtedness. The foregoing described restriction does not apply to or prevent
the creation of:
(i) existing Liens on property or Indebtedness of a corporation which is
merged with or into or consolidated with the Corporation or a
Subsidiary provided that the Liens do not apply to any property
theretofore owned by the Corporation;
(ii) any Lien existing on the effective date of this Indenture, and, if the
Corporation purchases in fee real property and acquires or constructs
improvements thereon to be used by the Corporation as office space, a
Lien on such real property and improvements to secure Indebtedness
incurred for the purchase of such real property and improvements, so
long as such Lien is limited to such real property and improvements
and such Indebtedness does not exceed 75% of the purchase price
thereof;
(iii) Liens on moneys or U.S. Government Obligations deposited with the
Trustee pursuant to the provisions of the Indenture summarized under
Article 9 below;
(iv) Liens (which term for purposes of theis Subsection (iv) shall include
conditional sale agreements or other title retention agreements and
leases in the nature of title retention agreements) upon motor
vehicles or office equipment acquired by the Corporation or a
Subsidiary after the effective date of this Indenture, under credit
terms customarily extended to purchasers by the manufacturers or other
sellers, provided that no such Lien shall extend to or cover any
property of the Corporation or any Subsidiary, as the case may be,
other than the property then being acquired;
(v) Liens for the sole purpose of extending, renewing or replacing, in
whole or in part, Liens securing Indebtedness of the type referred to
in the foregoing Subsections (i) through (iv) above, provided,
however, that the principal amount of the Indebtedness so secured at
the time of such extension, renewal or replacement shall not be
increased and that such
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extension, renewal or replacement shall be limited to all or part of
the property or Indebtedness which secured the Lien so extended,
renewed or replaced (plus improvements on such property):
(vi) Liens for taxes or assessments or other governmental charges or levies
not yet due and payable;
(vii) Materialmen's, mechanics' workers', repairmen's or other like Liens
arising in the ordinary course of business so long as the obligations
giving rise to such Liens are satisfied in a timely manner;
(viii)Liens created by or existing from any litigation or legal proceeding
which is currently being contested in good faith by appropriate
proceedings, and as to which execution is effectively stayed; or
(ix) Liens to secure Indebtedness having an outstanding principal balance
aggregating not more than $_______________ exclusive of Indebtedness
described in the foregoing Subsections (i) through (viii) above.
The Corporation further covenants that it will not incur any such Lien
unless the instruments and collateral documents equally and ratably securing the
Debentures are approved by the Trustee, and in the opinion of independent
counsel selected by the Trustee, the transaction creating such Lien complies
with the requirements of this Section.
Section 5.08. Compliance Certificate.
The Corporation shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Corporation an Officers' Certificate as to the
Corporation's compliance with all conditions and covenants under the Indenture,
and further stating whether or not the signers know of any Default that occurred
during the fiscal year. If the signers know of any such Default, the Officers'
Certificate shall describe the Default and its status, and the Corporation's
compliance shall be determined without regard to any grace period or notice
requirements under this Indenture. The certificate need not comply with Section
11.05.
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Section 5.09. Default Certificate.
The Corporation shall deliver to the Trustee, within seven (7) days of
obtaining knowledge of the existence of a Default hereunder, or within seven (7)
days of any event of default as described in Section 7.01(4) herein, a
certificate signed by one of its Officers, setting forth the nature of the
Default and the steps taken, if any, to cure such Default.
ARTICLE 6 SUCCESSORS
Section 6.01. When Corporation May Merge, etc.
The Corporation shall not consolidate with or merge into, or transfer or
lease all or substantially all of its assets to, any Person unless:
(1) the Person is a corporation organized and existing under the
laws of the United States, or any State thereof or the District of
Columbia;
(2) the Person assumes by supplemental indenture all the obligations
of the Corporation under the Debentures and this Indenture;
(3) immediately after the transaction no Default exists; and
(4) the Corporation has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel each stating that the transaction
and supplemental indenture comply with this Article.
The surviving transferee or lessee corporation shall be the successor
Corporation and deemed to and be substituted for the Corporation under the
Indenture, and the predecessor Corporation in the case of a transfer or lease
shall be released from all obligations and covenants under the Indenture and the
Debentures.
ARTICLE 7 DEFAULTS AND REMEDIES
Section 7.01. Events of Default.
An "Event of Default" occurs if:
(1) the Corporation defaults in the payment of interest on any
Debenture when the same becomes due and payable and the Default
continues for a period of 30 days;
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(2) the Corporation defaults in the payment of the Principal of any
Debenture when the same becomes due and payable at maturity, upon
redemption or otherwise;
(3) the Corporation fails to comply with any of its other
agreements in the Debentures or this Indenture and the Default
continues for the period and after the notice specified below;
(4) an event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be
secured or evidenced, any Indebtedness for money borrowed for which
the Corporation or any Consolidated Subsidiary is responsible or
liable as obligor, guarantor or otherwise or obligations of the
Corporation or any Consolidated Subsidiary as a lessee under leases
required to be capitalized under generally accepted accounting
principles, in an aggregate principal amount of $500,000 or more,
whether such Indebtedness or obligation now exists or shall hereafter
be created, shall happen and shall result in such Indebtedness or
obligation becoming or being declared due and payable prior to the
date on which it would otherwise become due and payable, and such
acceleration shall not be rescinded or annulled, or such Indebtedness
or obligation shall not have been discharged, within a period of 10
days after written notice has been given to the Corporation by the
Trustee or to the Corporation and the Trustee by the Holders of at
least 25% in principal amount of the Debentures then outstanding,
specifying such event of default and requiring the Corporation to
cause such acceleration to be rescinded or annulled or to cause such
Indebtedness or obligation to be discharged and stating that such
notice is a "Notice of Default" hereunder;
(5) the Corporation pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors; or
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(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law, and the order or decree remains unstayed
and in effect for 60 days, that:
(A) is for relief against the Corporation in an involuntary case,
(B) appoints a Custodian of the Corporation for all or substantially
all of its property, or
(C) orders the liquidation of the Corporation.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until (i) the Trustee
or the Holders of at least 25% in principal amount of the Debentures then
outstanding notify the Corporation of the Default, or (ii) the Corporation
provides notice to the Trustee pursuant to the provisions of Section 5.09
hereof, and the Corporation does not cure the Default within 60 days after
receipt of such respective notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." The
Trustee shall, if requested to do so by the Holders of 25% in principal amount
of the Debentures, notify the Corporation of the Default pursuant to this
Section.
