1
EXHIBIT 4.1
AUSTIN FUNDING.COM CORPORATION,
as Issuer,
$10,000,000
8% SECURED
SUBORDINATED DEBENTURES DUE DECEMBER 31, 2015
---------------------
INDENTURE
Dated as of December ______, 1999
---------------------
NORWEST BANK MINNESOTA, N.A.
as Trustee
---------------------
-----------------------------------------
2
CROSS REFERENCE TABLE*
TIA INDENTURE
SECTION SECTION
310(a)(1)..................................................................................................... 7.10
(a)(2)................................................................................................. 7.10
(a)(3)................................................................................................ N.A.**
(a)(4).................................................................................................. N.A.
(b)............................................................................................... 7.08; 7.10
(c)......................................................................................................N.A.
3.11(a)........................................................................................................7.11
(b)......................................................................................................7.11
(c)......................................................................................................N.A.
3.12(a)........................................................................................................2.05
(b).....................................................................................................12.03
(c).....................................................................................................12.03
(d)......................................................................................................7.06
3.13(a)........................................................................................................7.06
(b)(1).................................................................................................. N.A.
(b)(2)...................................................................................................7.06
(c).....................................................................................................12.02
(d)......................................................................................................7.06
3.14(a).................................................................................................4.02; 12.02
(b)......................................................................................................N.A.
(c)(1)..................................................................................................12.04
(c)(2)..................................................................................................12.04
(c)(3)...................................................................................................N.A.
(d)......................................................................................................N.A.
(e).....................................................................................................12.05
(f)......................................................................................................4.03
3.15(a)........................................................................................................7.01
(b)...............................................................................................7.05; 12.02
(c)......................................................................................................7.01
(d)......................................................................................................7.01
(e)......................................................................................................6.11
3.16(a) (last sentence)2.08
(a)(1)(A)................................................................................................6.05
(a)(1)(B)................................................................................................6.04
(a)(2)...................................................................................................N.A.
(b)......................................................................................................6.07
3.17(a)(1).....................................................................................................6.08
(a)(2)...................................................................................................6.09
(b)......................................................................................................2.04
3.18(a).......................................................................................................12.01
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
** Note: N.A. means Not Applicable.
3
TABLE OF CONTENTS
ARTICLE 1. ............................................................. .................... .1
DEFINITIONS AND INCORPORATION BY REFERENCE........................................ ..... .1
SECTION 1.01. Definitions................................................ .............. .1
SECTION 1.02. Other Definitions............................................. ........... .5
SECTION 1.03. Incorporation by Reference of Trust Indenture Act5
SECTION 1.04. Rules of Construction........................................... ......... .6
ARTICLE 2. ............................................................ ..................... .6
THE SECURITIES...................................................... .....................6
SECTION 2.01. Form and Dating.............................................. ............ .6
SECTION 2.02. Execution and Authentication....................................... ...... .6
SECTION 2.03. Registrar and Paying Agent........................................ ....... .7
SECTION 2.04. Paying Agent to Hold Money and Securities in Trust..........................7
SECTION 2.05. Holder Lists............................................... .............. .7
SECTION 2.06. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depositary7
SECTION 2.07. Replacement Securities.......................................... ...........8
SECTION 2.08. Outstanding Securities; Determinations Of Holders' Action...................9
SECTION 2.09. Temporary Securities........................................... ............9
SECTION 2.10 Cancellation.10
SECTION 2.11. Persons Deemed Owners.......................................... ...........10
SECTION 2.12. CUSIP Numbers.............................................. ...............10
SECTION 2.13. Restrictions On Transfer........................................ ..........10
ARTICLE 3 ............................................................ .......................11
REDEMPTION AND REPURCHASES............................................... ...............11
SECTION 3.01. Right To Redeem; Notices To Trustee................................... ....11
SECTION 3.02. Selection Of Securities To Be Redeemed................................. ...11
SECTION 3.03. Notice Of Redemption.......................................... ............11
SECTION 3.04. Effect Of Notice Of Redemption..................................... .......12
SECTION 3.05. Deposit Of Redemption Price....................................... ........12
SECTION 3.06. Securities Redeemed In Part....................................... ........13
SECTION 3.07. Conversion Arrangement On Call For Redemption..............................13
ARTICLE 4 ............................................................ .......................13
COVENANTS....................................................... ........................13
SECTION 4.01. Payment of Securities.......................................... ...........13
SECTION 4.02. Financial Information; SEC Reports................................... .....14
SECTION 4.03. Compliance Certificate......................................... ...........14
SECTION 4.04. Further Instruments and Acts....................................... .......14
SECTION 4.05. Maintenance of Office or Agency. .................................... .....15
SECTION 4.06. Existence................................................ .................15
ARTICLE 5 ............................................................ .......................15
SUCCESSOR CORPORATION................................................. ..................15
i
4
SECTION 5.01. When the Company May Merge or Transfer Assets..............................15
ARTICLE 6. ............................................................ ......................16
DEFAULTS AND REMEDIES................................................. ..................16
SECTION 6.01. Events of Default............................................ .............16
SECTION 6.02. Acceleration............................................... ...............17
SECTION 6.03. Other Remedies............................................. ...............17
SECTION 6.04. Waiver of Past Defaults......................................... ..........17
SECTION 6.05. Control by Majority........................................... ............17
SECTION 6.06. Limitation on Suits........................................... ............18
SECTION 6.07. Rights of Holders to Receive Payment.................................. ....18
SECTION 6.08. Collection Suit by Trustee....................................... .........18
SECTION 6.09. Trustee May File Proofs of Claim..................................... .....18
SECTION 6.10. Priorities............................................... .................19
SECTION 6.11. Undertaking for Costs.......................................... ...........19
SECTION 6.12. Waiver of Stay, Extension or Usury Laws................................. ..20
ARTICLE 7. ............................................................ ......................20
TRUSTEE........................................................ .........................20
SECTION 7.01. Duties of Trustee............................................ .............20
SECTION 7.02. Rights of Trustee............................................ .............21
SECTION 7.03. Individual Rights of Trustee...................................... ........22
SECTION 7.04. Trustee's Disclaimer.......................................... ............22
SECTION 7.05. Notice of Defaults........................................... .............22
SECTION 7.06. Reports by Trustee to Holders...................................... .......22
SECTION 7.07. Compensation and Indemnity....................................... .........23
SECTION 7.08. Replacement of Trustee......................................... ...........23
SECTION 7.09. Successor Trustee by Merger....................................... ........24
SECTION 7.10. Eligibility; Disqualification...................................... .......24
SECTION 7.11. Preferential Collection of Claims Against Company..........................24
ARTICLE 8. ............................................................ ......................25
DISCHARGE OF INDENTURE................................................. .................25
SECTION 8.01. Discharge of Liability on Securities.................................. ....25
SECTION 8.02. Repayment to the Company......................................... .........25
ARTICLE 9 ............................................................ .......................25
AMENDMENTS....................................................... .......................25
SECTION 9.01. Without Consent of Holders....................................... .........25
SECTION 9.02. With Consent of Holders......................................... ..........26
SECTION 9.03. Compliance with Trust Indenture Act. .................................. ...26
SECTION 9.04. Revocation and Effect of Consents, Waivers and Actions.....................26
SECTION 9.05. Notation on or Exchange of Securities.................................. ...27
SECTION 9.06. Trustee to Sign Supplemental Indentures................................. ..27
SECTION 9.07. Effect of Supplemental Indentures.................................... .....27
ARTICLE 10 ............................................................ ......................27
SUBORDINATION..................................................... ......................27
SECTION 10.01. Agreement of Subordination....................................... ........27
ii
5
SECTION 10.02. Payments to Holders.......................................... ............27
SECTION 10.03. Subrogation of Securities........................................ ........29
SECTION 10.04. Authorization by Holders........................................ .........30
SECTION 10.05. Notice to Trustee........................................... .............30
SECTION 10.06. Trustee's Relation to Senior Indebtedness............................... .31
SECTION 10.07. No Impairment of Subordination..................................... ......31
SECTION 10.08. Reliance by Holders of Senior Indebtedness on Subordination Provisions....32
SECTION 10.09. Reinstatement of Subordination..................................... ......32
SECTION 10.10. Permitted Payments........................................... ............32
SECTION 10.11. Article Applicable to Paying Agents................................ ......32
SECTION 10.12. Reliance on Judicial Order or Certificate of Liquidating Agent............32
ARTICLE 11 ............................................................ ......................33
SECURITY AND PAYMENT.................................................. ..................33
SECTION 11.01. Zero Coupon Bond............................................ .............33
SECTION 11.02. Payment Of Interest; Interest Rights Preserved............................33
SECTION 11.03 Payment of Principal Amount...................................... .........34
SECTION 11.04. Remaining Sums............................................. ..............35
ARTICLE 12.
