<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 21, 1997
REGISTRATION NO. 333-37527
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COMMUNITY FIRST BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 46-0391436
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
520 MAIN AVENUE
FARGO, NORTH DAKOTA 58124-0001
(701) 298-5600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
------------------------
DONALD R. MENGEDOTH
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
520 MAIN AVENUE
FARGO, NORTH DAKOTA 58124-0001
(701) 298-5600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPIES TO:
PATRICK DELANEY, ESQ.
MARTIN R. ROSENBAUM, ESQ.
Lindquist & Vennum P.L.L.P.
4200 IDS Center
80 South 8th Street
Minneapolis, Minnesota 55402
Telephone: (612) 371-3211
Fax: (612) 371-3207
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
Subject to completion, dated November 21, 1997
PROSPECTUS
DATED NOVEMBER , 1997
$150,000,000
COMMUNITY FIRST BANKSHARES, INC.
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES
[LOGO]
COMMUNITY FIRST BANKSHARES, INC. (the "Company") may offer from time to time,
together or separately, (i) shares of its common stock, par value $.01 per share
(the "Common Stock"), (ii) shares of its preferred stock, $.01 par value per
share (the "Preferred Stock"), and (iii) its secured or unsecured debt
securities, which may be either senior (the "Senior Notes") or subordinated (the
"Subordinated Notes" and, together with the Senior Notes, the "Debt
Securities"), in amounts, at prices and on terms to be determined at the time of
the offering thereof. The Common Stock, Preferred Stock and Debt Securities
(collectively, the "Securities") may be offered independently or together in any
combination ("Units") for sale directly to purchasers or through dealers,
underwriters or agents to be designated. The Subordinated Notes and Preferred
Stock may be convertible or exchangeable into other series of Debt Securities,
Preferred Stock or Common Stock. The Securities offered pursuant to this
Prospectus may be issued in one or more series or issuances, the aggregate
initial public offering price of which will not exceed $150.0 million (or the
equivalent thereof if the Debt Securities are denominated in one or more foreign
currencies of foreign currency units). If any Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price not to
exceed $150.0 million less the dollar amount of any securities previously issued
hereunder.
The specific terms of the Securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in the accompanying
supplement to this Prospectus (a "Prospectus Supplement"), including, where
applicable, (i) in the case of Common Stock, the aggregate number of shares, or
fractional interests therein, offered, (ii) in the case of the Preferred Stock,
the specific designation, the aggregate number of shares offered, the dividend
rate (or method of calculation thereof), the dividend period and dividend
payment dates, whether such dividends will be cumulative or noncumulative, the
liquidation preference, voting rights, if any, any terms for optional or
mandatory redemption, any terms for conversion or exchange into other series of
Preferred Stock or Common Stock and any other special terms, (iii) in the case
of Debt Securities, the specific designation, aggregate principal amount,
currency, ranking as Senior Notes or Subordinated Notes, authorized
denominations, maturity, any premium, rate or method of calculation of interest,
if any, and dates for payment thereof, any terms for optional or mandatory
redemption, any sinking fund provisions, any terms for conversion or exchange
into other series of Debt Securities, Preferred Stock or Common Stock and any
other special terms and (iv) the initial public offering price and the net
proceeds to the Company from and other specific terms relating to the Offered
Securities. Units may be issued in amounts, at prices, on terms and containing
such conditions, covenants and other provisions, and consisting of Offered
Securities and other securities as are set forth in a Prospectus Supplement. A
Prospectus Supplement also will contain information, where applicable, about
certain United States federal income tax considerations relating to and any
listing on a securities exchange of the Offered Securities covered by the
Prospectus Supplement.
The Senior Notes will rank PARI PASSU in right of payment with all
unsubordinated indebtedness of the Company, but, except to the extent such
Senior Notes are secured by collateral, they will be effectively subordinated to
the rights of holders of secured and unsubordinated indebtedness of the Company
to the extent of the value of the collateral securing such indebtedness. The
Senior Notes will rank senior to all subordinated and unsecured indebtedness of
the Company. The Subordinated Notes will be subordinate in right of payment to
all existing and future Senior Indebtedness (as defined herein) of the Company,
including any Senior Notes.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
For a discussion of certain factors which should be considered by prospective
purchasers of the securities offered hereby, see "Risk Factors" beginning on
page 6 herein.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, BY ANY OTHER GOVERNMENTAL AGENCY, OR
OTHERWISE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------
The Company may sell the Securities (i) through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate,
with such underwriters to be designated at the time of sale, (ii) through agents
designated from time to time or (iii) directly. The names of any underwriters or
agents of the Company involved in the sale of the Securities, the public
offering price or purchase price thereof, and any applicable fees, commissions
or discounts, will be set forth, or will be calculable from the information set
forth, in the accompanying Prospectus Supplement. See "Plan of Distribution" for
possible indemnification arrangements for agents, dealers and underwriters.
--------------------------
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information can be inspected and copied at the public
reference facilities that the Commission maintains at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of these
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission at the principal offices of the Commission, 450 Fifth Street,
N.W., Washington D.C. 20549. In addition, the Commission also maintains an
internet web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission. The Company's Common
Stock is quoted on the Nasdaq National Market. Reports, proxy statements and
other information also may be inspected at the National Association of
Securities Dealers, Inc., 1735 K. Street N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain items of which are
contained in schedules and exhibits to the Registration Statement as permitted
by the rules and regulations of the Commission. Statements made in the
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete. With respect to each such document filed with the
Commission as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description, and each such statement shall be deemed
qualified in its entirety by such reference.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S.$").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission (File No. 0-19368) pursuant to the Exchange Act, are hereby
incorporated by reference in this Prospectus: (i) Annual Report on Form 10-K for
the year ended December 31, 1996, as amended by Form 10-K/A filed on May 8,
1997; (ii) Current Report on Form 8-K filed July 29, 1997, as amended on Form
8-K/A filed on September 22, 1997; (iii) Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 1997; (iv) the description of
the Company's Common Stock as set forth on its Form 8-A Registration Statement
filed with the Commission and effective on August 13, 1991, (v) the description
of the Company's Common Stock and undesignated Preferred Stock, as set forth on
its Form 8-A Registration Statement filed with the Commission on April 7, 1994,
as amended on September 19, 1994, and (vi) the description of the Company's
Preferred Stock Purchase Rights, as set forth on its Form 8-A Registration
Statement filed with the Commission on January 9, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus shall be
deemed to be incorporated by reference herein. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed superseded or modified for purposes of this Prospectus to the extent that
a statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein or in the accompanying Prospectus
Supplement by reference) modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or the accompanying
Prospectus Supplement.
2
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference (other than exhibits to such documents which are not specifically
incorporated by reference in such documents.) Written requests for such copies
should be directed to the Company, 520 Main Avenue, Fargo, North Dakota
58124-0001, Attention: Mark A. Anderson, Executive Vice President and Chief
Financial Officer of the Company at (701) 298-5600.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR A PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN AND THEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN
OR THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS
MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES UNLESS ACCOMPANIED BY
A PROSPECTUS SUPPLEMENT APPLICABLE TO THE OFFERED SECURITIES BEING SOLD. THE
DELIVERY OF THIS PROSPECTUS AND A PROSPECTUS SUPPLEMENT RELATING TO PARTICULAR
OFFERED SECURITIES SHALL NOT CONSTITUTE AN OFFER OF ANY OF THE OTHER OFFERED
SECURITIES COVERED BY THIS PROSPECTUS. THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY THE OFFERED SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER
OR SOLICITATION OF AN OFFER TO BUY THE OFFERED SECURITIES IS UNLAWFUL.
3
<PAGE>
THE COMPANY
The Company is a multi-bank holding company that as of September 30, 1997
operated banks and bank branches (the "Company Banks") in 103 communities in
Colorado, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin and
Wyoming and had total assets of approximately $4.2 billion. The Company operates
community banks primarily in small and medium-sized communities and the
surrounding market areas. The Company provides a full range of financial
products and services to individuals and businesses, including commercial and
consumer banking, trust, insurance and investment services.
The Company's strategy is to operate and continue to acquire banks and bank
branches in communities which generally have populations between 3,000 and
50,000 and are located in the Company's key target acquisition states of
Arizona, Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska, North Dakota,
South Dakota, Wisconsin and Wyoming, and additionally in the adjacent states of
Idaho, Illinois, Missouri, New Mexico, Oklahoma and Utah (this seventeen state
area is collectively referred to as the "Acquisition Area"). Such communities
are believed to provide the Company with the opportunity for a stable,
relatively low-cost deposit base. The individual banks and bank branches sought
to be acquired by the Company generally have approximately $20 million to $150
million in assets.
On November 6, 1997, the Company entered into an agreement to acquire
Pioneer Bank of Longmont, Longmont, Colorado ("Pioneer"). As of September 30,
1997, Pioneer had total assets of approximately $119 million, deposits of
approximately $110 million and five banking offices in four Colorado
communities. On completion of the merger and subject to adjustments set forth in
the acquisition agreement, the Company expects to issue approximately 700,000
shares of its common stock to the holders of Pioneer common stock. Completion of
the transaction is subject to regulatory approvals, approval by the Pioneer
shareholders and other conditions. The transaction is anticipated to be
completed during the first quarter of 1998 and is expected to be accounted for
as a pooling of interests.
On September 10, 1997, the Company entered into an agreement with three
subsidiary banks of Banc One Corporation (the "Bank One Banks") to acquire 37
banking offices located in Arizona, Colorado and Utah (the "Bank One Branches").
At October 24, 1997, the Bank One Banks reported that the Bank One Branches had
total deposits of approximately $760 million and loans of approximately $56
million. The levels of deposits and loans of the Bank One Branches can be
expected to vary prior to closing. Under the terms of the acquisition agreement,
the Company will pay a purchase price premium equal to 6% of the deposits of the
Bank One Branches at closing. This premium is estimated to be approximately $46
million, based upon the reported level of deposits at October 24, 1997.
Consummation of the acquisition is subject to regulatory approvals and other
customary conditions and is anticipated to occur during the first quarter of
1998. The acquisition will be accounted for as an acquisition of assets and
assumption of liabilities and will result in the recognition by the Company of
deposit-based intangibles in an amount equal to the purchase price premium,
which is estimated to be approximately $46 million, as described above.
On August 22 and August 28, 1997, respectively, the Company entered into
separate merger agreements to acquire First National Summit Bankshares, Inc.,
Gunnison, Colorado ("Summit") and Republic National Bancorp, Inc., Phoenix,
Arizona ("Republic"). As of September 30, 1997, Summit had total assets of
approximately $94 million, deposits of approximately $86 million and banking
offices in five Colorado communities, and Republic had total assets of
approximately $52 million, deposits of approximately $46 million and one banking
office in Phoenix, Arizona. On completion of the Republic and Summit mergers,
and subject to adjustments set forth in the respective merger agreements, the
Company expects to issue approximately 368,500 shares of its common stock to the
holders of Republic common stock and approximately 316,000 shares of its common
stock to the holders of Summit common stock, respectively. In addition, the
former holders of Summit preferred stock will receive $100 in cash per share of
preferred stock surrendered plus accrued but unpaid dividends to the effective
time of the merger. The necessary regulatory approvals have been obtained for
the Summit and Republic mergers. Consummation
4
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of the transactions is anticipated to occur during the fourth quarter of 1997
subject to approval of the respective mergers at special meetings of the
shareholders of Summit and Republic scheduled to be held on December 1, 1997 and
November 24, 1997, respectively. Each of these business combinations is expected
to be accounted for as a pooling of interests.
On July 14, 1997, the Company acquired KeyBank National Association,
Cheyenne, Wyoming ("KeyBank Wyoming"), a subsidiary of KeyCorp, for a cash
purchase price of approximately $135 million. As of June 30, 1997, KeyBank
Wyoming had total assets of approximately $1.1 billion and banking offices in 24
communities in Wyoming. The transaction was accounted for as a business
combination using the purchase method of accounting and resulted in the
recognition of goodwill by the Company of approximately $60 million.
On December 18, 1996, the Company acquired Mountain Parks Financial Corp.
("Mountain Parks"), a bank holding company that operated a state chartered bank
with full service commercial banking facilities in 17 Colorado communities. The
facilities in two of these communities were sold following the acquisition. At
September 30, 1996, Mountain Parks had total assets of approximately $581.8
million. The Company issued approximately 5.2 million shares of common stock for
a total transaction value of approximately $142.2 million, based on market value
as of the date of closing. The transaction was a business combination accounted
for as a pooling of interests.
The Company provides the Banks with the advantages of affiliation with a
multi-bank holding company, such as access to its lines of financial services,
including trust products and administration, insurance and investment services,
data processing services, credit policy formulation and review, investment
management and specialized staff support, while granting substantial autonomy to
managers of the Banks with respect to day-to-day operations, customer service
decisions and marketing. The Banks are encouraged to participate in community
activities, support local charities and community development, and otherwise to
serve their communities.
The Company's principal executive offices are located at 520 Main Avenue,
Fargo, North Dakota 58124-0001 and its telephone number is (701) 298-5600. The
Company also maintains a web site at http://www.cfbx.com.
5
<PAGE>
RISK FACTORS
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING MATTERS IN CONNECTION WITH
AN INVESTMENT IN THE SECURITIES IN ADDITION TO THE OTHER INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR IN THE ACCOMPANYING
PROSPECTUS SUPPLEMENT. INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT MAY CONTAIN
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE,"
"ESTIMATE" OR "CONTINUE " OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR
COMPARABLE TERMINOLOGY. THE FOLLOWING MATTERS AND OTHER FACTORS NOTED THROUGHOUT
THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT ACCOMPANYING THIS PROSPECTUS, AS
WELL AS ANY EXHIBITS AND ATTACHMENTS TO THIS PROSPECTUS AND SUCH PROSPECTUS
SUPPLEMENT, CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS WITH
RESPECT TO ANY SUCH FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS.
RISKS INVOLVED IN ACQUISITION STRATEGY
The Company's acquisitions will continue to present material risks. The
Company has grown and intends to continue to grow primarily through acquisitions
of banks and other financial institutions. Such acquisitions involve risks of
adversely changing results of operations, unforeseen liabilities or asset
quality problems of acquired entities and other conditions beyond the control of
the Company, such as adverse personnel relations, loss of customers because of
change of identity and deterioration in local economic conditions. In connection
with the acquisition of financial institutions, the Company may from time to
time acquire new businesses that are different from its core business of
commercial banking and which present operating and strategic risks different
from those confronted in its core business. These various acquisition risks can
be heightened by larger transactions. To date, KeyBank Wyoming and Mountain
Parks are the largest institutions acquired by the Company. The proposed
acquisition of the Bank One Branches also represents a large acquisition for the
Company, and is expected to be consummated shortly after the proposed Summit and
Republic acquisitions and in advance of the acquisition of Pioneer. See "The
Company." These proposed acquisitions are subject to various conditions, and
there can be no assurance that they will be consummated.
Managing growth through acquisitions, including absorption and training of
personnel, combination of office and operations procedures and related matters,
is a difficult process. In connection with its recent significant acquisitions,
the Company has experienced challenges with data and item processing conversion,
management training, staffing and other operational integration areas. These
issues have resulted in the need for management and support personnel to
allocate increased time to the integration process, in some cases slowing the
acquired institutions' marketing and business development efforts. Although the
Company has taken steps to address the issues resulting from recent
acquisitions, the Company may experience such issues in connection with future
acquisitions, and there can be no assurance that these problems will not result
in disruption or expense.
Management believes future growth in the assets and earnings of the Company
will depend in significant part on consummation of further acquisitions. The
ability of the Company to pursue this strategy depends in part on its capital
position and, in the case of cash acquisitions, on its cash assets or ability to
acquire cash. Further, acquisition candidates may not be available in the future
on terms favorable to the Company. The Company must compete with a variety of
individuals and institutions, including major regional bank holding companies,
for suitable acquisition candidates. Although the Company has focused its
attention on smaller markets, in which the Company believed there was less
competition from the money center banks and major regional bank holding
companies, the Company recently acquired operations in metropolitan areas. The
Company may make further acquisitions of companies with operations in
metropolitan areas, in which case it will face more competition for such
acquisitions from larger institutions. Further, certain regional holding
companies have focused in some cases on the smaller markets traditionally
targeted by the Company, and there can be no assurance that the
6
<PAGE>
acquisition activities of competitors in these markets will not increase. Such
competition is likely to affect the Company's ability to make acquisitions,
increase the price that the Company pays for certain acquisitions and increase
the Company's costs in analyzing possible acquisitions.
GENERAL ECONOMIC CONDITIONS
Periods of economic slowdown or recession, rising interest rates,
fluctuations or declining demand for banking and financial services are
conditions that are beyond the control of the Company and may adversely affect
the Company's business.
DEPENDENCE ON DIVIDENDS FROM SUBSIDIARY BANKS
As a holding company, with the substantial majority of its assets
represented by its equity interest in its subsidiary banks, the Company's
ability to pay interest on its Debt Securities and dividends on Preferred Stock
depends primarily upon the cash dividends the Company receives from the
subsidiary banks. Dividend payments from the subsidiary banks are subject to
regulatory limitations, generally based on current and retained earnings,
imposed by the various regulatory agencies with authority over the respective
subsidiary banks. Payment of dividends is also subject to regulatory
restrictions if such dividends would impair the capital of the subsidiary banks.
Payment of subsidiary bank dividends is also subject to the subsidiary banks'
profitability, financial condition and capital expenditures and other cash flow
requirements. No assurance can be given that the subsidiary banks will be able
to pay dividends at past levels, or at all, in the future.
NEED FOR ADDITIONAL FINANCING
The Company's ability to execute its business strategy depends to a
significant degree on its ability to obtain additional indebtedness and equity
capital. Other than as described in this Prospectus or the accompanying
Prospectus Supplement, the Company has no commitments for additional borrowings
or sales of equity capital and there can be no assurance that the Company will
be successful in consummating any such future financing transactions on terms
satisfactory to the Company, if at all. Factors which could affect the Company's
access to the capital markets, or the costs of such capital, include changes in
interest rates, general economic conditions and the perception in the capital
markets of the Company's business, results of operations, leverage, financial
condition and business prospects. Each of these factors is to a large extent
subject to economic, financial, competitive and other factors beyond the
Company's control. In addition, covenants under the Company's current and future
debt securities and credit facilities may significantly restrict the Company's
ability to incur additional indebtedness and to issue Preferred Stock. The
Company's ability to repay its outstanding indebtedness, including the Debt
Securities, at maturity may depend on its ability to refinance such
indebtedness, which could be adversely affected if the Company does not have
access to the capital markets for the sale of additional debt or equity
securities through public offerings or private placements on terms reasonably
satisfactory to the Company.
COMPETITION
Banking is a highly competitive industry. The Banks compete directly with
other banks and lending and financial institutions in their local communities.
The Banks also compete indirectly with regional and national financial
institutions, especially in larger metropolitan market areas in which the
Company has increased its operations as a result of recent acquisitions.
Further, changes in government regulation of banking, particularly recent
legislation which removes restrictions on interstate banking and permits
interstate branching, are likely to increase competition by out-of-state banking
organizations or by other financial institutions in the Company's smaller
markets as well as its metropolitan market areas.
7
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REGULATION
As a bank holding company, the Company is subject to extensive regulation by
the Federal Reserve Board. This regulation limits the manner in which the
Company and the Banks conduct their businesses and obtain financing and is
designed primarily to protect depositors and not to benefit holders of
securities of financial institutions. In addition, the Banks are subject to
extensive regulation by various federal and state regulatory authorities. The
banking industry is subject to changing laws and regulations. Recent trends have
steadily expanded the geographic scope of services that may be offered by the
banking industry and have allowed additional competition in many geographical
regions. Recent trends have steadily expanded the geographic and functional
scope of services offered by the banking industry. In September 1994, the
Interstate Banking and Branching Efficiency Act of 1994 ("IBBEA") was enacted.
The IBBEA largely eliminated restrictions on interstate banking and since June
1, 1997 has permitted interstate branching, subject to certain options which
states may enact by law. Certain aspects of the IBBEA were clarified and amended
in 1997, with the passage of the Riegle-Neal Clarification Act. The Economics
Growth and Regulatory Paperwork Reduction Act of 1996 ("EGRPRA") streamlined
application processes and eased regulations in several areas, facilitating
acquisitions and expansion of non-banking activities. The IBBEA and EGRPRA may
increase competition by both out-of-state and in-state banking organizations or
by other financial institutions. There can be no assurance that implementation
of and changes in laws and regulations affecting banking will not adversely
affect the Company.
YEAR 2000 ISSUE
The Company is evaluating the potential impact of what is commonly referred
to as the "Year 2000" issue, concerning the inability of certain information
systems to properly recognize and process dates containing the year 2000 and
beyond. If not corrected, these systems could fail or create erroneous results.
The Company is in the process of determining which of its systems, if any, may
present Year 2000 issues, the magnitude of these issues, and the steps that may
be necessary to correct them. Therefore, the potential liabilities and costs
associated with Year 2000 compliance cannot be estimated with certainty at this
time. Regardless of the Year 2000 compliance of the Company's systems, there can
be no assurance that the Company will not be adversely affected by the failure
of others to become Year 2000 compliant. Such risks may include potential losses
related to loans made to third parties whose businesses are adversely affected
by the Year 2000 issue, the disruption or inaccuracy of data provided by
non-Year 2000 compliant third parties and business disruption caused by the
failure of service providers, such as security and data processing companies, to
become Year 2000 compliant. Because of these uncertainties, there can be no
assurance that the Year 2000 issue will not have a material financial impact in
any future period.
KEY PERSONNEL
Continued profitability of the Banks and the Company are dependent on a
limited number of key persons, including Donald R. Mengedoth, the President and
Chief Executive Officer, Mark A. Anderson, the Executive Vice President and
Chief Financial Officer, Ronald K. Strand, the Executive Vice President, Banking
Group, and David E. Groshong, the Executive Vice President, Financial Services,
of the Company. There would likely be a difficult transition period in case the
services of any of these individuals were lost to the Company because of death
or other reasons. There is no assurance that the Company will be able to retain
its current key personnel or attract additional qualified key persons as needed.
USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement,
proceeds from sales of Securities offered hereby, net of expenses in connection
with any such offering, will be used (i) to finance acquisitions by the Company
and (ii) for general corporate purposes.
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RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to combined fixed
charges and preferred stock dividends for each of the years in the five-year
period ended December 31, 1996 and the nine month periods ended September 30,
1996 and 1997.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to combined fixed charges and preferred
stock dividends:
Excluding interest on deposits..................... 4.54x 4.58x 4.14x 4.46x 5.23x 7.60x 8.53x
Including interest on deposits..................... 1.59x 1.57x 1.52x 1.55x 1.66x 1.61x 1.46x
</TABLE>
For purposes of computing the ratio of earnings to combined fixed charges
and preferred stock dividends, earnings represent income before income taxes,
extraordinary items, fixed charges and preferred stock dividends. Fixed charges
represent interest expense, including the interest component of rental expense.
Preferred stock dividends are assumed to equal the amount of pre-tax income that
would be necessary to pay such dividends.
DESCRIPTION OF SECURITIES
The following description of the terms of the Securities sets forth certain
general terms and provisions of the Securities to which any Prospectus
Supplement may relate. The particular terms of the Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to the Securities so offered will be described in the Prospectus
Supplement relating to such Securities.
The Company is authorized to issue 32,000,000 shares of stock, consisting of
30,000,000 shares of Common Stock, par value $0.01 per share, and 2,000,000
shares of Preferred Stock, $.01 par value per share, of which 230,000 shares are
designated as 7% Cumulative Convertible Preferred Stock (subject to the
Company's intention to cancel the designation of such shares, which would become
undesignated shares) and 150,000 shares are designated as Series A Junior
Participating Preferred Stock. As of September 30, 1997, the Company had issued
and outstanding 18,630,012 shares of Common Stock, net of treasury shares, and
no issued and outstanding shares of Preferred Stock. As of such date, there were
approximately 1,200 holders of record of the outstanding shares of Common Stock
and an additional estimated 5,900 beneficial holders. In addition, pursuant to
its merger agreements pending at November 15, 1997, the Company anticipates
issuing approximately 1.4 million shares of Common Stock, in the aggregate, to
the current holders of common stock of the entities to be acquired. See "The
Company."
COMMON STOCK
The following summary of the Company's Common Stock is qualified in its
entirety by reference to the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation"), its Amended Bylaws (the
"Bylaws"), and the Delaware General Corporation Law, as amended (the "Delaware
Law").
GENERAL. There are no preemptive rights, conversion rights, or redemption
or sinking fund provisions with respect to the shares of Common Stock. All of
the outstanding shares of Common Stock are duly and validly authorized and
issued, fully paid and non-assessable.
VOTING. Holders of Common Stock (the "Common Stockholders") are entitled to
one vote for each share held on each matter submitted to a vote of the Common
Stockholders; except that each stockholder may cumulate votes in the election of
directors. In such elections, each Common Stockholder will have a
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number of votes equal to the number of shares held by such holder multiplied by
the number of directors to be elected. Such votes may be cast for a single
candidate or divided among any number of candidates. In certain circumstances,
cumulative voting rights allow the holders of less than a majority of Common
Stock to elect directors when such holders may not be able to elect any
directors if cumulative voting was not allowed.
DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. Subject to the rights of the
Preferred Stock, the Common Stockholders are entitled to receive dividends as
and when declared by the Board of Directors of the Company. Under Delaware
corporate law, the Company may declare and pay dividends out of surplus, or if
there is no surplus, out of net profits for the fiscal year in which the
dividend is declared and/or the preceding year. No dividends may be declared,
however, if the capital of the Company has been diminished by depreciation,
losses or otherwise to an amount less than the aggregate amount of capital
represented by any issued and outstanding stock having a preference on
distribution. The Company's ability to pay cash dividends on the Common Stock is
also subject to restrictions arising under the terms of its outstanding and
to-be-issued capital securities and debt securities. The terms of such
securities generally restrict payment of dividends on Common Stock until
payments and distributions are made on those securities and may impose
additional restrictions in the future. Applicable federal regulation of bank
holding companies may also impose restrictions on the ability of a bank holding
company to pay dividends.
Federal banking laws and regulations limit the Company's ability to redeem
its equity securities. In general, bank holding companies are required to obtain
the prior approval of the Federal Reserve Board before any redemption of
permanent equity or other capital instruments, if the aggregate amount of such
redemptions over a twelve-month period exceeds ten percent of the net worth of
the company . However, a bank holding company is not required to obtain the
prior Federal Reserve Board approval for the redemption if (i) both before and
immediately after the redemption, the bank holding company is well capitalized;
(ii) the bank holding company is well managed; and (iii) the bank holding
company is not the subject of any unresolved supervisory issues. The Company
currently satisfies all of these criteria. Finally, any perpetual preferred
stock with a feature permitting redemption at the option of the issuer may
qualify as capital only if the redemption is subject to the prior approval of
the Federal Reserve Board.
If the Company were liquidated, the Common Stockholders would be entitled to
receive, pro rata, all assets available for distribution to them after full
satisfaction of the Company's liabilities and any payment applicable to the
Preferred Stock then outstanding.
SHAREHOLDER RIGHTS PLAN. Pursuant to a Rights Agreement dated as of January
5,1995 (the "Rights Agreement") between the Company and Norwest Bank Minnesota,
N.A., as Rights Agent, each share of Common Stock has attached one preferred
share purchase right (a "Right"). Except as set forth below, each Right entitles
the registered holder to purchase from the Company one one-hundredth (1/100) of
a share of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Junior Participating Preferred Stock"), at a price of $63 per one
one-hundredth of a share (the "Purchase Price").
Until the Distribution Date, as hereinafter defined, the Rights will be
transferred with and only with Common Stock certificates. The Rights will
separate from the shares of Common Stock and a "Distribution Date" for the
Rights will occur upon the earlier of ten days following (i) a public
announcement that, without the prior consent of the Board of Directors, a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of voting
securities having 15% or more of the voting power of the Company (the "Stock
Acquisition Date"), or (ii) the commencement of (or a public announcement of an
intention to make) a tender offer or exchange offer which would result in any
person or group and related persons having beneficial ownership of voting
securities having 15% or more of the voting power of the Company.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on January 5, 2005, unless earlier redeemed by the Company.
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<PAGE>
In the event that any person becomes the beneficial owner of 15% or more of
the voting power of the Company, ten days thereafter (the "Flip-In Event") each
holder of a Right will thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price of the Right, Common Stock (or, in
certain circumstances, a combination of cash, other property, Common Stock or
other securities) which has a value of two times the Purchase Price of the Right
(such right being called the "Flip-In Right"). In the event that the Company is
acquired in a merger or other business combination transaction where the Company
is not the surviving corporation or in the event that 50% or more of its assets
or earning power is sold, proper provision shall be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, common stock of the acquiring
entity which has a value of two times the Purchase Price of the Right (such
right being called the "Flip-Over Right"). The holder of a Right will continue
to have the Flip-Over Right whether or not such holder exercises the Flip-In
Right. Upon the occurrence of the Flip-In Event, any Rights that are or were at
any time owned by an Acquiring Person shall become null and void insofar as they
relate to the Flip-In Right.
The Purchase Price payable, and the number of shares of Junior Participating
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution under
certain circumstances.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the voting power of
the Company and prior to the acquisition by such person or group of 50% or more
of the voting power of the Company, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a share of Junior Participating Preferred Stock
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges) per Right (subject to
adjustment).
At any time prior to the earlier to occur of (i) the tenth day after the
Stock Acquisition Date, or (ii) the expiration of the Rights, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), at such time as the Board of Directors shall establish.
Additionally, the Continuing Directors may, following the Stock Acquisition
Date, redeem the then outstanding Rights in whole, but not in part, at the
Redemption Price provided that either (a) the Acquiring Person reduces his
beneficial ownership to less than 15% of the voting power of the Company in a
manner which is satisfactory to the Continuing Directors and there are no other
Acquiring Persons, or (b) such redemption is incidental to a merger or other
business combination transaction or series of transactions involving the Company
but not involving an Acquiring Person or any person who was an Acquiring Person.
The redemption of Rights described in the preceding sentence shall be effective
only after ten (10) business days prior notice. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The Junior Participating Preferred Stock purchasable upon exercise of the
Rights will be nonredeemable. Each share of Junior Participating Preferred Stock
will have a preferential quarterly dividend in an amount equal to 100 times the
dividend declared on each share of Common Stock. In the event of liquidation,
the holders of Junior Participating Preferred Stock will receive a preferred
liquidation payment of $100 per whole share of Junior Participating Preferred
Stock. Each whole share of Junior Participating Preferred Stock will have 100
votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock are exchanged, each
share of Junior Participating Preferred Stock will be entitled to receive 100
times the amount and type of consideration received per share of Common Stock.
The rights of the Junior Participating Preferred Stock as to dividends and
liquidations, and in the event of mergers and consolidations, are protected by
customary anti-dilution provisions.
11
<PAGE>
Until a Right is exercised, it will not entitle the holder to any rights as
a shareholder of the Company (other than those as an existing shareholder),
including, without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of the
Company (i) prior to the Distribution Date in any manner, and (ii) on or after
the Distribution Date to cure any ambiguity, to correct or supplement any
provision of the Rights Agreement which may be defective or inconsistent with
any other provisions, or in any manner not adversely affecting the interests of
the holders of the Rights.
INDEMNIFICATION AND LIMITED LIABILITY. The Company's Certificate of
Incorporation and Bylaws require the Company to indemnify the directors and
officers of the Company to the fullest extent permitted by law. In addition, as
permitted by Delaware Law, the Company's Certificate of Incorporation and Bylaws
provide that no director of the Company will be personally liable to the Company
or its stockholders for monetary damages for such director's breach of duty as a
director, except from liability for (i) any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) any liability under Section 174 of Delaware Law for unlawful distributions
or (iv) any transaction from which the director derived an improper personal
benefit. This provision of the Certificate of Incorporation will limit the
remedies available to a stockholder who is dissatisfied with a decision of the
Board of Directors protected by this provision, and such stockholder's only
remedy in that circumstance may be to bring a suit to prevent the action of the
Board of Directors. In many situations, this remedy may not be effective,
including instances when stockholders are not aware of a transaction or an event
prior to action of the Board of Directors in respect of such transaction or
event.
Subject to certain limitations, the Company's officers and directors are
insured against losses arising from claims made against them for wrongful acts
which they may become obligated to pay or for which the Company may be required
to indemnify them.
RESTRICTION ON BUSINESS COMBINATIONS. Section 203 of the Delaware General
Corporation Law prohibits a publicly held Delaware corporation from engaging in
a "business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless (i) prior to the date of the business combination, the
transaction is approved by the Board of Directors of the corporation, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock, or (iii) on or after such date the business
combination is approved by the Board of Directors of the corporation and by the
afi affirmative vote of at least 66 2/3% of the outstanding voting stock which
is not owned by the interested stockholder. A "business combination" includes
mergers, asset sales and other transactions resulting in a financial benefit to
the stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock. None of the Company's stockholders is currently
classified as an "interested person."
OTHER MATTERS. The Common Stock is listed on Nasdaq National Market under
the symbol "CFBX." Norwest Bank Minnesota, N.A., Minneapolis, Minnesota, is the
transfer agent and registrar for the Common Stock.
12
<PAGE>
PREFERRED STOCK
The description of certain provisions of the Preferred Stock set forth below
and in any Prospectus Supplement does not purport to be complete and is subject
to and qualified in its entirety by reference to the Company's Certificate of
Incorporation, and the Certificate of Designation relating to each series of
Preferred Stock, which will be filed with the Secretary of State of Delaware and
the Commission in connection with the offering of such series of Preferred
Stock.
GENERAL. The Board of Directors of the Company has the authority, without
approval of the Company's stockholders, to issue a maximum of 2,000,000 shares
of Preferred Stock, $.01 par value, and to establish one or more classes or
series of Preferred Stock having such voting powers, and such designations,
preferences and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions thereof, as the Board of Directors
may determine. There are currently reserved for issuance up to 150,000 shares of
Junior Participating Preferred Stock issuable under the Rights Agreement (see
"Common Stock -- Shareholder Rights Plan" above) and 230,000 unissued shares
that are designated as 7% Cumulative Convertible Preferred Stock (subject to the
Company's intention to cancel the designation of the shares of 7% Cumulative
Convertible Preferred Stock, which would become undesignated shares of Preferred
Stock).
The authority of the Board of Directors with respect to each such class or
series shall include, but is not limited to, the determination of: (i) the
distinctive serial designation of such class or series and the number of shares
constituting such class or series, (ii) the dividend rate for such class or
series, and whether dividends shall be cumulative, (iii) whether the shares of
such class or series are redeemable and, if so, the terms and conditions of such
redemption, (iv) the obligation, if any, to establish a sinking fund, (v) the
terms, if any, under which such class or series is convertible or exchangeable
for shares of any other class or series, (vi) whether the shares have voting
rights and, if so, the terms and conditions of such voting rights, (vii) the
rights of the shares of such class or series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Company, and (viii)
any other relative rights, powers, preferences, qualifications, limitations or
restrictions thereof relating to such class or series. The shares of Preferred
Stock of any one class or series shall be identical with each other in all
respects except as to the dates from and after which dividends shall cumulate,
if cumulative. The Preferred Stock will have the dividend, liquidation and
voting rights set forth below unless otherwise provided in the accompanying
Prospectus Supplement relating to a particular series of Preferred Stock.