Subject to the provisions of Sections 8.01 and 8.02, the Trustee shall not
be charged with knowledge of any Event of Default unless written notice thereof
shall have been given to a Trust Officer of the Trustee at the Corporate Trust
Office by the Corporation, the Paying Agent, the Holder of a Debenture or an
agent of such Holder or, in the case of an Event of Default under clause (4), by
the trustee acting under any mortgage, indenture or other instrument under which
the event of default shall have occurred or by the holder or the agent of any
holder of such Indebtedness.
Section 7.02. Acceleration.
If an Event of Default occurs and is continuing, the Trustee, by notice to
the Corporation, or the Holders of at least 25% in principal amount of the
Debentures then outstanding, by notice to the Corporation and the Trustee, may
declare the Principal of, and accrued interest on, all the Debentures to be due
and payable. Upon such declaration the Principal and interest shall be due and
payable immediately.
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The Holders of a majority in principal amount of the Debentures then
outstanding, by notice to the Trustee, may rescind an acceleration of all the
Debentures and its consequences if (i) all existing Events of Default have been
cured or waived except nonpayment of the Principal and interest that has become
due solely because of the acceleration and (ii) if the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 7.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal or interest on the
Debentures or to enforce the performance of any provision of the Debentures or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Debentures or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Debentureholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in such Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 7.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Debentures, by notice
to the Trustee, on behalf of all Debentureholders, may waive a past Default and
its consequences, except a Default in the payment of the Principal of or
interest on any Debenture, an uncured failure to make any redemption payment or
an uncured Default with respect to a provision which cannot be modified under
the terms of this Indenture without the consent of each Holder affected.
Section 7.05. Control by Majority.
The Holders of a majority in principal amount of the Debentures then
outstanding may 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 it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, is unduly prejudicial to the rights of
other Debentureholders, or would involve the Trustee in personal liability;
provided, that the Trustee may take any other action deemed proper by the
Trustee which is not
21
inconsistent with such direction. However, the Trustee is under no duty or
obligation to exercise its discretion in determining whether such directions may
conflict with law or this Indenture, or are unduly prejudicial to the rights of
Debentureholders.
Section 7.06. Limitation on Suits.
A Debentureholder may pursue a remedy with respect to this Indenture or the
Debentures only if:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default;
(2) the Holders of at least 25% in principal amount of the Debentures then
outstanding make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request by Debentureholders
pursuant to Section 7.06(2) above, within 60 days after receipt of the
request and the offer of indemnity; and
(5) during such 60day period the Holders of a majority in principal amount
of the Debentures then outstanding do not give the Trustee a direction
inconsistent with the request.
A Debentureholder may not use this Indenture to prejudice the rights of
another Debentureholder or to obtain a preference or priority over another
Debentureholder.
Section 7.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Debenture to receive payment of Principal and interest on the
Debenture, on or after the respective due dates expressed in the Debenture, or
to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
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Section 7.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or Principal specified in
Section 7.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the
Corporation for the whole amount of unpaid Principal and accrued interest
remaining unpaid.
Section 7.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Debentureholders
allowed in any judicial proceedings relative to the Corporation upon the
Debentures, its creditors or its property, and shall be entitled and empowered
to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian in any such
judicial proceeding is hereby authorized by each Debentureholder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Debentureholders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses and disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 8.07.
Section 7.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 8.07;
Second: to Debentureholders for amounts due and unpaid on the
Debentures for Principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Debentures for Principal and interest, respectively; and
Third: to the Corporation.
The Trustee may fix a record date and payment date for any payment to
Debentureholders pursuant to this Article.
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Section 7.11. Undertaking for Costs.
Subject to the provisions of Section 8.02 hereof, 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, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 7.07 or a suit by
Holders of more than 10% in principal amount of the Debentures.
Section 7.12. Waiver of Stay or Extension Laws.
The Corporation covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of the Indenture; and the Corporation (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 7.13. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under the Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Corporation, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 7.14. Record Date for Vote of Debentureholders.
The Corporation may set a record date for purposes of determining the
identity of Debentureholders entitled to vote or consent to any action by vote
or consent authorized or permitted by Sections 7.04 and 7.05 of this Indenture.
Such record date shall be the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders
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furnished to the Trustee pursuant to Section 2.05 of this Indenture prior to
such solicitation.
ARTICLE 8 TRUSTEE
Section 8.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise
as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own gross negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
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(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as otherwise agreed with the Corporation.
Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
Section 8.02. Rights of Trustee.
Except as otherwise provided in Section 8.01:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or
within its rights or powers.
Section 8.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Debentures and may otherwise deal with the Corporation or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
8.10 and 8.11.
Section 8.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Debentures, it shall not be accountable for the Corporation's
use of the proceeds from the
26
Debentures, and it shall not be responsible for any statement in the Debentures
other than its authentication.
Section 8.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to Debentureholders, in the manner and to the extent
provided in TIA Section 313(c), a notice of the Default within 90 days after it
occurs. Except in the case of a Default in payment of the principal of or
interest on any Debenture, the Trustee may withhold the notice if and so long as
the Board of Directors, the Executive Committee or a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Debentureholders.
Section 8.06. Reports by Trustee to Holders.
On or before each ________ beginning with the ________ following the date
of this Indenture, the Trustee shall mail to each Debentureholder a brief
report, dated as of such reporting date, with respect to any of the events
listed in TIA Section 313(a) which may have occurred within the previous 12
months, but if no such event has occurred within such period no such report need
be mailed. The Trustee also shall comply with TIA Section 313(b)(2).
A copy of each report required in this Section shall be mailed to such
Debentureholders as required by TIA Section 313(c) and shall, at the time of its
mailing to such Debentureholders, be filed with the Corporation, the SEC and
each stock exchange on which the Debentures are listed. The Corporation shall
notify the Trustee when the Debentures are listed on any stock exchange. Section
8.07. Compensation and Indemnity.
The Corporation shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. If an Event of
Default should occur, the Trustee shall be entitled to reasonable additional
compensation for all additional or extraordinary services rendered and expenses
(including counsel fees) incurred in connection with said Event of Default.
The Corporation shall indemnify the Trustee against any loss or liability
incurred by it. The Trustee shall notify the Corporation promptly of any claim
for which it may seek indemnity. The Corporation shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel,
and the Corporation shall pay the reasonable fees and expenses of such counsel.
