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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)
8600 West Bryn Mawr Avenue, Chicago, IL 60631-3505
--------------------------------------------------------
(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
TITLE OF CLASS AMOUNT
Variable Denomination Floating Rate Demand Notes $50,000,000
Approximate date of proposed public offering: June 1, 1997
Name and address of agent for service: Kerry J. Kirby, Vice President and Chief
Financial Officer, Cotter & Company, 8600 West Bryn Mawr Avenue, Chicago,
Illinois 60631-3505
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: Not
Applicable.
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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:
Cotter Acceptance Co., Inc., an Illinois corporation, and its wholly-owned
subsidiary:
Warner True Value(R) Hardware, Inc., a Minnesota corporation
Cotter Canada Hardware and Variety Company Inc., a Manitoba corporation
Cotter Real Estate Agency, Inc., an Illinois corporation
Cotter Trucking, Inc., an Illinois corporation
General Paint & Manufacturing Company (1), an Illinois corporation
COTTER & COMPANY AFFILIATES
Cotter Canada Hardware and Variety Cooperative Inc.(2), a Canadian corporation
True Value(R) De Mexico, S.A. de C.V.(3), 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.
NAME ADDRESS OFFICE
- ---- ------- ------
Daniel A. Cotter* 8600 West Bryn Mawr Ave. President, Chief Executive
Chicago, IL 60631-3505 Officer & Director
Karen M. Agnew 1224 W. Van Buren Vice President
Chicago, IL 60607-2819
- ------------
(1) Formerly Atlas Power Equipment Co. and Wheeler Manufacturing Co.,
also formerly Cotter Merchandising & Sales, Inc.
(2) Partially-owned subsidiary of Cotter Canada Hardware and Variety
Company, Inc.
(3) Majority-owned by Cotter & Company, minority owned by Cotter
Acceptance Co., Inc.
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Daniel T. Burns 8600 West Bryn Mawr Ave. Vice President, General
Chicago, IL 60631-3505 Counsel & Secretary
Danny R. Burton 8600 West Bryn Mawr Ave. Vice President
Chicago, IL 60631-3505
Robert F. Johnson 8600 West Bryn Mawr Ave. Vice President
Chicago, IL 60631-3505
Kerry J. Kirby 8600 West Bryn Mawr Ave. Vice President,
Chicago, IL 60631-3505 Treasurer, and Chief
Financial Officer
Paul Lemerise 8600 W. Bryn Mawr Ave. Vice President
Chicago, IL 60631-3505
Robert M. Liebgott 8600 West Bryn Mawr Ave. Vice President
Chicago, IL 60631-3505
Robert Ostrov 8600 West Bryn Mawr Ave. Vice President
Chicago, IL 60631-3505
John P. Semkus 8600 West Bryn Mawr Ave. Vice President
Chicago, IL 60631-3505
Joe S. Blagg* P.O. Box 1309 Director
Brownwood, TX 76804
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
William M. Halterman* 34-36 S. Main Street Director
P. O. Box 775
Petersburg, WV 26847
Jerrald T. Kabelin* 1010 1/2 Lincolnway Director
LaPorte, IN 46350
Robert J. Ladner* P.O. Box C Director and Chairman of
Granite Falls, MN 56241 the Board
John F. Lottes, III 2 E. Ste. Maries Street Director
Perryville, MO 63775
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Kenneth M. Noble Midtown Shopping Center Director
P.O. Box 1209
South Glens Falls, NY 12803
Richard L. Schaefer* 222 W. High Street Director
Bryan, OH 43506
George V. Sheffer 2909 Alveria Drive Director
Carbondale, IL 62901
Dennis A. Swanson* 29595 W. Highway 40 Director
Steamboat Springs, CO 80487
John M. West, Jr.* 975 S. McCall Road Director
Englewood, FL 34223
____________________________
It is expected that effective July 1, 1997, ServiStar Coast to Coast
Corporation will merge with and into the applicant which will thereafter be
known as TruServ Corporation. The individuals marked above with an asterisk and
the following persons have been chosen to serve as directors of TruServ
Corporation after the effectiveness of the merger.
