UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2000
--------------
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____ to _____
Commission file number: 0-22663
BANDO McGLOCKLIN CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-1364345
---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
W239 N1700 Busse Road
Waukesha, Wisconsin 53188-1160
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (262) 523-4300
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
On May 12, 2000, there were 3,841,789 shares outstanding of the Registrant's
common stock, 6-2/3 cents par value.
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BANDO McGLOCKLIN CAPITAL CORPORATION
FORM 10-Q INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2000
(Unaudited) and December 31, 1999 ...................................3
Consolidated Statements of Operations - For the Three
Months Ended March 31, 2000 and 1999 (Unaudited) ....................5
Consolidated Statements of Cash Flows - For the Three
Months Ended March 31, 2000 and 1999 (Unaudited) ....................7
Notes to the Consolidated Financial Statements (Unaudited) ..........8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ..........................................15
Item 2. Changes in Securities ......................................15
Item 3. Defaults Upon Senior Securities ............................15
Item 4. Submission of Matters to a Vote of Security Holders ........15
Item 5. Other Information ..........................................15
Item 6. Exhibits and Reports on Form 8-K ...........................15
Signatures .........................................................16
Exhibit Index ......................................................17
2
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BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2000 1999
------------ ------------
ASSETS
Consumer Products
Cash $ 812,114 $ 530,919
Accounts receivable, net of allowance of
$121,758 and $129,280 as of March 31, 2000
and December 31, 1999, respectively 2,834,710 2,954,428
Inventory 5,628,264 4,784,645
Prepaid inventory 710,019 872,531
Other prepaid expenses 395,484 407,361
------------ ------------
Total current assets 10,380,591 9,549,884
------------ ------------
Fixed assets, net of accumulated depreciation
of $1,519,911 and $1,408,103 as of March 31,
2000 and December 31, 1999, respectively 2,925,270 2,880,881
Loans 621,968 621,968
Prepaid royalties 1,541,666 1,666,667
Prepaid expenses and other assets 288,926 288,926
Goodwill, net of accumulated amortization
of $59,386 and $51,640 as of March 31,
2000 and December 31, 1999, respectively 560,367 568,113
------------ ------------
Total Consumer Products assets 16,318,788 15,576,439
------------ ------------
Financial Services
Cash 358,030 1,509,148
Interest receivable 727,245 597,705
Rent receivable 114,401 125,436
Other current assets 60,140 78,788
------------ ------------
Total current assets 1,259,816 2,311,077
------------ ------------
Loans, net of allowance for doubtful accounts
of $150,000 as of March 31, 2000 and
December 31, 1999, respectively 112,887,292 113,229,680
Leased properties:
Buildings, net of accumulated depreciation
of $677,022 and $536,684 as of March 31,
2000 and December 31, 1999, respectively 22,867,715 17,897,897
Land 3,377,609 2,848,326
Construction in progress 4,504,602 3,324,085
------------ ------------
Total leased properties 30,749,926 24,070,308
Fixed assets, net of accumulated depreciation
of $453,653 and $429,167 as of March 31,
2000 and December 31, 1999, respectively 290,073 313,393
Other assets, net 745,520 564,627
------------ ------------
Total Financial Services assets 145,932,627 140,489,085
------------ ------------
Total Assets $162,251,415 $156,065,524
============ ============
3
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BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
March 31, December 31,
2000 1999
------------ ------------
LIABILITIES, MINORITY INTEREST,
PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Consumer Products
Short-term borrowings $ 500,000 $ 200,000
Accounts payable 608,218 888,469
Accrued salaries 467,845 355,075
Accrued corporate taxes 244,326 431,309
Accrued liabilities 419,999 336,029
------------ ------------
Total current liabilities 2,240,388 2,210,882
Long-term debt 322,507 29,926
------------ ------------
Total Consumer Products liabilities 2,562,895 2,240,808
Financial Services
Commercial paper 57,766,820 68,657,172
Notes payable to banks 7,500,000 5,000,000
------------ ------------
Short-term borrowings 65,266,820 73,657,172
Accrued liabilities 1,269,729 1,760,157
------------ ------------
Total current liabilities 66,536,549 75,417,329
State of Wisconsin Investment
Board notes payble 13,333,333 13,666,667
Loan participations with repurchase options 39,402,824 32,724,235
Other long-term debt 10,317,398 1,583,761
------------ ------------
Total Financial Services liabilities 129,590,104 123,391,992
------------ ------------
Minority interest in subsidiaries 78,185 41,055
Redeemable Preferred stock, 1 cent par value,
3,000,000 shares authorized, 674,791 shares
issued and outstanding after deducting
15,209 shares in treasury as of March 31,
2000 and December 31, 1999 16,869,775 16,908,025
Shareholders' Equity
Common stock, 6 2/3 cents par value,
15,000,000 shares authorized, 4,401,599
shares issued and outstanding as of
March 31, 2000 and December 31, 1999,
respectively, before deducting shares
in treasury 293,441 293,441
Additional paid-in capital 16,604,744 16,604,744
Retained earnings 1,612,307 1,218,617
Treasury stock, at cost (522,710 shares
and 416,710 shares as of March 31, 2000
and December 31, 1999, respectively) (5,360,036) (4,633,158)
------------ ------------
Total Shareholders' Equity 13,150,456 13,483,644
------------ ------------
Total Liabilities, Minority Interest,
Preferred Stock and Shareholders' Equity $162,251,415 $156,065,524
============ ============
4
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BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months
Ended March 31,
2000 1999
------------ ------------
Consumer Products
Net sales $ 6,580,718 $ 4,218,825
Cost of sales 3,336,188 2,133,059
------------ ------------
Gross profit 3,244,530 2,085,766
Operating expenses
Sales and marketing 1,104,400 909,665
New product development 154,911 142,598
General and administrative 791,324 506,595
------------ ------------
Total operating expenses 2,050,635 1,558,858
Other income (expense)
Interest expense (16,039) (4,131)
Other income, net 58,362 32,702
------------ ------------
Total other income 42,323 28,571
Income before income taxes
and minority interest 1,236,218 555,479
Income tax expense (294,207) (74,174)
Minority interest in earnings
of subsidiaries (30,816) (720)
------------ ------------
Net income 911,195 480,585
------------ ------------
Financial Services
Revenues
Interest on loans 2,457,524 2,279,589
Rental income 684,661 633,820
Other income 33,310 159,983
------------ ------------
Total revenues 3,175,495 3,073,392
------------ ------------
Expenses
Interest expense 2,189,630 1,769,540
Other operating expenses 526,851 526,589
------------ ------------
Total expenses 2,716,481 2,296,129
------------ ------------
Net income $ 459,014 $ 777,263
------------ ------------
5
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BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)
(Unaudited)
For the Three Months
Ended March 31,
2000 1999
------------ ------------
Total Company
Income before income taxes and
minority interest
Consumer products $ 1,236,218 $ 555,479
Financial services 459,014 777,263
------------ ------------
Total company 1,695,232 1,332,742
Income tax expense (294,207) (74,174)
Minority interest in earnings of
subsidiaries (30,816) (720)
------------ ------------
Net income 1,370,209 1,257,848
Preferred stock dividends (321,498) (359,748)
------------ ------------
Net income available to common
shareholders $ 1,048,711 $ 898,100
============ ============
Basic Earnings Per Share $ 0.27 $ 0.22
============ ============
Diluted Earnings Per Share $ 0.27 $ 0.22
============ ============
Segment Reconciliation
Consumer products
Net income $ 911,195 $ 480,585
Intersegment expenses (418,193) (409,292)
------------ ------------
Total segment net income 493,002 71,293
Financial services
Net income 459,014 777,263
Intersegment income 418,193 409,292
------------ ------------
Total segment net income 877,207 1,186,555
Total company net income $ 1,370,209 $ 1,257,848
============ ============
6
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<TABLE>
BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Three Months For the Three Months
Ended March 31, 2000 Ended March 31, 1999
-------------------- --------------------
Consumer Financial Consumer Financial
Products Services Products Services
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 911,195 $ 459,014 $ 480,585 $ 777,263
Adjustments to reconcile net cash
provided by operating activities:
Depreciation and amortization 119,554 164,824 100,653 142,306
Allowance for doubtful accounts (7,522) - 26,061 -
Provision for inventory reserve 25,014 - (242,027) -
Change in appreciation on investments - (5,172) - 36,203
Change in minority interest in subsidiaries 37,130 - 721 -
Increase (decrease) in cash due to change in:
Accounts receivable 127,240 - 895,477 -
Inventory (1,578,652) - (770,412) -
Interest receivable - (129,540) (84,501)
Other assets 1,009,409 (146,038) 165,048 (83,361)
Accounts payable (280,251) - (195,934) -
Other liabilities 9,757 (490,428) (905,123) 2,988,422
----------- ------------ ----------- ------------
Net Cash (Used) Provided by Operations 372,874 (147,340) (444,951) 3,776,332
----------- ------------ ----------- ------------
Cash Flows from Investing Activities:
Loans made - (29,158,724) - (15,074,609)
Principal collected on loans - 29,501,112 - 19,130,975
Proceeds from sale of leased properties - - - 917,150
Purchase or construction of leased properties - (6,819,956) (1,162,825)
Purchase of fixed assets (156,197) (1,166) (253,779) (12,910)
----------- ------------ ----------- ------------
Net Cash (Used) Provided by Investing (156,197) (6,478,734) (253,779) 3,797,781
----------- ------------ ----------- ------------
Cash Flows from Financing Activities:
Increase (decrease) in short term borrowings 594,000 (8,390,352) - (2,035,416)
Proceeds from loan participations with
repurchase options - net - 15,413,589 - (4,868,783)
Repayment of SWIB notes - (333,334) (333,333)
(Decrease) in other notes payable (1,419) (1,363) (1,260) (1,310)
Preferred stock dividends paid - (359,748) - (359,748)
Common stock dividends paid - (655,021) - (664,038)
Repurchase of common stock - (726,878) - -
----------- ------------ ----------- ------------
Net Cash (Used) Provided by Financing 592,581 4,946,893 (1,260) (8,262,628)
----------- ------------ ----------- ------------
Net intercompany transactions (528,063) 528,063 (471,312) 471,312
Net (decrease) increase in cash 281,195 (1,151,118) (1,171,302) (217,203)
Cash, beginning of period 530,919 1,509,148 2,209,105 626,838
----------- ------------ ----------- ------------
Cash, end of period $ 812,114 $ 358,030 $ 1,037,803 $ 409,635
=========== ============ =========== ============
</TABLE>
7
<PAGE>
BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. NATURE OF BUSINESS
The consolidated financial statements of Bando McGlocklin Capital Corporation
(the "Company") include two segments of business; financial services and
consumer products. The consolidated financial statements as of and for the
periods presented include the accounts of the Company and Bando McGlocklin Small
Business Lending Corporation ("BMSBLC") as financial services companies and Lee
Middleton Original Dolls, Inc. ("Middleton Doll"), License Products, Inc.
("License Products") and Middleton (HK) Limited ("Middleton (HK)") as consumer
product companies. All significant intercompany accounts and transactions have
been eliminated in consolidation.
Effective January 1, 2000, Middleton Doll acquired a 51% equity ownership in
Middleton (HK), a Hong Kong corporation. Middleton (HK) is a management
corporation which provides Middleton Doll with all of its raw materials and
finished goods from Asia.
NOTE 2. BASIS OF PRESENTATION
The accompanying unaudited financial statements of the Company and its
majority-owned subsidiaries have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the other information and
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1999.
The accompanying consolidated financial statements have not been audited by
independent accountants in accordance with generally accepted auditing
standards, but in the opinion of management such financial statements include
all adjustments, consisting only of normal recurring accruals, necessary to
summarize fairly the Company's financial position and results of operations. The
results of operations for the period ended March 31, 2000 may not be indicative
of the results that may be expected for the year ending December 31, 2000.
8
<PAGE>
NOTE 3. INVENTORY
Inventories of Middleton Doll and License Products are valued at the lower of
cost or market. Middleton Doll and License Products utilize the average cost
method to determine cost. The components of inventory are as follows:
March 31, 2000 December 31, 1999
-------------- -----------------
Raw materials, net of reserve
of $260,582 and $235,568,
respectively $ 2,283,162 $ 2,157,740
Work in process 410,791 90,613
Finished goods 2,934,311 2,536,292
------------ -----------
Total $ 5,628,264 $ 4,784,645
============ ===========
NOTE 4. LONG-TERM DEBT
On March 23, 2000, BMSBLC entered into a Loan and Trust Agreement with one of
its correspondent banks for issuance of industrial revenue bonds. The bonds have
varying maturities from 2004 through 2015 with interest payments and principal
reductions payable monthly to the trustee. The interest rate changes weekly
based upon the remarketing agent's lowest rate to permit the sale of the bonds.
As of March 31, 2000, the outstanding principal balance was $8,735,000 and the
interest rate was 4.1%. The principal balance is included in other long-term
debt on the balance sheet.
NOTE 5. INCOME TAXES
The Company and its qualified REIT subsidiary, BMSBLC, qualify as a real estate
investment trust under the Internal Revenue Code. Accordingly, they are not
subject to income tax on taxable income that is distributed to shareholders.
Middleton Doll and License Products file their own tax returns. Income tax
provision in the accompanying financial statements is based on their operations
prior to the elimination of approximately $400,000 of interest and other
expenses on transactions with the Company.
NOTE 6. TREASURY STOCK
During first quarter 2000 the Company purchased 106,000 shares of its common
stock in the open market at an average price of $7.49. It is the Company's
intention to hold these shares as treasury stock.
9
<PAGE>
NOTE 7. EARNINGS PER SHARE
See Exhibit 11 for the computation of the net income per common share. The March
31, 1999 per share amount has been restate for the 10% stock dividend as the
December 31, 1999 record date.
NOTE 8. COMMITMENTS
Undisbursed construction loan commitments and lines of credit totaled $8,536,973
at March 31, 2000.
NOTE 9. SUBSEQUENT EVENTS
As of April 28, 2000, BMSBLC entered into an amended and restated loan agreement
with five participating banks. The loan agreement increased the existing
facility from a maximum of $70,000,000 to $75,000,000 less the outstanding
principal amount of commercial paper and industrial revenue bonds (see Note 4).
The facility will continue to bear interest at the prime rate or at the 30, 60,
or 90 day LIBOR rate plus one and three-eighths percent. Interest is payable
monthly and the loan agreement expires on June 30, 2000.
On April 28, 2000, BMCC entered into an amended credit agreement with one of its
correspondent banks providing for an increase of the existing $5,000,000 note to
a revolving note of $7,500,000 bearing interest at the prime rate. The
additional $2,500,000 is being loaned to InvestorsBancorp, Inc. through a 10
year, fixed rate promissory note. Interest is payable quarterly and the credit
agreement expires on June 30, 2000.
It is expected that both of these agreements will be extended for an additional
year at the renewal date of June 30, 2000.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
Amounts presented as of March 31, 2000 and December 31, 1999, and for the three
months ended March 31, 2000 and March 31, 1999 include the consolidation of two
segments. The financial services segment includes Bando McGlocklin Capital
Corporation (the "Company") and Bando McGlocklin Small Business Lending
Corporation ("BMSBLC"), a 100% owned subsidiary of the Company. The consumer
products segment includes Lee Middleton Original Dolls, Inc. ("Middleton Doll"),
a 99% owned subsidiary of the Company, License Products, Inc. ("License
Products"), a 51% owned subsidiary of the Company and Middleton (HK) Limited
("Middleton (HK)"), a 51% owned subsidiary of the Company.
Results of Operations
For the three months ended March 31, 2000 and March 31, 1999
The Company's total net income after income taxes and minority interest for the
quarter ended March 31, 2000 equaled $1.05 million or $0.27 per share (diluted)
as compared to $0.9 million or $0.22 per share (diluted) for the quarter ended
March 31, 1999, a 17% increase in net income. The March 31, 1999 per share
amount has been restated for the 10% stock dividend as of the December 31, 1999
record date.
Consumer Products
Net income from consumer products after income taxes and minority interest for
the quarter ended March 31, 2000 was $0.91 million compared to $0.48 million for
the quarter ended March 31, 1999, a 90% increase.
Net sales from consumer products for the quarter ended March 31, 2000 increased
56% to $6.58 million from $4.22 million in the corresponding prior year period.
This increase was due to increased sales of $1.78 million at Middleton Doll and
$0.58 million at License Products. The majority of the sales increase at
Middleton Doll was attributable to the introduction of Small Wonder, the new
smaller play doll and a 21% increase in sales of My Own Baby, the original play
doll, through its expanding national distribution. Small Wonder's sales for the
first quarter were $1.2 million. Cost of sales also increased 56% to $3.34
million for the quarter ended March 31, 2000 from $2.13 million for the prior
year quarter. Gross profit margin remained unchanged at 49% for the quarters
ended March 31, 2000 and 1999.
Total operating expenses of consumer products for the quarter ended March 31,
2000 were $2.05 million compared to $1.56 million for the quarter ended March
31, 1999, a 31% increase. Middleton Doll's total operating expenses increased
$0.46 million due to related expenses stemming from the continued growth of the
company. License Products' operating expense increased $0.03 million due to its
growth in sales. Sales and marketing expense and new product
11
<PAGE>
development increased $0.21 million to $1.26 million for the quarter ended March
31, 2000 compared to $1.05 million for the quarter ended March 31, 1999. The
large increase in sales and marketing expense was due to Middleton Doll using a
TV advertising campaign for the new Small Wonder play doll. In addition,
royalties increased 45% due to the increase in sales volume and catalog costs
were higher because Middleton Doll introduced more dolls in 2000 compared to
1999. General and administrative expenses increased $0.28 million over the same
period a year ago. Middleton Doll reclassified offsite warehouse expenses from
cost of goods sold to general and administrative expenses in 2000. This
reclassification of $0.14 million is the result of the warehouse now being used
only as a distribution center. During the first quarter of 2000 Middleton Doll
had additional personnel expenses of $0.07 million and $0.07 million in other
expenses due to growth.
Other income increased to $0.04 million from $0.03 million when compared to the
same period a year ago. The minority interest in earnings of subsidiaries
increased $0.03 million when comparing the quarter ended March 31, 2000 to the
corresponding prior year period due to the acquisition by Middleton Doll of a
51% interest in Middleton (HK) on January 1, 2000. Middleton (HK) had net income
of $0.05 million for the quarter ended March 31,2000. Consumer products recorded
an income tax expense of $0.29 million for the quarter ended March 31, 2000 as
compared to $0.07 million for the quarter ended March 31, 1999, an increase of
$0.22 million due to the increase in Middleton Doll's income. The income tax
expense is attributable only to Middleton Doll's income since License Products
has a net operating loss carryforward to offset its current net income and
Middleton (HK)'s earnings are currently being retained in Hong Kong.
Financial Services
Net income from financial services for the quarter ended March 31, 2000 was
$0.46 million compared to $0.78 million for the quarter ended March 31, 1999, a
41% decrease.
Total revenues were $3.18 million for the quarter ended March 31, 2000 compared
to $3.07 million for the quarter ended March 31, 1999, a 4% increase. Interest
on loans increased 8% to $2.46 million for the quarter ended March 31, 2000 from
$2.28 million for the comparative quarter. Average loans under management
decreased $1.19 million from the first quarter of 2000 compared to the first
quarter of 1999 due to normal market competition. However, the average prime
rate went up from 7.75% in first quarter 1999 to 8.69% in first quarter 2000.
BMSBLC purchased two leased properties during first quarter 2000. At March 31,
2000, the Company had $26.25 million in leased properties net of construction in
progress compared to $20.89 million as of March 31, 1999. Rental income only
increased $0.05 million to $0.68 million for the quarter ended March 31, 2000.
Due to the timing of the purchase of these new properties, the rental income
stream did not start until later in the quarter.
Other income decreased $0.13 million to $0.03 million when comparing March 31,
2000 to March 31, 1999. In the first quarter of 1999 BMSBLC sold two properties
for a gain of $0.11 million which was included in other income.
12
<PAGE>
Interest expense increased 24% to $2.19 million for the quarter ended March 31,
2000 as compared to $1.77 million for the quarter ended March 31, 1999. The
average debt balance increased $6.98 million in the first quarter of 2000
compared to the first quarter of 1999. In addition, due to the increase in the
average prime rate noted above the company's cost of funds increased. During
first quarter 1999 the company reduced its interest expense by $0.05 million as
a result of an investment swap that matured in June 1999.
The Company has not entered into any new investment swaps.
Operating expenses were the same at $0.53 million for the quarter ended March
31, 2000 and for the quarter ended March 31, 1999.
Overall net income decreased when comparing the first quarter of 2000 to the
first quarter of 1999. Interest rate increases for short-term borrowing at the
end of 1999 increased the Company's cost of funds at the beginning of 2000.
Also, the net interest margin on the portfolio decreased during the first
quarter of 2000 due to the rise in long-term borrowing rates.
Liquidity and Capital
Consumer Products
Total assets of consumer products were $16.22 million as of March 31, 2000 and
$15.58 million as of December 31, 1999, a 4.1% increase.
Cash increased to $0.81 million at March 31, 2000 from $0.53 million at December
31, 1999.
Accounts receivable, net of the allowance, decreased to $2.83 million at March
31, 2000 from $2.95 million at December 31, 1999. A decrease of $0.20 million is
attributable to Middleton Doll, and an increase of $0.08 million is attributable
to License Products. Typically both companies are seasonal with higher sales in
the third and fourth quarters, which corresponds with a large decrease in the
accounts receivable balance in the first quarter of the following year. However,
both companies continued to have high sales in the first quarter of 2000 which
resulted in only a 4% decrease in the accounts receivable balances at March 31,
2000.
Inventory was $5.63 million at March 31, 2000 compared to $4.78 million at
December 31, 1999. Middleton Doll's inventory increased $1.05 million due to new
doll lines that were introduced in the first quarter of 2000 while License
Products' inventory decreased $0.20 million. Usually the inventory level of
Middleton Doll would be very low at December 31 since it would have just
finished shipping for the Christmas season.
Fixed assets increased by $0.04 million and other assets and prepaid expenses
decreased by $0.41 million.
Middleton Doll increased its short-term borrowings by $0.30 million on a line of
credit with a bank during the three months ended March 31, 2000 to fund working
capital needs. Middleton (HK) Limited increased its long-term debt by $0.29
million also to fund working capital needs.
13
<PAGE>
Accounts payable decreased by $0.28 million as of March 31, 2000 compared to
December 31, 1999. Middleton Doll's accounts payable decreased $0.25 million
while License Products' accounts payable decreased $0.03 million. Other
liabilities decreased by $0.09 million.
Financial Services
Total assets of financial services were $145.93 million as of March 31, 2000 and
$140.49 million as of December 31, 1999, a 3.9% increase.
Cash decreased to $0.36 million at March 31, 2000 from $1.51 million at December
31, 1999.
Interest receivable increased to $0.73 million from $0.60 million. Fixed assets
and other assets including prepaid amounts increased in the aggregate by $0.13
million.
Total loans decreased by $0.34 million or 0.3% to $112.89 million at March 31,
2000 from $113.23 million at December 31, 1999 due to normal market competition.
The Company expects to replace these loans. Leased properties under management
increased $6.68 million due to the purchase of two properties and the
construction in progress on two properties.
The financial services' total consolidated indebtedness at March 31, 2000
increased $6.69 million. As of March 31, 2000, financial services had $63.05
million outstanding in long-term debt and $65.27 million outstanding in
short-term borrowings compared to $47.97 million outstanding in long-term debt
and $73.66 million outstanding in short-term borrowings as of December 31, 1999.
During the first quarter of 2000 BMSBLC entered into a long-term debt agreement
for $8.74 million which refinanced BMSBLC's short-term borrowings.
The entire short-term borrowings have a stated maturity of April 30, 2000. As of
April 28, 2000 the maturity has been extended to June 30, 2000. However, it is
the intention of all parties to renew all loan agreements at June 30, 2000 for a
twelve month period.
14
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is not a defendant in any material pending legal proceeding
and no such material proceedings are known to be contemplated.
Item 2. CHANGES IN SECURITIES
No material changes have occurred in the securities of the Registrant.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-k
(a) List of Exhibits
The Exhibits to this Quarterly Report on Form 10-Q are identified
on the Exhibit Index hereto.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 2000.
15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
BANDO McGLOCKLIN CAPITAL CORPORATION
(Registrant)
Date: May 12, 2000 /s/ George R. Schonath
----------------------
George R. Schonath
President and Chief Executive Officer
Date: May 12, 2000 /s/ Susan J. Hauke
------------------
Susan J. Hauke
Vice President Finance
16
<PAGE>
BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
4.1 Trust Indenture between Bando McGlocklin Small Business
Lending Corporation and Firstar Bank, National Association,
as trustee, dated March 1, 2000.