Preferred Stock will be fully paid and nonassessable upon issuance against full
payment of the purchase price therefor.
DIVIDEND RIGHTS. Holders of the Preferred Stock of each series will be
entitled to receive when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefor, cash dividends at such rates
and on such dates as are set forth in the accompanying Prospectus Supplement.
Such rate may be fixed or variable or both. Each such dividend will be payable
to the holders of record as they appear on the stock books of the Company on
such record dates as will be fixed by the Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the accompanying Prospectus Supplement. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period. Dividends on shares of each series
of Preferred Stock for which dividends are cumulative will accrue from the date
set forth in the accompanying Prospectus Supplement.
CONVERSION RIGHTS. The holders of Preferred Stock will be entitled, to the
extent and at the times provided in the Prospectus Supplement (except with
respect to shares called for redemption as to which all conversion rights shall
cease on the redemption date, Unless the Company shall default in the payment of
the redemption price) to convert their shares of Preferred Stock into shares of
Common Stock at the
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<PAGE>
conversion price per share of Preferred Stock provided in the Prospectus
Supplement (subject to adjustment as set forth below).
Shares of Preferred Stock surrendered for conversion during the period from
the close of business on any record date for the payment of dividends on such
Preferred Stock to the opening of business on the corresponding dividend payment
date (except shares called for redemption during such period) must be
accompanied by payment of an amount equal to the dividend payable on such shares
on such dividend payment date. The registered holder of such shares of Preferred
Stock at the close of business on a dividend payment record date shall be
entitled to receive the dividend payable on such shares (except shares called
for redemption between such record date and the dividend payment date) on the
corresponding dividend payment date notwithstanding the conversion thereof or
the Company's default in payment of the dividend due on such dividend payment
date. A holder of Preferred Stock on a dividend payment record date who (or
whose transferee) converts shares of Preferred Stock on a dividend payment date
will receive the dividend payable on such Preferred Stock by the Company on such
date, and the converting holder need not include payment in the amount of such
dividend upon surrender of shares of Preferred Stock for conversion.
No fractional shares will be issued upon conversion and, in lieu thereof, an
adjustment in cash will be made based upon the last reported sale price of the
Common Stock (or if not available, the average of the closing bid and asked
prices) on the Nasdaq National Market, or on the principal national securities
exchange where the Common Stock may then be traded, on the last business day
prior to the date of such conversion.
The conversion rate is subject to adjustment in certain events, including
(i) the issuance of capital stock of the Company as a dividend or a
distribution, (ii) subdivisions, combinations and reclassifications of the
Common Stock, (iii) the issuance to all holders of Common Stock of rights or
warrants entitling them to subscribe for or purchase shares of Common Stock at
less than the current market price, and (iv) the distribution to all holders of
Common Stock of evidences of indebtedness of the Company or of assets (other
than cash dividends from retained earnings) or subscription rights to securities
of the Company (other than those referred to above). Except in these cases, the
conversion rate will not be adjusted for the issuance of Common Stock. No
adjustment of the conversion rate will be required to be made in any case until
cumulative adjustments amount to at least one percent of the current conversion
rate. The Company reserves the right to make such increases in the conversion
rate in addition to those required by the foregoing provisions as the Company in
its discretion shall determine to be advisable in order that certain stock
related distributions hereafter made by the Company to its shareholders shall
not be taxable. Except as discussed above or provided in the Prospectus
Supplement, no fsdaadjustment upon conversion will be made for dividends on
either the Preferred Stock or the Common Stock.
In case of any consolidation or merger of the Company with or into any other
corporation other then a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of or
change in outstanding shares of Common Stock, or any sale or transfer of all or
substantially all the assets of the Company, the holder of each share of
Preferred Stock shall after such consolidation, merger, sale or transfer have
the right to convert such share of Preferred Stock into the kind and amount of
securities, cash and other property which such holder would have been entitled
to receive upon such consolidation, merger, sale or transfer if the holder had
held the Common Stock issuable upon the conversion of such share of Preferred
Stock immediately prior to such consolidation, merger, sale or transfer.
REDEMPTION AT THE OPTION OF THE COMPANY. The Preferred Stock is redeemable,
in whole or in part, at the option of the Company to the extent and at the times
described in the Prospectus Supplement. The Company shall, on or prior to the
date fixed for redemption, but not earlier than 45 days prior to the redemption
date, deposit with its transfer agent or other redemption agent, as a trust
fund, a sum sufficient to redeem the shares called for redemption, with
irrevocable instructions and authority to such agent to
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<PAGE>
give or complete the required notice of redemption and to pay the holders of
such shares the redemption price upon surrender of their certificates. Such
deposit shall be deemed to constitute full payment of such shares to their
holders and from and after the date of such deposit, notwithstanding that any
certificates for such shares shall not have been surrendered for cancellation,
the shares represented thereby shall no longer be deemed outstanding, the right
to receive dividends and distributions shall cease to accrue from and after the
redemption date, and all rights of the holders of the Preferred Stock called for
redemption as shareholders of the Company shall cease and terminate, except the
right to receive the redemption price, without interest, upon the surrender of
their respective certificates, and except the right to convert their shares of
Preferred Stock until the close of business on the redemption date.
Unless full accumulated dividends on all outstanding shares of the Preferred
Stock shall have been or contemporaneously are declared and paid or set apart
for payment for all past dividend periods, the Preferred Stock may not be
redeemed unless all the outstanding Preferred Stock is redeemed, and the Company
may not purchase any shares of the Preferred Stock otherwise than pursuant to a
purchase offer made on the same terms to all holders of Preferred Stock,
provided that the Company may complete the purchase or redemption of shares of
Preferred Stock for which a purchase contract was entered into, or notice of
redemption of which was initially given, prior to such default.
Notice of redemption shall be mailed to each holder of Preferred Stock to be
redeemed at the address shown on the books of the Company not less than 30 days
nor more than 60 days prior to the redemption date. If less than all of the
outstanding shares of Preferred Stock are to be redeemed, the Company will
select the shares to be redeemed by lot, pro rata (as nearly as may be), or in
such other equitable manner as the Board of Directors of the Company may
determine.
The Company may be required to obtain the approval of the Federal Reserve
Board for any redemption of any shares of the Preferred Stock. Because
redemption of the Preferred Stock would reduce the Company's regulatory capital,
redemption could be effected only if the Company had sufficient excess capital
to meet applicable guidelines after the redemption. The Federal Reserve
generally does not favor substantial reductions of capital even if excess
capital exists.
RIGHTS UPON LIQUIDATION. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Stock will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any distribution of
assets is made to holders of Common Stock, liquidating distributions in the
amount set forth in the accompanying Prospectus Supplement plus an amount equal
to accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to the Preferred Stock of any series are not paid in full, the holders
of the Preferred Stock of such series will share ratably in any such
distribution of assets of the Company in proportion to the full respective
preferential amounts (which may include accumulated dividends) to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of such series of Preferred Stock will have
no right or claim to any of the remaining assets of the Company. Neither the
sale of all or a portion of the Company's assets nor the merger or consolidation
of the Company into or with any other corporation shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, of the
Company.
VOTING RIGHTS. Except as indicated in the accompanying Prospectus
Supplement, or except as expressly required by Delaware Law, the holders of the
Preferred Stock will not be entitled to a vote on matters submitted for a vote
of Company stockholders. In the event the Company issues shares of a series of
the Preferred Stock, unless otherwise indicated in the Prospectus Supplement
relating to such series, each share will be entitled to one vote on matters on
which holders of such series are entitled to vote. In the case of any series of
Preferred Stock having one vote per share on matters on which holders of such
series are entitled to vote, the voting power of such series, on matters on
which holders of such series and holders of any other series of Preferred Stock
are entitled to vote as a single class, will depend on the
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<PAGE>
number of shares in such series, not the aggregate stated value, liquidation
preference or initial offering price of the shares of such series of the
Preferred Stock.
So long as any Preferred Stock of any series remains outstanding, the
Company will not, without the consent of the holders of the outstanding
Preferred Stock of such series and outstanding shares of all series of Preferred
Stock ranking on a parity with the Preferred Stock of such series (hereinafter
the "Preference Stock") either as to dividends or the distribution of assets
upon liquidation, dissolution or winding up and upon which like voting rights
have been conferred and are then exercisable, by a vote of at least two-thirds
of all such outstanding Preferred Stock and Preference Stock voting together as
a class, given in person or by proxy, either in writing or at a meeting, (i)
authorize, create or issue, or increase the authorized or issued amount of, any
class or series of stock ranking prior to the Preferred Stock with respect to
payment of dividends or the distribution of assets on liquidation, dissolution
or winding up, or (ii) amend, alter or repeal, whether by merger, consolidation
or otherwise, the provisions of the Company's Restated Certificate of
Incorporation, as amended, or of the resolutions contained in a Certificate of
Designation for any series of the Preferred Stock designating such series of the
Preferred Stock and the preferences and relative, participating, optional or
other special rights and qualifications, limitations and restrictions thereof,
so as to materially and adversely affect any right, preference, privilege or
voting power of the Preferred Stock or the holders thereof; provided, however,
that any increase in the amount of the authorized Preferred Stock or Preference
Stock or the creation and issuance of other series of Preferred Stock or
Preference Stock, or any increase in the amount of authorized shares of any
series of Preferred Stock or preference Stock, in each case ranking on a parity
with or junior to the Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up will
not be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. Particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general and specific provisions may apply to the Debt Securities offered will be
described in the Prospectus Supplement relating to such Debt Securities. The
Debt Securities may be issued either separately, or together with, or upon
conversion of or in exchange for, other Securities. The Debt Securities consist
of Senior Notes and Subordinated Notes.
The Senior Notes and the Subordinated Notes will be issued under the
indentures (the "Senior Indenture" and the "Subordinated Indenture,"
respectively) between the Company and the Trustee named in the applicable
Prospectus Supplement. The forms of Senior Indenture and Subordinated Indenture
(collectively, the "Indentures") have been filed as exhibits to the Registration
Statement of which this Prospectus is a part. The following brief summary of
certain provisions of the Indentures does not purport to be complete and is
subject to, and is qualified in its entirety by reference to all of the
provisions of, the Indentures, and is further qualified by any description
contained in the applicable Prospectus Supplement or Prospectus Supplements.
Certain terms capitalized and not otherwise defined herein are defined in the
Indentures. Whenever particular sections or defined terms of the Indentures are
referred to, such sections or defined terms are incorporated herein by
reference.
GENERAL. The Debt Securities may be issued from time to time in one or more
series. The terms of each series of Debt Securities, including without
limitation any restrictive covenants with respect thereto, will be established
by or pursuant to a resolution of the Board of Directors of the Company and set
forth or determined in the manner provided in an Officers' Certificate or by a
supplemental indenture. The particular terms of the Debt Securities offered
pursuant to any Prospectus Supplement or Prospectus Supplements will be
described in such Prospectus Supplement or Prospectus Supplements.
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The amount of Debt Securities offered by this Prospectus will be limited to
the amount of Securities set forth on the cover of this Prospectus that have not
been otherwise issued or reserved for issuance. The Indentures will not limit
the aggregate principal amount of Debt Securities that may be issued thereunder.
The Senior Notes will rank PARI PASSU in right of payment with all
unsubordinated indebtedness of the Company, but, except to the extent such
Senior Notes are secured by collateral, will be effectively subordinated to the
rights of holders of secured and unsubordinated indebtedness of the Company to
the extent of the value of the collateral securing such indebtedness. The Senior
Notes will rank senior to all subordinated and unsecured indebtedness of the
Company. The Subordinated Notes will be unsecured and will be subordinated in
right of payment of all existing and future Senior Indebtedness of the Company,
including the Senior Notes, as described under "Subordination of Subordinated
Notes."
The applicable Prospectus Supplement will indicate the form, registered or
bearer, and denominations in which Debt Securities of any series may be issued.
Debt Securities may be issuable in the form of one or more Global Securities, as
described below under "Global Securities." The Debt Securities (other than those
issued in the form of a Global Security) are exchangeable or transferable
without charge therefor, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith
and require the holders to furnish appropriate endorsements and transfer
documents.
Special federal income tax and other considerations applicable thereto and
special federal tax and other considerations applicable to any Debt Securities
which are denominated in a currency other than U.S. dollars will be described in
the Prospectus Supplement or Prospectus Supplements relating thereto. The
Company will not, however, render legal or tax advice on this subject; investors
must seek their own legal and tax advice.
Principal of and any premium and interest on the Debt Securities will be
payable, and the transfer of the Debt Securities will be registrable, at the
office or agency maintained for such purpose. Interest on any Debt Security that
is payable will be paid to the Person in whose name that Debt Security is
registered in the security register. In addition, payment of interest may be
made at the option of the Company by check mailed to the address of the Person
entitled thereto as it appears on the Security Register or by wire transfer to
an account maintained by the Person entitled to such interest.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the terms of the Debt Securities offered thereby, including the following: (i)
the title of the Debt Securities of the series (which shall distinguish the Debt
Securities of the series from Debt Securities of any other series); (ii) any
limit upon the aggregate principal amount of the Debt Securities of the series
which may be authenticated and delivered hereunder and the absence of such
limitation shall mean that the Company may issue from time to time additional
Debt Securities of such series without limitation as to aggregate principal
amount; (iii) the Person to whom any interest on a Debt Security of the series
shall be payable, if other than the Person in whose name that Debt Security is
registered at the close of business on the Regular Record Date for such
interest; (iv) the date or dates, or the method by which such date or dates are
determined or extended, on which the principal or installments of principal and
premium, if any, of the Debt Securities of the series is or are payable; (v) the
rate or rates (which may be fixed or variable) at which the Debt Securities of
the series shall bear interest, if any, or the method by which such rate or
rates shall be determined, the date or dates from which such interest shall
accrue, the interest payment dates on which such interest shall be payable, the
regular record date for the interest payable on any interest payment date and
the circumstances, if any in which the Company may defer interest payments and
the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months; (vi) the place or places, if any, where
the principal of (and premium, if any) and interest on Debt Securities of the
series shall be payable, any Debt Securities of the series may be surrendered
for registration of transfer or exchange and notices and demands to or upon the
Company with respect to the Debt Securities of the series and this Indenture may
be served, other than or in addition to the Corporate Trust Office of the
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Trustee; (vii) whether the Debt Securities of the series will be convertible
into shares of capital stock and/ or exchangeable for other securities, and if
so, the terms and conditions upon which such Debt Securities will be so
convertible or exchangeable, and any deletions from or modifications or
additions hereto to permit or to facilitate the issuance of such convertible or
exchangeable Debt Securities or the administration thereof; (viii) the identity
of each Note Registrar and Paying Agent, if other than or in addition to the
Trustee; (ix) if the amount of principal of or any premium or interest on any
Debt Securities of the series may be determined by reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined; (x)
the applicability of, and any addition to or change in, the definitions
currently set forth in the Indenture; (xi) if other than denominations of $1,000
or any amount in excess thereof which is an integral multiple of $1,000, the
denominations in which Debt Securities of the series shall be issuable; (xii)
any other event or events of default applicable with respect to Debt Securities
of the series in addition to or in lieu of those provided in the Indenture and
any change in the right of the Trustee or the Holders to declare the principal
of or any premium or interest on such Debt Securities due and payable; (xiii) if
less than the principal amount thereof, the portion of the principal amount of
Debt Securities of the series which shall be payable upon declaration of
acceleration of the Maturity pursuant to the terms of the Indenture; (xiv)
whether the Debt Securities of the series shall be issued in whole or in part in
the form of one or more Global Notes and, if so, (a) the Depositary with respect
to such Global Note, and (b) the circumstances under which any such Global Note
may be exchanged for Debt Securities registered in the name of, and any transfer
of such Global Note may be registered to, a Person other than such Depositary or
its nominee, if other than set forth in the Indenture; (xv) if applicable, the
period or periods within which or the date or dates on which, the price or
prices at which and the terms and conditions upon which Debt Securities of the
series may be redeemed, in whole or in part, at the option of the Company; (xvi)
any other covenant or warranty included for the benefit of the Debt Securities
of the series in addition to, or in lieu of, those set forth in the Indenture
for the benefit of Debt Securities of all series, or any provision that any
covenant or warranty set forth in the Indenture for the benefit of Debt
Securities of all series shall not be for the benefit of Debt Securities of such
series, or any combination of such covenants, warranties or provisions and the
applicability of waiver provisions to such covenants and warranties; and (xvii)
any other terms of the series (which terms shall not be inconsistent with the
provisions of the Indenture).
If the purchase price of any Debt Securities is payable in a currency other
than U.S. dollars or if principal of or premium, if any, or interest, if any, on
any of the Debt Securities is payable in any currency other than U.S. dollars,
the specific terms and other information with respect to such Debt Securities
and such foreign currency, including any material foreign currency risks, will
be specified in the Prospectus Supplement or Prospectus Supplements relating
thereto.
REDEMPTION. Except as set forth in the Prospectus Supplement with respect
to any offered Debt Securities or series thereof, the Company is not required to
make mandatory redemption or sinking fund payments with respect to the Debt
Securities. The Prospectus Supplement relating to any offered Debt Securities or
series thereof will specify the provisions, if any, regarding the sinking fund
provisions related to such Debt Securities or series thereof.
REPURCHASE AT THE OPTION OF HOLDERS. Except as set forth in the Prospectus
Supplement with respect to any offered Debt Securities or any series thereof,
the Indentures do not contain provisions that permit the Holders of the Debt
Securities to require that any Company repurchase or redeem the Debt Securities
in the event of a sale of assets or a takeover, recapitalization or similar
restructuring, nor does the Indenture contain covenants specifically designed to
protect holders in the event of a highly leveraged transaction involving the
Company.
COVENANTS. The Indentures will contain certain covenants relating to the
Company and its operations, including covenants requiring the Company, except as
otherwise set forth in the Prospectus Supplement, to (i) punctually pay interest
and principal of Debt Securities, (ii) maintain an office or agency in each
place of payment in respect of the Debt Securities, (iii) hold in trust money
for payment of
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interest or principal on Debt Securities, (iv) preserve the corporate existence,
rights and franchises of the Company and its Subsidiaries, (v) generally
maintain its properties and comply with applicable statutes, laws, ordinances
and regulations, (vi) not declare or pay dividends, purchase or redeem shares or
make other distributions if, after giving effect thereto, an Event of Default
would have occurred or be continuing, (vii) maintain adequate insurance, (viii)
timely pay or discharge material tax obligations and claims for labor, material
and supplies, which, if unpaid, might become a lien upon the property of the
Company or any Subsidiary, (ix) keep proper books of record and account and (x)
provide to the Trustee quarterly statements of compliance with the Indentures
and notice of any event which after notice or lapse of time or both would become
an Event of Default. The majority of holders in principal amount of the Debt
Securities of any series, may waive compliance with any term, provision or
condition of the Indenture. The Senior Indenture also provides, except as set
forth in the Prospectus Supplement, that the Company will not, directly or
indirectly, incur, create, assume or guarantee any Funded Recourse Debt that is
senior in right of payment to the Senior Notes. Certain of these covenants will
be subject to various exceptions and qualifications as set forth in the
Indentures.
Certain additional covenants in respect of the Company or modifications or
deletions with respect to any covenants of the Company, may be set forth in the
Prospectus Supplement accompanying this Prospectus.
CONSOLIDATION, MERGER OR TRANSFER. The Indentures provide that the Company
may not consolidate with, merge with, or transfer all or substantially all of
its assets to another entity where the Company is not the surviving corporation
unless (i) such other entity assumes the Company's obligations under the
applicable Indenture, (ii) after giving effect thereto, no event shall have
occurred and be continuing which, after notice or lapse of time, would become an
Event of Default and (iii) either the Company or the Successor Person delivers
to the Trustee an Officers' Certificate and an Opinion of Counsel stating that
the transaction complies with the Indenture and that all conditions precedent
for completing the transaction have been complied with.
EVENTS OF DEFAULT. The Indentures provide that, except as otherwise set
forth in the Prospectus Supplement, each of the following constitutes an Event
of Default with respect to the Debt Securities of any series issued pursuant to
the Indentures: (i) failure for 10 days to pay when due any interest on the Debt
Securities of that series; (ii) failure to pay the principal on the Debt
Securities of that series when due; (iii) failure to perform, or a breach of,
any covenant or warranty set forth in the Indenture for 30 days after receipt of
written notice from the Trustee or Holders of at least 25% in principal amount
of the outstanding Debt Securities specifying the default and requiring the
Company to remedy such default; (iv) default in the payment at stated maturity
of indebtedness of the Company or any Subsidiary for money borrowed having an
outstanding principal amount due at stated maturity greater than $2.0 million
and such default having continued for a period of 30 days beyond any applicable
grace period; (v) an event of default as defined in any mortgage, indenture or
instrument of the Company shall have happened and resulted in acceleration of
indebtedness which, together with the principal amount of any other indebtedness
so accelerated, exceeds $2.0 million or more at any time, and such default shall
not be cured or waived and such acceleration shall not have been rescinded or
annulled, (vi) certain events of insolvency, receivership or reorganization of
the Company or any Subsidiary (vii) entry of a final judgment, decree or order
against the Company or any Subsidiary for the payment of money in excess of $1.0
million and such judgment, decree or order continues unsatisfied for 30 days
without a stay of execution and (viii) any other Events of Default established
in an Officers' Certificate as set forth in the Indentures.
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a "Default" (meaning, for this purpose, the events specified above
without grace periods), give the Holders of the Notes notice of all Defaults
known to it unless such default shall have been cured or waived; provided, that,
except in the case of a Default relating to the payment of principal or interest
on any of the Notes, the Trustee shall be protected in withholding such notice
if and so long as it in good faith determines that the withholding of such
notice is in the interest of the Holders.
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If an Event of Default occurs and is continuing, the Company shall, upon
demand of the Trustee, pay to the Trustee, for the benefit of the Holders of the
Notes, the whole amount of Money then due and payable with respect to such
Notes, with interest upon the overdue principal and, to the extent that payment
of such interest shall be legally enforceable, upon any overdue installments of
interest at the same rate of interest as is payable with respect to the
principal amount of the Notes, and, in addition thereto, such Money as shall be
sufficient to cover the costs and expenses of collection. If the Company fails
to pay the Money it is required to pay upon such demand of the Trustee, the
Trustee, in its own name, may institute a judicial proceeding for collection of
the Money so due and unpaid, prosecute such proceeding to judgment or final
decree, enforce same against the Company or any other obligor and collect the
Money so adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor. If an Event of Default with
respect to the Notes occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of the
Notes by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in the Indenture or such Notes or in
aid of the exercise of any power granted in the Indenture or the Notes, or to
enforce any other proper remedy.
A Holder will not have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless (a) such Holder has
previously given to the Trustee written notice of a continuing Acceleration
Event or Event of Default, (b) the Holders of at least 25% in principal amount
of the Outstanding Notes shall have made written request, and offered
satisfactory indemnity, to the Trustee to institute such proceeding as Trustee,
(c) the Trustee shall have failed to institute such proceeding within 60 days,
and (d) within such 60-day period, the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Outstanding Notes a
direction inconsistent with such requests. However, the Holder of any Note will
have an absolute right to receive payment of the principal of and interest on
such Note on or after the respective due dates and to institute suit for the
enforcement of any such payment.
ACCELERATION EVENTS. Unless otherwise provided in the Prospectus
Supplement, an "Acceleration Event" under the Subordinated Indenture with
respect to any series of Subordinated Notes is defined as an Event of Default
relating to bankruptcy, insolvency or reorganization of the Company. Unless
otherwise provided in the Prospectus Supplement, an "Acceleration Event" under
the Senior Indenture with respect to any series of Senior Notes is defined as
any Event of Default under the Senior Indenture. If an Acceleration Event shall
occur and be continuing, either the Trustee or the Holders of at least 25% in
principal amount of Outstanding Debt Securities may accelerate the maturity of
all such Outstanding Debt Securities. If an Acceleration Event has occurred and
a declaration of acceleration made before a judgment or decree for payment of
money due is obtained, Holders of a majority in principal amount of the
Outstanding Debt Securities may rescind and annul the acceleration of the Debt
Securities and its consequences if all Acceleration Events have been remedied or
waived and all payments due, other than those due as a result of acceleration,
have been made.
DISCHARGE PROVISIONS. When all Debt Securities of any Series have become
due and payable or will become due and payable at their stated maturity within
one year, the Company will be discharged from any and all obligations in respect
of such Debt Securities (except for certain obligations to register the transfer
or exchange of Debt Securities, to replace destroyed, stolen, lost or mutilated
Debt Securities, to maintain paying agencies and to hold moneys for payment in
trust) after the date of deposit with the Trustee, in trust, of money, U.S.
Government obligations which through the payment of interest and principal
thereof in accordance with their terms will provide money, or a combination
thereof, in an amount sufficient to pay any installment of principal of (and
premium, if any) and interest on the Debt Securities of such series on the dates
on which such payments are due and payable in accordance with the terms of the
applicable Indenture and such Debt Securities; provided, that the Company has
paid all other amounts payable under the Indenture with respect to the Debt
Securities of such series, including amounts payable to the Trustee;
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and provided, further, that the Company has delivered to the Trustee a
Certificate of Independent Public Accountants as to the sufficiency of the funds
so deposited.
SUBORDINATION OF SUBORDINATED NOTES. The Subordinated Notes are
subordinated, in the manner and to the extent hereinafter described, to the
prior payment in full of all "Senior Indebtedness" of the Company. "Senior
Indebtedness" is defined as (1) (a) all indebtedness of the Company for money
borrowed (including indebtedness of others guaranteed by the Company) other than
the Subordinated Notes, whether outstanding on the date thereof or thereafter
created, assumed or incurred, and (b) any amendments, renewals, extensions,
modifications and refundings of any such indebtedness, unless in the case of
either (a) or (b) in the instrument creating or evidencing any such indebtedness
or pursuant to which it is outstanding it is provided that such indebtedness is
not Senior Indebtedness, and (2) Derivative Obligations.
For the purposes of such definition, "indebtedness for money borrowed" is
defined as (a) any obligation of the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, (b) any deferred payment obligation of the Company for the payment
of the purchase price of property or assets evidenced by a note or similar
instrument, (c) any obligation of the Company for the payment of rent or other
amounts under a lease of property or assets which obligation is required to be
classified and accounted for as a capitalized lease on the balance sheet of the
Company under general accepted accounting principals; provided, however, that
the foregoing shall not include any obligation that constitutes a trade payable
or accrued liability arising in the ordinary course of business.
"Derivative Obligations" are defined as any obligations of the Company to
make payment pursuant to the terms of any securities contracts and foreign
currency exchange contracts, derivative instruments, such as swap agreements
(including interest rate and currency and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange agreements, options, commodity futures contracts
and commodity options contracts other than obligations on account of
indebtedness for money borrowed ranking PARI PASSU with or subordinate to the
Subordinated Notes.
Upon a distribution of assets in a dissolution, winding up, liquidation or
reorganization of the Company, except a distribution in connection with a merger
or consolidation or a conveyance or transfer of all or substantially all of the
properties of the Company that complies with the provisions of the Indenture, or
if an event of default has occurred and is continuing with respect to any Senior
Indebtedness, or if an Acceleration Event shall have occurred and the principal
of the Subordinated Notes has been declared due and payable and such declaration
has not been rescinded or annulled, then in any such instance all Senior
Indebtedness must be paid in full before the Holders of any of the Subordinated
Notes can receive any payment of principal or interest on the Subordinated
Notes. However, subordination does not prevent the occurrence of an Acceleration
Event or an "Event of Default" (as defined above) under the Indenture.
By reason of the subordination of the Subordinated Notes, in the event of
liquidation of the Company, the Holders of the Subordinated Notes will not
receive payment until the holders of Senior Indebtedness have been satisfied.
MODIFICATION AND WAIVER. With certain limited exceptions which permit
modification of the Indenture by the Company and the Trustee only, modifications
and amendments of the respective Indentures may be made by the Company and the
Trustee with the consent of the holders of not less than a majority in principal
amount of the outstanding Debt Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding Debt
Security affected thereby, (i) change the stated maturity of the principal of,
or any installment of interest on, any Debt Security, reduce the interest on,
any Debt Security, change the place of payment where principal or interest on,
any Debt Security is payable, or impair the right to institute suit for the
enforcement of any payment on or after the stated maturity of any Debt Security,
(ii) reduce the percentage in principal amount of outstanding Debt Securities of
any series, the consent of
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the holders of which is required for modification or amendment of the Indenture
or for waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults, or (iii) modify any of the various sections relating
to above-described provisions.
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of each series may, on behalf of the holders of all
Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
The holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the holders of all
Debt Securities of that series, waive any past default under the Indenture with
respect to Debt Securities of that series, except a default (i) in the payment
of principal of, or any premium or interest on, any Debt Security of such series
when due, or (ii) in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security of such series affected.
GLOBAL SECURITIES. The following description will apply to any series of
Debt Securities issued, in whole or in part, in the form of a Global Security or
Global Securities deposited with, or on behalf of, a depository ("the
Depository") (each such Debt Security represented by a Global Security, being
herein referred to as a "Book-Entry Security").
Upon initial issuance, all Book-Entry Securities of the same series and
bearing interest, if any, at the same rate or pursuant to the same formula and
having the same date of issuance, redemption provisions, if any, repayment
provisions, if any, stated maturity and other terms will be represented by a
single Global Security. Each Global Security representing Book-Entry Securities
will be deposited with, or on behalf of, the Depository and will be registered
in the name of the Depository or a nominee of the Depository. Unless otherwise
specified in the applicable Prospectus Supplement, all Book-Entry Securities
will be denominated in U.S. dollars.
Upon the issuance of a Global Security, the Depository will credit accounts
held with it with the respective principal or face amounts of the Book-Entry
Securities represented by such Global Security. The accounts to be credited
shall be designated initially by the Agent through which the Debt Security was
sold or, to the extent that such Debt Securities are offered and sold directly,
by the Company. Ownership of beneficial interests in a Global Security will be
limited to institutions that have accounts with the Depository ("participants")
and to persons that may hold interests through such participants. Ownership of
beneficial interests by participants in a Global Security will be shown on, and
the transfer of that ownership interest will be effected only through, records
maintained by the Depository for such Global Security. Ownership of beneficial
interests in such Global Security by persons that hold through participants will
be shown on, and the transfer of that ownership interest within such
participants will be effected only through, records maintained by such
participants.
Payment of principal of, premium, if any, and interest, if any, on
Book-Entry Securities represented by any such Global Security will be made to
the Depository or its nominee, as the case may be, as the sole registered holder
of the Book-Entry Securities represented thereby for all purposes under the
Indentures. None of the Company, the Trustee, the Paying Agent or any agent of
the Company or the Trustee will have a responsibility or liability for any
aspect of Depository's records relating to or payments made on account of
beneficial ownership interests in a Global Security representing any Book-Entry
Securities or any other aspect of the relationship between the Depository and
its participants or the relationship between such participants and the owners of
beneficial interests in a Global Security owning through such participants or
for maintaining, supervising or reviewing any of Depository's records relating
to such beneficial ownership interests.
No Global Security may be transferred except as a whole by a nominee of
Depository to Depository or to another nominee of Depository, or by Depository
or any such nominee to a successor of Depository or a nominee of such successor.
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A Global Security representing Book-Entry Securities is exchangeable for
certificated Debt Securities of the same series and bearing interest, if any, at
the same rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, repayment provisions, if any, stated maturity and
other terms and of differing authorized denominations aggregating a like amount,
if any, if (i) the Depository notifies the Company that it is unwilling or
unable to continue as depositary for such Global Security and a successor
depository is not notified within 90 days of the time the Company is so notified
in writing, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such Global Security shall be exchangeable for
certificated Debt Securities or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Book-Entry Securities which
entitles the holder to accelerate the maturity. Such certificated Debt
Securities shall be registered in the names of the owners of the beneficial
interests in such Global Security as provided by the Depository's participants.
Owners of beneficial interests in a Global Security will not be considered
the registered holders thereof for any purpose under the applicable Indenture
and no Global Security representing Book-Entry Securities shall be exchangeable
or transferrable. Accordingly, each person owning a beneficial interest in such
a Global Security must rely on the procedures of the Depository and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a registered holder
under the applicable Indenture. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
The Depository, as the registered holder of each Global Security, may
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a registered holder is entitled to give or take under the applicable Indenture.
The Company understands that under existing industry practices, in the event
that the Company requests any action of registered holders or that an owner of a
beneficial interest in such a Global Security desires to give or take any action
which a registered holder is entitled to give or take, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities in one or more of the
following ways: (i) through underwriters or dealers, (ii) through agents, or
(ii) directly to one or more purchasers. The Prospectus Supplement with respect
to a particular offering of a series of Offered Securities will set forth the
terms of the offering of such Offered Securities, including the name or names of
any underwriters or agents with whom the Company has entered into arrangements
with respect to the sale of such Offered Securities, the public offering or
purchase price of such Offered Securities and the proceeds to the Company from
such sales and any underwriting discounts, agency fees or commissions and other
items constituting underwriters' compensation, the initial public offering
price, any discounts or concessions to be allowed or re-allowed or paid to
dealers and any securities exchange, if any, on which such Offered Securities
may be listed. Dealer trading may take place in certain of the Offered
Securities, including Offered Securities not listed on any securities exchange.
If underwriters are involved in the offer and sale of Offered Securities,
the Offered Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The Offered Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or by underwriters without a syndicate, all of which
underwriters in either case will be designated in the accompanying Prospectus
Supplement. Unless otherwise set forth in the applicable Prospectus Supplement,
under the terms of the underwriting agreement, the obligations of the
underwriters to purchase Offered Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all of
the Offered Securities if any
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are purchased. Any initial public offering price and any discounts or
concessions or re-allowances or payments to dealers may be changed from time to
time.
Offered Securities may be offered and sold directly by the Company or
through agents designated by the Company from time to time. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named in, and any commissions payable by the
Company to such agent will be set forth in or calculable from, the applicable
Prospectus Supplement. Unless other wise indicated in the Prospectus Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
If so indicated in the applicable Prospectus Supplement relating to the
Offered Securities, the Company may authorize dealers or other persons acting as
the Company's agents to solicit offers by certain institutions to purchase the
Offered Securities from the Company, at the public offering price set forth in
such Prospectus Supplement, pursuant to contracts providing for payment or
delivery on a future date. Each such contract will be for an amount of the
Offered Securities not less than and, unless the Company otherwise agrees, the
aggregate amount of the Offered Securities sold pursuant to such contract shall
be not more than the respective minimum and maximum amounts as stated in the
Prospectus Supplement. Institutions with which such contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions and
others, but shall in all cases be subject to the approval of the Company in its
sole discretion. The obligations of any purchaser under any such contract to pay
for and take delivery of the Offered Securities will not be subject to any
conditions except that (i) the purchase of the Offered Securities by such
institution shall not at the time of delivery be prohibited under the laws of
the jurisdiction to which such institution is subject and (ii) any related sale
of the Offered Securities to underwriters shall have occurred. A commission set
forth in the Prospectus Supplement will be paid to underwriters soliciting
purchases of the Offered Securities pursuant to such contracts accepted by the
Company. The dealers will not have any responsibility in respect of the validity
or performance of such contracts.