Jay Feinsod 43 North Main Street Director
Port Chester, NY 10573
Dave Guthrie 4811 South High School Rd. Director
Indianapolis, IN 46241
William Hood 132 South Washington Director
Emmett, ID 83617
James Howenstine 1480 Winchester Rd. Director
Decatur, IN 46733
Peter G. Kelly State and Parker Street Director
Newburyport, MA 01950
Paul E. Pentz 1 ServiStar Way Director
East Butler, PA 16029
John Wake, Jr. 11240 Patterson Ave. Director
Richmond, VA 23233
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Barbara B. Wilkerson P.O. Box 11294 Director
Charlotte, NC 28220
Messrs. Cotter, Pentz and Kirby are expected to serve as CEO, President
and Executive Vice President of TruServ, respectively. In addition, Donald J.
Hoye and Eugene J. O'Donnell, both of whose addresses are 1 ServiStar Way, East
Butler, PA 16029, are expected to act as Executive Vice Presidents of TruServ.
5. Principal owners of voting securities. Furnish the following
information as 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 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 April 30, 1997:
COL. A COL. B COL. C
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
Class A Common Stock 100,000 shares 48,100 shares
Class B Common Stock 2,000,000 shares 1,098,408 shares
Promissory(Subordinated) Unlimited $216,120,181
and Instalment Notes
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(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.
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 and continuance for a
period of 20 days; 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 a notice to indenture security holders: the trustee shall
notify 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 proceeds
from the sale of the Notes will be made available for general working
capital purposes, including the purchase of merchandise for resale to
Members.
(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 provision; 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 payment; or the applicant paying all other
sums payable under the Indenture by the applicant.
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(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 8, consecutively.
(b) The statement of eligibility and qualification of each trustee under
the indenture to be qualified: see Form T-1 (filed herewith and
incorporated herein by reference).
(c) The following exhibits in addition to those filed as a part of the
statement of eligibility and qualification of each trustee:
Exhibit T3A. Certificate of Incorporation of applicant.
Incorporated herein by reference to Exhibit 3-A to the applicant's
Annual Report on Form 10-K for the year ended January 1, 1994.
Exhibit T3B. By-laws of applicant. Incorporated herein by reference
to Exhibit 3-B to the applicant's Annual Report on Form 10-K for
the year ended January 1, 1994.
Exhibit T3C. Indenture to be qualified. (Filed herewith)
Exhibit T3D. Not applicable.
Exhibit T3E. Prospectus, applications and related materials.
Incorporated by reference to the Prospectus and Exhibits 99-A and
99-B contained in Applicant's Registration Statement on Form S-2,
filed May 8, 1997 (File No. 333-______).
Exhibit T3F. 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. See Exhibit
TC3 hereto.
Exhibit T3G. Trustee's Statement of Eligibility under the Trust
Indenture Act of 1939.
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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 8th day of May,
1997.
(Seal) Cotter & Company
By: /s/ Kerry J. Kirby
----------------------------
Kerry J. Kirby, Vice President,
Treasurer, Chief
Financial Officer and
Chief Accounting Officer
Attest: By: /s/ Daniel T. Burns
----------------------------
Daniel T. Burns
Secretary
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EXHIBIT T3C
COTTER & COMPANY
Issuer
and
FIRST TRUST NATIONAL ASSOCIATION
Trustee
Indenture
Dated as of May 8, 1997
Variable Denomination Floating Rate
Demand Notes
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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)(1)(A) 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) 613(2)(b), 703(2) (b) 903
Section 312 (a) 701, 702(1) Section 318 (a) 107
(b) 702(2)
(c) 702(2)(c)
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)(g)
(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.