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule (EDGAR version only)
17
Exhibit 4.1
-----------
TRUST INDENTURE
between
BANDO McGLOCKLIN SMALL BUSINESS LENDING CORPORATION
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
Dated as of March 1, 2000
Relating to:
$8,765,000
Industrial Development Revenue Bond Trust
Weekly Variable Rate Demand
Certificates of Participation,
Series A, B, C, D, E, F and G
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND GENERAL PROVISIONS................................2
1.01. Definitions.....................................................2
1.02. Rules of Interpretation.........................................7
ARTICLE II THE CERTIFICATES..................................................8
2.01. The Certificates................................................8
2.02. Redemption of Senior Certificates...............................9
2.03. Mandatory Tender of Senior Certificates........................10
2.04. Execution......................................................10
2.05. Mutilated, Lost and Destroyed Certificates.....................11
2.06. Partial Redemption.............................................11
2.07. Notice of Redemption...........................................11
2.08. Effect of Redemption; Cancellation.............................12
2.09. Registration, Transfer and Exchange of Certificates............12
2.10. Interest Rights Preserved; Dating of Certificates..............13
2.11. Persons Deemed Owners of Certificates..........................13
2.12. Cessation and Continuation of Interest.........................14
2.13. Transfer and Book-Entry System for Senior Certificates.........14
2.14. Purchase of Tendered Senior Certificates;
Senior Certificate Purchase Account..........................16
2.15. Purchase of Senior Certificates at Option of Owner.............17
2.16. Treatment of Untendered Certificates...........................19
2.17. Remarketing of Senior Certificates Tendered for Purchase.......19
2.18. Concerning the Remarketing Agent...............................20
2.19. Concerning the Tender Agent....................................20
2.20. Additional Series of Senior Certificates.......................21
ARTICLE III FORM OF CERTIFICATES.............................................21
3.01. Form of Senior Certificates....................................21
3.02. Form of Junior Certificates....................................21
3.03. Additional Matters Appearing on Certificates...................21
ARTICLE IV GENERAL COVENANTS................................................21
4.01. Payment of Principal and Interest..............................21
4.02. Right to Payments under IDRBs;
Instruments of Further Assurance.............................22
ARTICLE V FUNDS AND ACCOUNTS...............................................22
5.01. Acquisition Funds..............................................22
5.02. IDRB Funds.....................................................22
5.03. Trustee's Maintenance of Records of
Payments on Certificates.....................................23
5.04. Trustee Reports................................................24
5.05. Reporting of IDRB Interest Rates and IDRB Payments.............24
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ARTICLE VI INVESTMENTS......................................................24
6.01. Investments by Trustee.........................................24
ARTICLE VII DISCHARGE OF LIEN................................................24
7.01. Conditions for Discharge.......................................24
7.02. Payment of Certificates........................................25
7.03. Cancellation of Surrendered Senior Certificates................26
ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND
OWNERS OF SENIOR CERTIFICATES..................................26
8.01. Events of Default..............................................26
8.02. Acceleration...................................................27
8.03. Other Remedies; Rights of Owners of Senior Certificates........28
8.04. Direction of Proceedings by Owners of Senior Certificates......29
8.05. Waiver of Stay or Extension Laws...............................30
8.06. Application of Moneys..........................................30
8.07. Remedies Vested in Trustee.....................................31
8.08. Rights and Remedies of Owners of Senior Certificates...........31
8.09. Termination of Proceedings.....................................32
8.10. Waiver of Events of Default....................................32
8.11. Draws Under Letter of Credit...................................32
8.12. Substitute Letter of Credit....................................34
8.13. Concerning the Letter of Credit................................34
ARTICLE IX THE TRUSTEE......................................................35
9.01. Acceptance of the Trustee......................................35
9.02. Fees, Charges and Expenses of the Trustee......................37
9.03. Notice to Owners of Certificates if Default Occurs.............37
9.04. Intervention by Trustee........................................38
9.05. Successor Trustee..............................................38
9.06. Resignation by the Trustee.....................................38
9.07. Removal of Trustee.............................................38
9.08. Appointment of the Successor Trustee by the Owners
of Certificates; Temporary Trustee...........................38
9.09. Concerning any Successor Trustees..............................39
9.10. Trustee Protected in Relying Upon Resolutions, Etc.............39
9.11. Successor Trustee as Custodian of Funds........................39
ARTICLE X SUPPLEMENTAL INDENTURES..........................................39
10.01. Supplemental Indentures Not Requiring Consent of
Owners of Certificates.......................................39
10.02. Supplemental Indentures Requiring Consent of Owners
of Senior Certificates.......................................40
10.03. Supplemental Indentures Requiring Consent of Owners
of Junior Certificates.......................................41
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10.04. Effect of Supplemental Indentures..............................41
10.05. Consent of BMSBLC and Bank.....................................42
10.06. Rights of Trustee..............................................42
ARTICLE XI AMENDMENT OF LOAN AGREEMENT OR LETTER OF CREDIT..................42
11.01. Amendments, Etc. to Letter of Credit Not Requiring
Consent of Owners of Senior Certificates.....................42
11.02. Amendments, Etc. to Letter of Credit Requiring
Consent of Owners of Senior Certificates.....................42
11.03. Consent of Trustee and BMSBLC..................................43
11.04. Consent of Bank................................................43
ARTICLE XII MISCELLANEOUS....................................................43
12.01. Consent, Etc. of Owners of Certificates........................43
12.02. Limitation of Rights...........................................44
12.03. Severability...................................................44
12.04. Notices........................................................44
12.05. Counterparts...................................................45
12.06. Third-Party Beneficiary........................................45
EXHIBITS
Exhibit A - Form of Senior Certificate...............................Exhibit A-1
Exhibit B - Form of Junior Certificate...............................Exhibit B-1
Exhibit C - Form of Notice of Mandatory Tender Date..................Exhibit C-1
Exhibit D - Form of Tender Notice....................................Exhibit D-1
SERIES SUPPLEMENTS
Series A - Village of Grafton, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(Calibre, Inc. Project)...............................Series A-1
Series B - City of Mequon, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(SPI Lighting, Inc. Project)..........................Series B-1
Series C - City of Waukesha, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(Hydro-Thermal Corporation Project)...................Series C-1
Series D - Village of Menomonee Falls, Wisconsin, Industrial
Development Revenue Bonds, Series 1996 (Becker
Machine Co., Inc. Project)............................Series D-1
Series E - Village of Johnson Creek, Wisconsin, Industrial
Development Revenue Bonds, Series 1995 (Saelens
Corporation Project)..................................Series E-1
Series F - Village of Grafton, Wisconsin, Industrial
Development Revenue Bonds, Series 1995
(Calibre, Inc. Project)...............................Series F-1
Series G - City of New Berlin, Wisconsin, Industrial
Development Revenue Bonds, Series 1996 (Toolrite
Manufacturing Co., Inc. Project)......................Series G-1
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$8,765,000
Industrial Development Revenue Bond Trust
Weekly Variable Rate Demand
Certificates of Participation,
Series A, B, C, D, E, F and G
TRUST INDENTURE
THIS TRUST INDENTURE, dated as of March 1, 2000, is between BANDO
McGLOCKLIN SMALL BUSINESS LENDING CORPORATION, a Wisconsin corporation
("BMSBLC"), and FIRSTAR BANK, NATIONAL ASSOCIATION, Milwaukee, Wisconsin, as
Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, BMSBLC is the current owner of all of the bonds outstanding
of several issues of industrial development revenue bonds ("IDRBs") issued by
several Wisconsin municipalities, which IDRBs are described in the Series
Supplements attached hereto; and
WHEREAS, BMSBLC desires to create several partnerships, each
corresponding to a Series of IDRBs, in the form of a trust, under which Owners
of Senior Certificates will participate, on a senior, prior basis, in the
payments of principal of and interest on such IDRBs, and the Owners of Junior
Certificates will participate on a junior, subordinate basis therein;
NOW, THEREFORE, BMSBLC, in consideration of the premises and the
acceptance by the Trustee of the trusts hereby created and the purchase and
acceptance of the Certificates by the Owners thereof, in order to secure the
payment of the principal of and interest on the Certificates according to their
tenor and effect and, on a subordinate basis thereto, to secure the obligations
owed to the Bank (defined herein) under the Credit Agreement (defined herein),
does hereby grant, bargain, sell, convey, confirm, transfer in trust, assign,
pledge and grant a security interest in all rights, interest and privilege of
BMSBLC in, to and under the IDRBs to the Trustee, and to its successors in
trust, and to them and their assigns, forever, including, but not limited to,
all revenues and income received by the Trustee relating to such IDRBs, and all
proceeds of such revenues and income, all of which are hereby expressly assigned
to the Trustee, subject to the rights of the Bank, for deposit in trust accounts
in accordance with Article V hereof, and all proceeds from any property
described above, and any and all other property of every name and nature from
time to time hereafter by delivery or by writing of any kind conveyed,
mortgaged, pledged, assigned or transferred as or for additional security
hereunder by BMSBLC or by any issuer or trustee or anyone acting on their
behalf, to the Trustee, which is hereby authorized to receive any and all such
property at any and all times and to hold and apply the same subject to the
terms hereof;
TO HAVE AND TO HOLD all the same with all privileges and appurtenances
hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and
its successors in said trust and to them and their assigns forever;
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IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for
the benefit, security and protection of all Owners of Certificates issued under
and secured by this Trust Indenture, without privilege, priority or distinction
as to lien or otherwise, except as otherwise expressly provided herein, and, on
a subordinate basis thereto, to secure the Bank as described above, BMSBLC and
the Trustee mutually covenant and agree for the equal and proportionate benefit
of all Owners of Certificates as follows:
ARTICLE I
DEFINITIONS AND GENERAL PROVISIONS
Section 1.01. Definitions. Capitalized terms in this Trust Indenture
shall have the following respective meanings unless the context clearly requires
otherwise:
Authorized Denomination of Senior Certificates: $5,000 or any integral
multiple thereof.
Bank: Firstar Bank, National Association, Cincinnati, Ohio, or the
provider of any Substitute Letter of Credit.
Bank Purchase Date: the date of purchase of all of the Senior
Certificates of a Series by the Bank as provided in Section 8.02 of this Trust
Indenture.
Beneficial Owner: the actual purchaser of a Senior Certificate.
Beneficial Ownership Interest: the ownership interest in a Senior
Certificate of a Beneficial Owner.
BMSBLC: Bando McGlocklin Small Business Lending Corporation, a
Wisconsin corporation, its successors and assigns.
Bond Counsel and Special Counsel: counsel whose legal and tax opinion
on bond issues is nationally recognized; initially, Michael Best & Friedrich
LLP.
Business Day: any day other than a Saturday, Sunday or other day on
which commercial banks in the city in which the principal office of the Trustee
or the Bank is located are required or authorized by law or executive order to
remain closed or other day on which the New York Stock Exchange is not open for
business.
Cap Rate: the lesser of 10%, or the interest rate payable on the
applicable IDRB minus 0.1%.
Certificates: the Industrial Development Revenue Bond Trust Weekly
Variable Rate Demand Certificates of Participation of one or more Series,
authorized under this Trust Indenture to be issued in the form of Senior
Certificates and a Junior Certificate for each Series.
Certificate Register: the register maintained by the Trustee pursuant
to Section 2.09 hereof.
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<PAGE>
Closing Date: the date on which the Senior Certificates of a Series
will be delivered to the Underwriter, and the corresponding Junior Certificate
will be delivered to BMSBLC, in exchange for payment for them.
Code: the Internal Revenue Code of 1986, as amended, and any related
regulations.
Continuing Disclosure Agreement: the Continuing Disclosure Agreement
dated the date hereof between the Trustee and BMSBLC, and any amendments or
supplements thereto made in accordance with the provisions hereof.
Counsel: an attorney acceptable to the Trustee, duly admitted to
practice law before the highest court of Wisconsin, which may include BMSBLC's
counsel or Bond Counsel.
Credit Agreement: the Amended and Restated Credit Agreement dated as
of April 30, 1999, as supplemented by a First Amendment to Amended and Restated
Credit Agreement, and as amended from time to time, among BMSBLC, the financial
institutions party thereto and the Bank, as agent for such financial
institutions, pursuant to which the Bank will issue the Letter of Credit, or any
similar agreement between BMSBLC and the Bank, and all amendments, supplements,
changes and modifications thereto.
Determination of Taxability: any issuance of a statutory notice of
deficiency by the Internal Revenue Service, or a ruling of the National Office
or any District Office of the Internal Revenue Service, or a final decision of a
court of competent jurisdiction, or a regulation or revenue ruling issued by the
Internal Revenue Service, after the period, if any, for contest or appeal by the
taxpayer of such action, ruling or decision has expired without any such contest
or appeal having been properly instituted by the taxpayer, or delivery to the
Trustee by Bond Counsel of an opinion which holds or declares in effect that the
interest payable on any IDRB or the corresponding Series of Senior Certificates
is includable for federal income tax purposes in the gross income of the Owners
of such Senior Certificates.
Eligible Funds: (i) all amounts (including investment earnings) in the
Letter of Credit Account, (ii) amounts in the IDRB Payments Account which have
been held for the Minimum Holding Period, (iii) investment earnings on amounts
in the IDRB Payments Account which have been held for a Minimum Holding Period,
and (iv) any other moneys which are not recoverable from Owners of Senior
Certificates as a transfer avoidable as a preference in the event a petition is
filed under the United States Bankruptcy Code with respect to an IDRB Borrower
or IDRB Issuer as debtor, as applicable, or in the event of a filing of a
petition with respect to an IDRB Borrower or IDRB Issuer, as applicable, under
any existing bankruptcy, insolvency or similar law of the State of Wisconsin
relating to the enforcement of the rights of creditors and the relief of
debtors.
Event of Default: any of the events described as such in Section 8.01
hereof.
Government Obligations: investments listed in (a) and (b) of Qualified
Investments.
IDRB Bond Agreement: the Bond Agreement creating an IDRB and IDRB
Loan.
IDRB Borrower: the borrower of the proceeds of an IDRB.
3
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IDRB Collateral: the collateral securing payment by an IDRB Borrower
of an IDRB Loan under an IDRB Bond Agreement, as described in a Series
Supplement.
IDRB Fund: a Trust Fund created in Section 5.02 hereof.
IDRB Issuer: a municipal issuer of an IDRB.
IDRB Loan: the loan of IDRB proceeds to an IDRB Borrower.
IDRB Payments: all payments and prepayments derived from an IDRB.
IDRB Payments Account: the IDRB Payments Account within an IDRB Fund.
IDRB Rate: the weighted average of interest rate(s) applicable to an
IDRB.
Interest Payment Date: the first day of each month, commencing April
1, 2000.
Junior Certificate: the Junior Certificate of each Series, which shall
be junior and subordinate to the Senior Certificates of that Series.
Letter of Credit: the irrevocable direct-pay liquidity letter of
credit issued by the Bank, in favor of the Trustee, to be dated on or prior to
the Closing Date and any extension thereof or any Substitute Letter of Credit.
Letter of Credit Account: the Letter of Credit Account within an IDRB
Fund.
Letter of Credit Expiration Date: the stated expiry of a Letter of
Credit in accordance with the terms thereof.
Letter of Credit Substitution Date: each date designated as such in
accordance with Section 8.12 of this Trust Indenture.
Mandatory Tender Date: for Senior Certificates, (i) each Redemption
Date established by the Trustee pursuant to Sections 2.02 and 2.07, and (ii) the
Letter of Credit Substitution Date (but only if the Substitute Letter of Credit
is provided by a financial institution other than the provider of the existing
Letter of Credit); and for Junior Certificates, the mandatory tender date for
the last Outstanding Senior Certificate of the applicable Series.
Maturity Date: as to each Series of Certificates, the final maturity
set forth in the corresponding Series Supplement.
Minimum Holding Period: means a period of 125 days during which (i)
the Trustee holds amounts in an IDRB Payments Account, and (ii) no petition in
bankruptcy is filed by or against the IDRB Borrower or the IDRB Issuer, as
applicable, as debtor under the federal bankruptcy laws, and no other
proceedings are commenced with respect to the IDRB Borrower or the IDRB Issuer,
as applicable, as debtor under other applicable bankruptcy, reorganization or
insolvency laws.
Odd-Lots Subaccount: a subaccount created in Section 5.02(g) hereof.
4
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Opinion of Counsel: a written opinion of Counsel.
Original Issue Date: the Closing Date for each Series.
Outstanding: when used with reference to a Series of Senior
Certificates or portions thereof, as of the date of determination, all the
Senior Certificates of that Series delivered under this Trust Indenture, except:
(a) Senior Certificates theretofore canceled by the Trustee or
delivered to the Trustee canceled or for cancellation.
(b) Senior Certificates or portions thereof deemed paid in accordance
with the provisions of Section 7.02 hereof; and
(c) Senior Certificates in lieu of which other Senior Certificates
shall have been delivered pursuant to this Trust Indenture. In determining
whether the Owners of the requisite principal amount of Outstanding Senior
Certificates or portions thereof have given any request, demand, authorization,
direction, notice, consent or waiver under this Trust Indenture, Senior
Certificates owned by BMSBLC or any related person shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon such request, demand, authorization,
direction, notice, consent or waiver, only Senior Certificates which the Trustee
knows to be so owned shall be disregarded.
Owner: the registered owner of any of the Certificates.
Person: any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pledged Senior Certificates: the meaning attributed to it in Section
2.14 hereof.
Project: as to each IDRB, the Project described in the corresponding
Series Supplement.
Purchase Agreement: the agreement among BMSBLC and the Underwriter
providing, among other things, the terms of the purchase and sale of the Senior
Certificates.
Qualified Investments: any of the following:
(a) Direct general obligations of the United States of America;
(b) Obligations the payment of the principal of and interest on which
is unconditionally guaranteed by the United States of America;
(c) Bonds, debentures, participation certificates or notes issued by
any of the following: Banks for Cooperatives, Federal Financing Bank, Federal
Home Loan Banks, Federal Intermediate Credit Banks, Student Loan Marketing
Association, or any other agency or corporation which has been or may hereafter
be created by or pursuant to a statute of the Congress of the United States of
America as an agency or instrumentality thereof;
5
<PAGE>
(d) Certificates of deposit or time deposits or other interest-bearing
accounts with any banking or savings institution (including the Trustee or any
banking institution with which the Trustee is affiliated) which deposits are
fully insured by the FDIC;
(e) Repurchase agreements (including repurchase agreements with the
Trustee or any banking institution with which the Trustee is affiliated) which
are secured by obligations described in subsections (a) or (b) above;
(f) Commercial paper which has been classified for rating purposes by
Moody's Investors Service as "Prime-1," or by Standard & Poor's Ratings Services
as "A-1";
(g) Municipal obligations which have been classified for rating
purposes by Moody's Investors Service or Standard & Poor's Ratings Services as
"A" or higher, and the interest on which is exempt from inclusion in gross
income for federal income tax purposes;
(h) A pooled or collective investment or trust fund of the Trustee or
mutual fund which consists solely of investments permitted under (a) through
(g), above; or
(i) Any investments consented to by the Bank.
Redemption Date: the date upon which any Senior Certificate is to be
redeemed prior to maturity.
Redemption Price: the price at which any Senior Certificate is to be
redeemed in accordance with this Trust Indenture, 100% of the outstanding
principal balance plus accrued interest.
Remarketing Agent: Robert W. Baird & Co. Incorporated, Milwaukee,
Wisconsin, and any successor institution serving as Remarketing Agent pursuant
to Section 2.18 of this Trust Indenture.
Securities Depository: The Depository Trust Company, New York, New
York, or any successor or substitute securities depository under Section 2.13 of
this Trust Indenture.
Senior Certificates: the Senior Certificates of a Series, which shall
be senior and prior to the Junior Certificate of that Series.
Senior Certificate Purchase Account: the Senior Certificate Purchase
Account within an IDRB Fund.
Series: a series of Certificates corresponding to an IDRB, as further
described and authorized in a Series Supplement. A Series shall be comprised of
a Junior Certificate and the Senior Certificates of that Series. Reference to a
"Series of Senior Certificates" shall mean only the Senior Certificates of the
applicable Series.
Substitute Letter of Credit: the meaning assigned to such term in
Section 8.12 of this Trust Indenture.
6
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Tender Agent: Firstar Bank, National Association, Milwaukee,
Wisconsin, or its successor as Tender Agent hereunder.
Tendered Senior Certificates: Senior Certificates or beneficial
ownership interest therein tendered or required to be tendered for purchase in
accordance with Section 2.14 of this Trust Indenture.
Tender Date: a Mandatory Tender Date or the date a Senior Certificate
is tendered for purchase at the option of the Owner or Beneficial Owner thereof
pursuant to Section 2.15 of this Trust Indenture.
Tender Notice: the notice from a Senior Certificate Owner described in
Section 2.15 of this Trust Indenture, the form of which is attached hereto as
Exhibit D.
Trustee: Firstar Bank, National Association, Milwaukee, Wisconsin, and
any successor trustee appointed, qualified and acting as such under the
provisions of this Trust Indenture.
Trust Estate: the interests in property described in the Granting
Clauses of this Trust Indenture.
Trust Funds: the trust funds created in Article V hereof and
designated the Acquisition Fund and an IDRB Fund for each Series of
Certificates.
Trust Indenture: this Trust Indenture, together with any supplement or
amendment hereto entered into pursuant to the applicable provisions hereof.
Underwriter: Robert W. Baird & Co. Incorporated, Milwaukee, Wisconsin.
Untendered Senior Certificates: Senior Certificates or beneficial
ownership interests therein which are required to be tendered for purchase in
accordance with the provisions of Section 2.14 of this Trust Indenture but which
in fact are not delivered to the Trustee or the Tender Agent on or before the
applicable purchase date.
Weekly Variable Rate: the interest rate on the Senior Certificates
determined by the Remarketing Agent on each Wednesday (or the preceding Business
Day if a Wednesday is not a Business Day) for the week beginning on the Thursday
following the date of determination (whether or not a Business Day) and ending
on the immediately following Wednesday (whether or not a Business Day) as the
rate necessary (but not greater than the Cap Rate) to effect a sale of the
Senior Certificates at par on the immediately succeeding Thursday.
Section 1.02. Rules of Interpretation.
(a) This Trust Indenture shall be interpreted in accordance with and
governed by the laws of the State of Wisconsin;
(b) The words "herein," "hereof" and "hereunder," and words of similar
import, without reference to any particular section or subsection, refer to this
Trust Indenture as a whole rather than to any particular section or subsection
hereof;
7
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(c) The headings of articles and sections herein are for convenience
only and shall not affect the construction hereof;
(d) Unless the context hereof clearly requires otherwise, the singular
shall include the plural and vice versa, and the masculine shall include the
feminine and vice versa; and
(e) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and all computations provided for herein shall be made in accordance
with generally accepted accounting principles.
ARTICLE II
THE CERTIFICATES
Section 2.01. The Certificates.
(a) There are hereby created one or more Series of Certificates
entitled "Industrial Development Revenue Bond Trust Weekly Variable Rate Demand
Certificates of Participation." Each Series of Certificates shall be a separate
partnership made up of the Owners of the Certificates of that Series. Each
Series of Certificates shall be designated by series as shown in the Series
Supplements attached hereto. The Certificates of a Series shall be in the
aggregate principal amount of the aggregate outstanding principal amount of the
related IDRB. The Senior Certificates of a Series shall be in the aggregate
principal amount equal to the closest lesser amount to the outstanding principal
amount of the related IDRB that is divisible by $5,000. The Junior Certificate
of a Series shall be in the principal amount of the aggregate outstanding
principal amount of the related IDRB less the aggregate principal amount of the
Senior Certificates of that Series. The Certificates shall be issued as fully
registered certificates both as to principal and interest without coupons,
payable as set forth in the form of Senior Certificates and Junior Certificates
described in Article III hereof and set forth in Exhibits A and B, respectively,
attached hereto. The Senior Certificates shall be numbered R-1 and upwards. The
Certificates shall be initially dated the Closing Date for that Series, and upon
transfer, exchange or if delivered in lieu of any other Certificate, be dated
thereafter as provided in Section 2.09 hereof. The Senior Certificates shall be
in Authorized Denominations. There shall be only one Junior Certificate of a
Series. The Certificates shall be payable as to principal and interest by check
or draft mailed by the Trustee to the Certificate Owner at the address shown on
the Certificate Register. Owners of at least $1,000,000 principal amount of
Senior Certificates or the Securities Depository may elect to have their
interest paid by wire transfer of immediately available funds. The Certificates
shall be subject to redemption prior to maturity upon the terms and conditions
and at the prices set forth herein.
(b) The Senior Certificates will bear interest as follows. For the
period from the Closing Date through Wednesday of the immediately following
week, the Senior Certificates will bear interest at the rate established in the
Purchase Agreement. Thereafter, and until the Maturity Date of the Senior
Certificates, the Senior Certificates shall bear interest from the Thursday of a
week, to and including the Wednesday of the next week, at the Weekly Variable
Rate. If the Remarketing Agent fails to establish a Weekly Variable Rate, the
Senior Certificates shall bear interest for the immediately succeeding week at
the same rate as the immediately preceding week. The Trustee shall confirm the
interest rate on the Senior Certificates from time to time in effect by
telephone (confirmed in writing if requested). The determination of the
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Weekly Variable Rate shall be conclusive and binding on BMSBLC, the Trustee, the
Tender Agent, the Remarketing Agent, the Bank, the Owners from time to time of
the Senior Certificates and the Owners of the Junior Certificates. Interest
shall accrue from the scheduled date of any payment until the business day on
which such payment is made.
(c) Interest on the Senior Certificates shall be payable (i) on each
Interest Payment Date, (ii) on each Mandatory Tender Date, and (iii) as to
particular Senior Certificates, on the Redemption Date thereof.
(d) Interest on the Senior Certificates shall be calculated on the
basis of a 365/366-day year. Overdue principal shall bear interest at the same
rate as was borne by the Senior Certificates on the due date of the payment that
is delinquent.
(e) The Owner of a Junior Certificate will be entitled, on each
Interest Payment Date, to all amounts in the corresponding IDRB Fund, less (i)
principal and interest payable to Owners of the corresponding Senior
Certificates, (ii) the "odd lot" principal amount (if any) retained by the
Trustee (as described in Section 5.02(g) hereof), and (iii) all amounts payable
to the Bank and the Trustee relating to that Series. The rights of the Owner of
a Junior Certificate to any payments are junior and subordinate to the rights of
the Owners of Senior Certificates.
Section 2.02. Redemption of Senior Certificates. The Senior
Certificates may not be called for redemption prior to maturity, except as
provided below.
(a) Mandatory Redemption Upon Payment or Prepayment of IDRBs. Senior
Certificates of a Series are subject to mandatory redemption prior to stated
maturity, in whole or in part, in integral multiples of $5,000, on any Business
Day, as a result of any payment or prepayment of the corresponding IDRB under
the terms of the corresponding IDRB Bond Agreement. Principal on the IDRBs may
be paid or prepaid as a result of the following:
(i) Scheduled Payments of Principal. The IDRBs are subject to
scheduled payments of principal, whether by stated maturity payments or
sinking fund installments, as described in the Series Supplements.
(ii) Optional Redemption. The IDRBs are subject to optional
redemption at the option and direction of the IDRB Borrowers, as described
in the Series Supplements.
(iii) Extraordinary Redemption. The IDRBs are subject to mandatory
redemption, in whole but not in part, at any time following a casualty loss
or other extraordinary event that shall destroy or substantially damage the
project financed by an IDRB or make it impossible to operate such project
for a period of six months or more, as described in the Series Supplements.
(b) Mandatory Redemption Upon IDRB Payment Default. Senior
Certificates of a Series are subject to mandatory redemption, in whole but not
in part, if a default shall be made in the due and punctual payment of the
purchase price or principal of or interest on the corresponding IDRB, and such
default shall have continued for a period of 45 days.
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(c) Mandatory Redemption Upon Direction of the Bank. The Bank may at
any time certify to the Trustee that an Event of Default has occurred under the
Credit Agreement, and demand an acceleration of one or more Series of the Senior
Certificates.
(d) Mandatory Redemption Prior to Expiration of Letter of Credit. The
Senior Certificates shall be subject to mandatory redemption, in whole but not
in part, 15 days prior to the expiration date of the Letter of Credit then in
effect, unless an acceptable extension to or replacement of the Letter of Credit
then in effect, meeting the requirements of Sections 8.12 and 8.13 of this Trust
Indenture, shall have been delivered to the Trustee at least 45 days prior to
the expiration date of the Letter of Credit then in effect. Notwithstanding the
foregoing, if the Substitute Letter of Credit is from a bank other than the
provider of the then-existing Letter of Credit, then the Senior Certificates
shall be subject to mandatory tender on the Substitution Date. The redemption
price in any such event shall be 100% of the principal amount of the Senior
Certificates so redeemed, plus accrued interest to the redemption date, without
premium.
(e) Mandatory Redemption Upon Determination of Taxability of IDRB. The
Senior Certificates shall be subject to mandatory redemption, by Series, in
whole in the event that a determination has been made that interest on the IDRB
will not be excluded from inclusion in gross income of the owners of the IDRB,
as described in the Series Supplements. The redemption price of the Senior
Certificates upon a Determination of Taxability is 100% of the principal amount
of Senior Certificates so redeemed, plus accrued interest to the redemption
date. No tax redemption premium is to be paid to any Senior Certificate Owner,
regardless of the provisions, if any, relating to a tax redemption premium that
may be contained in the applicable IDRB Bond Agreement. The Letter of Credit
does not cover any tax redemption premium, and Senior Certificate Owners have no
recourse to any IDRB Borrower, the Trustee or to BMSBLC for the payment of any
tax redemption premium.
(f) Mandatory Redemption Upon Determination of Taxability of Senior
Certificates. The Senior Certificates shall be subject to mandatory redemption,
by Series, in whole but not in part, upon a Determination of Taxability relating
to such Series.
Section 2.03. Mandatory Tender of Senior Certificates. Each Senior
Certificate Owner or Beneficial Owner (except the Owner or Beneficial Owner of
Pledged Senior Certificates) must tender its Senior Certificates to the Trustee
or the Tender Agent on or before the Mandatory Tender Date for redemption or
purchase in accordance with this Trust Indenture on the Mandatory Tender Date.
The purchase price shall be equal to 100% of the principal amount plus accrued
interest, if any, to the date of purchase.
Section 2.04. Execution. The Certificates shall be executed by the
manual or facsimile signatures of authorized officers of the Trustee and sealed
with the impress or facsimile of the corporate seal of the Trustee. In case any
officer whose signature shall appear on the Certificates shall cease to be such
officer before the delivery of the Certificates, such signature shall
nevertheless be valid and sufficient for all purposes, the same as if (s)he had
remained in office until delivery.
Section 2.05. Mutilated, Lost and Destroyed Certificates. In case any
Certificate shall become mutilated or be destroyed or lost, the Trustee may
deliver a new Certificate of like
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Series, amount, number, maturity date and tenor in exchange and substitution for
and upon cancellation of such mutilated Certificate, or in lieu of and in
substitution for such Certificate, if any, destroyed or lost, upon paying by the
Certificate Owner of the reasonable expenses and charges of the Trustee in
connection therewith and, in case of a Certificate destroyed or lost, filing by
the Certificate Owner with the Trustee evidence satisfactory to it that such
Certificate was destroyed or lost, and of the Certificate Owner's ownership
thereof, and furnishing the Trustee with satisfactory indemnity. If the
mutilated, destroyed or lost Certificate has already matured or been called for
redemption in accordance with its terms, it shall not be necessary to issue a
new Certificate prior to payment.