MISCELLANEOUS............................................... ............................35
SECTION 12.01. Trust Indenture Act.......................................... ............35
SECTION 12.02. Notices................................................ ..................35
SECTION 12.03. Communication by Holders with Other Holders.............................. 36
SECTION 12.04. Certificate and Opinion as to Conditions Precedent. ......................37
SECTION 12.05. Statements Required in Certificate or Opinion.............................37
SECTION 12.06. Severability Clause.......................................... ............37
SECTION 12.07. Rules By Trustee, Paying Agent and Registrar..............................37
SECTION 12.08. Governing Law............................................. ...............37
SECTION 12.09. No Recourse Against Others....................................... ........37
SECTION 12.10. Successors............................................... ................38
SECTION 12.11. Multiple Originals........................................... ............38
iii
6
INDENTURE
This INDENTURE, dated as of December ______, 1999, is between Austin
Funding.com Corporation, a Nevada corporation (the "Company"), and Norwest Bank
Minnesota, National Association, a national banking association, as trustee (the
"Trustee").
Each party agrees, for the benefit of the other and for the equal and
ratable benefit of the Holders of the Company's 8% Secured Subordinated
Debentures due December 31, 2015 as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
control, when used with respect to any specified Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms controlling and controlled have meanings
correlative to the foregoing.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of such board.
"Business Day" means each day of the year on which banking institutions
are not required or authorized to close in the City of Minneapolis, Minnesota,
or the city in which the Corporate Trust Office is located.
"Cash" means U.S. legal tender.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is dated,
located at Minneapolis, Minnesota, Attention: Corporate Trust Services.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
7
"Depository" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Indebtedness" means, with respect to any Person, and without
duplication, (i) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), (ii) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances, (iii) all obligations and liabilities (contingent or
otherwise) in respect of leases of such Person (a) required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person, or (b) required, in
conformity with generally accepted accounting principles, to be accounted for as
an operating lease, provided either (1) such operating lease requires, at the
end of the term thereof, that such Person make any payment other than accrued
periodic rent in the event that such Person does not acquire the leased real
property and related fixtures subject to such lease, or (2) such Person has an
option to acquire the leased real property and related fixtures, whether such
option is exercisable at any time or under specific circumstances, (iv) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate swap, cap or collar agreement or other similar instrument or agreement, (v)
all direct or indirect guaranties or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (i) through (iv), (vi) any indebtedness or
other obligations described in clauses (i) through (iv) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person, and (vii) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (i) through (vi).
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action shall
be taken on the next succeeding date that is not a Legal Holiday.
"NASDAQ National Market" means the electronic inter-dealer quotation
system operated by NASDAQ Stock Market, Inc., a subsidiary of the National
Association of Securities Dealers, Inc.
"NYSE" means The New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.
2
8
"Officers' Certificate" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.04 and 12.05, from legal counsel acceptable to the
Trustee. The counsel may be an employee of, or counsel to, the Company or the
Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Principal" or "Principal Amount" of a Security means the principal
amount at Stated Maturity as set forth on the face of such Security.
"Redemption Date" means the date specified by the Company for
redemption of Securities in accordance with the terms of the Securities and
Section 3.01 of this Indenture.
"Redemption Price" shall have the meaning set forth in paragraph 5 of
the Securities.
"Representative" means the (i) Indenture trustee or other trustee,
agent or representative for any Senior Indebtedness, or (ii) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (a) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required Persons necessary to bind such holders or
owners of such Senior Indebtedness, and (b) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Sale Price of the Common Stock" means, on any date, the closing per
share sale price, or if no closing sale price is reported, the average bid and
ask prices or, if more than one, in either case, the average of the average bid
and average ask prices, on such date as reported in the composite transactions
for the principal United States securities exchange on which the common stock is
traded or, if the common stock is not listed on a United States national or
regional stock exchange, as reported by The NASDAQ National Market.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Company's 8% Secured Subordinated Debentures due
December 31, 2015, unless the context otherwise indicates.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
3
9
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding), rent and end of term
payments payable on or in connection with, and, to the extent not included in
the foregoing, all amounts payable as fees, costs, expenses, liquidated damages,
indemnities, repurchase and other put obligations and other amounts to the
extent accrued or due on or in connection with, Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing). Notwithstanding the foregoing,
the term Senior Indebtedness shall not include (i) Indebtedness evidenced by the
Securities, (ii) Indebtedness of the Company to any subsidiary of the Company, a
majority of the voting stock of which is owned, directly or indirectly, by the
Company, (iii) accounts payable or other indebtedness to trade creditors created
or assumed by the Company in the ordinary course of business, and (iv) any
particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to, or is pari passu with, or is
subordinated or junior to, the Securities.
"Significant Subsidiary" means, with respect to any Person, a
Subsidiary of such Person organized under the laws of the United States of
America, any state thereof, or the District of Columbia that would constitute a
"significant subsidiary" as such term is defined under Rule 1-02 of Regulation
S-X of the SEC.
"Stated Maturity," when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal of such Security is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other subsidiaries of that Person (or a combination
thereof), and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a subsidiary of such Person, or (b)
the only general partners of which are such Person or one or more subsidiaries
of such Person (or any combination thereof).
"TBCC" means the Texas Business & Commerce Code, as amended, as in
effect on the date of this Indenture.
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect
on the date of this Indenture, except as provided in Section 9.03.
"Trading Day" means a day during which trading in securities generally
occurs on the NYSE or, if the applicable security is not listed on the NYSE, on
the NASDAQ National Market, or if the applicable security is not quoted on the
NASDAQ National Market, on the principal other national or regional securities
exchange on which the applicable security is then listed or, if the applicable
security is not listed on a national or regional securities exchange, on the
principal other market on which the applicable security is then traded.
"Trust Officer" means any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistance secretary, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
4
10
"Voting Stock" means stock of any class or classes, however designated,
having ordinary voting power for the election of a majority of the board of
directors of a corporation, other than stock having such power only by reason of
the occurrence of a contingency.
SECTION 1.02. Other Definitions.
Defined
Term in Section
- ---- ----------
"Articles Of Incorporation".................................................................................2.13(a)
"Cash".........................................................................................................1.01
"Defaulted Interest".......................................................................................11.02(b)
"Defaulted Principal"......................................................................................11.03(b)
"Discharge Date"...............................................................................................8.01
"Event Of Default".............................................................................................6.01
"Interest Payment Date".......................................................................................11.01
"Notice Of Default"............................................................................................6.01
"Over-Allotment Option"........................................................................................2.02
"Ownership Limit" ..........................................................................................2.13(a)
"Paying Agent".................................................................................................2.03
"Payment Blockage Notice" ....................................................................................10.02
"Registrar"....................................................................................................2.03
"Regular Record Date".........................................................................................11.01
"Restriction Agreements".......................................................................................2.13
"Special Record Date"......................................................................................11.02(a)
"Trigger Event"................................................................................................11.9
"Zero Coupon Bond"............................................................................................11.01
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:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
a) a term has the meaning assigned to it;
5
11
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
ARTICLE 2.