The Corporation need not pay for any settlement made without its consent.
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The Corporation need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Corporation's payment obligations in this Section, the
Trustee shall have a lien prior to the Debentures on all money or property held
or collected by the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 8.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Corporation. The Holders of a
majority in principal amount of the Debentures may remove the Trustee by so
notifying the Trustee and the Corporation. The Corporation may remove the
Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property;
(4) the Trustee becomes incapable of acting; or
(5) the Trustee fails to comply with TIA Section 310(b) after an Event
of Default.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Corporation shall promptly appoint a successor
Trustee. Within one year after the successor Trustee assumes office, the Holders
of a majority in principal amount of the Debentures may appoint a successor
Trustee to replace the successor Trustee appointed by the Corporation.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Corporation or
the Holders of at least 10% in principal amount of the Debentures then
outstanding may petition
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any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Debentureholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Corporation. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Debentureholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 8.07.
Section 8.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
Section 8.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1). The Trustee shall always have a combined capital and
surplus of at least $15,000,000 as set forth in its most recent published annual
report of condition. Neither the Corporation nor any Affiliate shall serve as
Trustee upon the Debentures or pursuant to this Indenture. The Trustee is
subject to TIA Section 310(b).
Section 8.11. Preferential Collection of Claims
Against Corporation.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed is subject to TIA Section 311(a) to the extent indicated.
Section 8.12. Appointment of CoTrustee.
It is the purpose of this Indenture that there shall be no violation of any
law of any jurisdiction denying or restricting
29
the right of banking corporations or associations to transact business as
trustee in such jurisdiction. It is recognized that in case of litigation under
this Indenture, and in particular in case of the enforcement of an Event of
Default, or in case the Trustee deems that by reason of any present or future
law of any jurisdiction it may not exercise any of the powers, rights or
remedies herein granted to the Trustee in trust, as herein granted, or take any
other action which may be desirable or necessary in connection therewith, it may
be necessary that an additional individual or institution be appointed as a
separate or CoTrustee.
At any time or times, for the purpose of meeting the legal requirements of
any jurisdiction, the Trustee and the Corporation may appoint an additional
individual or institution as a separate or CoTrustee, in which event each and
every remedy, power, right, claim, demand, cause of action, immunity, estate,
title, interest and lien expressed or intended by this Indenture, to be
exercised by or vested in or conveyed to the Trustee with respect thereto shall
be exercisable by and vest in such separate or CoTrustee but only to the extent
necessary to enable such separate or CoTrustee to exercise such powers, rights
and remedies, and every covenant and obligation necessary to the exercise
thereof by such separate or CoTrustee shall run to and be enforceable by either
of them. If the Corporation does not join in such appointment within 15 days
after receipt by it of a request so to do, or in case an Event of Default has
occurred and is continuing, the Trustee alone shall have power to make such
appointment.
Should any deed, conveyance or instrument in writing from the Corporation
be required by the separate or CoTrustee so appointed by the Trustee for more
fully and certainly vesting in and confirming to it such properties, rights,
powers, trusts, duties and obligations, including particularly the right to be
paid its fees for services rendered, any and all such deeds, conveyances and
instruments in writing shall, on request, be executed, acknowledged and
delivered by the Corporation. In case any separate or CoTrustee, or a successor
to either, shall die, become incapable of acting, resign or be removed, all the
estates, properties, rights, powers, trusts, duties and obligations of such
separate or CoTrustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new Trustee or successor to
such separate or CoTrustee.
The rights, powers, duties and obligations hereby conferred or imposed upon
the Trustee in respect of this Indenture shall be conferred or imposed upon and
exercised or performed by the Trustee or by the Trustee and such separate or
CoTrustee jointly, as shall be provided in the instrument appointing such
separate or CoTrustee, except to the extent that under any law of any
30
jurisdiction in which any particular act is to be performed, the Trustee shall
be incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such separate
or CoTrustee.
ARTICLE 9 DISCHARGE OF INDENTURE
Section 9.01. Termination of Corporation's Obligations.
The Corporation may at any time terminate all of its obligations under this
Indenture if:
(1) the Corporation provides written notice to the Trustee of the
Corporation's intent to terminate its obligation under this Indenture;
(2) the Debentures mature within one year of the Corporation's written
notice of its intent to terminate or all of the Debentures are to be
called for redemption within one year of the Corporation's written
notice of its intent to terminate under arrangements satisfactory to
the Trustee for giving the notice of redemption; and
(3) the Corporation irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations sufficient to pay Principal and
interest on the Debentures at maturity or on redemption, as the case
may be. The Corporation may make the deposit only during the oneyear
period referred to in paragraph (2) above.
However, the Corporation's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 5.01, 8.07, 8.08 and 9.03 shall survive until the Debentures are no longer
outstanding. Thereafter, the Corporation's obligations in Sections 8.07 and 9.03
shall survive.
After a deposit the Trustee upon request shall acknowledge in writing the
discharge of the Corporation's obligations under this Indenture except for those
surviving obligations specified above.
In order to have money available on a payment date to pay Principal or
interest on the Debentures, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. The U.S. Government Obligations shall not be
callable at the issuer's option.
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Section 9.02. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 9.01. It shall apply the deposited money
and the money from the U.S. Government Obligations through the Paying Agent and
in accordance with this Indenture to the payment of Principal and interest on
the Debentures.
Section 9.03. Repayment to Corporation.
The Trustee and the Paying Agent shall promptly pay to the Corporation upon
request any excess money or securities held by the Trustee as a result of the
Corporation's making payments to the Trustee and Paying Agent in excess of that
required under the provisions of this Indenture. The obligation of the Trustee
and the Paying Agent to pay such excess money or securities to the Corporation
shall survive the payment and/or cancellation of all of the Debentures until all
such excess funds or securities have been so paid.
The Trustee and the Paying Agent shall pay to the Corporation annually as
of ________ of each year any money held by them for the payment of Principal or
interest that remains unclaimed for two years. After payment to the Corporation,
Debentureholders entitled to the money must look to the Corporation for payment
as general creditors unless an applicable abandoned property law designates
another person.
ARTICLE 10 AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 10.01. Without Consent of Holders.
The Corporation and the Trustee may amend or supplement this Indenture or
the Debentures without notice to or consent of any Debentureholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 6.01;
(3) to provide for uncertificated Debentures in addition to or in place of
certificated Debentures; or
(4) to make any change that does not materially adversely affect the
rights of any Debentureholder.