Section 2.06. Partial Redemption. If Senior Certificates of a Series
are redeemed in part, the particular Senior Certificates of that Series or
portions thereof to be redeemed shall be selected by the Trustee by lot or by
such other random means as the Trustee shall determine in its discretion. Any
Senior Certificate to be redeemed only in part shall be surrendered by the Owner
thereof and the Trustee shall deliver to such Owner a new Senior Certificate of
any authorized denomination requested by such Owner in an aggregate principal
amount equal to the unredeemed portion of the Senior Certificate so surrendered.
Senior Certificates of denominations greater than $5,000 may be called for
redemption in part, but only in multiples of $5,000. The Trustee shall notify
the Bank of any partial redemption and shall deliver to the Bank the proper
documentation to reduce the size of the Letter of Credit.
Section 2.07. Notice of Redemption. Notice of redemption shall be
mailed by the Trustee first-class mail, postage prepaid, not less than 30 and no
more than 60 days before the Redemption Date to the Bank and to each affected
Certificate Owner at the last address appearing on the Certificate Register;
except upon the declaration of the principal of all Senior Certificates of a
Series then Outstanding immediately due and payable under Section 8.02 hereof as
a result of an Event of Default or upon the occurrence of a Determination of
Taxability, in which case notice of redemption hereunder shall be mailed to
Owners of Senior Certificates of a Series within five days of an acceleration of
the Senior Certificates related to such Event of Default or Determination of
Taxability which notice shall establish a redemption date not more than 14 days
after such acceleration or Determination of Taxability. In no event, however,
shall such notice of redemption establish a redemption date later than one day
prior to the date on which the Letter of Credit would cease to be in an amount
sufficient to pay the principal of the Senior Certificates redeemed together
with interest accrued through the redemption date. Failure to give any such
notice by mailing, or any defect therein, shall not affect the validity of any
proceedings for the redemption of any other Certificate. All notices of
redemption shall (i) identify the Certificates to be redeemed by name, Series,
CUSIP number, date of issue, interest rate, maturity date and any other
descriptive information the Trustee deems desirable to identify accurately the
Certificates to be redeemed and, if only a portion of some Certificates will be
redeemed, their certificate numbers and the principal amount to be redeemed;
(ii) identify the Redemption Date; (iii) state the Redemption Price; (iv) state
that interest on the Certificates or the portions of them called for redemption
will stop accruing from the Redemption Date if funds sufficient for their
redemption and available for that purpose are on deposit with the Trustee on the
Redemption Date; and (v) state that payment for the Certificates will be made on
the Redemption Date at the principal trust office of the Trustee during normal
business hours upon the surrender of the Certificates to be redeemed in whole or
in part. If less than all Outstanding Senior Certificates are to be redeemed,
the Senior Certificates to be redeemed shall be identified
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by reference to the Series designation, date of issue, serial numbers, maturity
dates and, in the case of Senior Certificates to be redeemed in part only, the
portion thereof to be redeemed. The Trustee also agrees that a copy of each
redemption notice will also be sent, by registered or certified mail, to the
registered securities depositories and national information services that
disseminate redemption notices as the Trustee determines to be customary or
appropriate.
Section 2.08. Effect of Redemption; Cancellation. Prior to or on the
date fixed for redemption, Eligible Funds shall be deposited with the Trustee to
pay, and the Trustee is hereby authorized and directed to apply such funds to
the payment of, the Senior Certificates or portions thereof called, together
with accrued interest thereon to the Redemption Date. Notice of redemption
having been given in accordance with Section 2.07 hereof and the deposit of
Eligible Funds for redemption having been made, (i) the Senior Certificates or
portions thereof so to be redeemed shall be due and payable on the Redemption
Date and at the Redemption Price specified in the notice of redemption, and on
and after such date such Senior Certificates or portions thereof shall cease to
bear interest; (ii) such Senior Certificates or portions thereof shall cease to
be entitled to any lien, benefit or security under this Trust Indenture; and
(iii) the Owners of Senior Certificates shall have no rights in respect thereof
except to receive payment of the Redemption Price thereof.
Section 2.09. Registration, Transfer and Exchange of Certificates.
(a) The Trustee will cause to be kept at the principal corporate trust
office of the Trustee a Certificate Register in which, subject to such
reasonable regulations as the Trustee may prescribe, the Trustee shall provide
for the registration of Certificates and the registration of transfers of
Certificates entitled to be transferred as herein provided;
(b) Upon surrender for transfer of any Certificate, the Trustee shall
deliver, in the name of the designated transferee or transferees, one or more
new Certificates, as requested by the transferor of the same Series, of an
authorized principal amount, of a like aggregate unpaid principal amount, of
like payment dates, of the same maturity and bearing interest at the same rate;
(c) At the option of the Certificate Owner, Certificates may be
exchanged for Certificates of any authorized denominations with any authorized
payments, of a like aggregate unpaid principal amount and maturing on the same
dates upon surrender of the Certificates to be exchanged at the office of the
Trustee and upon payment, if the Trustee shall so require, of the charges
hereinafter provided. Whenever any Certificates are so surrendered for exchange,
the Trustee shall deliver the Certificates which the Certificate Owner making
the exchange is entitled to receive;
(d) All Certificates surrendered upon any exchange or transfer
provided for in this Trust Indenture shall be promptly cancelled by the Trustee
and thereafter disposed of;
(e) All Certificates issued in exchange for or upon transfer of
Certificates shall evidence the same debt and entitled to the same benefits
under this Trust Indenture as the Certificates surrendered for such exchange or
transfer;
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(f) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Trustee) be duly endorsed or be
accompanied by a written instrument of transfer, in form satisfactory to the
Trustee, duly executed by the Owner thereof or his attorney duly authorized in
writing;
(g) The Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates, other than exchanges expressly provided in
this Trust Indenture to be made without expense or without charge to Owners of
Certificates;
(h) The Trustee shall not be required to transfer or exchange any
Certificate (i) after receipt by the Trustee of a tender for purchase by the
Certificate Owner (as provided in Section 2.15 of this Trust Indenture) with
respect thereto and through the corresponding Tender Date, (ii) after the
Trustee has given notice of a Mandatory Tender Date and through the Mandatory
Tender Date, (iii) during the 15 days next preceding the mailing of any
redemption notice, or (iv) after such Certificate has been selected for
redemption; and
(i) No Certificate or any rights to interest therein may be registered
to bearer, and all Certificates must be fully registered.
Section 2.10. Interest Rights Preserved; Dating of Certificates. Each
Certificate delivered upon transfer of or in exchange for or in lieu of any
other Certificate shall carry all the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Certificate, and each such
Certificate shall be so dated that neither gain nor loss in interest shall
result from such transfer, exchange or substitution. Each Certificate shall be
dated by the Trustee as of the last preceding Interest Payment Date to which
interest on the Certificate has been paid or made available for payment. Prior
to the first Interest Payment Date after the Original Issue Date, such
Certificate shall be dated as of the Original Issue Date.
Section 2.11. Persons Deemed Owners of Certificates. The Trustee may
treat the person in whose name any Certificate is registered (with respect to
the payment of interest as of the immediately preceding Business Day) as the
Owner of such Certificate for the purpose of receiving payment of principal of
and interest on such Certificate and for all other purposes whatsoever, whether
or not such Certificate be overdue, and the Trustee shall not be affected by
notice to the contrary.
Section 2.12. Cessation and Continuation of Interest.
(a) Interest on each Certificate shall cease on its paid principal
balance on its stated maturity dates or on any prior date on which the
Certificate or the pertinent portion thereof shall have been duly called for
redemption as herein provided, provided that Eligible Funds sufficient for the
payment thereof with accrued interest have been deposited with the Trustee on or
before the stated maturity or Redemption Date, as the case may be, and, in the
case of redemption, that the requirements of Sections 2.07 and 2.08 hereof have
been complied with, or shall cease on any date after its stated maturity or
stated maturities on which such deposit has been made, including accrued
interest to the date of deposit, and the Certificate Owner shall have no further
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rights with respect to the Certificates or portions thereof under this Trust
Indenture except to receive the payment so deposited.
(b) In any case where the date of maturity of interest on or principal
of the Certificates, the date fixed for purchase of any Certificates or the date
fixed for redemption of any Certificates shall be in the city in which the
Trustee's principal office is located or any city in which any alternative
paying agent is located is not a Business Day, the payment of principal and
interest need not be made on such date in such city but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date and prior to the date of payment as aforesaid.
Section 2.13. Transfer and Book-Entry System for Senior Certificates.
(a) Each Series of Senior Certificates will be issued as a single
Senior Certificate in the name of The Depository Trust Company, New York, New
York (the "Securities Depository"), or its nominee, which will act as depository
for the Senior Certificates. During the term of the Senior Certificates,
ownership and subsequent transfers of ownership will be reflected by book entry
on the records of the Securities Depository and those financial institutions for
whom the Securities Depository effects book-entry transfers (collectively, the
"Participants"). No person for whom a Participant has an interest in Senior
Certificates (a "Beneficial Owner") shall receive a certificate representing its
interest in the Senior Certificates except in the event that the Securities
Depository or BMSBLC shall determine, at its option, to terminate the book-entry
system described in this Section. Payment of principal of, and interest on, the
Senior Certificates will be made by the Trustee to the Securities Depository,
which will in turn remit such payment of principal and interest to its
Participants, which will in turn remit such principal and interest to the
Beneficial Owners of the Senior Certificates until and unless the Securities
Depository or BMSBLC elects to terminate the book-entry system, whereupon BMSBLC
shall deliver certificates to the Beneficial Owners of the Senior Certificates
or their nominees. Certificates representing the Senior Certificates issued
under this Section may not be transferred or exchanged except as provided in
this Section.
(b) Upon the reduction of the principal amount of any maturity of
Senior Certificates, the registered Owner of a Senior Certificate may make a
notation of such redemption on the panel of the Senior Certificate, stating the
amount so redeemed, or may return the Senior Certificate to the Trustee for
exchange for a new Senior Certificate in a proper principal amount. Such
notation, if made by the Senior Certificate Owner, may be made for reference
only, and may not be relied upon by any other person as being in any way
determinative of the principal amount of such Senior Certificate Outstanding,
unless the Trustee has initialed the notation on the panel.
(c) Immediately upon delivery of the Senior Certificates to the
purchasers thereof on the Closing Date, such purchasers shall deposit the
certificates representing all of the Senior Certificates with the Securities
Depository. The Securities Depository, or its nominee, will be the sole Owner of
the Senior Certificates, and no investor or other party purchasing, selling or
otherwise transferring ownership of any Senior Certificates will receive, hold
or deliver any
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certificates as long as the Securities Depository holds the Senior Certificates
immobilized from circulation.
(d) The Senior Certificates may not be transferred or exchanged
except:
(i) To any successor of the Securities Depository (or its
nominee) or any substitute depository ("Substitute Depository") designated
pursuant to (ii) below, provided that any successor of the Securities
Depository or any Substitute Depository must be a qualified and registered
"clearing agency" as provided in Section 17A of the Securities Exchange Act
of 1934 as amended;
(ii) To a Substitute Depository designated by or acceptable to
BMSBLC upon (a) the determination by the Securities Depository that the
Senior Certificates shall no longer be eligible for depository services or
(b) a determination by BMSBLC that the Securities Depository is no longer
able to carry out its functions, provided that any such Substitute
Depository must be qualified to act as such, as provided in subparagraph
(i) above; or
(iii) To those persons to whom transfer is requested in written
transfer instructions in the event that:
(A) The Securities Depository shall resign or discontinue
its services for the Senior Certificates and, only if BMSBLC is unable
to locate a qualified successor prior to the resignation or
determination of noneligibility, or
(B) Upon a determination by BMSBLC that the continuation of
the book-entry system described herein, which precludes the issuance
of certificates to any Senior Certificate Owner other than the
Securities Depository (or its nominee) is no longer in the best
interest of the Beneficial Owners of the Senior Certificates.
(e) The Depository Trust Company, New York, New York, is hereby
appointed the Securities Depository for the Senior Certificates. BMSBLC, the
Remarketing Agent, the Tender Agent and the Trustee are hereby authorized to
execute a Representation Letter to The Depository Trust Company.
Section 2.14. Purchase of Tendered Senior Certificates; Senior
Certificate Purchase Account. Tendered Senior Certificates (that is, Senior
Certificates or beneficial ownership interests therein which are to be purchased
in accordance with the provisions of Section 2.02 or Senior Certificates or
beneficial ownership interests therein which are tendered for purchase by the
Beneficial Owners thereof pursuant to Section 2.15) shall be purchased in the
manner described in this Section 2.14. The purchase price shall be 100% of the
principal amount thereof including accrued interest, if any, to the date of
purchase.
There is hereby created and established a trust account within each
IDRB Fund to be designated "Senior Certificate Purchase Account." Each Tendered
Senior Certificate delivered to the Trustee or the Tender Agent pursuant to this
Section 2.14 shall be held in trust in the applicable Senior Certificate
Purchase Account for the following purposes:
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(a) Until the purchase price shall have been paid in full to the Owner
of such Tendered Senior Certificate, the Tendered Senior Certificate shall be
held for the account of such Owner; and
(b) Upon payment in full of the purchase price of such Tendered Senior
Certificate from the applicable Senior Certificate Purchase Account or pursuant
to Section 8.02(b) of this Trust Indenture, the Tendered Senior Certificate
shall be registered in the name of the purchaser (or its nominee) thereof and
delivered to or at the direction of such purchaser.
There shall be deposited into the applicable Senior Certificate
Purchase Account, when and as received by the Trustee (i) all funds received
from the Remarketing Agent prior to 10:00 a.m., Milwaukee, Wisconsin time, at
the Trustee's Principal Office or the Tender Agent's Principal Office, as the
case may be, on the Tender Date for the purchase of Tendered Senior
Certificates, or thereafter for the purchase of Pledged Senior Certificates, in
accordance with Section 2.17 of this Trust Indenture, (ii) all funds received
from the Bank for the purchase of Tendered Senior Certificates except for
Pledged Senior Certificates provided that such funds must be the Bank's own
funds and not funds of BMSBLC or an "insider" to BMSBLC; and (iii) any other
funds if accompanied with an Opinion of Counsel that such funds are Eligible
Funds with respect thereto. No other funds shall be accepted by the Trustee for
deposit into the Senior Certificate Purchase Account. Funds in the Senior
Certificate Purchase Account shall be held in trust for the account of the
respective owners of such funds at the time of the deposit thereof into the
Senior Certificate Purchase Account until such funds are applied by the Trustee
or the Tender Agent on the Tender Date to pay the purchase price of Tendered
Senior Certificates thereby being purchased.
Senior Certificates or beneficial ownership interests therein tendered
and purchased pursuant to this Section with money obtained by a drawing on the
Letter of Credit for which the Bank is not reimbursed simultaneously shall be
registered in the name of the Bank or as otherwise directed by the Bank and
retained by the Trustee as agent for the Bank to be held in pledge for the
benefit of the Bank ("Pledged Senior Certificates") as security for BMSBLC's
obligations to the Bank under the Credit Agreement. Simultaneously with receipt
by the Bank of funds in an amount necessary to reimburse the Bank and written
notice from the Bank to the Trustee of the reinstatement of the Letter of Credit
with respect to principal and interest on any Pledged Senior Certificate, the
Pledged Senior Certificates shall be released by the Bank from the pledge. If
any Pledged Senior Certificate is released by the Bank in part, the Trustee
shall exchange the Senior Certificate for Senior Certificates of an equal
aggregate amount, transferring Senior Certificates in place of the Pledged
Senior Certificates released by the Bank to the Remarketing Agent for delivery
to the purchasers thereof and retaining the remainder as agent for the Bank as
Pledged Senior Certificates. If any Pledged Senior Certificate is released by
the Bank in whole the Trustee shall exchange such Pledged Senior Certificate for
an equal amount of Senior Certificates, transferring Senior Certificates in
place of such Pledged Senior Certificate to the Remarketing Agent for delivery
to the purchasers thereof. The Trustee will not register any Pledged Senior
Certificates for transfer following remarketing or replace Pledged Senior
Certificates unless the Trustee has received written notice from the Bank that
the Letter of Credit has been reinstated with respect thereto. The proceeds of
the remarketing of Pledged Senior Certificates shall be delivered by the Trustee
to the Bank for application pursuant to the Credit Agreement unless the Trustee
shall have received a written certificate from the Bank stating that
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the Bank has been reimbursed in full, in which case such proceeds shall be
delivered by the Trustee to BMSBLC. Senior Certificates purchased with the
proceeds of remarketing or with funds drawn under the Letter of Credit for which
the Bank has been simultaneously reimbursed shall be delivered to the purchasers
thereof.
Section 2.15. Purchase of Senior Certificates at Option of Owner. The
Owner of any Senior Certificate (other than Pledged Senior Certificates) shall
have the right to tender such Senior Certificate to the Tender Agent for
purchase in whole or in part (in any Authorized Denomination) on any Business
Day at a purchase price equal to 100% of the principal amount of Senior
Certificates (or portions thereof in authorized denominations) tendered plus
accrued interest to the specified purchase date. In order to exercise such
option with respect to any Senior Certificate or portion thereof, the Owner
thereof must give to the Tender Agent at its designated corporate trust office
at least seven days immediately preceding the proposed purchase date, written
notice of tender to the Tender Agent (which written notice of tender shall be
received by the Trustee by 10:00 a.m., Milwaukee, Wisconsin time, on the day
required and shall in either case be in the form provided in this Trust
Indenture or shall be in such other form acceptable to the Tender Agent). Upon
the delivery of such written notice of tender, such election to tender shall be
irrevocable and binding upon the Owner thereof. At or before 10:00 a.m.,
Milwaukee, Wisconsin time, on the specified purchase date (or, if such purchase
date is not a Business Day, then on the immediately following Business Day), the
registered Owner of each Senior Certificate as to which such written notice of
tender shall have been given shall deliver each Senior Certificate to be
purchased as a whole or in part and an instrument of assignment or transfer duly
executed in blank (which instrument of assignment or transfer shall be in the
form provided on such Senior Certificate or in such other forms acceptable to
the Tender Agent), to the Tender Agent at its designated corporate trust office,
and any Senior Certificate which is not so tendered, but for which there has
been irrevocably deposited in the Senior Certificate Purchase Account an amount
sufficient to pay the purchase price thereof and all other Senior Certificates
tendered or deemed tendered for purchase on such specified purchase date, shall
be deemed to have been tendered by the Owner thereof and purchased from such
Owner on the specified purchase date. The Tender Agent shall, in its sole
discretion, determine whether, with respect to any Senior Certificate, the
registered Owner thereof shall have properly exercised the option to have its
Senior Certificate purchased as a whole or in part.
If any such notice of tender for purchase shall have been given to the
Tender Agent pursuant to this Section 2.15, the Tender Agent shall immediately
give telegraphic or telephonic notice, promptly confirmed by a written notice,
to the Remarketing Agent, the Bank, the Trustee and BMSBLC on the same date that
the Tender Agent receives notice of the tender for purchase, if possible, or on
the immediately following Business Day, specifying the principal amount of
Senior Certificates or beneficial ownership interests therein as to which notice
of tender for purchase has been given and the proposed date of purchase. On the
specified purchase date, the Tender Agent shall purchase, or cause to be
purchased, all Senior Certificates or beneficial ownership interests therein as
to which written notices of tender for purchase have been received at a purchase
price equal to the principal amount thereof plus accrued interest, if any,
thereon. Funds for payment of the purchase price of such Senior Certificates or
beneficial ownership interests therein shall be drawn by the Tender Agent from
the Senior Certificate Purchase Account as provided in Section 2.14 of this
Trust Indenture.
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If there has been irrevocably deposited in the Senior Certificate
Purchase Account an amount sufficient to pay the purchase price of all Senior
Certificates or beneficial ownership interests therein tendered or deemed to be
tendered for purchase on such specified purchase date, the Owner of any
Untendered Senior Certificate shall not be entitled to receive interest on such
Untendered Senior Certificate on and after the specified purchase date, and all
such Untendered Senior Certificates shall be deemed to have been tendered for
purchase and purchased pursuant to this Section 2.15 on such specified purchase
date. The Trustee, at the direction of the Tender Agent, shall issue a new
Senior Certificate or Senior Certificates in the same aggregate principal amount
for any Untendered Senior Certificates which are not tendered for purchase on
any specified purchase date and, upon receipt of any such Untendered Senior
Certificates from the Owner thereof, shall pay the purchase price of such
Untendered Senior Certificates to the Owners thereof and cancel such Untendered
Senior Certificates as provided in Section 2.16 of this Trust Indenture.
If the Senior Certificates are held in a book-entry system, a Tender
Notice pursuant to this Section 2.15 may be delivered by a Beneficial Owner.
Such Tender Notice must be delivered as set forth in this Section 2.15. Such
Tender Notice shall be delivered to the Tender Agent (through its Direct
Participant or Indirect Participant) at its designated corporate trust office by
10:00 a.m., Milwaukee, Wisconsin time, at such office at least seven days
preceding the proposed purchase date, and such Tender Notice shall: (a) state
the name and taxpayer identification number of the Beneficial Owner and identify
the Direct Participant or Indirect Participant, (b) be accompanied by evidence
satisfactory to the Trustee of the Beneficial Owner's beneficial ownership
interest in the Senior Certificate(s) to be purchased, (c) state the principal
amount of the Senior Certificate(s) or portions thereof to be purchased, (d)
state the purchase date on which purchase is demanded, which must be a Business
Day not earlier than seven days after delivery of the tender notice, and (e)
contain irrevocable authorization for the Direct Participant or Indirect
Participant to transfer the Beneficial Owner's Senior Certificate(s) on the
purchase date. Upon delivery of such notice, the Beneficial Owner must make
arrangements to have its beneficial ownership interest in the Senior
Certificates being tendered transferred to the Tender Agent at or prior to 10:00
a.m., Milwaukee, Wisconsin time on the Tender Date, but need not otherwise
comply with this Section 2.15.
Section 2.16. Treatment of Untendered Certificates. Untendered Senior
Certificates shall cease to bear interest on the date on which they were
scheduled to have been redeemed or purchased in accordance with this Trust
Indenture if funds sufficient to pay the purchase price or redemption price, as
the case may be, of an Untendered Senior Certificate (including any accrued and
unpaid interest) shall be held by the Trustee in the IDRB Fund (in the form of
Eligible Funds) or in the Senior Certificate Purchase Account, as the case may
be. All liability to the Owner thereof for the payment of such Untendered Senior
Certificate shall forthwith cease, terminate and be completely discharged, and
thereupon it shall be the duty of the Trustee and the Tender Agent to hold such
funds in a separate segregated trust account, without liability for interest
thereon, for the benefit of the Owner of such Untendered Senior Certificate who
shall thereafter be restricted exclusively to such account for any claim of
whatever nature on such person's part under this Trust Indenture or on or with
respect to such Senior Certificate. Such funds in such segregated trust account
shall not be considered a part of the Trust Estate, and such Untendered Senior
Certificates shall not be deemed to be Outstanding under this Trust Indenture.
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Section 2.17. Remarketing of Senior Certificates Tendered for
Purchase. Upon receipt of a Tender Notice, the Tender Agent shall notify BMSBLC,
the Trustee, the Bank and the Remarketing Agent by telephone, telex or other
electronic communication (in each case to be confirmed by prompt written notice)
of the principal amount and Series of Senior Certificates or beneficial
ownership interests to be purchased on the Tender Date.
The Remarketing Agent shall use its best efforts to solicit purchases
of the Tendered Senior Certificates at a price of par on each Tender Date. The
Remarketing Agent shall pay the purchase price received by it (for any Tendered
Senior Certificates so remarketed) to the Trustee for deposit in the Senior
Certificate Purchase Account prior to 10:00 a.m., Milwaukee, Wisconsin time, on
each Tender Date. The moneys paid by the Remarketing Agent to the Trustee shall
consist only of moneys received by the Remarketing Agent from sources other than
BMSBLC or an "insider" to BMSBLC for the purposes of the preference payment
provisions of the United States Bankruptcy Code. Upon request of BMSBLC or the
Bank from time to time, the Remarketing Agent shall advise the requesting party
of the status of the remarketing effort and the Trustee and the Tender Agent
shall advise the requesting party of the balance held by it in the Senior
Certificate Purchase Account. Prior to 5:00 p.m., Milwaukee, Wisconsin time, on
the Business Day immediately preceding the Tender Date, the Remarketing Agent
shall notify the Trustee and the Bank of the status of the remarketing effort,
including the principal amount of Tendered Senior Certificates which have not
been purchased.
Prior to 10:00 a.m., Milwaukee, Wisconsin time, on each Tender Date,
the Tender Agent and the Trustee shall each notify BMSBLC and the Bank by
telephone, telex or other electronic communication (in each case to be confirmed
by prompt written notice) of the exact amount of funds then held by the Trustee
in the Senior Certificate Purchase Account. Prior to 1:00 p.m., Milwaukee,
Wisconsin time, on the same day, the Trustee shall deposit in the Senior
Certificate Purchase Account any moneys received from the Bank for the purchase
of Tendered Senior Certificates on the Tender Date. The proceeds of any such
draw on the Letter of Credit shall be applied on the same day received to the
purchase of the Tendered Senior Certificates by BMSBLC.
In the event that Tendered Senior Certificates are not remarketed on a
Tender Date and become Pledged Senior Certificates, the Remarketing Agent shall
thereafter use its best efforts to solicit purchases of the Pledged Senior
Certificates at a price of par plus accrued interest. The Remarketing Agent
shall pay the purchase price received by it (for any Pledged Senior Certificates
so remarketed) to the Trustee for deposit in the Senior Certificate Purchase
Account prior to 10:00 a.m., Milwaukee, Wisconsin time, on the date of
remarketing. The moneys paid by the Remarketing Agent to the Trustee shall
consist only of moneys received by the Remarketing Agent from sources other than
BMSBLC or an "insider" to BMSBLC for the purposes of the preference payment
provisions of the United States Bankruptcy Code. Upon request of BMSBLC or the
Bank from time to time, the Remarketing Agent shall advise the requesting party
of the status of the remarketing effort.
Section 2.18. Concerning the Remarketing Agent. The Remarketing Agent
shall be a member of the National Association of Securities Dealers, Inc. and
authorized by law to perform the functions of the Remarketing Agent as described
in this Trust Indenture. The Trustee shall cooperate with the Remarketing Agent
in the performance of its duties. The Remarketing Agent
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may resign upon not less than 30 days' prior written notice to BMSBLC, the
Trustee, the Tender Agent and the Bank, and may be removed by BMSBLC, subject to
the written consent of the Bank, which shall not be unreasonably withheld, upon
not less than 30 days' prior written notice to the Trustee, the Tender Agent,
the Bank and the Remarketing Agent. Such resignation or removal shall take
effect only upon the appointment of and acceptance by such successor Remarketing
Agent and the acceptance of such successor Remarketing Agent by BMSBLC and the
Bank.
The Remarketing Agent's duty to remarket Tendered Senior Certificates
pursuant to this Trust Indenture (unless it shall agree otherwise in writing)
shall be a "best efforts" undertaking on its part and shall not obligate it to
purchase Senior Certificates for its own account or to advance funds for the
account of any of its customers or prospective purchasers of Senior
Certificates. BMSBLC shall, at its expense, furnish the Remarketing Agent with
an Offering Circular which, in the opinion of the Remarketing Agent and its
counsel, meets the requirements of applicable state and federal securities laws
as a condition precedent to the institution by BMSBLC of the remarketing
described in Section 2.17 hereof. The Remarketing Agent's compensation for
remarketing shall be fixed by agreement between BMSBLC and the Remarketing Agent
within the range of customary charges by investment bankers for similar services
and shall be paid by BMSBLC.
Section 2.19. Concerning the Tender Agent. The Tender Agent shall be a
commercial bank or trust company organized and existing under the laws of the
United States of America or one of the states thereof and shall have a combined
capital and surplus of at least $25,000,000 or assets under trust administration
of at least $500,000,000. The Tender Agent may resign upon not less than 60
days' prior written notice to BMSBLC, the Trustee, the Bank and the Remarketing
Agent and may be removed by BMSBLC, subject to the written consent of the Bank,
which shall not be unreasonably withheld, upon not less than 60 days' prior
written notice to the Trustee, the Tender Agent, the Bank and the Remarketing
Agent; provided, however, that no such resignation or removal shall become
effective until a successor Tender Agent shall have been appointed and shall
have accepted such appointment.