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TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
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PAGE
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SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Agent Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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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SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . 13
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, Reconciliation and Tie. . . . . . . . . 16
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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>
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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 . . . . . . 18
SECTION 305. Redemption at Option of the Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 403. Repayment by Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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>
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SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . . . . 33
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 613. Preferential Collection of Claim Against Company. . . . . . . . . . . . . . . . . . 35
</TABLE>
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
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SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 702. Preservation of Information; Communications to Holders. . . . . . . . . . . . . 40
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures without Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 802. Supplemental Indentures with Consent of Holders. . . . . . . . . . . . . . . . 44
SECTION 803. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . 45
SECTION 804. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 805. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE NINE
COVENANTS
SECTION 901. Administration of Program; Payment of Principal and Interest. . . . . . . . . . 45
SECTION 902. Maintenance of Security Register, Maintenance of Office or Agency. . . . . . . 46
SECTION 903. Money for Securities Payments to Be Held in Trust. . . . . . . . . . . . . . . 46
SECTION 904. Certificate of Officers of the Company. . . . . . . . . . . . . . . . . . . . . 47
SECTION 905. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
7
<PAGE> 8
INDENTURE, dated as of May 8, 1997, 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 8600
West Bryn Mawr Avenue, Chicago Illinois, and First Trust National Association,
having its principal offices at 111 East Wacker Drive, Chicago, Illinois, a
national banking association duly organized and existing under the laws of the
United States of America, 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 floating rate demand 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,
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<PAGE> 9
except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
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.
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<PAGE> 10
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chief Executive Officer, 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 an 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 Chief Executive
Officer, 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.
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<PAGE> 11
"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 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 TruServ Variable Denomination Floating Rate Demand
Note 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.
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<PAGE> 12
"Redemption Date", when used with respect to any Security to be redeemed,
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 Floating 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 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 the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
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<PAGE> 13
"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 904) 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.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an
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<PAGE> 14
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 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
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<PAGE> 15
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
(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
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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.
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
16
<PAGE> 17
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 in a principal amount not to exceed the amount of Securities as
stated in the Program's annual prospectus.
SECTION 202. Payment.
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<PAGE> 18
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 will 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, together with accrued and unpaid interest to the date
fixed for redemption. Interest on the redeemed amount shall cease to accrue on
and after the effective date the redeemed amount shall have become due and
payable.
SECTION 304. Redemption of Securities if Holder is Not Eligible to
Participate in the Program.
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<PAGE> 19
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 held in an Account not meeting guidelines established by the TruServ
Investment Program Committee. 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 in full or in part 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 or partial redemption of a Security by
written demand to 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 payment, 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 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.
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<PAGE> 20
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, and continuance of such default for a
period of twenty (20) days; 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 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
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<PAGE> 21
the then current provisions and rules and regulations of the
Program, or the payment cannot be made in accordance with the
then currentprovisions 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 Officer's Certificate 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:
(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
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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 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
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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 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
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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 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
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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 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
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(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 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
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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 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.
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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.
(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
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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 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.
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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 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
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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.
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
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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
Trust Indenture Act during the period of time provided for therein. Nothing
herein shall 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
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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.
(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
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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
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
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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 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 (3) 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
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(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 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 (3) 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.
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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 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,
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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;
(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;
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(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 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)
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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 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
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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 held accountable by reason of mailing
any material pursuant to a request made under Section 702.
SECTION 703. Reports by Trustee.
(1) Within sixty (60) days after May 15 of each year beginning with the
year 1998, 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
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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 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.
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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 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
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(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.
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
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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 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.
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(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.
(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.
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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.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
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
1998, the Company will file with the Trustee a certificate of the principal
executive officer, principal
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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 Section 902 or 903, 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, 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: /s/ Kerry J. Kirby
---------------------------
Vice President
FIRST TRUST NATIONAL ASSOCIATION
By: /s/ Melissa A. Rosal
---------------------------
Vice President
48
<PAGE> 49
STATE OF ILLINOIS
COUNTY OF COOK
On May 8, 1997, 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.
