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THIS IS A CONFIRMING ELECTRONIC FILING OF A FORM T-3 FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 2, 1994
FORM T-3
FACING SHEET
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
COTTER & COMPANY
(Name of applicant)
2740 NORTH CLYBOURN AVENUE, CHICAGO, IL 60614
(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
TITLE OF CLASS AMOUNT
Variable Denomination Fixed Rate Redeemable Term Notes $30,000,000
Approximate date of proposed public offering: January 1, 1995
Name and address of agent for service: John F. Moynihan, Cotter & Company,
2740 North Clybourn Avenue, Chicago, IL 60614.
GENERAL
1. General information. Furnish the following as to the applicant:
(a) Form of organization: corporation.
(b) State or other sovereign power under the laws of which organized:
Delaware.
2. Securities Act exemption applicable. State briefly the facts relied
upon by the applicant as a basis for the claim that registration of the
indenture securities under the Securities Act of 1933 is not required:
Section 3(a)(9).
There have been no sales of securites of the same class by the applicant or by
or
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through an underwriter at or about the same time as the transaction for which
the exemption is claimed. There has been no consideration which has been or is
to be given, directly or indirectly, to any person in connection with the
transaction. No cash payment has been or will be made by any holder of the
outstanding securities.
AFFILIATIONS
3. Affiliates. Furnish a list or diagram of all affiliates of the applicant
and indicate the respective percentages of voting securities or other bases of
control:
COTTER & COMPANY WHOLLY-OWNED SUBSIDIARIES:
Atlas Power Equipment Company, an Illinois corporation.
Cotter Acceptance Co., Inc., an Illinois corporation.
Warner True Value (R) Hardware, Inc., a Minnesota corporation.
Cotter Canada Hardware and Variety Company, Inc., a Manitoba corporation.
Cotter Insurance Agency, Inc., an Illinois corporation.
Cotter Insurance Agency, Inc., a Texas corporation.
Cotter Real Estate Agency, Inc., an Illinois corporation.
Cotter Trucking, Inc., and Illinois corporation.
Wheeler Manufacturing Co., an Illinois corporation.
COTTER & COMPANY AFFILIATES
Cotter Canada Hardware and Variety Cooperative Inc.(1), a Canadian corporation.
Cotter Insurance Ltd., a Cayman Islands captive mutual insurance company.(2)
Cotter Member Insurance, Ltd., a Bermuda captive mutual insurance company.(3)
True Value(R) de Mexico, S.A. de C.V.(4), a Mexico corporation.
MANAGEMENT AND CONTROL
4. Directors and executive officers. List the names and complete mailing
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors or executive officers. Indicate all
offices with the applicant held or to be held by each person named.
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(1) Partially-owned subsidiary of Cotter Canada Hardware and Variety
Company, Inc.
(2) Applicant is a member of such mutual insurance company.
(3) Applicant is a member of such mutual insurance company.
(4) Co-owned by Cotter & Company and by Cotter Acceptance Co., Inc.
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NAME ADDRESS OFFICE
- ---- ------- ------
Daniel A. Cotter 2740 N. Clybourn Ave. President, Chief Executive
Chicago, Il 60614 Officer, & Director
Steven J. Porter 2740 N. Clybourn Ave. Vice President & Chief
Chicago, Il 60614 Operating Officer
Karen M. Agnew 2740 N. Clybourn Ave. Vice President & Assistant
Chicago, Il 60614 Secretary
Daniel T. Burns 2740 N. Clybourn Ave. Vice President & General
Chicago, Il 60614 Counsel
Danny R. Burton 2740 N. Clybourn Ave. Vice President
Chicago, Il 60614
David W. Christmas 2740 N. Clybourn Ave. Vice President
Chicago, IL 60614
Robert F. Johnson 2740 N. Clybourn Ave. Vice President
Chicago, IL 60614
Kerry J. Kirby 2740 N. Clybourn Ave. Vice President, Secretary,
Chicago, Il 60614 Treasurer, and Chief
Financial Officer
Robert A. Nolawski 2740 N. Clybourn Ave. Vice President
Chicago, Il 60614
John P. Semkus 2740 N. Clybourn Ave. Vice President
Chicago, IL 60614
William M. Claypool, III 725 Broadway Director
Needles, CA 92363
Samuel D. Costa, Jr. 323 Water Street Director
Smethport, PA 16749
Leonard C. Farr 880 S. First - Box 1050 Director
Coos Bay, OR 97420
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NAME ADDRESS OFFICE
- ---- ------- ------
William M. Halterman 34-36 S. Main Street Director
P.O. Box 775
Petersburg, WV 26847
Jerrald T. Kabelin 1010 1/2 Lincolnway Director and Chairman
LaPorte, IN 46350 of the Board
Robert J. Ladner 761 Prentice Street Director
Granite Falls, MN 56241
Lewis W. Moore 318 Lincoln Highway Director
Rochelle, IL 61068
Jeremiah J. O'Connor 4 Tower Farm Road Director
Billerca, MA 01821
Richard L. Schaefer 222 W. High Street Director
Bryan, OH 43506
George V. Sheffer 2909 Alveria Drive Director
Carbondale, IL 62901
Robert G. Waters 129 Washington Square Director
P.O. Box 303
Junction City, KS 66441
John M. West, Jr. 975 S. McCall Road Director
Englewood, FL 34223
Donald E. Yeager 1610 East Main Director
Van Buren, AR 72956
5. Principal owners of voting securities. Furnish the following information
to each person owning 10 percent or more of the voting securities of the
applicant: none.
UNDERWRITERS
6. Underwriters. Give the name and complete mailing address of:
(a) each person who, within three years prior to the date of filing the
application, acted as an underwriter of any securities of the obligor
which were
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outstanding on the date of filing the application: none.
(b) each proposed principal underwriter of the securities proposed
to be offered: none.
As to each person specified in (a), give the title of each class of
securities underwritten: not applicable.
CAPITAL SECURITIES
7. Capitalization.
(a) Furnish the following information as to each authorized class
of securities of the applicant, as of November 26, 1994:
COL. A COL. B COL. C
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
Class A Common Stock 100,000 shares 63,620 shares
Class B Common Stock 2,000,000 shares 1,052,638 shares
Promissory (Subordinated)
and Installment Notes Unlimited $270,024,874
(b) Give a brief outline of the voting rights of each class of
voting securities referred to in paragraph (a) above. Class A Common
Stock has voting rights of one vote per share. No other securities of
applicant have voting rights.
INDENTURE SECURITIES
8. Analysis of indenture provisions.
(a) the definition of default: default in the payment of any part
of or all the principal of or interest on any security; default in the
performance or breach of the Indenture and the continuance thereof for
sixty (60) days after notice of such default or breach has been given
by the trustee or by the holders of at least twenty-five percent (25%)
of the outstanding securities; or certain actions under any applicable
federal or state bankruptcy, insolvency, reorganization or similar law
which affect the applicant, its subsidiaries or any significant part
of the assets of the applicant or a subsidiary.
Withholding of notice to indenture security holders: the trustee shall
notify
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holders of the securities of any default within ninety (90) days after
its occurrence unless it shall have been cured or waived; provided that
(i) except in the case of default in the payment of principal or
interest, the trustee may withhold notice if certain officials of the
trustee determine in good faith that the withholding of such notice
is in the interest of the holders of the securities, and (ii) in the
case of certain types of default concerning actions under bankruptcy,
insolvency, reorganization or similar laws, notice shall not be given
until at least thirty (30) days after such occurrence.
(b) the authentication and delivery of the indenture securities and
the application of the proceeds thereof: since no individual indenture
securities will be issued, there are no provisions concerning the
authentication and delivery of the indenture securities; the applicant
will not receive any cash proceeds upon the issuance of the Indenture
securities; upon such issuance, the applicant's indebtedness under its
Promissory (Subordinated) Notes being exchanged for the Indenture
securities will be canceled.
(c) the release or the release and substitution of any property
subject to the lien of the indenture: not applicable.
(d) the satisfaction and discharge of the indenture will occur
upon: termination of the applicant's investment program by applicant
pursuant to the program's provisions; all the indenture securities
becoming due and payable; the applicant depositing the entire amount
sufficient to pay all the indenture securities, including principal
and interest due or to become due to such date of maturity; or the
applicant paying all other sums payable under the Indenture by the
applicant.
(e) the evidence required to be furnished by the applicant to the
trustee as to compliance with the conditions and covenants provided for
in such Indenture: a certificate of compliance executed by an officer
of the applicant and an opinion of counsel shall be given to the
trustee upon any application by the applicant to the trustee to take
any action under the Indenture; in addition, the applicant shall
annually file with the trustee a certificate stating whether to the
knowledge of the signing officer any violation of an Indenture
provision occurred during the preceding year and, if so, identifying
such default.
9. Other obligors. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities: none.
Contents of application for qualification. This application for qualification
comprises--
(a) Pages numbered 1 to 7, consecutively.
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(b) The statement of eligibility and qualification of each
trustee under the indenture to be qualified; see form T-1
incorporated herein by reference and attached (Exhibit T3G).
(c) The following exhibits in addition to those filed as a part of
the statement of eligibility and qualification of each trustee:
certificate of incorporation of applicant (Exhibit T3A); by-laws
of applicant (Exhibit T3B); indenture to be qualified (Exhibit T3C);
prospectus, program description, and application (Exhibit T3E); and
cross-reference sheet showing the location in the indenture of the
provisions inserted therein pursuant to Section 310 through 318(a) of
the Trust Indenture Act of 1939 (Exhibit T3F).(5)
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the applicant,
Cotter & Company, a corporation organized and existing under the laws of
Delaware, has duly caused this application to be signed on its behalf by the
undersigned, thereunto duly authorized and its seal to be hereunto affixed and
attested, all in the City of Chicago, State of Illinois, on the 1st day of
December, 1994.
[Seal] Cotter & Company
By: /s/ KERRY J. KIRBY
-----------------------------------
Kerry J. Kirby, Vice President,
Secretary, Treasurer, and Chief
Financial Officer
Attest: By: /s/ JOHN F. MOYNIHAN
-----------------------------------
John F. Moynihan, Assistant
Secretary
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(5) Exhibit T3D is not applicable.
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Exhibit T3A
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RESTATED CERTIFICATE OF INCORPORATION OF "COTTER & COMPANY" FILED IN THIS
OFFICE ON THE TWENTY-FIFTH DAY OF MAY, A.D. 1993, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
----------------
/s/ WILLIAM T. QUILLEN
[SEAL] ----------------------------
William T. Quillen, Secretary of State
AUTHENTICATION: *3911802
DATE: 05/25/1993
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RESTATED
CERTIFICATE OF INCORPORATION
OF
COTTER & COMPANY
COTTER & COMPANY (herein the "Corporation"), a corporation organized and
existing under and by virtue of the the general Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
1. The original Certificate of Incorporation for Cotter & Company was
filed on January 14, 1953.
2. The Certificate of Incorporation of Cotter & Company, as heretofore
amended, is hereby further amended and restated as follows:
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Amended and Restated
CERTIFICATE OF INCORPORATION
of
COTTER & COMPANY
FIRST. The name of the Corporation is
COTTER & COMPANY
The Corporation filed its original Certificate of Incorporation on January 14,
1953.
SECOND. Its principal office in the State of Delaware is located at No. 1209
Orange Street in the City of Wilmington, County of New Castle. The name and
address of its resident agent is The Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware.
THIRD. The Corporation shall be organized and operated on a cooperative basis
for the benefit of the holders of shares of its Class A Common Stock (who are
its Members). The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
1. To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of
and trade and deal in and deal with goods, wares and merchandise and
personal property of every class and description, including, but not
limited to:
(a) hardware, goods, tools and related products;
(b) building materials and related products;
(c) paints and paint sundries and related products;
(d) crafts and related products;
(e) sporting goods and related products;
(f) farming, home and garden maintenance supplies and
related products;
(g) automotive and related products;
(h) variety, houseware goods, appliances and related
products; and
(i) musical instruments and related products.
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2. To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
3. To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage and otherwise deal in and dispose of letters
patent of the United States or any other foreign country, patent
rights, licenses and privileges, inventions, improvements and
processes, copyrights, trademarks and trade names incident to or
useful in connection with any business of this Corporation.
4. To acquire the capital stock, bonds or other evidences of
indebtedness, secured or unsecured, of any other corporation and to
acquire the goodwill, rights, assets and property and to undertake and
assume all or any part of the obligations or liabilities of any other
corporation, firm, association or person.
5. To acquire by purchase, subscription or otherwise, and to
receive, hold, own, guarantee, sell, assign, exchange, transfer,
mortgage, pledge or otherwise dispose of or deal in and with any of
the shares of the capital stock, or any voting trust certificates in
respect of the shares of capital stock, scrip, warrants, rights,
bonds, debentures, notes, trust receipts and other securities,
obligations, choses in action and evidences of indebtedness or
interest issued or created by any corporations, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private,
or by the government of the United States of America, or by any
foreign government, or by any state, territory, province, municipality
or other political subdivision or by any governmental agency, and as
owner thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute consents and
vote thereon, and to do any and all acts and things necessary or
advisable for the preservation, protection, improvement and
enhancement in value thereof.
6. To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation,
municipality, county, state, body politic or government or colony or
dependency thereof.
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7. To borrow or raise moneys for any of the purposes of the
Corporation and, from time to time without limit as to amount, to
draw, make, accept, endorse, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and other
negotiable or non-negotiable instruments and evidences of
indebtedness, and to secure the payment of any thereof and of the
interest thereon by mortgage upon or pledge, conveyance or assignment
in trust of the whole or any part of the property of the Corporation,
whether at the time owned or thereafter acquired, and to sell, pledge
or otherwise dispose of such bonds or other obligations of the
Corporation for its corporate purposes.
8. To purchase, hold, sell and transfer the shares of its own
capital stock; provided it shall not use its funds or property for the
purchase of its own shares of capital stock when such use would cause
any impairment of its capital except as otherwise permitted by law,
and provided further that shares of its own capital stock belonging to
it shall not be voted upon directly or indirectly.
9. To have one or more offices, to carry on all or any of its
operations and business and without restriction or limit as to amount
to purchase or otherwise acquire, hold, own, mortgage, sell, convey,
or otherwise deal in or dispose of real and personal property of every
class and description in any of the states, districts, territories or
colonies of the United States, and in any and all foreign countries,
subject to the laws of such state, district, territory, colony or
country.
10. In general, to carry on any other business in connection with
the foregoing, including but not limited to, to purchase, sell and
otherwise deal in display material, catalogs, circulars and other
printed material and advertising media, and to have and exercise all
the powers conferred by the laws of the State of Delaware upon
corporations formed under the General Corporation Law of the State of
Delaware, and to do any or all of the things hereinbefore set forth to
the same extent as natural persons might or could do.
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The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
Certificate of Incorporation, but the objects and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent objects
and purposes.
FOURTH. The total number of shares of all classes of Common Stock which this
Corporation shall have the authority to issue is 2,100,000, consisting of:
100,000 shares of Class A Common Stock, $100 par value; and
2,000,000 shares of Class B Common Stock, $100 par value.
The designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions of the Class A Common Stock and
the Class B Common Stock are as follows:
1. Only the Class A Common Stock shall have voting rights. The
holder of record of each outstanding share of Class A Common Stock shall be
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. In all elections for directors, every holder of record of Class
A Common Stock shall be entitled to as many votes as shall equal the number of
its shares of Class A Common Stock multiplied by the number of directors to be
elected, and may cast all of such votes for a single director or may distribute
them among the number to be voted for, or any two or more of them, as such
holder may see fit, which right, when exercised, shall be termed "cumulative
voting."