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication for the
Securities shall be substantially in the form of Exhibit "A" attached hereto and
incorporated herein by reference. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage; provided, any such
notation, legend or endorsement required by usage shall be in a form acceptable
to the Company. The Company shall provide any such notations, legends or
endorsements to the Trustee in writing. Each Security shall be dated the date of
its authentication.
SECTION 2.02. Execution and Authentication.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, and attested by its Treasurer or Secretary or one of its
Assistant Treasurers or one of its Assistant Secretaries. The signature of any
of these officers on the Securities may be manual or by facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount of $10,000,000 upon a Company Order
without any further action by the Company. The aggregate Principal Amount of
Securities outstanding at any time may not exceed the amount set forth in the
foregoing sentence, except as provided in Section 2.07 hereof.
6
12
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where debt with respect to the Securities shall be paid and the
Securities may be presented for purchase or payment ("Paying Agent"). The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term Paying Agent includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent or co-registrar (if not the Trustee or an Affiliate of
the Trustee). The agreement shall implement the provisions of this Indenture
that relate to such agent and the relevant Security. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07 hereof.
The Company or an Affiliate of the Company may act as Paying Agent or Registrar
or co-registrar.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04. Paying Agent to Hold Money and Securities in Trust.
Except as otherwise provided herein, prior to or on each due date of
payments in respect of any Security, the Company shall deposit with the Paying
Agent a sum of money or securities sufficient to make such payments when such
payments are due. The Company shall require the Paying Agent (if not the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money and securities held by the Paying
Agent for the making of payments in respect of the Securities and shall notify
the Trustee of any default by the Company in making any such payment. At any
time during the continuance of any such default, the Paying Agent shall, upon
the written request of the Trustee, forthwith pay to the Trustee all money and
securities so held in trust. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall segregate the money and securities held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require the Paying Agent to pay all money and securities held by it to the
Trustee and to account for any funds and securities disbursed by it. Upon doing
so, the Paying Agent shall have no further liability for such money or
securities.
SECTION 2.05. Holder 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
Holders. If the Trustee is not the Registrar, the Company shall cause to be
furnished to the Trustee at least semiannually on February 10 and August 10 a
listing of Holders dated within 15 days of the date on which the list is
furnished and at such other times as the Trustee may request in writing a list,
in such form and as of such date as the Trustee may reasonably require, of the
names and addresses of Holders.
SECTION 2.06. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depositary.
Upon surrender for registration of transfer of any Security at any
office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03 hereof and satisfaction of the requirements for such transfer
set forth in this Section 2.06, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate Principal Amount and bearing such restrictive legends as may be
required by this Indenture.
7
13
Securities may be exchanged for a like aggregate Principal Amount of Securities
of other authorized denominations. Securities to be exchanged shall be
surrendered at any office or agency to be maintained by the Company designated
as Registrar or co-registrar pursuant to Section 2.03 hereof and the Company
shall execute and register, and the Trustee shall authenticate and deliver in
exchange therefor, the Security or Securities which the Holder making the
exchange shall be entitled to receive, bearing registration numbers not
contemporaneously outstanding.
All Securities presented for registration of transfer or for exchange into like
Securities, repurchase, redemption or payment shall (if so required by the
Company, the Trustee, the Registrar or any co-registrar) be duly endorsed by, or
be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee, duly executed by the Holder or such
Holder's attorney duly authorized in writing.
No service charge shall be charged to the Holder for any exchange for like
Securities or registration of transfer of Securities, but the Company may
require payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Registrar or any co-registrar shall be
required to exchange for like Securities or register a transfer of (i) any
Securities for a period of 15 days next preceding the mailing of notice of
Securities to be redeemed, or (ii) any Securities or portions thereof selected
or called for redemption, or (iii) any Securities or portion thereof surrendered
for conversion into Common Stock.
All Securities issued upon any transfer or exchange for like Securities shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture as the Securities surrendered upon such
exchange or transfer.
SECTION 2.07. Replacement Securities.
If (i) any mutilated Security is surrendered to the Trustee, or (ii)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and, upon its written request, the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
Principal Amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be repurchased or
redeemed by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Security, pay, repurchase or redeem
such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may, as a condition to such issuance, require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
8
14
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08. Outstanding Securities; Determinations Of Holders'
Action.
Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those paid pursuant to Section 4.01 hereof, those replaced or paid
pursuant to Section 2.07 hereof and those described in this Section 2.08 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate thereof holds the Security; provided, however, in determining
whether the Holders of the requisite Principal Amount of Securities have given
or concurred in any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trust Officer actually knows to be so owned shall be so
disregarded unless written notice of such ownership is received by the Trustee
at the Corporate Trust Office of the Trustee in accordance with Section 12.02
hereof and such notice references the Securities and this Indenture. Subject to
the foregoing, only Securities outstanding at the time of such determination
shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9 hereof).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Repurchase Date, or on
Stated Maturity, money or securities, if permitted hereunder, sufficient to pay
Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and interest, if any, on such Securities shall
cease to accrue; provided, if such Securities 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.
SECTION 2.09. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03
hereof, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
9
15
SECTION 2.10 Cancellation.
All Securities surrendered for payment, purchase, conversion,
redemption or registration of transfer or exchange for the Securities shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. The Company
may not issue new Securities to replace Securities it has paid for or delivered
to the Trustee for cancellation. No Securities shall be authenticated in lieu of
or in exchange for any Securities canceled as provided in this Section 2.10,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be disposed of by the Trustee in accordance with its customary
procedures.
SECTION 2.11. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of Principal Amount, Redemption
Price and interest, if any, in respect thereof, for the purpose of conversion
and for all other purposes whatsoever, whether or not such Security be overdue,
and none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 2.12. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
SECTION 2.13. Restrictions On Transfer.
(a) Pursuant to the Company's Amended and Restated Articles of
Incorporation (the "Articles of Incorporation"), the Company's Common Stock and
Preferred Stock (as defined in the Articles of Incorporation) is subject to
certain restrictions on ownership and transfer. These provisions have been
implemented in connection with the Certificate of Designation, Preferences,
Rights and Limitations of 1999 Series A Preferred Stock of the Company dated as
of September 29, 1999, and the Company's 1999 Stock Option and Incentive Plan
(collectively, the "Restriction Agreements").
(b) Any Common Stock issued upon conversion of a Security shall bear a
legend in substantially the following form:
"SHAREHOLDERS MAY OBTAIN, UPON WRITTEN REQUEST AND WITHOUT CHARGE, A
STATEMENT DESCRIBING THE LIMITATIONS OR DENIALS OF SHAREHOLDERS'
PREEMPTIVE RIGHT TO OBTAIN UNISSUED SHARES OF THE CORPORATION, AS SET
FORTH IN THE ARTICLES OF INCORPORATION ON FILE IN THE OFFICE OF THE
SECRETARY OF STATE. SUCH A STATEMENT MAY BE OBTAINED BY SHAREHOLDERS
UPON WRITTEN REQUEST TO THE CORPORATION AT THE CORPORATION'S PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE."
10
16
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN CERTIFICATE OF DESIGNATION,
PREFERENCES, RIGHTS AND LIMITATIONS OF 1999 SERIES A PREFERRED STOCK OF
AUSTIN FUNDING.COM CORPORATION DATED AS OF SEPTEMBER 29, 1999,
INCLUDING THE POSSIBLE MANDATORY EXCHANGE THEREFOR FOR OTHER SECURITIES
OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE
OF BUSINESS OR REGISTERED OFFICE."