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Section 10.02. With Consent of Holders.
The Corporation and the Trustee may amend or supplement this Indenture or
the Debentures with the written consent of the Holders of at least a majority in
principal amount of the Debentures then outstanding. Without the consent of each
Debentureholder affected, however, an amendment under this Section may not:
(1) reduce the amount of Debentures whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or change the time for payment of interest on any
Debenture;
(3) reduce the Principal of or change the maturity of any Debenture;
(4) waive a Default in the payment of the Principal of or interest on any
Debenture;
(5) make any Debenture payable in money other than that stated in the
Debenture; or
(6) modify the provisions of Sections 7.04, 7.07 and 10.02 (second
sentence).
After an amendment or supplement under this Section becomes effective, the
Corporation shall mail to Debentureholders a notice briefly describing the
amendment.
Section 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Debentures shall
be set forth in a supplemental indenture that complies with the TIA as then in
effect.
Section 10.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Debenture is a continuing consent by the Holder and every
subsequent Holder of a Debenture or portion of a Debenture that evidences the
same debt as the consenting Holder's Debenture, even if notation of the consent
is not made on any Debenture. However, any such Holder or subsequent Holder may
revoke the consent as to his Debenture or portion of a Debenture if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective.
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Section 10.05. Notation on or Exchange of Debentures.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Debenture thereafter authenticated. The Corporation
in exchange for all Debentures may issue and the Trustee shall authenticate new
Debentures that reflect the amendment, supplement or waiver.
Section 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that adversely affects
its rights.
ARTICLE 11 MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of TIA Section 318(c), the imposed duties shall
control.
Section 11.02. Notices.
Any notice or communication by the Corporation or the Trustee to the other
is duly given if in writing and when delivered in person or mailed by firstclass
mail addressed as follows:
if to the Corporation:
VALLEY RESOURCES, INC.
1595 Mendon Road
Cumberland, RI 02864
Attention: Chief Financial Officer
if to the Trustee:
The Corporation or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Debentureholder shall be mailed by
firstclass mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Debentureholder or any defect in
it shall not affect its sufficiency with respect to other Debentureholders.
34
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Corporation mails a notice or communication to Debentureholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing, except as set forth
below.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice required by this
Indenture, then such method of notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of such notice.
Section 11.03. Communication by Holders with Other Holders.
Debentureholders may communicate pursuant to TIA Section 312(b) with other
Debentureholders with respect to their rights under this Indenture or the
Debentures. The Corporation, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Corporation to the Trustee to take
any action under this Indenture, the Corporation shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel addressed to the Trustee and upon which the
Trustee may rely, stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
Section 11.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
35
(1) a statement that the persons making such Officers' Certificate or
Opinion of Counsel have read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such persons, such
condition or covenant has been complied with.
Section 11.06. Rules by Trustee and Agent.
The Trustee may make reasonable rules for action by, or a meeting of,
Debentureholders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking
institutions in _________, are not required to be open. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
Section 11.08. No Recourse Against Others.
No liability under the Debentures shall inure to any director, officer,
employee or stockholder, as such, of the Corporation and each Debentureholder,
by accepting the Debenture, waives and releases all such liability.
Section 11.09. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
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Section 11.10. Governing Law.
The laws of the State of Rhode Island shall govern this Indenture and the
Debentures.
Section 11.11. Table of Contents, Headings, etc.
The table of contents, crossreference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
SIGNATURES
Dated: ______________, 1997 VALLEY RESOURCES, INC.
("Corporation")
(SEAL) By: _________________________
Its: President and Chief
Executive Officer
Attest: _________________________
Its: Corporate Secretary
Dated: ______________, 1997 _____________________________
("Trustee")
(SEAL) By: _________________________
Its: Trust Officer
Attest: _________________________
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FORM OF GLOBAL SECURITY
EXHIBIT A
THIS DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR NOMINEE
OF A DEPOSITORY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR DEBENTURES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN LIMITED
CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Valley Resources,
Inc., a Rhode Island corporation, or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
VALLEY RESOURCES, INC.
_____% Debenture Due September 1, 2027
$7,000,000
No._______________________ CUSIP No. ______________
VALLEY RESOURCES, INC., a Rhode Island corporation, for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the principal sum
of SEVEN MILLION DOLLARS on _______, 2027, and to pay interest on said principal
sum at the rate of ____% per annum calculated on the basis of a 360day year of
twelve 30day months.
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1. Interest.
VALLEY RESOURCES, INC. ("Corporation"), a Rhode Island corporation,
promises to pay interest on the principal amount of this Debenture at the rate
per annum shown above. The Corporation will pay interest semi-annually on March
1 and September 1 of each year (each such date being an "Interest Payment
Date"), commencing March 1, 1998. Interest on the Debentures will accrue from
the most recent date to which interest has been paid, or, if no interest has
been paid previously, from the date of original issuance of this Debenture;
provided that, if there is no existing default in the payment of interest, and
if this Debenture is authenticated between a "Record Date" (as hereinafter
defined) and the next succeeding Interest Payment Date, interest shall accrue
from the next Interest Payment Date. The term "Record Date" as used herein shall
mean the April 15 or August 15, as the case may be, immediately preceding each
Interest Payment Date.
2. Method of Payment.
The Corporation will pay interest on the Debentures (except defaulted
interest) to the Paying Agent who will then pay such interest to the Persons who
are registered Holders of Debentures at the close of business on the Record Date
next preceding the Interest Payment Date. The Corporation shall pay appropriate
amounts to the Paying Agent in immediately available funds at least one (1)
business day preceding the Interest Payment Date. The Paying Agent will pay
interest to such Holders on the next Interest Payment Date even though
Debentures are canceled after the Record Date but on or before the Interest
Payment Date. Holders must surrender Debentures to the Paying Agent to collect
Principal payments; except that, with respect to a Global Security, the
Depository need not surrender the Global Security to collect payments of
Principal other than the final payment of Principal of such Global Security,
provided that the Depository makes appropriate endorsement on such Global
Security of such prepayments on the Table of Prepayments. The Paying Agent will
pay Principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, except
as set forth in the last sentence of this paragraph: (i) the Paying Agent may
pay Principal and interest by check payable in such money; and (ii) the Paying
Agent may mail an interest check to a Holder's registered address. Any Holder of
at least $1,000,000 aggregate principal amount of Debentures shall have the
right to receive payment of Principal of and interest on the Debentures by wire
transfer of funds, provided that such Debentureholder requests such form of
payment, accompanied by appropriate wire transfer instructions, by written
notice to the Trustee and the Paying Agent given not later than the Record Date
immediately preceding such payment.