/s/ Diane Chrzastowski
----------------------
Notary Public
49
<PAGE> 50
STATE OF ILLINOIS
COUNTY OF COOK
On May 8, 1997, before me personally came Melissa A. Rosal, to me known, who,
being by me duly sworn, did depose and say that he is a Vice President of First
Trust National Association, 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.
/s/ Stacy Coleman
-----------------------
Notary Public
50
<PAGE> 1
EXHIBIT T3G
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION
305(B)(2)
----------------------
FIRST TRUST
NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
36-4046888
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
111 E. WACKER DRIVE, SUITE 3000 60601
CHICAGO, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
----------------------
G. M. CARROLL
FIRST TRUST NATIONAL ASSOCIATION
111 E. WACKER DRIVE, SUITE 3000
CHICAGO, ILLINOIS 60601
TELEPHONE (312) 228-9451
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------------
COTTER & COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2099896
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION IDENTIFICATION NO.)
8600 WEST BRYN MAWR AVENUE 60631-3505
CHICAGO,ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES OF
THE TRUSTEE:
AS OF APRIL 24,1997
<TABLE>
<CAPTION>
COL. B
COL. A AMOUNT
TITLE OF CLASS OUTSTANDING
--------------- ------------
<S> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION, IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING
INFORMATION:
(A) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER INDENTURE.
Not applicable by virtue of response to Item 13.
(B) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR THE CLAIM THAT
NO CONFLICTING INTEREST WITHIN THE MEANING OF SECTION 310(B)(1) OF THE
ACT ARISES AS A RESULT OF THE TRUSTEESHIP UNDER ANY SUCH OTHER
INDENTURE, INCLUDING A STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL
RANK AS COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER INDENTURE.
Not applicable by virtue of response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE TRUSTEE
IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE OR REPRESENTATIVE OF THE
OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON HAVING
ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable by virtue of response to Item 13.
1
<PAGE> 3
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
- ------- -------- ------------ -------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
- ------- -------- ------------ -------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED
BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE
TRUSTEE:
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
WHETHER
THE
SECURITIES
ARE VOTING
OR AMOUNT OWNED BENEFICIALLY OR PERCENT OF CLASS
TITLE OF NONVOTING HELD AS COLLATERAL SECURITY REPRESENTED BY AMOUNT
CLASS SECURITIES FOR OBLIGATIONS IN DEFAULT GIVEN IN COL. C
- ------- ---------- ----------------------------- ---------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
2
<PAGE> 4
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
- --------------- ----------- ---------------------- ----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
- --------------- ----------- ---------------------- ----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 11. OWNERSHIP OF HOLDINGS BY THE TRUSTEE OR ANY SECURITIES OF A PERSON
OWING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OR A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
- --------------- ----------- ---------------------- ----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
3
<PAGE> 5
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C
NATURE OF INDEBTEDNESS AMOUNT OUTSTANDING DATE DUE
- ---------------------- ------------------ --------
<S> <C> <C>
Not applicable by virtue of response to Item 13.
</TABLE>
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture.
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OR ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture. The trustee is a trustee under other
indentures under which securities issued by the obligor are outstanding.
There is not and there has not been a default with respect to the securities
outstanding under such other indentures.
ITEM 14. AFFILIATIONS WITH UNDERWRITERS.
If ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE OR THE TRUSTEES, DESCRIBE
EACH SUCH AFFILIATION.
Not applicable by virtue of response to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A copy of the Articles of Association of First Trust National
Association as now in effect, incorporated herein by reference to
Exhibit 1 to T-1; Registration No. 333-19025
2. A copy of the certificate of authority to commence business,
incorporated herein by reference to Exhibit 2 to T-1, Registration No.
33-64175.
3. A copy of the certificate of authority to exercise corporate trust
powers, incorporated herein by reference to Exhibit 3 to T-1,
Registration No. 33-64175.
4. A copy of the existing By-Laws of First Trust National Association
as now in effect filed herewith.
4
<PAGE> 6
5. Not applicable by virtue of response to Item 13.
6. The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, incorporated herein by reference of Exhibit 6 to
T-1; Registration No. 33-64175.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or examining
authority, filed herewith.