2. Except as hereinabove provided with respect to voting rights,
neither of the two classes of common stock shall be entitled to any preference
or priority over the other. No dividend shall be declared or paid unless at
the same rate per share on both classes of common stock at the same time, and
in the event of the dissolution, liquidation or winding up of the Corporation,
the shares of Class A Common Stock and Class B Common Stock shall be entitled
to the same amounts per share without preference or priority of one class over
the other.
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3. The Corporation shall have a lien upon the shares of Class A
Common Stock and Class B Common Stock registered in the name of any
stockholder and upon any dividends payable on such shares, to secure
the payment of any indebtedness due to the Corporation from such
stockholder. The Corporation shall not be required to transfer upon
its records the shares of Class A Common Stock or Class B Common Stock
of such stockholder or to pay any dividends declared on any such
shares until such indebtedness shall have been fully paid, and the
Corporation shall have the right to apply the dividends declared from
time to time upon the stock of such stockholder to the liquidation, in
whole or in part, of the said indebtedness. If the Corporation shall
exercise its option as hereinafter in these articles provided to
repurchase shares of Class A Common Stock or Class B Common Stock
owned by a stockholder who is then indebted to the Corporation, it
shall have the right to offset the stockholder's indebtedness against
the purchase price of such shares.
4. No shares of Class A Common Stock shall be issued or sold
except in such units and under such circumstances as will assure that
every holder of Class A Common Stock shall own an identical number of
said shares. The number of shares of Class A Common Stock which shall
comprise a unit of ownership shall be fixed from time to time by the
Board of Directors or in the By-Laws. No shares of Class B Common
Stock shall be issued or sold except to persons who are, at the time
of such issuance, holders of shares of Class A Common Stock.
5. Except as provided in Paragraph 4 of this Article FOURTH, no
holder of any class of stock of the Corporation shall have any
preemptive or preferential right to subscribe to or purchase any
shares of stock of the Corporation or shares or securities of any
kind, either convertible into or evidencing the right to purchase any
shares of stock of the Corporation, other than such thereof, if any,
as the Board of Directors in its discretion may from time to time
determine.
6. Whenever, for any reason, any stockholder shall desire to
dispose of any shares of Class A Common Stock or Class B Common Stock
of the Corporation (whether by sale, transfer, assignment, gift or in
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any other manner), or whenever any stockholder shall die or shall suffer any
other event by which any of such shares are voluntarily or involuntarily
transferred by operation of law or otherwise, the Corporation shall have an
option to purchase all shares of Class A Common Stock and Class B Common Stock
owned by such stockholder, at the price, and upon the conditions, hereinafter
stated. Such option may be exercised by the Corporation at any time within
ninety (90) days following the date upon which the Corporation receives from
the stockholder written notice of such stockholders' desire to dispose of any
of the shares owned by the stockholder or within ninety (90) days following the
receipt by the Corporation, from any party in interest, of written notice of
the death of the stockholder or other fact giving rise to voluntary or
involuntary transfer of any of the shares. The price to be paid by the
Corporation upon exercise of its option to purchase such shares shall be an
amount equal to the book value thereof; such purchase shall proceed upon such
other terms and conditions as may be specified in the By-Laws.
Any disposition or attempted disposition of the shares of Class A
Common Stock or Class B Common Stock of the Corporation, voluntary or
involuntary, by operation of law or otherwise, shall be null and void and no
such disposition or attempted disposition shall entitle any person to have any
of said shares transferred on the books of the Corporation or to claim or
assert any of the rights of a stockholder of the Corporation, unless the
Corporation shall have been afforded a proper opportunity to exercise its
option for the purchase of said shares as hereinbefore provided and shall have
failed to exercise its option within the time limited.
Nothing hereinbefore contained shall restrict the right of any
stockholder:
(a) to pledge (or otherwise subject to a lien) any of the shares
of Class A Common Stock or Class B Common Stock of the Corporation in a
bona fide transaction as security for a debt or other obligation of the
stockholder, or affect the rights which the pledgee or lienholder would
otherwise have with respect to
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said shares; provided, however, that if the pledge
or lien shall be foreclosed and the stockholder shall cease to
be the owner of said shares, such foreclosure shall be deemed
to be an involuntary transfer of the shares and the
Corporation shall thereupon have the option to purchase the
shares hereinabove provided which shall be exercisable within
ninety (90) days after receipt of written notice of the fact
of foreclosure; or
(b) to sell or otherwise dispose of all or any part of
the shares of Class B Common Stock (but not of Class A Common
Stock) to a person who is then the holder of shares of Class A
Common Stock of the Corporation.
Should the Corporation fail or decline to exercise its
option and a disposition be consummated, the stock shall be
subject to all and the same rights and restrictions (including,
without limitation the option set forth herein and any call or
similar rights of the Corporation as may be set forth herein, in
the By-Laws or elsewhere) in the hands of the new holder as in
the hands of the former holder.
7. The Corporation may be obligated or have the option to
purchase or redeem its stock and stockholders may be obligated or
have the right to sell their stock to the Corporation at a price
not to be lower than the lower of book value or par value in such
circumstances and upon terms and conditions as may be specified
in the By-Laws from time to time; provided, however, that the
stockholders shall approve any such provision in the By-Laws.
Without limiting the generality of the preceding sentence of this
Paragraph 7 of ARTICLE FOURTH or compelling inclusion of any
provision in the By-Laws, such right or obligation may be granted
with respect to situations where the business relationship of a
stockholder and the Corporation terminates.
8. As used in these articles:
(a) The term "person" shall mean and include any
individual, group or association of individuals however
organized, corporation, and any other natural or artificial
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entity. The term "stockholder" shall mean any person, so
defined, who is a stockholder of the Corporation.
(b) The term "book value" as applied to any shares of
Class A Common Stock or Class B Common Stock shall mean the
value, determined in accordance with generally accepted
accounting principles, of such shares as shown by the last
available year-end balance sheet of the Corporation, reported
on by the Corporation's certified public accountants, after
eliminating therefrom all value for goodwill, other intangible
assets and that portion of retained earnings that has been
specifically appropriated by the Board of Directors.
FIFTH. The minimum amount of capital with which the Corporation will commence
business is One Thousand Dollars ($1,000.00).
SIXTH. The Corporation is to have perpetual existence.
SEVENTH. The private property of the stockholders of the Corporation
shall not be subject to the payment of corporate debts to any extent whatever.
EIGHTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
To make, alter, amend or repeal the By-Laws of the Corporation.
To authorize and cause to be executed mortgages and liens upon the
real and personal property of the Corporation.
To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any purpose specified in the
By-Laws and to abolish any such reserve in the manner in which it was
created.
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By resolution or resolutions passed by a majority of the whole
board, to designate one or more committees, each committee to consist
of three or more of the directors of the Corporation, which, to the
extent provided in said resolution or resolutions or in the By-Laws of
the Corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be stated
in the By-Laws of the Corporation or as may be determined from time to
time by resolution adopted by the Board of Directors. A majority of
the members of any such committee may determine its action and fix the
time and place of its meetings unless the Board of Directors shall
otherwise provide. The Board of Directors shall have power at any
time to fill vacancies in, to change the membership of, or to dissolve
any committee.
When and as authorized by the affirmative vote of the holders of a
majority of the Common Stock issued and outstanding given at a
stockholders' meeting duly called for that purpose, or when authorized
by the written consent of the holders of a majority of the voting
stock issued and outstanding, to sell, lease or exchange all of the
property and assets of the Corporation, including its goodwill and its
corporate franchises, upon such terms and conditions and for such
consideration, which may be in whole or in part shares of stock in,
and/or other securities of, any other corporation or corporations, as
its Board of Directors shall deem expedient and for the best interests
of the Corporation.
NINTH. Meetings of stockholders may be held outside the State of
Delaware, if the By-Laws so provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation. Elections of
directors need not be by ballot unless the By-Laws of the Corporation shall so
provide.
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TENTH. The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ELEVENTH. The business of the Corporation shall be managed by a Board of
Directors, the number of which shall be such as from time to time shall be
fixed by, or in the manner provided in, the By-Laws, but in no case shall the
number be less than three. The directors may be divided into one, two or three
classes as may be provided in the By-Laws or in resolutions from time to time
adopted by the stockholders at any annual meeting or at any special meeting
held for that purpose; the term of office of those of the first class to expire
at the annual meeting next ensuing; of the second class one year thereafter; of
the third class two years thereafter, and at each annual election held after
such classification and election, directors shall be chosen for a full term, as
the case may be, to succeed those whose term expires.
TWELFTH:
(a) A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Law as the same exists or may hereafter be amended.
(b) The Corporation shall indemnify, in accordance with and to
the full extent permitted by the Delaware General Corporation Law as the
same exists or may hereafter be amended, any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, an action by or in the right
of the Corporation), by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director,
<PAGE> 20
officer, employee or agent of another Corporation,
partnership, joint venture, trust or other enterprise, against
any liability or expense actually and reasonably incurred by
such person in respect thereof. Such indemnification shall
not be deemed exclusive of any other right of such director,
officer or employee to indemnification provided by law or
otherwise.
(c) Any repeal or modification of the foregoing
paragraphs shall not adversely affect any right or protection
of any person thereunder with respect to any act or omission
occurring prior to or at the time of such repeal or
modification.
<PAGE> 21
THIS RESTATED CERTIFICATE OF INCORPORATION was duly adopted and
declared advisable by the Board of Directors of the Corporation and was
approved by the stockholders of the Corporation pursuant to the provisions of
Section 242 and Section 245 of the General Corporation Law of the State of
Delaware at an annual meeting of the stockholders called and held on April 6,
1993 upon notice in accordance with the provisions of Section 222 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Cotter & Company has caused its corporate seal to
be hereunto affixed and this certificate to be signed by Daniel A. Cotter, its
President, and attested by Kerry J. Kirby, its Secretary, this 10th day of
May, 1993.
Cotter & Company
By: /s/ DANIEL COTTER
-------------------
Daniel A. Cotter
President
Attest:
/s/ KERRY J. KIRBY
- ---------------------------
Kerry J. Kirby
Secretary
STATE OF ILLINOIS )
)
COUNTY OF COOK )
BE IT REMEMBERED, that on this 10th day of May, 1993, personally came before
me, Notary Public in and for the County and State aforesaid, Daniel A. Cotter,
President of Cotter & Company, a Corporation of the State of Delaware, and he
duly executed said certificate before me and acknowledged the said certificate
to be his act and deed and the act and deed of said Corporation and the facts
stated herein are true; and that the seal affixed to said Certificate and
attested by Kerry J. Kirby, the Secretary of said Corporation is the common or
corporate seal of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office this day
and here above written.
[SEAL] /s/ ESTELA FLORES
-----------------
Notary Public
<PAGE> 22
EXHIBIT T3B
BY-LAWS
OF
COTTER & COMPANY
<PAGE> 23
BY-LAWS
OF
COTTER & COMPANY
as amended and restated through June 1, 1993
ARTICLE I
OFFICES
SECTION 1. OFFICE IN DELAWARE. The registered office of the Corporation in
the State of Delaware shall be located at No. 1209 Orange Street in the City of
Wilmington, County of New Castle.
SECTION 2. ADDITIONAL OFFICES. The principal office of the Corporation in the
State of Illinois shall be located at 2740 North Clybourn Avenue in the City of
Chicago, County of Cook. The Corporation may have such other office or offices
within or without the State of Illinois as the Board of Directors may from time
to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the Stockholders for the
election of directors shall be held at such location, within or without the
State of Delaware, as the Board of Directors may from time to time designate.
Meetings of Stockholders for any other purpose may be held at such place,
within or without the State of Delaware, and time as shall be stated in the
notice of the meeting, or in a duly executed waiver of notice thereof.
SECTION 2. DATE OF ANNUAL MEETING. An annual meeting of Stockholders shall be
held on the first Tuesday of April in each year, if not a legal holiday, and if
a legal holiday, then on the next secular day following, at which the
Stockholders shall elect by ballot a Board of Directors and transact such other
business as may properly be brought before the meeting.
SECTION 3. NOTICE OF ANNUAL MEETING. Written notice of the annual meeting
shall be served upon or mailed to each Stockholder entitled to vote thereat at
such address as appears on the books of the Corporation, at least ten (10) days
prior to the meeting.
SECTION 4. LIST OF STOCKHOLDERS. At least ten (10) days before every election
of directors, a complete list of the Stockholders entitled to vote at said
election, arranged in alphabetical order, with the address of each and the
number of voting shares held by each, shall be prepared by the secretary. Such
list shall be open at the place where the election is to be held for said ten
(10) days to the examination of any Stockholder, and shall be produced and kept
at the time and place of election during the whole time thereof, and subject to
the inspection of any Stockholder who may be present.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by Certificate
of Incorporation, may be called by the chairman of the board with the approval
of a majority of the Board of Directors, or may be called by the president, and
shall be called by the president, or secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing of
Stockholders owning at least ten percent (10%) of the shares of voting stock of
the Corporation issued and outstanding and entitled to vote. Such request
shall state the purpose or purposes of the proposed meeting.
SECTION 6. NOTICE OF SPECIAL MEETINGS. Notice of a special meeting of
Stockholders, stating the time and place and object thereof, shall be served
upon or mailed, at least twenty (20) days before such meeting, to each
Stockholder entitled to vote thereat at such address as appears on the books of
the Corporation.
SECTION 7. BUSINESS AT SPECIAL MEETINGS. Business transacted at all special
meetings shall be confined to the objects stated in the call.
<PAGE> 24
SECTION 8. QUORUM; ADJOURNMENTS. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum at all
meetings of the Stockholders for the transaction of business, except as
otherwise provided by statute, by the Certificate of Incorporation or by these
By-Laws. If, however, a quorum shall not be present or represented at any
meeting of the Stockholders, the Stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally called. When a quorum
is present or represented at any meeting, the vote of the holders of a majority
of the stock having voting power present in person or represented by proxy
shall decide any question brought before such meeting, unless the question is
one upon which by express provision of the statutes or of the Certificate of
Incorporation or of these By-Laws a different vote is required, in which case
such express provision shall govern and control the decision of such question.
SECTION 9. VOTING; PRE-EMPTIVE RIGHTS. At any meeting of the Stockholders
every Stockholder of record having the right to vote shall be entitled to vote
in person, or by proxy appointed by an instrument in writing subscribed by such
Stockholder and bearing a date not more than three years prior to said meeting,
unless said instrument provides for a longer period. In all elections of
directors every Class A Common Stockholder shall be entitled to as many votes
as shall equal the number of its Class A Common Shares multiplied by the number
of directors to be elected, and may cast all of such votes for a single
director or may distribute them among the number to be voted for, or any two or
more of them, as such Stockholder may see fit, which right, when exercised,
shall be termed "cumulative voting."
Except as provided in Article FOURTH of the Certificate of Incorporation, no
holder of any class of stock of the Corporation shall have any pre-emptive or
preferential right to subscribe to or purchase any shares of stock of the
Corporation or shares or securities of any kind, either convertible into or
evidencing the right to purchase any shares of stock of the Corporation, other
than such thereof, if any, as the Board of Directors in its discretion may from
time to time determine.
SECTION 10. INFORMAL ACTION OF STOCKHOLDERS. Whenever the vote of
Stockholders at a meeting thereof is required or permitted to be taken in
connection with any corporate action by any provisions of the statutes or of
the Certificate of Incorporation or of these By-Laws, the meeting and vote of
Stockholders may be dispensed with if all the Stockholders who would have been
entitled to vote upon the action if such meeting were held shall consent in
writing to such corporate action being taken.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER; TERM. The number of directors which shall constitute the
whole board shall be not less than nine nor more than fifteen. The directors
shall be divided into three classes, each class to consist, as nearly as may
be, of one-third of the number of directors then constituting the whole board.