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3. Paying Agent and Registrar.
Initially, _________, [address], will act as Paying Agent and Registrar.
The Corporation may change any Paying Agent, Registrar or CoRegistrar without
notice. The Corporation or any of its Subsidiaries may act in any such capacity.
4. Indenture.
The Corporation issued the Debentures under an Indenture dated as of
September 1, 1997 ("Indenture"), between the Corporation and the Trustee. The
terms of the Debentures include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa77bbbb) (the "Act") as in effect on the date of the Indenture. The
Debentures are subject to all such terms, and Debentureholders are referred to
the Indenture and the Act for a statement of such terms. Capitalized terms used
but not otherwise defined herein shall have the same meanings such terms are
given in the Indenture. The Debentures are unsecured general obligations of the
Corporation limited to $7,000,000 in aggregate principal amount.
5. Redemption at Corporation's Option.
The Corporation may, at its option, at any time on or after September 1,
2002, redeem all the Debentures or some of them from time to time at the
following Redemption Prices (expressed in percentages of principal amount of the
Debentures) plus unpaid accrued interest to the Redemption Date.
If redeemed during the 12month period beginning September 1:
Year Percentage
2002 104%
2003 103
2004 102
2005 101
2006 until maturity 100
Notice of redemption at the Corporation's option will be mailed at least 30
days before the Redemption Date to each Holder of Debentures to be redeemed at
his registered address as set forth in the register. Debentures in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. On and after the Redemption Date (if there is no default in the payment
of the Redemption Price by the Corporation), interest ceases to accrue on
Debentures or portions thereof called for redemption.
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6. Redemption at Beneficial Owner's Option.
For purposes hereof, a "Beneficial Owner" means the Person who has the
right to sell, transfer or otherwise dispose of an interest in this Debenture
and the right to receive the proceeds therefrom, as well as the interest and
Principal payable to the Holder hereof. In general, a determination of
beneficial ownership in this Debenture will be subject to the rules, regulations
and procedures governing the Depository and institutions that have accounts with
the Depository or a nominee thereof ("Participants"). Participants may hold
interests in this Debenture as Beneficial Owners for their own accounts, or as
nominees for other persons.
Unless the Debentures have been declared due and payable prior to their
maturity by reason of an Event of Default, the Representative (as hereinafter
defined) of a deceased Beneficial Owner has the right to request redemption of
all or part of his interest, expressed in integral multiples of $1,000 principal
amount, in this Debenture for payment prior to its maturity, and the Corporation
will redeem the same subject to the limitations that the Corporation will not be
obligated to redeem, during the period from the original issuance of the
Debentures through and including September 1, 1998 (the "Initial Period"), and
during any twelvemonth period which ends on and includes each September 1
thereafter (each such twelve-month period being hereinafter referred to as a
"Subsequent Period"), (i) on behalf of a deceased Beneficial Owner any interest
in this Debenture which exceeds an aggregate principal amount of $25,000 or (ii)
interests in this Debenture in an aggregate principal amount exceeding $210,000.
In the case of interests in this Debenture owned by a deceased Beneficial Owner,
a request for redemption may be presented to the Trustee at any time and in any
principal amount. If the Corporation, although not obligated to do so, chooses
to redeem interests of any deceased Beneficial Owner in this Debenture in the
Initial Period or any Subsequent Period in excess of the $25,000 limitation,
such redemption, to the extent that it exceeds the $25,000 limitation for any
deceased Beneficial Owner, shall not be included in the computation of the
$210,000 limitation for such Initial Period or such Subsequent Period, as the
case may be, or for any succeeding Subsequent Period.
Subject to the $25,000 and $210,000 limitations, the Corporation will, upon
the death of any Beneficial Owner, redeem the interest of such Beneficial Owner
in this Debenture within 60 days following receipt by the Trustee of a
Redemption Request (as herein defined) from such Beneficial Owner's personal
representative, or surviving joint tenant(s), tenant(s) by the entirety or
tenant(s) in common, or other Persons entitled hereunder to effect such a
Redemption Request (each, a "Representative"). If Redemption Requests exceed the
aggregate principal amount of interests in Debentures required to be
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redeemed during the Initial Period or during any Subsequent Period, then such
excess Redemption Requests will be applied to successive Subsequent Periods,
regardless of the number of Subsequent Periods required to redeem such
interests.
A request for redemption of an interest in this Debenture may be made by
delivering a request to the Depository, in the case of a Participant which is
the Beneficial Owner of such interest, or to the Participant through whom the
Beneficial Owner owns such interest, in form satisfactory to the Participant,
together with evidence of the death of the Beneficial Owner and evidence of the
authority of the Representative satisfactory to the Participant and Trustee. A
Representative of a deceased Beneficial Owner may make the request for
redemption and shall submit such other evidence of the right to such redemption
as the Participant or Trustee shall require. The request shall specify the
principal amount of the interest in this Debenture to be redeemed. A request for
redemption in the form satisfactory to the Participant and accompanied by the
documents relevant to the request as above provided, together with a
certification by the Participant that it holds the interest on behalf of the
deceased Beneficial Owner with respect to whom the request for redemption is
being made (a "Redemption Request"), shall be provided to the Depository by a
Participant and the Depository will forward the request to the Trustee.
Redemption Requests shall be in form satisfactory to the Trustee.
The price to be paid by the Corporation for interests in the Debentures to
be redeemed pursuant to a Redemption Request from a deceased Beneficial Owner's
Representative is 100% of the principal amount thereof plus accrued but unpaid
interest to the date of payment. Subject to arrangements with the Depository,
payment for interests in the Debentures which are to be redeemed shall be made
to the Depository upon presentation of Debentures to the Trustee for redemption
in the aggregate principal amount specified in the Redemption Requests submitted
to the Trustee by the Depository which are to be fulfilled in connection with
such payment. Any acquisition of Debentures by the Corporation or its
Subsidiaries other than by redemption at the option of any Representative of a
deceased Beneficial Owner pursuant to this paragraph 6 shall not be included in
the computation of either the $25,000 or the $210,000 limitation for the Initial
Period or for any Subsequent Period.