ARTICLE 3.
REDEMPTION AND REPURCHASES
SECTION 3.01. Right To Redeem; Notices To Trustee.
The Company, at its option at any time after December 31, 2001, may
redeem the Securities in accordance with the provisions of paragraph 5 of the
Securities. If the Company elects to redeem Securities pursuant to paragraph 5
of the Securities, it shall notify the Trustee in writing of the Redemption
Date, the Principal Amount of Securities to be redeemed and the Redemption
Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 in the case of any redemption of the Securities, at least 30 days
before the Redemption Date unless a shorter notice shall be satisfactory to the
Trustee.
SECTION 3.02. Selection Of Securities To Be Redeemed.
If less than all the Securities held in definitive form are to be
redeemed pursuant to Section 3.01, the Trustee shall select the definitive
Securities to be redeemed pro rata or by lot or by a method the Trustee
considers fair and appropriate (as long as such method is not prohibited by the
rules of any securities exchange or quotation system on which the Securities are
then listed or quoted). The Trustee shall make the selection at least 25 days,
but not more than 65 days, before the Redemption Date from outstanding
definitive Securities not previously called for redemption. The Trustee may
select for redemption portions of the Principal Amount of Securities that have
denominations larger than $5,000. Securities and portions of them the Trustee
selects shall be in denominations of $5,000 or larger of Principal Amount but
only in integral multiples of $1,000 of Principal Amounts. Except as expressly
stated otherwise, provisions of this Indenture that apply to definitive
Securities called for redemption also apply to portions of definitive Securities
called for redemption. The Trustee shall notify the Company promptly of the
definitive Securities or portions of definitive Securities to be redeemed.
Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.
SECTION 3.03. Notice Of Redemption.
At least 20 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
11
17
(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(e) if fewer than all the outstanding Securities are to be redeemed,
the certificate number and Principal Amounts of the particular Securities to be
redeemed;
(f) that interest, if any, on Securities called for redemption will
cease to accrue on and after the Redemption Date; and
(g) the CUSIP number or numbers for the Securities.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04. Effect Of Notice Of Redemption.
Once notice of redemption is given, pursuant to Section 3.03 hereof,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price.
Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.
SECTION 3.05. Deposit Of Redemption Price.
Prior to 10 a.m., Central Standard Time, on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or an Affiliate
of the Company is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the Redemption Price of all Securities to be redeemed on that
date other than Securities or portions of Securities called for redemption which
prior thereto have been delivered by the Company to the Trustee for
cancellation, and on or after the Redemption Date (unless the Company shall
default in the payment of the Securities at the Redemption Price), interest, if
any, on the Securities or portion of Securities called for redemption shall
cease to accrue and, except as provided in Section 8.02 hereof, to be entitled
to any benefit or security under this Indenture, and the Holders thereof shall
have no right in respect of such Securities except the right to receive the
Redemption Price thereof and unpaid interest to (but excluding) the Redemption
Date. The Paying Agent shall as promptly as practicable return to the Company
any money, with interest, if any, thereon, not required for that purpose. If
such money is then held by the Company in trust and is not required for such
purpose, it shall be discharged from such trust.
12
18
SECTION 3.06. Securities Redeemed In Part.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder a new
Security in an authorized denomination equal in Principal Amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07. Conversion Arrangement On Call For Redemption.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion into Common Stock of any Securities
called for redemption by an agreement with one or more investment bankers or
other purchasers to purchase such Securities by paying to the Paying Agent in
trust for the Holders, on or before the close of business on the Redemption
Date, an amount that, together with any amounts deposited with the Paying Agent
by the Company for the redemption of the Securities, is not less than the
Redemption Price to the Redemption Date, of such Securities. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the Redemption Price of such Securities shall be deemed to be
satisfied and discharged to the extent such amount is so paid to the Paying
Agent on behalf of such purchasers. If such an agreement is entered into, any
Securities not duly surrendered for conversion to the Paying Agent by the
Holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
surrendered by such purchasers for conversion, all immediately prior to the
close of business on the Redemption Date, subject to payment of the above amount
as aforesaid. The Paying Agent shall hold and pay to the Holders whose
Securities are selected for redemption any such amount paid to it in the same
manner as it would money deposited with it by the Company for the payment of
Principal Amount and interest payable with respect to the Securities. Without
the Paying Agent's prior written consent, no arrangement between the Company and
such purchasers for the purchase and conversion of any Securities shall increase
or otherwise affect any of the powers, duties, responsibilities or obligations
of the Paying Agent as set forth in this Indenture, and the Company agrees to
indemnify the Paying Agent from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Paying Agent in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE 4.
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall promptly pay or cause to be paid all payments in
respect of the Securities on the dates and in the manner provided in the
Securities or pursuant to this Indenture. Principal Amount, Redemption Price and
interest, if any, shall be considered paid on the applicable date due if on such
date the Trustee or the Paying Agent holds, in accordance with this Indenture,
money or securities, if permitted hereunder, sufficient to pay all such amounts
then due.
The Company shall pay interest on overdue amounts at the rate set forth
in paragraph 1 of the Securities and it shall pay interest on overdue interest
at the same rate compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue.
13
19
SECTION 4.02. Financial Information; SEC Reports.
The Company will deliver to the Trustee (i) as soon as available and in
any event within 90 days after the end of each fiscal year of the Company (a) a
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of operations,
stockholders' equity and cash flows for such fiscal year, all reported on by an
independent public accountant of nationally recognized standing, and (b) a
report containing a management's discussion and analysis of the financial
condition and results of operations and a description of the business and
properties of the Company, and (ii) as soon as available and in any event within
45 days after the end of each of the first three quarters of each fiscal year of
the Company (y) an unaudited consolidated financial report for such quarter, and
(z) a report containing a management's discussion and analysis of the financial
condition and results of operations of the Company; provided, foregoing shall
not be required for any fiscal year or quarter, as the case may be, with respect
to which the Company files or expects to file with the Trustee an annual report
or quarterly report, as the case may be, pursuant to the third paragraph of this
Section 4.02.
At any time the Company is not subject to either Section 13 or 15(d) of
the Exchange Act, the Company shall at the request of any Holder (or holders of
Common Stock issued upon conversion of the Securities) provide to such Holder
(or holders of such Common Stock) and any prospective purchaser designated by
such Holders (or holders of such Common Stock), as the case may be, such
information, if any, required by Rule 144A(d)(4) under the Securities Act.
The Company shall file with the Trustee, within 15 days after it files
such annual and quarterly reports, information, documents and other reports with
the SEC, copies of its annual report 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 Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from the information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officers' Certificate in which one of the
two Officers signing such certificate is either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the knowledge of the signers thereof the Company is in
Default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
Default, specifying all such Defaults and the nature and status thereof of which
the signers may have knowledge.
Any notice required to be given under this Section 4.03 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 4.04. Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
14
20
SECTION 4.05. Maintenance of Office or Agency.
The Company will appoint in Minneapolis, Minnesota, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, exchange, purchase, redemption
or conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office or agency in
Minneapolis, State of Minnesota, shall be the Corporate Trust Office of the
Trustee, and shall be the office or agency for all of the aforesaid purposes
unless the Company shall appoint some other office or agency for such purposes
and shall give prompt written notice to the Trustee of the location, and any
change in the location, of such other office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in Minneapolis,
State of Minnesota, for such purposes.
SECTION 4.06. Existence.
Subject to Article 5 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence under the laws of its jurisdiction of incorporation, and to maintain
all qualifications, permits and licenses (including, without limitation, all
licenses and certifications required pursuant to any organization regulation in
connection with the ownership or operation of a residential mortgage business
and the conduct of lender and other related businesses and businesses incidental
thereto) necessary in the normal conduct of its business; provided, however, the
Company shall not be required to maintain any such qualification, permit or
license if the Company shall determine that the maintenance thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
ARTICLE 5.