Within the limits above specified, the number of directors shall be determined
by resolution of the Board of Directors. The directors shall be elected at the
annual meeting of the Stockholders to serve for a term of three years, except
as provided in section 4 of this ARTICLE, so that the term of office of one
class of directors shall expire in each year, and each director shall hold
office for the term elected and until a successor shall be elected and shall
qualify, except in the event of death, resignation, disqualification or removal
of a director where termination shall be immediate. Except in the case of
executive officers of the Corporation, no person first elected or first
appointed to the Board of Directors on or after July 1, 1984 shall be eligible
to be elected or appointed as a director at any time if such person has already
served as a director for three elected terms of three years. The third elected
term of three years shall not be considered as served if at any time during
that third term a director is elected and serves as chairman of the board. Any
period of time for which a director has served in such capacity to fill an
unexpired term created by a vacancy on the board prior to being elected to a
three-year term as a director shall not be taken into consideration in
determining the maximum period for which such person is eligible to serve as a
director. An executive officer of the Corporation shall be eligible for
election or re-election or appointment as a director at any time without regard
to the period of time during which such executive officer has previously served
as a director.
-2-
<PAGE> 25
SECTION 2. CHAIRMAN OF THE BOARD. The Board of Directors, by majority vote,
shall annually elect a chairman of the board. Each chairman elect's term shall
commence as the first order of business at the meeting of the Board of
Directors immediately following the annual Stockholders' meeting, and the
presiding chairman's term shall end at that time. The chairman of the board
shall preside at all meetings of the Stockholders and directors and shall be
ex-officio a member of all standing committees. The chairman shall consult with
the Corporation's officers on matters of concern, particularly when such
matters arise in periods between meetings of the Board of Directors, and in
general shall perform all duties incident to the position of chairman of the
board and such other duties as may be prescribed by the Board of Directors from
time to time. A chairman shall serve a maximum of three full terms, except
that in unusual circumstances the Board of Directors may by twelve votes of
directors present at a meeting, or, if less than twelve directors are in office
or are present, by unanimous vote of those present elect a board member to a
fourth term as chairman.
SECTION 3. PLACE OF MEETINGS. The directors may hold meetings and to the
extent permitted by law keep the books of the Corporation outside of Delaware,
at such places as they may from time to time determine.
SECTION 4. VACANCIES. If any vacancies occur in the Board of Directors,
caused by death, resignation, retirement, disqualification or removal from
office of any directors or otherwise, or any new directorship is created by any
increase in the authorized number of directors, a majority of the directors
then in office, though less than a quorum, may choose a successor or
successors, or fill the newly created directorship and the directors so chosen
shall hold office until the next annual election of directors and until their
successors shall be duly elected and qualified, unless sooner displaced.
SECTION 5. GENERAL POWERS. The property and business of the Corporation shall
be managed by its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the Stockholders.
SECTION 6. HONORARY DIRECTORS. The Board of Directors may from time to time
by two-thirds majority vote and in recognition of distinguished and meritorious
service tendered to the Corporation, elect to the office of honorary director
any Stockholders or former directors of the Corporation. The term of office of
an honorary director shall be for a period of three years, provided, however,
that such term shall expire immediately in the event such honorary director
shall cease to be a Stockholder of the Corporation. Persons holding the office
of honorary director shall, during their respective terms of office, be
privileged to attend meetings of the Board of Directors for the purpose of
making their advice and counsel available to the board in the management of the
affairs of the Corporation, but honorary directors shall not be entitled to
vote or have any other duties or responsibilities of directors of the
Corporation.
SECTION 7. FIRST MEETING. The first meeting of each newly elected board shall
be held at such time and place either within or without the State of Delaware
as shall be fixed by the vote of the Stockholders at the annual meeting and no
notice of such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall be present, or
they may meet at such place and time as shall be fixed by the consent in
writing of all the directors.
SECTION 8. REGULAR MEETING. Regular meetings of the board may be held without
notice at such time and place either within or without the State of Delaware as
shall from time to time be determined by the board.
SECTION 9. SPECIAL MEETINGS. Special meetings of the board may be called by
the chairman or the president or any three (3) directors on five (5) days'
notice to each director, either personally, by telephone, by any electronic
communication, or by mail. Special meetings shall be called by the chairman or
the president or secretary in like manner and with like notice on the written
request of four (4) directors. Special board meetings may take place by any
means through which all participating directors can hear each other, when
properly called.
SECTION 10. QUORUM. At all meetings of the board a majority of the directors
then in office and entitled to vote shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be
-3-
<PAGE> 26
otherwise specifically provided by statute or by the Certificate of
Incorporation or by these By-Laws. If a quorum shall not be present at any
meeting of directors the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.
SECTION 11. AGENDAS AND MINUTES. Agendas for all regular meetings shall be
mailed at least ten (10) days before the date of each such meeting. Any
director wishing to put an item on the agenda should have it in the chairman's
office fifteen (15) days before the meeting. Minutes of each meeting of the
Board of Directors shall be mailed to all directors and officers no later than
twenty- one (21) days following such meeting. They shall be attested to by the
chairman and the secretary.
SECTION 12. COMPENSATION. Directors shall not receive any stated salary for
their services as directors, but, by resolution of the board a fixed fee and
expenses of attendance may be allowed; provided that nothing herein contained
shall be construed to preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
SECTION 13. COMMITTEES. The Board of Directors may by resolution or
resolutions passed by a majority of the entire board designate one or more
committees, each committee to consist of three or more of the directors of the
Corporation, which, to the extent provided in said resolution or resolutions,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may have power
to authorize the seal of the Corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may
be determined from time to time by resolution adopted by the Board of
Directors. A majority of the members of any such committee may determine its
action and fix the time and place of its meetings unless the Board of Directors
shall otherwise provide. The Board of Directors shall have power at any time
to fill vacancies in, to change the Membership of, or to dissolve any
committee. Each committee shall keep regular minutes of its meetings and
report the same to the Board of Directors when required.
ARTICLE IV
NOTICES
SECTION 1. FORM; DELIVERY. Whenever under the provisions of the statutes or
of the Certificate of Incorporation or of these By- Laws notice is required to
be given to any director or Stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by telephone, by any
electronic communication, or by mail addressed to such director or Stockholder
at such address as appears on the books of the Corporation, and such notice
shall be deemed to be given at the time when the same shall be thus delivered,
conveyed by telephone call, entered into the electronic process or mailed.
SECTION 2. WAIVER. Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation or of these
By-Laws, a waiver thereof in writing signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall be chosen by the
directors and shall be a president, a vice president, a secretary and a
treasurer. The Board of Directors may also choose additional vice presidents
and one or more assistant secretaries and assistant treasurers. Two or more
offices may be held by the same person, except that where the offices of
president and secretary are held by the same person, such person shall not hold
any other office.
SECTION 2. APPOINTMENT OF OFFICERS. The Board of Directors at its first
meeting after each annual meeting of Stockholders shall choose a president, and
one or more vice presidents, a secretary and a treasurer, none of whom need be
a member of the board.
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<PAGE> 27
SECTION 3. OTHER OFFICERS AND AGENTS. The board may appoint such other
officers as it shall deem necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
SECTION 4. SALARIES. The salaries of all officers of the Corporation under
contract shall be fixed by the Board of Directors.
SECTION 5. TENURE AND REMOVAL. The officers of the Corporation shall hold
office until their successors are chosen and qualify in their stead. Any
officer elected or appointed by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the entire Board of Directors,
with or without cause, and without prejudice to any of such officer's contract
rights. If the office of any officer becomes vacant for any reason, the
vacancy shall be filled by the Board of Directors.
SECTION 6. PRESIDENT. The president shall perform all duties incident to the
office of president and such other duties as shall from time to time be
assigned to him by the Board of Directors. The president shall exercise all
the powers and discharge all the duties of the chairman of the board during the
latter's absence or inability to act. The president shall have power to sign
certificates for shares of the Corporation, any deeds, mortgages, bonds,
contracts, or other instruments which the Board of Directors has authorized to
be executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the Corporation.
SECTION 7. VICE PRESIDENTS. The vice presidents in the order of their
seniority shall, in the absence or disability of the president, perform the
duties and exercise the powers of the president, and shall perform such other
duties as the Board of Directors shall prescribe.
SECTION 8. SECRETARY. The secretary shall attend all sessions of the board
and all meetings of the Stockholders and record all votes and the minutes of
all proceedings in a book to be kept for that purpose. The secretary shall
give, or cause to be given, notice of all meetings of the Stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors, or president, under whose
supervision the secretary shall act. The secretary shall keep in safe custody
the seal of the Corporation and, when authorized, affix the same to any
instrument requiring it and, when so affixed, it shall be attested by the
signature of the secretary or treasurer, or an assistant secretary.
SECTION 9. ASSISTANT SECRETARIES. The assistant secretaries in order of their
seniority shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties as the Board of Directors shall prescribe.
SECTION 10. TREASURER. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designate by the Board of Directors.
The treasurer shall disburse the funds of the Corporation as may be ordered by
the board, taking proper vouchers for such disbursements, and shall render to
the president and directors, at the regular meetings of the board, or whenever
they may require it, an account of all transactions as treasurer and of the
financial condition of the Corporation.
If required by the Board of Directors, the treasurer shall give the Corporation
a bond (which shall be renewed every six years) in such sum and with such
surety or sureties as shall be satisfactory to the board for the faithful
performance of the duties of office and for the restoration to the Corporation,
in case of the treasurer's death, resignation, retirement or removal from
office, of all books, papers, checks, money and other property of whatever kind
in the treasurer's possession or control belonging to the Corporation.
SECTION 11. ASSISTANT TREASURERS. The assistant treasurers in the order of
their seniority shall, in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer and shall perform such
other duties as the Board of Directors shall prescribe.
-5-
<PAGE> 28
ARTICLE VI
CERTIFICATES OF STOCK AND CERTAIN QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF CAPITAL STOCK
SECTION 1. STOCK CERTIFICATES. The certificates of stock of the Corporation
shall be consecutively numbered and shall be entered on the books of the
Corporation as they are issued. They shall exhibit the holder's name and
number of shares and shall be signed by the chairman of the board, the
president or a vice president and the treasurer or an assistant treasurer or
the secretary or an assistant secretary. The designations, preferences and
relative, participating, optional or other special rights of each class of
stock and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
the certificates which the Corporation shall issue to represent such class of
stock. If any stock certificate is signed (1) by a transfer agent or an
assistant transfer agent or (2) by a transfer clerk acting on behalf of the
Corporation and a registrar, the signature of any such officer may be by
facsimile.
SECTION 2. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue
of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or the owner's
legal representative, to advertise the same in such manner as it shall require
and/or give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.
SECTION 3. TRANSFER OF SHARES. Subject to the qualifications, limitations and
restrictions set forth in the Certificate of Incorporation and these By-Laws,
upon surrender to the Corporation, or the transfer agent of the Corporation, of
a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
SECTION 4. CLOSING OF TRANSFER BOOKS. The Board of Directors shall have power
to close the stock transfer books of the Corporation for a period not exceeding
fifty (50) days preceding the date of any meeting of Stockholders or the date
for payment of any dividend or the date for the allotment of rights or the date
when any change or conversion or exchange of capital stock shall go into effect
or for a period of not exceeding fifty (50) days in connection with obtaining
the consent of Stockholders for any purpose; provided, however, that in lieu of
closing the stock transfer books as aforesaid, the Board of Directors may fix
in advance a date, not exceeding fifty (50) days preceding the date of any
meeting of Stockholders or the date for the payment of any dividend or the date
for the allotment of rights or the date when any change or conversion or
exchange of capital stock shall go into effect or a date in connection with
obtaining such consent, as a record date for the determination of the
Stockholders entitled to notice of, and to vote at, any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment or rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and
in such case such Stockholders and only such Stockholders as shall be
Stockholders of record on the date so fixed shall be entitled to such notice
of, and to vote at such meeting and any adjournment thereof, to receive payment
of such dividend, to receive such allotment of rights, to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the Corporation after any such record date fixed as
aforesaid.
SECTION 5. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
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<PAGE> 29
SECTION 6. REDEMPTION OF STOCK.
(a) MANDATORY REDEMPTION. Upon termination of a Member Agreement
(as referred to in ARTICLE VII hereof) for any reason whatsoever, the
Stockholder shall sell to the Corporation and the Corporation shall redeem from
the Stockholder all of its Stockholder's capital stock in the Corporation for
the book value thereof upon the terms and conditions set forth in section 7 of
this ARTICLE VI.
(b) OPTIONAL REDEMPTION BY BOARD. Whenever the Board of Directors
shall by the affirmative vote of two-thirds or more of the directors then in
office decide that it is in the best interests of the Corporation that any
Stockholder shall cease to be associated with the Corporation in that capacity,
the Corporation shall have the right, upon written demand addressed to such
Stockholder at the address as shown on the books of the Corporation, to
purchase all (but not less than all) of such Stockholder's shares of capital
stock of the Corporation at a price equal to the book value of the capital
stock.
(c) NOTICE OF REPURCHASE RIGHTS. The right or obligation of
purchase or redemption hereby reserved to the Corporation may be stated in the
subscription agreement under which the Corporation's stock is sold, in the
Member Agreement and on any stock certificates.
(d) REPURCHASE RIGHTS NOT EXCLUSIVE. The right or obligation of
purchase or redemption provided for in this section 6 of ARTICLE VI of the
By-Laws is in addition to, and not in derogation of, the rights reserved to the
Corporation by the provisions of ARTICLE FOURTH of the Certificate of
Incorporation and any other rights to repurchase, redeem or otherwise acquire
its stock that the Corporation may now have or ever obtain.
SECTION 7. MECHANICS, TERMS AND CONDITIONS OF REDEMPTION. Any purchase or
redemption of shares of stock of this Corporation made pursuant to these
By-Laws or the Certificate of Incorporation, unless expressly provided
otherwise, shall proceed as follows:
(a) TERMINATION OF RIGHTS AND PRIVILEGES AS STOCKHOLDER. Upon the
effective date of the termination of a Member Agreement or upon the date of
exercise of any option to repurchase or redeem stock or upon such other date
set by these By-Laws, the Certificate of Incorporation, or the Member and this
Corporation, whichever shall be appropriate in the circumstances, all of this
Corporation's stock owned by such Stockholder (hereinafter referred to as
"Terminated Stockholder") shall be deemed to be and shall be and become the
property of this Corporation; from and after such date all rights and
privileges incident to the ownership of the shares (including but not limited
to the right to dividends thereon) shall cease, except only the right to
receive the purchase price (as hereinafter provided) plus a sum equal to any
dividends declared but unpaid at said date and accrued Patronage Dividends for
the relevant year or portion thereof (to be paid in the manner provided for
payment of all Patronage Dividends) all without interest and subject to the
Corporation's liens and right of setoff. The Terminated Stockholder shall
promptly remit any certificates duly endorsed in blank or with stock powers.
(b) PAYMENT OF REDEMPTION PRICE. Immediately upon receipt of
properly endorsed certificates representing all of a Terminated Stockholder's
stock of the Corporation, the Corporation shall remit the redemption price to
the Terminated Stockholder in the following manner:
(i) Cash equal to the book value of Terminated Stockholder's
Class A Common Stock reduced by the amount of any lien or setoff
to which the Corporation may be entitled; and
(ii) A note in face amount equal to the book value of Terminated
Stockholder's Class B Common Stock. The note shall be payable in
five (5) equal annual installments of principal, the first of which
shall be due on the December 31 next following termination of the
Terminated Stockholder's rights and privileges as a Stockholder (as
provided in section 7(a) of this Article VI) and shall bear
interest payable with the installments of principal from the date
of the note at the rate per annum borne by the issue of this
Corporation's Promissory (Subordinated) Notes distributed as
Patronage Dividends most recently distributed prior to the date of
the note. The note shall be dated as of the date upon which the
Terminated Stockholder's rights as a Stockholder terminated (as
-7-
<PAGE> 30
provided in section 7(a) of this Article VI) and shall be subject
to the right of setoff in favor of the Corporation as provided in
Article VII, section 4.