8. Not applicable.
9. Not applicable.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE
TRUSTEE, FIRST TRUST NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION
ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY
CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF CHICAGO, AND STATE
OF ILLINOIS, AS OF THE 24TH DAY OF APRIL, 1997.
First Trust National Association
By /s/ G. M. Carroll
-------------------------
G. M. Carroll
Vice President and Assistant Secretary
<PAGE> 7
EXHIBIT 4
FIRST TRUST
NATIONAL ASSOCIATION
BYLAWS
AS LAST AMENDED ON JULY 16, 1996
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meeting. The annual meeting of the shareholders, for
the election of directors and the transaction of other business, shall be held
at a time and place as the Chairman or President may designate. Notice of such
meeting shall be given at least ten days prior to the date thereof, to each
shareholder of the Association. If, for any reason, an election of directors is
not made on the designated day, the election shall be held on some subsequent
day, as soon thereafter as practicable, with prior notice thereof.
Section 1.2. Special Meetings. Except as otherwise specially provided by
law, special meetings of the shareholders may be called for any purpose, at any
time by a majority of the board of directors, or by any shareholder or group of
shareholders owning at least ten percent of the outstanding stock. Every such
special meeting, unless otherwise provided by law, shall be called upon not less
than ten days prior notice stating the purpose of the meeting.
Section 1.3. Nominations for Directors. Nominations for election to the
board of directors may be made by the board of directors or by any shareholder.
Section 1.4. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing. Proxies shall be valid only
for one meeting and any adjournments of such meeting and shall be filed with the
records of the meeting.
Section 1.5. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders unless otherwise provided by law. A majority of the votes cast
shall decide every question or matter submitted to the shareholders at any
meeting, unless otherwise provided by law or by the Articles of Association.
<PAGE> 8
ARTICLE II
Directors
Section 2.1. Board of Directors. The board of directors (hereinafter
referred to as the "board"), shall have power to manage and administer the
business and affairs of the Association. All authorized corporate powers of the
Association shall be vested in and may be exercised by the board.
Section 2.2. Powers. In addition to the foregoing, the board of directors
shall have and may exercise all of the powers granted to or conferred upon it by
the Articles of Association, the Bylaws and by law.
Section 2.3. Number. The board shall consist of a number of members to be
fixed and determined from to time by resolution of the board or the shareholders
at any meeting thereof, in accordance with the Articles of Association.
Section 2.4. Organization Meeting. The newly elected board shall meet for
the purpose of organizing the new board and electing and appointing such
officers of the Association as may be appropriate. Such meeting shall be held
on the day of the election or as soon thereafter as practicable, and, in any
event, within thirty days thereafter. If, at the time fixed for such meeting,
there shall not be a quorum present, the directors present may adjourn the
meeting until a quorum is obtained.
Section 2.5. Regular Meetings. The regular meetings of the board shall be
held, without notice, as the Chairman or President may designate and deem
suitable.
Section 2.6. Special Meetings. Special meetings of the board may be
called by the Chairman or the President of the Association, or at the request of
two or more directors. Each member of the board shall be given notice stating
the time and place of each such meeting.
Section 2.7. Quorum. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but fewer may
adjourn any meeting. Unless otherwise provided, once a quorum is established,
any act by a majority of those constituting the quorum shall be the act of the
board.
Section 2.8. Vacancies. When any vacancy occurs among the directors, the
remaining members of the board may appoint a director to fill such vacancy at
any regular meeting of the board, or at a special meeting called for that
purpose.
-2-
<PAGE> 9
ARTICLE III
Committees
Section 3.1. Advisory Board of Directors. The board may appoint persons,
who need not be directors, to serve as advisory directors on an advisory board
of directors established with respect to the business affairs of either this
Association alone or the business affairs of a group of affiliated organizations
of which this Association is one. Advisory directors shall have such powers and
duties as may be determined by the board, provided, that the board's
responsibility for the business and affairs of this Association shall in no
respect be delegated or diminished.