SUCCESSOR CORPORATION
SECTION 5.01. When the Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into any other
Person (other than in a merger or consolidation in which the Company is the
surviving Person) or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(a) the Person (if other than the Company) formed by such consolidation
or into which the Company is merged or the Person which acquires by conveyance,
transfer or lease the properties and assets of the Company substantially as an
entirety shall be a corporation, limited liability company, partnership or trust
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia, and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee in form reasonably
satisfactory to the Trustee, the due and punctual payment of the Principal
Amount, Redemption Price or interest, if any, on the Securities, according to
their tenor, and the due and punctual performance of all of the covenants and
obligations of the Company under the Securities and this Indenture, and shall
have provided for conversion rights in accordance with this Indenture;
(b) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required
15
21
in connection with such transaction, such supplemental indenture, comply with
this Article 5 and that all conditions precedent herein provided for relating to
such transaction have been satisfied.
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An Event of Default occurs if:
(a) the Company defaults in the payment of the Principal Amount,
Redemption Price or the payment of interest on any Security when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for repurchase by the Company or otherwise, and fails to
remedy the same within 10 days of receipt by the Company of a Notice of Default,
whether or not such payment shall be prohibited by Article 10 hereof;
(b) the Company fails to comply with any of its agreements or covenants
in the Securities or this Indenture (other than those referred to in clause (a)
above) and such failure continues for 60 days after receipt by the Company of a
Notice of Default;
(c) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the Company
under any Bankruptcy Law, and such decree or order shall have continued
undischarged and unstayed for a period of 60 consecutive days; or a decree or
order of a court having jurisdiction in the premises of the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the winding-up or liquidation of its affairs,
shall have been entered, and such decree or order shall have remained in force
undischarged and unstayed of a period of 60 consecutive days; or
(d) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under any Bankruptcy Law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.
A Default under clause (b) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in clause (b) above after
actual receipt of such notice (a "Notice Of Default"). Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
Notice of Default.
16
22
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(c) or (d) hereof) occurs and is continuing, the Trustee by notice
to the Company, or the Holders of at least 25% in aggregate Principal Amount of
the Securities at the time outstanding by notice to the Company and the Trustee,
may declare the Principal Amount and accrued and unpaid interest to the date of
declaration on all the Securities to be immediately due and payable. Upon such a
declaration, such Principal Amount and accrued unpaid interest shall become and
be due and payable immediately. If an Event of Default specified in Section
6.01(c) or (d) hereof occurs and is continuing, the Principal Amount and accrued
and unpaid interest on all the Securities shall become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holders. The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding, by notice to the Company and the Trustee
(and without notice to any other Holder), may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of the Principal Amount and accrued and unpaid interest that have
become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 7.07 hereof have been paid. No such rescission shall
affect any subsequent or other Default or Event of Default or impair any
consequent right.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of the Principal Amount and accrued
a nd unpaid interest) on the Securities or to enforce the performance of any
provision of the Securities or this Indenture. Notwithstanding the foregoing to
the contrary, the Zero Coupon Bond is non-callable and the Trustee may not
dispose of, or disburse the proceeds of, the Zero Coupon Bond until its maturity
in 2015 and, provided further, the Trustee shall not undertake any action which
could impair the value of the Zero Coupon Bond.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Holder 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, the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding, by notice to the Company and the Trustee
(and without notice to any other Holder), may waive an existing Default or Event
of Default and its consequences except (i) an Event of Default described in
Section 6.01(a) hereof, or (ii) a Default in respect of a provision that under
Section 9.02 hereof cannot be amended without the consent of each Holder
affected. When a Default or Event of Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any consequent right.
SECTION 6.05. Control by Majority.
The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with any law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial to the rights of
other Holders or would involve the Trustee in personal liability unless the
Trustee is offered indemnity reasonably satisfactory to it.
SECTION 6.06. Limitation on Suits.
17
23
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(a) the Holder gives to the Company and the Trustee written notice
stating that an Event of Default is continuing;
(b) the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense satisfactory to the Trustee;
(d) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity; and
(e) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60 day period.
A Holder may not use this Indenture to prejudice the rights of any
other Holder or to obtain a preference or priority over any other Holder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, but subject to
Section 6.04 and Articles 10 and 11 hereof, the right of any Holder to receive
payment of the Principal Amount, Redemption Price or interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any date of redemption, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected adversely without the consent of each such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default described in Section 6.01(a) hereof occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with respect
to the Securities and the amounts provided for in Section 7.07 hereof.
SECTION 6.09. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Principal Amount, Redemption
Price or interest, if any, in respect of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Redemption Price or interest, if any, and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
18
24
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.
If the Trustee does not file a claim or proof of debt in the form
required in such proceedings prior to 30 days before the expiration of the time
to file such claims or proofs, then any holder or holders of Senior Indebtedness
or their representative or representatives shall have the right to demand, sue
for, collect, receive and receipt for the payments and distributions in respect
of the Securities which are required to be paid or delivered to the holders of
Senior Indebtedness as provided in this Article and to file and prove all claims
therefor and to take all such other action in the name of the holders or
otherwise as such holders of Senior Indebtedness or the Representative thereof
may determine to be necessary or appropriate for the enforcement of the
provisions of this Article.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claims of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to holders of Senior Indebtedness to the extent required by
Article 10 hereof;
THIRD: to Holders for amounts due and unpaid on the Securities for the
Principal Amount, Redemption Price or interest, if any, as the case may be,
ratably, without preference or priority of any kind, according to such amounts
due and payable on the Securities; and
FOURTH: the balance, if any, to the Company.
The Trustee may fix a proposed record date and payment date for any
payment to Holders pursuant to this Section 6.10 and shall notify the Company in
writing with respect to such proposed record date and payment date. At least 15
days before such record date, the Company (or the Trustee at the request of the
Company) shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs.
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 (other than the Trustee) 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 and expenses, 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 6.11 does not apply to a suit
by the Trustee, any suit by a Holder for the enforcement of the payment of the
Principal Amount, Redemption Price or interest, if any, on or after the due date
expressed in such Security, or a suit by Holders of more than 10% in aggregate
Principal Amount of the Securities at the time outstanding.
19
25
SECTION 6.12. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the Principal
Amount or Redemption Price in respect of Securities, or any interest on any such
amounts, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
laws and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7.
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) 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, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA, and
such Section 315(a) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent actions, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) 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
(iii) 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 6.05 hereof.
Subparagraphs (c)(i),(ii) and (iii) shall be in lieu of Sections
315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1),
315(d)(2) and 315(d)(3) are hereby expressly excluded from this Indenture, as
permitted by the TIA.
20
26
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity reasonably satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on any document reasonably
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 a
Company Order, 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 a Company Order, 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) Subject to the provisions of Section 7.01(c), 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.
(e) The Trustee may consult with counsel selected by it and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture, unless the Holders shall have
offered to the Trustee reasonable security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities which may be incurred therein
or thereby.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any negligent act on the
part of any agent or attorney appointed with due care by it hereunder.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee in
accordance with Section 12.02 hereof, and such notice references the Securities
and this Indenture.