(c) LEGAL AVAILABILITY OF FUNDS. Should the funds of the
Corporation legally available for such purpose be insufficient for immediate
payment of all or any part of the redemption price, an agreement for purchase
and sale of the stock shall be executed by the Corporation and the Terminated
Stockholder pursuant to which the Corporation shall unqualifiedly undertake to
pay all or the balance, as the case may be, of the redemption price as soon as
funds are legally available for that purpose and further that no dividends or
Patronage Dividends shall be declared and paid or set apart for payment to
Members until after payment to the Terminated Stockholder of the full purchase
price for such stock.
(d) BOOK VALUE. The term "book value" as applied to any shares of
Class A Common Stock or Class B Common Stock shall mean the value, determined
in accordance with generally accepted accounting principles, of such shares as
shown by the last available year-end balance sheet of the Corporation, reported
on by the Corporation's certified public accountants, after eliminating
therefrom all value for goodwill, other intangible assets and that portion of
retained earnings that has been specifically appropriated by the Board of
Directors.
(e) HARDSHIP. Notwithstanding the provisions of Paragraph 7(b) of
this Article VI, the Board of Directors in its discretion and with due regard
for the financial condition and requirements of the Corporation, may authorize
and cause payment in cash for all or part of the redemption price which would
otherwise be paid by a note if the Board of Directors determines that the
prescribed method of payment imposes an undue hardship upon the Terminated
Stockholder. The Board of Directors may implement this provision by adopting
hardship guidelines and delegating authority to an officer or officers.
(f) LIEN ON STOCK AND NOTES. The Corporation shall have a lien on,
and a right of setoff against, any stock or notes, including those issued as
Patronage Dividend and against any cash portion of such Patronage Dividend
which is in excess of twenty percent (20%) of the overall patronage dividend
payable in any year for such indebtedness of the Terminated Stockholder to the
Corporation as may, for whatever cause, exist. In the event that the
Corporation initiates proceedings to recover amounts due it by the Terminated
Stockholder, the Corporation shall be entitled to the recovery of all
associated costs, interest and reasonable attorney's fees.
ARTICLE VII
MEMBER AGREEMENTS
SECTION 1. CORPORATE PURPOSE. The Corporation shall be organized and operated
on a cooperative basis for the benefit of the holders of shares of its Class A
Common Stock (who are its Members).
SECTION 2. GENERAL TERMS. As a condition of Membership every prospective
Member shall enter into a contract (the "Member Agreement") with this
Corporation that shall contain such terms, conditions and agreements as the
officers of this Corporation shall deem necessary or desirable or as shall be
required hereunder, pursuant to the Certificate of Incorporation or these
By-Laws, or pursuant to direction of the Board of Directors. The Member
Agreement shall not be assignable, or transferable, in any manner whatsoever,
without the express written consent of the Corporation and shall contain,
without limitation, the following terms and provisions:
(a) An express consent by the Member to the tax treatment and
effects specified in section 2(b) of Article VIII hereof;
(b) A requirement that Member establishes and maintains a retail
store in which to sell merchandise;
(c) A requirement that the Member notify the Corporation in writing
immediately upon any change in business name, form of organization
(proprietorship, partnership, corporation or whatever), ownership or control;
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<PAGE> 31
(d) A requirement that the Member purchase qualifying shares of the
Corporation (as referred to in Article XI of these By-Laws) pursuant to a
subscription agreement; and
(e) Automatic modification of the Member Agreement upon notice by
the Corporation to the Member of any relevant changes in the Certificate of
Incorporation or By-Laws or current form of Member Agreement approved by a
two-thirds vote of the Board of Directors then in office.
SECTION 3. IMMEDIATE TERMINATION FOR BREACH OF MEMBER AGREEMENT. The
president or a vice president of the Corporation shall have the right to
immediately terminate any Member Agreement existing between the Corporation and
any Member by written notice to the Member, in the event and at the time or
after the Member becomes insolvent, commits any act of bankruptcy, files a
voluntary petition in bankruptcy, is adjudicated a bankrupt or breaches any
obligation or condition under the Member Agreement, which breach is not cured
within ten (10) days after the Member's receipt of written notice of such
breach from the Corporation.
SECTION 4. OTHER TERMINATION. In addition to other methods of terminating the
Member Agreement (together with any ancillary agreements between the
Corporation and the Member) between a Member and the Corporation, any such
agreement may be terminated as follows:
(a) BY MEMBER. Such Agreement may be terminated unilaterally by a
Member upon sixty (60) days written notice mailed to any executive officer of
the Corporation at the Corporation's principal office.
(b) BY CORPORATION. Such Agreement may be terminated unilaterally
by the Corporation upon sixty (60) days written notice mailed to the Member at
the address shown on the books of the Corporation; provided, however, that such
termination by the Corporation shall occur after affirmative vote of two-thirds
or more of the directors then in office that such termination is in the best
interest of the Corporation. Without limiting the generality of the foregoing,
the following events shall be deemed to create situations in which it is prima
facie in the best interests of the Corporation to terminate such agreement:
(i) death or incapacity of an individual Member;
(ii) change in the nature or composition of Membership of a
sole proprietorship, partnership, joint venture or corporate
Member; and
(iii) change in control or management of a corporate or
partnership Member.
In the event a Member changes a sole proprietorship, partnership or joint
venture to a corporate form, where the Corporation has agreed to accept the
corporate successor-in-interest as a Member, then the Member shall sell,
transfer or otherwise assign to such successor-in-interest all shares of stock
of this Corporation owned by such Member. Such shares shall remain subject to
the Corporation's liens and right of setoff and all other rights provided for
in the Certificate of Incorporation and the By-Laws.
SECTION 5. MECHANICS OF SETOFF. Notes issued by the Corporation, whether
issued incidental to the distribution of Patronage Dividend or to the
redemption of Class B Common Stock, shall provide that if the Corporation
exercises its right of setoff, the value of the note to be setoff against the
holder's indebtedness to the Corporation or one of its subsidiaries shall be
determined at the time of setoff as follows: The Corporation shall have the
right to discount the note to its then current cash value, which shall be in
the lesser of the face amount of the note or the yield to maturity of the note
as discounted at a rate per annum equal to the prime rate at the time of setoff
at the Harris Trust and Savings Bank, Chicago, Illinois, plus two percentage
points.
ARTICLE VIII
PATRONAGE DIVIDENDS
SECTION 1. PAYMENT OF PATRONAGE DIVIDENDS. The Corporation shall distribute
Patronage Dividends to Members annually on the basis of the volume of and
margins applicable to merchandise and/or services
-9-
<PAGE> 32
purchased by each Member, which equal the excess (if any) of gross margins
from business done with or for Members, after deducting therefrom the following:
(a) Expenses directly or indirectly related to such business;
(b) Such reasonable reserves for necessary corporate purposes as may
from time to time be provided by the Board of Directors for depreciation and
obsolescence, state and federal taxes, bad debts, casualty losses, insurance
and other corporate and operating charges and expenses, all established and
computed in accordance with generally accepted accounting principles;
(c) Such reasonable reserves for working capital necessary for the
operation of the Corporation and for deficits arising from such operation,
(including deficits from business other than business done with or for
Members).
Any amount set aside for reserves shall first be set aside from net earnings,
if any, of the Corporation from business other than business done with or for
Members, and only the excess shall be deducted from gross margins from business
done with or for Members in the computation described above.
The amounts set aside for reserves in any year from gross margins of the
Corporation from business done with or for Members shall be allocated, to the
extent possible, to Members on the books of the Corporation on a patronage
basis for that year, or, in lieu thereof, the books or records of the
Corporation shall afford a means of doing so at any time, so that in the event
of a distribution of amounts formerly carried in reserves each Member may
receive, to the extent possible, Member's pro rata share thereof.
SECTION 2.
(a) METHOD AND TIMING OF PAYMENT. The Patronage Dividend to which
Stockholder-Members ("Members") become entitled for each fiscal year shall be
distributed no later than the fifteenth day of the ninth month following such
fiscal year. The Board of Directors may, in its discretion, determine to pay
Patronage Dividends either all in a form that will be treated as a deductible
qualified written notice of allocation within the meaning of section 1388(c) of
the Internal Revenue Code of 1986, as amended (hereinafter referred to as the
"IRC"), all in a form that will be treated as a nonqualified written notice of
allocation within the meaning of section 1388(d) of the IRC, or part in
qualified form and part in nonqualified form. At least twenty percent (20%) of
any qualified payment of Patronage Dividends shall be paid in cash. Subject to
this limitation with respect to qualified distributions, the Board of Directors
may decide that the balance of any Patronage Dividend, be paid in whole or in
part, in cash, property, Class B Common Stock, promissory notes or other
evidences of indebtedness, or in any other form of written notice of allocation
(within the meaning of section 1388(b) of the IRC).
(b) TAX TREATMENT OF PATRONAGE DIVIDEND BY MEMBERS. Each person who
is a Member of the Corporation on the effective date of this section 2(b) of
this ARTICLE VIII of the By-Laws and continues as a Member after such date and
each person who becomes a Member of the Corporation after such effective date
shall, by such act alone, consent and be deemed to have consented that the
amount of any distributions with respect to the Member's patronage which are
made in written notices of allocation (as defined in section 1388 of the IRC)
and which are received by the Member from the Corporation, will be taken into
account by the Member at their stated dollar amounts in the manner provided in
section 1385(a) of the IRC in the taxable year in which such written notices of
allocation are received by the Member. This consent, however, shall not extend
to written notices of allocation received by the Member as part of a
nonqualified payment of patronage which clearly indicate on their face that
they are nonqualified. By way of illustration, the term "written notice of
allocation" shall include such items as the Promissory (Subordinated) Notes,
the shares of Class B Common Stock, a notice or statement that such securities
have been deposited with a bank or other qualified agent on behalf of the
Member, a notice of credit to the account of the Member on the books of the
Corporation (against stock subscription or any other indebtedness as the
Corporation may elect) and such other forms of notice as the Board of Directors
may determine, distributed by the Corporation in payment, or part payment of
the Patronage Dividends. The stated dollar amount of the Promissory
(Subordinated) Notes is the principal amount thereof and the stated dollar
amount of the shares of Class B Common Stock is the book value thereof.
-10-
<PAGE> 33
SECTION 3. ISSUANCE OF CLASS B COMMON STOCK. In order to ensure the
Corporation's opportunity for healthy growth and expansion and in order to meet
the corresponding needs for additional working capital the following plan for
the investment by Members of part of the Patronage Dividend shall, subject to
modification or termination by the Board of Directors, be in effect:
(a) ANNUAL ISSUANCE. With respect to the Patronage Dividend payable
for each fiscal year, the Corporation may pay each Member a portion of such
Patronage Dividend, not to exceed two percent (2%) of Member's net purchases
(computed to the nearest multiple of $100) from the Corporation during such
fiscal year, in shares of Class B Common Stock of the Corporation at the book
value thereof; provided, however, that at least twenty percent (20%) of such
Member's Patronage Dividend shall be paid in money or by qualified check.
SECTION 4. PROMISSORY (SUBORDINATED) NOTES. Subject only to the payment of at
least twenty percent (20%) of each Member's annual Patronage Dividend in cash
and distribution of Class B Common Stock as provided in section 3 of this
ARTICLE VIII, the Corporation may pay each Member all or any portion of the
annual Patronage Dividend in Promissory (Subordinated) Notes which shall bear
interest at the rate from time to time fixed by the Board of Directors and
shall mature at the time fixed by the Board of Directors not later than seven
(7) years from the date of issuance. The Promissory (Subordinated) Notes so
issued may be subordinated to any liabilities or obligations of the
Corporation, existing, contingent or created after date of issuance. The
Corporation shall have a lien upon and a right of setoff against any said
Promissory (Subordinated) Notes issued to a Member to secure payment of any
indebtedness due the Corporation or any of its subsidiaries by the Member; such
lien and right are in addition to and not in lieu of any rights the Corporation
may have to collect indebtedness due it as the Board of Directors may specify
at the issuance of any series of such Notes.
SECTION 5. HARDSHIP. If, upon application by a Member, the Board of Directors
shall determine that payment of such Member's Patronage Dividend for any year
by the method herein provided or prescribed by the Board of Directors imposed
an undue hardship upon such Member, the Board of Directors, in its discretion
and with due regard for the financial condition and requirements of the
Corporation, may authorize and cause the payment of all or any additional part
of such Patronage Dividends in cash. The Board of Directors may implement this
provision by adopting hardship guidelines and delegating authority to an
officer or officers.
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, may be declared
out of gross margins of the Corporation, other than gross margins from business
done with or for Members, after deducting therefrom all expenses directly or
indirectly allocable thereto, by the Board of Directors at any regular or
special meeting, pursuant to law. Dividends may be paid in cash, property,
Promissory (Subordinated) Notes, or shares of the capital stock, subject to the
provisions of the Certificate of Incorporation.
SECTION 2. ANNUAL STATEMENT. The Board of Directors shall present at each
annual meeting and when called for by vote of the Stockholders at any special
meeting of the Stockholders, a full and clear statement of the business and
conditions of the Corporation.
SECTION 3. CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such person or
persons as the Board of Directors may from time to time designate.
SECTION 4. FISCAL YEAR. The fiscal year shall begin the first Sunday closest
to December 31, whether that day falls in December or in January.
SECTION 5. SEAL. The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Corporate Seal,
Delaware." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
-11-
<PAGE> 34
ARTICLE X
BY-LAW AMENDMENTS
SECTION 1. BY-LAW AMENDMENTS. These By-Laws may be altered or repealed at any
annual meeting of the Stockholders or at any special meeting of the
Stockholders at which a quorum is present or represented, provided notice of
the proposed alteration or repeal be contained in the notice of such special
meeting, by the affirmative vote of a majority of the Board of Directors at any
regular meeting of the board or at any special meeting of the board if notice
of the proposed alteration or repeal be contained in the notice of such special
meeting; provided, however, that no change of time or place of the meeting for
the election of directors shall be made within sixty (60) days next before the
day on which such meeting is to be held, and that in case of any change of such
time or place, notice thereof shall be given to each Stockholder in person or
by letter mailed to the Stockholder's last known post office address at least
twenty (20) days before the meeting is held.
ARTICLE XI
QUALIFYING SHARES OF CAPITAL STOCK
SECTION 1. QUALIFYING SHARES. The unit ownership of Class A Common Stock
shall consist of ten (10) shares and no person shall be deemed to be a
Stockholder of the Corporation or shall exercise any of the rights of a
Stockholder until such person has become the holder of record of ten (10) fully
paid and nonassessable shares of said Class A Common Stock, $100 par value.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
SECTION 1. INDEMNIFICATION.
(a) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses for
which such person has not otherwise been reimbursed (including attorneys' fees,
judgments, fines and amounts paid in settlement) actually and reasonably
incurred by such person in connection with such action, suit or proceeding, if
such person acted in good faith and in a manner which was reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe that the conduct in question was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which was
reasonably believed to be in or not opposed to the best interest of the
Corporation, and, with respect to any criminal action or proceeding had
reasonable cause to believe that the conduct in question was unlawful.
(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses for which such person has not otherwise been reimbursed (including
attorneys' fees and amounts paid in settlement) actually and reasonably
incurred by such person in connection with the defense or settlement of such
suit or action if such person acted in good faith and in a manner which was
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such person's duty to
the Corporation unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such
-12-
<PAGE> 35
person is fairly and reasonably entitled to indemnification for such expenses
which the Court of Chancery of Delaware or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Paragraphs 1(a) or (b) of this
Article, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees), actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under Paragraphs 1(a) or (b) of this Article
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because such person
has met the applicable standard of conduct set forth in such Paragraphs 1(a) or
(b) of this Article. Such determination shall be made (i) by the Board of
Directors by a majority vote of a quorum, consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, and a quorum of disinterested directors so directs, by independent
legal counsel in written opinion, or (iii) by the Stockholders.