The Debt Securities and the Preferred Stock will be new issues of securities
with no established trading market. Any underwriters to whom Offered Securities
are sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Offered Securities.
Any underwriter, dealer or agent participating in the distribution of the
Offered Securities may be deemed to be an underwriter, as that term is defined
in the Securities Act, of the Offered Securities so offered and sold and any
discounts or commissions received by it from the Company and any profit realized
by it on the sale or resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act.
Under agreements entered into with the Company, underwriters, dealers and
agents may be entitled to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters or agents may be required to
make in respect thereof.
Underwriters, dealers and agents also may be customers of, engaged in
transactions with, or perform other services for the Company in the ordinary
course of business.
LEGAL MATTERS
The validity of the shares of Common Stock, the Preferred Stock and the Debt
Securities offered hereby will be passed upon for the Company by the Minneapolis
law firm of Lindquist & Vennum P.L.L.P. Patrick Delaney, a holder of Common
Stock and of options to purchase Common Stock and a Director of the Company, is
a partner of Lindquist & Vennum.
24
<PAGE>
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report (Form 10-K) for the year ended December
31, 1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference therein and incorporated
by reference elsewhere herein which (i) as to the years 1995 and 1994, are based
in part on the reports of Arthur Andersen LLP, formerly independent auditors of
Mountain Parks, and (ii) as to the year 1994, are based in part on the reports
of Hacker, Nelson & Co., P.C. and Fortner, Bayens, Levkulich and Co., P.C.,
formerly independent auditors for Minowa Bancshares, Inc. and First Community
Bankshares, Inc., respectively. As of the date of their reports and during the
periods covered by the financial statements on which they reported, each of the
foregoing accounting firms were independent certified public accountants with
respect to the Company, Mountain Parks, Minowa Bancshares, Inc. and First
Community Bankshares, Inc., as the case may be, within the meaning of the
Securities Act and the applicable published rules and regulations thereunder.
The Company has agreed to indemnify Hacker, Nelson & Co., P.C., its of ficers,
directors and employees from any and all damages, fines, legal costs and
expenses that may be incurred by the parties being indemnified in successfully
defending their audit to any person, corporation or governmental entity relying
upon the audit, provided that such indemnification will not apply to any claim,
legal expense, or costs incurred if Hacker, Nelson & Co., P.C. has been found
guilty of professional malpractice with respect to such audit. The consolidated
financial statements referred to above are incorporated herein by reference in
reliance upon such reports given upon the authority of such firms as experts in
accounting and auditing.
The financial statements of KeyBank Wyoming as of and for the year ended
December 31, 1996 appearing in Community First Bankshares, Inc.'s Current Report
on Form 8-K/A filed on September 22, 1997 with the Securities and Exchange
Commission have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance on such report given upon the authority of such firm as experts in
accounting and auditing.
25
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offer made in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or
solicitation by anyone in any state in which such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 4
Risk Factors............................................................... 6
Use of Proceeds............................................................ 8
Ratios of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends.......................................................... 9
Description of Securities.................................................. 9
Plan of Distribution....................................................... 24
Legal Matters.............................................................. 25
Experts.................................................................... 25
</TABLE>
COMMUNITY FIRST
BANKSHARES, INC.
------------------
P R O S P E C T U S
------------------
, 19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- ---------------------------------------------------------------------------
<C> <S>
1.1 Form of Purchase Agreement for Common Stock Offerings.
2.1 Stock Purchase Agreement dated as of February 18, 1997, among the
Registrant, KeyCorp and Key Bank of the Rocky Mountains, Inc.
(incorporated by reference to Exhibit 2.8 to the Registrant's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, filed with the Securities and Exchange Commission (the
"Commission") as of May 8, 1997).
2.2 Agreement and Plan of Reorganization dated as of June 25, 1996, between
Registrant and Mountain Parks Financial Corp. (incorporated by reference
to Exhibit 2.1 to the Registrant's Registration Statement on Form S-4
(File No. 333-14439) as declared effective by the Commission on November
6, 1996).
2.3 Agreement and Plan of Merger dated as of March 8, 1996, between Registrant,
Trinidad Acquisition Corporation and Financial Bancorp., Inc.
(incorporated by reference to Exhibit 2.1 to the Registrant's
Registration Statement on Form S-4 (File No. 333-6239) as declared
effective by the Commission on August 9, 1996 (the "1996 S-4")).
2.4 Restated Agreement and Plan of Merger dated as of August 22, 1997,
including Agreement and First Amendment to Agreement dated as of the same
date, between the Registrant and First National Summit Bankshares, Inc.
(incorporated by reference to Appendices A and B, respectively, to the
Proxy Statement Prospectus contained in the Registrant's Registration
Statement on Form S-4 (File No. 333-38997) filed with the Commission on
October 29, 1997).
2.5 Restated Agreement and Plan of Merger dated as of August 28, 1997, between
the Registrant and Republic National Bancorp, Inc. (incorporated by
reference to Appendix A to the Proxy Statement-Prospectus contained in
Registrant's Registration Statement on Form S-4 (File No. 333-38225), as
filed with the Commission on October 20, 1997).
2.6 Office Purchase and Assumption Agreement by and between Bank One, Arizona,
National Association, Bank One, Colorado, National Association, Bank One,
Utah, National Association and the Registrant dated as of the 10th day of
September, 1997 (incorporated by reference to Exhibit 2.6 to the
Registrant's Registration Statement on Form S-4 (File No. 333-36091), as
filed with the Commission on September 22, 1997).
2.7 Agreement and Plan of Merger dated as of November 6, 1997, among the
Registrant, Community First National Bank and Pioneer Bank of Longmont.
3.1 Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1996.
3.2 Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-1 (File No. 33-1246) as
declared effective by the Commission on August 13, 1991 (the "1991
S-1")).
4.1 Specimen Common Stock Certificate of the Registrant (incorporated by
reference to Exhibit 4 to the 1991 S-1).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- ---------------------------------------------------------------------------
<C> <S>
4.2 Indenture dated June 24, 1997 relating to the Registrant's 7.30%
Subordinated Notes Due 2004 (the "New Notes") between the Registrant and
Norwest Bank Minnesota, National Association, as trustee (a specimen of
the New Notes is contained as Exhibit A thereto) (incorporated by
reference to Exhibit 4.1 to the 1997 S-4).
4.3 Form of Senior Indenture.
4.4 Registration Rights Agreement dated as of June 24, 1997, by and among the
Registrant, Piper Jaffray Inc. and Keefe, Brayette & Woods, Inc.
(incorporated by reference to Exhibit 4.2 to the 1997 S-4).
4.5 Form of Senior Note (included in Exhibit 4.3).
4.6 Certificate of Designations, Preferences and Rights of 7% Cumulative
Convertible Preferred Stock of the Registrant (incorporated by reference
to Exhibit 4.1 to the Registrant's Registration Statement on Form S-3
(File No. 33-77398) as declared effective by the Commission on May 4,
1994 (the "1994 S-3")).
4.7 Form of Subordinated Indenture.
4.8 Deposit Agreement dated as of May 4, 1994 by and among the Registrant,
Norwest Bank Minnesota, National Association, as Depositary, and the
Holders from time to time of the Depositary Receipts (incorporated by
reference to Exhibit 4.2 to the 1994 S-3).
4.9 Form of Subordinated Note (included in Exhibit 4.7).
4.10 Certificate of Designations, Preferences and Rights of Series A Junior
Participating Preferred Stock (incorporated by reference to Exhibit A to
Exhibit 1 to the Registrant's Registration Statement on Form 8-A filed
with the Commission on January 9, 1995 (the "Form 8-A")).
4.11 Form of Certificate of Designation for Preferred Stock.
4.12 Form of Rights Agreement dated as of January 5, 1995 by and between the
Registrant and Norwest Bank Minnesota, N.A. (incorporated by reference to
Exhibit 1 to the Form 8-A).
4.13 Specimen Preferred Stock Certificate of the Registrant.
5.1 Opinion and Consent of Lindquist & Vennum P.L.L.P., Counsel to the Company,
regarding legality of securities being registered.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Lindquist & Vennum P.L.L.P. (See Exhibit 5.1 above).
23.2 Consent of Ernst & Young LLP.*
23.3 Consent of Hacker, Nelson & Co., P.C.*
23.4 Consent of Fortner, Bayens, Levkulich and Co., P.C.*
23.5 Consent of Arthur Andersen LLP.*
24.1 A Power of Attorney is set forth on the signature pages of this
Registration Statement.*
99.1 Report of Arthur Andersen LLP regarding financial statements of Mountain
Parks Financial Corp. (incorporated by reference to Exhibit 99.1 to the
Registrant's Registration Statement on Form S-3 (File No. 333-19921), as
filed with Amendment No. 1 to such Registration Statement filed with the
Commission on January 30, 1997).
</TABLE>
- ------------------------
* Previously filed.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Fargo, State of North Dakota, on the 21st day of November, 1997.
<TABLE>
<S> <C> <C>
COMMUNITY FIRST BANKSHARES, INC.
By: /s/ DONALD R. MENGEDOTH
-----------------------------------------
Donald R. Mengedoth
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment has been signed below on the 21st day of November, 1997, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DONALD R. MENGEDOTH President, Chief Executive
- ------------------------------ Officer and Chairman of
Donald R. Mengedoth the Board
Executive Vice President
/s/ MARK A. ANDERSON and Chief Financial
- ------------------------------ Offer (Principal
Mark A. Anderson Financial and Accounting
Officer)
*
- ------------------------------ Director
Patricia A. Adam
*
- ------------------------------ Director
James T. Anderson
*
- ------------------------------ Director
Patrick E. Benedict
*
- ------------------------------ Director
Patrick Delaney
*
- ------------------------------ Director
John H. Flittie
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director
Dennis M. Mathisen
*
- ------------------------------ Director
Dean E. Smith
*
- ------------------------------ Director
Thomas C. Wold
*
- ------------------------------ Director
Harvey L. Wollman
</TABLE>
*By: /s/ MARK A. ANDERSON
-------------------------
Mark A. Anderson
ATTORNEY-IN-FACT
II-4
<PAGE>
____ SHARES(1)
COMMUNITY FIRST BANKSHARES, INC.
COMMON STOCK
PURCHASE AGREEMENT
____________ , 199__
Ladies and Gentlemen:
Community First Bankshares, Inc., a Delaware corporation (the "Company")
proposes to sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of ____________ shares (the "Firm Shares") of
Common Stock, $.01 par value per share (the "Common Stock"), of the Company.
The Company has also granted to the Underwriters an option to purchase up to
__________ additional shares of Common Stock on the terms and for the
purposes set forth in Section 3 hereof (the "Option Shares"). The Firm
Shares and any Option Shares purchased pursuant to this Purchase Agreement
are herein collectively called the "Securities."
The Company hereby confirms its agreement with respect to the sale of the
Securities to the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement
on Form S-3 (File No. 333-37527) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission; one or more amendments to such registration
statement have also been so prepared and have been, or will be, so filed;
and, if the Company has elected to rely upon Rule 462(b) of the Rules and
Regulations to increase the size of the offering registered under the Act,
the Company will prepare and file with the Commission a registration
statement with respect to such increase pursuant to Rule 462(b). Copies of
such registration statement(s) and amendments and each related preliminary
prospectus have been delivered to you.
(a) If the Company has elected not to rely upon Rule 430A of the
Rules and Regulations, the Company has prepared and will promptly file an
amendment to the registration statement and an amended prospectus (including
a term sheet, if any, meeting the requirements of Rule 434 of the
- ---------------
(1) Plus an option to purchase up to _______ additional shares to cover
over-allotments.
<PAGE>
Rules and Regulations) if necessary to complete the Prospectus. If the
Company has elected to rely upon Rule 430A of the Rules and Regulations, it
will prepare and file a prospectus (or a term sheet meeting the requirements
of Rule 434) pursuant to Rule 424(b) that discloses the information
previously omitted from the prospectus in reliance upon Rule 430A. If the
Company has elected to rely upon the requirements of Rule 424(b)(2) or Rule
424(b)(5) of the Rules and Regulations, it will promptly prepare and file a
supplemented prospectus pursuant to such rule. Such registration statement
as amended at the time it is or was declared effective by the Commission,
and, in the event of any amendment thereto after the effective date and prior
to the First Closing Date (as hereinafter defined), such registration
statement as so amended (but only from and after the effectiveness of such
amendment), including a registration statement (if any) filed pursuant to
Rule 462(b) of the Rules and Regulations increasing the size of the offering
registered under the Act, all documents incorporated or deemed to be
incorporated by reference therein, and information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rules
430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement." The prospectus included in the Registration
Statement at the time it is or was declared effective by the Commission is
hereinafter called the "Prospectus," except that if any prospectus (including
any term sheet meeting the requirements of Rule 434 of the Rules and
Regulations provided by the Company for use with a prospectus subject to
completion within the meaning of Rule 434 in order to meet the requirements
of Section 10(a) of the Rules and Regulations) filed by the Company with the
Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the Rules
and Regulations or any other such prospectus provided to the Underwriters by
the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission
pursuant to Rule 424(b) of the Rules and Regulations) differs from the
prospectus on file at the time the Registration Statement is or was declared
effective by the Commission, the term "Prospectus" shall refer to such
differing prospectus (including any term sheet within the meaning of Rule 434
of the Rules and Regulations) from and after the time such prospectus is
filed with the Commission or transmitted to the Commission for filing
pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and after
the time it is first provided to the Underwriters by the Company for such use
and except that in connection with a Registration Statement filed pursuant to
Rule 415 of the Rules and Regulations the term "Prospectus" shall mean the
supplemented prospectus. The term "Preliminary Prospectus" as used herein
means any preliminary prospectus included in the Registration Statement prior
to the time it becomes or became effective under the Act, any preliminary
prospectus supplement used in connection with a Registration Statement filed
pursuant to Rule 415 of the Rules and Regulations and any prospectus subject
to completion as described in Rule 430A or 434 of the Rules and Regulations.
All references in this Agreement to the Registration Statement, a Preliminary
Prospectus or the Prospectus, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval System. All
references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall
be deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "Exchange Act")
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be.
2
<PAGE>
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, the
Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and the Preliminary
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that the foregoing shall not apply to statements in or omissions from the
Preliminary Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by either Underwriter for use in the
preparation thereof.
(ii) As of the time the Registration Statement (or any
post-effective amendment thereto, including a registration statement (if
any) filed pursuant to Rule 462(b) of the Rules and Regulations increasing
the size of the offering registered under the Act) is or was declared
effective by the Commission, upon the filing or first delivery to the
Underwriters of the Prospectus (or any supplement to the Prospectus
(including any term sheet meeting the requirements of Rule 434 of the
Rules and Regulations)) and at the First Closing Date and Second Closing
Date (as hereinafter defined), (A) the Registration Statement and
Prospectus (in each case, as so amended and/or supplemented) conformed or
will conform in all material respects to the requirements of the Act and
the Rules and Regulations, (B) the Registration Statement (as so amended)
did not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (C) the Prospectus (as so
supplemented) did not or will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they are or were made, not misleading; except that the foregoing
shall not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to the
Company by any Underwriter specifically for use in the preparation thereof.
If the Registration Statement has been declared effective by the
Commission, no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
initiated or, to the Company's knowledge, threatened by the Commission.
(iii) The documents of the Company incorporated by reference in
the Registration Statement and the Prospectus, when they were filed with
the Commission conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Registration Statement and the Prospectus or any
further amendment or supplement thereto, when such documents are filed
with the Commission will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
3
<PAGE>
(iv) The consolidated financial statements of the Company,
together with the notes thereto, incorporated by reference in the
Registration Statement, Preliminary Prospectus and Prospectus comply in
all material respects with the requirements of the Act and the Exchange
Act and fairly present the consolidated financial condition of the
Company and its consolidated subsidiaries as of the dates indicated and
the results of operations and changes in cash flows for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except
as otherwise stated in the Registration Statement and Prospectus) and
the independent public accountants whose reports are contained therein
are independent public accountants as required by the Act and the Rules
and Regulations. The summary financial information included in the
Preliminary Prospectus and Prospectus under the caption "Summary
Consolidated Financial Data," present fairly the information required to
be stated therein.
(v) No other financial statements or schedules are required
to be included in the Registration Statement or Prospectus.
(vi) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware and is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), supervised by
the Board of Governors of the Federal Reserve System (the "FRB"). The
only subsidiaries of the Company (each a "Subsidiary" and collectively
the "Subsidiaries") and the percentage of issued and outstanding shares
of stock of each such Subsidiary owned of record and beneficially by the
Company are set forth in Exhibit A attached hereto. Each Subsidiary has
been duly organized and is validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization as the
case may be. Each of the Company and its Subsidiaries has full
corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the
Registration Statement and Prospectus, and is duly qualified to do
business as a foreign corporation in good standing under the corporation
and financial services laws of each jurisdiction in which the conduct of
its business or ownership or lease of its properties requires such
qualification and where the failure to be so qualified would,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects,
assets, results of operations or properties of the Company and its
Subsidiaries taken as a whole. Other than the foregoing Subsidiaries,
the Company owns no capital stock or other equity, ownership or
proprietary interest in any company, partnership, association, trust or
other entity. The accounts of each of the Company's Subsidiaries which
are banks are insured by the Bank Insurance Fund of the Federal Deposit
Insurance Corporation (the "FDIC") up to the maximum applicable amount
in accordance with the rules and regulations of the FDIC, and no
proceedings for the termination or revocation of such membership or
insurance are pending, or, to the knowledge of the Company, threatened.
(vii) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
Subsidiaries has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with
respect to its capital stock, (other than dividends paid in the ordinary
course with respect to shares of the Company's common stock) or any of
its Subsidiaries' Common Stock; and there has not been any change in the
capital stock (other than a change in the number of
4
<PAGE>
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in
the short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock, of
the Company or any of its Subsidiaries, or any material adverse change,
or any development involving a prospective material adverse change, in
the general affairs, condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of
the Company and its Subsidiaries, taken as a whole.
(viii) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding to which the Company or any of its
Subsidiaries is a party before or by any court or governmental agency,
authority or body, or any arbitrator, which might result in any material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and its
Subsidiaries, taken as a whole.
(ix) There are no contracts or documents of the Company or any
of its Subsidiaries that are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
contracts or documents have not been so filed.
(x) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any agreement or instrument to
which the Company is a party or by which it is bound or to which any of
its property is subject, the Company's charter or bylaws, or any order,
rule, regulation or decree of any court or governmental agency or body
having jurisdiction over the Company or any of its properties; no
consent, approval, authorization or order of, or filing with, any court
or governmental agency or body is required for the execution, delivery
and performance of this Agreement or for the consummation of the
transactions contemplated hereby, including the issuance or sale of the
Securities by the Company, except such as may be required under the Act
or state securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to authorize, issue and sell
the Securities as contemplated by this Agreement.
(xi) All of the issued and outstanding shares of capital stock
of the Company, including the outstanding shares of Common Stock, are duly
authorized and validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities, and the holders thereof
are not subject to personal liability by reason of being such holders;
the Securities which may be sold hereunder by the Company have been duly
authorized and, when issued, delivered and paid for in accordance with
the terms hereof, will have been validly issued and will be fully paid
and nonassessable, and the holders thereof will not be subject to
personal liability by reason of being such holders; and the capital
stock of the Company, including the Common Stock, conforms to the
description thereof in the Registration Statement and Prospectus.
Except as otherwise stated in the Registration Statement and Prospectus,
there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting
5
<PAGE>
or transfer of, any shares of Common Stock pursuant to the Company's
charter, bylaws or any agreement or other instrument to which the Company
is a party or by which the Company is bound. Neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating to
the registration of any shares of Common Stock or other securities of the
Company. All of the issued and outstanding shares of capital stock of
each of the Company's Subsidiaries have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise described in the Registration Statement and Prospectus and
except for any directors' qualifying shares, the Company owns of record
and beneficially, free and clear of any security interests, claims,
liens, proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the
Registration Statement and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to purchase
or acquire from the Company or any Subsidiary of the Company any shares
of the capital stock of the Company or any Subsidiary of the Company.
The Company has an authorized and outstanding capitalization as set
forth in the Registration Statement and the Prospectus.
(xii) The Company and each of its Subsidiaries holds, and is
operating in compliance in all material respects with, all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises,
grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and
the Company and each of its Subsidiaries is in compliance in all
material respects with all applicable federal, state, local and foreign
laws, regulations, orders and decrees except to the extent that the
failure to comply would not have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects,
assets, results of operations or properties of the Company and its
Subsidiaries taken as whole.
(xiii) The Company and its Subsidiaries have good title to all
property and good and marketable title to all real property described in
the Registration Statement and Prospectus as being owned by them, in
each case free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Registration
Statement and the Prospectus or which do not interfere in any material
respect with the use of the property or the conduct of the business of
the Company and its Subsidiaries; the property held under lease by the
Company and its Subsidiaries is held by them under valid, subsisting and
enforceable leases with only such exceptions with respect to any
particular lease as do not interfere in any material respect with the
conduct of the business of the Company or its Subsidiaries; the Company
and each of its Subsidiaries owns or possesses all patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of the
business of the Company and its Subsidiaries as currently carried on and
as described in the Registration Statement and Prospectus; except as
stated in the Registration Statement and Prospectus, to the best of the
Company's knowledge, no name which the Company or any of its
Subsidiaries uses and no other aspect of the business of the Company or
any of its Subsidiaries will involve or give rise to any infringement
of, or license or similar fees for, any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service
mark registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others material to the business or prospects of
the Company and neither the Company nor any of its Subsidiaries has
received any notice alleging any such infringement or fee.
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(xiv) Neither the Company nor any of its Subsidiaries is in
violation of its respective charter or bylaws; none of the Company or
any of its Subsidiaries is in breach of or otherwise in default in the
performance of any material obligation, agreement or condition contained
in any bond, debenture, note, indenture, loan agreement or any other
material contract, lease or other instrument to which it is subject or
by which any of them may be bound, or to which any of the material
property or assets of the Company or any of its Subsidiaries is subject.
(xv) The Company and its Subsidiaries have filed all federal,
state, local and foreign income and franchise tax returns required to be
filed and are not in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect
thereto, other than any which the Company or any of its Subsidiaries is
contesting in good faith.
(xvi) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by
the Company.
(xvii) The Common Stock (including the Securities) is
registered pursuant to Section 12(g) of the Exchange Act and is listed on
the Nasdaq National Market, and the Company has taken no action designed
to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from
the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of
Securities Dealers, Inc. is contemplating terminating such registration
or listing. The Company has filed an application to list the Securities
on the NASDAQ National Market System and has paid the required fee in
connection therewith.
(xviii) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(xix) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xx) Neither the Company nor any of its affiliates is presently
doing business with the government of Cuba or with any person or affiliate
located in Cuba.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
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3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to issue and sell _________ Firm Shares to the
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Stockholders the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule II hereto.
The purchase price for each Firm Share shall be $_____ per share. In making
this Agreement, each Underwriter is contracting severally and not jointly;
except as provided in paragraph (c) of this Section 3 and in Section 8
hereof, the agreement of each Underwriter is to purchase only the respective
number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company to the Underwriters
against payment of the purchase price therefor by immediately available funds
payable to the order of the Company at the offices of Piper Jaffray Inc.,
Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota, or such
other location as may be mutually acceptable, at 9:00 a.m. Central time on
the third (or if the Securities are priced, as contemplated by Rule 15c6-1(c)
under the Exchange Act, after 4:30 p.m. Eastern time, on the fourth) full
business day following the date hereof, or at such other time and date as you
and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act,
such time and date of delivery being herein referred to as the "First Closing
Date." If the Underwriters so elect, delivery of the Firm Shares may be made
by credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Underwriters. Certificates representing the Firm
Shares, in definitive form and in such denominations and registered in such
names as you may request upon at least two business days' prior notice to the
Company and the Custodian, will be made available for checking and packaging
not later than 10:30 a.m., Central time, on the business day next preceding
the First Closing Date at the offices of Piper Jaffray Inc., Piper Jaffray
Tower, 222 South Ninth Street, Minneapolis, Minnesota, or such other location
as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company hereby grants to the Underwriters an option to purchase all or
any portion of the Option Shares at the same purchase price as the Firm
Shares, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised at any time (but not more than once)
within 30 days after the effective date of this Agreement upon notice
(confirmed in writing) by the Underwriters to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for the
Option Shares are to be registered and the date and time, as determined by
you, when the Option Shares are to be delivered, such time and date being
herein referred to as the "Second Closing" and "Second Closing Date",
respectively; provided, however, that the Second Closing Date shall not be
earlier than the First Closing Date nor earlier than the second business day
after the date on which the option shall have been exercised. If the option
is exercised, the number of Option Shares to be purchased by each Underwriter
shall be the same percentage of the total number of Option Shares to be
purchased by the Underwriters as the number of Firm Shares to be purchased by
such Underwriter is of the total number of Firm Shares to be purchased by the
Underwriters, as adjusted by the Underwriters in such manner as the
Underwriters deem advisable to avoid fractional shares. No Option Shares
shall be sold and delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to the
Underwriters against payment of the purchase price therefor by immediately
available funds payable to the order of the Company at the offices of
____________________________________________________ or such
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other location as may be mutually acceptable at 9:00 a.m., Central time, on
the Second Closing Date. If the Underwriters so elect, delivery of the
Option Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Underwriters.
Certificates representing the Option Shares in definitive form and in such
denominations and registered in such names as you have set forth in your
notice of option exercise, will be made available for checking and packaging
not later than 10:30 a.m., Central time, on the business day next preceding
the Second Closing Date at the office of _________________________________
or such other location as may be mutually acceptable.
(c) It is understood that either Underwriter may (but shall not be
obligated to) make payment to the Company on behalf of the other Underwriter
for the Securities to be purchased by such other Underwriter. Any such
payment by an Underwriter shall not relieve any such other Underwriter of any
of its obligations hereunder. Nothing herein contained shall constitute any
of the Underwriters an unincorporated association or partner with the Company.
4. COVENANTS.
(a) The Company covenants and agrees with the Underwriters as
follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause
the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify you
promptly of the time when the Registration Statement or any post-effective
amendment to the Registration Statement has become effective or any
supplement to the Prospectus (including any term sheet within the meaning
of Rule 434 of the Rules and Regulations) has been filed and of any request
by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional information; if the Company has
elected to rely on Rule 430A of the Rules and Regulations, the Company will
prepare and file a Prospectus (or term sheet within the meaning of Rule 434
of the Rules and Regulations) containing the information omitted therefrom
pursuant to Rule 430A of the Rules and Regulations with the Commission
within the time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules and
Regulations; if the Company has elected to rely upon Rule 462(b) of the
Rules and Regulations to increase the size of the offering registered under
the Act, the Company will prepare and file a registration statement with
respect to such increase with the Commission within the time period
required by, and otherwise in accordance with the provisions of, Rule
462(b); if the Company has elected to rely upon the requirements of Rule
424(b)(2) or Rule 424(b)(5) of the Rules and Regulations, it will be
promptly prepare and file a supplemented prospectus pursuant to such rule;
the Company will prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement or
Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) that, in your opinion, may be necessary or advisable
in connection with the distribution of the Securities by the Underwriters;
and the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) to which you shall
reasonably object by notice to the Company after having been furnished a
copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Securities for
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offering or sale in any jurisdiction, or of the initiation or threatening
of any proceeding for any such purpose; and the Company will promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.
(iii) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed upon
it by the Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof and the Prospectus. If during such period any
event occurs as a result of which the Prospectus would include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify you and will amend the Registration
Statement or supplement the Prospectus (at the expense of the Company) so
as to correct such statement or omission or effect such compliance.
(iv) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so long
as required for the distribution of the Securities, except that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any
state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus, and all amendments
and supplements (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) to such documents, in each case as soon as
available and in such quantities as you may from time to time reasonably
request.
(vi) During a period of five years commencing with the date
hereof, the Company will furnish to the Underwriters, copies of all
periodic and special reports furnished to the stockholders of the Company
and all information, documents and reports filed with the Commission.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning
after the effective date of the Registration Statement that shall satisfy
the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(viii) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective under the provisions of Section 9(a) hereof or is
terminated, will pay or cause to be paid (A) all expenses (including
transfer taxes allocated to the respective transferees) incurred in
connection with the delivery to the Underwriters of the Securities, (B)
all expenses and fees (including, without limitation, fees and expenses of
the Company's accountants and counsel but, except as otherwise provided
below, not including fees of the Underwriters' counsel) in connection with
the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and
all amendments, schedules, and exhibits thereto), the Securities, each
Preliminary Prospectus, the Prospectus, and any amendment thereof or
supplement thereto, and the printing, delivery, and
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shipping of this Agreement and other underwriting documents, including
Blue Sky Memoranda, (C) all filing fees and fees and disbursements of
the Underwriters' counsel incurred in connection with the qualification
of the Securities for offering and sale by the Underwriters or by
dealers under the securities or blue sky laws of the states and other
jurisdictions which you shall designate, (D) the fees and expenses of
any transfer agent or registrar, (E) the filing fees incident to any
required review by the National Association of Securities Dealers, Inc.
of the terms of the sale of the Securities, (F) listing fees, if any,
and (G) all other costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for
herein. If the sale of the Securities provided for herein is not
consummated by reason of action by the Company pursuant to Section 9(a)
hereof which prevents this Agreement from becoming effective, or by
reason of any failure, refusal or inability on the part of the Company
to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to
be fulfilled by the Company is not fulfilled, the Company will reimburse
the Underwriters for all out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection
with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations
hereunder. The Company shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
(ix) [The Company will not, without your prior written consent,
offer for sale, contract to sell, grant any option for the sale of or
otherwise issue or dispose of any Common Stock or any securities
convertible into or exchangeable for, or any options or rights to purchase
or acquire, Common Stock, except to the Underwriters pursuant to this
Agreement for a period of 180 days after the commencement of the public
offering of the Securities by the Underwriters.]
(x) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(xi) The Company will not incur any liability for any finder's
or broker's fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xii) The Company will inform the Florida Department of Banking
and Finance at any time prior to the consummation of the distribution of
the Securities by the Underwriters if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba. Such information will be provided within 90 days after the
commencement thereof or after a change occurs with respect to previously
reported information.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder are subject to the accuracy, as of the date hereof and
at each of the First Closing Date and the Second Closing Date (as if made at
such Closing Date), of and compliance with all representations, warranties and
agreements of the Company contained herein, to the performance by the Company
of its obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as you shall approve and all filings
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required by Rules 424, 430A and 434 of the Rules and Regulations shall have
been timely made; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued and no
proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule 434
of the Rules and Regulations), contains an untrue statement of fact which, in
your opinion, is material, or omits to state a fact which, in your opinion,
is material and is required to be stated therein or necessary to make the
statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its Subsidiaries
shall have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid
any dividends or made any distribution of any kind with respect to its
capital stock; and there shall not have been any change in the capital stock
(other than a change in the number of outstanding shares of Common Stock due
to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any of its
Subsidiaries, or any material adverse change or any development involving a
prospective material adverse change (whether or not arising in the ordinary
course of business), in the general affairs, condition (financial or
otherwise), business, key personnel, property, prospects, net worth or
results of operations of the Company and its Subsidiaries, taken as a whole,
that, in your judgment, makes it impractical or inadvisable to offer or
deliver the Securities on the terms and in the manner contemplated in the
Prospectus.
(d) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, the opinion of Lindquist &
Vennum P.L.L.P., counsel for the Company, dated such Closing Date and
addressed to you, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and is duly registered as a bank holding
company under the BHC Act. The deposit accounts of each of the Company's
Subsidiaries that is a bank are insured by the FDIC, and, to the knowledge
of such counsel, no proceedings for the termination or revocation of such
membership or insurance are pending or threatened. Each of the Company and
its Subsidiaries has full corporate power and authority to own its
properties and conduct its business as currently being carried on and as
described in the Registration Statement and Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which its ownership or lease of real property or
the conduct of its business makes such qualification necessary and in which
the failure to so qualify would have a material adverse effect upon the
business, condition (financial or otherwise) or properties of the Company
and its Subsidiaries, taken as a whole.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock." All of the issued and
outstanding shares of the capital stock of the Company have been duly
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authorized and validly issued and are fully paid and nonassessable, and
the holders thereof are not subject to personal liability by reason of
being such holders. The Securities to be issued and sold by the Company
hereunder have been duly authorized and, when issued, delivered and paid
for in accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being
such holders. Except as otherwise stated in the Registration Statement
and Prospectus, there are no preemptive rights or options, warrants,
agreements, contracts or other rights in existence to purchase or
acquire from the Company any shares of the capital stock of the Company
pursuant to the Company's charter, bylaws or any agreement or other
instrument known to such counsel to which the Company is a party or by
which the Company is bound. To the best of such counsel's knowledge,
neither the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any shares of Common
Stock or other securities of the Company.
(iii) All of the issued and outstanding shares of capital
stock of each of the Company's Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, to the
best of such counsel's knowledge, except as otherwise described in the
Registration Statement and Prospectus and except for directors'
qualifying shares, the Company owns of record and beneficially, free and
clear of any security interests, claims, liens, proxies, equities or
other encumbrances in the case of the Subsidiaries set forth on Exhibit
A attached hereto, that percentage of shares of the issued and
outstanding shares of such Subsidiaries' stock as is set forth on such
Exhibit A. To the best of such counsel's knowledge, except as described
in the Registration Statement and Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to purchase
or acquire from the Company or any Subsidiary any shares of the capital
stock of any Subsidiary of the Company.
(iv) The Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or, to the
knowledge of such counsel, threatened by the Commission.
(v) The descriptions in the Registration Statement and
Prospectus of statutes, and to the best of such counsel's knowledge,
legal and governmental proceedings or rulings, contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown; and such counsel does not know of any
statutes or legal or governmental proceedings required to be described
in the Prospectus that are not described as required, or of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or included as exhibits to the
Registration Statement that are not described or included as required.
(vi) The reports of the Company incorporated by reference in
the Registration Statement and the Prospectus or any further amendment
or supplement thereto made by the Company (other than the financial
statements, other financial data and related schedules therein, as to
which such counsel need express no opinion), when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
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(vii) The Company has full corporate power and authority to
enter into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid, legal and
binding obligation of the Company enforceable in accordance with its
terms (except as rights to indemnity hereunder may be limited by federal
or state securities laws and except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity); the execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or
regulation, any agreement or instrument known to such counsel to which
the Company is a party or by which it is bound or to which any of its
property is subject, the Company's charter or bylaws, or any order or
decree known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its respective
properties; and no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as may be
required under the Act or state securities laws.
(viii) To the best of such counsel's knowledge, neither the
Company nor any of its Subsidiaries is in violation of its respective
charter or bylaws.
(ix) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet within
the meaning of Rule 434 of the Rules and Regulations), comply as to form
in all material respects with the requirements of the Act and the Rules
and Regulations; and on the basis of conferences with officers of the
Company, examination of documents referred to in the Registration
Statement and Prospectus and such other procedures as such counsel
deemed appropriate, nothing has come to the attention of such counsel
that causes such counsel to believe that the Registration Statement or
any amendment thereof, at the time the Registration Statement became
effective and as of such Closing Date (including any Registration
Statement filed under Rule 462(b) of the Rules and Regulations),
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (as of its date
and as of such Closing Date), as amended or supplemented, includes any
untrue statement of material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; it being understood that
such counsel need express no opinion as to the financial statements or
other financial data included in any of the documents mentioned in this
clause.