For purposes of this paragraph 6, an interest in a Debenture held in
tenancy by the entirety, joint tenancy or by tenants in common will be deemed to
be held by a single Beneficial Owner and the death of a tenant by the entirety,
joint tenant or tenant in common will be deemed the death of a Beneficial Owner.
The death of a person, who, during his lifetime, was entitled to substantially
all of the rights of a Beneficial Owner of an interest in this Debenture will be
deemed the death of the Beneficial Owner, regardless of the recordation of such
interest on the records of the Participant, if such rights can be
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established to the satisfaction of the Participant and the Trustee. Such
interests shall be deemed to exist in typical cases of street name or nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other joint ownership
arrangements between a husband and wife (including individual retirement
accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by
or for the decedent and his spouse), and trust and certain other arrangements
where one Person has substantially all of the rights of a Beneficial Owner
during his lifetime. Beneficial interests shall include the power to sell,
transfer or otherwise dispose of an interest in this Debenture and the right to
receive the proceeds therefrom, as well as interest and Principal payable with
respect thereto.
In the case of any Redemption Request which is presented pursuant to this
paragraph 6 and which has not been fulfilled at the time the Corporation gives
notice of its election to redeem Debentures pursuant to paragraph 5, such
interest or portion thereof shall not be subject to redemption pursuant to
paragraph 5 but shall remain subject to redemption pursuant to this
paragraph 6.
Subject to the provisions of the immediately preceding sentence, any
Redemption Request may be withdrawn by the Person(s) presenting the same upon
delivery of a written request for such withdrawal given by the Depository to the
Trustee prior to the issuance of a check in payment of such Redemption Request.
7. Denominations, Transfer, Exchange.
The Debentures are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. The transfer of Debentures shall be
registered and Debentures may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Debenture or portion of a Debenture selected for redemption.
Also, it need not exchange or register the transfer of any Debentures during
that period of time subsequent to any Record Date and prior to the next
succeeding Interest Payment Date.
8. Persons Deemed Owners.
The registered Holder of a Debenture may be treated as its owner for all
purposes.
9. Amendments, Supplements and Waivers.
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented, and any existing
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Default may be waived, with the consent of Holders of a majority in principal
amount of the Debentures then outstanding. Without the consent of any
Debentureholder, the Indenture or the Debentures may be amended or supplemented,
among other reasons, to cure any ambiguity, defect or inconsistency, to provide
for assumption of Corporation obligations to Debentureholders or to make any
change that does not materially adversely affect the rights of any
Debentureholder.
10. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of interest on the
Debentures; default in payment of Principal of the Debentures; failure by the
Corporation for 60 days after notice to it to comply with any of its other
agreements in the Indenture or the Debentures; default in the payment of
Indebtedness having an outstanding principal balance of $500,000 or more under
certain circumstances; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Debentures may declare all the Debentures
to be due and payable immediately. Debentureholders may not enforce the
Indenture or the Debentures except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Debentures. Subject to certain limitations, Holders of a majority in principal
amount of the Debentures may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Debentureholders notice of any continuing
Default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Corporation must furnish an
annual Officers' Certificate to the Trustee.
The Trustee shall not be charged with knowledge of any Event of Default as
defined in the Indenture, unless written notice thereof shall have been given to
a Trust Officer of the Trustee at the Corporate Trust Office by the Corporation,
the Paying Agent, the Holder of a Debenture or an agent of such Holder.
11. Trustee Dealings with Corporation.
_____________, the Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Corporation or its Affiliates, and may otherwise deal with the
Corporation or its Affiliates, as if it were not Trustee, subject to any
limitations imposed by the Act.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Corporation
shall not have any liability for any obligations of the Corporation under the
Debentures or the Indenture or for any claim based on, in respect of or by
reason of such
A-44
obligations or their creation. Each Debentureholder by accepting a Debenture
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Debentures.
13. Authentication.
This Debenture shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.
14. Abbreviations.
Customary abbreviations may be used in the name of a Debentureholder or an
assignee, such as TEN COM ( = tenants in common), TEN ENT ( = tenants by the
entireties), JT TEN ( = joint tenants with right of survivorship and not as
tenants in common), CUST ( = Custodian), and U/G/M/A ( = Uniform Gifts to Minors
Act).
Dated:
Authenticated:
_______________, VALLEY RESOURCES, INC.
as Trustee
By:___________________________ By:___________________________
Its: Authorized Signer Its: President
By:___________________________
Its: Corporate Secretary
(SEAL)
_________________________
The Corporation will furnish to any Debentureholder upon written request and
without charge a copy of the Indenture, which has in it the text of this
Debenture in larger type. Requests may be made to: Chief Financial Officer,
Valley Resources, Inc., 1595 Mendon Road, Cumberland, RI 02864.
_________________________
A-45
TABLE OF PREPAYMENTS
Upon all partial payments of principal of the within Debenture, this
Debenture shall be surrendered to the Trustee for issuance of a new Debenture
unless the registered Holder hereof shall make appropriate endorsements on the
table below indicating the amount of principal so prepaid, prior to any transfer
to this Debenture. Any purchaser or transferee of this Debenture shall verify
with the Trustee the principal balance outstanding prior to the purchase or
transfer hereof.
Principal Remaining Unpaid
Date Amount Paid Principal Balance Signature
- --------------------------------------------------------------------------------
A-46
ASSIGNMENT FORM
I/We assign and transfer this Debenture to
[__________________]
(Insert assignee's social
security or tax I.D. number)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint _________________________________________
________________________________________ agent to transfer this
Debenture on the books of the Corporation. The agent may
substitute another to act for him.
Date: _____________________ Signature: _________________________
(Sign exactly as your
name appears on this
Debenture)
Signature Guarantee
_________________________
349\023\5522\059.EXH
A-47
FORM OF DEBENTURE
EXHIBIT B
(Face of Debenture)
VALLEY RESOURCES, INC.
_____% Debenture Due 2027
No. ______________________ $_________________________
VALLEY RESOURCES, INC., a Rhode Island corporation, for value received,
hereby promises to pay to ________________________, or registered assigns, the
principal sum of_______________________ DOLLARS on September 1, 2027, and to pay
interest on said principal sum at the rate of _____% per annum calculated on the
basis of a 360 day year of twelve 30day months.