(e) Expenses incurred by defending a civil or criminal action, suit
or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board of
Directors in the specific case upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount unless it
shall ultimately be determined that he is entitled to be indemnified by the
Corporation.
(f) The indemnification provided in this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of Stockholders or disinterested
directors or otherwise, or of any other indemnification which may be granted to
any person apart from this Article, both as to action in its official capacity
and as to action in another capacity while holding office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
SECTION 2. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against and incurred by such person in any such capacity, or arising
out of its status as such, whether or not the Corporation would have the power
to indemnify such person against such liability under the provisions of this
Article.
13
<PAGE> 36
EXHIBIT T3C
COTTER & COMPANY
ISSUER
AND
BANK OF AMERICA ILLINOIS
TRUSTEE
INDENTURE
DATED AS OF NOVEMBER 16, 1994
VARIABLE DENOMINATION FIXED RATE
REDEEMABLE TERM NOTES
<PAGE> 37
Reconciliation and Tie between Trust Indenture Act of 1939 and Indenture
<TABLE>
<CAPTION>
Trust Indenture Trust Indenture
Act Section Indenture Section Act Section Indenture Section
- ----------- ----------------- --------------- -----------------
<S> <C> <C> <C>
Section 310 (a)(1) 609 Section 316 (a) 101
(a)(2) 609 (a)(a)(A) 502, 512
(a)(3) Not Applicable (a)(1)(B) 513
(a)(4) Not Applicable (a)(2) Not Applicable
(a)(5) 609 (b) 508
(b) 608 and 610 (c) 104(5)
Section 311 (a) 613(1) Section 317 (a)(1) 503
(b) 613(2) (a)(2) 504
(b)(2) 703(1)(b), 703(2) (b) 903
Section 312 (a) 701, 702(1) Section 318 (a) 107
(b) 702(2)
(c) 702(3)
Section 313 (a) 703(1)
(b) 703(2)
(c) 703(1), 703(2)
(d) 703(3)
Section 314 (a)(1) 704
(a)(2) 704
(a)(3) 704
(a)(4) 904
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
Section 315 (a) 601(1)
(b) 602, 703(1)(f)
(c) 601(2)
(d) 601(3)
(d)(1) 601(1)(a)
(d)(2) 601(3)(b)
(d)(3) 601(3)(c)
(e) 514
</TABLE>
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
2
<PAGE> 38
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Agent Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Wholly-owned Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 105. Notices, Etc., to Trustee and Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 108. Effect of Headings, Table of Contents, and Reconciliation and Tie . . . . . . . . . . . . . . 16
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 114. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO
AMOUNT, PAYMENT AND
RESTRICTION OF TRANSFER OF SECURITIES
SECTION 201. Amount Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 202. Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 203. Restriction on Transfer of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE THREE
REDEMPTION OF SECURITIES
SECTION 301. Redemption at Option of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 302. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 303. Payment of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 304. Redemption of Securities if Holder is Not Eligible to Participate in the Program . . . . . . 19
SECTION 305. Redemption at Option of the Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 403. Repayment by Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . . . . . . . . . . . . . . . . . . . . 22
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. . . . . . . . . . . . . . . 23
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 505. Trustee May Enforce Claim Without Possession of Securities. . . . . . . . . . . . . . . . . . 25
SECTION 506. Application of Money Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . 26
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 604. Not responsible for Recitals or Issuance of Securities. . . . . . . . . . . . . . . . . . . . 31
SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . 35
SECTION 613. Preferential Collection of Claim Against Company. . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . 40
SECTION 702. Preservation of Information; Communications to Holders. . . . . . . . . . . . . . . . . . . . 40
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures without Consent of Holders . . . . . . . . . . . . . . . . . . . . . 44
SECTION 802. Supplemental Indentures with Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 803. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 804. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 805. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE NINE
COVENANTS
SECTION 901. Administration of Program; Payment of Principal and Interest. . . . . . . . . . . . . . . . . 46
SECTION 902. Maintenance of Security Register, Maintenance of Office or Agency. . . . . . . . . . . . . . 46
SECTION 903. Money for Securities Payments to Be Held in Trust. . . . . . . . . . . . . . . . . . . . . . 47
SECTION 904. Certificate of Officers of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 905. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
7
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INDENTURE, dated as of November 16, 1994, between Cotter & Company, a
corporation duly organized and existing under the laws of the State of
Delaware, (herein called the "Company"), having its principal office at North
Clybourn, Chicago Illinois, and Bank of America Illinois, having its principal
offices at 231 S. LaSalle Street, Chicago, Illinois, a corporation duly
organized and existing under the laws of the state of Illinois, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
variable denomination fixed rate redeemable term notes (herein called the
"Securities") pursuant to the Program (as defined below).
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or
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permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of
such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Bank" means a bank or corporation, and its successors and
assigns, appointed by the Company to act as agent under the Program and to
perform all functions required of such agent pursuant to the provisions of the
Program and to serve as Paying Agent pursuant to the provisions of this
Indenture.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the Agent Bank is authorized or obligated by
law to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph
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<PAGE> 45
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means as of any particular time the
aggregate amount of assets after deducting therefrom (a) all current
liabilities (excluding any such liability that by its terms is extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed) and (b) all
goodwill, excess of cost over assets acquired, patents, copyrights, trademarks,
trade names, unauthorized debt discount and expense and other like intangibles,
all as shown in the most recent consolidated financial statements of the
Company and its Subsidiaries prepared in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered.
"Corporation" includes corporations, associations, companies and
business trusts.
"Event of Default" has the meaning specified in Section 501.
"Holder" means, with respect to a Security, a Person in whose name at
the time a particular Security is registered in the Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or other counsel satisfactory to the
Trustee, which is delivered to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities in which Holders have made investments as
shown on the
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Securities Register, except:
(1) Securities or portions thereof theretofore redeemed by the
Holders pursuant to the provisions of the Program and this Indenture;
(2) Securities or portions thereof theretofore redeemed by the
Company pursuant to the provisions of this Indenture;
(3) Securities or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent), for the Holders of such Securities; provided
that, 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;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Agent Bank shall serve as Paying Agent pursuant to the terms
of this Indenture.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Program" means the Cotter & Company Investment Program established by
the Company and in effect on the date hereof, as the same may be amended or
supplemented by the Company from time to time.
"Principal Amount", when used with reference to a Security, means, as
of a particular time, the sum of the funds invested in a Security, plus the sum
of interest accrued, paid and reinvested in a Security, less the sum of
redemptions from time to time.
"Redemption Date", when used with respect to any Security to be
redeemed,
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means the date fixed for such redemption by or pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or
any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Secured Debt" means indebtedness for money borrowed which is secured
by a mortgage, pledgee, lien, security interest or encumbrance on any property
of any character of the Company.
"Security" or "Securities" means any Variable Denomination Fixed Rate
Demand Note or Notes, as the case may be, issued pursuant to the Program and
under this Indenture, which are evidenced by an individual record or entries in
the name of the Particular Holder established on the Security Register.
"Security Register" has the meaning specified in Section 902.
"Subsidiary" means (i) with respect to the Company, a corporation more
than fifty percent (50%) of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries and (ii) with respect to the
Company a corporation more than fifty percent (50%) of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 805.
"United States" means the United States of America (including the
States and
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<PAGE> 48
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Wholly-owned Subsidiary" means any Subsidiary of which, at the time
of determination, all of the outstanding voting stock (other than directors'
qualifying shares) is owned by the Company, directly or indirectly. For
purposes of this definition, "voting stock" has the same meaning as under the
definition of "Subsidiary".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than annual
certificates provided pursuant to Section 905) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he/she has made such examination or investigation as is necessary to
enable him/her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his/her certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
(2) The fact and date of the execution by any Person of any such
instrument
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or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him
the execution thereof. Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(3) The ownership of Securities shall be proved by reference to
the Security Register.
(4) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon
such Security.
(5) The Company may set a record date for purposes of determining
the identity of Holders entitled to give any request, demand,
authorization, direction, notice, consent, waiver or other Act which
record date shall be the later of ten (10) days prior to the first
solicitation of such action or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 701 of this
Indenture prior to such solicitation. If a record date is fixed,
those persons who were Holders of Securities at such record date (or
their duly designated proxies), and only those persons shall be
entitled to take such action or to revoke any such previous action,
whether or not such persons continue to be Holders after such record
date. No such request, demand, authorization, direction, notice,
consent, waiver or other Act shall be valid or effective for more than
one hundred and twenty (120) days after such record date.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing, to the
Trustee or Holders by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address, as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties
imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture Act
through operation of Section 318(c) thereof, such imposed duties shall control.
SECTION 108. Effect of Headings, Table of Contents, and Reconciliation and
Tie.
The Article and Section headings herein and the Table of Contents and
Reconciliation and Tie are for convenience only and shall not affect the
construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 110. Separability 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with Federal law and with the laws of the State of Illinois.
SECTION 113. Legal Holidays.
In any case where any Redemption Date shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of the redemption price need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Redemption Date, provided that no interest shall accrue for
the period from and after such Redemption Date.
SECTION 114. Persons Deemed Owners.
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 of or interest
on such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
ARTICLE TWO
AMOUNT, PAYMENT AND
RESTRICTION OF TRANSFER OF SECURITIES
Section 201. Amount Limited.
The Securities shall be issued pursuant to the Program and under this
Indenture
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in a principal amount not to exceed the amount of Securities as stated in the
Program's annual prospectus.
SECTION 202. Payment.
The Securities shall be payable at the office or agency of the Agent
Bank as may from time to time be designated in writing, maintained for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.
SECTION 203. Restriction on Transfer of Securities.
The Securities may not be transferred, in whole or in part, either
directly or by operation of law or otherwise.
ARTICLE THREE
REDEMPTION OF SECURITIES
SECTION 301. Redemption at Option of the Company.
The Company may redeem, at any time in its discretion, all or any
portion of the Securities issued pursuant to the Program and under this
Indenture. Any partial redemption of the entirety of the Securities will be
effected by lot or pro rata or by any other method that is deemed fair and
appropriate by the Trustee.
SECTION 302. Notice of Redemption.
The Company may give prior written notice of at least thirty (30) days
but not more than ninety (90) days to Holders whose Securities are subject to
full or partial redemption. Such notice from the Company will specify the
effective date of redemption, the amount being redeemed and the effective date
the redeemed amount shall become due and payable and that interest shall cease
to accrue as of that date. All partial redemption notices will list the
remaining, principal amount of the Security.
SECTION 303. Payment of Redemption Price.
The full or partial Security being redeemed, plus accrued and unpaid
interest therein to the date of redemption, shall be paid by check to the
Holder. The Company covenants that it will pay or cause to be paid to the
Trustee or to the Agent Bank or to another paying agent cash in an amount
sufficient to pay the principal amount of the Security or portion thereof to be
redeemed on such date. Interest on the redeemed amount shall cease to accrue
on and after the effective date the redeemed amount shall have become due and
payable.
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SECTION 304. Redemption of Securities if Holder is Not Eligible to
Participate in the Program.
The Company also may redeem, at any time in its sole and absolute
discretion, any Security issued pursuant to the Program and under this
Indenture if the Holder of such Security is not eligible to participate in the
Program as defined in the annual Program Description. Notice of such
redemption will be given in the manner provided in Section 302, and payment of
the redemption price shall be made as provided in Section 303.
SECTION 305. Redemption at Option of the Holder.
Subject to the terms and conditions of the Program, a Security may be
redeemed, with loss of accrued interest, in full at any time at the option of,
and upon demand by, the Holder. Subject to the terms and conditions of the
Program, demand may be made for full redemption of a Security by written demand
to the Agent Bank for payment by bank check drawn on the Agent Bank. The
Company covenants that it will pay or cause to be paid to the Trustee or to the
Agent Bank or to another paying Agent cash in an amount sufficient to pay the
principal of the Security to be redeemed.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 401. Satisfaction and Discharge of Indenture.
If at any time:
(1) the Company shall have terminated the Program pursuant to its
provisions,
(2) all the Securities shall have become due and payable,
(3) the Company shall have deposited or caused to be deposited
with the Trustee as trust funds the entire amount (other than moneys
repaid by any Paying Agent to the Trustee in accordance with Section
403) sufficient to pay all the Securities, including principal and
interest due or to become due to such date of maturity, and
(4) the Company shall have paid or caused to be paid all other
sums payable hereunder by the Company, then this Indenture shall cease
to be of further effect, and the Trustee, on demand of and at the cost
and expense of the Company shall execute proper instruments
acknowledging satisfaction of and
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discharge of this Indenture. The Company agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee in connection with this Indenture, the Program
or the Securities.
SECTION 402. Application of Trust Money.
All moneys deposited with the Trustee pursuant to Section 401 shall be
held in trust and applied by it to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent), to the
Holders of the Securities for the payment of which such moneys have been
deposited with the Trustee of all sums due and to become due thereon for
principal and interest. The Trustee shall be under no obligation to invest or
pay interest on any moneys so held in trust.
SECTION 403. Repayment by Paying Agents.
In connection with the satisfaction and discharge of this Indenture
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be repaid to it or paid to the Trustee and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Events of Default", means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any part of or all the principal of
or interest on any Security as and when the same shall be due and
payable, in accordance with the then current provisions and rules and
regulations of the Program and this Indenture; provided, however,that:
(a) the failure of the Company to make any payment of the
principal of or interest on any Security, or any delay in
making such payment shall not be considered in determining
whether an "Event of Default" shall have occurred if:
(i) the Trustee believes in good faith that the
Security is subject to a conflicting claim,
attachment, lien or proceeding, or
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any person demanding such payment is not, or may
not be, legally entitled thereto, or the amount of
the payment demanded exceeds the principal amount of
the Security according to the Security Register, or
the demand for payment has not been made in
accordance with the then current provisions and rules
and regulations of the Program, or the payment cannot
be made in accordance with the then current
provisions and rules and regulations of the Program,
or
(ii) the Company shall have paid over to the
Trustee for deposit to an account not subject to
offset, charge or encumbrance by the Trustee the
amount of the principal of or interest on any
Security which has become due and payable,
and if requested by the Trustee the Company shall have
furnished the Trustee with an Officers' Certificates as to the
matters described in the foregoing clauses (i) and (ii); and
(b) an administrative error relating to a Security or
improperly identifying the Security of a Holder shall not be
considered in determining whether an "Event of Default" shall
have occurred unless such error shall have continued
uncorrected for a period of sixty (60) days after written
notification thereof to the Agent Bank or the Trustee by a
Holder, the Trustee to be the sole judge of whether the error
has been corrected (the above enumeration of specific examples
of situations which shall not be considered in determining
whether an "Event of Default" shall have occurred shall not be
exclusive, and the Trustee may determine in any particular
instance and, absence bad faith, shall incur no liability to
any person in so determining whether the circumstances
concerning a particular Security should be considered in
determining whether an "Event of Default" shall have
occurred); or
(2) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of sixty (60) days after there has
been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
twenty-five per cent (25%) in principal amount of the Outstanding
Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(3) the entry by a court having jurisdiction in the premises of:
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(a) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or
(b) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or
in respect of the Company under any applicable Federal or
State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of
the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of sixty
(60) consecutive days; or
(4) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(5) in connection with any proceeding under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors,
involving the Company or one of its Subsidiaries an order for relief
shall be entered by a court of competent jurisdiction which affects
any significant part of the assets of the Company or any of its
Subsidiaries.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to the Securities occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
fifty percent (50%) in the principal amount of the Outstanding Securities may
declare all of the
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Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
the Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(a) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in
such Securities;
(b) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(c) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to the Securities, other
than the non-payment of the principal of Securities which have become
due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if default is made in the payment of the
principal of or interest on any Security when the same shall have become due
and payable the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and on any overdue interest, at the rate or rates prescribed therefor
in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including
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the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to the Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of the Securities by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 504. 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 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 overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(1) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Securities 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 and any predecessor Trustee, their agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial 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 to the Trustee any amount
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due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee and any predecessor Trustee, their agents and counsel, and any
other amounts due the Trustee and any predecessor Trustee under Section 607.