Section 3.2. Audit Committee. The board shall appoint an Audit Committee
which shall consist of at least two Directors. If legally permissible, the
board may determine to name itself as the Audit Committee. The Audit Committee
shall direct and review audits of the Association's fiduciary activities.
The members of the Audit Committee shall be appointed each year and shall
continue to act until their successors are named. The Audit Committee shall
have power to adopt its own rules and procedures and to do those things which
in the judgment of such Committee are necessary or helpful with respect to the
exercise of its functions or the satisfaction of its responsibilities.
Section 3.3. Executive Committee. The board may appoint an Executive
Committee which shall consist of at least three directors and which shall have,
and may exercise, all the powers of the board between meetings of the board or
otherwise when the board is not meeting.
Section 3.4. Other Committees. The board may appoint, from time to time,
committees of one or more persons who need not be directors, for such purposes
and with such powers as the board may determine. In addition, either the
Chairman or the President may appoint, from time to time, committees of one or
more officers, employees, agents or other persons, for such purposes and with
such powers as either the Chairman or the President deems appropriate and
proper.
Whether appointed by the board, the Chairman, or the President, any such
Committee shall at all times be subject to the direction and control of the
board.
Section 3.5. Meeting Minutes and Rules. An advisory board of directors
and/or committee shall meet as necessary in consideration of the purpose of
the advisory board of directors or committee, and shall maintain minutes in
sufficient detail to indicate actions taken or recommendations made; unless
required by the members, discussions, votes or other specific details need not
be reported. An advisory board of directors or a committee may, in
consideration of its purpose, adopt its own rules for the exercise of any of its
functions or authority.
-3-
<PAGE> 10
ARTICLE IV
Officers and Employees
Section 4.1. Chairman of the Board. The board may appoint one of its
members to be Chairman of the board to serve at the pleasure of the board. The
Chairman shall supervise the carrying out of the policies adopted or approved by
the board; shall have general executive powers, as well as the specific powers
conferred by these Bylaws; shall also have and may exercise such powers and
duties as from time to time may be conferred upon or assigned by the board.
Section 4.2. President. The board may appoint one of its members to be
President of the Association. In the absence of the Chairman, the President
shall preside at any meeting of the board. The President shall have general
executive powers, and shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the Office of President, or
imposed by these Bylaws. The President shall also have and may exercise such
powers and duties as from time to time may be conferred or assigned by the
board.
Section 4.3. Vice President. The board may appoint one or more Vice
Presidents who shall have such powers and duties as may be assigned by the board
and to perform the duties of the President on those occasions when the President
is absent, including presiding at any meeting of the board in the absence of
both the Chairman and President.
Section 4.4. Secretary. The board shall appoint a Secretary, or other
designated officer who shall be Secretary of the board and of the Association,
and shall keep accurate minutes of all meetings. The Secretary shall attend to
the giving of all notices required by these Bylaws to be given; shall be
custodian of the corporate seal, records, document and papers of the
Association; shall provide for the keeping of proper records of all
transactions of the Association; shall have and may exercise any and all other
powers and duties pertaining by law, regulation or practice, to the Secretary,
or imposed by these Bylaws; and shall also perform such other duties as may be
assigned from time to time by the board.
Section 4.5. Other Officers. The board may appoint, and may authorize
the Chairman or the President to appoint, any officer as from time to time may
appear to the board, the Chairman or the President to be required or desirable
to transact the business of the Association. Such officers shall exercise such
powers and perform such duties as pertain to their several offices, or as may be
conferred upon or assigned to them by these Bylaws, the board, the Chairman or
the President.
Section 4.6. Tenure of Office. The Chairman or the President and all
other officers shall hold office for the current year for which the board was
elected, unless they shall resign, become disqualified, or be removed. Any
vacancy occurring in the Office of Chairman or President shall be filled
promptly by the board.