Interest Payment Dates: March 1 and September 1
Record Dates: April 15 and August 15
Dated:
Authenticated:
_____________, VALLEY RESOURCES, INC.
as Trustee
By:__________________________ By:___________________________
Its: Authorized Signer Its: President
By:___________________________
Its: Corporate Secretary
(SEAL)
B-48
(Back of Debenture)
VALLEY RESOURCES, INC.
_____% Debenture Due September 1, 2027
1. Interest.
VALLEY RESOURCES, INC. ("Corporation"), a Rhode Island corporation,
promises to pay interest on the principal amount of this Debenture at the rate
per annum shown above. The Corporation will pay interest semi-annually on March
1 and September 1 of each year (each such date being an "Interest Payment
Date"), commencing March 1, 1998. Interest on the Debentures will accrue from
the most recent date to which interest has been paid, or, if no interest has
been paid previously, from the date of original issuance of this Debenture;
provided that, if there is no existing default in the payment of interest, and
if this Debenture is authenticated between a Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
the next Interest Payment Date.
2. Method of Payment.
The Corporation will pay interest on the Debentures (except defaulted
interest) to the Paying Agent who will then pay such interest to the Persons who
are registered Holders of Debentures at the close of business on the Record Date
next preceding the Interest Payment Date. The Corporation shall pay appropriate
amounts to the Paying Agent in immediately available funds at least one (1)
business day preceding the Interest Payment Date. The Paying Agent will pay
interest to such Holders on the next Interest Payment Date even though
Debentures are canceled after the Record Date but on or before the Interest
Payment Date. Holders must surrender Debentures to the Paying Agent to collect
Principal payments. The Paying Agent will pay Principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. However, except as set forth in the last sentence of
this paragraph: (i) the Paying Agent may pay Principal and interest by check
payable in such money; and (ii) the Paying Agent may mail an interest check to a
Holder's registered address. Any Holder of at least $1,000,000 aggregate
principal amount of Debentures shall have the right to receive payment of
Principal of and interest on the Debentures by wire transfer of funds, provided
that such Debentureholder requests such form of payment, accompanied by
appropriate wire transfer instructions, by written notice to the Trustee and the
Paying Agent given not later than the Record Date immediately preceding such
payment.
B-49
3. Paying Agent and Registrar.
Initially, ___________, [address], will act as Paying Agent and Registrar.
The Corporation may change any Paying Agent, Registrar or CoRegistrar without
notice. The Corporation or any of its Subsidiaries may act in any such capacity.
4. Indenture.
The Corporation issued the Debentures under an Indenture dated as of
September 1, 1997 ("Indenture"), between the Corporation and the Trustee. The
terms of the Debentures include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa77bbbb) (the "Act") as in effect on the date of the Indenture. The
Debentures are subject to all such terms, and Debentureholders are referred to
the Indenture and the Act for a statement of such terms. Capitalized terms used
but not otherwise defined herein shall have the same meanings such terms are
given in the Indenture. The Debentures are unsecured general obligations of the
Corporation limited to $7,000,000 in aggregate principal amount.
5. Redemption at Corporation's Option.
The Corporation may, at its option, at any time on or after September 1,
2002, redeem all the Debentures or some of them from time to time at the
following Redemption Prices (expressed in percentages of principal amount of the
Debentures) plus unpaid accrued interest to the Redemption Date.
If redeemed during the 12month period beginning September 1:
Year Percentage
2002 104%
2003 103
2004 102
2005 101
2006 until maturity 100
Notice of redemption at the Corporation's option will be mailed at least 30
days before the Redemption Date to each Holder of Debentures to be redeemed at
his registered address as set forth in the register. Debentures in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. On and after the Redemption Date (if there is no default in the payment
of the Redemption Price by the Corporation), interest ceases to accrue on
Debentures or portions thereof called for redemption.
B-50
6. Redemption at Holder's Option.
Unless the Debentures have been declared due and payable prior to their
maturity by reason of an Event of Default, the Representative (as hereinafter
defined) of a deceased Debentureholder has the right to present Debentures for
payment prior to their maturity, and the Corporation will redeem the same
subject to the limitations that the Corporation will not be obligated to redeem,
during the period from the original issuance of the Debentures through and
including September 1, 1998 (the "Initial Period"), and during any twelvemonth
period which ends on and includes each September 1 thereafter (each such
twelve-month period being hereinafter referred to as a "Subsequent Period"), (i)
Debentures presented on behalf of a deceased Debentureholder exceeding an
aggregate principal amount of $25,000 or (ii) Debentures in an aggregate
principal amount exceeding $210,000. In the case of Debentures owned by a
deceased Holder, Debentures may be presented to the Trustee for redemption at
any time and in any principal amount. If the Corporation, although not obligated
to do so, chooses to redeem Debentures of any deceased Debentureholder in any
such period in excess of the $25,000 limitation, such redemption, to the extent
that it exceeds the $25,000 limitation for any deceased Debentureholder, shall
not be included in the computation of the $210,000 limitation for such Initial
Period or such Subsequent Period, as the case may be, or for any succeeding
Subsequent Period.
Subject to the $25,000 and $210,000 limitations, the Corporation will, upon
the death of any Debentureholder, redeem Debentures within 60 days following
receipt by the Trustee of a request therefor from such Debentureholder's
personal representative, or surviving joint tenant(s), tenant(s) by the entirety
or tenant(s) in common, or other Persons entitled hereunder to request such
redemption (each, a "Representative"). If Debentures presented for redemption
exceed the aggregate principal amount of Debentures required to be redeemed
during the Initial Period or during any Subsequent Period, then such excess
Debentures presented for redemption will be applied to successive Subsequent
Periods, regardless of the number of Subsequent Periods required to redeem such
Debentures.
Debentures may be presented for redemption by delivering to the Trustee:
(i) a written request for redemption, in form satisfactory to the Trustee,
signed by the Representative of the deceased Debentureholder, (ii) the
Debenture(s) to be redeemed and (iii) appropriate evidence of death of the
Debentureholder and appropriate evidence of the authority of the Representative
of the deceased Debentureholder. No particular forms of request for redemption
or authority to request redemption are necessary. The price to be paid by the
Corporation for all Debentures presented to it pursuant to the provisions
described in this paragraph 6 is 100% of the principal amount thereof plus
accrued
B-51
but unpaid interest to the date of payment. Any acquisition of Debentures by the
Corporation or its Subsidiaries other than by redemption at the option of any
Representative of a deceased Debentureholder pursuant to this paragraph 6 shall
not be included in the computation of either the $25,000 or the $210,000
limitation for the Initial Period or for any Subsequent Period.