(x) Such other matters as you may reasonably request.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Minnesota and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local
counsel are satisfactory to them and that they believe they and you are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Company and its
Subsidiaries and of public officials provided that the extent of such reliance
is specified in such opinion.
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(e) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from
Faegre & Benson LLP, counsel for the Underwriters, dated such Closing Date and
addressed to you, with respect to the formation of the Company, the validity of
the Securities, the Registration Statement, the Prospectus and other related
matters as you reasonably may request, and such counsel shall have received
such papers and information as they request to enable them to pass upon such
matters.
(f) On each Closing Date you shall have received a letter of Ernst &
Young LLP, dated such Closing Date and addressed to you, confirming that they
are independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, and stating,
as of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date of such letter), the conclusions and findings of said firm
with respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this Agreement, and
the effect of the letter so to be delivered on such Closing Date shall be to
confirm the conclusions and findings set forth in such prior letter.
(g) On each Closing Date, there shall have been furnished to you a
certificate, dated such Closing Date and addressed to you, signed by the chief
executive officer and by the chief financial officer of the Company, to the
effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at
and as of such Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof or
the qualification of the Securities for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments
thereof or supplements thereto (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations), and (A) such
documents contain all statements and information required to be included
therein, the Registration Statement, or any amendment thereof, does not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, does not include any untrue statement of material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, (B) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amended or
supplemented prospectus which has not been so set forth, (C) subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any
of its Subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect to
its capital stock (other than dividends paid in the ordinary course with
respect to shares of the Company's Common Stock or any of its
Subsidiaries' common stock), and except as disclosed in the Prospectus,
there has not been
15
<PAGE>
any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon
the exercise of outstanding options or warrants), or any material change
in the short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital
stock, of the Company, or any of its Subsidiaries, or any material
adverse change or any development involving a prospective material
adverse change (whether or not arising in the ordinary course of
business), in the general affairs, condition (financial or otherwise),
business, key personnel, property, prospects, net worth or results of
operations of the Company and its Subsidiaries, taken as a whole, and
(D) except as stated in the Registration Statement and the Prospectus,
there is not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any
of its Subsidiaries is a party before or by any court or governmental
agency, authority or body, or any arbitrator, which might result in any
material adverse change in the condition (financial or otherwise),
business, prospects or results of operations of the Company and its
Subsidiaries, taken as a whole.
(h) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or
they may have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and counsel for the Underwriters.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the
information deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rules 430A and 434(d) of the Rules and Regulations,
if applicable, any Preliminary Prospectus, the Prospectus, or any amendment
or supplement thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations and any prospectus supplement to a
Registration Statement filed pursuant to Rule 415 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability
or action arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by you specifically for use in the preparation
thereof.
In addition to its other obligations under this Section 6(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based
upon any statement or omission, or any alleged statement or omission,
described in this Section 6(a), it will reimburse each Underwriter on a
monthly basis for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation,
16
<PAGE>
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the party or parties that
made such payment, together with interest, compounded daily, determined on
the basis of the prime rate (or other commercial lending rate for borrowers
of the highest credit standing) announced from time to time by Norwest Bank
Minnesota, N.A. (the "Prime Rate"). Any such interim reimbursement payments
which are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities
which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with your written consent),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by you specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any
liability that it may have to any indemnified party. In case any such action
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that if, in the sole
judgment of the Underwriters, it is advisable for the Underwriters to be
represented as a group by separate counsel, the Underwriters shall have the
right to employ a single counsel to represent all Underwriters who may be
subject to liability arising from any claim in respect of which indemnity may
be sought by the Underwriters under this Section 6, in which event the
reasonable fees and expenses of such separate counsel shall be borne by the
indemnifying party or parties and remitted to the Underwriters for payment to
such counsel as such fees and expenses are incurred (in accordance with the
provisions of the second paragraph in subsection (a) above). An indemnifying
party shall not be obligated under any settlement agreement relating to any
action under this Section 6 to which it has not agreed in writing.
17
<PAGE>
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand
and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(d) were to be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 6 shall be in addition to any
liability that the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company
(including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons and shall
survive delivery of, and payment for, the Securities to and by the
Underwriters hereunder.
18
<PAGE>
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased does not
aggregate more than 10% of the total amount of Firm Shares set forth in
Schedule II hereto, the remaining Underwriters shall be obligated to take up
and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in Schedule II hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting
Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased aggregates more
than 10% of the total amount of Firm Shares set forth in Schedule II hereto,
and arrangements satisfactory to you for the purchase of such Firm Shares by
other persons are not made within 36 hours thereafter, this Agreement shall
terminate. In the event of any such termination neither the Company nor any
Selling Stockholder shall be under any liability to any Underwriter (except
to the extent provided in Section 4(a)(viii), Section 4(b)(ii) and Section 6
hereof) nor shall any Underwriter (other than an Underwriter who shall have
failed, otherwise than for some reason permitted under this Agreement, to
purchase the amount of Firm Shares agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company or the Selling Stockholders
(except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by
the non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, Prospectus and any other
documents, as well as any other arrangements, may be effected. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Central
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of
the Registration Statement as the Underwriters in their discretion shall
first release the Securities for sale to the public; provided, that if the
Registration Statement is effective at the time this Agreement is executed,
this Agreement shall become effective at such time as the Underwriters in
their discretion shall first release the Securities for sale to the public.
For the purpose of this Section, the Securities shall be deemed to have been
released for sale to the public upon release by the Underwriters of the
publication of a newspaper advertisement relating thereto or upon release by
the Underwriters of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter
specified before the time this Agreement becomes effective, the Underwriters
or the Company may prevent this Agreement from becoming effective without
liability of any party to any other party, except that the provisions of
Section 4(a)(viii) and Section 6 hereof shall at all times be effective.
(b) The Underwriters shall have the right to terminate this
Agreement by giving notice as hereinafter specified at any time at or prior
to the First Closing Date, and the option referred to in Section 3(b), if
exercised, may be cancelled at any time prior to the Second Closing Date, if
(i) the Company shall have failed, refused or been unable, at or prior to
such Closing Date, to perform any agreement on its
19
<PAGE>
part to be performed hereunder, (ii) any other condition of the Underwriters'
obligations hereunder is not fulfilled, (iii) trading in securities on the
New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or System, (iv) a banking moratorium shall have been declared by
Federal, New York, North Dakota, South Dakota, Minnesota or Colorado
authorities, or (vi) there has occurred any material adverse change in the
financial markets in the United States or an outbreak of major hostilities
(or an escalation thereof) in which the United States is involved, a
declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6
hereof shall at all times be effective.
(c) If the Underwriters elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this
Section, the Company shall be notified promptly by you by telephone or
telegram, confirmed by letter. If the Company elects to prevent this
Agreement from becoming effective, you shall be notified by the Company by
telephone or telegram, confirmed by letter.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in
the Prospectus constitute the written information furnished by the
Underwriters or on their behalf referred to in Section 2 and Section 6 hereof.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to _____________________________
______________________________________________________ if to the Company,
shall be mailed, telegraphed or delivered to it at 520 Main Avenue, Fargo,
North Dakota 58124-0001, Attention: Donald R. Mengedoth. Any party to this
Agreement may change such address for notices by sending to the parties to
this Agreement written notice of a new address for such purpose.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal
or equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from any of the Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota without regard to the
conflicts of law provisions thereof.
[Signature Page Follows]
20
<PAGE>
Please sign and return to the Company the enclosed duplicates of
this letter whereupon this letter will become a binding agreement between the
Company and you in accordance with its terms.
Very truly yours,
COMMUNITY FIRST BANKSHARES, INC.
By
----------------------------------
Its
-------------------------------
Confirmed as of the date first
above mentioned.
By
---------------------------------
Managing Director
By
---------------------------------
Managing Director
21
<PAGE>
SCHEDULE I
Underwriter Number of Firm Shares (1)
- ----------- -------------------------
--------------
Total .................................
--------------
--------------
- ----------------------
(1) The Underwriters may purchase up to an additional ________ Option
Shares, to the extent the option described in Section 3(b) of the
Agreement is exercised, in the proportions and in the manner described
in the Agreement.
<PAGE>
EXHIBIT A
COMMUNITY FIRST BANKSHARES, INC.
SUBSIDIARIES
<TABLE>
<CAPTION>
OWNERSHIP
SUBSIDIARY BANK: LOCATION: PERCENTAGE
<S> <C> <C>
Community First National Bank Fergus Falls, MN 100.000%
Community First National Bank Fargo, ND 100.000%
Community First State Bank Vermillion, SD 100.000%
Community First National Bank Decorah, IA 100.000%
Community First National Bank Alliance, NE 100.000%
Community First National Bank Spooner, WI 100.000%
Colorado Community First National Bank Ft. Morgan, CO 100.000%
Community First National Bank Cheyenne, WY 100.000%
NONBANK SUBSIDIARIES:
Community First Financial, Inc. Fargo, ND 100.000%
Community First Service Corporation Fargo, ND 100.000%
Community Insurance, Inc. Fargo, ND 100.000%
Community First Properties, Inc. Fargo, ND 100.000%
CFB Capital I Fargo, ND 100.000%
SUBSIDIARIES OF SUBSIDIARIES (100% OWNED):
Community First Insurance Agencies, Inc. Fargo, ND (Subsidiary of
Community First State
Bank [Vermillion, SD])
Equity Lending, Inc. Edina, MN (Subsidiary of
Colorado Community First
National Bank [Fort
Morgan, CO])
Mountain Parks Financial Services, Inc. Denver, CO (Subsidiary of
Colorado Community First
State Bank [Fort
Morgan, CO])
</TABLE>
24
<PAGE>
EXHIBIT 2.7
AGREEMENT AND PLAN OF MERGER
dated as of November 6, 1997
among
COMMUNITY FIRST BANKSHARES, INC.
COMMUNITY FIRST NATIONAL BANK
and
PIONEER BANK OF LONGMONT
<PAGE>
INDEX TO AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Effective Time of the Merger. . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Calculation of Pioneer Value. . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT BANKS;
EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . 3
(a) Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Exchange Rate. . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Adjustments to Exchange Rate Based on CFB Trading Value. . . . 4
(d) Adjustments to Exchange Rate Based on Pioneer Value. . . . . . 4
(e) Shareholders' Right of Dissent . . . . . . . . . . . . . . . . 4
2.2 Exchange of Certificates. . . . . . . . . . . . . . . . . . . . . . 5
(a) Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . 5
(c) Distributions with Respect to Unexchanged Shares; Voting . . . 5
(d) Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . 6
(f) Termination of Exchange Fund . . . . . . . . . . . . . . . . . 6
(g) Lost or Destroyed Shares . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . 7
3.1 Representations and Warranties of Pioneer . . . . . . . . . . . . . 7
(a) Pioneer Organization . . . . . . . . . . . . . . . . . . . . . 7
(b) Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Limitation of Pioneer's Powers . . . . . . . . . . . . . . . . 7
(d) Corporate Records. . . . . . . . . . . . . . . . . . . . . . . 7
(e) Insured Status of Pioneer. . . . . . . . . . . . . . . . . . . 7
(f) No Default; Creation of Liens. . . . . . . . . . . . . . . . . 8
(g) Financial Statements . . . . . . . . . . . . . . . . . . . . . 8
(h) Fidelity Insurance . . . . . . . . . . . . . . . . . . . . . . 9
(i) Employment Contracts . . . . . . . . . . . . . . . . . . . . . 9
(j) Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 9
i
<PAGE>
(k) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(l) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(m) Title to Property. . . . . . . . . . . . . . . . . . . . . . . 10
(n) Insurance Policies . . . . . . . . . . . . . . . . . . . . . . 10
(o) Pioneer Property . . . . . . . . . . . . . . . . . . . . . . . 10
(p) Conduct of Business. . . . . . . . . . . . . . . . . . . . . . 10
(q) Loan Allowance and Documentation . . . . . . . . . . . . . . . 11
(r) Leases and Contracts . . . . . . . . . . . . . . . . . . . . . 11
(s) Shareholder List . . . . . . . . . . . . . . . . . . . . . . . 12
(t) Principals . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(u) Information Supplied . . . . . . . . . . . . . . . . . . . . . 12
(v) Agreements with Regulators . . . . . . . . . . . . . . . . . . 12
3.2 Representations and Warranties of CFB . . . . . . . . . . . . . . . 13
(a) CFB Organization. . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . 13
(d) No Default; Creation of Liens . . . . . . . . . . . . . . . . . 13
(e) Information Supplied. . . . . . . . . . . . . . . . . . . . . . 14
(f) No Plan to Transfer Assets. . . . . . . . . . . . . . . . . . . 14
ARTICLE 4 COVENANTS OF PIONEER AND CFB. . . . . . . . . . . . . . . . . . . 14
4.1 Covenants of Pioneer. . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Shareholder Meeting . . . . . . . . . . . . . . . . . . . . . . 15
(c) Registration Statement. . . . . . . . . . . . . . . . . . . . . 15
(d) Confidential Information. . . . . . . . . . . . . . . . . . . . 15
(e) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) No Solicitations. . . . . . . . . . . . . . . . . . . . . . . . 16
(g) No Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . 16
(h) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(i) Pooling Restrictions. . . . . . . . . . . . . . . . . . . . . . 17
(j) Financial Statements. . . . . . . . . . . . . . . . . . . . . . 17
(k) Additional Covenants of Pioneer . . . . . . . . . . . . . . . . 17
4.2 Covenants of CFB. . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Application . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Registration Statement. . . . . . . . . . . . . . . . . . . . . 20
(e) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) Shares to be Issued . . . . . . . . . . . . . . . . . . . . . . 21
(g) Blue Sky. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(h) Confidential Information. . . . . . . . . . . . . . . . . . . . 21
ii
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(i) Registration Statement. . . . . . . . . . . . . . . . . . . . . 21
4.3 Covenants of Pioneer and CFB. . . . . . . . . . . . . . . . . . . . 22
(a) Governing Documents . . . . . . . . . . . . . . . . . . . . . . 22
(b) Other Actions . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Advice of Changes; Government Filings . . . . . . . . . . . . . 22
(d) Title of Property . . . . . . . . . . . . . . . . . . . . . . . 22
(e) Environmental Assessment. . . . . . . . . . . . . . . . . . . . 23
ARTICLE 5 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 23
5.1 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . 23
5.2 Letters of Financial Officers . . . . . . . . . . . . . . . . . . . 24
5.3 Access to Information . . . . . . . . . . . . . . . . . . . . . . . 24
5.4 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.5 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . 24
5.6 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.7 Additional Agreements; Best Efforts . . . . . . . . . . . . . . . . 25
ARTICLE 6 CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Conditions to Each Party's Obligation to Effect the Merger. . . . . 25
(a) Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . 25
(b) Nasdaq Market System Listing. . . . . . . . . . . . . . . . . . 25
(c) Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Registration Statement. . . . . . . . . . . . . . . . . . . . . 26
(e) No Injunctions or Restraints; Illegality. . . . . . . . . . . . 26
(f) No Unduly Burdensome Condition. . . . . . . . . . . . . . . . . 26
6.2 Conditions to Obligations of CFB. . . . . . . . . . . . . . . . . . 26
(a) Representations and Warranties. . . . . . . . . . . . . . . . . 26
(b) Performance of Obligations of Pioneer . . . . . . . . . . . . . 26
(c) Minimum Pioneer Value . . . . . . . . . . . . . . . . . . . . . 27
(d) Supplement to Loan Loss Reserve . . . . . . . . . . . . . . . . 27
(e) Pooling Letter. . . . . . . . . . . . . . . . . . . . . . . . . 27
(f) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.3 Conditions to Obligations of Pioneer. . . . . . . . . . . . . . . . 27
(a) Representations and Warranties. . . . . . . . . . . . . . . . . 27
(b) Performance of Obligations of CFB . . . . . . . . . . . . . . . 27
(c) Consents Under Agreements . . . . . . . . . . . . . . . . . . . 27
(d) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(e) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Employment Agreement. . . . . . . . . . . . . . . . . . . . . . 28
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ARTICLE 7 TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . . . 28
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . 29
7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 8 GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 30
8.1 Non-Survival of Representations and Warranties. . . . . . . . . . . 30
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.3 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5 Entire Agreement: Third Party Beneficiaries; Rights of Ownership. . 31
8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.7 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.9 Enforcement of Agreement. . . . . . . . . . . . . . . . . . . . . . 31
iv
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 6, 1997 (the
"Agreement"), by and among Community First Bankshares, Inc., a Delaware
corporation ("CFB"), Community First National Bank, a de novo national
banking association ("Acquisition Subsidiary") and Pioneer Bank of Longmont,
a Colorado banking corporation ("Pioneer").
WHEREAS, the Boards of Directors of CFB, Acquisition Subsidiary and
Pioneer have approved, and deem it advisable and in the best interests of
their respective companies and their stockholders to consummate the business
combination transaction provided for herein in which Pioneer will be merged
with and into Acquisition Subsidiary (the "Merger");
WHEREAS, CFB and Pioneer desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to prescribe various conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, articles of merger (the "Articles of Merger") in substantially the
form as attached hereto as EXHIBIT A shall be duly prepared, executed and
acknowledged by Acquisition Subsidiary and Pioneer and thereafter delivered
for filing to the Office of the Comptroller of the Currency (the "OCC"), as
provided in the National Bank Act (the "Act"), on the Closing Date (as
defined in Section 1.2). The Merger shall become effective when so declared
by the OCC, upon the filing of the Articles of Merger (the "Effective Time").
Notwithstanding the immediately preceding sentence, however, the parties
intend that the effective date and time of the Closing, as defined in Section
1.2 below, for both financial and tax reporting purposes, shall be as of the
close of business on the Closing Date.
1.2 CLOSING. Subject to the terms and conditions hereof, the closing
of the Merger (the "Closing") will take place after the satisfaction or
waiver (subject to applicable law) of the latest to occur of the conditions
set forth in Article 6 hereof (the "Closing Date"), at the offices of
Lindquist, Vennum & Christensen P.L.L.P., in Denver, Colorado, unless another
time, date or place is agreed to in writing by the parties hereto. Each of
the parties agrees to use its best efforts
<PAGE>
to cause the Merger to be completed within thirty (30) business days after
the satisfaction or waiver of the conditions set forth in Article 6 of this
Agreement.
1.3 EFFECTS OF THE MERGER.
(a) At the Effective Time: (i) the separate existence of Pioneer
shall cease and Pioneer shall be merged with and into Acquisition Subsidiary;
(ii) the Articles of Association of the Acquisition Subsidiary, as in effect
immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Bank until duly amended in accordance with
applicable law; (iii) the Bylaws of the Acquisition Subsidiary, as in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Bank until amended in accordance with applicable law; (iv) CFB, as the holder
of all of the outstanding common stock of the Acquisition Subsidiary, shall
continue as sole shareholder of the Surviving Bank, and (v) the holders of
certificates representing shares of Pioneer Common Stock (as defined in
Section 2.1(a) below) shall cease to have any rights as shareholders of
Pioneer, except such rights, if any, as they may Article 113 of the Colorado
Business Corporation (the "Colorado Act") Act, and their sole right shall be
the right to receive (A) the number of whole shares of CFB Common Stock (as
defined in Section 2.1(a) below) into which their shares of Pioneer Common
Stock have been converted in the Merger as provided herein (together with any
dividend payments with respect thereto, to the extent provided in Section
2.2(c) below), and (B) the cash value of any fraction of a share of CFB
Common Stock into which their shares of Pioneer Common Stock have been
converted as provided herein.
(b) As used in this Agreement, the term "Constituent Banks" shall
mean Pioneer and the Acquisition Subsidiary. The term "Surviving Bank" shall
mean the Acquisition Subsidiary, after giving effect to the Merger.
(c) At and after the Effective Time, the Merger will have the
effects set forth in Section 215a of the Act.
1.4 CALCULATION OF PIONEER VALUE. As of the last day of the month
immediately preceding the Effective Time (the "Determination Date"), Pioneer
shall prepare a consolidated balance sheet of Pioneer in accordance with
generally accepted accounting principles, but excluding the effects of any
adjustments otherwise required by FASB 115 and excluding any footnotes that
might be required to be included with such financial statements (the
"Determination Date Balance Sheet"), together with a consolidated statement
of income (the "Interim Income") for the period from January 1, 1997 to the
Determination Date (the "Interim Income Statement"), such consolidated
statement of income shall be prepared in accordance with generally accepted
accounting principles, but excluding the effects of any adjustments otherwise
required by FASB 115 and excluding any footnotes that might be required to be
included with such statements (the "Determination Date Balance Sheet and
Interim Income Statement are herein referred to as the "Determination Date
Financial Statements"). The Determination Date Financial Statements shall be
delivered to CFB as soon as they are prepared so that CFB and its accountants
may review and confirm their accuracy. For purposes of this Agreement, the
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"Pioneer Value" shall be equal to the total consolidated assets of Pioneer
minus the total consolidated liabilities of Pioneer, all as reflected on the
Determination Date Balance Sheet, prepared in accordance with this Section
1.4. Total consolidated liabilities of Pioneer shall include, without
limitation, provision for taxes and the expenses of the preparation of the
final tax return for Pioneer.
ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT BANKS; EXCHANGE OF CERTIFICATES
2.1 EFFECT ON CAPITAL STOCK.
(a) CONVERSION. At the Effective Time, by virtue of the Merger
and without any action on the part of any holder of shares of common stock,
par value $10.00 per share, of Pioneer ("Pioneer Common Stock"), subject to
Section 2.2(e), each issued and outstanding share of Pioneer Common Stock,
other than shares of Pioneer Common Stock held by persons who have taken all
steps required to perfect their right to be paid the fair value of such
shares under Article 113 of the Colorado Act, shall be converted into validly
issued, fully paid and nonassessable shares of common stock of CFB, $.01 par
value ("CFB Common Stock"). The number of shares of CFB Common Stock
exchanged for shares of Pioneer Common Stock shall be calculated in
accordance with Section 2.1(b). All such shares of Pioneer Common Stock
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist. Each Pioneer shareholder's certificate or
certificates previously representing shares of Pioneer Common Stock (each a
"Pioneer Certificate") shall be aggregated (if a single stockholder holds
more than one Pioneer Certificate) and exchanged for a certificate
representing whole shares of CFB Common Stock and cash in lieu of any
fractional share issued in consideration therefor upon the surrender of such
Pioneer Certificates in accordance with Section 2.2, without any interest
thereon. In the event that, subsequent to the date of this Agreement but
prior to the Effective Time, the outstanding shares of CFB Common Stock shall
have been increased, decreased, changed into or exchanged for a different
number or kind of shares or securities through a reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split, or other similar change in CFB's capitalization, then an
appropriate and proportionate adjustment shall be made to the "Exchange
Rate", as hereinafter defined, so that the number of shares of CFB Common
Stock into which a share of Pioneer Common Stock shall be converted will
equal the number of shares of CFB Common Stock that the holders of shares of
Pioneer Common Stock would have received pursuant to such reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split or other similar change had the record date therefor been
immediately following the Closing Date.
(b) EXCHANGE RATE. Subject to the adjustments provided in Section
2.1(c) hereof, all of the issued and outstanding shares of Pioneer Common
Stock and any outstanding options, warrants or other rights to Pioneer Common
Stock shall be exchanged for Seven Hundred Thousand (700,000) shares of CFB
Common Stock (the aforementioned exchange rate is
3
<PAGE>
hereinafter referred to as the "Exchange Rate"). On or before the Effective
Time, all stock options and other rights with respect to Pioneer Common Stock
shall be (i) accelerated and exercised by the holder thereof, in accordance
with the terms of the stock option plan or agreement, or (ii) released and
terminated by written acknowledgment and agreement by the holder thereof,
obtained by Pioneer less than ten (10) business days prior to the Closing
Date.
(c) ADJUSTMENTS TO EXCHANGE RATE BASED ON CFB TRADING VALUE.
Notwithstanding anything to the contrary in this Article 2, the Exchange Rate
shall be subject to modification as set forth below:
(i) If the CFB Trading Value is less than $46.00 per share, then
Pioneer shall have the right to terminate the transaction pursuant to
Section 7.1 hereof;
(ii) If the CFB Trading Value is greater than $50.50 per share,
then the Exchange Rate shall be reduced so that the product of the CFB
Trading Value multiplied by the Exchange Rate shall be $35,350,000.
For purposes of this Agreement, the "CFB Trading Value" of the CFB
Common Stock shall be the average of the per share closing price for the CFB
Common Stock as reported by the Nasdaq Market System National Market System
for the 20 trading days ending at the end of the fourth trading day
immediately preceding the Closing Date (as appropriately and proportionately
adjusted in the event that, between the date hereof and the termination of
such twenty trading day period, shares of CFB Common Stock shall be changed
into a different number of shares or a different class of shares by reason of
any reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment or stock dividend). Calculations will be rounded to
three decimal places. Any fractional share of CFB Common Stock will be paid
in cash in accordance with Section 2.2(e). Illustrations of the above
Exchange Rate calculations are attached as EXHIBIT 2.1(C) hereto and
incorporated herein by reference.
(d) ADJUSTMENTS TO EXCHANGE RATE BASED ON PIONEER VALUE. In the
event that the Pioneer Value, calculated in accordance with Section 1.4,
above, shall be greater than $8,100,000, then, at the election of Pioneer and
subject to the requirements of Section 6.2(e) hereof, either (i) the
difference shall be paid by special dividend to Pioneer shareholders
immediately prior to the Determination Date or (ii) the Exchange Rate
determined in accordance with Section 2.1(c) shall be subject to increase.
The amount of increase shall be determined by (i) subtracting the difference
between the Pioneer Value and $8,100,000, and then (ii) dividing such
difference by the CFB Trading Value.
(e) SHAREHOLDERS' RIGHT OF DISSENT. Any holder of shares of Pioneer
Common Stock who does not vote in favor of the Merger at the meeting of
shareholders of Pioneer and has given notice in writing to the presiding officer
prior to the Merger vote that he or she intends to demand payment for his or her
shares of Pioneer Common Stock if the Merger is effectuated,
4
<PAGE>
shall be entitled to receive the value of the Pioneer Common Stock so held by
him or her in accordance with Article 113 of the Colorado Act.
2.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. At the Closing, CFB shall deposit with
Norwest Bank Minnesota, N.A. or such other bank or trust company acceptable
to the parties (the "Exchange Agent"), for the benefit of the holders of
shares of Pioneer Common Stock, certificates dated the Closing Date
representing the shares of CFB Common Stock and the cash to be paid in lieu
of fractional shares (such cash and certificates for shares of CFB Common
Stock together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund") to be issued and paid
pursuant to Section 2.1 in exchange for the outstanding shares of Pioneer
Common Stock.
(b) EXCHANGE PROCEDURES. Within five (5) business days after the
Closing Date, CFB shall cause the Exchange Agent to mail to each holder of
record of a Pioneer Certificate or Pioneer Certificates (i) a letter of
transmittal which shall specify that delivery shall be effective, and risk of
loss and title to the Pioneer Certificate(s) shall pass, only upon delivery
of the Pioneer Certificate(s) to the Exchange Agent and which shall be in
such form and have such other provisions as CFB and Pioneer may reasonably
specify not later than five business days before the Closing Date and (ii)
instructions for use in effecting the surrender of the Pioneer Certificate(s)
in exchange for a certificate representing shares of CFB Common Stock and the
cash to be paid in lieu of any fractional share. Upon surrender of a
shareholder's Pioneer Certificate or Pioneer Certificates for cancellation to
the Exchange Agent together with such letter of transmittal, duly executed,
the holder of such Pioneer Certificate(s) shall be entitled to receive in
exchange therefor (1) a certificate representing the number of whole shares
of CFB Common Stock and (2) a check representing the amount of the cash to be
paid in lieu of a fractional share, if any, and unpaid dividends and
distributions, if any, which such holder has the right to receive in respect
of the Pioneer Certificate(s) surrendered, as provided in Section 2.2(c)
below, and the Pioneer Certificate(s) so surrendered shall forthwith be
canceled. No interest will be paid on the cash in lieu of fractional shares
and unpaid dividends and distributions, if any, payable to holders of Pioneer
Certificates. In the event of a transfer of ownership of Pioneer Common
Stock which is not registered in the transfer records of Pioneer, a CFB
Certificate representing the proper number of shares of CFB Common Stock,
together with a check for the cash to be paid in lieu of a fractional share,
may be issued to such a transferee if the Pioneer Certificate representing
such Pioneer Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer. Any applicable
stock transfer taxes shall be paid by CFB.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES; VOTING. The
Exchange Agent shall receive and hold, for distribution without interest to
the first record holder of the certificate or certificates representing
shares of Pioneer Common Stock, all dividends and other distributions paid on
shares of CFB Common Stock held in the Exchange Agent's name as agent.
5
<PAGE>
Holders of unsurrendered Pioneer Certificates shall not be entitled to vote
after the Closing Date at any meeting of CFB shareholders until they have
exchanged their Pioneer Certificates.
(d) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of Pioneer of the shares of Pioneer
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Pioneer Certificates are presented to the
Surviving Corporation, they shall be canceled and exchanged for the shares of
CFB Common Stock and cash, in an amount as determined in accordance with the
provisions of Section 2.1(a) and this Section 2.2, deliverable in respect
thereof pursuant to this Agreement. Pioneer Certificates surrendered for
exchange by any person constituting an "affiliate" of Pioneer for purposes of
Rule 145(c) under the Securities Act of 1933, as amended (the "Securities
Act"), shall not be exchanged until CFB has received a written agreement from
such person as provided in Section 5.4.
(e) FRACTIONAL SHARES. No fractional shares of CFB Common Stock
shall be issued pursuant hereto. In lieu of the issuance of any fractional
share, cash adjustments will be paid to holders in respect of any fractional
share of CFB Common Stock that would otherwise be issuable, and the amount of
such cash adjustment shall be equal to such fractional proportion of the
Trading Value of a share of CFB Common Stock. For purposes of calculating
fractional shares, a holder of Pioneer Common Stock with more than one
Pioneer Certificate shall receive cash only for the fractional share
remaining after aggregating all of its, his or her Pioneer Common Stock to be
exchanged.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund (including the proceeds of any investments thereof and any CFB Common
Stock) that remains unclaimed by the shareholders of Pioneer for twelve
months after the Closing Date shall be paid to CFB. Any shareholders of
Pioneer who have not theretofore complied with this Article 2 shall
thereafter look only to CFB for payment of their shares of CFB Common Stock,
and cash in an amount as determined in accordance with the provisions of
Section 2.1(a) and this Section 2.2, without any interest thereon.
Notwithstanding the foregoing, none of CFB, the Exchange Agent nor any other
person shall be liable to any former holder of shares of Pioneer Common Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(g) LOST OR DESTROYED SHARES. In the event any Pioneer
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Pioneer Certificate to be
lost, stolen or destroyed and, if required by the Exchange Agent, the posting
by such person of a bond in such amount as CFB may direct as indemnity
against any claim that may be made against it with respect to such Pioneer
Certificate, the Exchange Agent will issue in exchange for such lost, stolen
or destroyed Pioneer Certificate the shares of CFB Common Stock, and cash in
an amount as determined in accordance with the provisions of Section 2.1(a)
and this Section 2.2, deliverable in respect thereof pursuant to this
Agreement.
6
<PAGE>
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF PIONEER. In order to induce CFB
to enter into this Agreement, Pioneer represents and warrants to CFB, in all
material respects, as of the date of this Agreement (except as otherwise
expressly provided), as follows, except as disclosed on the attached EXHIBIT B
(the "Pioneer Disclosure Schedule") and the schedules thereunder which are
numbered to correspond to the representations set forth below:
(a) PIONEER ORGANIZATION. Pioneer is a Colorado banking
corporation duly organized and validly existing and in good standing under
the laws of the State of Colorado with an authorized capital of $500,000,
consisting of 50,000 shares of one class of common stock, par value $10.00
per share. All of the shares of stock of Pioneer which are presently issued
and outstanding, have been validly issued, fully paid and non-assessable, and
there are no stock options or other commitments outstanding pursuant to which
Pioneer is obligated to issue additional shares of such stock or purchase or
redeem any outstanding shares of such stock. Pioneer has all requisite power,
authority, charters, licenses and franchises necessary or required by law to
carry on the business activity in which it is presently engaged, except where
the failure to have any such power, authority, charters, licenses or
franchises would not reasonably be expected to have a material adverse effect
on Pioneer. Pioneer has no direct or indirect subsidiaries and is not a
partner to any partnership.
(b) ENFORCEABILITY. Subject to the required approval of the
Merger by the shareholders of Pioneer, Pioneer has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this Agreement by
Pioneer and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Pioneer. Subject to
approval by the Pioneer shareholders and of government agencies and other
governing bodies having regulatory authority over Pioneer as may be required
by statute or regulation, this Agreement constitutes a valid and binding
obligation of Pioneer, enforceable against it in accordance with its terms.
(c) LIMITATION OF PIONEER'S POWERS. There are no proceedings or
actions pending by any federal or state regulatory body having authority over
Pioneer to limit or impair any of Pioneer's powers, rights and privileges, to
terminate deposit insurance or to dissolve Pioneer.
(d) CORPORATE RECORDS. Pioneer's Articles of Incorporation and
Bylaws are each unchanged from the form in which they were delivered to CFB
on or before the date of this Agreement. The minute books of Pioneer contain
reasonably complete and accurate records of all meetings and corporate
actions of each of their respective shareholders and Boards of Directors
(including committees of the Boards of Directors).
(e) INSURED STATUS OF PIONEER. Pioneer is an insured bank under
the provisions of Chapter 16 of Title 12, United States Code Annotated, known
as the "Federal Deposit Insurance
7
<PAGE>
Act," and no act or default on the part of Pioneer exists that could
reasonably be expected to have a material adverse effect on its status as an
insured bank thereunder. Pioneer possesses and is in full compliance with
all licenses, franchises, permits and other governmental authorizations that
are legally required to hold its properties or conduct its business, except
where the failure to possess any such licenses, franchises, permits or other
governmental authorizations would not reasonably be expected to have a
material adverse effect on Pioneer.
(f) NO DEFAULT; CREATION OF LIENS. Neither the execution and
delivery of this Agreement, nor the consummation of the Merger will (i)
conflict with, result in the breach of, constitute a default under or
accelerate the performance provided by the terms of (A) any judgment, order
or decree of any court or other governmental agency to which Pioneer may be
subject, (B) any of the "Material Contracts," as hereinafter defined, or (C)
the Articles of Incorporation or Bylaws of Pioneer, or (ii) constitute an
event that, with the lapse of time or action by a third party, would result
in a default under any of the foregoing or result in the creation of any
lien, charge or encumbrance upon Pioneer Common Stock.
(g) FINANCIAL STATEMENTS. The following financial statements of
Pioneer (the "Financial Statements") have been delivered to CFB and are
incorporated by reference herein:
(i) The Consolidated Reports of Condition and Income as of
December 31 for each of the years 1994, 1995 and 1996 and the period ending
September 30, 1997; and
(ii) The financial statements of Pioneer, prepared in the
ordinary course of business for each of the years ended December 31,
1994, 1995 and 1996.