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 claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 607; and SECOND: To the payment of the amounts then due
and unpaid for principal of and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities;
(2) the Holders of not less than fifty percent (50%) in principal
amount of the Outstanding Securities shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as
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Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such sixty (60) day period by the Holders
of a majority in principal amount of the Outstanding Securities; it
being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to
seek to obtain priority or preference over any other of such Holders
or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Security on the
applicable due date provided therefor pursuant to the Program (or, in the case
of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and
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remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy acting upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to the
Securities, provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) subject to Section 601, the Trustee shall have the right to
decline to follow any such direction if the Trustee shall reasonably
determine, in good faith, that the action or proceeding so directed
would be unjustly prejudicial to any Holders not joining in such
direction or would involve the Trustee in any personal liability
unless indemnified to its reasonable satisfaction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default:
(1) in the payment of the principal of or interest on any
Security, or
(2) in respect of a covenant or provision hereof which under
Article Eight
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cannot be modified or amended without the consent of the Holders of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All Parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than ten percent
(10%) in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or interest on the Security on or after the applicable due date therefor
provided pursuant to the Program (or, in the case of redemption, on or after,
the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or any time hereafter in force, which may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
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(1) Except during the continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(b) 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 the Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture.
(2) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and would in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his/her own affairs.
(3) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that
(a) this Subsection shall not be construed to limit the
effect of Subsection (1) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities, determined as
provided in Section 512, relating to the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the
Securities; and
(d) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of
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its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(4) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the
provisions of this Section.
SECTION 602. Notice of Defaults.
Within ninety (90) days after the occurrence of any default hereunder
with respect to the Securities, the Trustee shall transmit by mail to all
Holders of Securities, as their names and addresses appear in the Security
Register, notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of or interest on any
Security, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Securities;
and provided, further, that in the case of any default of the character
specified in Section 501(3) with respect to the Securities, no such notice to
Holders shall be given until at least thirty (30) days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced
by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon
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an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice,
or oral advice subsequently confirmed in writing, of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) 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 such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(7) 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
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by the
Indenture.
SECTION 604. Not responsible for Recitals or Issuance of Securities.
The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of securities or the proceeds thereof.
SECTION 605. May Hold Securities.
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Subject to the provisions of the Program with respect to Persons who
may hold Securities, the Trustee, the Agent Bank, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner of Securities and, subject to Sections 608
and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Agent Bank, Paying Agent, Security Registrar or
such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith or willful
misconduct; and
(3) to indemnity each of the Trustee and any predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense
incurred without negligence, bad faith or willful misconduct, on
Trustee's or any predecessor Trustee's part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder or the performance of their duties hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall be subject to the provisions of Section 310(b) of
the Trustee Indenture Act during the period of time provided for therein.
Nothing herein shall
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prevent the Trustee from filing with the Commission the application referred
to in the second-to-last paragraph of Section 310(b) of the Trust Indenture
Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State authority; provided, however, that if Section 310(a) of the Trust
Indenture Act or the rules and regulations of the Commission under the Trust
Indenture Act at any time permit a corporation organized and doing business
under the laws of any other jurisdiction to serve as trustee of an indenture
qualified under the Trust Indenture Act, this Section 609 shall be
automatically amended to permit a corporation organized and doing business
under the laws of any such other jurisdiction to serve as Trustee hereunder.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor
any person directly or indirectly controlling, controlled by or under common
control with the Company may serve as Trustee. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(2) The Trustee may resign at any time with respect to the
Securities by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section
611 shall not have been delivered to the Trustee within thirty (30)
days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of
such series.
(3) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of a majority in principal amount of
the Outstanding Securities, delivered to the Trustee and to the
Company.
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(4) If at any time:
(a) the Trustee shall fail to comply with Section 608
after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Security for at least six
(6) months, unless the Trustee's duty to resign has been
stayed as provided in Section 310(b) of the Trust Indenture
Act, or
(b) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(c) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation.
then, in any case, (i) the Company by a Board Resolution may remove
the Trustee with respect to all Securities, or (ii) subject to Section
514, any Holder who has been a bona fide Holder of a Security for at
least six (6) months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee and shall comply with the applicable requirements of
Section 611. If, within one (1) year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor
Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor
Trustee and to that extent supersede the successor Trustee appointed
by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner
required by Section 611, any Holder who has been a bona fide Holder of
a Security for at least six (6) months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(6) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by
mailing written
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notice of such event by first-class mail, postage prepaid, to all
Holders of Securities as their names and addresses appear in the
Security Register. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor Trustee,
every such successor Trustee so appointed 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.
(2) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting
in and confirming to such successor Trustee all such rights, powers
and trusts referred to in paragraph (1) of this Section.
(3) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 613. Preferential Collection of Claim Against Company.
(1) Subject to Subsection (2) of this Section, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured
or unsecured, of the Company in its capacity as trustee within three
(3) months prior to a default, as defined
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in Subsection (3) of this Section, or subsequent to such a default,
then, unless and until such default shall be cured, the Trustee shall
set apart and hold in a special account for the benefit of the Trust
individually, the Holders of the Securities and the holders of other
indenture securities, as defined in Subsection (3) of this Section:
(a) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the beginning
of such three months' period and valid as against the Company
and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in
paragraph (b) of this Subsection, or from the exercise of any
right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the
Company upon the date of such default; and
(b) all property received by the Trustee in respect of
any claims as such creditor, either as security therefor, or
in satisfaction or composition thereof, or otherwise, after
the beginning of such three (3) months' period, or an amount
equal to the proceeds of any such property, if disposed of,
subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(c) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the
Company) who is liable thereon, and (ii) the proceeds of the
bona fide sale of any such claim by the Trustee to a third
Person, and (iii) distributions made in cash, securities or
other property in respect of claims filed against the Company
in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or
applicable State law;
(d) to realize, for its own account, upon any property
held by it as security for any such claim, if such property
was so held prior to the beginning of such three (3) months'
period;
(e) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such three (3) months' period
and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such
property was received the
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Trustee had no reasonable cause to believe that a default, as
defined in Subsection (3) of this Section, would occur within
three (3) months; or
(f) to receive payment on any claim referred to in
paragraph (d) or (e), against the release of any property held
as security for such claim as provided in paragraph (d) or
(e), as the case may be, to the extent of the fair value of
such property.
For the purposes of paragraphs (d), (e) and (f), property substituted
after the beginning of such three months' period for property held as
security at the time of such substitution shall, to the extent of the
fair value of the property released, have the same status as the
property released, and, to the extent that any claim referred to in
any of such paragraphs is created in renewal of or in substitution for
or for the purpose of repaying or refunding any preexisting claim of
the Trustee as such creditor, such claim shall have the same status as
such preexisting claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other
indenture securities in such manner that the Trustee, the Holders and
the holders of other indenture securities realize, as a result of
payments from such special account and payments of dividends on claims
filed against the Company in bankruptcy or receivership or in
Proceedings for reorganization pursuant to the Federal Bankruptcy Code
or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of
other indenture securities dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable
State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to
any claim, the term "dividends" shall include any distribution with
respect to such claim, in bankruptcy or receivership or proceedings
for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash,
securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such
claim. The court, in which such bankruptcy, receivership or
proceedings for reorganization is pending shall have jurisdiction (i)
to apportion among the Trustee, the Holders and the holders of other
indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such Special account and
proceeds
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thereof, or (ii) in lieu of such apportionment, in whole or in part,
to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the
Trustee and the Holders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not
be necessary to liquidate or to appraise the value of any securities
or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after the beginning of
such three (3) months' period shall be subject to the provisions of
this Subsection (1) as though such resignation or removal had not
occurred. If any Trustee has resigned or been removed prior to the
beginning of such three (3) months' period, it shall be subject to the
provisions of this Subsection (1) if and only if the following
conditions exist:
(g) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such
Trustee had continued as Trustee, occurred after the beginning
of such three (3) months' period; and
(h) such receipt of property or reduction of claim
occurred within (3) three months after such resignation or
removal.
(2) There shall be excluded from the operation of Subsection (1)
of this Section a creditor relationship arising from:
(a) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one (1) year or more at the time of acquisition by
the Trustee;
(b) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture, for the
purpose of preserving any property which shall at any time be
subject to the lien of this Indenture or of discharging tax
liens or other prior liens or encumbrances thereon, if notice
of such advances and of the circumstances surrounding the
making thereof is given to the Holders at the time and in the
manner provided in this Indenture;
(c) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent,
registrar, custodian, Paying Agent, fiscal agent or
depositary, or other similar capacity;
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(d) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction, as
defined in Subsection (c) of this Section;
(e) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of
the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Company; and
(f) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances or obligations
which fall within the classification of self liquidating
paper, as defined in Subsection (c) of this Section.
(3) For the purposes of this Section only:
(a) the term "default" means any failure to make payment
in full of the principal of or interest on any of the
Securities or upon the other indenture securities when and as
such principal or interest becomes due and payable;
(b) the term "other indenture securities" means
securities upon which the Company is an obligor outstanding
under any other indenture (i) under which the Trustee is also
trustee, (ii) which contains provisions substantially similar
to the provisions of this Section, and (iii) under which a
default exists at the time of the apportionment of the funds
and property held in such special account;
(c) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;
(d) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
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obligation;
(e) the term "Company" means any obligor upon the
Securities; and
(f) the term "Federal Bankruptcy Code" means the
Bankruptcy Code or Title 11 of the United States Code.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not later than March 1 and September 1 in each
year, a list in such form as the Trustee may reasonably require, of
the names and addresses of the Holders as of the preceding February 15
or August 15, as the case may be, and
(2) at such other times as the Trustee may request in writing,
within thirty (30) days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
fifteen (15) days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(1) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
(2) If three (3) or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six (6) months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders with respect to their rights under this
Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
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transmit, then the Trustee shall, within five (5) business days after
the receipt of such application, at its election, either
(a) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 702(1), or
(b) inform such applicants as to the approximate number
of Holders whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with
Section 702(1), and as to the approximate cost of mailing to
such Holders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon written request of such
applicants, mail to each Holder whose name and address appear in the
information preserved at the time by the Trustee in accordance with
Section 702(1) a copy of the form of proxy or other communication
which is specified in such request, with reasonable promptness after a
tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing,
unless within five (5) days after such tender the Trustee shall mail
to such applicants and file with the Commission, together with a copy
of the material to be mailed, a written statement to the effect that,
in the opinion of the Trustee, such mailing would be contrary to the
best interest of the Holders or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of
an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither
the Company nor the Trustee nor any agent of either of them
shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders
in accordance with Section 702(2), regardless of the source
from which such information was derived, and that the Trustee
shall not be hold accountable by reason of mailing any
material pursuant to a request made under Section 702.
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SECTION 703. Reports by Trustee.
(1) Within sixty (60) days after May 15 of each year beginning
with the year 1995, the Trustee shall transmit by mail to all Holders,
as their names and addresses appear in the Security Register, a brief
report dated as of such May 15 with respect to any of the following
events which may have occurred within the previous twelve (12) months
(but if no such event has occurred within such period, no report need
be transmitted):
(a) any change to its eligibility under Section 609 and
its qualifications under Section 608;
(b) The creation of or any material change to a
relationship specified in Section 310(b)(1) through Section
310(b)(10) of the Trust Indenture Act;
(c) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the
making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report, and for the reimbursement
of which it claims or may claim a lien or charge, prior to
that of the Securities, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not
be required (but may elect) to report such advances if such
advances so remaining unpaid aggregate not more than one-half
of one percent (1/2 of 1%) of the principal amount of the
Securities Outstanding on the date of such report;
(d) the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other
obligor on the Securities) to the Trustee in its individual
capacity, on the date of such report, with a brief description
of any property held as collateral security therefor, except
an indebtedness based upon a creditor relationship arising in
any manner described in Section 613(2)(b), (c), (d) or (f);
(e) the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(f) any additional issue of Securities which the Trustee
has not previously reported; and
(g) any action taken by the Trustee in the performance of
its duties hereunder which it has not previously reported and
which in its opinion materially affects the Securities, except
action in respect of a default, notice of which has been or is
to be withheld by the Trustee in
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accordance with Section 602.
(2) The Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, a brief report
with respect to the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) since the date of the last
report transmitted pursuant to Subsection (1) of this Section (or if
no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims
or may claim a lien or charge, prior to that of the Securities, on
property or funds held or collected by it as Trustee and which it has
not previously reported pursuant to this Subsection, except that the
Trustee shall not be required (but may elect) to report such advances
if such advances remaining unpaid at any time aggregate ten percent
(10%) or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within ninety (90) days after
such time.
(3) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission and
with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within fifteen (15) days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on
a national securities exchange as may be prescribed from time to time
in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional
43
<PAGE> 79
information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within thirty (30) days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of the Securities or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(2); or
(5) to cure any ambiguity, or correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
shall not adversely affect the interests of the Holders of Securities
in any material respect.
44
<PAGE> 80
SECTION 802. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than sixty-six and
two-thirds percent (66 2/3%) in principal amount of the Outstanding Securities,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the character of the Securities from being payable on
demand or reduce the principal amount of any Security or impair the
right to institute suit for the enforcement of any such payment on or
after the applicable due date thereof (or, in the case of redemption,
on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) Change any obligation of the Company, with respect to
Outstanding Securities, to maintain an office or agency in the places
and for the purposes specified in Section 902, or
(4) modify any of the provisions of this Section, Section 513 or
Section 904, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Security
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section and Section 904, or the deletion of this proviso, in
accordance with the requirements of Sections 611(2) and 801(5).
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 803. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created
45
<PAGE> 81
by this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 804. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 805. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
ARTICLE NINE
COVENANTS
SECTION 901. Administration of Program; Payment of Principal and Interest.
(1) The Company covenants and agrees to maintain and administer
the Program and the Securities issued pursuant thereto in accordance
with the provisions of the Program, as the same may from time to time
be in force and effect, and this Indenture; provided, however, that
nothing herein shall prevent the Company from exercising any of its
rights to amend, modify or terminate the Program, or to adopt, amend
or rescind the rules established under the Program, as provided
therein.
(2) The Company covenants and agrees for the benefit of Holders of
Securities that it will duly and punctually pay the principal of and
interest on the Securities in accordance with the terms of the Program
and this Indenture. Interest will accrue on the Securities in
accordance with the provisions of the Program. The interest rate on
the Securities shall be determined in accordance with the provisions
of the Program. Interest rates will vary from time to time. There
are no minimum or maximum interest rates.
SECTION 902. Maintenance of Security Register, Maintenance of Office or
Agency.
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<PAGE> 82
(1) The Company will keep at an office or agency proper books of
record and account (which books may be in written form or in any other
form capable of being converted into written form) in which full and
correct entries shall be made of all funds invested in the Securities,
together with interest accrued thereon, and all redemptions thereof,
in accordance with sound accounting practice and which shall contain
the names and addresses of all Holders and the principal amounts of
their respective Securities (collectively, the "Security Register").
(2) The Company will maintain in the City of Chicago or such other
city where the Company maintains its corporate headquarters an office
or agency where notices and demands hereunder may be given to or made
upon the Company in respect of the Securities and this Indenture may
be served. The Company will give prompt written notice to the Trustee
and the Holders of the location, and any change in the location, of
any such 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 notices and demands may be
made or served at the Corporate Trust Office of the Trustee.