The provisions of Section 9.01 of this Trust Indenture regarding the
Trustee and the performance of the duties of the Trustee hereunder shall apply
to the Tender Agent and the performance of its duties as Tender Agent hereunder
to the same extent as if they were set forth in full at this point with the
substitution of the word "Tender Agent" for the word "Trustee."
Section 2.20. Additional Series of Senior Certificates. From time to
time, BMSBLC may sell and assign to the Trustee IDRBs in addition to those
described in the Series Supplements attached hereto. In such event, the Trustee
may cause additional Series of Senior Certificates to be issued, substantially
equal in principal amount to the outstanding principal amount of the
corresponding additional IDRBs, upon the same terms and conditions, and on a
parity with, the Senior Certificates. No such additional Series of Senior
Certificates shall be issued unless BMSBLC has caused the Bank to deliver an
amended Letter of Credit in an amount equal to all principal and up to 45 days
of interest at the Cap Rate on all outstanding Senior Certificates, including
the additional Senior Certificates.
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ARTICLE III
FORM OF CERTIFICATES
Section 3.01. Form of Senior Certificates. The Senior Certificates
shall be prepared in substantially the form and tenor set forth in Exhibit A
attached hereto.
Section 3.02. Form of Junior Certificates. The Junior Certificates
shall be prepared in substantially the form and tenor set forth in Exhibit B
attached hereto.
Section 3.03. Additional Matters Appearing on Certificates. There may
be printed or otherwise reproduced on any Certificate form (i) the legal opinion
of Special Counsel, (ii) CUSIP numbers or other numbers of similar use and
import, (iii) customary "back file panel" summary information, (iv) restrictions
on transfer in form approved by the Trustee as required in particular instances,
and (v) any other information deemed necessary or appropriate by the Trustee
with the approval of Bond Counsel and the Underwriter to give notice of
information to Certificate Owners. Any portions of the text of any Certificate
may be set forth on the reverse side thereof, with an appropriate reference
thereto on the face of the Certificate.
ARTICLE IV
GENERAL COVENANTS
Section 4.01. Payment of Principal and Interest. The principal of and
interest on each Series of Certificates are payable solely from revenues derived
from the corresponding IDRB and the Letter of Credit, which revenues are hereby
specifically assigned and pledged to the payment thereof in the manner and to
the extent herein specified and from funds provided by BMSBLC as provided
herein.
Section 4.02. Right to Payments under IDRBs; Instruments of Further
Assurance. BMSBLC covenants that it will defend its right to the payment of
amounts due under the IDRBs, for the benefit of the Owners of Senior
Certificates, against the claims and demands of all persons whomsoever. BMSBLC
covenants that it will do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, such indentures supplemental hereto
and such further acts, instruments and transfers as the Trustee may reasonably
require for the better assuring, transferring, conveying, pledging, assigning
and confirming unto the Trustee all and singular the rights assigned hereby and
the amounts pledged hereby to the payment of the principal of and interest on
the IDRBs. BMSBLC covenants and agrees that, except as provided herein, it will
not sell, convey, mortgage, encumber or otherwise dispose of any part of the
revenues and receipts from the IDRBs or its rights under the IDRBs.
ARTICLE V
FUNDS AND ACCOUNTS
Section 5.01. Acquisition Funds. There is hereby created and
established with the Trustee a Trust Fund for each Series of Certificates to be
designated the "Acquisition Fund." On the Closing Date for each Series, the
Trustee shall deposit the amount received by it for the
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account of BMSBLC from the sale of a Series of Certificates into the
corresponding Acquisition Fund.
Section 5.02. IDRB Funds.
(a) There is hereby created and established with the Trustee a Trust
Fund for each Series of Certificates to be designated the "IDRB Fund."
(b) The Trustee shall deposit into the appropriate IDRB Fund, when and
as received:
(i) All payments received under the Letter of Credit; and
(ii) All payments and prepayments pursuant to or related to the
IDRB.
(c) There are hereby created and established with the Trustee three
separate accounts within the IDRB Fund to be designated the "IDRB Payments
Account," "Letter of Credit Account" and "Senior Certificate Purchase Account."
All IDRB Payments received by the Trustee shall be deposited into the
IDRB Payments Account. Moneys paid into the appropriate IDRB Payments Account
shall be used for the payment of the principal of and interest on the Senior
Certificates when due and for payment of the principal of and interest on the
Senior Certificates upon a redemption of the Senior Certificates prior to
maturity.
Within each IDRB Payments Account shall be created an "Odd-Lots
Subaccount." Any IDRB Payment of IDRB principal in excess of an amount divisible
for $5,000 (the denomination amount of Senior Certificates) shall be retained in
the Odd-Lots Subaccount and paid out (a) to Owners of Senior Certificates only
in lots of $5,000, or (b) to the Owner of the corresponding Junior Certificate
upon retirement of all of the corresponding Series of Senior Certificates.
All funds received from the Bank from draws under the Letter of Credit
will be deposited into the appropriate Letter of Credit Account, except those to
pay the purchase price of Senior Certificates tendered or deemed tendered for
purchase. Moneys in the Letter of Credit Account will be used for the payment of
the principal and interest on the corresponding Senior Certificates when due and
for payment of the principal and interest on the Senior Certificates upon a
redemption of the Senior Certificates prior to maturity.
The Senior Certificate Purchase Account provisions are set forth in
Section 2.14 hereof.
(d) Each payment into the IDRB Payments Account shall be segregated by
the Trustee into an individual subaccount, and each such subaccount shall be
maintained apart from all other funds in the IDRB Payments Account and all other
funds held by the Trustee, provided that all amounts in the IDRB Payments
Account which have been held for a Minimum Holding Period may be commingled in
one subaccount.
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(e) Except as set forth below, the Trustee shall pay principal of and
interest on the Senior Certificates from the following sources and in the
following priority:
(i) The Letter of Credit Account; and
(ii) Eligible Funds in the IDRB Payments Account.
On the Business Day immediately preceding any Interest Payment Date
(whether at maturity, by acceleration or call for redemption or otherwise), the
Trustee shall promptly present a draft to the Bank (with a copy to BMSBLC) for
payment under the Letter of Credit to ensure timely payment of the principal of
and/or interest due on Senior Certificates. The amount of such draft shall be
sufficient for the Trustee to make the required payment of principal of and/or
interest due on the Senior Certificates.
(f) Not later than the 15th day of the month immediately following the
payment of principal and accrued interest on the Senior Certificates on any
Payment Date, the Trustee shall remit from the IDRB Payments Account, first to
the Bank (if the Bank shall not be in default under the Letter of Credit) the
amount reimbursable to the Bank under the Credit Agreement for amounts drawn
upon under the Letter of Credit for payment of principal of and interest on the
Senior Certificates, and second to the Owner of the corresponding Junior
Certificate (if BMSBLC shall not be in default under the Credit Agreement) any
amounts remaining in the IDRB Payments Account.
Section 5.03. Trustee's Maintenance of Records of Payments on
Certificates. In connection with the payment, redemption or purchase of all
Certificates under the provisions of this Trust Indenture, the Trustee shall
keep accurate records of the source of the moneys used to pay, redeem or
purchase such Senior Certificates (whether derived from BMSBLC payments, IDRB
Payments, draws on the Letter of Credit, or otherwise).
Section 5.04. Trustee Reports. Upon request of BMSBLC and the Bank,
the Trustee shall furnish a copy of the transactions, remaining balance in each
fund and account and listing of investments to BMSBLC and the Bank. Upon written
request of BMSBLC or the Bank, the Trustee shall confirm any information
requested in order to comply with the requirements of their independent
auditors.
Section 5.05. Reporting of IDRB Interest Rates and IDRB Payments. No
later than the 15th day of each month, and at times necessary to permit the
Trustee and the Remarketing Agent to determine each Cap Rate and the amount to
be deposited in each IDRB Payments Account, including each Odd-Lots Subaccount,
BMSBLC shall advise the Trustee, the Bank and the Remarketing Agent of the
interest rates borne by the IDRBs. BMSBLC shall provide to the Trustee, the Bank
and the Remarketing Agent written copies of all communications relating to
interest rate changes or monthly IDRB Payments.
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ARTICLE VI
INVESTMENTS
Section 6.01. Investments by Trustee. Subject to the provisions of any
law then in effect to the contrary, the Trustee shall invest all moneys on
deposit from time to time in the Trust Funds to the extent practicable from time
to time, and by the provisions hereof, in any Qualified Investments.
Such Qualified Investments shall be made so as to mature or be subject
to redemption at the option of the Owner thereof on or prior to the date or
dates that the Trustee anticipates that moneys therefrom will be required. The
Trustee may trade with itself or any affiliate in the purchase and sale of such
Qualified Investments and the Trustee shall not be liable or responsible for any
loss resulting from any such investment. Such Qualified Investments shall be
registered in the name of the Trustee or its nominee.
The Trustee shall without further direction from BMSBLC sell such
Qualified Investments as and when required to make any payment for the purpose
of which such investments are held. Each investment shall be credited to the
fund for which it is held, subject to any provisions of this Trust Indenture
directing some other credit.
ARTICLE VII
DISCHARGE OF LIEN
Section 7.01. Conditions for Discharge. If there shall be paid from
Eligible Funds all of the principal and interest to become due on the
Certificates at the times and in the manner stipulated herein, and if the
covenants and promises in the Certificates and in this Trust Indenture expressed
are kept, performed and observed by BMSBLC and the Trustee; all fees and
expenses of the Trustee required by this Trust Indenture to be paid shall have
been paid; and the Bank has been paid in full all amounts owing the Bank under
the Credit Agreement and the Letter of Credit has been returned to and cancelled
by the Bank, then these presents and the estate, rights and interests granted
hereby shall cease, determine and be void, and thereupon the Trustee shall
cancel and discharge the lien of this Trust Indenture, execute and deliver to
BMSBLC such instruments in writing as shall be requisite to satisfy the lien
hereof, and assign and deliver to BMSBLC any property at the time subject to the
lien of this Trust Indenture which may then be in its possession, including any
amounts required to be paid to BMSBLC under Section 8.06 hereof except (i) cash
and securities held by the Trustee for the payment of the principal of and
interest to accrue on the Certificates, and (ii) amounts held for the payment of
untendered Certificates, and deliver the Letter of Credit to the Bank for
cancellation.
Section 7.02. Payment of Certificates. Any Certificate shall be deemed
to be paid within the meaning of this Article when payment of the principal of
such Certificate, plus interest thereon to the due date thereof (whether such
due date be by reason of maturity or upon redemption as provided in this Trust
Indenture, or otherwise), either (a) shall have been made or caused to be made
from Eligible Funds in accordance with the terms hereof, or (b) shall have been
provided for by irrevocably depositing with the Trustee, in trust and
irrevocably set aside exclusively for such payment, cash, without regard to any
investment or reinvestment thereof,
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sufficient to make such payment, and all necessary and proper fees and expenses
of the Trustee pertaining to the Certificates with respect to which such deposit
is made. At such time as a Certificate shall be deemed to be paid hereunder as
aforesaid, it shall no longer be deemed to be Outstanding hereunder and shall no
longer be secured by or entitled to the benefits of this Trust Indenture, except
for the purposes of any such payment from such moneys.
Notwithstanding the foregoing, no deposit under clause (b) of the
immediately preceding paragraph shall be deemed a payment of such Certificate as
aforesaid until:
(a) The deposit shall have been made under the terms of an escrow
trust agreement in form and substance satisfactory to the Trustee consistent
herewith;
(b) BMSBLC shall have delivered a certificate designating when such
Certificates are to be paid or redeemed under terms of such escrow trust
agreement;
(c) A redemption notice meeting the requirements of Section 2.07
hereof and stating that such Certificates are being redeemed from a deposit made
pursuant to this Article either (i) shall have been given, or (ii) shall have
been provided for by delivery to the Trustee of irrevocable instructions for the
giving of such notice;
(d) In the case of Certificates which are subject to mandatory
redemption or mandatory or optional tender for purchase, evidence satisfactory
to the Trustee that such redemption or purchase will not create a deficiency in
the escrow; and
(e) The Trustee shall have been furnished with an opinion of Bond
Counsel to the effect that the payment of the Certificates in accordance with
said escrow trust agreement will not adversely affect the tax-exempt status of
the Certificates and will not cause the Certificates to be classified as
"arbitrage bonds" under Section 148 of the Code.
The Trustee shall provide notice of any such deposit to the Owners of
the affected Certificates.
Notwithstanding any provision of any other Article of this Trust
Indenture which may be contrary to the provisions of this Article, all moneys
set aside and held in trust pursuant to the provisions of this Article for the
payment of Certificates (including interest thereon) shall be applied to and
used solely for the payment of the particular Certificates (including interest
thereon) with respect to which such moneys have been so set aside in trust.
Anything in Article X hereof to the contrary notwithstanding, if
moneys have been deposited or set aside with the Trustee pursuant to this
Article for the payment of Certificates and the interest thereon and such
Certificates and the interest thereon shall not have in fact been actually paid
in full, no amendment to the provisions of this Article may be made without the
consent of the Owner of each of the Certificates affected thereby.
Section 7.03. Cancellation of Surrendered Senior Certificates. BMSBLC
may at any time surrender to the Trustee for cancellation by it any Senior
Certificates previously delivered hereunder, which BMSBLC acquired in any manner
whatsoever, and such Senior Certificates, after a period of 125 days during
which no petition in bankruptcy is filed by or against BMSBLC
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as debtor under the federal bankruptcy laws and no other proceedings are
commenced with respect to BMSBLC as debtor under other applicable bankruptcy,
reorganization or insolvency laws, upon such surrender and cancellation, shall
be deemed to be paid and retired.
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND OWNERS OF SENIOR CERTIFICATES
Section 8.01. Events of Default. If any of the following events
occurs, it is hereby defined as and declared to be and to constitute an Event of
Default:
(a) If default shall be made in the due and punctual payment of
purchase price or principal of or interest on any outstanding Senior Certificate
at the date fixed for purchase or redemption thereof;
(b) If default shall be made in the due and punctual payment of any
other moneys required to be paid to the Trustee under the provisions of this
Trust Indenture and such default shall have continued for a period of 30 days
after written notice thereof, specifying such default, shall have been given by
the Trustee to BMSBLC and the Bank;
(c) If the Bank shall have certified to the Trustee that an Event of
Default occurred under the Credit Agreement and demanded an acceleration of the
Senior Certificates;
(d) If the Bank shall have certified to the Trustee within five
calendar days after any Payment Date that the Bank has not been reimbursed in
full by BMSBLC for any drawing under the Letter of Credit or any other Event of
Default has occurred under the Credit Agreement and as a consequence thereof the
interest component of the Letter of Credit will not be reinstated; or
(e) If the Bank fails to comply with the provisions of the Letter of
Credit, or the Letter of Credit is not, for any reason, in full force and
effect, or the Bank admits insolvency or becomes unable to pay its debts as they
mature or a receiver is appointed for the Bank; and upon the occurrence of any
such event, BMSBLC fails within 30 days to deliver (i) a Substitute Letter of
Credit to the Trustee meeting the requirements of this Trust Indenture, in an
amount sufficient to cover the principal of and at least 45 days of interest on
the Senior Certificates, and (ii) an opinion of counsel satisfactory to the
Trustee as to the validity and enforceability of such letter of credit and
stating that payment of amounts due under the Substitute Letter of Credit will
not constitute a preference under the United States Bankruptcy Code or under any
existing bankruptcy, insolvency, or similar law of the State of Wisconsin
relating to the enforcement of the rights of creditors and the relief of debtors
if a petition in bankruptcy with respect to BMSBLC is filed under the United
States Bankruptcy Code or in the event of the filing of a petition with respect
to BMSBLC under any such laws of the State of Wisconsin and that the
enforceability of the Substitute Letter of Credit would not be materially
affected by the filing of a petition under the federal bankruptcy law with
respect to BMSBLC or any person obligated to reimburse the provider of the
Substitute Letter of Credit for payments made under the Substitute Letter of
Credit.
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Section 8.02. Acceleration.
(a) Upon the occurrence and continuance for two Business Days of an
Event of Default described in Section 8.01(a) above, the Trustee shall declare
the principal of all Senior Certificates then outstanding to be immediately due
and payable by notice in writing to BMSBLC and the Bank, and such principal (and
interest to the date of purchase or redemption) shall thereupon become and be
immediately due and payable. Upon the occurrence of an Event of Default
described in Sections 8.01(b), (c), (d) and (e) above without regard to the
continuance of such default, the Trustee may, and, upon the written request of
the Owners of a majority in aggregate principal amount of Senior Certificates
outstanding, the Trustee shall declare the principal of all Senior Certificates
then outstanding to be immediately due and payable by notice in writing to
BMSBLC and the Bank, and such principal (and interest to the date of purchase or
redemption) shall thereupon become and be immediately due and payable; provided,
however, that if the Letter of Credit shall be outstanding, then an
acceleration, redemption and Event of Default described in Sections 8.01(b), (c)
and (d) shall be subject to the prior written consent of the Bank.
(b) If the Trustee shall accelerate the payment of the Senior
Certificates, the Bank, at its option, may purchase with its own immediately
available funds all (but not part) of such Senior Certificates at a price of
100% of the principal amount thereof plus accrued interest or interest due
thereon on the date of purchase, provided that such Senior Certificates may be
purchased by the Bank only with moneys which are not recoverable from Senior
Certificate Owners as a transfer avoidable as a preference in the event a
petition is filed under the United States Bankruptcy Code with respect to BMSBLC
as debtor, or in the event of a filing of a petition with respect to BMSBLC
under any existing bankruptcy, insolvency or similar law of the State of
Wisconsin relating to the enforcement of the right of creditors and the relief
of debtors.
Upon acceleration of one or more Series of Senior Certificates, the
Trustee immediately shall present a draft to the Bank for payment under the
Letter of Credit pursuant to the terms thereof in an amount sufficient to pay in
full principal of and interest on such Senior Certificates on the payment date
established for redemption of all of such Senior Certificates; provided that the
Bank's obligation under the Letter of Credit is limited to the principal of and
45 days of interest on the Senior Certificates.
Such option shall be exercised by a written notice, delivered to the
Trustee within five Business Days of the acceleration of the Senior Certificates
under Section 8.02 or redemption under Section 2.02. Such notice of intention to
purchase shall: (i) be signed by an authorized officer of the Bank; and (ii)
state that the Bank elects to exercise its option to purchase the Senior
Certificates pursuant to the provisions of this Section 8.02(b) on the date
otherwise established for redemption or acceleration, as applicable (the "Bank
Purchase Date"). Moneys for the purchase of such Senior Certificates shall be
held by the Trustee irrevocably in trust and used solely for the purchase of
such Senior Certificates; provided, however, that any moneys so held which are
not applied to the purchase of Senior Certificates within three years after such
Bank Purchase Date shall be remitted to the Bank subject to any other
requirements of law as may be applicable to such funds, and the Owner of any
Senior Certificate not tendered on the Bank Purchase Date shall thereafter, as
an unsecured general creditor, look only to the Bank for the payment of the
purchase price of any such Untendered Senior Certificate and thereafter, neither
BMSBLC, the Trustee nor any other person (except the Bank) shall be liable or
responsible to
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any Owners of such Untendered Senior Certificates for any payment on account of
any such Untendered Senior Certificates.
The Trustee promptly (and in any event within five Business Days)
following receipt of the aforesaid notice from the Bank of its intention to
purchase the Senior Certificates, shall give written notice to the Owner of each
Senior Certificate directing such Owner to tender the Senior Certificates held
by such Owner to the Trustee for purchase by the Bank on the Bank Purchase Date.
From and after the Bank Purchase Date, until transferred to the Bank,
the Bank shall be entitled to receive any interest on such Senior Certificate as
if it were the Owner of such Senior Certificate, and the Bank shall have power
to concur in or dissent from any request, demand, authorization, direction,
notice, consent or waiver with respect to such Senior Certificate under the
provisions of this Trust Indenture as if it were the Owner of such Senior
Certificate. Interest on any Senior Certificate purchased by the Bank in lieu of
acceleration will be payable to the Bank but shall be held by the Trustee until
such Senior Certificate has been delivered to the Trustee for transfer.
Section 8.03. Other Remedies; Rights of Owners of Senior Certificates.
Upon the occurrence of an Event of Default, the Trustee, with the written
consent of the Bank as long as the Letter of Credit is outstanding and has not
been improperly dishonored, may pursue any available remedy by suit at law or
equity as the Trustee shall deem most effective to protect and enforce, or aid
in the protection and enforcement of, the covenants and agreements set forth
herein.
The Trustee, as beneficiary of the Letter of Credit, shall, with the
prior written consent of the Bank, if it is not in default with respect to the
Letter of Credit, enforce such of its rights as owner of an IDRB as the Trustee
shall deem necessary or appropriate. In exercising such rights and the rights
given the Trustee under this Article VIII, the Trustee shall take such action
as, in the judgment of the Trustee applying the standards described in Section
9.01 hereof, would best serve the interests of the Owners of Senior Certificates
(subject to the rights of the Bank).
If an Event of Default shall have occurred, and if it shall have been
requested so to do by the Owners of a majority in aggregate principal amount of
Senior Certificates or portions thereof outstanding with the consent of the Bank
so long as the Letter of Credit is outstanding and has not been improperly
dishonored and shall have been indemnified as provided in Section 9.01 hereof,
the Trustee shall be obligated to exercise such one or more of the rights and
powers conferred by this Article VIII as the Trustee, being advised by Counsel,
shall deem most expedient in the interests of the Owners of Senior Certificates;
provided however, that the Trustee shall have the right to decline to comply
with any such request if the Trustee shall be advised by Counsel that the action
so requested may not lawfully be taken or if the Trustee in good faith shall
determine that such action would be unjustly prejudicial to the Owners of Senior
Certificates not parties to such request.
No remedy by the terms of this Trust Indenture conferred upon or
reserved to the Trustee or to the Owners of Senior Certificates is intended to
be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to any other remedy given to
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the Trustee or to the Owners of Senior Certificates hereunder or now or
hereafter existing at law or in equity or by statute. The assertion or
employment of any right or remedy hereunder shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission to exercise any right or power accruing upon any
Event of Default shall impair any such right or power or shall be construed to
be a waiver of any such Event of Default or acquiescence therein; and every such
right and power may be exercised from time to time and as often as may be deemed
expedient by the Trustee or, subject to the limitations herein specified, by the
Owners of Senior Certificates, as the case may be. No waiver of any default or
Event of Default hereunder, whether by the Trustee or by the Owners of Senior
Certificates, shall extend to or shall affect any subsequent default or Event of
Default or shall impair any rights or remedies consequent thereon.
Section 8.04. Direction of Proceedings by Owners of Senior
Certificates. The Owners of a majority in aggregate principal amount of a Series
of Senior Certificates or portions thereof then Outstanding shall have the
right, at any time, by an instrument or instruments in writing executed and
delivered to the Trustee, to direct the method and place of conducting all
proceedings to be taken in connection with the enforcement of the terms and
conditions of this Trust Indenture relating to such Series; provided that (a)
such direction shall be in accordance with the provisions of law and of this
Trust Indenture, (b) the Trustee shall determine that the action so directed
would not be unduly prejudicial to the Owners of Senior Certificates of such
Series not taking part in such direction, and (c) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
directions; and provided further that if the action requested is one to which
the Bank's consent would have been required had it been undertaken by the
Trustee alone then such direction shall have been consented to by the Bank.
Notwithstanding the foregoing, the Bank shall have the right to exercise the
rights given to the Owners of Senior Certificates of a Series under this Section
so long as the Letter of Credit is not in default.
Section 8.05. Waiver of Stay or Extension Laws. To the extent that
such rights may lawfully be waived, neither BMSBLC nor anyone claiming through
it or under it shall or will set up, claim, or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force in order to prevent or hinder the enforcement of this Trust Indenture or
the foreclosure of the lien of this Trust Indenture, but BMSBLC, for itself and
all who may claim through or under it, hereby waives, to the extent that it
lawfully may do so, the benefit of all such laws and all right of appraisement
and redemption to which it may be entitled under the laws of the State of
Wisconsin.
Section 8.06. Application of Moneys. All moneys received by the
Trustee pursuant to any right given or action taken under the provisions of this
Article VIII, except moneys received under Section 8.02(b) or from draws on the
Letter of Credit (which shall be applied solely to the principal of and interest
on the Senior Certificates for which such amounts were drawn), shall, after
payment of the cost and expenses of the proceedings resulting in the collection
of such moneys and of the expenses, liabilities and advances incurred or made by
the Trustee, be deposited in the IDRB Fund of the appropriate Series and all
moneys in the Trust Funds shall be applied as follows:
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(a) Unless the principal of and interest accrued on all the Senior
Certificates shall have become or shall have been declared due and payable, all
such moneys shall be applied:
FIRST: to the payment to the persons entitled thereto of all
installments of interest then due on the Senior Certificates of such
Series, in the order of the maturity of the installments of such interest,
and, if the amount available shall not be sufficient to pay in full any
particular installment, then to the payment ratably, according to the
amounts due on such installments, to the persons entitled thereto, without
any discrimination or privilege; and
SECOND: to the payment to the persons entitled thereto of the
unpaid principal of any of the Senior Certificates of such Series which
shall have become due (other than Senior Certificates of such Series called
for redemption and for the payment of which moneys are held pursuant to the
provisions of this Trust Indenture) and, if the amount available shall not
be sufficient to pay in full the principal on Senior Certificates of a
Series due on any particular date, then to the payment ratably, according
to the amount of principal due on such date, to the persons entitled
thereto, without any discrimination or privilege;
(b) If the principal of and interest accrued on all the Senior
Certificates of a Series shall have become due or shall have been declared due
and payable, all such moneys shall be applied to the payment of the principal
and interest then due and unpaid upon the Senior Certificates of such Series,
without preference or priority of principal over interest or of interest over
principal, or of any installment of interest over any other installment of
interest, or of any Senior Certificate over any other Senior Certificate of such
Series, ratably, according to the amounts due respectively for principal and
interest, to the persons entitled thereto, without any discrimination or
privilege; and
(c) If the principal of and interest accrued on all the Senior
Certificates of a Series shall have been declared due and payable, and if such
declaration shall thereafter have been rescinded and annulled under the
provisions of Section 8.10 hereof, then (subject to the provisions of subsection
(b) of this Section in the event that the principal of all the Senior
Certificates shall later become due or be declared due and payable) the moneys
shall be applied in accordance with the provisions of subsection (a) of this
Section.
Whenever moneys are to be applied by the Trustee pursuant to the
provisions of this Section, such moneys shall be applied by it at such times,
and from time to time, as the Trustee shall determine, having due regard to the
amount of such moneys available for application and the likelihood of additional
moneys becoming available for such application in the future. Whenever the
Trustee shall apply such funds, it shall fix the date upon which such
application is to be made, and upon such date interest on the amounts of
principal to be paid on such dates shall cease to accrue. The Trustee shall give
such notice as it may deem appropriate of the deposit with it of any such moneys
and of the fixing of any such date.
Whenever all Senior Certificates of a Series and interest thereon have
been paid under the provisions of this Section 8.06, and all expenses and
charges of the Trustee and Bank have been paid, any balance remaining shall be
paid to the person entitled to receive the same; if no other
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person shall be entitled thereto, then the balance shall be paid to the Bank, if
the Trustee shall have received notice of any amount owing under the Credit
Agreement, and the remainder to the Owner of the corresponding Junior
Certificate.
Section 8.07. Remedies Vested in Trustee. All rights of action,
including the right to file proof of claims under this Trust Indenture or under
any of the Senior Certificates may be enforced by the Trustee without the
possession of any of the Senior Certificates or the production thereof in any
trial or other proceedings relating thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its name as Trustee without the
necessity of joining as plaintiffs or defendants any Owners of Senior
Certificates, and any recovery of judgment shall be for the equal benefit of the
Owners of the Outstanding Senior Certificates of the applicable Series or
portions thereof and, on a subordinate basis, the Bank.