21
27
(j) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
(k) The Trustee shall be under no obligation to expend or risk its own
funds or to exercise, at the request or direction of any of the Holders, any of
the rights or powers vested in it by this Indenture pursuant to this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar or co-registrar may do the same with the like rights. However,
the Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for Company's use
of the proceeds from the Securities; and it shall not be responsible for any
statement in the prospectus for the Securities or in this Indenture or the
Securities (other than its certificate of authentication), the acts of a prior
Trustee hereunder, or the determination as to which beneficial owners are
entitled to receive any notices hereunder.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is actually known by a
Trust Officer or if written notice of any event which is in fact such a default
is received by the Trustee at the Corporate Trust Office of the Trustee in
accordance with Section 12.02 hereof, and such notice references the Securities
and this Indenture, the Trustee shall give to each Holder notice of the Default
within 90 days after it occurs. Except in the case of a Default described in
Section 6.01(a) hereof, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Holders. The second sentence of this Section 7.05
shall be in lieu of the proviso to Section 315(b) of the TIA, and such provision
is hereby expressly excluded from this Indenture, as permitted by the TIA. The
Trustee shall not give notice of a Default pursuant to Section 6.01(c) until at
least 60 days have passed since its occurrence.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 1, beginning with the May 1 following the
date of this Indenture, the Trustee shall mail to each Holder a brief report
dated as of such May 1 that complies with TIA Section 313(a), if required by
such Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange on which the Securities are
listed. The Company agrees to promptly notify the Trustee whenever the
Securities become listed on any securities exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity.
The Company agrees:
22
28
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the compensation and
the expense, advances and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
and all loss, damage, claims, liability or expense (including taxes other than
taxes based upon, measured by, or determined by the income of the Trustee)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim (whether asserted by
the Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount, Redemption Price or interest, if any, as the case may be, on particular
Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(c) or (d), the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company; provided, however,
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.08. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(a) the Trustee fails to comply with, or ceases to be eligible under,
Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge or control of the Trustee
or its property or affairs; or
(d) the Trustee otherwise in the Company's reasonable judgment becomes
incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject to the lien provided for in Section
7.07 hereof. Upon request of any such successor Trustee, the Company shall
execute any and all
23
29
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts. No successor Trustee shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be eligible under this Article.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee at the expense of the Company.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.09. Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business (including the trust
created by this Indenture) or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee hereunder; provided, such corporation shall be otherwise
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a)(1) and 310(b). The Trustee shall have a combined capital and surplus of
at least $50,000,000 (or if the Trustee is a member of a bank holding company
system, its bank holding company shall have a combined capital and surplus of at
least $50,000,000) as set forth in its most recent published annual report of
conditions. Nothing herein contained shall prevent the Trustee from filing with
the SEC the application referred to in the penultimate paragraph of TIA Section
310(b). If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 7.10, it shall correct such ineligibility or
resign immediately in the manner and with the effect specified in this Article
7.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
24
30
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Securities.
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07 hereof) for
cancellation, or (ii) all outstanding Securities have become due and payable and
the Company deposits with the Trustee Cash and/or securities, as permitted by
the terms hereof, sufficient to pay at Stated Maturity the Principal Amount of
all outstanding Securities (other than Securities replaced pursuant to Section
2.07 hereof), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 7.07
hereof, cease to be of further effect. The Trustee shall join in the execution
of a document prepared by the Company acknowledging satisfaction and discharge
of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company any money
or securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed as of June 30, 2016; provided, the Trustee or
such Paying Agent, before being required to make any such return, shall mail to
each such Holder notice that such money or securities remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication or mailing, any unclaimed money or then remaining
will be returned to the Company. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person.
ARTICLE 9.
AMENDMENTS
SECTION 9.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture and the Securities
without the consent of any Holder:
(a) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions with regard to matters or questions
arising under this Indenture which shall not materially adversely affect the
interests of the Holders;
(b) to provide for the assumption of the Company's obligations to the
Holders of the Debentures in case of a merger or consolidation or sale of all or
substantially all of the Company's assets;
(c) to provide for uncertificated Securities in addition to
certificated Securities so long as such uncertificated Securities are in
registered form for purposes of the Internal Revenue Code of 1986, as amended;
(d) to make any change that does not adversely affect the right of any
Holder; or
(e) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in connection with the
qualification, if any, of the Indenture under the TIA.
SECTION 9.02. With Consent of Holders.
The Company and the Trustee, with the written consent of the Holders of
at least a majority in aggregate
25
31
Principal Amount of the Securities at the time outstanding, may amend this
Indenture or the Securities. However, without the consent of each Holder
affected, an amendment or supplement to this Indenture or the Securities may
not:
(a) make any change to the Principal Amount of Securities whose Holders
must consent to an amendment;
(b) make any change to the manner or rate of accrual in connection with
interest, if any, reduce the rate of interest referred to in paragraph 1 of the
Securities or extend the time for payment of interest, if any, on any Security;
(c) reduce the Principal Amount of or extend the Stated Maturity of any
Security;
(d) reduce the Redemption Price of any Security; (e) make any Security
payable in money or securities other than that stated in the Security;
(f) make any change in Article 10 hereof that adversely affects the
rights of any Holder;
(g) make any change in Sections 6.04 or 6.07 hereof or this Section
9.02, except to increase the percentage of Holders referenced in Sections 6.04
or 6.07 hereof, as applicable; or
(h) make any change that adversely affects the right of the Company to
repurchase the Securities in accordance with the terms thereof and this
Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 or Section 9.01 hereof may not
make any change that adversely affects the rights under Article 10 hereof of any
holder of Senior Indebtedness then outstanding unless the requisite holders of
such Senior Indebtedness consent to such change pursuant to the terms of such
Senior Indebtedness.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03. Compliance with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA as then in effect, if then required to so comply.
SECTION 9.04. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action becomes effective, a consent
to it or any other action by a Holder of a Security is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Holder.
SECTION 9.05. Notation on or Exchange of Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 9 may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by
26
32
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
SECTION 9.06. Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant
to this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such amendment the Trustee
shall be entitled to receive, and (subject to the provisions of Section 7.01
hereof) shall be fully protected in relying upon, an Officers' Certificate and
an Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
SECTION 9.07. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. Agreement of Subordination.
The Company covenants and agrees for itself and its successors, and
each Holder of Securities issued hereunder by such Holder's acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article 10, and each Person holding any such Security
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment of the Principal Amount, Redemption Price, interest and any
other amounts payable, if any, in respect of all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full in Cash or other
payment satisfactory to the holders of Senior Indebtedness of all Senior
Indebtedness of the Company, whether outstanding at the date of this Indenture
or thereafter incurred, or thereafter created, assumed or guaranteed.
No provision of this Article 10 shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 10.02. Payments to Holders.
No payment shall be made with respect to the payment of Principal
Amount, Redemption Price, interest and any other amounts payable, if any, on the
Securities, except payments and distributions made by the Trustee as permitted
by Section 10.05, if:
(a) a default in any payment obligations in respect of Senior
Indebtedness occurs and is continuing, without regard to any applicable period
of grace (whether at maturity or at a date fixed for payment or by declaration
or otherwise); or
(b) any other default occurs and is continuing with respect to Senior
Indebtedness that permits the holders of such Senior Indebtedness as to which
such default relates to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a holder of Senior
Indebtedness.
27
33
If the Trustee receives any Payment Blockage Notice pursuant to clause
(b) above, no subsequent Payment Blockage Notice shall be effective for purposes
of this Section unless and until at least 365 days shall have elapsed since the
initial effectiveness of the immediately prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be the basis for a subsequent
Payment Blockage Notice (it being acknowledged that (i) any action of the
Company or any of its Subsidiaries occurring subsequent to delivery of a Payment
Blockage Notice that would give rise to any event of default pursuant to any
provision of Senior Indebtedness under which an event of default previously
existed (or was continuing at the time of delivery of such Payment Blockage
Notice) shall constitute a new event of default for this purpose, and (ii) any
breach of a financial covenant giving rise to a nonpayment default for a period
ending subsequent to the date of delivery of the respective Payment Blockage
Notice shall constitute a new event of default for this purpose).