SECTION 903. Money for Securities Payments to Be Held in Trust.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of, or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject, to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
or interest on Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal or interest on the Securities; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
47
<PAGE> 83
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paving Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for three years after such principal or
interest has become due and payable shall be paid to the Company upon the
Company's request; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
City of Chicago, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than thirty (30) days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 904. Certificate of Officers of the Company.
On or before the last day of March of each year beginning with the
year 1995, the Company will file with the Trustee a certificate of the
principal executive officer, principal financial officer or principal
accounting officer stating whether or not the signer has obtained knowledge of
any action or failure to act on the part of the Company during the preceding
calendar year in violation of any covenant, agreement, provision or condition
contained in this Indenture and, if so, specifying, each such default of which
the signers may have knowledge and the nature thereof. For purposes of this
Section 904, compliance shall be determined without regard to any period of
grace or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 905. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 902 to 904, inclusive, if
before the time for such compliance the Holders of at least sixty-six and
two-thirds percent (66 2/3%) in principal amount of the Outstanding Securities
shall, by Act of such Holders, either waive such compliance in such instance or
general waive compliance with such term,
48
<PAGE> 84
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
COTTER & COMPANY
By:
-----------------------------
Vice President
BANK OF AMERICA ILLINOIS, NATIONAL
ASSOCIATION
By:
-----------------------------
Vice President
STATE OF ILLINOIS
COUNTY OF COOK
On November 16, 1994, before me personally came Kerry J. Kirby, to me known,
who, being by me duly sworn, did depose and save that he is a Vice President of
Cotter & Company, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
-----------------------------
Notary Public
49
<PAGE> 85
STATE OF ILLINOIS
COUNTY OF COOK
On November 16, 1994, before me personally came ,to me
known, who, being by me duly sworn, did depose and say that he is a Vice
President of Bank of America Illinois, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
-----------------------------
Notary Public
50
<PAGE> 86
EXHIBIT T3E
PROSPECTUS
COTTER & COMPANY
$30,000,000
VARIABLE DENOMINATION FIXED RATE REDEEMABLE TERM NOTES
These Variable Denomination Fixed Rate Redeemable Term Notes (the "Notes")
are being issued and offered by Cotter & Company (the "Company") pursuant to the
Cotter & Company Investment Program (the "Program"). This offering (the "Offer")
is being made in reliance upon Section 3(a)(9) of the Securities Act of 1933, as
Amended. Consequently, no registration statement has been filed with the U.S.
Securities & Exchange Commission.
The Notes are offered exclusively to current holders of certain Company
Promissory Subordinated Notes maturing on December 31, 1994 ("Promissory
Notes"), who are not holders of the Company's Class A Common Stock (the
"Offerees") in exchange for such Promissory Notes. The Class A Common Stock is
held by retailers of hardware, variety and related merchandise and who are
Members of the Company. Membership in the Company entitles a Member to use
certain Company trademarks and trade names, including the federally registered
collective membership trademarks indicating membership in "True Value(R)
Hardware Stores" and "V&S Variety Stores(R)", and to receive annual patronage
dividends based upon the Member's purchases from the Company. The Company
estimates that it will incur expenses aggregating $30,000 in connection with the
Offer. Since the Notes are being offered solely in exchange for the Promissory
Notes, the Company will not realize any cash proceeds from the Offer.
The Notes will be offered through a mailing to all Offerees (See "How to
Invest"). The Notes will have various maturity dates and pay fixed rates of
interest, as stated, for each maturity (See "General"). The Notes are restricted
as to transferability (See "How to Redeem") and are subject to call by the
Company (See "Certain Terms of the Notes"). Investment in a Note will be
represented by a program account ("Account") established for each Offeree who
exchanges maturing Promissory Notes for Notes (the "Investor") by the agent bank
(the "Agent Bank") appointed by the Company. The Notes will not be represented
by a certificate or any other instrument evidencing the Company's indebtedness
(See "Trust Indenture"). The Company reserves the right to modify, withdraw, or
cancel this offer at any time.
For further information regarding the Cotter & Company Investment Program,
please call toll free 800-507-9000.
Please read this Prospectus carefully and retain for future reference.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED BY, DISAPPROVED BY, NOR REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES HAVE NOT
BEEN APPROVED NOR DISAPPROVED BY ANY STATE SECURITIES COMMISSION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 8, 1994
<PAGE> 87
The Notes are not equivalent to a deposit or other bank account and are not
subject to the protection of the Federal Deposit Insurance Corporation or any
other insurance. The Program is not subject to the requirements of the
Investment Company Act of 1940 (including diversification of investments) or the
Employee Retirement Income Security Act of 1974. All investments in the Notes
are investments in securities of the Company and are not an obligation of the
Agent Bank or any other company.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as the Regional Offices of the
Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission, Washington, D.C. 20549 at prescribed rates.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended January
1, 1994 and Quarterly Reports on Form 10-Q for the quarters ended April 2, 1994
and July 2, 1994 filed pursuant to Section 15(d) of the Exchange Act are
incorporated herein by reference. All documents filed by the Company pursuant to
Section 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offer shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing such
documents. The Company currently estimates that the Offer will terminate on or
about December 31, 1994.
The Company will provide without charge to each person to whom a Prospectus
is delivered, upon written or oral request of such person, a copy of any and all
of the documents incorporated by reference in the Prospectus (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into the documents that the Prospectus incorporates). Requests for
such copies should be directed to Kerry J. Kirby, Vice President and Chief
Financial Officer, Cotter & Company, 2740 North Clybourn Avenue, Chicago, IL
60614, 312-975-2700.
2
<PAGE> 88
THE COMPANY
The Company was organized as a Delaware corporation in 1953. Upon its
organization, it succeeded to the business of Cotter & Company, an Illinois
corporation organized in 1948. The Company's principal executive offices are
located at 2740 North Clybourn Avenue, Chicago, Illinois 60614, telephone number
312-975-2700.
The Company is a Member-owned wholesaler of hardware, variety and related
merchandise. It is the largest wholesaler of hardware and related items in the
United States. The Company also manufactures paint, paint applicators, outdoor
power equipment, heaters and hardware related products. For reporting purposes,
the Company operates in a single industry as a Member-owned wholesaler
cooperative.
The Company serves approximately 7,300 True Value(R) Hardware Stores
throughout the United States, including approximately 900 combination True
Value(R) Hardware and V&S Variety Stores(R) and 1,100 V&S Variety Stores(R).
Primary concentrations of Members exist in California (approximately 8%), New
York (approximately 7%), Illinois (approximately 6%), Pennsylvania and Texas
(approximately 5% each) and Michigan and Ohio (approximately 4% each).
CONSOLIDATED RATIO OF EARNINGS TO
FIXED CHARGES OF THE COMPANY
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR
- ----------------------------------------
1993 1992 1991 1990 1989
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.73 2.73 2.96 2.89 3.41
</TABLE>
<TABLE>
<CAPTION>
FOR THE THIRTY-NINE WEEKS ENDED
- -------------------------------
OCTOBER 1, OCTOBER 2,
1994 1993
- ---------- ----------
<S> <C>
2.79 2.92
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by fixed charges. Fixed charges
consist of interest expense and the portion of rental expense deemed to
represent interest expense.
USE OF PROCEEDS
The Notes will be exchanged for certain maturing Promissory Notes which are
not eligible for renewal as Promissory Notes. The Company will thus not realize
any cash proceeds as a result of the Offer.
3
<PAGE> 89
GENERAL
The Program is designed to provide Investors with a convenient means of
maintaining their invested funds directly with the Company. The Notes will be
issued to Investors in denominations reflecting the face value of the maturing
Promissory Notes held by each Investor at December 31, 1994. The Promissory
Notes were originally issued as a part of the Company's annual patronage
dividend to its Members.
NOTE TERMS
The Notes will be issued January 1, 1995 and will be offered in two-year
terms maturing December 31, 1996 (the "Two-Year Notes"); in three-year terms
maturing December 31, 1997 (the "Three-Year Notes"); and in four-year terms
maturing December 31, 1998 (the "Four-Year Notes").
INTEREST RATE
The Two-Year Notes will bear interest at 7.00% per annum. The Three-Year
Notes will bear interest at 7.37% per annum. The Four-Year Notes will bear
interest at 7.61% per annum.
Investors will have the option to elect to receive interest payments on a
semi-annual basis, on June 30 and December 31, or to have the interest payments
added to the Note principal on these dates, resulting in compounded interest
calculations. Interest is calculated on a 365 day year. Interest payments and
principal at maturity will be paid by check.
The Investor can change the interest payment option between paid or
reinvested by notifying the Agent Bank in writing.
TYPES OF ACCOUNTS
Investors may hold ownership of the Notes in one of the following four
types of accounts: Single Tenancy, Joint Tenancy with Right of Survivorship,
Tenancy by Custodian (under the Uniform Gifts to Minors Act) and Living Trust.
The Notes are not transferable and may not be pledged as collateral for any debt
of the Investor.
If an Investor's legal name changes, Form W-9 and a signature guarantee
will be needed to change the name of the Investor.
These Notes cannot be held by a retirement savings plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended.
ACCOUNT INFORMATION
For current Account Information, Investors may call toll-free 800-507-9000.
4
<PAGE> 90
HOW TO INVEST
The Notes will be offered through a mailing to all Offerees. This mailing
will include this Prospectus, the Program Description, and an application form
to be returned to the Company. The application form will include the Investors
registration form, which allows the Investors to exchange their maturing
Promissory Notes for either Two-Year Notes, Three-Year Notes, or Four-Year
Notes. By signing and returning the application, an Investor shall consent to be
bound by the terms of the Program as described in the Program Description, as
amended from time to time by the Company. Upon receipt of the application from
the Investor, the Investor's maturing Promissory Notes will be exchanged for the
Notes on January 1, 1995. THIS COMPLETED APPLICATION MUST BE RECEIVED BY THE
COMPANY ON OR BEFORE DECEMBER 2, 1994.
HOW TO REDEEM
The Notes may be redeemed prior to maturity subject to a penalty (the
"Penalty") consisting of the loss of all interest accrued from the first day of
the interest period during which early redemption is demanded. The Penalty can
be minimized by requesting early redemption immediately following an interest
payment date.
Investors may not transfer ownership of the Notes. In cases of probate or
court decree, the Notes will be redeemed and will be subject to Penalty. The
Investors will not be able to break the Notes into smaller denominations at any
time during the life of the Notes.
CERTAIN TERMS OF THE NOTES
TRUST INDENTURE
The Notes shall be issued under an indenture (the "Indenture"), between the
Company and Bank of America Illinois (the "Trustee"). The statements under this
heading are subject to the detailed provisions of the Indenture, a copy of which
will be provided without charge to each person to whom a Prospectus is
delivered, upon written or oral request. Such request should be directed to
Kerry J. Kirby, Vice President and Chief Financial Officer, Cotter & Company,
2740 North Clybourn Avenue, Chicago, IL 60614, 312-975-2700.
NOTE SUBORDINATION
The Notes will be subordinated in right of payment to any and all current
indebtedness of the Company and to future indebtedness of the Company as
specified by the Company.
OPTIONAL REDEMPTION BY THE COMPANY
The Notes will be redeemable at the Company's option, in whole or in part,
at 100% of the principal amount thereof, plus accrued and unpaid interest to the
redemption date. Any partial redemption of the entirety of the Notes will be
effected by lot or pro rata or by any other method that is deemed fair and
appropriate by the Trustee.
Any Notes redeemed at the Company's option, plus accrued and unpaid
interest thereon to the date of redemption, will be paid by check to the
Investor. Interest on all redeemed Notes shall cease to accrue on and after the
effective date of redemption.
5
<PAGE> 91
AGENT BANK AND ADMINISTRATION
The Company has engaged the Northern Trust Bank of Chicago as the Agent
Bank to service the Program. The Agent Bank will send the following to the
Investor:
-- Initial Conversion confirmation to be sent January 2, 1995,
-- Quarterly statements listing all notes held and all transaction
information on a year-to-date basis,
-- Advance maturity notices with renewal forms, and
-- Form 1099INT.
Additionally, the Agent Bank will provide an automated voice response
system, 800-507-9000, to allow Investors to call and obtain aggregate account
and individual Note information. The Agent Bank will also process early
redemption requests, respond to inquiries and provide to Investors information
on Notes and accounts. Additional or other inquiries from Investors to the Agent
Bank will be forwarded to the Company.
TAXES
The Program is not qualified under Section 401(a) of the Internal Revenue
Code. Accordingly, all interest credited to the Notes or paid in any taxable
year is reportable by the Investor as taxable income for Federal income tax
purposes. No part of the taxable interest is excludable from taxable income.
The December statement to each Investor from the Agent Bank each year will
state the full amount reportable as taxable income. The Agent Bank also will
file tax information returns as required by law. State and local income taxes
and tax reporting also may be applicable. Investors are individually responsible
for complying with applicable Federal, state, and local tax laws and should
consult their individual tax advisors with respect to tax consequences which may
be applicable to their particular situation.
LEGAL OPINION
The legality of the Notes will be passed upon for the Company by Daniel T.
Burns, Vice President and General Counsel of the Company.
INDEPENDENT AUDITORS
The consolidated financial statements of the Company, included in the
Company's Annual Report on Form 10-K for the year ended January 1, 1994, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference.
6
<PAGE> 92
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information................... 2
Documents Incorporated by Reference..... 2
The Company............................. 3
Consolidated Ratio of Earnings to Fixed
Charges of the Company.................. 3
Use of Proceeds......................... 3
General................................. 4
Note Terms.............................. 4
Interest Rate........................... 4
Types of Accounts....................... 4
Account Information..................... 4
How to Invest........................... 5
How to Redeem........................... 5
Certain Terms of the Notes.............. 5
Trust Indenture......................... 5
Note Subordination...................... 5
Optional Redemption by the Company...... 5
Agent Bank and Administration........... 6
Taxes................................... 6
Legal Opinion........................... 6
Independent Auditors.................... 6
</TABLE>
$30,000,000
COTTER & COMPANY
VARIABLE DENOMINATION
FIXED RATE
REDEEMABLE TERM NOTES
FOR INFORMATION CONCERNING
THE COTTER & COMPANY
INVESTMENT PROGRAM,
WRITE TO:
THE COTTER & COMPANY INVESTMENT PROGRAM
P.O. BOX 75409
CHICAGO, ILLINOIS 60675-5409
OR CALL:
800-507-9000
<PAGE> 93
COTTER & COMPANY INVESTMENT PROGRAM DESCRIPTION
General Program Description
The notes offered through the Cotter & Company Investment Program (the
"Notes") are being made available to current holders of Cotter &
Company Promissory Subordinated Notes maturing on December 31, 1994
who are no longer holders of Class A Common Stock in Cotter & Company.
These Promissory Notes were originally included as a part of the
Cotter & Company's annual distribution of its cooperative patronage
dividend.
The Cotter & Company Investment Program is designed to offer those
Promissory Subordinated Noteholders an investment alternative. The
Notes will be issued for two, three and four year periods. The Notes
will be issued in the same denominations as the face value of the
maturing Promissory Subordinated Notes.
Cotter & Company reserves the right to modify, withdraw, or
cancel the offer made hereby at any time.
Communications with Cotter & Company are effective only upon actual
receipt by Cotter & Company.
In acting upon or rejecting any request by an Investor or by a
purported Investor, Cotter & Company may conclusively presume the
accuracy of any statements or representations contained in the
Application submitted by the Investor.
Interest Rate
The rate of interest on the Notes was set by Cotter & Company. The
two-year Notes, to be issued January 1, 1995 and maturing December 31,
1996, will bear annual interest at 7.00%. The three-year Notes, to be
issued January 1, 1995 and maturing December 31, 1997, will bear
annual interest at 7.37%. The four-year Notes, to be issued January
1, 1995 and maturing December 31, 1998, will bear annual interest at
7.61%
1
<PAGE> 94
Investors will have the option to elect to receive interest payment on
a semi-annual basis, on June 30 and December 31, of each year, or to
have the interest payments added to the Note principal on these dates,
resulting in compounded interest calculations. Interest is calculated
on a 365 day year actual/actual basis. Interest payments and
principal at maturity will be paid by check.