Each of the aforementioned Financial Statements is, and the Determination
Date Financial Statements will be (when delivered pursuant to Section 1.4),
true and correct in all material respects, and together they fairly present,
in accordance with generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes thereto and except that
the unaudited financial statements are subject to any adjustments which might
be required as a result of an examination of independent accountants) the
financial position and results of operation of Pioneer as of the dates and
for the periods therein set forth. To the knowledge of Pioneer, such
Financial Statements did not, as of the date of the preparation thereof,
include any material assets or omit to state any material liability, absolute
or contingent, the inclusion or omission of which renders such Financial
Statements, in light of the circumstances in which they were made, misleading
in any material respect. Since December 31, 1996, there has been no material
adverse change in the financial condition, results of operation or business
of Pioneer, taken as a whole (other than changes in banking laws or
regulations, changes in generally accepted accounting principles or
interpretations thereof that affect the banking industry generally, or
changes in general economic conditions that affect the banking industry on a
nationwide basis, including changes in the general level of interest rates).
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(h) FIDELITY INSURANCE. Pioneer is insured under a Banker's
Blanket Bond which is in full force and effect and Pioneer has not received
notice of cancellation or non-renewal thereof, or filed any claim thereunder
during the past five years. There are no unresolved claims.
(i) EMPLOYMENT CONTRACTS. Except as set forth in Section 3.1(i)
of the Pioneer Disclosure Schedule, Pioneer is not a party to or bound by any
written or oral (i) employment or consulting contract that is not terminable
without penalty by Pioneer on 30 days' or less notice or (ii) any collective
bargaining agreement covering employees.
(j) EMPLOYEE BENEFITS. Section 3.1(j) of the Pioneer Disclosure
Schedule lists every employee benefit plan within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
which Pioneer maintains or to which Pioneer contributes on behalf of current
or former employees of Pioneer. All of the plans and programs listed in
Section 3.1(j) of the Pioneer Disclosure Schedule (hereinafter referred to as
the "Plans") are in compliance in all material respects with all applicable
requirements of ERISA and all other applicable federal and state laws. Each
of the Plans that is a defined benefit pension plan has assets with an
aggregate value that exceeds the present value of its liability for accrued
benefits, all as determined on a termination basis. None of the Plans has
engaged in a "prohibited transaction", within the meaning of Section 4975 of
the Code or Section 406 of ERISA, none of the Plans which is subject to Title
IV of ERISA or any trust created thereunder has been terminated nor have
there been any "reportable events" as that term is defined in Section 4043 of
ERISA with respect to any Plan and none of the Plans has incurred an
accumulated funding deficiency within the meaning of Section 412(a) of the
Code.
(k) LITIGATION. Except as described in Section 3.1(k) of the
Pioneer Disclosure Schedule, no claims have been asserted by written notice
to Pioneer and no relief has been sought against Pioneer or any of the Plans
in any pending litigation or governmental proceedings or otherwise. Pioneer
is not a party to any unsatisfied order, judgment or decree which is adverse
to Pioneer and Pioneer (i) is not the subject of any cease and desist order,
or other formal or informal enforcement action by any regulatory authority;
or (ii) has not made any commitment to or entered into any agreement with any
regulatory authority that restricts or adversely affects its operations or
financial condition. To the knowledge of Pioneer, there do not exist facts
that would reasonably be expected to give rise to a material claim against
Pioneer after the Closing Date.
(l) TAXES. Pioneer has filed all federal and state income tax
returns and all other returns with respect to any taxes, either federal,
state or local, which it is required to have filed; said returns have been
correctly and accurately prepared; all taxes reflected thereon have been paid
or adequately accrued for; no notice of any deficiency, assessments or
additions to tax have been received by Pioneer; Pioneer has not waived any
statute of limitations with respect to any taxes reflected on said returns;
and deferred taxes have been properly reflected on the Pioneer Statements.
Except as set forth in Section 3.1(l) of the Pioneer Disclosure Schedule,
there are no other taxes of any kind or character for which Pioneer is or may
be liable which are now past due, delinquent and/or unpaid.
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(m) TITLE TO PROPERTY. Pioneer has good and marketable title to
all material assets and properties, whether real or personal, that it
purports to own, including without limitation all real and personal assets
and properties reflected in its Financial Statement as of December 31, 1996,
or acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary course of
business since December 31, 1996) subject to no liens, mortgages, security
interests, encumbrances or charges of any kind, except (i) as noted in
subsequent Consolidated Reports of Income and Condition of Pioneer or the
Schedules thereto; (ii) statutory liens for taxes not yet delinquent; (iii)
security interests granted to secure deposits of funds by federal, state or
other governmental agencies; (iv) minor defects and irregularities in title
and encumbrances that do not materially impair the use thereof for the
purposes for which they are held by Pioneer as of the date hereof; and (v)
such liens, mortgages, security interests, encumbrances and charges that are
not in the aggregate material to the assets and properties of Pioneer.
(n) INSURANCE POLICIES. Pioneer has delivered to CFB true,
accurate and complete copies of all insurance policies of Pioneer as of the
date of this Agreement. Each such policy is in full force and effect, with
all premiums due thereon on or prior to the date of this Agreement having
been paid as and when due.
(o) PIONEER PROPERTY. All buildings, structures, fixtures, and
appurtenances comprising the premises of Pioneer are in good condition
subject to ordinary wear and tear. Except for the facts set forth in the
Assessment (as hereinafter defined), Pioneer is, and has been at all times,
in substantial compliance with all applicable Environmental Laws (as defined
below), and have not engaged in any activity resulting in a material
violation of any applicable Environmental Law. To the best knowledge of
Pioneer, there is no legal, administrative, or other proceeding, claim,
investigation (with respect to which Pioneer is aware), inquiry, order,
hearing or action of any nature seeking to impose, or that would reasonably
be expected to result in the imposition on Pioneer of any liability arising
from any violation of or obligation under any local, state or federal
environmental statute, regulation or ordinance including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("Environmental Laws"), pending or, to the knowledge of
Pioneer, threatened against Pioneer; and there is no reasonable basis for any
such proceeding, claim, investigation, inquiry, order, hearing or action; and
Pioneer is not subject to any agreement, order, judgment, or decree by or
with court, governmental authority or third party imposing any such
environmental liability. No claims have been made by any governmental
authority or third party against Pioneer during the past ten (10) years
relating to damage, contribution, cost recovery, compensation, loss or
inquiry resulting from any violation of or obligation under any Environmental
Laws.
(p) CONDUCT OF BUSINESS. Pioneer is in compliance in all material
respects with all laws, regulations and orders (including zoning ordinances)
applicable to it and to the conduct of its business, including without
limitation, all statutes, rules and regulations pertaining to the conduct of
its banking activities (including the exercise of fiduciary and trust
powers), except where the failure to comply would not reasonably be expected
to have a material adverse effect on Pioneer.
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(q) LOAN ALLOWANCE AND DOCUMENTATION. Pioneer's consolidated
allowance for losses on loans included in the Financial Statement as of June
30, 1997 was $510,000, representing .6% of its total consolidated loans held
in portfolio. The amount of such allowance for losses on loans was adequate
to absorb reasonably expectable losses in the loan portfolio of Pioneer. To
the knowledge of Pioneer, there are no facts which would cause it to increase
the level of such allowance for losses on loans. The loan portfolio of
Pioneer, as of June 30, 1997 in excess of such reserves is, to the best
knowledge and belief of the executive officers of Pioneer, after due inquiry
as to potential losses, and based on past loan loss experience, fully
collectible in accordance with the terms of the documentation relating to the
loans in such portfolio. The documentation relating to loans made by Pioneer
and relating to all security interests, mortgages and other liens with
respect to all collateral for such loans, taken as a whole, is adequate for
the enforcement of the material terms of such loans and of the related
security interests, mortgages and other liens. The terms of such loans and of
the related security interests, mortgages and other liens comply in all
material respects with all applicable laws, rules and regulations (including
laws, rules and regulations relating to the extension of credit). There are
no loans, leases, other extensions of credit or commitments to extend credit
of Pioneer that have been or should in accordance with generally acceptable
accounting principles, have been classified by Pioneer as nonaccrual, as
restructured, as 90 days past due, as still accruing and doubtful of
collection or any comparable classification. Pioneer has provided to CFB
true, correct and complete in all material respects such written information
concerning the its loan portfolio as CFB has requested.
(r) LEASES AND CONTRACTS. Except as described on Section 3.1(r)
of the Pioneer Disclosure Schedule, Pioneer is not a party to or bound by any
written or oral (i) lease or license with respect to any property, real or
personal, with a value in excess of $20,000, whether as a lessor, lessee,
licensor or licensee; (ii) contract or commitment for capital expenditures in
excess of $20,000 for any one project or $50,000 in the aggregate; (iii)
contract or commitment for total expenses in excess of $20,000 made in the
ordinary course of business for the purchase of materials, supplies, or for
the performance of services for a period of more than 180 days from the date
of this Agreement; or (iv) contract or option for the purchase or sale of any
real or personal property other than in the ordinary course of business (all
such agreements, contracts, and commitments collectively are herein referred
to as the "Material Contracts"). Neither Pioneer nor any affiliate has
entered into any written or oral broker agreement or understanding regarding
fees or commissions due upon a sale or transfer of control of Pioneer.
Pioneer has performed in all material respects all obligations required to be
performed by it to date, and is not in material default under, and no event
has occurred which, with the lapse of time or action by a third party, could
result in a material default under any of the Material Contracts to which
Pioneer is a party or by which Pioneer is bound. Each of the Material
Contracts is a valid and legally binding obligation of Pioneer and the other
party or parties thereto, subject to (i) all applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and (ii) the application of equitable principles
if equitable remedies are sought.
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(s) SHAREHOLDER LIST. Pioneer has furnished to CFB a current
shareholder list as of the date set forth therein that (i) sets forth the
record name and number of shares held by each holder of common stock of
Pioneer and (ii) identifies each shareholder who is an officer or director of
Pioneer.
(t) PRINCIPALS. No director or executive officer of Pioneer, nor
any holder of ten percent or more of the outstanding capital stock of
Pioneer, nor any affiliate of such person as that term is defined under 12
USC 371(c) ("Principal") (i) is or has during the period subsequent to
December 31, 1994, been a party (other than as a depositor) to any
transaction with Pioneer, whether as a borrower or otherwise, which (a) was
made other than in the ordinary course of business; (b) was made on other
than substantially the same terms, including interest rate and collateral, as
those prevailing at the time for comparable transactions for other persons;
or (c) involves more than the normal risk of collectibility or presents other
unfavorable features; or (ii) is a party to any loan or loan commitment,
whether written or oral, from Pioneer involving an amount in excess of
$10,000. Except as set forth in Section 3.1(t) of the Pioneer Disclosure
Schedule, no Principal holds any position with any depository organization
other than Pioneer. For the purposes of this provision, the term "depository
organization" means a commercial bank (including a private bank), a savings
bank, a trust company, a savings and loan association, a homestead
association, a cooperative bank, an industrial bank, a credit union, or a
depository holding company.
(u) INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Pioneer for inclusion or incorporation by reference in (i) the
"Registration Statement" (as hereinafter defined) will, at the time the
Registration Statement becomes effective under the Securities Act of 1993, as
amended (the "Securities Act"), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading and (ii) the "Prospectus-Proxy Statement"
(as hereinafter defined) and any amendment or supplement thereto will, at the
date of mailing to the Pioneer stockholders and at the times of the meeting
of stockholders of Pioneer to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. Pioneer will use its reasonable best efforts to cause
those portions of the Registration Statement supplied by Pioneer to comply in
all material respects with applicable law.
(v) AGREEMENTS WITH REGULATORS. Except as set forth in Section
3.1(v) of the Pioneer Disclosure Schedule, Pioneer: (i) is not a party to
any written agreement or memorandum of understanding with; (ii) is subject to
any order or directive by; (iii) is not subject to any extraordinary
supervisory letter from; or (iii) has not adopted any board resolutions at
the request of, federal or state governmental entities charged with the
supervision or regulation of banks or engaged in the insurance of bank
deposits ("Regulators"), nor has Pioneer been advised by any Regulator that
it is contemplating issuing or requesting any such order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar undertaking.
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3.2 REPRESENTATIONS AND WARRANTIES OF CFB. CFB represents and warrants to
Pioneer, in all material respects, as of the date of this Agreement (except as
otherwise expressly provided) as follows, except as disclosed on the attached
EXHIBIT C (the "CFB Disclosure Schedule") and the schedules thereunder which are
numbered to correspond to the representations set forth below:
(a) CFB ORGANIZATION. CFB is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
authorized capital stock consisting of 30,000,000 shares of common stock, par
value of $.01 per share, of which 18,672,914 shares were issued and outstanding
as of June 30, 1997 and 2,000,000 shares of preferred stock, none of which were
issued and outstanding as of June 30, 1997. CFB has all requisite power,
authority, charters, licenses and franchises necessary or required by law to
carry on the business activity in which it is presently engaged. CFB is
registered as a corporation under Section 1841 of Title 12, United States Code,
as amended (the "Bank Holding Company Act").
(b) REPORTS. CFB and each of its subsidiary banks and nonbanking
corporations (the "CFB Subsidiaries") have filed all reports, registrations and
statements, together with any required amendments thereto, that they were
required to file with (i) the Securities and Exchange Commission ("SEC"),
including, but not limited to, Forms 10-K, Forms 10-Q and proxy statements,
(ii) the Federal Reserve Board, (iii) the FDIC, (iv) the Comptroller and (v) any
applicable state securities or banking authorities. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the "CFB Reports." As of their respective dates, the
CFB Reports complied in all material respects with all the rules and regulations
promulgated by the SEC, the Federal Reserve Board, the FDIC, the Comptroller and
any applicable state securities or banking authorities, as the case may be, and
did not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. CFB has timely filed with the SEC all reports, statements and forms
required to be filed pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(c) ENFORCEABILITY. The execution, delivery and performance of this
Agreement by CFB and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors of CFB. Subject to approval
by the government agencies and other governing bodies having regulatory
authority over CFB as may be required by statute or regulation, this Agreement
constitutes a valid and binding obligation of CFB, enforceable against it in
accordance with its terms. This Agreement does not require the approval of CFB
shareholders.
(d) NO DEFAULT; CREATION OF LIENS. Neither the execution and
delivery of this Agreement nor the consummation of the transaction contemplated
hereby will conflict with, result in the breach of, constitute a default under
or accelerate the performance provided by the terms of any judgment, order or
decree of any court or other governmental agency to which CFB or any of the CFB
Subsidiaries may be subject, or any contract, agreement or instrument to
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which CFB or any of the CFB Subsidiaries is a party or by which CFB or any of
the CFB Subsidiaries is bound or committed, or the Articles of Incorporation
or Bylaws of CFB, or constitute an event that, with the lapse of time or
action by a third party, could result in a default under any of the foregoing
or result in the creation of any lien, charge or encumbrance upon the CFB
Common Stock or the capital stock of any of the CFB Subsidiaries.
(e) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by CFB or the CFB Subsidiaries for inclusion or incorporation by
reference in (i) the Registration Statement will, at the time the Registration
Statement becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading and (ii) the
Prospectus-Proxy Statement and any amendment or supplement thereto will, at the
date of mailing to Pioneer stockholders and at the times of the meetings of
stockholders of Pioneer to be held in connection with the Merger, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading. The Registration Statement will comply as to form in all material
respects with applicable law.
(f) NO PLAN TO TRANSFER ASSETS. CFB has no plan or intention to sell
or otherwise dispose of any of the assets of Pioneer to be acquired in the
Merger, except for dispositions in the ordinary course of business or transfers
to controlled subsidiaries as described in Section 368(a)(2)(C) of the Code.
ARTICLE 4
COVENANTS OF PIONEER AND CFB
4.1 COVENANTS OF PIONEER. During the period from the date of this
Agreement and continuing until the Effective Time, Pioneer agrees as follows:
(a) ORDINARY COURSE. Except as otherwise required under this
Agreement or by CFB, Pioneer shall carry on its business in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted and
use all reasonable efforts to preserve intact its present business organization,
maintain its rights and franchises and preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
their goodwill and ongoing businesses shall not be impaired in any material
respect. Pioneer shall not (i) enter into any new material line of business,
(ii) increase or decrease the current number of the directors of Pioneer, (iii)
change its lending, investment, liability management or other material banking
policies in any respect that is material to such party; or (iv) incur or commit
to any capital expenditures (or any obligations or liabilities in connection
therewith) other than capital expenditures (and obligations or liabilities in
connection therewith) incurred or committed to in the ordinary course of
business consistent with past practices. Any and all transaction costs incurred
by Pioneer, including legal, accounting and other professional fees and costs,
shall be based solely upon usual and customary rates and charges.
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(b) SHAREHOLDER MEETING. Pioneer will cause to be duly called, and
will cause to be held not later than forty-five (45) days following the
effective date of the Registration Statement, a meeting of its shareholders and
will direct that this Agreement be submitted to a vote at such meeting. Pioneer
will (i) cause proper notice of such meeting to be given to its shareholders in
compliance with the Colorado Act and other applicable laws and regulations;
(ii) recommend by the affirmative vote of a majority of the Board of Directors a
vote in favor of approval of this Agreement; and (iii) use its best efforts to
solicit from its shareholders proxies in favor thereof.
(c) REGISTRATION STATEMENT. Pioneer will furnish or cause to be
furnished to CFB all of the information concerning Pioneer required for
inclusion in, and will cooperate with CFB in the preparation of, the
Registration Statement and Prospectus-Proxy Statement (including audited
financial statements, prepared in accordance with generally accepted accounting
principles, in form suitable for inclusion in the Registration Statement and
Prospectus-Proxy Statement), or any statement or application made by CFB to any
governmental body in connection with the Merger. Pioneer agrees promptly to
advise CFB if at any time prior to the Effective Date of the Merger, any
information provided by or on behalf of Pioneer becomes incorrect or incomplete
in any material respect and to provide the information needed to correct such
inaccuracy or omission.
(d) CONFIDENTIAL INFORMATION. Pioneer will hold in confidence all
documents and nonpublic information concerning CFB and the CFB Subsidiaries
furnished to Pioneer and its representatives in connection with the Merger and
will not release or disclose such information to any other person, except as
required by law and except to Pioneer's outside professional advisers in
connection with this Agreement, with the same undertaking from such professional
advisers. If the Merger contemplated by this Agreement shall not be
consummated, such confidence shall be maintained and such information shall not
be used in competition with CFB (except to the extent that such information can
be shown to be previously known to Pioneer, in the public domain, or later
acquired by Pioneer from other legitimate sources) and, upon request, all such
documents, any copies thereof and extracts therefrom shall immediately
thereafter be returned to CFB.
(e) BENEFIT PLANS. Pioneer will, to the extent legally permissible,
take all action necessary or required (i) to terminate or amend, if requested by
CFB and at CFB's cost, all qualified pension and welfare benefit plans and all
non-qualified benefit plans and compensation arrangements as of the Effective
Time; (ii) to amend the Plans to comply with the provisions of the Tax Reform
Act of 1986, as amended, and regulations thereunder and other applicable law as
of the Effective Time; and (iii) to submit application to the Internal Revenue
Service for a favorable determination letter for each of the Plans which is
subject to the qualification requirements of Section 401(a) of the Code prior to
the Effective Time.
Except as set forth in Section 3.1(j) of the Pioneer Disclosure
Schedule, and except as otherwise required pursuant to this Section 4.1(e),
Pioneer agrees that it will not, without the prior written consent of CFB, (i)
enter into, adopt, amend (except as may be required by law) or terminate any
Plan, as the case may be, or any other employee benefit plan or any agreement,
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arrangement, plan or policy between Pioneer and one or more of its directors or
officers; provided, however, that Pioneer may amend any of the Plans to reduce
or eliminate a requirement of mandatory periodic contributions provided that if
any of the Plans do not have assets with an aggregate value that exceeds the
present value of its liability for accrued benefits, all as determined on a
termination basis, then Pioneer shall accrue on its Determination Date Financial
Statements the amount by which any of the Plans are underfunded; (ii) except for
normal increases in the ordinary course of business consistent with past
practice that in the aggregate do not result in aggregate annual base
compensation expense to Pioneer in excess of 105% of that in effect as of June
30, 1997, increase in any manner the compensation of any director, officer, or
employee, or pay any benefit not required by any plan and arrangement as in
effect as of the date hereof (including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock, restricted stock
units or performance units or shares) or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing; or (iii) enter into or
renew any contract, agreement, commitment or arrangement providing for the
payment to any director, officer or employee of Pioneer of compensation or
benefits contingent, or the terms of which are materially altered, upon the
occurrence of the Merger.
(f) NO SOLICITATIONS. Pioneer shall not authorize or permit any of
its officers, directors or employees or any investment banker, financial
advisor, attorney, accountant or other representative or agent retained by it to
solicit, or take any other action to facilitate, any inquiries or the making of
any proposal which constitutes, or may reasonably be expected to lead to, any
takeover proposal (as defined below), or agree or endorse any takeover proposal,
or participate in any discussions or negotiations, or provide third parties with
any nonpublic information, relating to any such inquiry or proposal. Pioneer
shall promptly advise CFB orally and in writing of any such inquiries or
proposals, including all of the material terms thereof. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving Pioneer or
any proposal or offer to acquire in any manner a substantial equity interest in,
or a substantial portion of the assets of Pioneer other than the transactions
contemplated or permitted by this Agreement.
(g) NO ACQUISITIONS. Other than (i) acquisitions described in
Section 4.1(g) of the Pioneer Disclosure Schedule, as the case may be, or
(ii) acquisitions which may be mutually agreed to by the parties, Pioneer shall
not acquire or agree to acquire, by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or division thereof or otherwise acquire or agree to acquire any
substantial amount of assets in each case; PROVIDED, however, that the foregoing
shall not prohibit (i) foreclosures and other acquisitions related to previously
contracted debt, in each case in the ordinary course of business, or (ii)
acquisitions of assets in each case in the ordinary course of business.
(h) INSURANCE. Pioneer shall maintain the insurance coverage (or
coverage of a like kind and amount) referenced in Section 3.1(o) through the
Effective Time.
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(i) POOLING RESTRICTIONS. From and after the date of this Agreement,
Pioneer shall not take any action which would disqualify the Merger as a
"pooling of interests" for accounting purposes.
(j) FINANCIAL STATEMENTS. Pioneer shall have prepared, filed and
submitted to CFB all quarterly and management prepared financial statements for
any periods ending at least 30 days before the Closing Date.
(k) ADDITIONAL COVENANTS OF PIONEER. From the date of this Agreement
to the Closing Date or the earlier termination of this Agreement, Pioneer,
EXCEPT WITH THE PRIOR WRITTEN CONSENT OF CFB (except as otherwise specifically
provided in clauses (xiv) and (xv) of this Section 4.1(k)), or as specifically
required under the Agreement, shall not, nor shall it allow the Bank to:
(i) Except as set forth in Section 4.1(g) of the Pioneer
Disclosure Schedule, issue, sell or commit to issue or sell any shares
of capital stock of Pioneer, securities convertible into or
exchangeable for capital stock of Pioneer, warrants, options or other
rights to acquire such stock, or enter into any agreement with respect
to the foregoing;
(ii) Redeem, purchase or otherwise acquire (except for trust
account shares) directly or indirectly, any shares of capital stock of
Pioneer or any securities convertible or exercisable for any shares of
capital stock of Pioneer;
(iii) Split, combine or reclassify any of capital stock of
Pioneer or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of, or in substitution for shares of
capital stock of Pioneer;
(iv) Borrow, assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other
individual, corporation or other entity, in any material amount;
(v) Other than in the ordinary course of business, discharge or
satisfy any material lien or encumbrance on the properties or assets
of Pioneer or pay any material liability;
(vi) Mortgage, pledge or subject to any lien or other encumbrance
any of its assets, except (A) in the ordinary course of business, (B)
liens and encumbrances for current property taxes not yet due and
payable, and (C) liens and encumbrances which do not materially affect
the value or interfere with the current use or ability to convey the
property subject thereto or affected thereby;
(vii) Sell, assign or transfer any tangible or intangible assets
with a book value greater than $10,000, except in the ordinary course
of business;
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(viii) Enter into any individual employment, agency or other
contract or arrangement for the performance of personal services for
an amount in excess of $10,000 (except for service agreements in the
ordinary course of business);
(ix) Amend Pioneer's Articles of Incorporation, Bylaws or other
governing documents;
(x) Fail to maintain a reserve for loss and cost associated with
those litigation matters reflected in Section 3.1(k) of the Pioneer
Disclosure Schedule to the extent required by generally accepted
accounting principles;
(xi) Cancel any material debt or claim or waive any right of
material value, except in the ordinary course of business;
(xii) Repurchase or enter into any agreement to repurchase all or
any portion of any loan previously participated to any other financial
institution other than loans repurchased in compliance with all
applicable laws and regulations;
(xiii) Originate any loan which is thereafter participated to
another financial institution providing for payment upon default on
any basis other than pro rata;
(xiv) Make or commit to make any further advances on any loan
which is either in default or classified, whether such classification
is a result of a federal or state bank regulatory examination or
internal classification of substandard or lower by Pioneer's officers
or directors, unless Pioneer is under a legal obligation to do so;
(xv) (A) make, or agree to make, any fully secured loan or
increase any existing fully secured loan for an amount in excess of
$500,000, to any one borrower, unless said loan is made pursuant to a
properly documented and legally enforceable commitment of Pioneer to
the borrower made prior to the date of this Agreement; (B) make, or
agree to make, any unsecured loan or increase any unsecured loan by
$50,000 or more, unless said loan is made pursuant to a properly
documented and legally enforceable commitment of Pioneer to the
borrower made prior to the date of this Agreement; (C) make, or agree
to make any new loan or advance on any existing loan, except in
conformity with Pioneer's current loan policies; or (D) make any
change with respect to the terms of any existing loan, except in the
ordinary course of business (the provisions of parts A and B of this
section shall not apply to renewals of existing loans, advances under
existing loans or increases to existing loans for an amount below the
applicable limit set forth in parts A and B);
(xvi) Make or agree to make any loan to any Bank principal or any
person, corporation or entity in violation of any state or federal law
or regulation;
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(xvii) Incur any obligation or liability with respect to capital
expenditures which exceeds $10,000 for any single matter or $50,000 in
the aggregate, except for capital expenditures described in Section
3.1(s) of the Pioneer Disclosure Schedule;
(xviii) Fail to timely pay and discharge all federal and state
taxes and other accounts payable for which it is liable, provided,
that Pioneer may deposit an amount equal to any such taxes, in lieu of
the payment thereof, into a reserve account, determined consistently
with prior practices, from which such taxes will be paid when and to
the extent they are found to be properly due and payable;
(xix) Except in accordance with (i) compensation schedules and
Plans in effect on June 30, 1997 and (ii) special compensation and
bonus arrangements which shall be fully accrued for on the
Determination Date, pay or commit to pay any additional salary or
other compensation to any of Pioneer's officers, directors or
employees;
(xx) Except as otherwise required pursuant to Section 4.1(e),
enter into, adopt, amend (except as may be required by law), terminate
or make or grant any increase above current funding levels in any of
the Plans (other than normal premium increases on current health care
insurance) or arrangement;
(xxi) Purchase or sell any bonds or other investment securities
prior to maturity without prior written consent of CFB or make or
agree to make any investment in violation of any federal law or
regulation except that Pioneer may purchase U.S. Treasury or Agencies
securities with maturity dates of 36 months or less;
(xxii) Fail to charge and pay interest rates on loans and
deposits, respectively, not materially consistent with practices in
Pioneer's marketplace;
(xxiii) Fail to use its reasonable best efforts to comply with
any law, rule, regulation or order applicable to Pioneer if such
failure would have a material adverse effect upon Pioneer;
(xxiv) Fail to make all appropriate and required transfers to
Pioneer's loan loss reserves based upon its existing policies or at
the request of any regulatory agency;
(xxv) Change any accounting methods, practices or procedures with
respect to the accumulation and presentation of financial information,
except as directed by applicable law or regulation or to conform with
accounting standards;
(xxvi) Declare or pay any dividends or distributions with respect
to its stock after the Determination Date; or
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(xxvii) Fail to use its reasonable best efforts to obtain the
consent or approval of each person (other than the government
authorities referred to in Section 6.1(c)) whose consent or approval
is required in order to permit a succession by the Surviving
Corporation pursuant to the Merger to any obligation, right or
interest of Pioneer under any loan or credit agreement, note,
mortgage, indenture, lease, license or other agreement or instrument.
4.2 COVENANTS OF CFB. During the period from the date of this Agreement
and continuing until the Effective Time, CFB agrees as follows:
(a) ORDINARY COURSE. Except as set forth in Section 4.2(a) of the
CFB Disclosure Schedule, CFB shall carry on its business in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted.
(b) APPLICATION. Subject to the required cooperation of Pioneer and
its affiliates, CFB shall use its reasonable best efforts to prepare and submit
within thirty (30) days of the date hereof an application to the Office of the
Comptroller of the Currency for approval of the proposed transaction, and to
prosecute all required federal and state applications.
(c) COOPERATION. CFB will furnish to Pioneer all the information
concerning CFB required for inclusion in, and will cooperate in the preparation
of, the Prospectus-Proxy Statement to be sent to the shareholders of Pioneer.
CFB agrees promptly to advise Pioneer if at any time prior to the Effective Date
of the Merger, any information provided by CFB in the Prospectus-Proxy Statement
becomes incorrect or incomplete in any material respect and to provide the
information needed to correct such inaccuracy or omission.
(d) REGISTRATION STATEMENT. As promptly as practicable after the
execution of this Agreement, CFB will file with the SEC appropriate documents
required under the Securities Act to register the exchange of CFB Common Stock
for Pioneer Common Stock, and will use its best efforts to cause any
registration statement or other filing to become effective under the Securities
Act and applicable state securities laws as soon as practicable. CFB shall
advise Pioneer promptly when such registration statement has become effective
with respect to this transaction and of any supplements or amendments thereto,
and CFB shall furnish Pioneer with copies of all such documents. At the time
such registration statement becomes effective, the Prospectus-Proxy Statement
will comply in all material respects with the provisions of the Securities Act
and the published rules and regulations thereunder, and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they are made, not misleading. At the
time of mailing thereof to the Pioneer shareholders, at the time of the Pioneer
shareholders' meeting referred to in Section 4.1(b) hereof and at the Effective
Time of the Merger, the Prospectus-Proxy Statement included as part of such
registration statement or any amendment thereof or supplement thereto, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements contained therein, in light of the
circumstances under which they are made, not misleading or omit to state a
material fact
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necessary to correct any statement in any earlier communication with respect
to the solicitation of any proxy for the Pioneer shareholders' meeting;
PROVIDED, HOWEVER, that none of the provisions of this subparagraph shall
apply to statements in or omissions from such registration statement or any
amendment or supplement thereto or the Prospectus-Proxy Statement made in
reliance upon and in conformity with information furnished by Pioneer or the
Bank for use in such registration statement or the Prospectus-Proxy
Statement. CFB shall bear the costs of all SEC filing fees with respect to
such registration statement, the costs of printing the Prospectus-Proxy
Statement, and the costs of qualifying the shares of CFB Common Stock under
state blue sky laws as necessary.
(e) LISTING. CFB will file all documents required to be filed to
obtain approval for listing the CFB Common Stock to be issued pursuant to the
Merger on the Nasdaq Market System and use its best efforts to effect said
listing.
(f) SHARES TO BE ISSUED. The shares of CFB Common Stock to be issued
by CFB to the shareholders of Pioneer pursuant to this Agreement will, upon such
issuance and delivery to said shareholders pursuant to the Agreement, be duly
authorized, validly issued, fully paid and nonassessable. The shares of CFB
Common Stock to be delivered to the shareholders of Pioneer pursuant to this
Agreement are and will be free of any preemptive rights of the stockholders of
CFB.
(g) BLUE SKY. CFB will file all documents required to obtain prior
to the Effective Time of the Merger all necessary Blue Sky permits and
approvals, if any, required to carry out the transactions contemplated by this
Agreement, will pay all expenses incident thereto and will use its best efforts
to obtain such permits and approvals.
(h) CONFIDENTIAL INFORMATION. CFB will hold in confidence all
documents and information concerning Pioneer furnished to it and its
representatives in connection with the transactions contemplated by this
Agreement and will not release or disclose such information to any other person,
except as required by law and except to its outside professional advisers in
connection with this Agreement, with the same undertaking from such professional
advisers. If the transactions contemplated by this Agreement shall not be
consummated, such confidence shall be maintained and such information shall not
be used in competition with Pioneer (except to the extent that such information
can be shown to be previously known to CFB, in the public domain, or later
acquired by CFB from other legitimate sources) and, upon request, all such
documents, copies thereof or extracts therefrom shall immediately thereafter be
returned to Pioneer.
(i) REGISTRATION STATEMENT. CFB will furnish or cause to be
furnished all of the information concerning CFB and the CFB Subsidiaries
required for inclusion in, and will cooperate with Pioneer in the preparation of
any registration statement or amendment or supplement thereto, or any statement
or application made by Pioneer to any governmental body in connection with the
transactions contemplated by this Agreement. CFB agrees to advise
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Pioneer if at any time prior to the Effective Time, any information provided
by or on behalf of CFB becomes incorrect or incomplete in any material
respect and to provide the information needed to correct such inaccuracy or
omission.
4.3 COVENANTS OF PIONEER AND CFB. During the period from the date of this
Agreement and continuing until the Effective Time, Pioneer and CFB agree as to
themselves and their subsidiaries that, except as expressly contemplated or
permitted by this Agreement, or to the extent that the parties shall otherwise
consent in writing:
(a) GOVERNING DOCUMENTS. No party shall amend its Certificate or
Articles of Incorporation or Bylaws.
(b) OTHER ACTIONS. Unless such action is required by law or sound
banking practice, no party knowingly and intentionally shall, or shall permit
any of its subsidiaries to, take any action that (i) is intended to result in
any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect, or in any of the conditions to the
Merger set forth in Article VI not being satisfied or in a violation of any
provision of this Agreement, or (ii) would adversely affect the ability of any
of them to obtain any of the Requisite Regulatory Approvals (as defined in
Section 5.1(b)) without imposition of a condition or restriction of the type
referred to in Section 6.1(f) hereof except, in every case, as may be required
by applicable law or this Agreement.
(c) ADVICE OF CHANGES; GOVERNMENT FILINGS. Each party shall promptly
advise the other orally and in writing of any change or event constituting a
material breach of any of the representations, warranties or covenants of such
party contained herein. CFB shall file all reports required to be filed by it
with the SEC between the date of this Agreement and the Effective Time and shall
deliver to Pioneer copies of all such reports promptly after the same are filed.
CFB, Pioneer and each subsidiary of CFB that is a bank shall file all
Consolidated Reports of Income and Condition with the appropriate bank
regulators and all other reports, applications and other documents required to
be filed with the appropriate bank regulators between the date hereof and the
Closing Date and shall make available to the other party copies of all such
reports promptly after the same are filed.