The Company may and shall resume payments on and distributions in
respect of the Securities:
(i) in case of a default referred to in clause (a) above, the
earlier of the date upon which the default is cured or waived in accordance with
the terms of the governing instrument or ceases to exist, or
(ii) in the case of a default referred to in clause (b) above,
the earlier of the date upon which the default is cured, waived in accordance
with the terms of the governing instrument or ceases to exist or 179 days pass
after the applicable Payment Blockage Notice is received if the maturity of such
Senior Indebtedness has not been accelerated, unless this Article 10 otherwise
prohibits the payment or distribution at the time of such payment or
distribution.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in Cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization or
bankruptcy of the Company, whether voluntary or involuntary, or insolvency,
receivership or similar proceedings relating to the Company or its property, or
an assignment for the benefit of creditors or any marshaling of the Company's
assets or liabilities, all amounts due or to become due upon all Senior
Indebtedness of the Company shall first be paid in full in Cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the Principal Amount, Redemption Price, interest or any other
amounts payable, if any, in respect of the Securities (except payments made
pursuant to Article 8 hereof from monies deposited with the Trustee pursuant
thereto prior to the happening of such dissolution or winding-up or liquidation
or reorganization or bankruptcy of the Company, whether voluntary or involuntary
or insolvency, receivership or similar proceedings relating to the Company or
its property, or an assignment of the benefit of creditors or any marshaling of
the Company's assets or liabilities), and upon any such dissolution or
winding-up or liquidation or reorganization or bankruptcy of the Company,
whether voluntary or involuntary or insolvency, receivership or similar
proceedings relating to the Company or its property, or an assignment of the
benefit of creditors or any marshaling of the Company's assets or liabilities,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in Cash, property or securities, to which the Holders of
the Securities or the Trustee would be entitled, except for the provisions of
this Article 10, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders of the Securities or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company as their interests may appear or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may appear to
the extent necessary to pay all such Senior Indebtedness in full in Cash or
other payment satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
such Senior Indebtedness, before any payment or distribution is made to the
Holders of the Securities or to the Trustee.
In the event that any Securities are declared due and payable before
their Stated Maturity pursuant to Section 6.02 hereof, then and in such event
the Company shall promptly notify holders of its Senior Indebtedness of such
acceleration. The Company may not pay the Securities until five days have passed
after such acceleration occurs and may thereafter pay the Securities only to the
extent that this Article 10 permits the payment at that time.
28
34
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in Cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
10.02, shall be received by the Trustee or the Holders of the Securities before
all Senior Indebtedness of the Company is paid in full in Cash or other payment
satisfactory to the holders of such Senior Indebtedness, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of Senior Indebtedness of the Company or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of all such Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full in Cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article 10, the words Cash, property or securities
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article 10 with respect to
the Securities to the payment of all Senior Indebtedness of the Company which
may at the time be outstanding; provided, (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
(other than leases that are not assumed by the Company or the new corporation,
as the case may be) are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article 5 hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 10.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 5
hereof.
Nothing in this Section 10.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof. This Section 10.02 shall
be subject to the further provisions of Section 10.05 hereof.
SECTION 10.03. Subrogation of Securities.
Subject to the payment in full in Cash or other payment satisfactory to
the holders of Senior Indebtedness of all Senior Indebtedness of the Company,
the rights of the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
Cash, property or securities of the Company applicable to such Senior
Indebtedness until the Principal Amount, Redemption Price and interest, if any,
in respect of the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any Cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article 10, and no payment over pursuant to the provisions of this Article 10,
to or for the benefit of the holders of such Senior Indebtedness by Holders of
the Securities or the Trustee, shall, as between the Company, its creditors
other than holders of its Senior Indebtedness, and the Holders of the Securities
be deemed to be a payment by the Company to or on account of the Senior
Indebtedness; and no payments or distributions of Cash, property or securities
to or for the benefit of the holders of the Securities pursuant to the
subrogation provisions of this Article 10, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Securities. It is understood that the
provisions of this Article 10 are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
Nothing contained in this Article 10 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of its Senior Indebtedness and the Holders of
the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the Principal Amount,
Redemption Price and interest, if any, in respect of the Securities as and when
the same shall
29
35
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of its Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 10 of
the holders of Senior Indebtedness in respect of Cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee, subject to the provisions of Section 7.01
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee, to the Holders of the Securities for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10.
SECTION 10.04. Authorization by Holders.
Each Holder of a Security by such Holder's acceptance thereof
authorizes and directs the Trustee in his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 10 and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
SECTION 10.05. Notice to Trustee.
The Company shall give prompt written notice in a form of an Officers'
Certificate to a Trust Officer of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any Paying
Agent in respect of the Securities pursuant to the provisions of this Article
10, but failure to give such notice shall not affect the subordination of the
Securities to the Senior Indebtedness as provided in this Article 10.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 10, unless and until a Trust Officer shall have
actually received written notice thereof at the Corporate Trust Office from the
Company (in the form of an Officers' Certificate) or a holder or holders of
Senior Indebtedness or a Representative or from any trustee therefor; and before
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 7.01 hereof, shall be entitled in all respects to assume that no such
facts exist; provided, if on a date not fewer than two Business Days prior to
the date upon which by the terms hereof any such monies may become payable for
any purpose (including, without limitation, the payment of the Principal Amount,
Redemption Price, interest or any other amounts payable, if any, in respect of
any Security) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 10.05, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing
shall prevent any payment of amounts deposited with the Trustee pursuant to
Section 8.01 hereof so long as the Trustee had no notice that such amounts when
so deposited were prohibited pursuant to the provisions of Section 10.02 hereof.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Senior Indebtedness
of the Company (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder or a Representative of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of the
30
36
Company to participate in any payment or distribution pursuant to this Article
10, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 10, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 10.06. Trustee's Relation to Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 10 in respect of any Senior Indebtedness of the
Company at any time held by it, to the same extent as any other holder of such
Senior Indebtedness, and nothing in this Article 10 or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder. The
provisions of this Article 10 shall not apply to the Trustee's rights under
Section 7.07 hereof.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the
Company and, subject to the provisions of Section 7.01 hereof, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Holders of Securities, the Company or any other Person money or
assets to which any holder of Senior Indebtedness of the Company shall be
entitled by virtue of this Article 10 or otherwise.
SECTION 10.07. No Impairment of Subordination.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by (i) any amendment of or addition or supplement
to any such Senior Indebtedness or any instrument or agreement relating thereto
(unless otherwise expressly provided therein), or (ii) any act or failure to act
on the part of the Company or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of the instrument, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with or (iii) a failure
to act by any Holders of Securities or the failure of such Holder to comply with
this Indenture.
SECTION 10.08. Reliance by Holders of Senior Indebtedness on
Subordination Provisions.
Each Holder of Securities by such Holder's acceptance thereof,
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of the Company, whether such Senior Indebtedness was created,
assumed or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness, and no amendment or modification
of the provisions contained herein shall diminish the rights of such holder or
holders unless such holder or holders shall have agreed in writing thereto.
SECTION 10.09. Reinstatement of Subordination.
If, at any time, all or part of any payment of any Senior Indebtedness
theretofore made by the Company or any other Person is rescinded or must
otherwise be returned by the holders of such Senior Indebtedness for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of the Company or such other Person), these subordination
provisions shall continue to be effective or be reinstated, as the case may be,
all as though such payment had not been made.
SECTION 10.10. Permitted Payments.
31
37
Nothing contained in this Article 10 or elsewhere in this Indenture, or
in the Securities shall prevent (a) the Company at any time, except under the
conditions described in Section 10.02 hereof, from making payments at any time
of Principal Amount, Redemption Price or interest or any other amounts payable,
if any, in respect of the Securities, or from depositing with the Trustee or any
Paying Agent money for such payments, or (b) the application by the Trustee or
Paying Agent of any monies deposited with it under this Indenture to the payment
of or on account of the Principal Amount, Redemption Price or interest or any
other amounts payable, if any, in respect of the Securities to the Holders of
the Securities entitled thereto to the beneficiaries thereof, if such payment
would not have been prohibited by the provisions of Section 10.02 hereof.