Section 8.08. Rights and Remedies of Owners of Senior Certificates. No
Senior Certificate Owner shall have any right to institute any suit, action or
proceeding in equity or at law for the enforcement of this Trust Indenture or
for the execution of any trust hereof or any other remedy hereunder unless a
default shall have become an Event of Default and the Owners of Senior
Certificates of 25% in aggregate principal amount of Senior Certificates of a
Series or portions thereof then Outstanding shall have made written request to
the Trustee and shall have offered it reasonable opportunity either to proceed
to exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name, nor unless also they have offered to the Trustee
indemnity as provided in Section 9.01 hereof, and the Trustee shall thereafter
fail or refuse to exercise the powers hereinbefore granted or to institute such
action or proceeding in its own name; it being understood and intended that no
one or more Owners of Senior Certificates shall have any right in any manner
whatsoever to affect, disturb or prejudice the lien of this Trust Indenture by
its, his or their action or to enforce any right hereunder except in the manner
herein provided and that all proceedings at law or in equity shall be
instituted, had and maintained in the manner herein provided and for the equal
benefit of the Owners of all Outstanding Senior Certificates of a Series or
portions thereof. Nothing in this Trust Indenture shall affect or impair the
right of any Senior Certificate Owner to enforce by suit or otherwise the
payment of the principal of and interest on each of the Senior Certificates
issued hereunder to the respective Owners thereof at the time and place, from
the source and in the manner in said Senior Certificates expressed. Nothing in
this Trust Indenture shall affect or impair the right of any Senior Certificate
Owner to institute suit against an IDRB Issuer to enforce payment when due to
such Owner of its share of IDRB Payments.
Section 8.09. Termination of Proceedings. In case the Trustee shall
have proceeded to enforce any right under this Trust Indenture, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Trustee, then and in every such case
BMSBLC and the Trustee shall be restored to their former positions and rights
hereunder with respect to the property herein conveyed, and all rights, remedies
and powers of the Trustee shall continue as if no such proceedings had been
taken.
Section 8.10. Waiver of Events of Default. If the Letter of Credit is
outstanding and has not been improperly dishonored, the Bank may direct the
Trustee to waive any Event of Default hereunder and its consequences and rescind
any declaration of acceleration of principal and accrued interest; provided,
however, that there shall not be waived any Event of Default under
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Section 8.01(d) or (e) unless the Letter of Credit has been reinstated to the
amount required by Section 8.13(c), and there shall not be waived without
consent of the Owners of all the Senior Certificates Outstanding any Event of
Default in the payment of the principal of any Outstanding Senior Certificates
or portions thereof when due, whether at the stated maturity or at the
Redemption Date thereof or otherwise or any Event of Default in the payment when
due in the interest on any such Senior Certificates, unless in either such case
prior to such waiver or rescission there has been paid or deposited with the
Trustee a sum sufficient to pay:
(a) All overdue installments of interest on the Senior Certificates;
(b) Principal of any Senior Certificates which has become due
otherwise than by such declaration of acceleration; and
(c) All expenses of the Trustee hereunder.
No such waiver or rescission shall extend to any subsequent or other
default or Event of Default or impair any rights consequent thereon.
Section 8.11. Draws Under Letter of Credit. For so long as the Letter
of Credit remains outstanding, the Trustee shall draw on the Letter of Credit as
follows:
(a) On or before 1:00 p.m., Milwaukee, Wisconsin time, on the Business
Day immediately preceding each Interest Payment Date -- an amount sufficient,
together with available Eligible Funds then on deposit in each IDRB Fund, to pay
all interest on the Senior Certificates of each Series (which are not Pledged
Senior Certificates) due on such Interest Payment Date;
(b) On or before 1:00 p.m., Milwaukee, Wisconsin time, on the Business
Day preceding each Redemption Date fixed pursuant to this Trust Indenture -- an
amount sufficient, together with available Eligible Funds then on deposit in
each IDRB Fund, to pay the principal of and accrued interest (to the extent not
already covered by the draw described in clause (a) above) on all Senior
Certificates of each Series (which are not Pledged Senior Certificates) to be
redeemed on such redemption date;
(c) Before 10:30 a.m., Milwaukee, Wisconsin time, on each Tender Date
- -- an amount sufficient, together with available funds then on deposit in the
Senior Certificate Purchase Account, to pay the purchase price (to the extent
not already covered by the draw described in clause (a) above) on all Senior
Certificates of each Series or beneficial interests (which are not Pledged
Senior Certificates) to be purchased on any Tender Date; and
(d) Upon acceleration of the maturity of the Senior Certificates of a
Series under this Trust Indenture or the Bank has notified the Trustee to
accelerate the Senior Certificates because of the occurrence of an Event of
Default under the Credit Agreement as provided in Sections 8.01(c) and 8.02 of
this Trust Indenture, within five calendar days after the earlier of (i) the
date of the acceleration of the Senior Certificates of a Series caused by an
Event of Default under this Trust Indenture or (ii) the date of notice from the
Bank to accelerate -- an amount sufficient, together with available Eligible
Funds then on deposit in the IDRB Fund, to pay the principal of the Senior
Certificates (which are not Pledged Senior Certificates) and the accrued
interest
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thereof to the date on which the proceeds of such draw are to be used for such
payment which will be a date not later than 13 days from the earlier of (iii)
the date of the acceleration of the Senior Certificates of a Series caused by an
Event of Default under this Trust Indenture or (iv) the date of the notice from
the Bank to accelerate, as the case may be; but in any event not later than the
date immediately preceding the date on which a draw under the Letter of Credit
would be insufficient to pay the principal of an interest on all Outstanding
Senior Certificates. The Trustee shall give notice of any such acceleration in
accordance with Section 2.07 hereof.
Each such draw on the Letter of Credit shall be made in timely manner
in accordance with the terms of the Letter of Credit. In the event that for
purposes of obtaining or maintaining a rating for the Senior Certificates or for
any other reason, it shall be necessary or desirable to make provision for draws
on the Letter of Credit at particular times, the Trustee shall deliver a written
undertaking so to do and shall be bound thereby to the same extent as if the
terms thereof were set forth in full in this Trust Indenture.
The Trustee understands that the Letter of Credit automatically
reduces in amount from time to time and that it is therefore critically
important that draws upon the Letter of Credit be made in timely fashion. The
Trustee agrees (for the benefit of the Owners of Senior Certificates) to make
diligent efforts prior to any Interest Payment Date to learn whether any event
has occurred that would prevent money in an IDRB Fund from being Eligible Funds,
including checking with the Clerk of Court for the Federal District Court for
the Eastern District or Western District of Wisconsin, as applicable, that no
petition in bankruptcy has been filed by or against the applicable IDRB Borrower
or IDRB Issuer.
Section 8.12. Substitute Letter of Credit. The Trustee shall from time
to time, at the written direction of BMSBLC, accept a renewal, extension,
substitute or replacement Letter of Credit (a "Substitute Letter of Credit") to
be effective on an Interest Payment Date to replace the Letter of Credit then in
effect (the "existing Letter of Credit"), provided that:
(a) BMSBLC shall give the Trustee and the Remarketing Agent at least
45 days' written notice of the date selected by BMSBLC as the Letter of Credit
Substitution Date;
(b) The Substitute Letter of Credit meets the requirements of a Letter
of Credit as set forth below; and
(c) The Substitute Letter of Credit is accepted by the Trustee at
least 45 days prior to such Interest Payment Date.
On the Letter of Credit Substitution Date, the existing Letter of
Credit shall be delivered to the provider of the existing Letter of Credit for
cancellation and thereupon all references in this Trust Indenture to the Letter
of Credit, the Bank and the Letter of Credit Expiration Date shall be construed
by reference to the Substitute Letter of Credit. If a Substitute Letter of
Credit is provided by a financial institution other than the provider of the
existing Letter of Credit, then (A) the Trustee shall give written notice of
such substitution to the Owners of Senior Certificates not less than 30 days
prior to the Letter of Credit Substitution Date, and (B) the Letter of Credit
Substitution Date shall also be a Mandatory Tender Date subject to Section 2.03.
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On the Letter of Credit Substitution Date, the existing Letter of
Credit shall be delivered to the provider of the existing Letter of Credit for
cancellation and thereupon all references in this Trust Indenture to the Letter
of Credit, the Bank and the Letter of Credit Expiration Date shall be construed
by reference to the Substitute Letter of Credit. If a Substitute Letter of
Credit is provided by a financial institution other than the provider of the
existing Letter of Credit, the Trustee shall give written notice of such
substitution to the Owners of Senior Certificates.
Section 8.13. Concerning the Letter of Credit. Each Letter of Credit
shall have the following terms and provisions:
(a) The Letter of Credit shall be issued by a financial institution
acceptable to the Remarketing Agent and rated, at the time of the initial
issuance of the Letter of Credit, at least "A" by a national rating agency;
(b) The Letter of Credit shall permit draws to be made against it as
set forth in Section 8.11 of this Trust Indenture;
(c) The Letter of Credit shall have a Letter of Credit Expiration Date
that is the 15th day of a month and shall have a term of at least one year;
(d) The Letter of Credit shall be in an amount not less than the sum
of (i) the maximum principal amount of Senior Certificates that will be
Outstanding commencing on the first date on which draws are permitted
thereunder, plus (ii) at least 45 days of interest on such principal amount of
Senior Certificates at the Cap Rate;
(e) The Letter of Credit shall be issued in favor of the Trustee and
delivered to the Trustee; and
(f) The Letter of Credit shall be in form and substance acceptable to
the Trustee.
The Trustee shall not accept any instrument as a Letter of Credit
unless it determines to its satisfaction that the foregoing conditions have been
satisfied and unless the Trustee shall have been furnished with (i) an Opinion
of Counsel to the effect that the Letter of Credit has been duly authorized,
executed and delivered and is a legally valid and binding obligation of the Bank
enforceable in accordance with its terms (subject to customary exceptions as to
enforceability) and that payment of amounts due under the Letter of Credit will
not constitute a preference under the United States Bankruptcy Code or under any
existing bankruptcy, insolvency, or similar law of the State of Wisconsin
relating to the enforcement of the rights of creditors and the relief of debtors
if a petition in bankruptcy with respect to BMSBLC or any IDRB Borrower or IDRB
Issuer is filed under the United States Bankruptcy Code or in the event of the
filing of a petition with respect to BMSBLC or any IDRB Borrower or IDRB Issuer
under any such laws of the State of Wisconsin and that the enforceability of the
Letter of Credit would not be materially affected by the filing of a petition
under the federal bankruptcy law with respect to BMSBLC, any IDRB Borrower, any
IDRB Issuer or any person obligated to reimburse the provider of the Letter of
Credit for payments made under the Letter of Credit; and (ii) an opinion of Bond
Counsel to the effect that delivery of such Substitute Letter of Credit will not
result in a Determination of Taxability.
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ARTICLE IX
THE TRUSTEE
Section 9.01. Acceptance of the Trustee. The Trustee hereby accepts
the trusts imposed upon it by this Trust Indenture and agrees to perform said
trusts, but only upon and subject to the following terms and conditions:
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Trust Indenture, and no implied covenants or obligations should be read into
this Trust Indenture against the Trustee. In case an Event of Default hereunder
has occurred and has not been cured, the Trustee agrees to perform such trusts
as an ordinarily prudent trustee under similar circumstances. Whether or not
therein expressly so provided, every provision of this Section 9.01 and this
Trust Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
subsection.
(b) The Trustee may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents, receivers or
employees, but shall be answerable for the conduct of the same in accordance
with the standard specified above, and shall be entitled to advice of Counsel
concerning all matters of trusts hereof and duties hereunder, and may in all
cases pay such reasonable compensation to any attorney, agent, receiver or
employee retained or employed by it in connection herewith. The Trustee may act
upon the opinion or advice of any attorney or accountant selected by it in the
exercise of reasonable care or, if selected or retained by BMSBLC, approved by
the Trustee in the exercise of such care. The Trustee shall not be responsible
for any loss or damage resulting from any action or nonaction based on its good
faith reliance upon such opinion or advice.
(c) The Trustee shall not be responsible for any recital herein or in
the Certificates, or for the investment of moneys, except as provided in Article
VI hereof, or for the validity of the execution by BMSBLC of this Trust
Indenture or of any supplemental indentures or instruments of further assurance,
or for the sufficiency of the security for the Certificates issued hereunder or
intended to be secured hereby, or otherwise as to the maintenance of the
security hereof. The Trustee may (but shall be under no duty to) advise BMSBLC
and the Bank of any impending default known to the Trustee.
(d) The Trustee shall not be accountable for the use or application of
any of the Certificates or the proceeds thereof or for the use and application
of any money paid over by the Trustee in accordance with the provisions of this
Trust Indenture or for the use and application of money received by the Trustee.
The Trustee may become the Owner of Certificates secured hereby with the same
rights it would have if not Trustee.
(e) The Trustee shall be protected in acting upon any notice, order,
requisition, request, consent, certificate, order, opinion (including an Opinion
of Counsel), affidavit, letter, telegram or other paper or document in good
faith deemed by it to be genuine and correct and to have been signed or sent by
the proper person or persons. Any action taken by the Trustee
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pursuant to this Trust Indenture upon the request or authority or consent of any
person who at the time of making such request or giving such authority or
consent is the Owner of any Certificate shall be conclusive and binding upon all
future Owners of the same Certificate issued in exchange therefor or in place
thereof.
(f) The Trustee shall not be answerable in connection with its duties
hereunder for any act or failure to act, including but not limited to any debts
contracted or for damages to persons or to personal property injured or damaged
or for salaries or nonfulfillment of contracts during any period in which it may
be in the possession of or managing the pledged property as in this Trust
Indenture provided except for its negligence or willful default.
(g) At any and all reasonable times, the Trustee and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives shall have the right fully to inspect any and all of the
property herein conveyed, and to obtain copies of such memoranda from and in
regard thereto as may be desired.
(h) The Trustee shall not be required to give any bond or surety in
respect of the execution of the said trusts and powers or otherwise in respect
of the premises.
(i) Notwithstanding anything elsewhere in this Trust Indenture
contained, the Trustee shall have the right, but shall not be required, to
demand, with respect to the withdrawal of any cash, the release of any property
or any action whatsoever within the scope of this Trust Indenture, any showings,
certificates, opinions (including Opinions of Counsel), appraisals or other
information, corporate action or evidence thereof, in addition to that by the
terms hereof required, as a condition of such action by the Trustee, deemed
desirable for the purpose of establishing the right to the withdrawal of any
cash, the release of any property or the taking of any other action by the
Trustee.
(j) Before taking any action hereunder requested by Owners of
Certificates (other than presentation of drafts to the Bank under the Letter of
Credit), the Trustee may require that it be furnished by and at the expense of
the Owners of Certificates an indemnity bond satisfactory to it for the
reimbursement of all expenses to which it may be put and to protect it against
all liability, except liability which results from the negligence or willful
default of the Trustee, by reason of any action so taken by the Trustee.
Section 9.02. Fees, Charges and Expenses of the Trustee. The Trustee
shall be entitled to payment and/or reimbursement for reasonable fees for
services rendered hereunder and all advances, legal fees and other expenses
reasonably and necessarily made or incurred by it in and about the execution of
the trusts created by this Trust Indenture and in and about the exercise and
performance of the powers and duties of the Trustee hereunder and for the
reasonable and necessary costs and expenses incurred in defending any liability
in the premises of any character whatsoever (unless such liability is
adjudicated to have resulted from the negligence or willful default of the
Trustee).
BMSBLC will pay the Trustee's closing expenses, including attorney's
fees, at the closing. BMSBLC will also pay to the Trustee all reasonable
expenses incurred by the Trustee
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in connection with the transactions contemplated by this Trust Indenture which
are not otherwise required to be paid by BMSBLC under the terms of this Trust
Indenture.
Upon an Event of Default, but only upon an Event of Default, the
Trustee shall have a first lien with right of payment prior to payment on
account of interest or principal of any Certificate, except for those
Certificates deemed to be paid within the meaning of Section 7.02 hereof, upon
the Trust Estate for said fees, advances, legal fees, costs and expenses
incurred by it, but under no circumstances does the Trustee have any lien on
amounts drawn under the Letter of Credit.
Section 9.03. Notice to Owners of Certificates if Default Occurs. The
Trustee shall give to the Owners of Certificates notice of all defaults or
Events of Default known to the Trustee within 30 days after the occurrence of a
default or Event of Default, unless such default or Event of Default shall have
been cured before the giving of such notice; provided that, except in the case
of Events of Default in the payment of the principal of or interest on any of
the Certificates, 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 chief executive officer of the Trustee in good faith
determines that the withholding of such notice is in the interest of the Owners
of Certificates.
Section 9.04. Intervention by Trustee. In any judicial proceeding
which in the opinion of the Trustee and its counsel has a substantial bearing on
the interest of Owners of Certificates, the Trustee may intervene on behalf of
Owners of Certificates of a Series and shall do so if requested in writing by
the Owners of Certificates of at least 25% of the aggregate principal amount of
the Outstanding Certificates of a Series or portions thereof. The rights and
obligations of the Trustee under this Section 9.04 are subject to the approval
of a court of competent jurisdiction in the premises.
Section 9.05. Successor Trustee. Any corporation, association or
agency into which the Trustee may be converted or merged, with which it may be
consolidated or to which it may sell or transfer its trust business and assets
as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which it is a party, ipso facto, shall be and become successor Trustee hereunder
and under the Continuing Disclosure Agreement and vested with all of the title
to the whole property or Trust Estate and all of the trusts, powers,
discretions, immunities, privileges and all other matters as was its predecessor
without the execution or filing of any instrument or any further act, deed, or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.06. Resignation by the Trustee. The Trustee may at any time
resign from the trusts hereby created by giving 30 days' written notice to
BMSBLC and by first-class mail to each Certificate Owner, and such resignation
shall take effect only upon the appointment and the acceptance of a successor
Trustee by the Owners of Certificates or by BMSBLC and the acceptance by such
successor Trustee. Such notice to BMSBLC may be served personally or sent by
registered mail.
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Section 9.07. Removal of Trustee. The Trustee may be removed at any
time by an instrument or concurrent instruments in writing delivered to the
Trustee and BMSBLC and signed by the Owners of Certificates of a majority in
aggregate principal amount of the then-Outstanding Certificates or portions
thereof, and such removal shall take effect only upon the appointment and the
acceptance of a successor Trustee by the Owners of Certificates or by BMSBLC and
the acceptance by such successor Trustee.
Section 9.08. Appointment of the Successor Trustee by the Owners of
Certificates; Temporary Trustee. In case the Trustee shall resign or be removed,
or shall be dissolved or in the course of dissolution or liquidation, or
otherwise become incapable of acting hereunder, or in case it shall be taken
under the control of any public officer or officers or of a receiver appointed
by a court, a successor may be appointed by the Owners of Certificates of a
majority in aggregate principal amount of the then-Outstanding Certificates or
portions thereof by an instrument or concurrent instruments in writing signed by
such Owners of Certificates or by their attorney-in-fact duly authorized;
provided that no such appointment shall be effective without the written consent
of BMSBLC, which consent shall not be withheld unreasonably.
Nevertheless, in case of such vacancy, BMSBLC may appoint a temporary
trustee to fill such vacancy until a successor trustee shall be appointed by the
Owners of Certificates in the manner above provided; and any such temporary
trustee so appointed by BMSBLC shall immediately and without further act be
superseded by the trustee so appointed by such Owners of Certificates. Every
such trustee appointed pursuant to the provisions of this Section 9.08 shall be
a trust company or bank having a reported combined capital and surplus of at
least $25,000,000 or assets under trust administration of at least $500,000,000
if there be such an institution willing, qualified and able to accept the trust
upon reasonable or customary terms.
Section 9.09. Concerning any Successor Trustees. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and BMSBLC an instrument in writing accepting such appointment
hereunder and under the Continuing Disclosure Agreement, and thereupon such
successor, without any further act, assignment or conveyance, shall become fully
vested with all the estates, properties, rights, powers, trusts, duties and
obligations of its predecessors as Trustee; but such predecessor shall,
nevertheless, on the written request of BMSBLC or of its successor Trustee,
execute and deliver an instrument transferring to such successor Trustee all the
estates, properties, rights, powers and trusts of such predecessor hereunder,
and every predecessor trustee shall deliver all securities and moneys held by it
as Trustee hereunder to its successor. Should any instrument in writing from
BMSBLC be required by any successor Trustee for more fully and certainly vesting
in such successor the estates, rights, powers and duties hereby vested or
intended to be vested in the predecessor Trustee, any and all such instruments
in writing shall, on request, be executed, acknowledged and delivered by BMSBLC.
The resignation of any Trustee and the instrument or instruments removing any
Trustee and appointing a successor hereunder, together with all other
instruments provided for in this Section, shall be forthwith filed and/or
recorded by the successor Trustee in each recording office where this Trust
Indenture has been filed and/or recorded.
Section 9.10. Trustee Protected in Relying Upon Resolutions, Etc. The
resolutions, orders, requisitions, opinions, certificates and other instruments
provided for in this Trust Indenture may be accepted by the Trustee as
conclusive evidence of the facts and conclusions
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stated therein and shall be full warrant, protection and authority to the
Trustee for the release of property and the withdrawal of cash hereunder.
Section 9.11. Successor Trustee as Custodian of Funds. In the event of
a change in the office of Trustee, the predecessor trustee which has resigned or
been removed shall cease to be custodian of the Trust Funds prescribed in
Article V, and the successor Trustee shall be and become such custodian.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Not Requiring Consent of Owners
of Certificates. BMSBLC and the Trustee may, from time to time and at any time,
without the consent of, or notice to, any of the Owners of Senior Certificates,
and when so required by this Trust Indenture shall, enter into an indenture or
indentures supplemental to this Trust Indenture (which supplemental indenture or
indentures shall thereafter form a part hereof), so as thereby to (a) cure any
ambiguity or formal defect or omission in this Trust Indenture or in any
supplemental indenture; (b) grant to or confer upon the Trustee for the benefit
of the Owners of Senior Certificates any additional rights, remedies, powers,
authority or security that may lawfully be granted to or conferred upon the
Owners of Senior Certificates or the Trustee; (c) describe or identify more
precisely any part of the Trust Estate or to subject to the lien and pledge of
this Trust Indenture additional revenues, properties or collateral; (d) evidence
the appointment of a separate trustee or a co-trustee or the successor of a new
Trustee; (e) modify, eliminate and/or add to the provisions of this Trust
Indenture to such extent as shall be necessary to effect the qualification of
this Trust Indenture under the Trust Indenture Act of 1939, as then amended, or
under any similar federal statute hereafter enacted, and to add to this Trust
Indenture such other provisions as may be expressly permitted by said Trust
Indenture Act of 1939, excluding, however, the provisions referred to in Section
316(a)(2) of said Trust Indenture Act of 1939; or (f) make any other change
which, in the judgment of the Trustee, is not to the prejudice of the Trustee or
the Owners of Senior Certificates.
Section 10.02. Supplemental Indentures Requiring Consent of Owners of
Senior Certificates. Exclusive of supplemental indentures covered by Section
10.01, and subject to the terms and provisions contained in this Section, and
not otherwise, the Trustee, upon receipt of an instrument evidencing the consent
to a supplemental indenture by the Owners of Senior Certificates of not less
than a majority of the aggregate principal amount of the Outstanding Senior
Certificates or portions thereof, shall join with BMSBLC in the execution of
such indenture or indentures supplemental hereto as shall be deemed necessary
and desirable for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in this
Trust Indenture or in any supplemental indenture; provided, however, that
nothing herein contained shall permit or be construed as permitting, except with
the consent of the Owners of Senior Certificates of all Outstanding Senior
Certificates or portions thereof (a) an extension of the maturity of the
principal of or the interest on any Senior Certificate; or (b) a reduction in
the principal amount of any Senior Certificate or the rate of interest on any
Senior Certificate; or (c) a privilege or priority of any Senior Certificate or
Senior Certificates over any other Senior Certificate or Senior Certificates; or
(d) a reduction in the
39
<PAGE>
aggregate principal amount of the Senior Certificates required for consent to
such supplemental indenture; or (e) the creation of any lien ranking prior to or
on a parity with the lien of this Trust Indenture on the Trust Estate or any
part thereof, except as hereinbefore expressly permitted; or (f) the deprivation
of the Owner of any then-Outstanding Senior Certificates of the lien hereby
created on the Trust Estate; or (g) the modification of any of the provisions of
this Section; or (h) the circumstances under which or the prices at which the
Senior Certificates may be redeemed or tendered.
If at any time BMSBLC shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such supplemental indenture to be mailed to
each registered Owner of a Senior Certificate. Such notice shall briefly set
forth the nature of the proposed supplemental indenture and shall state that
copies thereof are on file at the principal office of the Trustee for inspection
by all Owners of Senior Certificates. The Trustee shall not, however, be subject
to any liability to any Senior Certificate Owner by reason of its failure to
give such notice, and any such failure shall not affect the validity of such
supplemental indenture when consented to and approved as provided in this
Section.
Section 10.03. Supplemental Indentures Requiring Consent of Owners of
Junior Certificates. Exclusive of supplemental indentures covered by Section
10.01, and subject to the terms and provisions contained in this Section, and
not otherwise, the Trustee, upon receipt of an instrument evidencing the consent
to a supplemental indenture by the Owners of Junior Certificates of not less
than a majority of the aggregate principal amount of the Outstanding Junior
Certificates or portions thereof, shall join with BMSBLC in the execution of
such indenture or indentures supplemental hereto as shall be deemed necessary
and desirable for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in this
Trust Indenture or in any supplemental indenture; provided, however, that
nothing herein contained shall permit or be construed as permitting, except with
the consent of the Owners of all Outstanding Junior Certificates or portions
thereof (a) an extension of the maturity of the principal of or the interest on
any Junior Certificate; or (b) a reduction in the principal amount of any Junior
Certificate or the rate of interest on any Junior Certificate; or (c) a
privilege or priority of any Junior Certificate or Junior Certificates over any
other Junior Certificate or Junior Certificates; or (d) a reduction in the
aggregate principal amount of the Junior Certificates required for consent to
such supplemental indenture; or (e) the creation of any lien ranking prior to or
on a parity with the lien of this Trust Indenture on the Trust Estate or any
part thereof, except as hereinbefore expressly permitted; or (f) the deprivation
of the Owner of any then-Outstanding Junior Certificates of the lien hereby
created on the Trust Estate; or (g) the modification of any of the provisions of
this Section; or (h) the circumstances under which or the prices at which the
Junior Certificates may be redeemed or tendered.
If at any time BMSBLC shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such supplemental indenture to be mailed to
each registered Owner of a Junior Certificate. Such notice shall briefly set
forth the nature of the proposed supplemental indenture and shall state that
copies thereof are on file at the principal office of the Trustee for inspection
by all Owners
40
<PAGE>
of Junior Certificates. The Trustee shall not, however, be subject to any
liability to any Junior Certificate Owner by reason of its failure to give such
notice, and any such failure shall not affect the validity of such supplemental
indenture when consented to and approved as provided in this Section.
Section 10.04. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article X, this Trust Indenture shall
be modified in accordance therewith and such supplemental indenture shall form a
part of this Trust Indenture for all purposes, and every Owner of Senior
Certificates theretofore or thereafter delivered hereunder shall be bound
thereby; provided, however, that no supplemental indenture shall be given effect
unless the Trustee shall have first received a written opinion of Bond Counsel
to the effect that the execution and implementation of the supplemental
indenture will not result in a Determination of Taxability.
Section 10.05. Consent of BMSBLC and Bank. Anything herein to the
contrary notwithstanding, a supplemental indenture under this Article X which,
in the reasonable judgment of BMSBLC, adversely affects the rights of BMSBLC
hereunder or under the Credit Agreement, and while BMSBLC is not in default
under the Credit Agreement, shall not become effective unless and until BMSBLC
shall have consented in writing to the execution and delivery of such
supplemental indenture. Anything herein to the contrary notwithstanding, a
supplemental indenture under this Article X so long as the Bank has not
improperly dishonored a draw on the Letter of Credit, shall not become effective
unless and until the Bank shall have consented in writing to the execution and
delivery of such supplemental indenture. In this regard, the Trustee shall cause
notice of the proposed execution and delivery of any such supplemental indenture
to the execution and delivery of which BMSBLC and the Bank have not already
consented, together with a copy of the proposed supplemental indenture and
written consent form to be signed by each of BMSBLC and the Bank, to be mailed
by registered mail to BMSBLC and the Bank at least 30 days prior to the proposed
date of execution and delivery of any such supplemental indenture.