(d) TITLE OF PROPERTY. Pioneer agrees to deliver to CFB (at
Pioneer's expense) within 30 days of the date hereof, a title insurance
commitment for all real property owned by Pioneer in the State of Colorado
(other than property held as OREO) (the "Title Opinions"). CFB shall have 15
days after receipt by CFB's counsel of said Title Opinions within which to
notify Pioneer, in writing, of CFB's objection to any exceptions (other than any
exception of the type described in Section 3.1(m)(i) through (iv)) to the title
shown in said Title Opinions. In the event of any such objection, then Pioneer
shall have 30 days from the date of such objection within which to attempt to
eliminate such objected to exceptions to title from the Title Opinions. In the
event such objected to exceptions are not eliminated or satisfied to the
reasonable satisfaction of CFB, CFB may terminate this Agreement pursuant to
Section 7.1 hereof and such
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termination shall be the sole and exclusive remedy for the failure to
eliminate or satisfy such exceptions..
(e) ENVIRONMENTAL ASSESSMENT. Pioneer shall engage at its expense an
independent, qualified environmental engineering firm, acceptable to CFB, for
the purpose of conducting a Phase I Hazardous Waste Assessment (the
"Assessment") of all real properties owned or controlled by Pioneer. The
Assessment shall satisfy ASTM's E-1527 Standard Practice and shall include a
record review of publicly available federal, state and local sources of
environmental records. The Assessment shall be completed within thirty (30)
days after the date hereof. CFB shall have a period of fifteen (15) days from
the date of receipt of such Assessment to review such Assessment and give
written notice to Pioneer stating either that (i) such Assessment is approved by
CFB or (ii) such Assessment is not approved by CFB and the reasons therefor.
If CFB gives a notice pursuant to (ii) above which sets forth specific
objections to the Assessment, then CFB may, at its option, terminate this
Agreement as of the date which is sixty (60) days after the date of such notice
unless during such sixty (60) day period Pioneer corrects or satisfies such
objections, or indemnifies CFB against loss, liability or expense, to the
reasonable satisfaction of CFB.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 REGULATORY MATTERS.
(a) CFB shall use its reasonable best efforts to have any
registration statement or amendment or supplement thereto declared effective
under the Securities Act as promptly as practicable after such filing, and,
following the respective record dates for the stockholder meeting of Pioneer,
thereafter mail the Prospectus-Proxy Statement to the stockholders of Pioneer.
(b) The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications, notices, petitions, filings
and other documents, and to obtain as promptly as practicable all necessary
permits, consents, and authorizations of all governmental entities necessary to
consummate the Merger ("Requisite Regulatory Approvals"). Pioneer and CFB shall
have the right to review in advance, and to the extent practicable each will
consult the other on, subject to applicable laws relating to the exchange of
information, all the information relating to Pioneer or CFB, as the case may be,
and any of their respective subsidiaries, which appear in any filing made with,
or written materials submitted to any governmental entity in connection with the
Merger. In exercising the foregoing right, each of the parties hereto shall act
reasonably and as promptly as practicable.
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(c) Pioneer and CFB shall promptly furnish each other with copies of
written communications received by Pioneer or CFB, as the case may be, or any of
their respective Subsidiaries, Affiliates or Associates (as such items are
defined in Rule 12b-2 under the Exchange Act as in effect on the date hereof)
from, or delivered by any of the foregoing to, any governmental entity in
respect of the Merger.
5.2 LETTERS OF FINANCIAL OFFICERS. Pioneer shall cause to be delivered to
CFB a letter of Pioneer's chief financial officer in substantially the form
shown on EXHIBIT 5.2A dated (i) the date on which the Registration Statement
shall become effective and (ii) the business day prior to the Closing Date, and
addressed to CFB.
CFB shall cause to be delivered to Pioneer a letter of CFB's chief
financial officer in substantially the form shown on EXHIBIT 5.2B dated (i) the
date on which the Registration Statement shall become effective and (ii) the
business day prior to the Closing Date, and addressed to Pioneer.
5.3 ACCESS TO INFORMATION. Upon reasonable notice and subject to
applicable laws relating to the exchange of information, Pioneer and CFB shall
each (and cause each of its subsidiaries to) afford to the officers, employees,
accountants, counsel and other representatives of CFB, access during normal
business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records for the purpose of
updating any review of such items performed prior to the date of this Agreement
and, during such period, Pioneer and CFB shall (and shall cause each of its
subsidiaries to) make available to the other: (a) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal or state securities
laws or federal or state banking laws (other than reports or documents which
either party is not permitted to disclose under applicable law); and (b) all
other information concerning its business, properties and personnel as either
party may reasonably request. It is the intention of the parties that CFB shall
conduct an examination of Pioneer prior to the Closing Date in order to confirm
compliance with the representations, warranties and covenants set forth in this
Agreement. No investigation by either party shall affect the representations
and warranties set forth herein.
5.4 AFFILIATES. Each of Pioneer and CFB shall use its reasonable best
efforts to cause each director, executive officer and other person who is an
"affiliate" (for purposes of Rule 145 under the Securities Act) of Pioneer or
CFB to deliver to the other party hereto, as soon as practicable after the date
hereof, and at least 32 days prior to the Closing Date, a written agreement
substantially in the form of EXHIBIT 5.5.
5.5 EMPLOYEE BENEFIT PLANS. Each person who is an employee of Pioneer
as of the Effective Time ("Employees") shall be participants in the employee
welfare plans, and shall be eligible for participation in the pension plans
of CFB, as in effect from time to time, subject to any eligibility
requirements (with full credit for years of past service to Pioneer, or to
any predecessor-in-interest of Pioneer to the extent such service is
presently given credit under the Plans described in Section 3.1(j) hereof,
for the purpose of satisfying any eligibility and vesting
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periods) applicable to such plans (but not subject to any pre-existing
condition exclusions) and shall enter each welfare plan immediately after the
Effective Time and shall enter each pension plan not later than the first day
of the calendar quarter which begins at least 32 days after the Effective
Time. For the purpose of determining each Employee's benefit for the year in
which the Merger occurs under the CFB vacation program, vacation taken by an
Employee in the year in which the Merger occurs will be deducted from the
total CFB benefit. Each Employee shall be eligible for participation, as a
new employee with the credit for past service described above, in the CFB
Plans under the terms thereof.
5.6 EXPENSES. Except as otherwise stated herein, whether or not the
Merger is consummated, all costs and expenses incurred in connection with
this Agreement, and the transactions contemplated hereby shall be paid by the
party incurring such expense, except as may be permitted by Section 7.2. All
of the expenses (including but not limited to professional fees) incurred or
to be incurred by Pioneer in connection with the Merger shall be accrued as
expenses on the Determination Date Balance Sheet.
5.7 ADDITIONAL AGREEMENTS; BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take all action and to do all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, cooperating fully with the other party hereto, providing
the other party hereto with any appropriate information and making all
necessary filings in connection with the Requisite Regulatory Approvals.
ARTICLE 6
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction prior to the Effective Time of the following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been approved
and adopted by the affirmative vote of the holders of a majority of the
outstanding shares of Pioneer Common Stock entitled to vote thereon.
(b) NASDAQ MARKET SYSTEM LISTING. The shares of CFB Common Stock
issuable to the Pioneer stockholders pursuant to this Agreement shall have
been approved for listing on the Nasdaq Market System upon notice of issuance.
(c) OTHER APPROVALS. Other than the filing provided for by
Section 1.1, all consents, orders or approvals of, or declarations or filings
with, and all expirations of waiting periods imposed by, any governmental
entity (collectively, the "Consents") which are prescribed
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by law as necessary for the consummation of the Merger and the other
transactions contemplated hereby (other than immaterial Consents) shall have
been filed, occurred or been obtained and all such Requisite Regulatory
Approvals shall be in full force and effect.
(d) REGISTRATION STATEMENT. The registration statement or
amendment or supplement thereto shall have become effective under the
Securities Act and no stop order suspending such effectiveness shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No order,
injunction or decree issued by any court or agency of competent jurisdiction
or other legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger or any of the transactions contemplated hereby
shall be in effect, nor shall any proceeding by any governmental entity
seeking any such Injunction be pending. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, or enforced by any
governmental entity which prohibits, restricts or makes consummation of the
Merger illegal.
(f) NO UNDULY BURDENSOME CONDITION. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced
or deemed applicable to the Merger or any of the transactions contemplated
hereby, by any federal or state governmental entity which, in connection with
the grant of a Requisite Regulatory Approval, imposes any condition or
restriction upon CFB or any of its Subsidiaries which would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement as to render inadvisable, in the reasonable
business judgment of the Board of Directors of CFB; the consummation of the
Merger.
6.2 CONDITIONS TO OBLIGATIONS OF CFB. The obligation of CFB to effect
the Merger is also subject to the satisfaction or waiver by CFB prior to the
Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Pioneer set forth in this Agreement shall be true and correct
in all material respects as of the date of the Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on the Closing Date, except where the failure
to be true and accurate in all material respects would not have or would not
be reasonably expected to have a material adverse effect on Pioneer, and CFB
shall have received a certificate signed on behalf of Pioneer by the
President of Pioneer to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PIONEER. Pioneer shall have
performed in all materials respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and CFB shall
have received a certificate signed on behalf of Pioneer by the President of
Pioneer to such effect.
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(c) MINIMUM PIONEER VALUE. The Value of Pioneer as of the
Determination Date shall not be less than $8,100,000. The confirmation of
the minimum Pioneer Value shall be made pursuant to the procedures set forth
in Section 1.4.
(d) SUPPLEMENT TO LOAN LOSS RESERVE. The Pioneer loan loss
reserve shall have been supplemented by a transfer of $400,000 on or before
the Determination Date, and reflected in the Determination Date financial
statements and the calculation of Pioneer Value, in accordance with the
procedures set forth in Section 1.4.
(e) POOLING LETTER. CFB shall have received a letter from Ernst &
Young, in form and substance reasonably satisfactory to CFB, approving the
accounting treatment of the Merger as a "pooling of interests" in accordance
with generally accepted accounting principles, as of a date no more than five
business days prior to the Closing Date; in support of the Ernst & Young
pooling letter, Ernst & Young and CFB shall have received a letter from
Pioneer's accountants, in form and substance reasonably satisfying to Ernst &
Young, confirming certain facts on behalf of Pioneer. Without limiting the
foregoing, it shall be a condition of receipt of such pooling letter that
James O. Haas shall refinance that certain outstanding loan secured by stock
of Pioneer with a bank not affiliated with CFB.
(f) LEGAL OPINION. CFB shall have received the opinion of Thomas
L. Beckmann, counsel to Pioneer, dated the Closing Date, in substantially the
form shown on Exhibit 6.2, and such opinion shall not have been withdrawn
prior to the Effective Time.
6.3 CONDITIONS TO OBLIGATIONS OF PIONEER. The obligation of Pioneer to
effect the Merger is also subject to the satisfaction or waiver by Pioneer
prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of CFB set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on the Closing Date, except as otherwise
contemplated by this Agreement, and Pioneer shall have received a certificate
signed on behalf of CFB by the Chairman and Chief Executive Officer of CFB to
such effect.
(b) PERFORMANCE OF OBLIGATIONS OF CFB. CFB and the Acquisition
Subsidiary shall have performed in all material respects all obligations
required to be performed by either of them under this Agreement at or prior
to the Closing Date, and Pioneer shall have received a certificate signed on
behalf of CFB and the Acquisition Subsidiary by the Chairman and Chief
Executive Officer of CFB to such effect.
(c) CONSENTS UNDER AGREEMENTS. CFB shall have obtained the
consent or approval of each person (other than the governmental entities
referred to in Section 6.1(c)) whose consent or approval shall be required in
connection with the transactions contemplated hereby under any
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loan or credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument to which CFB or any of its subsidiaries is a party or
is otherwise bound, except those for which failure to obtain such consents
and approvals would not, in the reasonable opinion of Pioneer, individually
or in the aggregate, have a material adverse effect on CFB or upon the
consummation of the transactions contemplated hereby.
(d) TAX OPINION. Pioneer shall have received the opinion of Kane
& Associates, P. C., advisors to Pioneer, dated the Closing Date, to the
effect that (i) the Merger will be treated for Federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code, (ii) CFB
and Pioneer will each be a party to that reorganization within the meaning of
Section 368(b) of the Code, (iii) shareholders of Pioneer who exchange their
shares of Pioneer Common Stock for shares of CFB Common Stock will not
recognize gain or loss, for purposes of federal income tax, except to the
extent of the cash received in lieu of fractional shares, and (iv) Pioneer
will not recognize gain or loss, for purposes of federal income tax, as a
result of consummation of the Merger.
(e) LEGAL OPINION. Pioneer shall have received the opinion of
Lindquist and Vennum, P.L.L.P., counsel to CFB, dated the Closing Date, in
substantially the form shown on Exhibit 6.3, and such opinion shall not have
been withdrawn prior to the Effective Time.
(f) EMPLOYMENT AGREEMENT. Daniel L. Allen and CFB shall have
entered into an Employment Agreement, for a term of two (2) years beginning
the Effective Time, providing for payment of base salary no less in amount
than that currently due and providing for benefits comparable to those
currently enjoyed. Mr. Allen shall be eligible for participation in CFB's
Annual Incentive Plan for executive officers.
ARTICLE 7
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated in writing at any
time prior to the Effective Time, whether before or after approval of the
Merger by the stockholders of Pioneer or CFB, only in the following
circumstances:
(a) by mutual consent of CFB and Pioneer in a written instrument,
if the Board of Directors of each so determines by a vote of a majority of
the members of its entire Board;
(b) by either CFB or Pioneer if (i) any Requisite Regulatory
Approval shall have been denied; or (ii) any governmental entity of competent
jurisdiction shall have issued a final nonappealable order enjoining or
otherwise prohibiting the consummation of the transactions contemplated by
this Agreement;
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(c) by either CFB or Pioneer if the Merger shall not have been
consummated on or before March 1, 1998, unless the failure of consummation
shall be due to the failure of the party seeking to terminate to perform or
observe in all material respects the covenants and agreements hereunder to be
performed or observed by such party; or
(d) by either CFB or Pioneer if there shall have been a material
breach of any of the covenants or agreements set forth in this Agreement on
the part of the other party, which breach shall not have been cured before
closing or within twenty (20) business days following receipt by the
breaching party of written notice of such breach from the other party,
whichever occurs first.
(e) by Pioneer if the CFB Trading Value shall be less than $46.00;
(f) by CFB pursuant to the terms of Section 4.3(d) or 4.3(e), as
applicable.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either CFB or Pioneer as provided in Section 7.1, this Agreement
shall forthwith become void and have no effect except that the obligations
under Sections 4.1(d), 4.2(h), 5.6, and 7.2 shall survive termination of this
Agreement; provided, however, that no party shall be relieved or released
from any liabilities or damages arising out of the willful breach by such
party of any provision of this Agreement.
7.3 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of Pioneer, provided, however, that after any
such approval, no amendment shall be made which by law requires further
approval by such stockholders, without such further approval. This Agreement
may not be amended except by an instrument in writing signed on behalf of
each of the parties hereto.
7.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto; (ii) waive any inaccuracies in the representations and warranties
contained herein or in any of the Schedules; and (iii) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
29
<PAGE>
ARTICLE 8
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No representation
or warranty contained in this Agreement shall survive the Merger or the
termination of this Agreement, except that Sections 3.2, 4.2(c), 4.2(d),
4.2(e), 4.2(f), 4.2(h), 4.2(i), 5.6 and 8.5 shall survive the Merger, and
Sections 4.1(d) and 4.2(h), 5.6 and 7.2 shall survive the termination of this
Agreement.
8.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given when received by the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to CFB or
Acquisition Subsidiary, to: Community First Bankshares, Inc.
Attn: Donald R. Mengedoth, President
520 Main Avenue
Fargo, ND 58124
with copies to: Steven J. Johnson, Esq.
Lindquist & Vennum P.L.L.P.
4200 IDS Center
80 South 8th Street
Minneapolis, MN 55402-2205
and
(b) if to Pioneer, to: Pioneer Bank of Longmont
Attn: Dan Allen, President
1610 Hover Street
Longmont, CO 80501
with copies to: Thomas L. Beckmann, Esq.
1880 Industrial Circle
Suite A-1
Longmont, CO 80501
8.3 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the words "include", "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation".
30
<PAGE>
8.4 COUNTERPARTS. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
8.5 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES; RIGHTS OF OWNERSHIP.
This Agreement (including the documents and the instruments referred to
herein) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof. This Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder, except
that Sections 3.2 and 4.2(i) are intended for the benefit of the Pioneer
shareholders; and Section 5.5 is intended for the benefit of employees of the
Bank. CFB shall be liable to such third-party beneficiaries for damages
caused by the breach of such Sections. No party shall have the right to
acquire or shall be deemed to have acquired shares of common stock of the
other party pursuant to the Merger until consummation thereof.
8.6 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Colorado.
8.7 PUBLICITY. Except as otherwise required by law or the rules of the
Nasdaq Market System or the National Association of Securities Dealers, so
long as this Agreement is in effect, neither CFB nor Pioneer shall, nor shall
either of them permit any of its subsidiaries to, issue or cause the
publication of any press release or other public announcement with respect to
the transactions contemplated by this Agreement without the consent of the
other party, which consent shall not be unreasonably withheld.
8.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
8.9 ENFORCEMENT OF AGREEMENT. Each of the parties hereto agrees that
it will not object if the other party seeks to obtain an injunction to
prevent breaches of this Agreement or to enforce specifically the terms and
provision hereof in any court in the United States or any state have
jurisdiction. The enforcing party shall be entitled to recover its attorneys
fees incurred in the successful enforcement of the terms and provisions of
this Agreement.
31
<PAGE>
IN WITNESS WHEREOF, CFB, Acquisition Subsidiary and Pioneer have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first above written.
COMMUNITY FIRST BANKSHARES, INC.
By: /s/ Gary A. Knutson
-----------------------------------------
Name: Gary Knutson
Attest: Title: Senior Vice President
/s/ Bruce A. Heysse
- -----------------------------------
Name: Bruce A.Heysse
Title: Senior Vice President COMMUNITY FIRST NATIONAL BANK
By: /s/ Gary A. Knutson
--------------------------------------
Name: Gary A. Knutson
Title: Senior Vice President
Attest:
/s/ Bruce A. Heysse
- ------------------------------------
Name: Bruce A. Heysse
Title: Senior Vice President
PIONEER BANK OF LONGMONT
By: /s/ Daniel L. Allen
-------------------------------------
Attest: Name: Daniel L. Allen
Title: President
/s/ Roger L. Kopman
- ------------------------------------
Name: Roger L. Kopman
Title: Executive Vice President
32
<PAGE>
TABLE OF EXHIBITS
EXHIBIT A - Articles of Merger
EXHIBIT B - Pioneer Disclosure Schedule
EXHIBIT C - CFB Disclosure Schedule
EXHIBIT 2.1(c) - Illustrations of Exchange Rate Calculations
EXHIBIT 5.5 - Affiliate Agreement
EXHIBIT 6.2 - Thomas L. Beckmann Opinion
EXHIBIT 6.3 - Lindquist & Vennum Opinion
<PAGE>
COMMUNITY FIRST BANKSHARES, INC.
AS ISSUER
TO
________________________________
AS TRUSTEE
INDENTURE
SENIOR NOTES
____________, 199__
<PAGE>
SENIOR NOTES
COMMUNITY FIRST BANKSHARES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED
AND INDENTURE, DATED AS OF ________, 199__
Trust Indenture Act Indenture
Section Section
------- -------
Section 310 (a)(1) . . . . . . . . . . . . . . 608
Section 310 (a)(2) . . . . . . . . . . . . . . 608
Section 310 (a)(3) . . . . . . . . . . . . . . Inapplicable
Section 310 (a)(4) . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . 605
. . . . . . . . . . . . . . 609
Section 311 . . . . . . . . . . . . . . 605
Section 312 (a) . . . . . . . . . . . . . . 701
. . . . . . . . . . . . . . 702
(b) . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . 702
Section 313 (a) . . . . . . . . . . . . . . 703
(b)(1) . . . . . . . . . . . . . . Inapplicable
(b)(2) . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . 703
Section 314 (a) . . . . . . . . . . . . . . 704
. . . . . . . . . . . . . . 1011
(b) . . . . . . . . . . . . . . Inapplicable
(c)(1) . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . Inapplicable
(d) . . . . . . . . . . . . . . Inapplicable
(e) . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . 601
. . . . . . . . . . . . . . 603
(b) . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . 601
. . . . . . . . . . . . . . 603
ii
<PAGE>
Section 316 (a)(1)(A) . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . 104
Section 317 (a)(1) . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . 1003
Section 318 (a) . . . . . . . . . . . . . . 108
- ------------------------------------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
iii
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE -- DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION. . . . . . . . . . . . . . . . . . 1
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . 1
Acceleration Event. . . . . . . . . . . . . . . . . . . . . . . 2
Acquired Indebtedness . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper. . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Capitalized Lease Obligation. . . . . . . . . . . . . . . . . . 3
Certificate of Authentication . . . . . . . . . . . . . . . . . 3
Certificated Note . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Subsidiary . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . 4
Definitive Notes. . . . . . . . . . . . . . . . . . . . . . . . 4
Depository. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 4
Funded Recourse Debt. . . . . . . . . . . . . . . . . . . . . . 4
Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations. . . . . . . . . . . . . . . . . . . . . 5
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Independent Public Accountants. . . . . . . . . . . . . . . . . 6
Initial Interest Accrual Date . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . 6
Issue Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Legal Holiday . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Note" or "NOTES . . . . . . . . . . . . . . . . . . . . . . . . 6
Note Register" and "Note Registrar. . . . . . . . . . . . . . . 6
iv
<PAGE>
Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 8
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment. . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Note. . . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 8
Restricted Payment. . . . . . . . . . . . . . . . . . . . . . . 8
Restrictive Legend. . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act. . . . . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
United States . . . . . . . . . . . . . . . . . . . . . . . . . 9
Vice President. . . . . . . . . . . . . . . . . . . . . . . . . 9
Voting Stock. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 102. Compliance Certificates and Opinions. . . . . . . . . 9
Section 103. Form of Documents Delivered to Trustee. . . . . . . .10
Section 104. Acts of Holders . . . . . . . . . . . . . . . . . . .11
Section 105. Notices, Etc. to Trustee and Company. . . . . . . . .12
Section 106. Notice to Holders of Notes; Waiver. . . . . . . . . .13
Section 107. Language of Notices . . . . . . . . . . . . . . . . .13
Section 108. Conflict with Trust Indenture Act . . . . . . . . . .13
Section 109. Effect of Headings and Table of Contents. . . . . . .14
Section 110. Successors and Assigns. . . . . . . . . . . . . . . .14
Section 111. Separability Clause . . . . . . . . . . . . . . . . .14
Section 112. Benefits of Indenture . . . . . . . . . . . . . . . .14
Section 113. Governing Law . . . . . . . . . . . . . . . . . . . .14
Section 114. Legal Holidays. . . . . . . . . . . . . . . . . . . .14
Section 115. Schedules . . . . . . . . . . . . . . . . . . . . . .15
Section 116. Counterparts. . . . . . . . . . . . . . . . . . . . .15
ARTICLE TWO -- FORM OF NOTES . . . . . . . . . . . . . . . . . . . . . .15
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . .15
Section 202. Global Notes. . . . . . . . . . . . . . . . . . . . .15
v
<PAGE>
ARTICLE THREE -- THE NOTES . . . . . . . . . . . . . . . . . . . . . . .16
Section 301. Title and Terms; Issuable in Series . . . . . . . . .16
Section 302. Currency; Denominations . . . . . . . . . . . . . . .18
Section 303. Execution, Authentication, Delivery and Dating. . . .19
Section 304. Temporary Notes . . . . . . . . . . . . . . . . . . .21
Section 305. Registration, Transfer and Exchange . . . . . . . . .22
Section 306. Mutilated, Destroyed, Lost and Stolen Notes . . . . .24
Section 307. Payment of Interest; Rights to Interest Preserved . .25
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . .26
Section 309. Cancellation. . . . . . . . . . . . . . . . . . . . .27
Section 310. Authentication and Delivery of the Notes. . . . . . .27
Section 311. Computation of Interest . . . . . . . . . . . . . . .27
ARTICLE FOUR -- SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . .27
Section 401. Satisfaction and Discharge of Indenture . . . . . . .27
Section 402. Application of Trust Money. . . . . . . . . . . . . .29
ARTICLE FIVE -- REMEDIES . . . . . . . . . . . . . . . . . . . . . . . .29
Section 501. Events of Default . . . . . . . . . . . . . . . . . .29
Section 502. Acceleration of Maturity; Rescission and Annulment. .31
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . .32
Section 504. Trustee May File Proofs of Claim. . . . . . . . . . .33
Section 505. Trustee May Enforce Claims without
Possession of Notes . . . . . . . . . . . . . . . . .34
Section 506. Application of Money Collected. . . . . . . . . . . .34
Section 507. Limitations on Suits. . . . . . . . . . . . . . . . .35
Section 508. Unconditional Right of Holders to
Receive Principal and Interest. . . . . . . . . . . .35
Section 509. Restoration of Rights and Remedies. . . . . . . . . .36
Section 510. Rights and Remedies Cumulative. . . . . . . . . . . .36
Section 511. Delay or Omission Not Waiver. . . . . . . . . . . . .36
Section 512. Control by Holders of Notes . . . . . . . . . . . . .36
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . .37
Section 514. Waiver of Stay or Extension Laws. . . . . . . . . . .37
ARTICLE SIX -- THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . .37
Section 601. Certain Duties and Responsibilities . . . . . . . . .37
Section 602. Notice of Defaults. . . . . . . . . . . . . . . . . .39
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . .39
Section 604. Not Responsible for Recitals or Issuance of Notes . .40
Section 605. May Hold Notes. . . . . . . . . . . . . . . . . . . .40
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . .40
Section 607. Compensation and Reimbursement. . . . . . . . . . . .41
Section 608. Corporate Trustee Required; Eligibility . . . . . . .42
vi
<PAGE>
Section 609. Resignation and Removal;
Appointment of Successor. . . . . . . . . . . . . . .42
Section 610. Acceptance of Appointment by Successor. . . . . . . .43
Section 611. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . . . .44
Section 612. Appointment of Authenticating Agent . . . . . . . . .45
ARTICLE SEVEN -- HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY. . . . . . . . . . . . . . . . . . . . . . . . .46
Section 701. Company to Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . . . . . . .46
Section 702. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . .47
Section 703. Reports by Trustee. . . . . . . . . . . . . . . . . .47
Section 704. Reports by Company. . . . . . . . . . . . . . . . . .47
ARTICLE EIGHT -- CONSOLIDATION, MERGER AND SALES . . . . . . . . . . . .49
Section 801. Company May Consolidate, Etc.,
Only on Certain Terms . . . . . . . . . . . . . . . .49
Section 802. Successor Person Substituted for Company. . . . . . .49
ARTICLE NINE -- SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . .50
Section 901. Supplemental Indentures without
Consent of Holders. . . . . . . . . . . . . . . . . .50
Section 902. Supplemental Indentures with Consent of Holders . . .51
Section 903. Execution of Supplemental Indentures. . . . . . . . .51
Section 904. Effect of Supplemental Indentures . . . . . . . . . .52
Section 905. Reference in Notes to Supplemental Indentures . . . .52
Section 906. Record Date . . . . . . . . . . . . . . . . . . . . .52
ARTICLE TEN -- COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .53
Section 1001. Payment of Principal and Interest . . . . . . . . . .53
Section 1002. Maintenance of Office or Agency . . . . . . . . . . .53
Section 1003. Money for Note Payments to Be Held in Trust . . . . .53
Section 1004. Corporate Existence . . . . . . . . . . . . . . . . .54
Section 1005. Maintenance of Properties . . . . . . . . . . . . . .55
Section 1006. Restrictions on Dividends and Other Payments. . . . .55
Section 1007. [Intentionally Left Blank]. . . . . . . . . . . . . .56
Section 1008. Insurance . . . . . . . . . . . . . . . . . . . . . .56
Section 1009. Payment of Taxes and Other Claims . . . . . . . . . .56
Section 1010. Books and Records . . . . . . . . . . . . . . . . . .56
Section 1011. Statement by Officers as to Default . . . . . . . . .56
Section 1012. Waiver of Certain Covenants . . . . . . . . . . . . .57
Section 1013. Limitation on Ranking of Future Indebtedness. . . . .57
EXHIBIT A - FORM OF NOTE . . . . . . . . . . . . . . . . . . . . . . . A-1
vii
<PAGE>
INDENTURE, dated as of ___________, 199_ (the "Indenture"), between
COMMUNITY FIRST BANKSHARES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company"),
having executive offices located at 520 Main Avenue, Fargo, North Dakota 58124
and _____________________________________________, a _________________________
(hereinafter called the "Trustee"), having its principal corporate trust office
at __________________________________________________________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Senior Notes
(hereinafter called the "Notes"), to be issued in one or more series as herein
provided. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders (as hereinafter defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders from time to time
of the Notes or of series thereof, as follows:
ARTICLE ONE - DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
Except as otherwise expressly provided in this Indenture or unless the
context otherwise requires, for all purposes of this Indenture:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act (as hereinafter defined), either directly or by reference
therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States and,
1
<PAGE>
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required
or permitted hereunder shall mean such accounting principles as are
generally accepted in the United States at the date of such computation;
(4) the words "herein", "hereof", "hereto" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(5) the word "or" is always used inclusively (for example, the phrase
"A or B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"ACCELERATION EVENT" has the meaning specified in Section 502.
"ACQUIRED INDEBTEDNESS" means indebtedness of a Person existing at the time
such Person becomes a Subsidiary of the Company or assumed in connection with
the acquisition by the Company or a Subsidiary of the Company of assets from
such Person, and not incurred in connection with, or in anticipation of, such
Person becoming a Subsidiary of the Company or such acquisition.
"ACT", when used with respect to any Holder, has the meaning specified in
Section 104.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee pursuant
to Section 612 to act on behalf of the Trustee to authenticate Notes of one or
more series.
"AUTHORIZED NEWSPAPER" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
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"BOARD OF DIRECTORS" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"BOARD RESOLUTION" means a copy of one or more resolutions, certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, delivered to the Trustee. Where any provision hereof refers to
action to be taken pursuant to a Board Resolution (including establishment of
any series of the Notes and the forms and terms thereof), such action may be
taken by any committee, officer or employee of the Company authorized to take
such action (generally or in any particular respect) by a Board Resolution.
"BUSINESS DAY", with respect to any Place of Payment or other location,
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a Legal
Holiday in such Place of Payment or other location.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property which obligations are
required to be classified and accounted for as capital lease obligations on a
balance sheet of such Person under generally accepted accounting principles and,
for purposes of this Indenture, the amount of such obligations at any date shall
be the capitalized amount thereof at such date, determined in accordance with
generally accepted accounting principles.
"CERTIFICATE OF AUTHENTICATION" means the certificate set forth in EXHIBIT
A or Section 612.
"CERTIFICATED NOTE" means a Note which is not a Global Note.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934 or, if at
any time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person, and any other obligor upon the Notes.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written request
or order, as the case may be, signed in the name of the Company by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President, a Vice President, the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, or
by another officer of the Company duly authorized to sign by a Board Resolution,
and delivered to the Trustee.
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"CONSOLIDATED" when used in conjunction with any other defined term means
the aggregate amount of the items included within the defined term of the
Company on a consolidated basis, eliminating inter-company items.
"CONSOLIDATED SUBSIDIARY" means a Subsidiary of the Company the financial
statements of which are included in the financial statements of the Company and
its Subsidiaries.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of original execution of this Indenture
is located at ___________________________.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEFINITIVE NOTES" means Notes that are in the form of the Notes attached
hereto as EXHIBIT A and that do not include the information called for by
footnotes 1 and 2 thereof.
"DEPOSITORY" means, with respect to any Notes of any series issued in the
form of one or more Global Notes, the Person designated as Depository by the
Company in or pursuant to this Indenture, which Person must be, to the extent
required by applicable law or regulation, a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and any successor to such Person.
If at any time there is more than one such Person, "Depository" shall mean, with
respect to any Notes of any series, the qualifying entity which has been
appointed with respect to such Notes of such series.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"FUNDED RECOURSE DEBT" means any of the following obligations of the
Company or any Subsidiary which by its terms matures at or is extendable or
renewable at the sole option of the obligor without requiring the consent of the
obligee to a date more than one year after the date of the creation or
incurrence of such obligation: (1) any obligations, contingent or otherwise, for
borrowed money or for the deferred purchase price of property, assets, notes or
services (including, without limitation, any interest accruing subsequent to an
event of default), (2) all obligations (including the Notes) evidenced by bonds,
notes, debentures or other similar instruments, (3) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired, except any such obligation that constitutes a
trade payable and an accrued liability arising in the ordinary course of
business, if and to the extent any of the foregoing indebtedness would appear as
a liability upon a balance sheet prepared in accordance with generally accepted
accounting principles, (4) all Capitalized Lease Obligations and (5) any
guarantee or endorsement (other than for collection or deposit in the ordinary
course of business) or discount with recourse of, or other agreement, contingent
or otherwise, to purchase, repurchase, or otherwise acquire, to supply, or
advance funds or become liable with respect to, any indebtedness or any
obligation of the type
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referred to in any of the foregoing Clauses (1) through (4), regardless of
whether such obligation would appear on a balance sheet; provided, however,
that Funded Recourse Debt shall not include any obligations included in the
foregoing clauses (1) through (5) under which the rights and remedies of the
lender in the event of default are limited to repossession or sale of
property securing such obligation, with no recourse to the Company or any
Subsidiary.
"GLOBAL NOTE" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as EXHIBIT A evidencing all or part of a series of
Notes, issued to the Depositary or its nominee for such series, and registered
in the name of such Depositary or nominee.
"GOVERNMENT OBLIGATIONS" means direct obligations of the United States of
America, or any Person controlled or supervised by and acting as an agency or
instrumentality of such government, in each case where the payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by such government and which are not callable or redeemable at the option of the
issuer or issuers thereof, and shall also include a depository receipt issued by
a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of or other amount
with respect to any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, PROVIDED that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of or other amount with respect to the Government
Obligation evidenced by such depository receipt.
"HOLDER", when used with respect to the Notes, means the Person in whose
name a Note is registered in the Note Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of any particular series of Notes established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument due to the appointment of one or more
separate Trustees for any one or more separate series of Notes pursuant to
Section 610, the term "Indenture" shall mean, with respect to such series of
Notes for which any such Person is Trustee, this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of any particular series of Notes
for which such Person is Trustee established as contemplated by Section 301,
exclusive, however, of any provisions or terms which relate solely to other
series of Notes for which such Person is not Trustee, regardless of when such
terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental hereto executed and
delivered after such Person had become such Trustee but to which such person, as
such Trustee, was not a party.
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"INDEPENDENT PUBLIC ACCOUNTANTS" means a nationally recognized firm of
accountants that, with respect to the Company, are independent public
accountants within the meaning of the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder, who may be
the independent public accountants regularly retained by the Company or who may
be other independent public accountants. Such accountants or firm shall be
entitled to rely upon any Opinion of Counsel as to the interpretation of any
legal matters relating to the Indenture or certificates required to be provided
hereunder.