-4-
<PAGE> 11
Any officer elected by the board or appointed by the Chairman or the
President may be removed at any time, with or without cause, by the affirmative
vote of a majority of the board or, if such officer was appointed by the
Chairman or the President, by the Chairman or the President, respectively.
ARTICLE V
Stock
Section 5.1. Shares of stock shall be transferable on the books of the
Association, and a transfer book shall be kept in which all transfers of stock
shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to such person's shares, succeed to all rights of the
prior holder of such shares. Each certificate of stock shall recite on its
face that the stock represented thereby is transferable only upon the books of
the Association properly endorsed.
ARTICLE VI
Corporate Seal
Section 6.1. The Chairman, the President, the Secretary, any Assistant
Secretary or other officer designated by the board, the Chairman, or the
President, shall have authority to affix the corporate seal to any document
requiring such seal, and to attest the same. Such seal shall be substantially
in the following form:
[FIRST TRUST CORPORATE SEAL]
ARTICLE VII
Miscellaneous Provisions
Section 7.1. Execution of Instruments. All agreements, checks, drafts,
orders, indentures, notes, mortgages, deeds, conveyances, transfers,
endorsements, assignments, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, guarantees, proxies and other instruments or
documents may be signed, countersigned, executed, acknowledged, endorsed,
verified, delivered or accepted on behalf of the Association, whether in a
fiduciary capacity or otherwise, by any officer of the Association, or such
employee or agent as may be designated from time to time by the board by
resolution, or by the Chairman or the President by written instrument, which
resolution or instrument shall be certified as in effect by the
-5-
<PAGE> 12
Secretary or an Assistant Secretary of the Association. The provisions of this
section are supplementary to any other provision of the Articles of Association
or Bylaws.
Section 7.2. Records. The Articles of Association, the Bylaws and the
proceedings of all meetings of the shareholders, the board, and standing
committees of the board, shall be recorded in appropriate minute books provided
for the purpose. The minutes or each meeting shall be signed by the Secretary,
or other officer appointed to act as Secretary of the meeting.
Section 7.3. Trust Files. There shall be maintained in the Association
files all fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.
Section 7.4. Trust Investments. Funds held in a fiduciary capacity
shall be invested according to the instrument establishing the fiduciary
relationship and according to law. Where such instrument does not specify the
character and class of investments to be made and does not vest in the
Association a discretion in the matter, funds held pursuant to such instrument
shall be invested in investments in which corporate fiduciaries may invest
under law.
Section 7.5. Notice. Whenever notice is required by the Articles of
Association, the Bylaws or law, such notice shall be by mail, postage prepaid,
telegram, in person, or by any other means by which such notice can reasonably
be expected to be received, using the address of the person to receive such
notice, or such other personal data, as may appear on the records of the
Association. Prior notice shall be proper if given not more than 30 days nor
less than 10 days prior to the event for which notice is given.
ARTICLE VIII
Indemnification
Section 8.1. The Association shall indemnify to the full extent
permitted by, and in the manner permissible under, the Articles of Association
and the laws of the United States of America, as applicable and as amended from
time to time, any person made, or threatened to be made, a party to any action,
suit or proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that such person is or was a director, advisory director,
officer or employee of the Association, or any predecessor of the Association,
or served any other enterprise as a director or officer at the request of the
Association or any predecessor of the Association.
Section 8.2. The board in its discretion may, on behalf of the
Association, indemnify any person, other than a director, advisory director,
officer or employee, made a party to any action, suit or proceeding by reason
of the fact that such person is or was an agent of the Association or any
predecessor of the Association serving
-6-
<PAGE> 13
in such capacity at the request of the Association or any predecessor of the
Association.
ARTICLE IX
Interpretation and Amendment
Section 9.1. These Bylaws shall be interpreted in accordance with and
subject to appropriate provisions of law, and may be amended, altered or
repealed, at any regular or special meeting of the board.
Section 9.2. A copy of the Bylaws, with all amendments, shall at all
times be kept in a convenient place at the main office of the Association, and
shall be open for inspection to all shareholders during Association hours.