Section 10.06. Rights of Trustee. If, in the opinion of the Trustee,
any supplemental indenture provided for in this Section affects the rights,
duties or immunities of the Trustee under this Trust Indenture or otherwise, the
Trustee may, in its discretion, decline to execute such supplemental indenture,
except to the extent that this may be required in the case of a supplemental
indenture entered into under Section 10.01 hereof. The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
as conclusive evidence that any such supplemental indenture conforms to the
requirements of this Trust Indenture.
ARTICLE XI
AMENDMENT OF LOAN AGREEMENT OR LETTER OF CREDIT
Section 11.01. Amendments, Etc. to Letter of Credit Not Requiring
Consent of Owners of Senior Certificates. The Trustee may, without the consent
of or notice to the Owners of Senior Certificates, consent to any amendment,
change or modification of the Letter of Credit which may be required or
permitted (i) by the provisions of this Trust Indenture or the Letter of Credit;
41
<PAGE>
(ii) for the purpose of curing any ambiguity or formal defect or omission; or
(iii) in connection with any other change therein which, in the judgment of the
Trustee, is not to the prejudice of the Trustee or the Owners of Senior
Certificates. The Trustee shall consent to no amendment, change or modification
of the Letter of Credit which is inconsistent with the requirements of this
Trust Indenture.
Section 11.02. Amendments, Etc. to Letter of Credit Requiring Consent
of Owners of Senior Certificates. Except for the amendments, changes or
modifications as provided in Section 11.01, the Trustee shall not consent to any
other amendment, change or modification of the Letter of Credit without notice
and the written approval or consent of the Owners of Senior Certificates of not
less than a majority in aggregate principal amount of the then-Outstanding
Senior Certificates or portions thereof given and procured as in this Section;
provided that the Trustee shall consent to no amendment which adversely affects
the rights of some but less than all the Outstanding Senior Certificates without
the consent of Owners of Senior Certificates so affected; and provided further
that the Trustee shall not, without the unanimous written consent of the Owners
of Senior Certificates, consent to any amendment which would (i) decrease the
amounts payable under the Letter of Credit, or (ii) change the dates of payment
under the Letter of Credit.
If at any time BMSBLC shall request the consent of the Trustee to any
such proposed amendment, change or modification of the Letter of Credit, the
Trustee shall, upon being satisfactorily indemnified by BMSBLC with respect to
expenses, cause notice of such proposed amendment, change or modification to be
given in the same manner as provided by Section 10.01 hereof with respect to
supplemental indentures. Such notice shall briefly set forth the nature of such
proposed amendment, change or modification and shall state that copies of the
instrument embodying the same are on file at the principal office of the Trustee
for inspection by all Owners of Senior Certificates. If the Owners of Senior
Certificates of not less than a majority in aggregate principal amount of the
Outstanding Senior Certificates or portions thereof at the time of the execution
of any such amendment, change or modification shall have consented to and
approved the execution of any such amendment, change or modification as herein
provided, no Owner of any Senior Certificate shall have any right to object to
any of the terms and provisions contained therein, or the operation thereof, or
in any manner to question the propriety of the execution thereof, or to enjoin
or restrain the Trustee or BMSBLC from executing the same or from taking any
action pursuant to the provisions thereof.
Section 11.03. Consent of Trustee and BMSBLC. The Letter of Credit may
not be effectively amended, changed or modified as provided in this Article XI
without the written consent of the Trustee and BMSBLC. If, in the opinion of the
Trustee, who may rely on an opinion of Bond Counsel, any amendment, change or
modification of the Letter of Credit provided for in this Section materially
affects the rights, duties or immunities of the Trustee under this Trust
Indenture or otherwise, the Trustee may, in its discretion, decline to consent
thereto.
Section 11.04. Consent of Bank. No amendment, change or modification
of any document referred to in this Article XI shall be effective unless the
Bank shall have consented in writing thereto.
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ARTICLE XII
MISCELLANEOUS
Section 12.01. Consent, Etc. of Owners of Certificates. Any consent,
request, direction, approval, objection or other instrument required by this
Trust Indenture to be signed and executed by Owners of Certificates may be in
any number of concurrent writings of similar tenor and may be signed or executed
by such Owners of Certificates in person or by agent appointed in writing. Proof
of the execution of any such consent, request, direction, approval, objection or
other instrument or of the writing appointing any such agent and of the
ownership of the Certificates, if made in the following manner, shall be
sufficient for any of the purposes of this Trust Indenture and shall be
conclusive in favor of the Trustee with regard to any action taken by it under
such request or other instrument, namely:
(a) The fact and date of the execution by any person of any such
writing may be proved by the certificate of any officer in any jurisdiction who
by law has power to take acknowledgments within such jurisdiction that the
person signing such writing acknowledged before him the execution thereof, or by
an affidavit of any witness to such execution; and
(b) The ownership of Certificates shall be proved by the Certificate
Register.
Section 12.02. Limitation of Rights. With the exception of rights
herein conferred, nothing expressed or mentioned in or to be implied from this
Trust Indenture or the Certificates is intended or shall be construed to give to
any person or company other than the parties hereto, the Owners of Certificates,
the Beneficial Owners, the Remarketing Agent, the Bank, any legal or equitable
right, remedy or claim under or with respect to this Trust Indenture or any
covenants, conditions and provisions herein contained; this Trust Indenture and
all of the covenants, conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and the Owners of
Certificates hereby secured as herein provided.
Section 12.03. Severability. If any provision of this Trust Indenture
shall be held or deemed to be or shall, in fact, be inoperative or unenforceable
as applied in any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because it conflicts with any provisions or
any constitution or statute or rule of public policy, or for any other reason,
such circumstances shall not have the effect of rendering the provision in
question inoperative or unenforceable in any other case or circumstance or of
rendering any other provision or provisions herein contained invalid inoperative
or unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or
paragraphs in this Trust Indenture contained shall not affect the remaining
portions of this Trust Indenture or any part thereof.
Section 12.04. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when mailed by registered mail, postage prepaid, with proper address as
indicated below. BMSBLC, the Trustee and the Bank may, by written notice given
by each to the others, designate any address or addresses to which notices,
certificates or other communications to them shall be sent when required as
contemplated by this
43
<PAGE>
Trust Indenture. The Remarketing Agent and the Bank shall receive copies of all
notices hereunder. Until otherwise provided by the respective parties, all
notices, certificates and communications to each of them shall be addressed as
follows:
To BMSBLC: Bando McGlocklin Small Business
Lending Corporation
W239 N1700 Busse Road and Highway J
Waukesha, WI 53188
Attn: Scott J. Russell
To the Bank: Firstar Bank, National Association
777 East Wisconsin Avenue, JS 3 South
Milwaukee, WI 53202
Attn: Jon B. Beggs
To the Trustee: Firstar Bank, National Association
1555 North RiverCenter Drive, #301
Milwaukee, WI 53212
Attn: Corporate Trust Services
To the Robert W. Baird & Co. Incorporated
Remarketing Agent: 777 East Wisconsin Avenue, 28th Floor
Milwaukee, WI 53202
Attn: Municipal Bond Trading
Section 12.05. Counterparts. This Trust Indenture may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 12.06. Third-Party Beneficiary. The Trustee and BMSBLC
acknowledge that so long as the Letter of Credit is in effect or any amount
remains payable under the Credit Agreement, the Bank shall be an express
third-party beneficiary of this Trust Indenture, with full power, to the maximum
extent permitted by applicable law, to enforce the provisions hereof.
44
<PAGE>
IN WITNESS WHEREOF, Bando McGlocklin Small Business Lending
Corporation, a Wisconsin corporation, has caused these presents to be signed in
its name and behalf by its President and Secretary, and, to evidence its
acceptance of the trusts hereby created, Firstar Bank, National Association,
Milwaukee, Wisconsin, as Trustee, has caused these presents to be signed in its
name and behalf by its duly authorized officers, all as of the date first above
written.
BANDO McGLOCKLIN SMALL BUSINESS
LENDING CORPORATION
By: /s/ Scott J. Russell
--------------------------------
Name: Scott J. Russell
--------------------------------
Title: Senior Vice President
--------------------------------
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Peter M. Brennan
--------------------------------
Name: Peter M. Brennan
--------------------------------
Title: Assistant Vice President
--------------------------------
By: /s/ Steven J. Peterson
--------------------------------
Name: Steven J. Peterson
--------------------------------
Title: Trust Officer
--------------------------------
[Signature Page of Trust Indenture]
45
<PAGE>
EXHIBIT A
FORM OF SENIOR CERTIFICATE
INDUSTRIAL DEVELOPMENT REVENUE BOND TRUST
WEEKLY VARIABLE RATE DEMAND
SENIOR CERTIFICATES OF PARTICIPATION,
SERIES __
REGISTERED REGISTERED
NO. R-__ $__________
Initial
Interest Maturity CUSIP
Dated Date Rate Date Closing Date Number
March 23, 2000 4.10% ___________ March 23, 2000 456057___
Registered Owner: CEDE & CO.
Principal Amount: ___________________ DOLLARS ($__________)
KNOW ALL PEOPLE BY THESE PRESENTS that Firstar Bank, National
Association, Milwaukee, Wisconsin, or its successor or successors, as Trustee
(the "Trustee") of the Industrial Development Revenue Bond Trust (the "Trust")
created pursuant to the Trust Indenture dated as of March 1, 2000 (the "Trust
Indenture"), will pay, but only from moneys available under the Trust Indenture,
to the Registered Owner, or registered assigns, on the Maturity Date (unless
this Senior Certificate shall have been called for prior redemption, in which
case on such date (the "Redemption Date")), upon presentation and surrender
hereof, the Principal Amount, and to pay interest thereon (computed on a
365/366-day year basis), from the date hereof through the Wednesday of the
following week at the Initial Interest Rate set forth above and thereafter at
the interest rate per annum established below, payable on the first day of each
month, commencing April 1, 2000, and on each Redemption Date described below
(the "Interest Payment Dates"), until payment of such principal sum, or if this
Senior Certificate shall be duly called for redemption, until the Redemption
Date. This Senior Certificate shall be dated by the Trustee as of the last
preceding Interest Payment Date to which interest on the Certificate has been
paid or made available for payment. Prior to the first Interest Payment Date
after the Original Issue Date, such Certificate shall be dated as of the
Original Issue Date. The principal of and interest on this Senior Certificate
are payable in lawful money of the United States of America at the principal
corporate trust office of the Trustee. Interest hereon which is payable, and
punctually paid or duly provided for, on any interest payment date shall be paid
by check drawn by the Trustee payable to the order of the person in whose name
this Senior Certificate is registered at the close of business on the Business
Day as defined below immediately preceding such date. Such interest shall be
mailed to such person at the address shown on the Certificate Register kept
Exhibit A-1
<PAGE>
by the Trustee. Owners of at least $1,000,000 principal amount of Senior
Certificates or The Depository Trust Company or any successor Securities
Depository may elect to have their interest paid by wire transfer of immediately
available funds in accordance with the Trust Indenture hereinafter referred to.
Payment of the principal of and interest on this Senior Certificate shall be
made in lawful money of the United States of America. All payments hereon shall
be applied first to accrued interest and the remainder to reduction of principal
on the Maturity Date or any Redemption Date.
The Senior Certificates of Participation ("Senior Certificates") of
each Series represent undivided proportionate interests in rights to receive
principal and interest payments made on industrial development revenue bonds
("IDRBs") issued by Wisconsin municipalities. Bando McGlocklin Small Business
Lending Corporation, a Wisconsin corporation ("BMSBLC"), is the current owner of
the IDRBs and will sell and assign the IDRBs to the Trustee as provided in the
Trust Indenture.
To further secure the Senior Certificates, Firstar Bank, National
Association, Cincinnati, Ohio (the "Bank"), has issued its irrevocable
direct-pay liquidity letter of credit (the "Letter of Credit," which term
includes any Substitute Letter of Credit) in favor of the Trustee. The amount
available under the Letter of Credit is sufficient to pay the principal of and
up to 45 days of interest on the Senior Certificates at a maximum rate of the
lesser of 10%, or the interest rate payable on the applicable IDRB minus 0.1%
(the "Cap Rate") as such principal and interest becomes due.
From the period from the date of the initial delivery of the Senior
Certificates through the Wednesday of the immediately following week, the Senior
Certificates will bear interest at the rate set forth above. Thereafter, and
until the maturity date of this Senior Certificate, the Senior Certificates
shall bear interest from the Thursday of a week, to and including the Wednesday
of the next week at the Weekly Variable Rate. "Weekly Variable Rate" means the
interest rate on the Senior Certificates determined by the Remarketing Agent on
each Wednesday (or the preceding Business Day if a Wednesday is not a Business
Day) for the week beginning on the Thursday following the date of determination
(whether or not a Business Day) and ending on the immediately following
Wednesday (whether or not a Business Day) as the rate necessary (but not greater
than the lesser of the interest rate payable on the applicable IDRB or the Cap
Rate) to effect a sale of the Senior Certificates at par on the immediately
succeeding Thursday. If the Remarketing Agent fails to establish a Weekly
Variable Rate, the Senior Certificates shall bear interest for the immediately
succeeding week at the same rate as the immediately preceding week. The Trustee
shall confirm the interest rate on the Senior Certificates from time to time in
effect by telephone (confirmed in writing if requested). The determination of
the Weekly Variable Rate shall be conclusive and binding on BMSBLC, the Trustee,
the Tender Agent, the Remarketing Agent, the Bank and the Owners from time to
time of the Senior Certificates. Interest shall accrue from the scheduled date
of any payment until the business day on which such payment is made.
Purchase of Senior Certificates at Option of Senior Certificate Owners
An Owner or Beneficial Owner of a Senior Certificate may tender its
Senior Certificate or beneficial ownership interest for purchase in whole or in
part (and if in part in integral
Exhibit A-2
<PAGE>
multiples of $5,000) to the Tender Agent, Firstar Bank, National Association,
1555 North RiverCenter Drive, Suite 301, Milwaukee, Wisconsin 53212, Attention:
Corporate Trust Services, on any Business Day for a price of 100% of the
principal amount of the Senior Certificates so tendered plus accrued interest.
In order to exercise such option with respect to any Senior Certificate or
portion thereof, the Beneficial Owner thereof must give to the Tender Agent
(through its Direct Participant or Indirect Participant) at its designated
corporate trust office by the opening of business at such office at least seven
days preceding the proposed purchase date, written notice which: (a) states the
name and taxpayer identification number of the Beneficial Owner and identifies
the Direct Participant or Indirect Participant, (b) is accompanied by evidence
satisfactory to the Trustee of the Beneficial Owner's beneficial ownership
interest in the Senior Certificate(s) to be purchased, (c) states the Series and
principal amount of the Senior Certificate(s) or portions thereof to be
purchased, (d) states the purchase date on which purchase is demanded, which
must be a Business Day not earlier than seven days after delivery of the tender
notice, and (e) contains irrevocable authorization for the Direct Participant or
Indirect Participant to transfer the Beneficial Owner's Senior Certificate(s) on
the purchase date. Upon the delivery of such written notice of tender, such
election to tender shall be irrevocable and binding upon the Beneficial Owner
thereof. Upon delivery of such notice, the Beneficial Owner must make
arrangements to have its beneficial ownership interest in the Senior
Certificates being tendered transferred to the Tender Agent at or prior to 10:00
a.m., Milwaukee, Wisconsin time, on the tender date. The Tender Agent shall, in
its sole discretion, determine whether, with respect to any Senior Certificate,
the Beneficial Owner thereof shall have properly exercised the option to have
its Senior Certificate or beneficial ownership interest purchased as a whole or
in part.
If the Senior Certificates are held in a book-entry system, a Tender
Notice pursuant to the preceding paragraph may be delivered by a Beneficial
Owner. Such Tender Notice must be delivered as set forth in Section 2.15 of the
Trust Indenture. Such Tender Notice must be delivered to the Tender Agent
(through its Direct Participant or Indirect Participant) at its designated
corporate trust office by the opening of business at such office at least seven
days preceding the proposed purchase date, and such Tender Notice shall: (a)
state the name and taxpayer identification number of the Beneficial Owner and
identify the Direct Participant or Indirect Participant, (b) be accompanied by
evidence satisfactory to the Trustee of the Beneficial Owner's beneficial
ownership interest in the Senior Certificate(s) to be purchased, (c) state the
principal amount of the Senior Certificate(s) or portions thereof to be
purchased, (d) state the purchase date on which purchase is demanded, which must
be a Business Day not earlier than seven days after delivery of the tender
notice, and (e) contain irrevocable authorization for the Direct Participant or
Indirect Participant to transfer the Beneficial Owner's Senior Certificate(s) on
the purchase date. Upon delivery of such notice, the Beneficial Owner must make
arrangements to have its beneficial ownership interest in the Senior
Certificates being tendered transferred to the Tender Agent at or prior to 10:00
a.m., Milwaukee, Wisconsin time on the Tender Date, but need not otherwise
comply with Section 2.15 of the Trust Indenture.
If there has been irrevocably deposited in the Senior Certificate
Purchase Account an amount sufficient to pay the purchase price of all Senior
Certificates tendered or deemed to be tendered for purchase on such specified
purchase date, the Owner of any Senior Certificates which are required to be
tendered for redemption or purchase in accordance with the provisions of Section
2.14 of the Trust Indenture but which in fact are not delivered to the Trustee
or the
Exhibit A-3
<PAGE>
Tender Agent, as the case may be, on or before the applicable redemption or
purchase date (an "Untendered Senior Certificate") shall not be entitled to
receive interest on such Untendered Senior Certificate on and after the
specified purchase date, and all such Untendered Senior Certificates shall be
deemed to have been tendered for purchase and purchased pursuant to Section 2.15
of the Trust Indenture on such specified purchase date. The Trustee, at the
direction of the Tender Agent, shall issue a new Senior Certificate or Senior
Certificates in the same aggregate principal amount for any Untendered Senior
Certificates which are not tendered for purchase on any specified purchase date
and, upon receipt of any such Untendered Senior Certificates from the Owner
thereof, shall pay the purchase price of such Untendered Senior Certificates to
the Owners thereof and cancel such Untendered Senior Certificates as provided in
the Trust Indenture.
Substitute Letter of Credit. The Trustee shall, from time to time, at
the written direction of BMSBLC, accept a renewal, substitute or replacement
Letter of Credit (a "Substitute Letter of Credit") effective on an Interest
Payment Date to replace the Letter of Credit then in effect (the "existing
Letter of Credit"), provided that the Substitute Letter of Credit meets the
requirements of a Letter of Credit as set forth in the Trust Indenture.
Redemption of Senior Certificates. The Senior Certificates may not be
called for redemption prior to maturity, except as described below. The Letter
of Credit covers the payment of principal and accrued interest (up to 45 days at
the Cap Rate) due on the date of any such redemption.
Following an Event of Default (as defined therein) under the Trust
Indenture, the Trustee may be required to accelerate the maturity of the Senior
Certificates (or, if the Event of Default relates to certain of the IDRBs, the
corresponding Series of Senior Certificates) and draw upon the Letter of Credit
for the funds necessary to retire such Senior Certificates. An Event of Default
under the Trust Indenture resulting in the acceleration of the Senior
Certificates can occur, at the direction of the Bank, anytime there is a default
under the Credit Agreement as it exists on the date the Senior Certificates are
issued or as it may be amended from time to time by BMSBLC and the Bank.
Mandatory Redemption Upon Payment or Prepayment of IDRBs. Senior
Certificates of a Series are subject to mandatory redemption prior to stated
maturity, in whole or in part, in integral multiples of $5,000, on any Business
Day, as a result of any payment or prepayment of the corresponding IDRB under
the terms of the corresponding IDRB Bond Agreement. The redemption price for any
such redemption shall be 100% of the par amount, plus accrued interest to the
date of redemption. Principal on the IDRBs may be paid or prepaid as a result of
the following:
(a) Scheduled Payments of Principal. The IDRBs are subject to
scheduled payments of principal, whether by stated maturity payments or sinking
fund installments, as described in the Series Supplements.
(b) Optional Redemption. The IDRBs are subject to optional redemption
at the option and direction of the IDRB Borrowers, as described in the Series
Supplements.
Exhibit A-4
<PAGE>
(c) Extraordinary Redemption. The IDRBs are subject to mandatory
redemption, in whole but not in part, at any time at a redemption price of 100%
of the principal amount so redeemed, plus accrued interest to the applicable
Redemption Date, following a casualty loss or other extraordinary event that
shall destroy or substantially damage the project financed by an IDRB or make it
impossible to operate such project for a period of six months or more, as
described in the Series Supplements.
Mandatory Redemption Upon IDRB Payment Default. Senior Certificates of
a Series are subject to mandatory redemption, in whole but not in part, if a
default shall be made in the due and punctual payment of the purchase price or
principal of or interest on the corresponding IDRB, and such default shall have
continued for a period of 45 days.
Mandatory Redemption Upon Direction of the Bank. The Bank may at any
time certify to the Trustee that an Event of Default has occurred under the
Credit Agreement, and demand an acceleration of one or more Series of the Senior
Certificates.
Mandatory Redemption Prior to Expiration of Letter of Credit. The
Senior Certificates shall be subject to mandatory redemption, in whole but not
in part, 15 days prior to the expiration date of the Letter of Credit then in
effect, unless an acceptable extension to or replacement of the Letter of Credit
then in effect, meeting the requirements of Sections 8.12 and 8.13 of the Trust
Indenture, shall have been delivered to the Trustee at least 45 days prior to
the expiration date of the Letter of Credit then in effect. Notwithstanding the
foregoing, if the Substitute Letter of Credit is from a bank other than the
provider of the then-existing Letter of Credit, then the Senior Certificates
shall be subject to mandatory tender on the Substitution Date. The redemption
price in any such event shall be 100% of the principal amount of the Senior
Certificates so redeemed, plus accrued interest to the redemption date, without
premium.
Mandatory Redemption Upon Determination of Taxability of IDRB. The
Senior Certificates shall be subject to mandatory redemption, by Series, in
whole in the event that a determination has been made that interest on the IDRB
will not be excluded from inclusion in gross income of the owners of the IDRB,
as described in the Series Supplements. The redemption price of the Senior
Certificates upon a Determination of Taxability is 100% of the principal amount
of Senior Certificates so redeemed, plus accrued interest to the redemption
date. No tax redemption premium is to be paid to any Senior Certificate Owner,
regardless of the provisions, if any, relating to a tax redemption premium that
may be contained in the applicable IDRB Bond Agreement. The Letter of Credit
does not cover any tax redemption premium, and Senior Certificate Owners have no
recourse to any IDRB Borrower, the Trustee or to BMSBLC for the payment of any
tax redemption premium.
Mandatory Redemption Upon Determination of Taxability of Senior
Certificates. The Senior Certificates shall be subject to mandatory redemption,
by Series, in whole but not in part, upon a Determination of Taxability relating
to such Series.
Mandatory Tender of Senior Certificates. Each Senior Certificate Owner
or Beneficial Owner (except the Owner or Beneficial Owner of Pledged Senior
Certificates) must tender its Senior Certificates to the Trustee or the Tender
Agent on or before the Mandatory Tender Date for redemption or purchase in
accordance with the Trust Indenture on the Mandatory Tender
Exhibit A-5
<PAGE>
Date. The purchase price shall be equal to 100% of the principal amount plus
accrued interest, if any, to the date of purchase. "Mandatory Tender Date" shall
mean each Redemption Date and Letter of Credit Substitution Date (but only if
the Substitute Letter of Credit is provided by a financial institution other
than the provider of the existing Letter of Credit).
Partial Redemption. If Senior Certificates of a Series are redeemed in
part, the particular Senior Certificates of that Series or portions thereof to
be redeemed shall be selected by the Trustee by lot or by such other random
means as the Trustee shall determine in its discretion. Any Senior Certificate
to be redeemed only in part shall be surrendered by the Owner thereof and the
Trustee shall deliver to such Owner a new Senior Certificate of any authorized
denomination requested by such Owner in an aggregate principal amount equal to
the unredeemed portion of the Senior Certificate so surrendered. Senior
Certificates of denominations greater than $5,000 may be called for redemption
in part, but only in multiples of $5,000. The Trustee shall notify the Bank of
any partial redemption and shall deliver to the Bank the proper documentation to
reduce the size of the Letter of Credit.
Notice of Redemption. Notice of redemption shall be mailed not less
than 30 but not more than 60 days before the Redemption Date, except that notice
of a call for redemption because of a default and consequent acceleration of the
Senior Certificates under Article VIII of the Trust Indenture or because of a
Determination of Taxability shall be given by mailing a redemption notice within
5 days after the date of any such acceleration or Determination of Taxability,
with the redemption date to occur not more than 14 days after the date of such
acceleration or Determination of Taxability. In no event, however, shall such
notice of redemption establish a redemption date later than one day prior to the
date on which the Letter of Credit would cease to be in an amount sufficient to
pay the principal of the Senior Certificates redeemed together with interest
accrued through the redemption date. Failure to give any such notice by mailing,
or any defect therein, shall not affect the validity of any proceedings for the
redemption of any other Senior Certificate. All Senior Certificates so called
for redemption will cease to bear interest on the specified redemption date,
provided funds for their redemption have been duly deposited, and, except for
the purpose of payment, shall no longer be protected by the Trust Indenture and
shall not be deemed Outstanding under the provisions of the Trust Indenture.
If the Trustee shall accelerate the payment of one or more Series of
Senior Certificates, the Bank, at its option, may purchase with its own
immediately available funds all (but not part) of such Senior Certificates at a
price of 100% of the principal amount thereof plus accrued interest or interest
due thereon on the date of purchase, provided that such Senior Certificates may
be purchased by the Bank only with moneys which are not recoverable from Senior
Certificate Owners as a transfer avoidable as a preference in the event a
petition is filed under the United States Bankruptcy Code with respect to BMSBLC
as debtor, or in the event of a filing of a petition with respect to BMSBLC
under any existing bankruptcy, insolvency or similar law of the State of
Wisconsin relating to the enforcement of the right of creditors and the relief
of debtors.
The Senior Certificate Owner shall have no right to enforce the
provisions of the Trust Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any default or Event of
Default under the Trust Indenture, or to institute, appear in or defend any suit
or other proceedings with respect thereto, except as provided in the Trust
Indenture.
Exhibit A-6
<PAGE>
Nothing in the Trust Indenture shall affect or impair the right of any Senior
Certificate Owner to institute suit against an IDRB Issuer to enforce payment
when due to such Owner of its share of IDRB Payments. In certain events, on the
conditions, in the manner and with the effect set forth in the Trust Indenture,
the principal of all Senior Certificates issued thereunder and then Outstanding
may become or may be declared due and payable before the stated maturity
thereof, together with interest accrued thereon. Modifications or alterations of
the Trust Indenture, or of any indenture supplemental thereto, may be made only
to the extent and in the circumstances permitted by the Trust Indenture.
This Senior Certificate is transferable by the Owner hereof upon
surrender of this Senior Certificate for transfer at the office of the Trustee,
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and executed by the Owner hereof or his attorney
duly authorized in writing. Thereupon, the Trustee shall deliver, in exchange
for this Senior Certificate, one or more new Senior Certificates in the name of
the transferee, of an authorized denomination, in aggregate unpaid principal
amount equal to the aggregate unpaid principal amount of this Senior
Certificate, of the same maturity, and having the same payment dates and bearing
interest at the same rate and on the same dates. The Senior Certificates may not
be registered to bearer.
Exhibit A-7
<PAGE>
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions
and things required to exist, to happen and to be performed precedent to and in
the execution and delivery of the Trust Indenture and the issuance of this
Senior Certificate do exist, have happened and have been performed in due time,
form and manner, as required by law, and that the issuance of this Senior
Certificate and the Series of which it forms a part, together with all other
obligations of BMSBLC, does not exceed or violate any constitutional or
statutory limitation of indebtedness.
IN WITNESS WHEREOF, Firstar Bank, National Association, Milwaukee,
Wisconsin, as Trustee, has caused this Senior Certificate to be executed in its
name by the facsimile signatures of its authorized officers and sealed with a
facsimile of its corporate seal.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
[SEAL] By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Exhibit A-8
<PAGE>
ASSIGNMENT
SOCIAL SECURITY OR FEDERAL
EMPLOYER IDENTIFICATION
NUMBER:
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of transferee)
the within Senior Certificate and all rights and thereunder, and hereby
irrevocably constitutes and appoints
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of attorney)
attorney-in-fact to transfer the within Senior Certificate on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
-----------------------------
Signature Guaranteed:
- ----------------------------------- -----------------------------------
NOTICE: Signature(s) must be NOTICE: The signature to this
guaranteed by a commercial bank, assignment must correspond with the
broker, dealer, municipal or name as it appears upon the face of
government securities broker or the within Senior Certificate in
dealer, credit union, national every particular, without
securities exchange, registered alteration or enlargement or any
securities association, clearing change whatsoever.
agency or savings association.