"INITIAL INTEREST ACCRUAL DATE" as to any Note means the date from which
interest shall begin to accrue in connection with the original issuance of such
Note, which shall be the date as of which such Note originally issued by the
Company to the initial purchaser thereof shall be dated, and which shall be the
date upon which it was originally sold to such initial purchaser as designated
by the Company Order requesting authentication and delivery thereof.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"ISSUE DATE" means the date on which the Notes are originally issued in
accordance with the terms of this Indenture.
"LEGAL HOLIDAY" with respect to any Place of Payment or other location,
means a Saturday, a Sunday or a day on which banking institutions or trust
companies in such Place of Payment or other location are not authorized or
obligated to be open.
"MATURITY" means the date on which the principal of the Notes or an
installment of principal becomes due and payable as provided in this Indenture,
whether at the Stated Maturity or by declaration of acceleration.
"MONEY" with respect to any payment, deposit or other transfer pursuant to
or contemplated by the terms hereof, means United States dollars or other
equivalent unit of legal tender for payment of public or private debts in the
United States of America.
"NOTE" or "NOTES" means any note or notes of any series, as the case may
be, authenticated and delivered under this Indenture; provided, however, that if
at any time there is more than one Person acting as Trustee hereunder, the term
"Notes" as to which such Person is Trustee shall mean Notes authenticated and
delivered hereunder, exclusive, however, of Notes of any series as to which such
Person is not Trustee.
"NOTE REGISTER" AND "NOTE REGISTRAR" have the respective meanings specified
in Section 305.
"OFFICE OR AGENCY" means an office or agency of the Company maintained or
designated in a Place of Payment for the Notes pursuant to Section 1002 or any
other office or agency of the Company maintained or designated for the Notes
pursuant to Section 1002 or, to the extent
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designated or required by Section 1002 in lieu of such office or agency, the
Corporate Trust Office of the Trustee.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company, that complies with the requirements of
Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that complies with the requirements of Section 314
(e) of the Trust Indenture Act.
"OUTSTANDING", when used with respect to any Notes, means, as of the date
of determination, all Notes of any series theretofore authenticated and
delivered under this Indenture, except:
(1) any Note theretofore canceled by the Trustee or the Note Registrar or
delivered to the Trustee or the Note Registrar for cancellation;
(2) any Note or portion thereof for whose payment at the Maturity thereof
Money in the necessary amount has been theretofore deposited pursuant
hereto with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of the
Notes;
(3) any Note with respect to which the Company has effected defeasance
pursuant to Clauses (1)(b) and (3) of Section 401 hereof; and
(4) any Note which has been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, unless there shall have been
presented to the Trustee proof satisfactory to it that such Note is
held by a bona fide purchaser in whose hands such Note is a valid
obligation of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes of any series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes of
such series owned by the Company or any other obligor upon such Notes or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making any such determination or relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee knows to be so owned shall be so disregarded. Notes so owned which
shall have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee (a) the pledgee's right
so to act with respect to
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such Notes and (b) that the pledgee is not the Company or any other obligor
upon the Notes or any Affiliate of the Company or such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or interest on any Note on behalf of the Company.
"PERIODIC OFFERING" means an offering of Notes of a series from time to
time the specific terms of which Notes, including without limitation the rate or
rates of interest (or formula for determining the rate or rates of interest), if
any, thereon, and the Stated Maturity or Maturities thereof, are to be
determined by the Company or its agents upon the issuance of such Notes.
"PERSON" means any individual, Corporation, partnership, joint venture,
joint stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PLACE OF PAYMENT" has the meaning set forth in Section 301.
"PREDECESSOR NOTE" of a Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the
purposes of this definition, any Note authenticated and delivered under Section
306 in exchange for or in lieu of a lost, destroyed, mutilated or stolen Note
shall be deemed to evidence the same debt as the lost, destroyed, mutilated or
stolen Note.
"REGULAR RECORD DATE" for the interest payable on any Note of any series on
any Interest Payment Date therefor means the date specified in EXHIBIT A as the
"Regular Record Date".
"RESPONSIBLE OFFICER" means any officer of the Trustee in its Corporate
Trust Office and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"RESTRICTED PAYMENT" has the meaning specified in Section 1006.
"RESTRICTIVE LEGEND" has the meaning set forth in Section 305(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on any Note
means a date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY" with respect to any Note or any installment of principal
thereof or interest thereon means the date established by this Indenture or any
supplemental indenture as the fixed date on which the principal of such Note or
such installment of principal or interest is due and payable.
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"SUBSIDIARY" means any Corporation of which at the time of determination
the Company or one or more Subsidiaries owns or controls directly or indirectly
more than 50% of the shares of Voting Stock.
"TRANSACTION" has the meaning specified in Section 1015.
"TRANSFER RESTRICTIONS" has the meaning set forth in Section 305(b).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Notes of any series
shall mean the Trustee with respect to Notes of that series.
"UNITED STATES" except as otherwise provided herein, means the United
States of America (including the states thereof and the District of Columbia),
its territories and possessions and other areas subject to its jurisdiction.
"VICE PRESIDENT" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
"VOTING STOCK" means stock of a Corporation of the class or classes having
general voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers or trustees of such Corporation, PROVIDED
that, for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered Voting Stock
whether or not such event shall have happened.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents or any of them is specifically
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required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of counsel or Opinion of Counsel or
representation of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Note, they may, but need not, be
consolidated and form one instrument.
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SECTION 104. ACTS OF HOLDERS.
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Note, shall be sufficient for any purpose of
this Indenture and (subject to Section 315 of the Trust Indenture Act)
conclusive in favor of the Trustee and the Company and any agent of the
Trustee or the Company, if made in the manner provided in this Section.
Without limiting the generality of this Section, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depository
that is a Holder of a Global Note, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in or pursuant
to this Indenture to be made, given or taken by Holders, and a Depository
that is a Holder of a Global Note may provide its proxy or proxies to the
beneficial owners of interests in any such Global Note through such
Depository's standing instructions and customary practices.
The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any Global Note held by a
Depository entitled under the procedures of such Depository to make, give
or take, by a proxy or proxies duly appointed in writing, any request,
demand, authorization, direction, notice, consent, waiver or other action
provided in or pursuant to this Indenture to be made, given or taken by
Holders. If such a record date is fixed, the Holders on such record date
or their duly appointed proxy or proxies, and only such Persons, shall be
entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other action, whether or not such
Holders remain Holders after such record date. No such request, demand,
authorization, direction, notice, consent, waiver or other action shall be
valid or effective if made, given or taken more than 90 days after such
record date.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient and in accordance with such reasonable rules as
the Trustee may determine; and the Trustee may in any instance require
further proof with respect to any of the matters referred to in this
Section.
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(3) The ownership, principal amount and serial numbers of Notes held
by any Person, and the date of the commencement and the date of the
termination of holding the same, shall be proved by the Note Register.
(4) If the Company shall solicit from the Holders of any Notes of any
series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated
to), by Board Resolution, fix in advance a record date for the
determination of Holders of Notes of such series entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of Notes of such series of
record at the close of business on such record date shall be deemed to be
Holders for the purpose of determining whether Holders of the requisite
proportion of Outstanding Notes of such series have authorized or agreed or
consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Notes of
such series shall be computed as of such record date; PROVIDED that no such
authorization, agreement or consent by the Holders of Notes of any series
on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six
months after the record date.
(5) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or suffered to be done by the Trustee, any Note
Registrar, any Paying Agent or the Company in reliance thereon, whether or
not notation of such action is made upon such Note.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, or sent by facsimile and
U.S. mail, first-class postage prepaid, to the Company addressed to the
attention of its Chief Financial Officer at the address of its principal
office specified in the first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee by the Company.
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SECTION 106. NOTICE TO HOLDERS OF NOTES; WAIVER.
Except as otherwise expressly provided in this Indenture, where this
Indenture provides for notice to Holders of Notes of any series of any event,
such notice shall be sufficiently given to Holders of Notes of such series if in
writing and mailed, first-class postage prepaid, to each Holder of a Note of a
series affected by such event, at such Holder's address as it appears in the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice.
In any case where notice to Holders of Notes of any series is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Note of a series shall affect the
sufficiency of such notice with respect to other Holders of Notes of such
series. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given or provided. In case by reason of
the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Notes shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. LANGUAGE OF NOTICES.
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language.
SECTION 108. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act, such required provision
shall control.
SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 110. SUCCESSORS AND ASSIGNS.
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All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 111. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes of any series shall
be invalid, illegal or unenforceable, either wholly or partially, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and such provisions shall be given effect to the
fullest extent permitted by law.
SECTION 112. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person, other than the parties hereto, any Note Registrar, any Paying
Agent, any Authenticating Agent and their respective successors hereunder and
the Holders of Notes, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 113. GOVERNING LAW.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable to agreements
made or instruments entered into and, in each case, performed in said state.
SECTION 114. LEGAL HOLIDAYS.
In any case where any Interest Payment Date or Stated Maturity of any
Note shall be a Legal Holiday at any Place of Payment, then (notwithstanding
any other provision of this Indenture) payment need not be made at such Place
of Payment on such date, but may be made on the next succeeding day that is a
Business Day at such Place of Payment with the same force and effect as if
made on the Interest Payment Date or at the Stated Maturity, and no interest
shall accrue on the amount payable on such date or at such time for the
period from and after such Interest Payment Date or Stated Maturity, as the
case may be.
SECTION 115. SCHEDULES.
Any Schedules attached hereto are by this reference made a part hereof
with the same effect as if herein set forth in full.
SECTION 116. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute
but one and the same instrument.
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ARTICLE TWO - FORM OF NOTES
SECTION 201. FORMS GENERALLY.
Each Note of any series issued pursuant to this Indenture, including
Global Notes, shall be in substantially the form included in EXHIBIT A
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture or any indenture
supplemental hereto and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rule or regulation of any stock
exchange or national market system or as may, consistently herewith, be
determined by the officers executing such Note as evidenced by their
execution of such Note. The Notes shall be issuable without coupons in fully
registered form only. Any portion of the text of any Note may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of
the Note.
The Notes shall be printed, lithographed or engraved or produced by any
combination of these methods on a steel engraved border or steel engraved
borders or may be produced in any other manner, all as determined by the
officers of the Company executing such Notes, as evidenced by their execution
of such Notes.
SECTION 202. GLOBAL NOTES.
Notes issued hereunder may be issued as one or more Global Notes.
Ownership of beneficial interests in a Global Note will be limited to persons
who have accounts with the Depository ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a
Global Note will be shown on, and the transfer of the ownership interests
will be effected only through, records maintained by the Depository or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
Any endorsement of any Note in global form to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
Outstanding Notes represented thereby shall be made in such manner and by
such Person or Persons as shall be specified therein or in the Company Order
to be delivered pursuant to Section 303 or 304 with respect thereto. Subject
to the provisions of Section 303 and, if applicable, Section 304, the Trustee
shall deliver and redeliver any Global Note in permanent global form in the
manner and upon instructions given by the Person or Persons specified therein
or in the applicable Company Order. If a Company Order pursuant to Section
303 or 304 has been, or simultaneously is, delivered, any instructions by the
Company with respect to a Global Note shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
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ARTICLE THREE - THE NOTES
SECTION 301. TITLE AND TERMS; ISSUABLE IN SERIES.
The Notes may be issued in one or more series. There shall be
established, without the approval of any Holders or the Trustee, by or
pursuant to authority granted by one or more Board Resolutions, and, subject
to Section 303, there shall be set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the
initial issuance of Notes of any series, all or any of the following, as
applicable:
(1) the title of the Notes of the series (which shall distinguish the
Notes of the series from Notes of any other series);
(2) any limit upon the aggregate principal amount of the Notes of the
series which may be authenticated and delivered hereunder (except for Notes
authenticated and delivered upon registration of transfer of, or in lieu
of, other Notes of the series pursuant to Sections 304, 305, or 306 and
except for any Notes which, pursuant to Section 303, are deemed never to
have been authenticated and delivered hereunder) and the absence of such
limitation shall mean that the Company may issue from time to time
additional Notes of such series without limitation as to aggregate
principal amount;
(3) the Person to whom any interest on a Note of the series shall be
payable, if other than the Person in whose name that Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates, or the method by which such date or dates are
determined or extended, on which the principal or installments of principal
and premium, if any, of the Notes of the series is or are payable;
(5) the rate or rates (which may be fixed or variable) at which the
Notes of the series shall bear interest, if any, or the method by which
such rate or rates shall be determined, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such interest
shall be payable, the Regular Record Date for the interest payable on any
Interest Payment Date and the circumstances, if any in which the Company
may defer interest payments and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(6) the place or places, if any, where the principal of (and premium,
if any) and interest on Notes of the series shall be payable, any Notes of
the series may be surrendered
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for registration of transfer or exchange and notices and demands to or upon
the Company with respect to the Notes of the series and this Indenture may
be served, other than or in addition to the Corporate Trust Office of the
Trustee;
(7) whether the Notes of the series will be convertible into shares
of capital stock and/or exchangeable for other securities, and if so, the
terms and conditions upon which such Notes will be so convertible or
exchangeable, and any deletions from or modifications or additions hereto
to permit or to facilitate the issuance of such convertible or exchangeable
Notes or the administration thereof;
(8) the identity of each Note Registrar and Paying Agent, if other
than or in addition to the Trustee;
(9) if the amount of principal of or any premium or interest on any
Notes of the series may be determined by reference to an index or pursuant
to a formula, the manner in which such amounts shall be determined;
(10) the applicability of, and any addition to or change in, the
definitions currently set forth herein;
(11) if other than denominations of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
Notes of the series shall be issuable;
(12) any other event or events of default applicable with respect to
Notes of the series in addition to or in lieu of those provided in Section
501 or any event or events of default provided in Section 501 which will
not be applicable to Notes of the series, and any change in the right of
the Trustee or the Holders to declare the principal of or any premium or
interest on such Notes due and payable;
(13) if less than the principal amount thereof, the portion of the
principal amount of Notes of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(14) whether the Notes of the series shall be issued in whole or in
part in the form of one or more Global Notes and, if so, (a) the Depositary
with respect to such Global Note or Notes and (b) the circumstances under
which any such Global Note may be exchanged for Notes registered in the
name of, and any transfer of such Global Note may be registered to, a
Person other than such Depositary or its nominee, if other than set forth
in Section 305;
(15) if applicable, the period or periods within which or the date
or dates on which, the price or prices at which and the terms and
conditions upon which Notes of the series may be redeemed, in whole or
in part, at the option of the Company;
(16) any other covenant or warranty included for the benefit of the
Notes of the series in addition to (and not inconsistent with) those set
forth herein for the benefit of Notes of all series, or any other covenant
or warranty included for the benefit of Notes of the series in lieu of any
covenant or warranty set forth herein for the benefit of Notes of all
series, or any provision that any covenant or warranty set forth herein
for the benefit of Notes of all series shall not be for the benefit of
Notes of such series, or any combination of such covenants, warranties or
provisions and the applicability, if any, of the provisions of Section 1012
to such covenants and warranties; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions hereof, except as permitted by Section
901(5)).
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All Notes of any one series (other than Notes offered in a Periodic
Offering) shall be substantially identical except as to denomination and
except as may otherwise be provided by or pursuant to the Board Resolution
referred to above and, subject to Section 303, set forth, or determined in
the manner provided, in the Officers' Certificate referred to above or in any
such indenture supplemental hereto. All Notes of any one series need not be
issued at the same time. Unless otherwise provided, Notes of a single series
may have different terms, and a series may be reopened, without the consent
of the Holders of Notes of such series, for issuance of additional Notes of
such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
With respect to Notes of a series offered in a Periodic Offering, such
Board Resolution and Officers' Certificate or supplemental indenture may
provide general terms or parameters for Notes of such series and provide
either that the specific terms of particular Notes of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a
Company Order as contemplated by Section 303.
The principal of and interest on the Notes of any series shall be payable
at the Office or Agency of the Company in Minneapolis, Minnesota ("PLACE OF
PAYMENT") maintained for such purposes pursuant to Section 1002; PROVIDED,
HOWEVER, that, at the option of the Company, payment of interest may be made
(subject to collection) (i) by check mailed to the address of the Person
entitled thereto as such address shall appear on the Note Register or (ii) by
wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register.
SECTION 302. CURRENCY; DENOMINATIONS.
The principal of and interest on the Notes of each series shall be
payable in United States dollars or other equivalent unit of legal tender for
payment of public or private debts in the United States of America. In the
absence of any specification with respect to the Notes of any series, Notes
shall be issuable in fully registered form only without coupons in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Notes shall be executed on behalf of the Company by its Chairman of the
Board, one of its Vice Chairmen of the Board, its Chief Executive Officer, its
President, its Chief Financial Officer, its Treasurer or one of its Vice
Presidents under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.
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Notes bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
At any time and from time to time after the execution and delivery
hereof, the Company may deliver Notes of any series executed by the Company
to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, or, in the case of Notes offered
in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents,
promptly confirmed in writing by the Company) acceptable to the Trustee as
may be specified from time to time by a Company Order for establishing the
specific terms of particular Notes being so offered, and the Trustee in
accordance with the Company Order shall authenticate and deliver such Notes.
If the form or forms or terms of the Notes of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Section 301, in authenticating such Notes and accepting the additional
responsibilities hereunder in relation to such Notes, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon
(a) an Opinion of Counsel stating:
(1) that the form or forms of such Notes have been established in
conformity with the provisions thereof,
(2) that the terms of such Notes have been established in conformity
with the provisions thereof,
(3) that authentication and delivery of such Notes and the execution
and delivery of the supplemental indenture, if any, by the Trustee will not
violate the terms hereof,
(4) that the Company has the corporate power to issue, and has duly
authorized, such Notes;
(5) that such Notes, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles; and
(6) that the issuance of such Notes will not contravene the
certificate of incorporation or bylaws of the Company or result in any
violation of any of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement known
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to such Counsel by which the Company or its assets is bound, the violation
of which would have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(b) an executed supplemental indenture, if any;
(c) a copy of the Board Resolution; and
(d) an Officers' Certificate;
provided, however, that, with respect to Notes of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Notes of such series and that the opinions described in clauses (a)(2) and
(a)(5) above may state, respectively, that
(2) if the terms of such Notes are to be established pursuant to a
Company Order or pursuant to such procedures as may be specified from time
to time by a Company Order, all as contemplated by a Board Resolution or
action taken pursuant thereto, such terms will have been duly authorized by
the Company and established in conformity with the provisions hereof; and
(5) that such Notes, when executed by the Company, completed,
authenticated and delivered by the Trustee in accordance herewith, and
issued and delivered by the Company and paid for, all in accordance with
any agreement of the Company relating to the offering, issuance and sale of
such Notes, will be duly issued hereunder and will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting generally the enforcement of
creditors' rights and to general principles of equity.
With respect to Notes of a series offered in a Periodic Offering, the
Trustee may rely conclusively, as to the authorization by the Company of any of
such Notes, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel, Company
Order and other documents delivered pursuant to Section 301 and this Section, as
applicable, in connection with the first authentication of a form of Notes of
such series and it shall not be necessary for the Company to deliver such
Opinion of Counsel and other documents (except as may be required by the
specified other procedures, if any, referred to above) at or prior to the time
of authentication of each Note of such series unless and until the Trustee
receives actual notice that such Opinion of Counsel or other documents have been
superseded or revoked, and may assume compliance with any conditions specified
in such Opinion of Counsel (other than any conditions to be performed by the
Trustee). If such form or forms or terms have been so established, the Trustee
shall not be required to authenticate such Notes if the issue of such Notes
pursuant hereto will affect the Trustee's own rights, duties or immunities under
the Notes and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
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The Company may establish by Company Order that the Notes of any series to
be issued hereunder shall be in the form of one or more Global Notes. The
Company shall execute and the Trustee shall, in accordance with this Section and
the Company Order with respect to such Notes, authenticate and deliver one or
more Global Notes in permanent form that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of the
Outstanding Notes to be represented by such Global Note or Notes, (ii) shall be
registered in the name of the Depository for such Global Note or Notes or the
nominee of such Depository, (iii) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instruction and (iv) shall bear a
legend substantially to the following effect: "Unless and until it is exchanged
in whole or in part for Notes in certificated form, this Note may not be
transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository" or to such other effect as the
Depository and the Trustee may agree.
Each Note of a series shall be dated the date of its authentication.
No Note of any series shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
Certificate of Authentication substantially in the form provided for in EXHIBIT
A or Section 612 executed by or on behalf of the Trustee by the manual signature
of one of its authorized officers or by an Authenticating Agent. Such
certificate upon any Note of any series shall be conclusive evidence, and the
only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of Definitive Notes of any series, the Company may
execute and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary Notes
in lieu thereof which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the Definitive Notes of any series in lieu of which they are issued, in
registered form and with such appropriate insertions, omissions, substitutions
and other variations as the officers of the Company executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
Except in the case of temporary Global Notes, which shall be exchanged in
accordance with the provisions thereof, if temporary Notes of any series are
issued, the Company shall cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of Definitive Notes, such temporary
Notes shall be exchangeable for such Definitive Notes upon surrender of such
temporary Notes at an Office or Agency for such Notes, without charge to any
Holder thereof. Upon surrender for cancellation of any one or more temporary
Notes, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Unless otherwise provided in or pursuant to this Indenture with
respect
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to a temporary Global Note, until so exchanged the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
SECTION 305. REGISTRATION, TRANSFER AND EXCHANGE.
The Company shall cause to be kept a register (herein sometimes referred to
as the "NOTE REGISTER") at an Office or Agency maintained pursuant to Section
1002 in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of the Notes of any series and of
transfers of the Notes. The Trustee is hereby initially appointed as Note
Registrar for the Notes. In the event that the Trustee shall cease to be Note
Registrar it shall have the right to examine the Note Register at all reasonable
times.
Upon surrender for registration of transfer of any Note of any series at
the Office or Agency of the Company, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, denominated as authorized in this Indenture,
of a like aggregate principal amount bearing a number not contemporaneously
outstanding and containing identical terms and provisions.
At the option of the Holder, Notes of any series (except a Global Note
representing all of the Outstanding Notes) may be exchanged for other Notes, in
any authorized denominations, and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such Office or Agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive.
Whenever any Notes are surrendered for exchange as contemplated by the
immediately preceding two paragraphs, the Company shall execute, and the Trustee
shall authenticate and deliver, the Notes which the Holder making the exchange
is entitled to receive.
No beneficial owner of an interest in a Global Note will be able to
transfer that interest except in accordance with the applicable procedures of
the Depository (in addition to any other procedures specified herein).
Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, no Global Note of any series shall be exchangeable in whole
or in part for Definitive Notes unless (i) the Depository is at any time
unwilling, unable or ineligible to continue as Depository and a successor
depository is not appointed by the Company within 90 days of the date the
Company is so informed in writing, (ii) the Company executes and delivers to the
Trustee a Company Order to the effect that such Global Note shall be so
exchangeable, or (iii) an Event of Default has occurred and is continuing with
respect to the Global Note of any series which entitles the Holders to
accelerate the maturity thereof. If the beneficial owners of interests in a
Global Note of any series are entitled to exchange such interests for Definitive
Notes of such series of like tenor and principal amount of any authorized form
and denomination as specified as contemplated by Section 304, then without
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unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
Definitive Notes in such form and denominations as are required by or
pursuant to this Indenture, containing identical terms and in aggregate
principal amount equal to the principal amount of such Global Note, executed
by the Company. On or after the earliest date on which such interests may be
so exchanged, such Global Note shall be surrendered by the Depository in
accordance with instructions given to the Trustee and the Depository (which
instructions shall be in writing but need not be contained in or accompanied
by an Officers' Certificate or be accompanied by an Opinion of Counsel) as
shall be specified in the Company Order with respect thereto to the Trustee,
as the Company's agent for such purpose. Promptly following any such
exchange in part, such Global Note shall be returned by the Trustee to such
Depository in accordance with the instructions of the Company referred to
above. If a Note is issued in exchange for any portion of a Global Note
after the close of business at the Office or Agency for such Note where such
exchange occurs on or after (i) any Regular Record Date for such Note and
before the opening of business at such Office or Agency on the next Interest
Payment Date, or (ii) any Special Record Date for such Note and before the
opening of business at such Office or Agency on the related proposed date for
payment of interest or Defaulted Interest, as the case may be, interest shall
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Note, but shall be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only
to the Person to whom interest in respect of such portion of such Global Note
shall be payable in accordance with the provisions of this Indenture.
Notwithstanding any other provision of this Indenture, a Global Note of
any series may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary.
All Notes of any series issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company evidencing
the same debt and entitling the Holders thereof to the same benefits under
this Indenture as the Notes surrendered upon such registration of transfer or
exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Note Registrar for such
Note) be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Note Registrar duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304 or 905 not involving any transfer.
As used in this Section 305, the term "transfer" encompasses any sale,
pledge, transfer or other disposition of any Notes referred to herein.
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SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If any mutilated Note, including a Global Note, is surrendered to the
Trustee, subject to the provisions of this Section, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Note containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee (1) evidence to
their satisfaction of the destruction, loss or theft of any Note, including a
Global Note if the destroyed, lost or stolen Note was a Global Note, and (2)
such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company's request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any
such destroyed, lost or stolen Note, a new Note of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing provisions of this Section, in case any
mutilated, destroyed, lost or stolen Note of any series has become or is
about to become due and payable for any reason, the Company in its discretion
may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an additional original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any
and all other Notes of that series duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to
this Indenture, shall be exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 307. PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED.
Unless otherwise provided as contemplated by Section 301, any interest on
any Note of any series which shall be payable and is punctually paid or duly
provided for on any Interest Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered as of
the close of business on the Regular Record Date for such interest.
Any interest on any Note of any series which shall be payable, but shall
not be punctually paid or duly provided for, on any Interest Payment Date for
such Note (herein called "DEFAULTED
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INTEREST") shall forthwith cease to be payable to the Holder thereof on the
relevant Regular Record Date by virtue of having been a Holder on such date;
and such Defaulted Interest shall be paid by the Company, at its election in
each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Person in whose name such Note of such series (or a Predecessor Note
thereof) shall be registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on such Note and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of Money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to
the date of the proposed payment. Such Money when so deposited shall be
held in trust for the benefit of the Person entitled to such Defaulted
Interest. Thereupon, the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to the Holder of such Note (or a Predecessor Note thereof) at such Holder's
address as it appears in the Note Register not less than 10 days prior to
such Special Record Date. In addition to the mailing, the Trustee may, in
its discretion, in the name and at the expense of the Company cause a
similar notice to be published at least once in an Authorized Newspaper of
general circulation in each Place of Payment, but such publication shall
not be a condition precedent to the establishment of such Special Record
Date and the failure of a Holder to observe such published notice shall not
entitle such Holder to additional benefits or interest with respect to such
Holder's Notes. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Person in whose name such Note of
such series (or a Predecessor Note thereof) shall be registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or national market system on which the Notes may be
listed, and upon such notice as may be required by such exchange or
national market system, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such payment shall
be deemed practicable by the Trustee.
At the option of the Company, interest on any Note may be paid (i) by
mailing a check to the address of the Person entitled thereto as such address
shall appear in the Note Register, or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Note Register.
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Subject to the foregoing provisions of this Section and Section 305, each
Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer or
exchange, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Note is registered in the
Note Register as the owner of such Note for the purpose of receiving payment
of principal of and (subject to Sections 305 and 307) interest on such Note
and for all other purposes whatsoever, whether or not any payment with
respect to such Note shall be overdue, and neither the Company, nor the
Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Payments on Global Notes will be made to the Depository, or its nominee,
as the registered owner thereof. Neither the Company, the Trustee nor any
paying agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
No holder of any beneficial interest in any Global Note held on its
behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Note or any Note represented thereby, and such
Depositary may be treated by the Company, the Trustee, and any agent of the
Company or the Trustee as the owner of such Global Note or any Note
represented thereby for all purposes whatsoever. Notwithstanding the
foregoing, with respect to any Global Note, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished
by a Depositary Holder of such Global Note, or impair, as between a
Depositary and the owners of beneficial interests in such Global Note, the
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominees) as Holder of such Global Note. None of the
Company, the Trustee, any Paying Agent or the Note Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
SECTION 309. CANCELLATION.
All Notes surrendered for payment, registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to
the Trustee, and any such Notes, as well as Notes surrendered directly to the
Trustee for any such purpose, shall be canceled promptly by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner
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whatsoever, and all Notes so delivered shall be canceled promptly by the
Trustee. No Notes shall be authenticated in lieu of or in exchange for any
Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes held by the Trustee shall be destroyed by
the Trustee, unless by a Company Order the Company directs their return to it.
SECTION 310. AUTHENTICATION AND DELIVERY OF THE NOTES.
Forthwith upon the execution and delivery of this Indenture, or from time
to time thereafter, Notes may be executed by the Company and delivered to the
Trustee for authentication, and shall thereupon be authenticated and delivered
by the Trustee upon Company Order, Board Resolution, or indentures supplemental
hereto.
SECTION 311. COMPUTATION OF INTEREST.
Except as otherwise specified pursuant to Section 301 for the Notes of
any series, interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. Interest shall be payable to and excluding any
Interest Payment Date and interest shall be payable to and excluding the
Maturity.
ARTICLE FOUR - SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect with respect to any series of Notes and
the Trustee, on receipt of such Company Order, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture as to such series of Notes, when
(1) either
(a) all Notes of such series theretofore authenticated and
delivered (other than (i) Notes which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306
and (ii) Notes for whose payment Money has theretofore been deposited
in trust with the Trustee or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(b) all Notes of such series not so theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will
become due and payable at their stated maturity within one year, and
the Company has irrevocably deposited or caused to be deposited with
the Trustee, as trust funds and/or obligations in trust for such
purpose, Money and/or Government Obligations which through the payment
of
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interest and principal in respect thereof in accordance with their
terms, without consideration of any reinvestment thereof, will provide
not later than the opening of business on the due dates of any payment
of principal and interest with respect thereto, or a combination
thereof, Money in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation, including the principal thereof and interest
thereon, to the date of such deposit (in the case of Notes which have
become due and payable) or to the Maturity thereof, as the case may
be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company, including amounts owing to the Trustee; and
(3) the Company has delivered to the Trustee a certificate of
Independent Public Accountants certifying as to the sufficiency of the
amounts deposited pursuant to subclause (b) of Clause (1) of this Section
for payment of the principal and interest on the dates such payments are
due, and an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein providing for or relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series of Notes, the obligations of the Company and the Trustee
to the Holders of Notes of other series not so satisfied and discharged, the
obligations of the Company to the Trustee under Section 607, the obligations
of the Trustee to any Authenticating Agent under Section 612 and, if Money
and/or Government Obligations shall have been deposited with the Trustee
pursuant to subclause (b) of Clause (1) of this Section, the obligations of
the Trustee under Section 402 and the last paragraph of Section 1003, shall
survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
Money and Government Obligations deposited with the Trustee pursuant to
Section 401 and all Money received by the Trustee in respect of Government
Obligations deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Notes of
each series and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the principal
and interest for whose payment such Money has or Government Obligations have
been deposited with or received by the Trustee; but such Money and Government
Obligations need not be segregated from other funds of the Trustee except to
the extent required by law.
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ARTICLE FIVE - REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"EVENT OF DEFAULT" wherever used herein with respect to Notes of any
series, and unless otherwise provided with respect to Notes of any series
pursuant to Section 301, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest on any Note of such series
when such interest becomes due and payable, and continuance of such default
for a period of 10 days; or
(2) default in the payment of the principal of any Note of such
series when it becomes due and payable at its Maturity; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or the Notes of such series
(other than a covenant or warranty a default in the performance or the
breach of which is elsewhere in this Section specifically dealt with or
which expressly has been included herein solely for the benefit of a series
of one or more Notes other than such series), and continuance of such
default or breach for a period of 30 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Notes of such series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(4) default in the payment at stated maturity of any indebtedness of
the Company or any Subsidiary for money borrowed (not described above in
paragraph (1) or (2)) in principal amount due at stated maturity in excess
of $2,000,000, and such default shall continue, without being cured, waived
or consented to and without such indebtedness being discharged, for a
period of 30 days beyond any applicable period of grace, PROVIDED, HOWEVER,
that the provisions of this Section 501(4) shall not apply to any
indebtedness of the Company or any Subsidiary under which the rights and
remedies of the lender in the event of default are limited to repossession
or sale of property securing such obligation, with no recourse to the
Company or any Subsidiary; or
(5) the occurrence of an event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there
may be secured or evidenced, any indebtedness of the Company or any
Subsidiary for money borrowed (not described above in paragraph (3)) (or
the payment of which is guaranteed by the Company), whether such
indebtedness now exists or shall hereafter be created, PROVIDED, HOWEVER,
that no such
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event of default shall constitute an Event of Default hereunder unless
such event of default results in the acceleration of such indebtedness
prior to its expressed maturity, which together with the principal
amount of any such other indebtedness so caused to be accelerated,
aggregates $2,000,000 or more at any one point in time and such default
shall not have been cured or waived and such acceleration shall not
have been rescinded or annulled, PROVIDED, HOWEVER, that the provisions
of this Section 501(5) shall not apply to any indebtedness of the Company
or any Subsidiary under which the rights and remedies of the lender in
the event of default are limited to repossession or sale of property
securing such obligation, with no recourse to the Company or any
Subsidiary; or
(6) the entry by a court or agency or supervisory authority having
competent jurisdiction of:
(a) a decree or order for relief in respect of the Company or
any Subsidiary in an involuntary proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(b) a decree or order adjudging the Company or any Subsidiary to
be insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of the Company or any
Subsidiary and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(c) a decree or order appointing any Person to act as a
custodian, receiver, liquidator, assignee, trustee or other similar
official of the Company or any Subsidiary or of any substantial part
of the property of the Company or any Subsidiary, as the case may be,
or ordering the winding up or liquidation of the affairs of the
Company or any Subsidiary and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or any Subsidiary of a voluntary
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or of a voluntary proceeding seeking to be adjudicated
insolvent or the consent by the Company or any Subsidiary to the entry of
a decree or order for relief in an involuntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any insolvency proceedings against it, or the filing
by the Company or any Subsidiary of a petition or answer or consent
seeking reorganization or relief under any applicable law, or the consent
by the Company or any Subsidiary to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or similar official of the Company or any Subsidiary or
any substantial part of the property of the Company or any Subsidiary or
the making by the Company or any Subsidiary of an assignment for the
benefit of creditors, or the taking of corporate action by the Company or
any Subsidiary in furtherance of any such action;
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(8) a final judgment, judicial decree or order for the payment of
money in excess of $1,000,000 shall be rendered against the Company or any
Subsidiary and such judgment, decree or order shall continue unsatisfied
for a period of 60 days without a stay of execution; or
(9) any other Event of Default provided with respect to the Notes of
such series pursuant to Section 301.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default specified in Section 501 (except as may be limited
pursuant to Section 301) occurs or is continuing (an "Acceleration Event"),
then the Trustee or the Holders of not less than 25% in principal amount of
the outstanding Notes of any series may declare the principal of all the
Notes of such series, and the interest accrued thereon, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if
given by the Holders), and upon any such declaration such amount shall become
immediately due and payable; provided, however, that any Event of Default
specified in Subsection 501(7) shall result in immediate and automatic
acceleration of maturity of the outstanding Notes of every series, and the
principal of all the Notes of every series and the interest accrued thereon
shall be due and payable immediately without notice, as if a declaration of
acceleration, as contemplated in this Section 502, had been made.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the Money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Notes of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum of Money
sufficient to pay
(a) all overdue installments of any interest on all Notes of
such series,
(b) the principal of any Notes of such series which have become
due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by such Notes,
(c) to the extent that payment of such interest is lawful,
interest upon overdue installments of any interest at the rate borne
by such Notes, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
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(2) all Events of Default, other than the non-payment of the
principal of and interest on Notes of such series which shall have become
due solely by reason of such Acceleration Event, shall have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default occurs and is continuing,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Notes, the whole amount of money then due and
payable (including any amount of money payable as a result of acceleration) with
respect to such Notes, with interest upon any overdue principal and, to the
extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest at the same rate of interest as is payable on
the principal amount of the Notes, and, in addition thereto, such further amount
of Money as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay the Money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the Money so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Notes and collect the Money
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Notes, wherever situated.