-7-
<PAGE> 14
EXHIBIT 7
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC - BALANCE SHEET
Dollar Amounts in Thousands
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<S> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin (1)_________________________________________________ 76,629
b. Interest-bearing balances (2)__________________________________________________________________________ 0
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)____________________________________________ 0
b. Available-for-sale securities (from Schedule RC-B, column D)__________________________________________ 3,195
3. Federal funds sold and securities purchased under agreements to resell:
a. Federal funds sold ___________________________________________________________________________________ 0
b. Securities purchased under agreements to resell ______________________________________________________ 0
4. Loans and lease financing receivables:
a. Loan and leases, net of unearned income ______________________________________________________________ 0
(from Schedule RC-C)__________________________________________________________________________________ 0
b. LESS: Allowance for loan and lease losses____________________________________________________________ 0
c. LESS: Allocated transfer risk reserve _______________________________________________________________ 0
allowance, and reserve (item 4.a minus 4.b and 4.c) __________________________________________________ 0
d. Loans and leases, net of unearned income,
5. Trading assets ___________________________________________________________________________________________ 0
6. Premises and fixed assets (including capitalized leases) _________________________________________________ 99
7. Other real estate owned (from Schedule RC-M) _____________________________________________________________ 0
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) ___________________________________________________________________________________________ 0
9. Customers' liability to this bank on acceptances outstanding _____________________________________________ 0
10. Intangible assets (from Schedule RC-M) ___________________________________________________________________ 25,943
11. Other assets (from Schedule RC-F) ________________________________________________________________________ 2,217
12. Total assets (sum of items 1 through 11) _________________________________________________________________ 108,083
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(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
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SCHEDULE RC - CONTINUED Dollar Amounts in Thousands
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LIABILITIES
<S> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of
columns A and C from Schedule RC-E)_________________________________________________________________ 0 13.a
(1) Noninterest-bearing (1)_________________________________________________________________________ 0 13.a.1
(2) Interest-bearing________________________________________________________________________________ 0 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs_______________________________________
(1) Noninterest-bearing_____________________________________________________________________________
(2) Interest-bearing________________________________________________________________________________
14. Federal funds purchased and securities sold under agreements to repurchase:
a. Federal funds purchased_____________________________________________________________________________ 0 14.a
b. Securities sold under agreements to repurchase______________________________________________________ 0 14.b
15. a. Demand notes issued to the U.S. Treasury____________________________________________________________ 0 15.a
b. Trading liabilities_________________________________________________________________________________ 0 15.b
16. Other borrowed money:
A. with a remaining maturity of one year or less_______________________________________________________ 0 16.a
B. with a remaining maturity of more than one year_____________________________________________________ 0 16.b
17. Mortgage indebtedness and obligations under capitalized leases_________________________________________ 0 17.
18. Bank's liability on acceptances executed and outstanding_______________________________________________ 0 18.
19. Subordinated notes and debentures______________________________________________________________________ 0 19.
20. Other liabilities (from Schedule RC-G)_________________________________________________________________ 1,245 20.
21. Total liabilities (sum of items 13 through 20)_________________________________________________________ 1,245 21.
22. Limited-life preferred stock and related surplus_______________________________________________________ 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus__________________________________________________________ 0 23.
24. Common stock___________________________________________________________________________________________ 1,000 24.
25. Surplus (exclude all surplus related to preferred stock)_______________________________________________ 106,712 25.
26. a. Undivided profits and capital reserves______________________________________________________________ (874) 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities______________________________ 0 26.b
27. Cumulative foreign currency translation adjustments____________________________________________________
28. Total equity capital (sum of items 23 through 27)______________________________________________________ 106,838 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum
of items 21, 22, and 28________________________________________________________________________________ 108,083 29.
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1995________________________________________ N/A
1= Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a
report on the bank
2= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3= Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4= Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5= Review of the bank's financial statements by external auditors
6= Compilation of the banks's financial statements by external auditors
7= Other audit procedures (excluding tax preparation work)
8= No external audit work
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(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