Exhibit A-9
<PAGE>
EXHIBIT B
FORM OF JUNIOR CERTIFICATE
INDUSTRIAL DEVELOPMENT REVENUE BOND TRUST
WEEKLY VARIABLE RATE DEMAND
JUNIOR CERTIFICATE OF PARTICIPATION,
SERIES __
REGISTERED REGISTERED
NO. J-__ $__________
Maturity
Dated Date Date Closing Date
March 23, 2000 ____________ March 23, 2000
Registered Owner: BANDO McGLOCKLIN SMALL BUSINESS
LENDING CORPORATION
Principal Amount: ___________________ DOLLARS ($__________)
KNOW ALL PEOPLE BY THESE PRESENTS that Firstar Bank, National
Association, Milwaukee, Wisconsin, or its successor or successors, as Trustee
(the "Trustee") of the Industrial Development Revenue Bond Trust (the "Trust")
created pursuant to the Trust Indenture dated as of March 1, 2000 (the "Trust
Indenture"), will pay, but only from moneys available under the Trust Indenture,
to the Registered Owner, or registered assigns, on the Maturity Date (unless
this Junior Certificate shall have been called for prior redemption, in which
case on such date (the "Redemption Date")), upon presentation and surrender
hereof, the Principal Amount, and to pay interest thereon (computed on a
365/366-day year basis), from the date hereof through the Wednesday of the
following week at the Initial Interest Rate set forth above and thereafter at
the interest rate per annum established below, payable on the first day of each
month, commencing April 1, 2000, and on each Redemption Date for the Senior
Certificates of the Series (the "Interest Payment Dates"), until payment of such
principal sum, or if this Junior Certificate shall be duly called for
redemption, until the Redemption Date. This Junior Certificate shall be dated by
the Trustee as of the last preceding Interest Payment Date to which interest on
the Certificate has been paid or made available for payment. Prior to the first
Interest Payment Date after the Original Issue Date, such Certificate shall be
dated as of the Original Issue Date. The principal of and interest on this
Junior Certificate are payable in lawful money of the United States of America
at the principal corporate trust office of the Trustee. Interest hereon which is
payable, and punctually paid or duly provided for, on any interest payment date
shall be paid by check drawn by the Trustee payable to the order of the person
in whose name this Junior Certificate is registered at the close of business on
the Business Day as defined below immediately preceding such date. Such interest
shall be mailed to such person at the address shown on the Certificate
Exhibit B-1
<PAGE>
Register kept by the Trustee. Payment of the principal of and interest on this
Junior Certificate shall be made in lawful money of the United States of
America.
This Junior Certificate is one of several Series of junior
certificates of participation ("Junior Certificates") issued under and equally
and ratably secured and executed and delivered by the Trustee or any successor
Trustee under the Trust Indenture. Reference is made to the Trust Indenture,
including all indentures supplemental thereto, for the provisions with respect
to the nature and extent of the security, the rights, duties and obligations of
Bando McGlocklin Small Business Lending Corporation, a Wisconsin corporation
("BMSBLC"), the Trustee and the Owners of Junior Certificates, and the terms
upon which the Junior Certificates are issued and secured.
The Owner of this Junior Certificate will be entitled, on each
Interest Payment Date, to all amounts in the corresponding IDRB Fund, less (i)
principal and interest payable to Owners of the corresponding Senior
Certificates of the Series, (ii) all amounts payable to the Bank and to the
Trustee relating to the Series, and (iii) the "odd lot" principal amount (if
any) retained by the Trustee (as described in Section 5.02(g) of the Trust
Indenture), which shall be payable only upon redemption of the last Outstanding
Senior Certificate of the Series. The rights of the Owner of a Junior
Certificate to any payments are junior and subordinate to the rights of the
Owners of Senior Certificates, as set forth in the Indenture. The Owner of this
Junior Certificate shall not be entitled to any benefit of the Letter of Credit
issued for the benefit of the Owners of the Senior Certificates of the Series.
Mandatory Redemption. This Junior Certificate must be tendered for
redemption on the Redemption Date for the last Outstanding Senior Certificate of
the Series, as provided in the Trust Indenture.
The Junior Certificate Owner shall have no right to enforce the
provisions of the Trust Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any default or Event of
Default under the Trust Indenture, or to institute, appear in or defend any suit
or other proceedings with respect thereto, except as provided in the Trust
Indenture. In certain events, on the conditions, in the manner and with the
effect set forth in the Trust Indenture, the principal of all Junior
Certificates issued thereunder and then Outstanding may become or may be
declared due and payable before the stated maturity thereof, together with
interest accrued thereon. Modifications or alterations of the Trust Indenture,
or of any indenture supplemental thereto, may be made only to the extent and in
the circumstances permitted by the Trust Indenture.
This Junior Certificate is transferable by the Owner hereof upon
surrender of this Junior Certificate for transfer at the office of the Trustee,
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and executed by the Owner hereof or his attorney
duly authorized in writing. Thereupon, the Trustee shall deliver, in exchange
for this Junior Certificate, one or more new Junior Certificates in the name of
the transferee, of an authorized denomination, in aggregate unpaid principal
amount equal to the aggregate unpaid principal amount of this Junior
Certificate, of the same maturity, and having the same payment dates and bearing
interest at the same rate and on the same dates. The Junior Certificates may not
be registered to bearer.
Exhibit B-2
<PAGE>
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions
and things required to exist, to happen and to be performed precedent to and in
the execution and delivery of the Trust Indenture and the issuance of this
Junior Certificate do exist, have happened and have been performed in due time,
form and manner, as required by law, and that the issuance of this Junior
Certificate and the Series of which it forms a part, together with all other
obligations of BMSBLC, does not exceed or violate any constitutional or
statutory limitation of indebtedness.
IN WITNESS WHEREOF, Firstar Bank, National Association, Milwaukee,
Wisconsin, as Trustee, has caused this Junior Certificate to be executed in its
name by the facsimile signatures of its authorized officers and sealed with a
facsimile of its corporate seal.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
[SEAL] By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Exhibit B-3
<PAGE>
ASSIGNMENT
SOCIAL SECURITY OR FEDERAL
EMPLOYER IDENTIFICATION
NUMBER:
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of transferee)
the within Junior Certificate and all rights and thereunder, and hereby
irrevocably constitutes and appoints
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of attorney)
attorney-in-fact to transfer the within Junior Certificate on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
-----------------------------
- ----------------------------------- -----------------------------------
NOTICE: Signature(s) must be NOTICE: The signature to this
guaranteed by a commercial bank, assignment must correspond with the
broker, dealer, municipal or name as it appears upon the face of
government securities broker or the within Junior Certificate in
dealer, credit union, national every particular, without
securities exchange, registered alteration or enlargement or any
securities association, clearing change whatsoever.
agency or savings association.
Exhibit B-4
<PAGE>
Exhibit C-1
EXHIBIT C
FORM OF NOTICE OF MANDATORY TENDER DATE
TO: [Name and address of Senior Certificate Owner]
In accordance with Section 2.01 of the Trust Indenture dated as of
March 1, 2000 (the "Trust Indenture") between Bando McGlocklin Small Business
Lending Corporation, a Wisconsin corporation ("BMSBLC"), and the undersigned, as
Trustee (the "Trustee"), securing $8,765,000 aggregate principal amount of
Industrial Development Revenue Bond Trust Weekly Variable Rate Demand Senior
Certificates of Participation, Series A, B, C, D, E, F and G ("Senior
Certificates"), you are hereby notified that the Senior Certificates are subject
to Mandatory Tender by you at a price equal to the principal amount thereof plus
accrued interest to the Mandatory Tender Date (the "Tender Purchase Price") by
delivery of your Senior Certificates to the Tender Agent, Firstar Bank, National
Association, 1555 North RiverCenter Drive, Suite 301, Milwaukee, Wisconsin
53212, Attention: Corporate Trust Services, prior to 10:00 a.m., Milwaukee,
Wisconsin time, on or before __________, 20___ with the transfer of registration
form printed on the Senior Certificate executed in blank. No interest will be
payable to you on any Senior Certificate from and after __________, 20___ (the
"Mandatory Tender Date"). Payment of the Tender Purchase Price may be delayed by
failure to deliver your Senior Certificates timely for mandatory tender to the
Trustee.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Exhibit C-1
<PAGE>
Exhibit D-1
EXHIBIT D
FORM OF TENDER NOTICE
To: Firstar Bank, National Association
1555 North RiverCenter Drive, #301
Milwaukee, WI 53212
Attn: Corporate Trust Services
Re: Industrial Development Revenue Bond Trust
Weekly Variable Rate Demand Senior Certificates of Participation
The undersigned, as the Beneficial Owner of the Senior Certificate
referenced herein, hereby irrevocably elects the option granted the undersigned
pursuant to the Trust Indenture (the "Trust Indenture") relating to the
above-referenced senior certificates of participation ("Senior Certificates") to
tender all or a portion of such Senior Certificates to Firstar Bank, National
Association, Milwaukee, Wisconsin, as Tender Agent. In accordance with such
option, the undersigned hereby states the following:
Series of Senior Certificates: Series
--------
Name of Beneficial Owner:
-------------------------------------------------------
Taxpayer Identification No.:
----------------------------------------------------
DTC Participant which holds the Senior Certificate:
-----------------------------
Principal amount(s) of Senior Certificates (or portions
thereof, in integral multiples of $5,000) to be purchased:
----------------------
The Purchase Date (which must be a Business Day,
at least seven days after the date of this notice):
-----------------------------
In accordance with such tender, the undersigned hereby irrevocably
sells, assigns and transfers such Senior Certificate or portion thereof at the
purchase price set forth in the Trust Indenture, and does hereby irrevocably
constitute and appoint the Trustee as attorney to transfer such Senior
Certificate or portion thereof on the books of the Trustee, with full power of
substitution in the premises.
Dated:
------------------------ ------------------------------------
Signature
------------------------------------
Signature Guaranteed
Notice: To exercise the option available to the Owner pursuant to the Trust
Indenture, the Owner must notify the Trustee of such exercise and provide
evidence, satisfactory to the Trustee of the Beneficial Owner's beneficial
ownership interest in the Senior Certificate(s).
Exhibit D-1
<PAGE>
SERIES SUPPLEMENT - A
CERTIFICATE INFORMATION
1. Series Designation: Series A
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $400,000
(b) Junior Certificate: $4,901.11
4. Final Maturity Date: June 1, 2004
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
04/01/00 $ 5,000 09/01/01 $10,000 02/01/03 $ 5,000
05/01/00 5,000 10/01/01 5,000 03/01/03 10,000
06/01/00 5,000 11/01/01 5,000 04/01/03 5,000
07/01/00 5,000 12/01/01 5,000 05/01/03 5,000
08/01/00 5,000 01/01/02 5,000 06/01/03 5,000
09/01/00 10,000 02/01/02 5,000 07/01/03 5,000
10/01/00 5,000 03/01/02 10,000 08/01/03 5,000
11/01/00 5,000 04/01/02 5,000 09/01/03 10,000
12/01/00 5,000 05/01/02 5,000 10/01/03 5,000
01/01/01 5,000 06/01/02 5,000 11/01/03 5,000
02/01/01 5,000 07/01/02 5,000 12/01/03 5,000
03/01/01 10,000 08/01/02 5,000 01/01/04 5,000
04/01/01 5,000 09/01/02 10,000 02/01/04 5,000
05/01/01 5,000 10/01/02 5,000 03/01/04 10,000
06/01/01 5,000 11/01/02 5,000 04/01/04 5,000
07/01/01 5,000 12/01/02 5,000 05/01/04 5,000
08/01/01 5,000 01/01/03 5,000 06/01/04 110,000
IDRB INFORMATION
1. Issuer: Village of Grafton, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
Series A-1
<PAGE>
4. Name of IDRB: Village of Grafton, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(Calibre, Inc. Project)
5. Original Issue Date: May 3, 1996
6. Original Principal
Amount: $499,715
7. Borrower: Calibre, Inc., a Wisconsin corporation
8. Collateral: Mortgage and Assignment of Leases and Rents
(2 parcels)
9. Interest Rate(s): Variable, 30-day LIBOR plus 1.50% per annum
10. Principal Amount
Outstanding as
of March 23, 2000: $404,901.11
11. Final Maturity Date: June 1, 2004
12. Amortization of Balance: 51 monthly installments, with a balloon payment
of $107,061.11 at maturity
13. Prepayment Provisions:
(a) Optional: The Bonds are subject to optional redemption by the
Issuer (at the election of the Borrower), in whole or in part (in integral
multiples of $5,000, at par, at any time, at the principal amount of such Bonds
to be redeemed plus accrued interest thereon to the date of redemption, at the
times set forth below, together with premiums equal to the following percentages
of the principal amount being redeemed:
Period Premium
------ -------
From January 1, 2000 through December 31, 2000 2%
From January 1, 2001 through December 31, 2001 1%
January 1, 2002 and thereafter None
It is a condition of any optional redemption pursuant to the above that
the Borrower shall have deposited the redemption price in Eligible Funds into
the Bond Fund.
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower, or the Bondowners by Requisite Consent if the Project shall have been
damaged or destroyed; title to or the temporary use of all or substantially all
of the Project shall have been taken under the exercise of the power of
Series A-2
<PAGE>
eminent domain by any governmental issuer; any court or administrative body of
competent jurisdiction shall enter a judgment, order or decree requiring the
Borrower to cease all or any substantial part of its operations at the Project;
as a result of any changes in the Constitution of Wisconsin or the Constitution
of the United States of America or of legislative or administrative action
(whether state or federal) or by final decree, judgment or order of any court or
administrative body (whether state or federal), the Bond Agreement shall have
become void or unenforceable or impossible of performance in accordance with the
intent and purposes of the parties as expressed herein, or unreasonable burdens
or excessive liabilities shall have been imposed on the Issuer or the Borrower;
or it shall subsequently be discovered that the Borrower's title to the Project
shall be materially defective, and the Borrower's title to the Project shall be
lost by reason of such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at a floating rate equal to the Prime Rate plus 1.0%, adjusted on the
first day of each month. The Borrower shall also pay to the Bondowners (and any
former Bondowners holding Bonds during any period subsequent to an Event of
Taxability) as additional interest, the amount of penalties, additions to tax
(exclusive of any taxes imposed under Section 11 or any successor provision of
the Code) or interest assessed against the Bondowners (and former Bondowners) on
account of a Determination of Taxability.
Series A-3
<PAGE>
SERIES SUPPLEMENT - B
CERTIFICATE INFORMATION
1. Series Designation: Series B
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $1,595,000
(b) Junior Certificate: $4,825.17
4. Final Maturity Date: May 1, 2011
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
05/01/05 $10,000 05/01/07 $20,000 05/01/09 $25,000
06/01/05 20,000 06/01/07 20,000 06/01/09 25,000
07/01/05 15,000 07/01/07 20,000 07/01/09 25,000
08/01/05 20,000 08/01/07 20,000 08/01/09 20,000
09/01/05 15,000 09/01/07 25,000 09/01/09 25,000
10/01/05 20,000 10/01/07 20,000 10/01/09 25,000
11/01/05 20,000 11/01/07 20,000 11/01/09 25,000
12/01/05 15,000 12/01/07 20,000 12/01/09 25,000
01/01/06 20,000 01/01/08 25,000 01/01/10 25,000
02/01/06 20,000 02/01/08 20,000 02/01/10 25,000
03/01/06 20,000 03/01/08 20,000 03/01/10 25,000
04/01/06 15,000 04/01/08 25,000 04/01/10 25,000
05/01/06 20,000 05/01/08 20,000 05/01/10 25,000
06/01/06 20,000 06/01/08 25,000 06/01/10 25,000
07/01/06 20,000 07/01/08 20,000 07/01/10 25,000
08/01/06 20,000 08/01/08 20,000 08/01/10 25,000
09/01/06 15,000 09/01/08 25,000 09/01/10 25,000
10/01/06 20,000 10/01/08 20,000 10/01/10 25,000
11/01/06 20,000 11/01/08 25,000 11/01/10 25,000
12/01/06 20,000 12/01/08 20,000 12/01/10 25,000
01/01/07 20,000 01/01/09 25,000 01/01/11 25,000
02/01/07 20,000 02/01/09 25,000 02/01/11 25,000
03/01/07 20,000 03/01/09 20,000 03/01/11 25,000
04/01/07 25,000 04/01/09 25,000 04/01/11 25,000
05/01/11 25,000
Series B-1
<PAGE>
IDRB INFORMATION
1. Issuer: City of Mequon, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
4. Name of IDRB: City of Mequon, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(SPI Lighting, Inc. Project)
5. Original Issue Date: May 17, 1996
6. Original Principal Amount: $1,600,000
7. Borrower: SPI Lighting, Inc., a Wisconsin corporation
8. Collateral: Mortgage, Security Agreement and Assignment of
Leases and Rents; Unlimited Guarantee of
Realized Losses
9. Interest Rate(s): Variable, 30-day LIBOR plus 1.75% per annum
10. Principal Amount
Outstanding as of
March 23, 2000: $1,599,825.17
11. Final Maturity Date: May 1, 2011
12. Amortization of Balance: 73 monthly installments commencing May 1, 2005
13. Prepayment Provisions:
(a) Optional: The Bonds are subject to optional redemption by the
Issuer (at the election of the Borrower), in whole or in part (in integral
multiples of $5,000, at par, at any time after May 1, 1997, at the principal
amount of such Bonds to be redeemed plus accrued interest thereon to the date of
redemption.
It is a condition of any optional redemption pursuant to the above that
the Borrower shall have deposited the redemption price in Eligible Funds into
the Bond Fund.
Any prepayments of principal shall be applied in inverse order of the
amortization schedules and pro rata with respect to the Bonds. The Bonds are
subject to redemption prior to maturity upon receipt by the Trustee of the
written request from the Borrower stating that it intends to prepay the loan
upon notice, provided by the Trustee not less than 30 days prior to the
Series B-2
<PAGE>
redemption date, and thereby effect redemption of the Bonds being redeemed, at
the redemption prices set forth above, plus accrued interest to the redemption
date.
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower, or the Bondowners by Requisite Consent if the Project shall have been
damaged or destroyed; title to or the temporary use of all or substantially all
of the Project shall have been taken under the exercise of the power of eminent
domain by any governmental issuer; any court or administrative body of competent
jurisdiction shall enter a judgment, order or decree requiring the Borrower to
cease all or any substantial part of its operations at the Project; as a result
of any changes in the Constitution of Wisconsin or the Constitution of the
United States of America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any court or
administrative body (whether state or federal), the Bond Agreement shall have
become void or unenforceable or impossible of performance in accordance with the
intent and purposes of the parties as expressed herein, or unreasonable burdens
or excessive liabilities shall have been imposed on the Issuer or the Borrower;
or it shall subsequently be discovered that the Borrower's title to the Project
shall be materially defective, and the Borrower's title to the Project shall be
lost by reason of such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at a floating rate equal to the Prime Rate plus 1.0%, adjusted on the
first day of each month. The Borrower shall also pay to the Bondowners (and any
former Bondowners holding Bonds during any period subsequent to an Event of
Taxability) as additional interest, the amount of penalties, additions to tax
(exclusive of any taxes imposed under Section 11 or any successor provision of
the Code) or interest assessed against the Bondowners (and former Bondowners) on
account of a Determination of Taxability.
Series B-3
<PAGE>
SERIES SUPPLEMENT - C
CERTIFICATE INFORMATION
1. Series Designation: Series C
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $470,000
(b) Junior Certificate: $1,801.80
4. Final Maturity Date: January 1, 2004
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
04/01/00 $ 5,000 08/01/01 $10,000 12/01/02 $10,000
05/01/00 10,000 09/01/01 10,000 01/01/03 5,000
06/01/00 10,000 10/01/01 5,000 02/01/03 10,000
07/01/00 5,000 11/01/01 10,000 03/01/03 10,000
08/01/00 10,000 12/01/01 10,000 04/01/03 10,000
09/01/00 10,000 01/01/02 10,000 05/01/03 10,000
10/01/00 5,000 02/01/02 10,000 06/01/03 5,000
11/01/00 10,000 03/01/02 5,000 07/01/03 10,000
12/01/00 10,000 04/01/02 10,000 08/01/03 10,000
01/01/01 5,000 05/01/02 10,000 09/01/03 10,000
02/01/01 10,000 06/01/02 10,000 10/01/03 10,000
03/01/01 10,000 07/01/02 10,000 11/01/03 5,000
04/01/01 10,000 08/01/02 5,000 12/01/03 10,000
05/01/01 5,000 09/01/02 10,000 01/01/04 75,000
06/01/01 10,000 10/01/02 10,000
07/01/01 10,000 11/01/02 10,000
IDRB INFORMATION
1. Issuer: City of Waukesha, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
4. Name of IDRB: City of Waukesha, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(Hydro-Thermal Corporation Project)
Series C-1
<PAGE>
5. Original Issue Date: November 27, 1996
6. Original Principal
Amount: $792,431
7. Borrower: Hydro-Thermal Corporation, a Wisconsin
corporation
8. Collateral: Security Agreement
9. Interest Rate: Prime Rate minus 1/2%, adjusted monthly as
Prime Rate changes
10. Principal Amount
Outstanding as of
March 23, 2000: $471,801.80
11. Final Maturity Date: January 1, 2004
12. Amortization of Balance: 46 monthly installments, with a balloon paymen
of $64,051.80 at maturity
13. Prepayment Provisions:
(a) Optional: On and after January 1, 1997, the Bonds are subject to
redemption by the Issuer (at the election of the Borrower) prior to stated
maturity, in whole or in part, in integral multiples of $1,000, at any time. The
redemption price for any such redemption shall be the amount determined from the
table below (expressed as a percentage of the principal amount of the Bonds or
portions thereof so redeemed), plus accrued interest to the redemption date:
For any Payment Date on or after January 1, 1997 for the Bonds as
follows:
Redemption Period Redemption
(Dates Inclusive) Prices
----------------- ----------
January 1, 1997 through December 31, 2000 103%
January 1, 2001 and thereafter 101%
On and after January 1, 2000, the redemption price set forth above
shall apply only in the event that the Bonds are prepaid through a refinancing.
In the event that the Borrower elects to prepay the Bonds in full after January
1, 2000, there shall be no prepayment penalty or redemption premium.
It is a condition of any optional redemption pursuant to Section 2.05
that the Borrower shall have deposited the redemption price in Eligible Funds
into the Bond Fund.
Series C-2
<PAGE>
Any prepayments of principal shall be applied in inverse order of the
amortization schedules and pro rata with respect to the Bonds. The Bonds are
subject to redemption prior to maturity upon receipt by the Trustee of the
written request from the Borrower stating that it intends to prepay the loan
upon notice, provided by the Trustee not less than 30 days prior to the
redemption date, and thereby effect redemption of the Bonds being redeemed, at
the redemption prices set forth above, plus accrued interest to the redemption
date.
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower if the Project shall have been damaged or destroyed; title to or the
temporary use of all or substantially all of the Project shall have been taken
under the exercise of the power of eminent domain by any governmental issuer;
any court or administrative body of competent jurisdiction shall enter a
judgment, order or decree requiring the Borrower to cease all or any substantial
part of its operations at the Project; as a result of any changes in the
Constitution of Wisconsin or the Constitution of the United States of America or
of legislative or administrative action (whether state or federal) or by final
decree, judgment or order of any court or administrative body (whether state or
federal), the Bond Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purposes of the
parties as expressed herein, or unreasonable burdens or excessive liabilities
shall have been imposed on the Issuer or the Borrower; or it shall subsequently
be discovered that the Borrower's title to the Project shall be materially
defective, and the Borrower's title to the Project shall be lost by reason of
such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at the Prime Rate. The Borrower shall also pay to the Bondowners (and
any former Bondowners holding Bonds during any period subsequent to an Event of
Taxability) as additional interest, the amount of penalties, additions to tax
(exclusive of any taxes imposed under Section 11 or any successor provision of
the Code) or interest assessed against the Bondowners (and former Bondowners) on
account of a Determination of Taxability.
Series C-3
<PAGE>
SERIES SUPPLEMENT - D
CERTIFICATE INFORMATION
1. Series Designation: Series D
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $955,000
(b) Junior Certificate: $310.21
4. Final Maturity Date: July 1, 2014
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
04/01/00 $ 0 07/01/02 $5,000 10/01/04 $5,000
05/01/00 5,000 08/01/02 5,000 11/01/04 0
06/01/00 0 09/01/02 5,000 12/01/04 5,000
07/01/00 5,000 10/01/02 0 01/01/05 5,000
08/01/00 5,000 11/01/02 5,000 02/01/05 5,000
09/01/00 0 12/01/02 5,000 03/01/05 5,000
10/01/00 5,000 01/01/03 5,000 04/01/05 5,000
11/01/00 0 02/01/03 0 05/01/05 5,000
12/01/00 5,000 03/01/03 5,000 06/01/05 5,000
01/01/01 5,000 04/01/03 5,000 07/01/05 5,000
02/01/01 0 05/01/03 5,000 08/01/05 5,000
03/01/01 5,000 06/01/03 0 09/01/05 5,000
04/01/01 5,000 07/01/03 5,000 10/01/05 5,000
05/01/01 0 08/01/03 5,000 11/01/05 0
06/01/01 5,000 09/01/03 5,000 12/01/05 5,000
07/01/01 5,000 10/01/03 5,000 01/01/06 5,000
08/01/01 0 11/01/03 0 02/01/06 5,000
09/01/01 5,000 12/01/03 5,000 03/01/06 5,000
10/01/01 5,000 01/01/04 5,000 04/01/06 5,000
11/01/01 0 02/01/04 5,000 05/01/06 5,000
12/01/01 5,000 03/01/04 5,000 06/01/06 5,000
01/01/02 5,000 04/01/04 5,000 07/01/06 5,000
02/01/02 5,000 05/01/04 0 08/01/06 5,000
03/01/02 0 06/01/04 5,000 09/01/06 5,000
04/01/02 5,000 07/01/04 5,000 10/01/06 5,000
05/01/02 5,000 08/01/04 5,000 11/01/06 5,000
06/01/02 0 09/01/04 5,000 12/01/06 5,000
Series D-1
<PAGE>
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
01/01/07 $ 5,000 07/01/09 $10,000 01/01/12 $10,000
02/01/07 5,000 08/01/09 5,000 02/01/12 5,000
03/01/07 5,000 09/01/09 5,000 03/01/12 10,000
04/01/07 5,000 10/01/09 5,000 04/01/12 10,000
05/01/07 5,000 11/01/09 10,000 05/01/12 5,000
06/01/07 10,000 12/01/09 5,000 06/01/12 10,000
07/01/07 5,000 01/01/10 5,000 07/01/12 5,000
08/01/07 5,000 02/01/10 5,000 08/01/12 10,000
09/01/07 5,000 03/01/10 10,000 09/01/12 5,000
10/01/07 5,000 04/01/10 5,000 10/01/12 10,000
11/01/07 5,000 05/01/10 5,000 11/01/12 5,000
12/01/07 5,000 06/01/10 10,000 12/01/12 10,000
01/01/08 5,000 07/01/10 5,000 01/01/13 10,000
02/01/08 5,000 08/01/10 5,000 02/01/13 5,000
03/01/08 5,000 09/01/10 10,000 03/01/13 10,000
04/01/08 10,000 10/01/10 5,000 04/01/13 10,000
05/01/08 5,000 11/01/10 10,000 05/01/13 10,000
06/01/08 5,000 12/01/10 5,000 06/01/13 5,000
07/01/08 5,000 01/01/11 5,000 07/01/13 10,000
08/01/08 5,000 02/01/11 10,000 08/01/13 10,000
09/01/08 5,000 03/01/11 5,000 09/01/13 5,000
10/01/08 5,000 04/01/11 10,000 10/01/13 10,000
11/01/08 10,000 05/01/11 5,000 11/01/13 10,000
12/01/08 5,000 06/01/11 10,000 12/01/13 5,000
01/01/09 5,000 07/01/11 5,000 01/01/14 10,000
02/01/09 5,000 08/01/11 5,000 02/01/14 10,000
03/01/09 10,000 09/01/11 10,000 03/01/14 10,000
04/01/09 5,000 10/01/11 5,000 04/01/14 10,000
05/01/09 5,000 11/01/11 10,000 05/01/14 10,000
06/01/09 5,000 12/01/11 5,000 06/01/14 5,000
07/01/14 10,000
IDRB INFORMATION
1. Issuer: Village of Menomonee Falls, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
4. Name of IDRB: Village of Menomonee Falls, Wisconsin,
Industrial Development Revenue Bonds, Series
1996 (Becker Machine Co., Inc. Project)
5. Original Issue Date: November 26, 1996
Series D-2
<PAGE>
6. Original Principal
Amount: $1,150,000
7. Borrower: Becker Machine Co., Inc., a Wisconsin
corporation
8. Collateral: Mortgage and Assignment of Leases and Rents
9. Interest Rate(s): Variable, Prime Rate minus 1/2%, adjusted
monthly as Prime Rate changes
10. Principal Amount
Outstanding as
of March 23, 2000: $955,310.21
11. Final Maturity Date: January 1, 2015
12. Amortization of Balance: 172 monthly installments
13. Prepayment Provisions:
(a) Optional: The Bonds are subject to redemption by the Issuer (at the
election of the Borrower) prior to stated maturity, in whole or in part, in
integral multiples of $1,000, at any time, at the principal amount of such Bonds
to be redeemed plus accrued interest thereon to the date of redemption, at the
times set forth below, together with premiums equal to the following percentages
of the principal amount being redeemed:
Redemption Period Redemption
(Dates Inclusive) Prices
----------------- ----------
January 1, 1997 through December 31, 2002 103%
January 1, 2003 and thereafter 101%
On and after January 1, 2003, the redemption price set forth above
shall apply only in the event that the Bonds are prepaid through a refinancing.