SECTION 10.11. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article 10 in addition to or in place of the Trustee; provided, however, the
first paragraph of Section 10.05 hereof shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 10.12. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10.
ARTICLE 11.
SECURITY AND PAYMENT
SECTION 11.01. Zero Coupon Bond.
The Principal Amount shall be secured by the Company's pledge of one or
more non-callable United States government zero coupon securities whether one or
more, (the "Zero Coupon Bond"). On or before the date a Security is issued
pursuant to this Agreement, the Company shall purchase the Zero Coupon Bond and
perfect the Trustee's security interest therein through either (i) delivery to
the Trustee of a certificated security representing ownership of the Zero Coupon
Bond, along with an appropriate security power therefor, or (ii) designation of
the Trustee as the entitlement holder (as such term is defined in Section 8.102
of the TBCC) with respect to the Zero Coupon Bond on behalf of the Holders
pursuant to this Agreement, which designation shall be accomplished through the
issuance of an appropriate entitlement order (as such term is defined in Section
8.102(a)(8) of the TBCC) and any other instrument reasonably requested by the
issuer of the Zero Coupon Bond and/or the Trustee. The parties acknowledge that
evidence of the Company's purchase of the Zero Coupon Bond may be provided in
the form of a certificate reflecting Company ownership thereof or a letter
issued by a governmental agency or institutional depositor confirming a
book-entry credit in such agency's or entity's books and records in favor of the
Company and, in such regard, the parties agree to take all reasonable and
necessary steps to insure that the Trustee receives a perfected security
interest in the Zero Coupon Bond in accordance with applicable law (which shall
be the law of the State of Texas unless expressly required to be that of the
state in which the issuer is located). The Zero Coupon Bond shall secure payment
of the Company's obligations hereunder and, in the event of the Company's
default and failure to pay obligations due Holders when due hereunder, the
32
38
Trustee shall, subject to the provisions of Article 6 hereof, collect the
proceeds thereof and distribute the same, first, to the Holders (pro rata, if
necessary, in accordance with the Company's obligations), and second, the
remainder, if any, to the Company.
SECTION 11.02. Payment Of Interest; Interest Rights Preserved.
(a) Interest on any Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid by the Company to
the Trustee prior to the date due. Following receipt of such funds, the Trustee
shall pay interest due to the person in whose name that Security is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Company maintained for such purpose. Each installment of
interest on any Security shall be paid in Cash to Payee's address located inside
the United States on or before the date due.
(b) Except as otherwise specified with respect to the Securities, any
interest on any Security that is payable, but is returned undeliverable to the
Trustee following any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities are registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. At any time following
receipt of the Trustee's report of Defaulted Interest, the Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment (which shall not be less
than 20 days after such notice is received by the Trustee), and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of proposed payment, such money when deposited to be held in trust
for the benefit of the persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities at his address
as it appears on the list of Holders maintained pursuant to Section 2.05 hereof
not less than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the persons in whose
names the Securities are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(ii).
(ii) The Company may make payment of any Defaulted Interest on
the Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
(iii) The Trustee shall pay, with the proceeds of the Zero
Coupon Bond, any accrued and unpaid interest in accordance with the provisions
of Section 12.01 hereof.
Subject to the foregoing provisions of this Section and Section 2.06
hereof, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights
33
39
to interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 11.03 Payment of Principal Amount.
(a) The Principal Amount that is due and payable shall be punctually
paid or duly provided for by the Company, Trustee prior to the Stated Maturity
date. Following receipt of such funds, the Trustee shall pay such Principal
Amount to the person in whose name that Security is registered at the close of
business on the Regular Record Date for such Principal Amount at the office or
agency of the Company maintained for such purpose. Each Principal Amount shall
be paid in Cash to Payee's address located inside the United States.
(b) Except as otherwise specified with respect to the Security, any
Principal Amount on any Security that is payable, but is returned undeliverable
to the Trustee following any applicable Maturity Date (herein called "Defaulted
Principal") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Principal Amount may be paid by the Company, at its election in
each case, as provided in clause (i) and (ii) below:
(i) The Company may elect to make payment of any Defaulted
Principal Amount to the persons in whose names the Securities are registered at
the close of business on a Special Record Date for the payment of such Defaulted
Principal Amount, which shall be fixed in the following manner. At any time
following receipt of the Trustee's report of Defaulted Principal, the Company
shall notify the Trustee in writing of the amount of Defaulted Principal Amount
proposed to be paid on each Security and the date of the proposed payment (which
shall not be less than 20 days after such notice is received by the Trustee),
and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Principal Amount or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of proposed payment, such money
when deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Principal Amount as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Principal Amount which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Principal Amount and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities at his address as it
appears on the list of Holders maintained pursuant to Section 2.05 hereof not
less than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Principal Amount and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Principal Amount shall be paid to the
persons in whose names the Securities are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (ii).
(ii) The Company may make payment of any Defaulted Principal
Amount on the Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
SECTION 11.04. Remaining Sums. The Trustee shall pay any remaining
proceeds of the Zero Coupon Bond and any unpaid amount with respect to the
Securities (including, without limitation, any unpaid Principal Amount) to the
Company on June 30, 2016. Payment shall be made by wire transfer by the Trustee
to the Company's designated account within the United States and thereafter
neither the Trustee nor the Company shall have any further obligations to one
another or any Holder pursuant to this Indenture.
34
40
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act.
This Indenture is hereby made subject to, and shall be governed by, the
provisions of the TIA required to be part of and to govern indentures qualified
under the TIA; provided, however, this Section 12.01 shall not require this
Indenture or the Trustee to be qualified under the TIA prior to the time such
qualification is in fact required under the terms of the TIA, nor shall it
constitute any admission or acknowledgment by any party that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the TIA. If any provision hereof limits, qualifies
or conflicts with another provision hereof which is required to be included in
an indenture qualified under the TIA, such required provision shall control.
SECTION 12.02. Notices.
Any request, demand, authorization, notice, waiver, consent or
communication shall be in writing and delivered in Person or mailed by first
class mail, postage prepaid, addressed as follows or transmitted by facsimile
transmission (confirmed by overnight courier) to the following facsimile
numbers:
if to the Company:
Austin Funding.com Corporation
823 Congress Avenue, Suite 515
Austin, Texas 78701
Attention: Mr. Glenn A. LaPointe, President
Phone: (512) 480-8000
Telecopy: (512) 480-8001
with a copy to:
Mr. Jack A. Selman
Selman Munson & Lerner, P.C.
111 Congress Plaza, Suite 1000
Austin, Texas 78701
Phone: (512) 505-5955
Telecopy: (512) 505-5956
if to the Trustee:
Norwest Bank Minnesota, National Association
N9303-120
Sixth and Marquette
Attn: Corporate Trust Services
Phone: (612) 667-2344
Telecopy: (612) 667-9825
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the
Holder, by first class mail, postage
35
41
prepaid, at the Holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent or co-registrar.
SECTION 12.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar, the Paying Agent and anyone else shall have
the protection of TIA Section 312(c).
36
42
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) 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
(b) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(a) a statement that each individual making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement that, in the opinion of such individual, such covenant
or condition has been complied with.
SECTION 12.06. Severability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.07. Rules By Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 12.08. Governing Law.
THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THIS INDENTURE AND THE
SECURITIES, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 12.09. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Securities.
SECTION 12.10. Successors.
37
43
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 12.11. Multiple Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first written above.
AUSTIN FUNDING.COM CORPORATION,
a Nevada corporation
By:
----------------------------------------
Glenn A. LaPointe, President
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
38