Each investor in a Note ("Investor") will have the ability to change
the option on the way interest is paid or reinvested by notifying the
Agent Bank at:
The Cotter & Company Investment Program
P. O. Box 75409
Chicago, Illinois, 60675-5409
Types of Accounts
The Notes must be registered in one of the four categories listed
below and investment applications must include documentation as
listed.
- Single Tenancy - Social Security or Federal Tax
Identification Number, Signature on the Application.
- Joint Tenancy with Right of Survivorship - Social Security
or Federal Tax Identification Numbers, Signatures of all
parties on the Application.
- Tenancy by Custodian (Uniform Gift to Minor Act) - Social
Security or Federal Tax Identification Number and signatures
of Guardian(s) on the Application.
(For a custodial account, the minor is considered the
beneficial owner of the account. An adult Custodian manages
the account until the minor comes of age as specified in
the Uniform Gift to Minors Act in the Custodian's state of
residence. The Custodian's signature is required for all
transactions.)
- Living Trust - Copy of Living Trust, Social Security
Number or Federal Tax Identification Number, Signatures on
the Application
These Notes cannot be held by a retirement savings plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended.
2
<PAGE> 95
Note Characteristics
The Notes are not transferable to any other party in any fashion.
Assignment of the Notes is not permitted.
Pledging of Notes is not permitted.
Notes can not be split into smaller denominations.
Cotter & Company may comply with any levies, garnishments and court
orders at its sole and absolute discretion.
A Note is not equivalent to a deposit or other bank account
and is not subject to the protection of the Federal Deposit Insurance
Corporation or any other insurance. The Program is not subject to the
requirements of the Investment Company Act of 1940 (including
diversification of Investments) or the Employee Retirement Income
Security Act of 1974.
There are no up front "sales load", management or redemption fees.
Taxes
The Program is not qualified under Section 401(a) of the Internal
Revenue Code. Accordingly, all interest credited to the Notes or paid
in any taxable year is reportable by the registered holder as taxable
income for Federal income tax purposes. No part of the taxable
interest is excludable from taxable income.
The interest income information needed to prepare tax returns will be
sent to the taxpayer shortly after the end of each calendar year on
FORM 1099INT.
Under Federal tax law, Noteholders must provide Cotter & Company with
a correct Social Security Number or other Taxpayer Identification
Number, a certification that the number provided is correct and a
certification that the Noteholder is not subject to backup
withholding. This information is to be included on Form W-9, which is
included in the Cotter & Company Investment Program Application and
Agreement Form. Failure to furnish the correct Social Security or
Taxpayer Identification Number or to so certify will result in 31% of
interest paid being withheld and paid to the IRS. In addition, the
taxpayer may be subject to a penalty imposed by the IRS if he/she
fails to provide
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<PAGE> 96
his/her/it's correct Social Security or Taxpayer ID number or makes an
incorrect certification.
Applicable Law
This Program shall be enforced and interpreted under the laws of the
State of Illinois. Any controversy or claims arising out of or
relating to this offering, or any breach thereof, including, without
limitation, any claim that this offering or any portion thereof is
invalid, illegal or otherwise voidable, shall be submitted to
arbitration before and in accordance with the rules of the American
Arbitration Association or some extra judicial or other arbitration or
dispute resolution process agreed to by the parties and judgement upon
the award may be entered in any court having jurisdiction thereof.
The location of the arbitration proceedings shall be at the American
Arbitration Association office geographically or physically located
closest to the Investor's domicile, unless otherwise agreed upon in
writing by the parties.
Agent Bank
Cotter & Company has engaged the Northern Trust Bank of Chicago as the
Agent Bank to service this Program. The Agent Bank will send the
following to the Investor:
Initial Conversion confirmation to be sent January 2, 1995.
Confirmation of new investment.
Quarterly statements listing all Notes held and all
transaction information on a year-to-date basis.
Advance maturity notices with renewal forms.
Form 1099INT.
Semi-annual interest check with amounts for multiple Notes (if
the Investor owns more than one) combined.
Northern Trust is not a co-principal of the Cotter & Company
Investment Program and no investment dollars will be held by Northern
Trust.
Additionally, the Agent Bank provides an automated voice response
system (800-507-9000) to allow Investors to call and obtain aggregate
account and individual Note information. The
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<PAGE> 97
Agent Bank will also set up new accounts and notes, process early
redemption requests, respond to inquiries and provide to Investors
information on Notes and accounts. Additional or other inquiries from
Investors will be forwarded to Cotter & Company.
Investments in a Note will be represented by a Program account (a
"Cotter & Company Investment Program Account" or "Account")
established for the Investor by the Agent Bank. The Notes will not be
represented by a certificate or any other instrument evidencing the
Cotter & Company's indebtedness.
Each Investor will be assigned a new account number and Personal
Identification Number (P.I.N.) for telephone access to their Account
information.
All investments in the Notes are investments in the securities of
Cotter & Company and are not an obligation of the Northern Trust, the
Agent Bank.
Communications with the Agent Bank will be deemed to be received by
the Agent Bank when received by the Agent Bank's personnel with the
responsibility for action on the contents thereof.
In acting upon or rejecting any request by an Investor or by a
purported Investor, the Agent bank may conclusively presume the
accuracy of any statements or representations contained in the
Application submitted by the Investor.
Trustee
The Notes are issued under an Indenture between Cotter & Company and
Bank of America Illinois of Chicago. The Investment Program
Application accompanying this Program Description and incorporated by
reference herein erroneously identifies the Trustee as Harris Bank.
Redemption by the Noteholder
Investors will have the option of redeeming a Note at any time. In
all cases of early redemption, the penalty ("Penalty") will be the
loss of interest accrued from the first day of the interest period to
the redemption date. There will be no transfer of ownership under any
circumstances.
In cases of probate or court decree the Note(s) will have to be
redeemed and will be subject to Penalty. Penalty can be minimized by
requesting early redemption immediately following
5
<PAGE> 98
an interest payment date. The Investors will not be able to break
the Note into smaller denominations at any time during the life of
the Note.
Notes may be redeemed by writing to:
The Cotter & Company Investment Program
P. O. Box 75409
Chicago, Illinois, 60675-5409
All signatures of registered owners are required. Checks will be sent
only to Noteholders or Noteholders' registered account address.
Redemptions will be posted by the Agent Bank no later than the
business day following the business day of the receipt of the
redemption request.
Redemption by Cotter & Company
The Notes will be redeemable at the Company's option, in whole or in
part, at 100% of the principal amount thereof, plus accrued and unpaid
interest to the redemption date. Any partial redemption of the
entirety of the Notes will be effected by lot or pro rata or by any
other method that is deemed fair and appropriate by the Trustee. The
Company may also, at any time at its option, redeem one or more
individual Notes. Any partial redemption of the entirety of the Notes
will be effected by lot or pro rata or by any other method that is
deemed fair and appropriate by the Trustee.
The Notes being redeemed by Cotter & Company, plus accrued and unpaid
interest thereon to the date of redemption, will be paid by check to
the registered holder of the Note. Interest on the redeemed amount
shall cease to accrue on and after the effective date of redemption.
Account Information
For current Account Information, Investors may call toll-free
800-507-9000.
Note Subordination
The Notes will be subordinated in right of payment to any and all
current indebtedness of the Company and to future indebtedness of the
Company as specified by the Company.
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<PAGE> 99
Additional Information
A W-9 and signature guarantee will be needed for all title and trust
changes, such as name changes due to marriage or adoption. The W-9
portion of the application must be completed.
Applications must be received by December 2, 1994.
The application form must be signed by all parties listed as
owners of the current Promissory Subordinated Notes on file with
Cotter & Company.
Any incomplete application will result in the Cotter & Company
Promissory Subordinated Note being redeemed on December 31, 1994.
The Prospectus for this offering and Cotter & Company Investment
Program Application and Agreement Form mailed with this Program
Description are incorporated herein by reference. Additional copies
of the Prospectus may be obtained by contacting Cotter & Company at
312-975-4135.
Any communications to Cotter & Company must be sent to:
Cotter & Company
Attn: John Moynihan
2740 North Clybourn
Chicago, Ill 60614
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<PAGE> 100
COTTER & COMPANY
INVESTMENT PROGRAM APPLICATION
AND AGREEMENT FORM
Current Information on file
- - Name 1 (PRIMARY)
- - Name 2 (JOINT TENANCY PARTNER 1)
- - Registered Address
- - City, State, and Zip Code
- - Telephone
- - Name 3 (JOINT TENANCY PARTNER 2)
- - Name 4 (JOINT TENANCY PARTNER 3)
- - Type of Account
- - IRS Backup Withholding
PLEASE ENTER ALL OF THE FOLLOWING INFORMATION BELOW:
PLEASE NOTE THAT FILLING OUT THE W-9 FORM WILL UPDATE THE ACCOUNT INFORMATION
FOR CURRENT MATURING AND FUTURE NOTES. W-9 information must be completed or
application will not be processed.
Telephone Number: / / / / / / / / / / / / /
Type of Account: (Fill in one) Supporting Documents Required:
/ / INDIVIDUAL OWNERSHIP W-9 information required
/ / JOINT TENANCY WITH W-9 information required
RIGHTS OF SURVIVORSHIP (All applicants information is
required)
/ / TENANCY OF CUSTODIAN W-9 information required
(UNDER THE UNIFORM
GIFT TO MINOR ACT)
/ / LIVING TRUST W-9 information required
TRUST AGREEMENT must be enclosed
with application
Please read the reverse side and all account owners must sign this application.
<PAGE> 101
Instructions for Completing Payer's Request for Taxpayer Identification
Certification:
Under Federal tax law, you must provide Cotter & Company with your correct
Social Security Number or other Taxpayer ID Number, a certification that the
number provided is correct and a certification that you are not subject to
backup withholding. Failure to furnish your correct Social Security or
Taxpayer ID Number or to so certify will result in 31% of interest paid to your
account being withheld and paid to the IRS. In addition, you may be subject
to a penalty imposed by the IRS if you fail to provide your correct Social
Security or Taxpayer ID Number of if you make an incorrect certification.
Application
I/We request the rollover of the Cotter & Company Patronage Dividend notes as
I/we have identified on the annual renewal form with regards to the two-,
three- and/or four-year term(s) and semi-annual interest compounding or
payment, into the Cotter & Company Investment Program.
I/We agree to all terms and conditions of the Cotter & Company Investment
Program as set forth in the Program Description. I/We acknowledge that I/we
have received and reviewed the Program Description, Prospectus and have
reviewed and approved all schedules including renewal addendum and IRS W-9
Taxpayer and Certification form. I/We agree that Cotter & Company may amend
the Program Description from time to time and that such amendments shall be
binding upon me/us.
I/We agree that Cotter & Company may comply with any levys, garnishments and
court orders at the sole and absolute discretion of Cotter & Company.
I/We jointly and severally hereby agree to defend, indemnify, reimburse,
exonerate, save and hold harmless Cotter & Company and its agents for, from and
against any and all losses, damages, claims, demands, and expenses including
reasonable attorneys fees of any and every nature actually or allegedly arising
in whole or in part out of the written information, tax identification number,
certifications, notice or instructions provided by me/us or out of my/our bad
faith, negligence, willful misconduct, strict liability of breach of this
agreement.
I/We agree that this agreement may be terminated by Cotter & Company at any
time upon Cotter & Company's written notice mailed to me/us at the address
stated herein.
I/We understand that Cotter & Company Investment Program is administered by
the Northern Trust Company on behalf of Cotter & Company. The Northern Trust
Company is not a co-principal of the Cotter & Company Investment Program and no
investment dollars will be held by the Northern Trust Company. Harris Bank is
the acting indenture trustee of the Cotter & Company Investment Program
pursuant to a written trust indenture between Cotter & Company and Harris Bank.
Please Primary
Sign Here, Signature> Date>
Co-Applicant
Signature> Date>
Co-Applicant
Signature> Date>
Co-Applicant
Signature> Date>
Written Redemption: Subject to the terms of the Program Description as amended,
you may redeem any or all of your account by writing: Cotter & Company
Investment Program, Investor Services Attn: Agent of Issuer, P.O. Box 75409,
Chicago, IL 60675-5409. All signatures of registered owners are required.
Checks will be sent only to your registered account address.
Custodial Account: A minor is the beneficial owner of the account. An adult
Custodian manages the account until the minor comes of age as specified in
the Uniform Gift to Minors Act in the Custodian's state of residence.
Custodian's signature is required for all transactions.
Additional copies of the Program Description and Prospectus are available upon
request by writing to: Cotter & Company Investment Program, Investor Services
Attn: Agent of Issuer, P.O. Box 75409, Chicago, IL 60675-5409.
This form is intended for the sole use of investors by the agent of the Cotter
& Company Investment Program. Incomplete forms, missing supporting
documentation or failure to return the form for renewal of note or notes
maturing December 31, 1994 will result in redemption and payment distribution.
Summary of Key Features of the Program include, (full Program provisions are
detailed in the Program Description and Prospectus)
- Investments in the Cotter & Company Investment Program
cannot be pledged.
- Note denominations cannot be altered once purchased.
- Ownership cannot be transferred or changed.
- Subordination; it is a condition of the obligation of the Company,
and the holder by the acceptance hereof agrees, that the
indebtedness evidenced by and accruing on notes to be purchased
shall be and at all times remain junior and subordinate in right of
payment to any and all indebtedness of the Company and to other
indebtedness of the Company as specified by its Board of Directors.
- Cotter & Company retains the sole right to call any and all Cotter
& Company Investment Program Notes at any time.
<PAGE> 102
[LOGO]
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/ / / / / / / / / /
/ / / / / / / / / /
/ / / / / / / / / /
/ / / / / / / / / /
DARKEN INSIDE OVALS ONLY /X/
I/We agree to all terms and conditions of the Cotter & Company Investment
Program as set forth in the Program Description. I/We acknowledge that I/we
have received and reviewed the Program Description and Prospectus. I/We agree
that Cotter & Company may amend the Program Description from time to time and
that such amendments shall be binding upon me/us.
X / / / / / / /
----------------------------------------
PRIMARY SIGNATURE REQUIRED FOR VALIDATION DATE (MONTH/DAY/YEAR)
<PAGE> 103
EXHIBIT T3F
Reconciliation and Tie between Trust Indenture Act of 1939 and Indenture
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST INDENTURE
ACT SECTION INDENTURE SECTION ACT SECTION INDENTURE SECTION
- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C>
Section 310 (a)(1) 609 Section 316 (a) 101
(a)(2) 609 (a)(a)(A) 502,512
(a)(3) Not Applicable (a)(1)(B) 513
(a)(4) Not Applicable (a)(2) Not Applicable
(a)(5) 609 (b) 508
(b) 608 and 610 (c) 104(5)
Section 311 (a) 613(1) Section 317 (a)(1) 503
(b) 613(2) (a)(2) 504
(b)(2) 703(1)(b), 703(2) (b) 903
Section 312 (a) 701, 702(1) Section 318 (a) 107
(b) 702(2)
(c) 702(3)
Section 313 (a) 703(1)
(b) 703(2)
(c) 703(1), 703(2)
(d) 703(3)
Section 314 (a)(1) 704
(a)(2) 704
(a)(3) 704
(a)(4) 904
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
Section 315 (a) 601(1)
(b) 602, 703(1)(f)
(c) 601(2)
(d) 601(3)
(d)(1) 601(1)(a)
(d)(2) 601(3)(b)
(d)(3) 601(3)(c)
(e) 514
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