In the event that the Borrower elects to prepay the Bonds in full after January
1, 2003, there shall be no prepayment penalty or redemption premium.
It is a condition of any optional redemption pursuant to Section 2.05
that the Borrower shall have deposited the redemption price in Eligible Funds
into the Bond Fund.
Any prepayments of principal shall be applied in inverse order of the
amortization schedules and pro rata with respect to the Bonds. The Bonds are
subject to redemption prior to maturity upon receipt by the Trustee of the
written request from the Borrower stating that it intends to prepay the loan
upon notice, provided by the Trustee not less than 30 days prior to the
Series D-3
<PAGE>
redemption date, and thereby effect redemption of the Bonds being redeemed, at
the redemption prices set forth above, plus accrued interest to the redemption
date.
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower if the Project shall have been damaged or destroyed; title to or the
temporary use of all or substantially all of if the Project shall have been
taken under the exercise of the power of eminent domain by any Governmental
Authority or the Issuer; any court or administrative body of competent
jurisdiction shall enter a judgment, order or decree requiring the Borrower to
cease all or any substantial part of its operations at the Project; as a result
of any changes in the Constitution of Wisconsin or the Constitution of the
United States of America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any court or
administrative body (whether state or federal), the Bond Agreement shall have
become void or unenforceable or impossible of performance in accordance with the
intent and purposes of the parties as expressed herein, or unreasonable burdens
or excessive liabilities shall have been imposed on the Issuer or the Borrower
including without limitation federal, state or other ad valorem, property,
income or other taxes not being imposed on the date hereof; or it shall
subsequently be discovered that the Borrower's title to if the Project shall be
materially defective, and the Borrower's title to if the Project shall be lost
by reason of such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at the Prime Rate. The Borrower shall also pay to the Bondowners (and
any former Bondowners holding Bonds during any period subsequent to an Event of
Taxability) as additional interest, the amount of penalties, additions to tax
(exclusive of any taxes imposed under Section 11 or any successor provision of
the Code) or interest assessed against the Bondowners (and former Bondowners) on
account of a Determination of Taxability.
Series D-4
<PAGE>
Series E-1
SERIES SUPPLEMENT - E
CERTIFICATE INFORMATION
1. Series Designation: Series E
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $1,850,000
(b) Junior Certificate: $3,750
4. Final Maturity Date: December 1, 2012
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
04/01/00 $ 5,000 07/01/02 $ 10,000 10/01/04 $ 10,000
05/01/00 10,000 08/01/02 5,000 11/01/04 10,000
06/01/00 5,000 09/01/02 10,000 12/01/04 5,000
07/01/00 10,000 10/01/02 10,000 01/01/05 15,000
08/01/00 5,000 11/01/02 5,000 02/01/05 10,000
09/01/00 10,000 12/01/02 10,000 03/01/05 10,000
10/01/00 5,000 01/01/03 10,000 04/01/05 10,000
11/01/00 10,000 02/01/03 10,000 05/01/05 10,000
12/01/00 5,000 03/01/03 5,000 06/01/05 10,000
01/01/01 10,000 04/01/03 10,000 07/01/05 10,000
02/01/01 10,000 05/01/03 10,000 08/01/05 10,000
03/01/01 5,000 06/01/03 10,000 09/01/05 10,000
04/01/01 10,000 07/01/03 10,000 10/01/05 10,000
05/01/01 5,000 08/01/03 5,000 11/01/05 10,000
06/01/01 10,000 09/01/03 10,000 12/01/05 10,000
07/01/01 10,000 10/01/03 10,000 01/01/06 10,000
08/01/01 5,000 11/01/03 10,000 02/01/06 10,000
09/01/01 10,000 12/01/03 10,000 03/01/06 15,000
10/01/01 5,000 01/01/04 10,000 04/01/06 10,000
11/01/01 10,000 02/01/04 5,000 05/01/06 10,000
12/01/01 10,000 03/01/04 10,000 06/01/06 10,000
01/01/02 5,000 04/01/04 10,000 07/01/06 10,000
02/01/02 10,000 05/01/04 10,000 08/01/06 10,000
03/01/02 10,000 06/01/04 10,000 09/01/06 10,000
04/01/02 5,000 07/01/04 10,000 10/01/06 15,000
05/01/02 10,000 08/01/04 10,000 11/01/06 10,000
06/01/02 10,000 09/01/04 10,000 12/01/06 10,000
Series E-1
<PAGE>
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
01/01/07 $ 10,000 01/01/09 $ 10,000 01/01/11 $ 15,000
02/01/07 10,000 02/01/09 15,000 02/01/11 15,000
03/01/07 15,000 03/01/09 15,000 03/01/11 15,000
04/01/07 10,000 04/01/09 10,000 04/01/11 15,000
05/01/07 10,000 05/01/09 15,000 05/01/11 15,000
06/01/07 15,000 06/01/09 10,000 06/01/11 15,000
07/01/07 10,000 07/01/09 15,000 07/01/11 15,000
08/01/07 10,000 08/01/09 15,000 08/01/11 15,000
09/01/07 15,000 09/01/09 10,000 09/01/11 15,000
10/01/07 10,000 10/01/09 15,000 10/01/11 15,000
11/01/07 10,000 11/01/09 10,000 11/01/11 15,000
12/01/07 10,000 12/01/09 15,000 12/01/11 15,000
01/01/08 15,000 01/01/10 15,000 01/01/12 15,000
02/01/08 10,000 02/01/10 15,000 02/01/12 15,000
03/01/08 15,000 03/01/10 10,000 03/01/12 15,000
04/01/08 10,000 04/01/10 15,000 04/01/12 15,000
05/01/08 15,000 05/01/10 15,000 05/01/12 20,000
06/01/08 10,000 06/01/10 15,000 06/01/12 15,000
07/01/08 15,000 07/01/10 15,000 07/01/12 15,000
08/01/08 10,000 08/01/10 10,000 08/01/12 15,000
09/01/08 15,000 09/01/10 15,000 09/01/12 15,000
10/01/08 10,000 10/01/10 15,000 10/01/12 20,000
11/01/08 10,000 11/01/10 15,000 11/01/12 15,000
12/01/08 15,000 12/01/10 15,000 12/01/12 145,000
IDRB INFORMATION
1. Issuer: Village of Johnson Creek, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
4. Name of IDRB: Village of Johnson Creek, Wisconsin, Industrial
Development Revenue Bonds, Series
1995 (Saelens Corporation Project)
5. Original Issue Date: November 21, 1995
6. Original Principal
Amount: $2,120,000
7. Borrower: Saelens Corporation, a Wisconsin corporation
8. Collateral: Mortgage and Assignment of Leases and Rents;
Unlimited Personal Guaranty
Series E-2
<PAGE>
9. Interest Rate(s): Variable, 30-day LIBOR plus 1.375% per annum
10. Principal Amount
Outstanding as
of March 23, 2000: $1,853,750
11. Final Maturity Date: December 1, 2012
12. Amortization of Balance: 155 monthly installments, with a balloon
payment of $131,000 at maturity
13. Prepayment Provisions:
(a) Optional: The Bonds are subject to optional redemption by the
Issuer (at the election of the Borrower), in whole or in part (in integral
multiples of $5,000, at par, at any time at the principal amount of such Bonds
to be redeemed, plus accrued interest thereon to the date of redemption,
together with premiums equal to the following percentages of the principal
amount being redeemed:
Period Premium
From December 1, 1999 through November 30, 2000 3.0%
From December 1, 2000 through November 30, 2001 2.5%
From December 1, 2001 through November 30, 2002 2.0%
From December 1, 2002 through November 30, 2003 1.5%
From December 1, 2003 through November 30, 2004 1.0%
From December 1, 2005 through November 30, 2005 0.5%
From December 1, 2006 and thereafter None
It is a condition of any optional redemption pursuant to the above that
the Borrower shall have deposited the redemption price in Eligible Funds into
the Bond Fund.
Any prepayments of principal shall be applied in inverse order of the
amortization schedules and pro rata with respect to the Bonds. The Bonds are
subject to redemption prior to maturity upon receipt by the Trustee of the
written request from the Borrower stating that it intends to prepay the loan
upon notice, provided by the Trustee not less than 30 days prior to the
redemption date, and thereby effect redemption of the Bonds being redeemed, at
the redemption prices set forth above, plus accrued interest to the redemption
date.
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower, or the Bondowners by Requisite Consent if the Project shall have been
damaged or destroyed; title to or the temporary use of all or substantially all
of if the Project shall have been taken under the exercise of the power of
eminent domain by any governmental issuer; any court or administrative body of
competent jurisdiction shall enter a judgment, order or decree requiring the
Borrower to cease all or any
Series E-3
<PAGE>
substantial part of its operations at the Project; as a result of any changes in
the Constitution of Wisconsin or the Constitution of the United States of
America or of legislative or administrative action (whether state or federal) or
by final decree, judgment or order of any court or administrative body (whether
state or federal), the Bond Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purposes of the
parties as expressed herein, or unreasonable burdens or excessive liabilities
shall have been imposed on the Issuer or the Borrower; or it shall subsequently
be discovered that the Borrower's title to if the Project shall be materially
defective, and the Borrower's title to if the Project shall be lost by reason of
such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at a floating rate equal to the Prime Rate plus .50%, adjusted on the
first day of each month, plus 2.0% per annum. The Borrower shall also pay to the
Bondowners (and any former Bondowners holding Bonds during any period subsequent
to an Event of Taxability) as additional interest, the amount of penalties,
additions to tax (exclusive of any taxes imposed under Section 11 or any
successor provision of the Code) or interest assessed against the Bondowners
(and former Bondowners) on account of a Determination of Taxability.
Series E-4
<PAGE>
SERIES SUPPLEMENT - F
CERTIFICATE INFORMATION
1. Series Designation: Series F
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $1,930,000
(b) Junior Certificate: $2,846.23
4. Final Maturity Date: January 1, 2015
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
04/01/00 $ 5,000 07/01/02 $ 5,000 10/01/04 $ 10,000
05/01/00 10,000 08/01/02 5,000 11/01/04 5,000
06/01/00 5,000 09/01/02 5,000 12/01/04 5,000
07/01/00 10,000 10/01/02 5,000 01/01/05 10,000
08/01/00 5,000 11/01/02 5,000 02/01/05 5,000
09/01/00 10,000 12/01/02 5,000 03/01/05 5,000
10/01/00 5,000 01/01/03 5,000 04/01/05 10,000
11/01/00 10,000 02/01/03 10,000 05/01/05 5,000
12/01/00 5,000 03/01/03 5,000 06/01/05 10,000
01/01/01 10,000 04/01/03 5,000 07/01/05 5,000
02/01/01 5,000 05/01/03 5,000 08/01/05 5,000
03/01/01 5,000 06/01/03 5,000 09/01/05 10,000
04/01/01 5,000 07/01/03 10,000 10/01/05 5,000
05/01/01 5,000 08/01/03 5,000 11/01/05 10,000
06/01/01 5,000 09/01/03 5,000 12/01/05 5,000
07/01/01 5,000 10/01/03 5,000 01/01/06 10,000
08/01/01 5,000 11/01/03 5,000 02/01/06 5,000
09/01/01 5,000 12/01/03 10,000 03/01/06 10,000
10/01/01 5,000 01/01/04 5,000 04/01/06 5,000
11/01/01 5,000 02/01/04 5,000 05/01/06 10,000
12/01/01 5,000 03/01/04 10,000 06/01/06 5,000
01/01/02 5,000 04/01/04 5,000 07/01/06 10,000
02/01/02 5,000 05/01/04 5,000 08/01/06 5,000
03/01/02 5,000 06/01/04 5,000 09/01/06 10,000
04/01/02 5,000 07/01/04 10,000 10/01/06 5,000
05/01/02 10,000 08/01/04 5,000 11/01/06 10,000
06/01/02 5,000 09/01/04 5,000 12/01/06 5,000
Series F-1
<PAGE>
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
01/01/07 $ 10,000 10/01/09 $ 10,000 07/01/12 $ 15,000
02/01/07 5,000 11/01/09 5,000 08/01/12 10,000
03/01/07 10,000 12/01/09 10,000 09/01/12 10,000
04/01/07 5,000 01/01/10 10,000 10/01/12 10,000
05/01/07 10,000 02/01/10 10,000 11/01/12 10,000
06/01/07 10,000 03/01/10 10,000 12/01/12 15,000
07/01/07 5,000 04/01/10 10,000 01/01/13 10,000
08/01/07 10,000 05/01/10 10,000 02/01/13 10,000
09/01/07 5,000 06/01/10 10,000 03/01/13 15,000
10/01/07 10,000 07/01/10 10,000 04/01/13 10,000
11/01/07 10,000 08/01/10 10,000 05/01/13 10,000
12/01/07 5,000 09/01/10 10,000 06/01/13 10,000
01/01/08 10,000 10/01/10 10,000 07/01/13 15,000
02/01/08 10,000 11/01/10 10,000 08/01/13 10,000
03/01/08 5,000 12/01/10 10,000 09/01/13 10,000
04/01/08 10,000 01/01/11 10,000 10/01/13 15,000
05/01/08 10,000 02/01/11 10,000 11/01/13 10,000
06/01/08 5,000 03/01/11 10,000 12/01/13 10,000
07/01/08 10,000 04/01/11 10,000 01/01/14 15,000
08/01/08 10,000 05/01/11 10,000 02/01/14 10,000
09/01/08 10,000 06/01/11 10,000 03/01/14 15,000
10/01/08 5,000 07/01/11 10,000 04/01/14 10,000
11/01/08 10,000 08/01/11 10,000 05/01/14 15,000
12/01/08 10,000 09/01/11 10,000 06/01/14 10,000
01/01/09 5,000 10/01/11 10,000 07/01/14 15,000
02/01/09 10,000 11/01/11 10,000 08/01/14 10,000
03/01/09 10,000 12/01/11 10,000 09/01/14 15,000
04/01/09 10,000 01/01/12 10,000 10/01/14 10,000
05/01/09 10,000 02/01/12 15,000 11/01/14 15,000
06/01/09 5,000 03/01/12 10,000 12/01/14 10,000
07/01/09 10,000 04/01/12 10,000 01/01/15 445,000
08/01/09 10,000 05/01/12 10,000
09/01/09 10,000 06/01/12 10,000
IDRB INFORMATION
1. Issuer: Village of Grafton, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
4. Name of IDRB: Village of Grafton, Wisconsin, Industrial
Development Revenue Bonds, Series 1995
(Calibre, Inc. Project)
Series F-2
<PAGE>
5. Original Issue Date: November 17, 1995
6. Original Principal
Amount: $2,300,000
7. Borrower: Calibre, Inc., a Wisconsin corporation
8. Collateral: Mortgage, Security Agreement and Assignment of
Leases and Rents (2 properties)
9. Interest Rate(s): Variable, 30-day LIBOR plus 1.375% per annum
10. Principal Amount
Outstanding as
of March 23, 2000: $1,932,846.23
11. Final Maturity Date: January 1, 2015
12. Amortization of Balance: 178 monthly installments, with a balloon
payment of $431,096.23 at maturity
13. Prepayment Provisions:
(a) Optional: The Bonds are subject to optional redemption by the
Issuer (at the election of the Borrower), in whole or in part (in integral
multiples of $5,000, at par, at any time, at the principal amount of such Bonds
to be redeemed plus accrued interest thereon to the date of redemption, at the
times set forth below, together with premiums equal to the following percentages
of the principal amount being redeemed:
Period Premium
From January 1, 2000 through December 31, 2002 3%
From January 1, 2003 through December 31, 2005 2%
From January 1, 2006 through December 31, 2008 1%
January 1, 2008 and thereafter None
It is a condition of any optional redemption pursuant to the above that
the Borrower shall have deposited the redemption price in Eligible Funds into
the Bond Fund.
Any prepayments of principal shall be applied in inverse order of the
amortization schedules and pro rata with respect to the Bonds. The Bonds are
subject to redemption prior to maturity upon receipt by the Trustee of the
written request from the Borrower stating that it intends to prepay the loan
upon notice, provided by the Trustee not less than 30 days prior to the
redemption date, and thereby effect redemption of the Bonds being redeemed, at
the redemption prices set forth above, plus accrued interest to the redemption
date.
Series F-3
<PAGE>
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower, or the Bondowners by Requisite Consent if the Project shall have been
damaged or destroyed to such extent that, in the opinion of the Borrower
expressed in a Borrower's Certificate; title to or the temporary use of all or
substantially all of if the Project shall have been taken under the exercise of
the power of eminent domain by any governmental issuer; any court or
administrative body of competent jurisdiction shall enter a judgment, order or
decree requiring the Borrower to cease all or any substantial part of its
operations at the Project; as a result of any changes in the Constitution of
Wisconsin or the Constitution of the United States of America or of legislative
or administrative action (whether state or federal) or by final decree, judgment
or order of any court or administrative body (whether state or federal), the
Bond Agreement shall have become void or unenforceable or impossible of
performance in accordance with the intent and purposes of the parties as
expressed herein, or unreasonable burdens or excessive liabilities shall have
been imposed on the Issuer or the Borrower; or it shall subsequently be
discovered that the Borrower's title to if the Project shall be materially
defective, and the Borrower's title to if the Project shall be lost by reason of
such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at a floating rate equal to the Prime Rate plus 1.0%, adjusted on the
first day of each month. The Borrower shall also pay to the Bondowners (and any
former Bondowners holding Bonds during any period subsequent to an Event of
Taxability) as additional interest, the amount of penalties, additions to tax
(exclusive of any taxes imposed under Section 11 or any successor provision of
the Code) or interest assessed against the Bondowners (and former Bondowners) on
account of a Determination of Taxability.
Series F-4
<PAGE>
SERIES SUPPLEMENT - G
CERTIFICATE INFORMATION
1. Series Designation: Series G
2. Closing Date: March 23, 2000
3. Original Principal Amounts:
(a) Senior Certificates: $1,565,000
(b) Junior Certificate: $2,985
4. Final Maturity Date: December 1, 2006
5. Senior Certificate Sinking Fund Schedule:
Date Amount Date Amount Date Amount
---- ------ ---- ------ ---- ------
04/01/00 $ 10,000 07/01/02 $ 15,000 10/01/04 $ 15,000
05/01/00 10,000 08/01/02 10,000 11/01/04 15,000
06/01/00 10,000 09/01/02 15,000 12/01/04 15,000
07/01/00 15,000 10/01/02 15,000 01/01/05 15,000
08/01/00 10,000 11/01/02 15,000 02/01/05 20,000
09/01/00 10,000 12/01/02 10,000 03/01/05 15,000
10/01/00 15,000 01/01/03 15,000 04/01/05 15,000
11/01/00 10,000 02/01/03 15,000 05/01/05 20,000
12/01/00 10,000 03/01/03 15,000 06/01/05 15,000
01/01/01 15,000 04/01/03 15,000 07/01/05 15,000
02/01/01 10,000 05/01/03 15,000 08/01/05 20,000
03/01/01 15,000 06/01/03 15,000 09/01/05 15,000
04/01/01 10,000 07/01/03 10,000 10/01/05 15,000
05/01/01 15,000 08/01/03 15,000 11/01/05 20,000
06/01/01 10,000 09/01/03 15,000 12/01/05 15,000
07/01/01 15,000 10/01/03 15,000 01/01/06 20,000
08/01/01 10,000 11/01/03 15,000 02/01/06 15,000
09/01/01 15,000 12/01/03 15,000 03/01/06 20,000
10/01/01 10,000 01/01/04 15,000 04/01/06 20,000
11/01/01 10,000 02/01/04 15,000 05/01/06 15,000
12/01/01 15,000 03/01/04 15,000 06/01/06 20,000
01/01/02 15,000 04/01/04 15,000 07/01/06 20,000
02/01/02 10,000 05/01/04 15,000 08/01/06 20,000
03/01/02 15,000 06/01/04 15,000 09/01/06 15,000
04/01/02 15,000 07/01/04 20,000 10/01/06 20,000
05/01/02 10,000 08/01/04 15,000 11/01/06 20,000
06/01/02 15,000 09/01/04 15,000 12/01/06 390,000
Series G-1
<PAGE>
IDRB INFORMATION
1. Issuer: City of New Berlin, Wisconsin
2. Trustee: Firstar Bank, National Association
3. Paying Agent: Bando McGlocklin Small Business Lending
Corporation
4. Name of IDRB: City of New Berlin, Wisconsin, Industrial
Development Revenue Bonds, Series 1996
(Toolrite Manufacturing Co., Inc. Project)
5. Original Issue Date: July 25, 1996
6. Original Principal
Amount: $1,850,000
7. Borrower: Toolrite Manufacturing Co., Inc., a Wisconsin
corporation
8. Collateral: Mortgage and Assignment of Leases and Rents;
General Business Security Agreement
9. Interest Rate(s): Variable, Prime Rate, adjusted monthly as Prime
Rate changes
10. Principal Amount
Outstanding as
of March 23, 2000: $1,567,985
11. Final Maturity Date: January 1, 2007
12. Amortization of Balance: 81 monthly installments, with a balloon payment
of $373,940 on December 1, 2006
13. Prepayment Provisions:
(a) Optional: Except as provided in Section 2.06 and 2.07 of the Bond
Agreement and as set forth below, the Bonds are not subject to redemption until
on or after January 1, 2000. On and after January 1, 2000, the Bonds are subject
to redemption by the Issuer (at the election of the Borrower) prior to stated
maturity, in whole or in part, on any Payment Date. The redemption price for any
such redemption shall be the amount determined from the table below (expressed
as a percentage of the principal amount of the Bonds or portions thereof so
redeemed), plus accrued interest to the redemption date:
Series G-2
<PAGE>
Redemption Period Redemption
(Dates Inclusive) Prices
January 1, 2000 through December 31, 2000 105%
January 1, 2001 through December 31, 2001 104%
January 1, 2002 through December 31, 2002 103%
January 1, 2003 through December 31, 2003 102%
January 1, 2004 through December 31, 2004 101%
January 1, 2005 and thereafter 100%
It is a condition of any optional redemption pursuant to Section 2.05
that the Borrower shall have deposited the redemption price in Eligible Funds
into the Bond Fund.
Any prepayments of principal shall be applied in inverse order of the
amortization schedules and pro rata with respect to the Bonds. The Bonds are
subject to redemption prior to maturity upon receipt by the Trustee of the
written request from the Borrower stating that it intends to prepay the loan
upon notice, provided by the Trustee not less than 30 days prior to the
redemption date, and thereby effect redemption of the Bonds being redeemed, at
the redemption prices set forth above, plus accrued interest to the redemption
date.
(b) Certain Extraordinary Events: The Bonds are subject to redemption,
at par plus accrued interest to the Redemption Date at the option of the
Borrower if the Project shall have been damaged or destroyed to such extent
that, in the opinion of the Borrower expressed in a Borrower's Certificate;
title to or the temporary use of all or substantially all of if the Project
shall have been taken under the exercise of the power of eminent domain by any
governmental issuer; any court or administrative body of competent jurisdiction
shall enter a judgment, order or decree requiring the Borrower to cease all or
any substantial part of its operations at the Project; as a result of any
changes in the Constitution of Wisconsin or the Constitution of the United
States of America or of legislative or administrative action (whether state or
federal) or by final decree, judgment or order of any court or administrative
body (whether state or federal), the Bond Agreement shall have become void or
unenforceable or impossible of performance in accordance with the intent and
purposes of the parties as expressed herein, or unreasonable burdens or
excessive liabilities shall have been imposed on the Issuer or the Borrower; or
it shall subsequently be discovered that the Borrower's title to if the Project
shall be materially defective, and the Borrower's title to if the Project shall
be lost by reason of such defect.
14. Determination of Taxability: The Bonds shall bear interest on the first
Payment Date after the occurrence of a Determination of Taxability, computed
at the rate set forth in this Section (the "Taxable Rate") (on a 360-day
year, actual days elapsed basis) on the outstanding principal amount of the
Bonds (as reduced from time to time) from the date of the Event of
Taxability, less any interest already paid, from the date of the Event of
Taxability to such Payment Date. Thereafter, the Bonds shall bear Taxable
Interest.
Taxable Interest payable on the Bonds for purposes of this Section
shall be at the Prime Rate. The Borrower shall also pay to the Bondowners (and
any former Bondowners holding Bonds during any period subsequent to an Event of
Taxability) as additional interest, the amount of
Series G-3
<PAGE>
penalties, additions to tax (exclusive of any taxes imposed under Section 11 or
any successor provision of the Code) or interest assessed against the Bondowners
(and former Bondowners) on account of a Determination of Taxability.
Series G-4
Exhibit 11
----------
BANDO McGLOCKLIN CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
For the three months
ended March 31,
--------------------
2000 1999
----------- ----------
Net income available to
common shareholders $ 1,048,711 $ 898,100
----------- ----------
Determination of shares:
Weighted average common shares
outstanding (basic) 3,952,693 4,058,012 *
Assumed conversion of stock options 1,213 2,383 *
----------- ----------
Weighted average common shares
outstanding (diluted) 3,953,906 4,060,395 *
=========== ==========
Basic earnings per share $ 0.27 $ 0.22 *
Diluted earnings per share $ 0.27 $ 0.22 *
* Restated for 10% stock dividend as of the December 31, 1999 record date.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,170,144
<SECURITIES> 144,259,186
<RECEIVABLES> 3,798,114
<ALLOWANCES> 121,758
<INVENTORY> 5,628,264
<CURRENT-ASSETS> 1,165,643
<PP&E> 5,188,907
<DEPRECIATION> 1,973,564
<TOTAL-ASSETS> 162,251,415
<CURRENT-LIABILITIES> 68,776,937
<BONDS> 63,053,555
<COMMON> 293,441
16,869,775
0
<OTHER-SE> 12,857,015
<TOTAL-LIABILITY-AND-EQUITY> 162,251,415
<SALES> 6,580,718
<TOTAL-REVENUES> 9,756,213
<CGS> 3,336,188
<TOTAL-COSTS> 3,336,188
<OTHER-EXPENSES> 2,519,124
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,205,669
<INCOME-PRETAX> 1,695,232
<INCOME-TAX> 294,207
<INCOME-CONTINUING> 1,048,711
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,048,711
<EPS-BASIC> 0.27
<EPS-DILUTED> 0.27
</TABLE>