For purposes of this paragraph 6, a Debenture held in tenancy by the
entirety, joint tenancy or by tenants in common will be deemed to be held by a
single Debentureholder and the death of a tenant by the entirety, joint tenant
or tenant in common will be deemed the death of a Debentureholder. The death of
a person, who, during his lifetime, was entitled to substantially all of the
beneficial interests of ownership of a Debenture will be deemed the death of the
Debentureholder, regardless of the registered Debentureholder, if such
beneficial interest can be established to the satisfaction of the Trustee. Such
beneficial interest shall be deemed to exist in typical cases of street name or
nominee ownership, ownership under the Uniform Gifts to Minors Act or the
Uniform Transfers to Minors Act, community property or other joint ownership
arrangements between a husband and wife (including individual retirement
accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by
or for the decedent and his spouse), and trust and certain other arrangements
where one person has substantially all of the beneficial ownership interests in
the Debenture during his lifetime. Beneficial interests shall include the power
to sell, transfer or otherwise dispose of a Debenture and the right to receive
the proceeds therefrom, as well as interest and Principal payable with respect
thereto.
In the case of Debentures held by Qualified Institutions on behalf of
beneficial owners, the $25,000 limitation shall apply to each such beneficial
owner and the death of such beneficial owner shall entitle a Qualified
Institution to seek redemption of such Debentures as if the deceased beneficial
owner were the record Debentureholder. Such Qualified Institutions, in their
request for redemption on behalf of such beneficial owners, must submit
evidence, satisfactory to the Trustee, that they hold Debentures on behalf of
such beneficial owners and must certify that the aggregate requests for
redemption tendered by such Qualified Institution on behalf of each such
beneficial owner in the Initial Period or any Subsequent Period does not exceed
$25,000. In addition, any request for redemption made by a Qualified Institution
on behalf of a beneficial owner must be delivered to the Trustee by registered
mail, return receipt requested.
In the case of any Debenture which is presented for redemption in part
only, upon such redemption the Corporation shall execute and the Trustee shall
authenticate and deliver to or on the order of the Holder of such Debenture,
without service charge to the Debentureholder, a new Debenture or Debentures, of
any authorized denomination or denominations as requested by such
B-52
Holder, in aggregate principal amount equal to the unredeemed portion of the
principal of the Debenture so presented.
In the case of any Debenture or portion thereof which is presented for
redemption pursuant to this paragraph 6 and which has not been redeemed at the
time the Corporation gives notice of its election to redeem Debentures pursuant
to paragraph 5, such Debenture or portion thereof shall not be subject to
redemption pursuant to paragraph 5 but shall remain subject to redemption
pursuant to this paragraph 6.
Subject to the provisions of the immediately preceding sentence, any
Debentures presented for redemption at the option of the Representative of a
deceased Debentureholder may be withdrawn by the Person(s) presenting the same
upon delivery of a written request for such withdrawal given to the Trustee
prior to the issuance of a check in payment of such Debentures presented by
reason of the death of a Debentureholder.
7. Denominations, Transfer, Exchange.
The Debentures are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. The transfer of Debentures shall be
registered and Debentures may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Debenture or portion of a Debenture selected for redemption.
Also, it need not exchange or register the transfer of any Debentures during
that period of time subsequent to any Record Date and prior to the next
succeeding Interest Payment Date.
8. Persons Deemed Owners.
The registered Holder of a Debenture may be treated as its owner for all
purposes.
9. Amendments, Supplements and Waivers.
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented, and any existing Default may be waived, with the
consent of Holders of a majority in principal amount of the Debentures then
outstanding. Without the consent of any Debentureholder, the Indenture or the
Debentures may be amended or supplemented, among other reasons, to cure any
ambiguity, defect or inconsistency, to provide for assumption of Corporation
obligations to Debentureholders or to make any change that does not materially
adversely affect the rights of any Debentureholder.
B-53
10. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of interest on the
Debentures; default in payment of Principal of the Debentures; failure by the
Corporation for 60 days after notice to it to comply with any of its other
agreements in the Indenture or the Debentures; default in the payment of
Indebtedness having an outstanding principal balance of $500,000 or more under
certain circumstances; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Debentures may declare all the Debentures
to be due and payable immediately. Debentureholders may not enforce the
Indenture or the Debentures except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Debentures. Subject to certain limitations, Holders of a majority in principal
amount of the Debentures may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Debentureholders notice of any continuing
Default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Corporation must furnish an
annual Officers' Certificate to the Trustee.
The Trustee shall not be charged with knowledge of any Event of Default as
defined in the Indenture, unless written notice thereof shall have been given to
a Trust Officer of the Trustee at the Corporate Trust Office by the Corporation,
the Paying Agent, the Holder of a Debenture or an agent of such Holder.
11. Trustee Dealings with Corporation.
____________, the Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Corporation or its Affiliates, and may otherwise deal with the
Corporation or its Affiliates, as if it were not Trustee, subject to any
limitations imposed by the Act.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Corporation
shall not have any liability for any obligations of the Corporation under the
Debentures or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Debentureholder by accepting
a Debenture waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Debentures.
13. Authentication.
This Debenture shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.
B-54
14. Abbreviations.
Customary abbreviations may be used in the name of a Debentureholder or an
assignee, such as TEN COM ( = tenants in common), TEN ENT ( = tenants by the
entireties), JT TEN ( = joint tenants with right of survivorship and not as
tenants in common), CUST ( = Custodian), and U/G/M/A ( = Uniform Gifts to Minors
Act).
__________________________
The Corporation will furnish to any Debentureholder upon written request
and without charge a copy of the Indenture, which has in it the text of this
Debenture in larger type. Requests may be made to: Chief Financial Officer,
Valley Resources, Inc., 1595 Mendon Road, Cumberland, Rhode Island 02864.
__________________________
B-55
ASSIGNMENT FORM
I/We assign and transfer this Debenture to
[__________________]
(Insert assignee's social
security or tax I.D. number)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint _________________________________________
________________________________________ agent to transfer this
Debenture on the books of the Corporation. The agent may substitute
another to act for him.
Date: ___________________ Signature: ______________________
(Sign exactly as your
name appears on the
other side of this
Debenture)
Signature Guarantee
_________________________
349\023\5522\060.EXH
B-56