If any Event of Default with respect to the Notes of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of such Notes by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the collection of all principal and
interest then due and payable hereunder (in the absence of any acceleration), or
the specific enforcement of any covenant or agreement in this Indenture or such
Notes or in aid of the exercise of any power granted herein or therein, or to
enforce any other proper remedy.
The rights and remedies under this Section 503 are in addition to the other
rights and remedies available under this Article 5 or otherwise legally
available.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Notes of any series or the property of the Company or such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Notes of any
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series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any
demand on the Company for the payment of any overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Notes of any series for
which the Trustee acts as trustee and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents or counsel) and of
the Holders of Notes of such series allowed in such judicial proceeding,
and
(2) to collect and receive any Money or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Notes of such series to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders of Notes of such series, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Note of
any series any plan of reorganization, arrangement, adjustment or composition
affecting the Notes of such series or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a Note of
such series in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or any of the Notes of
any series may be prosecuted and enforced by the Trustee without the possession
of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery or judgment, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, shall be for
the ratable benefit of each and every Holder of a Note of such series in respect
of which such judgment has been recovered.
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SECTION 506. APPLICATION OF MONEY COLLECTED.
Any Money collected by the Trustee with respect to any series of Notes
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such Money on
account of principal or interest, upon presentation of the Notes of such series,
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 607;
SECOND: In the case the principal of the Notes of such series shall
not have become due and payable, to the payment of the amounts then due and
unpaid upon the Notes of such series for interest in respect of which or
for the benefit of which such Money has been collected, in the order of the
Maturity of the installments of such interest, with interest, to the extent
that such interest is lawful and has been collected by the Trustee, upon
overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Notes for
interest;
THIRD: In the case the principal of the Notes of such series shall
have become due and payable, to the payment of the amounts then due and
unpaid upon the Notes for principal and interest in respect of which or for
the benefit of which such Money has been collected, with interest, to the
extent that such interest is lawful and has been collected by the Trustee,
upon overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Notes for
principal and interest, respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATIONS ON SUITS.
No Holder of any Note of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Acceleration Event or Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes of such series shall have made written request to the
Trustee to institute proceedings in respect of such Acceleration Event or
Event of Default in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, fees, expenses and
liabilities to be incurred in compliance with such request (including
reasonable fees of counsel);
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Notes of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Note to accelerate amounts due under the Notes when the
Trustee could not accelerate such amounts or otherwise exercise any remedies
which the Trustee could not have exercised hereunder, or any right to affect,
disturb or prejudice the rights of any other Holders, or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all such Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, but subject to those
limitations regarding acceleration which are applicable to the Trustee and which
are contained in Section 502, the Holder of any Note of any series shall have
the right, which is absolute and unconditional, to receive payment of the
principal of and (subject to Sections 305 and 307) interest on such Note on the
respective Stated Maturity or Maturities therefor specified in such Note and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Note of any series has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 306,
and subject to the provisions of
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Sections 502 and 503, no right or remedy herein conferred upon or reserved to
the Trustee or to each and every Holder of a Note is intended to be exclusive
of any other right or remedy, and every right and remedy, to the extent
permitted by law, shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note of any
series to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to any Holder of a Note of any series may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
SECTION 512. CONTROL BY HOLDERS OF NOTES.
The Holders of a majority in principal amount of the Outstanding Notes of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Notes, PROVIDED
that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to Section 601, the Trustee need not take any action
which might be unjustly prejudicial to the rights of the other Holders of
Notes not joining in such action.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series on behalf of the Holders of all the Notes of
such series may waive any past default hereunder and its consequences, except a
default
(1) in the payment of the principal of or interest on any Note of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note of such series.
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Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants that (to the extent that it may lawfully do so) it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE SIX - THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(1) With respect to Notes of any series, except during the continuance of
an Event of Default with respect to that series only,
(a) the Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(2) With respect to Notes of any series, in case an Event of Default has
occurred and is continuing with respect to that series only, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(3) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
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(a) this Subsection shall not be construed to limit the effect of
Subsection (1) of this Section;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding Notes
of any series, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to
the Notes of such series, provided such direction shall not be in conflict
with any rule of law or with this Indenture; and
(d) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(4) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default hereunder with respect
to the Notes of any series, the Trustee shall transmit to the Holders of Notes
of such series, in the manner and to the extent provided in Section 313 (b) of
the Trust Indenture Act, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a default in the payment of the principal of or interest
on any Note of such series, 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 and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders of Notes of such series; and PROVIDED, FURTHER, that in the case of any
default of the character specified in Section 501 (3) with respect to Notes of
such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default.
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SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence shall be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate and/or Opinion
of Counsel;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Notes of any series pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security
or indemnity against the costs, fees, expenses and liabilities which might
be incurred by it, including reasonable fees of counsel, in complying with
such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine,
during business hours and upon reasonable notice, the books, records and
premises of the Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not
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be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes of each series, except the
Trustee's Certificate of Authentication, shall be taken as the statements of the
Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Notes of any series,
except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Notes of any series and perform its
obligations hereunder. Neither the Trustee nor any Authenticating Agent shall
be accountable for the use or application by the Company of the Notes of any
series or the proceeds thereof. The Trustee shall not be responsible for any
statement made in any prospectus or similar document used to sell the Notes of
any series.
SECTION 605. MAY HOLD NOTES.
The Trustee, any Authenticating Agent, any Paying Agent, any Note Registrar
or any other Person that may be an agent of the Trustee or the Company, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note Registrar or such other Person.
SECTION 606. MONEY HELD IN TRUST.
Except as provided in Section 402 and Section 1003, Money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any Money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable costs, expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
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expense, disbursement or advance as may be attributable to the Trustee's
negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the trust hereunder, including the
costs and expenses of defending themselves against any claim or liability
in connection with the exercise or performance of any of their powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Notes upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the payment of principal of and interest on Notes of any series. "Trustee"
for the purposes of this Section includes any predecessor Trustee, but
negligence or bad faith of any Trustee shall not be attributed to any other
Trustee.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable compensation and the expenses and disbursements of
reasonable compensation and the expenses and disbursements of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee and each predecessor Trustee.
SECTION 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, or any other person permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
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SECTION 609. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 610.
(2) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 610 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(3) The Trustee may be removed at any time with respect to Notes of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act
after written request therefor by the Company or any Holder of a
Note who has been a bona fide Holder of a Note for at least six
months, or
(b) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board
Resolution, may remove the Trustee, or (ii) subject to Section 315 (e) of
the Trust Indenture Act, any Holder of a Note who has been a bona fide
Holder of a Note for at least six months may, on behalf of such Holder and
all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to Notes of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee with respect
to the Notes of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Notes of one or more
or all of such series and that at any time there shall be only one Trustee
with respect to the Notes of any particular series) and shall comply with
the applicable requirements of Section 610. If, within one year after such
resignation, removal or incapability, or the occurrence of such
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vacancy, a successor Trustee with respect to the Notes of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 610, become the successor Trustee with respect to
the Notes of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Notes of any series shall have been so appointed by the Company or the
Holders of Notes of such series and accepted appointment in the manner
required by Section 610, any Holder of a Note of such series who has been a
bona fide Holder of a Note of such series for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Notes of such series.
(6) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Notes of any series and each
appointment of a successor Trustee by mailing written notice of such event
by first-class mail, postage prepaid, to the Holders of Notes of such
series as their names and addresses appear in the Note Register. Each
notice shall include the name of the successor Trustee with respect to the
Notes of such series and the address of its Corporate Trust Office.
SECTION 610. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(1) In case of the appointment hereunder of a successor Trustee with
respect to all Notes, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties hereunder of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder.
(2) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Notes of
one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and
which (a) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to
the Notes of that or those series to which the appointment of such
successor Trustee relates, (b) if the retiring Trustee is not retiring with
respect to all Notes, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with
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respect to the Notes of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring
Trustee and (c) shall add to or change any of the provisions hereof as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such Trustee shall
be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to
the extent provided therein and each such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Notes of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Notes of that or those series to which the
appointment of such successor Trustee relates. Whenever there is a
successor Trustee with respect to one or more (but less than all) series
of Notes issued pursuant hereto, the terms "Indenture" and "Notes" shall
have the meanings specified in the provisos to the respective definitions
of those terms in Section 101 which contemplate such situation.
(3) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraphs (1) or (2) of this Section, as the case may be.
(4) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 611. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes of any series shall have been
authenticated but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.
SECTION 612. APPOINTMENT OF AUTHENTICATING AGENT.
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The Trustee may appoint one or more Authenticating Agents acceptable to the
Company with respect to one or more series of Notes which shall be authorized to
act on behalf of the Trustee to authenticate such Notes issued upon original
issue, exchange, registration of transfer, or pursuant to Section 306, and Notes
so authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of one or more series of Notes by the Trustee or the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a Certificate of Authentication executed on behalf of the Trustee by an
Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and, except as
provided in this Indenture, shall at all times be a Corporation that would be
permitted by the Trust Indenture Act to act as trustee under an indenture
qualified under the Trust Indenture Act, is authorized under applicable law and
by its charter to act as an Authenticating Agent and has a combined capital and
surplus (computed in accordance with Section 310(a) (2) of the Trust Indenture
Act) of at least $50,000,000. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, provided such Corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Notes
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Note Register. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 607.
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The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more series
pursuant to this Section, the Notes of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's Certificate of Authentication, an
alternate Certificate of Authentication in the following form:
This is one of the Notes described herein.
________________________________________________
As Authenticating Agent
By_____________________________________________
Authorized Signatory
Authentication Date
____________________
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
In accordance with Section 312 (a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(1) semi-annually on January 1 and July 1 of each year, a list, in
each case in such form as the Trustee may reasonably require, of the names
and addresses of Holders of Notes of any series for which the Trustee acts
as trustee as of the applicable date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
PROVIDED, HOWEVER, that so long as the Trustee is the Note Registrar no such
list shall be required to be furnished for Notes of any series for which the
Trustee acts as Note Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
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Every Holder of Notes of any series, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent nor any Note Registrar shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders of Notes in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(1) Within 60 days after May 15 of each year, if required by Section
313(a) of the Trust Indenture Act, the Trustee shall transmit, pursuant to
Section 313(c) of the Trust Indenture Act, a brief report dated as of such
May 15 with respect to any of the events specified in said Section 313 (a)
which may have occurred since the later of the immediately preceding May 15
and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(b)
of the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Sections 313(c) and 313(d) of the
Trust Indenture Act.
SECTION 704. REPORTS BY COMPANY.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it shall file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a Note listed and registered on a national securities exchange
or national market system as may be prescribed from time to time in such
rules and regulations; provided that notwithstanding the requirements of
such rules and regulations, so long as any Note is Outstanding the Company
shall file with the Trustee at a minimum (a) as soon as practicable, but in
any event no more than ninety (90) days, after the end of each fiscal year,
copies of a balance sheet and statements of income and retained earnings of
the Company as of the end of and for such fiscal year, audited by
Independent Public Accountants, and (b) as soon as practicable, but
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in any event no more than forty-five (45) days, after the end of each
quarterly fiscal period, except for the last quarterly fiscal period in each
fiscal year, a summary statement (which need not be audited) of income and
retained earnings of the Company for such period;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company, as the case may be, with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations;
(3) transmit to the Holders of Notes of each series within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to paragraphs (a) and (b) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission;
PROVIDED that notwithstanding the requirements of such rules and
regulations, so long as the Company has a class of securities registered
pursuant to the Securities Exchange Act of 1934, the Company shall transmit
to the Holders of Notes of each series, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, the information,
documents and other reports of the Company as are furnished to the holders
of such class of securities registered under the Securities Exchange Act of
1934; PROVIDED FURTHER that so long as any Note is Outstanding, the Company
shall transmit to the Holders of Notes of each series at a minimum (a) as
soon as practicable, but in any event no more than ninety (90) days, after
the end of each fiscal year, copies of a balance sheet and statements of
income and retained earnings of the Company as of the end of and for such
fiscal year, audited by Independent Public Accountants, and (b) as soon as
practicable, but in any event no more than forty-five (45) days, after the
end of each fiscal quarterly period, except for the last quarterly fiscal
period in each fiscal year, a summary statement (which need not be audited)
of income and retained earnings of the Company for such period; and
(4) furnish to the Trustee the Officers' Certificates and notices
required by Section 1011 hereof.
ARTICLE EIGHT - CONSOLIDATION, MERGER AND SALES
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Nothing contained in this Indenture shall prevent any consolidation or
merger of the Company with or into any other Person or Persons (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any conveyance, transfer or lease of the property of the Company as an
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entirety or substantially as an entirety, to any other Person (whether or not
affiliated with the Company); PROVIDED, HOWEVER, that:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the entity formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a Person organized and existing under
the laws of the United States of America, any state thereof or the District
of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed by the successor Person and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all the Notes and the performance of every
other covenant of this Indenture on the part of the Company to be performed
or observed;
(2) immediately after giving effect to such transaction, no event
which, after notice or lapse of time, or both, would become an Event of
Default shall have occurred and be continuing; and
(3) either the Company or the successor Person shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, stating
that such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 802. SUCCESSOR PERSON SUBSTITUTED FOR COMPANY.
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and thereafter, except in the case of a lease to another Person, the predecessor
Person shall be released from all obligations and covenants under this Indenture
and the Notes.
ARTICLE NINE - SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder of Notes of any series, the Company (when
authorized by or pursuant to a Board Resolution) and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, which shall conform with the requirements of the Trust
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Indenture Act as then in effect and be in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Notes; or
(2) to add to or change any of the provisions of this Indenture to
change or eliminate any restrictions on the payment of principal of or
interest on Notes of any series or to permit or facilitate the issuance of
Notes of any series in uncertificated form, provided any such action shall
not adversely affect the interests of the Holders of Notes of any series in
any material respect; or
(3) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not adversely affect the
interests of the Holders of Notes of any series in any material respect; or
(4) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any Notes of any series pursuant to Article Four; provided
that any such action shall not adversely affect the interests of any Holder
of a Note of any series in any material respect; or
(5) to add to the covenants of the Company for the benefit of the
Holders of the Notes of each series (as shall be specified in such
supplemental indenture or indentures) or to surrender any right or power
herein conferred upon the Company; or
(6) to evidence and provide acceptance of the appointment of a
successor Trustee hereunder.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Notes of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee,
the Company (when authorized by or pursuant to a Board Resolution), and the
Trustee may enter into one or more indentures supplemental hereto (which
shall conform with the requirements of the Trust Indenture Act as then in
effect) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Notes of any series under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture, without the consent
of the Holder of each Outstanding Note affected thereby, shall
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any affected Note, or change the rate of
interest thereon, or change the Place of Payment,
50
<PAGE>
currency in which the principal of or interest on any Note, is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the Outstanding
Notes of any series, the consent of the Holders of any series which is
required for any such supplemental indenture, or the consent of the Holders
of any series which is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, or Section 513 or
Section 1012, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Note affected
thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision hereof which has expressly been included solely for the benefit of one
or more particular series of Notes, or which modifies the rights of the Holders
of Notes of such series with respect to such covenant or other provision, shall
be deemed not to affect the rights hereunder of the Holders of Notes of any
other series.
It shall not be necessary for any Act of Holders of Notes under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
As a condition to executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Note of the series affected thereby theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
51
<PAGE>
SECTION 905. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Notes of
any series so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
SECTION 906. RECORD DATE.
If the Company shall solicit from the Holders of any series any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders of such series entitled to consent to any supplemental
indenture, agreement or instrument or any waiver, and shall promptly notify the
Trustee of any such record date. If a record date is fixed those Persons who
were Holders of such series at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
supplemental indenture, agreement or instrument or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. The record date shall be a date no more than 30 days
prior to the first solicitation of Holders generally in connection therewith and
no later than the date such solicitation is completed. No such consent shall be
valid or effective for more than six months after such record date. Subject to
applicable law, until any supplemental indenture, agreement, instrument or
waiver becomes effective, or a consent to it by a Holder of a Note of such
series shall cease to be valid and effective as set forth in the preceding
sentence, such consent is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note.
ARTICLE TEN - COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms thereof and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment an Office or Agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration, transfer or exchange and where notices and demands
to or upon the Company in respect of the Notes and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such Office or Agency. The Company hereby
initially designates the Corporate Trust Office of the Trustee as its Office or
Agency for each of the foregoing
52
<PAGE>
purposes. If at any time the Company shall fail to maintain any such
required Office or Agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it shall, on
or before each due date of the principal of or interest on the Notes of any
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum of Money sufficient to pay the principal or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and shall promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents, it shall, on or
prior to each due date of the principal of or interest on the Notes of any
series, deposit with any Paying Agent a sum of Money sufficient to pay the
principal or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled thereto, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company shall cause each Paying Agent other than the Trustee or the
Company to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of or
interest on Notes of any series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as provided in this Indenture;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal or
interest on the Notes of any series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such Money.
53
<PAGE>
Any Money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Note of any series and remaining unclaimed for five years after such principal
or interest shall have become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust Money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in each Place of Payment, or to be mailed to Holders of
Notes, or both, notice that such Money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such Money then remaining will
be repaid to the Company.
SECTION 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and its
Subsidiaries, and shall comply with all statutes, rules, regulations and orders
of and restrictions imposed by governmental and administrative authorities and
agencies applicable to the Company and its Subsidiaries; PROVIDED, HOWEVER, that
the foregoing shall not obligate the Company to preserve any such right or
franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries and that the loss thereof is not disadvantageous in any material
respect to any Holder.
SECTION 1005. MAINTENANCE OF PROPERTIES.
The Company will:
(1) cause its properties and the properties of its Subsidiaries
(other than properties obtained by the Company or any Subsidiary through
foreclosure or other resolution of any loan or properties subject to valid
and binding leases with customers of the Company or any Subsidiary) used or
useful in the conduct of the business of the Company and its Subsidiaries
to be maintained and kept in good condition, repair and working order and
supplied with all necessary facilities and equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
the foregoing shall not prevent the Company or a Subsidiary from
discontinuing the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business and not disadvantageous in any material respect to
any Holder;
54
<PAGE>
(2) take all appropriate steps to preserve, protect and maintain the
trademarks, trade names, copyrights, licenses and permits used in the
conduct of the business of the Company and its Subsidiaries; PROVIDED,
HOWEVER, that the foregoing shall not prevent the Company or a Subsidiary
from selling, abandoning or otherwise disposing of any such trademark,
trade name, copyright, license or permit if such sale, abandonment or
disposition is, in the judgment of the Company, desirable in the conduct of
its business and not disadvantageous in any material respect to any Holder;
and
(3) The Company and each of its Subsidiaries shall comply with all
statutes, laws, ordinances, or government rules and regulations to which it
is subject, noncompliance with which would materially adversely affect the
business, prospects, earnings, properties, assets or condition (financial
or otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 1006. RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS.
The Company shall not (i) declare or pay any dividend, either in cash or
property, on any shares of its capital stock (except dividends or other
distributions payable solely in shares of capital stock of the Company) or (ii)
purchase, redeem or retire any shares of its capital stock or any warrants,
rights or options to purchase or acquire any shares of its capital stock or
(iii) make any other payment or distribution, either directly or indirectly
through any Subsidiary, in respect of its capital stock (such dividends,
purchases, retirements, payments and distributions being herein collectively
called "RESTRICTED PAYMENTS") if, after giving effect thereto, an Event of
Default shall have occurred or be continuing. Notwithstanding the foregoing,
the Company may make a previously declared Restricted Payment if the
declaration of such Restricted Payment was permitted under this Section when
made. For purposes of this Section, the amount of any Restricted Payment
payable in property shall be deemed to be the fair market value of such property
as determined by the Board of Directors of the Company.
SECTION 1007. [INTENTIONALLY LEFT BLANK].
SECTION 1008. INSURANCE.
Subject to the right to sell, abandon or otherwise dispose of any building
or property whenever in the opinion of the Company the retention thereof is
inadvisable or not necessary to the business of the Company and its
Subsidiaries, the Company will at all times cause all buildings, equipment and
other insurable properties owned or operated by it or any Subsidiary to be
properly insured and kept insured with responsible insurance carriers, or
adequately insured by means of proper inter-insurance contracts, against loss or
damage by fire and other hazards, to the extent that such properties are usually
insured by Corporations owning or operating properties of a similar character;
PROVIDED, HOWEVER, that the foregoing shall not prevent the Company or any
Subsidiary from maintaining any self-insurance program covering minor risks if
adequate reserves are maintained in connection with such program.
55
<PAGE>
SECTION 1009. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (2) all lawful claims
for labor, material and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; PROVIDED, HOWEVER, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which disputed amounts adequate reserves (in the good faith judgment of the
Board of Directors of the Company) have been established.
SECTION 1010. BOOKS AND RECORDS.
The Company shall, and shall cause each Subsidiary to, at all times keep
proper books of record and account in which proper entries shall be made in
accordance with generally accepted accounting principles and, to the extent
applicable, regulatory accounting principles.
SECTION 1011. STATEMENT BY OFFICERS AS TO DEFAULT.
(1) The Company will deliver to the Trustee, within 45 days after the
end of each calendar quarter, an Officers' Certificate, stating whether or
not to the best knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and
conditions of this Indenture, (other than a term, provision or condition
specifically dealt with in Clause (2) of this Section 1011) setting forth
the arithmetical computations required to show compliance with the
provisions of Sections 1006 and 1007 during the previous year, and, if the
Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
(2) The Company will deliver to the Trustee, within five days after
the occurrence thereof, written notice of any event which after notice or
lapse of time or both would become an Event of Default pursuant to Clause
(4) of Section 501.
SECTION 1012. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 through 1010 with respect to
the Notes of any series if before the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Notes of such series, by
Act of such Holders, either shall waive such compliance in such instance or
generally shall have waived compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
56
<PAGE>
SECTION 1013. LIMITATION ON RANKING OF FUTURE INDEBTEDNESS.
The Company will not, directly or indirectly, incur, create, assume or
guarantee any Funded Recourse Debt that is senior in right of payment to the
Notes.
-----------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
COMMUNITY FIRST BANKSHARES, INC.
By
-----------------------------------
Name:
Title:
Attest:
- -------------------------------------
, AS TRUSTEE
----------------------------------
By
-----------------------------------
Name:
Title:
Attest:
- -------------------------------------
57
<PAGE>
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the ____ day of ______________, 19___, before me personally
came _____________________________, to me known, who, being by me duly sworn,
did depose and say that he is the _________________________
of Community First Bankshares, Inc., a Delaware corporation, one of the persons
described in and who executed the foregoing instrument; and that he signed his
name thereto by like authority.
-------------------------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the ____ day of ______________, 19___, before me personally
came _____________________________, to me known, who, being by me duly sworn,
did depose and say that he is _________________________________
of _________________________ , a ______________________________ , one of the
persons described in and who executed the foregoing instrument; and that he
signed his name thereto by like authority.
-------------------------------------------------
Notary Public
[NOTARIAL SEAL]
58
<PAGE>
EXHIBIT A - FORM OF NOTE
COMMUNITY FIRST BANKSHARES, INC.
___% SENIOR NOTE DUE ____
$________________________ NO._____________________
Community First Bankshares, Inc., a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to______________________
_____________________________________________________________, or registered
assigns, the principal sum of ________________________ Dollars on
_______________, and to pay interest thereon at the rate of ____% per annum from
the Initial Interest Accrual Date or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, on ____________________ of
each year, commencing _____________ (each an "Interest Payment Date"), until the
principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, except as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest, which will be the 15th day of the month in which the
relevant Interest Payment Date occurs. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and either may be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to the Holders not less than ten days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Note will be made at the office or agency of
the Company maintained for that purpose in Minneapolis, Minnesota, or in such
other office or agency as may be established by the Company pursuant to the
Indenture (initially the principal corporate trust office of the Trustee in
____________________ (the "Corporate Trust Office")), in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; PROVIDED, HOWEVER, that payment of interest
may be made at the option of the Company (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Note Register or
(ii) by wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register. Payments of principal and interest at maturity
will be made against presentation of this Note at the Corporate Trust Office (or
such other office as may be established pursuant to the Indenture), by check or
wire transfer.
A-1
<PAGE>
Reference is hereby made to the further provisions of this Note set forth
on the reverse side hereof, which further provisions shall for all purposes have
the same effect as though fully set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee or an Authenticating Agent under the Indenture referred to on the
reverse hereof by the manual signature of one of its authorized officers, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name by the manual or facsimile signature of its Chief Executive Officer, its
President or one of its Vice Presidents and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries.
Date:
COMMUNITY FIRST BANKSHARES, INC.
By:_____________________________________
President
ATTEST:
____________________________________
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the Indenture.
________________________________________
as Trustee
Authentication
Date:_____________ By______________________________________
Authorized Signatory
A-2
<PAGE>
(Reverse of Note)
COMMUNITY FIRST BANKSHARES, INC.
____% SENIOR NOTE DUE ____
THIS NOTE IS NOT A SAVINGS ACCOUNT OR A DEPOSIT AND IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OF THE UNITED STATES.
[Unless and until it is exchanged in whole or in part for Definitive Notes,
this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
Note is presented by an authorized representative of the Depository to the
issuer or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of ____________ or such other name as may
be requested by an authorized representative of the Depository (and any payment
is made to ______________ or such other entity as may be requested by an
authorized representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, _____________, has an interest herein.](1)
This Note is one of a duly authorized issue of Series ____ Notes of the
Company ("Series ____ Notes") designated as its ____% Senior Notes due ____
limited in aggregate principal amount to $__________ issued and to be issued
under an Indenture dated as of __________, 199_ and a supplemental indenture
dated ______________ (herein called the "Indenture"), between the Company and
________________________________________, as Trustee (herein called the
"Trustee," which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Company, the Trustee
and the Holders of all series of Notes of the Company (collectively, the
"Notes"), and the terms upon which the Notes are, and are to be, authenticated
and delivered.
The Notes may not be redeemed by the Company prior to Maturity.
If an Acceleration Event with respect to the Series ____ Notes shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Series ____ Notes may declare the
principal of all Series ____ Notes due and payable in the manner and with the
effect provided in the Indenture. An "Acceleration Event" is an Event of
Default relating to non-payment of principal, non-payment of interest,
bankruptcy, insolvency, or reorganization of the Company as more specifically
defined by the Indenture. The Indenture provides that such declaration
- --------------------------
(1)This paragraph should be included only for a Global Note.
A-3
<PAGE>
and its consequences may, in certain events, be annulled by the Holders of a
majority in principal amount of the Outstanding Series ____ Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Series ____ Notes under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of Series ____ Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of Series ____ Notes at the
time Outstanding, on behalf of the Holders of all Series ____ Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note may be registered on the Note Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company to be maintained for that purpose in
_____________________________), or at such other office or agency as may be
established by the Company for such purpose pursuant to the Indenture (initially
the principal corporate trust office of the Trustee in __________________), duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company, and duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
Series ____ Notes are issuable only in fully registered form, without
coupons, in denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000. As provided in the Indenture, and subject to
certain limitations therein set forth, Series ____ Notes are exchangeable for a
like aggregate principal amount of Series ____ Notes in authorized
denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A-4
<PAGE>
Prior to the due presentment of this Note for registration of transfer or
exchange, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Interest on Series ____ Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. Interest shall be payable to and excluding any
Interest Payment Date.
The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.
This Note shall not be valid until authenticated by the manual signature of
the Trustee or an Authenticating Agent.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
Each Holder of a Series ____ Note covenants and agrees by such Holder's
acceptance thereof to comply with and be bound by the foregoing provisions.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
A-5
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_______________________________________________________________________________
(Insert assignee's Soc. Sec. or Tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
_______________________________________________________________________________
Date:_____________
Your Signature:_____________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee
A-6
<PAGE>
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES (2)
The following exchanges of a part of the Global Note for Definitive Notes
have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease Amount of increase of this Global Note authorized officer
in in following such of
Principal Amount of Principal Amount of decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ---------------- ------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------------
(2) This should be included only in a Global Note.
A-7
<PAGE>
EXHIBIT 4.7
COMMUNITY FIRST BANKSHARES, INC.
AS ISSUER
TO
________________________________
AS TRUSTEE
INDENTURE
SUBORDINATED NOTES
____________, 199__
<PAGE>
SUBORDINATED NOTES
COMMUNITY FIRST BANKSHARES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED
AND INDENTURE, DATED AS OF ____________, 199__
Trust Indenture Act Indenture
Section Section
------- -------
Section 310 (a)(1) . . . . . . . . . . . . . . 608
Section 310 (a)(2) . . . . . . . . . . . . . . 608
Section 310 (a)(3) . . . . . . . . . . . . . . Inapplicable
Section 310 (a)(4) . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . 605
. . . . . . . . . . . . . . 609
Section 311 . . . . . . . . . . . . . . 605
Section 312 (a) . . . . . . . . . . . . . . 701
. . . . . . . . . . . . . . 702
(b) . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . 702
Section 313 (a) . . . . . . . . . . . . . . 703
(b)(1) . . . . . . . . . . . . . . Inapplicable
(b)(2) . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . 703
Section 314 (a) . . . . . . . . . . . . . . 704
. . . . . . . . . . . . . . 1011
(b) . . . . . . . . . . . . . . Inapplicable
(c)(1) . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . Inapplicable
(d) . . . . . . . . . . . . . . Inapplicable
(e) . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . 601
. . . . . . . . . . . . . . 603
(b) . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . 601
. . . . . . . . . . . . . . 603
ii
<PAGE>
Section 316 (a)(1)(A) . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . 104
Section 317 (a)(1) . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . 1003
Section 318 (a) . . . . . . . . . . . . . . 108
- ------------------------------------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
iii
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE - DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION. . . . . . . . . . . . . . . . . . 1
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . 1
Acceleration Event. . . . . . . . . . . . . . . . . . . . . . . 2
Acquired Indebtedness . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper. . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate of Authentication . . . . . . . . . . . . . . . . . 3
Certificated Note . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Subsidiary . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . 4
Definitive Notes. . . . . . . . . . . . . . . . . . . . . . . . 4
Depository. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Derivative Obligations. . . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 4
Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Government Obligations. . . . . . . . . . . . . . . . . . . . . 4
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Independent Public Accountants. . . . . . . . . . . . . . . . . 5
Initial Interest Accrual Date . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . 5
Issue Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Legal Holiday . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Note or Notes . . . . . . . . . . . . . . . . . . . . . . . . . 6
Note Register and Note Registrar. . . . . . . . . . . . . . . . 6
Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . 6
iv
<PAGE>
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 7
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment. . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Note. . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 8
Restricted Payment. . . . . . . . . . . . . . . . . . . . . . . 8
Restrictive Legend. . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act. . . . . . . . . . . . . . . . . . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
United States . . . . . . . . . . . . . . . . . . . . . . . . . 9
Vice President. . . . . . . . . . . . . . . . . . . . . . . . . 9
Voting Stock. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 102. Compliance Certificates and Opinions. . . . . . . . . 9
Section 103. Form of Documents Delivered to Trustee. . . . . . . .10
Section 104. Acts of Holders . . . . . . . . . . . . . . . . . . .11
Section 105. Notices, Etc. to Trustee and Company. . . . . . . . .12
Section 106. Notice to Holders of Notes; Waiver. . . . . . . . . .13
Section 107. Language of Notices . . . . . . . . . . . . . . . . .13
Section 108. Conflict with Trust Indenture Act . . . . . . . . . .13
Section 109. Effect of Headings and Table of Contents. . . . . . .14
Section 110. Successors and Assigns. . . . . . . . . . . . . . . .14
Section 111. Separability Clause . . . . . . . . . . . . . . . . .14
Section 112. Benefits of Indenture . . . . . . . . . . . . . . . .14
Section 113. Governing Law . . . . . . . . . . . . . . . . . . . .14
Section 114. Legal Holidays. . . . . . . . . . . . . . . . . . . .14
Section 115. Schedules . . . . . . . . . . . . . . . . . . . . . .15
Section 116. Counterparts. . . . . . . . . . . . . . . . . . . . .15
ARTICLE TWO - FORM OF NOTES. . . . . . . . . . . . . . . . . . . . . . .15
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . .15
Section 202. Global Notes. . . . . . . . . . . . . . . . . . . . .15
v
<PAGE>
ARTICLE THREE - THE NOTES. . . . . . . . . . . . . . . . . . . . . . . .16
Section 301. Title and Terms; Issuable in Series . . . . . . . . .16
Section 302. Currency; Denominations . . . . . . . . . . . . . . .19
Section 303. Execution, Authentication, Delivery and Dating. . . .19
Section 304. Temporary Notes . . . . . . . . . . . . . . . . . . .22
Section 305. Registration, Transfer and Exchange . . . . . . . . .22
Section 306. Mutilated, Destroyed, Lost and Stolen Notes . . . . .24
Section 307. Payment of Interest; Rights to Interest Preserved . .25
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . .26
Section 309. Cancellation. . . . . . . . . . . . . . . . . . . . .27
Section 310. Authentication and Delivery of the Notes. . . . . . .27
Section 311. Computation of Interest . . . . . . . . . . . . . . .27
ARTICLE FOUR- SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . .28
Section 401. Satisfaction and Discharge of Indenture . . . . . . .28
Section 402. Application of Trust Money. . . . . . . . . . . . . .29
ARTICLE FIVE - REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . .29
Section 501. Events of Default . . . . . . . . . . . . . . . . . .29
Section 502. Acceleration of Maturity; Rescission and Annulment. .31
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . .32
Section 504. Trustee May File Proofs of Claim. . . . . . . . . . .33
Section 505. Trustee May Enforce Claims without
Possession of Notes . . . . . . . . . . . . . . . . .34
Section 506. Application of Money Collected. . . . . . . . . . . .34
Section 507. Limitations on Suits. . . . . . . . . . . . . . . . .35
Section 508. Unconditional Right of Holders to Receive
Principal and Interest. . . . . . . . . . . . . . . .35
Section 509. Restoration of Rights and Remedies. . . . . . . . . .36
Section 510. Rights and Remedies Cumulative. . . . . . . . . . . .36
Section 511. Delay or Omission Not Waiver. . . . . . . . . . . . .36
Section 512. Control by Holders of Notes . . . . . . . . . . . . .36
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . .37
Section 514. Waiver of Stay or Extension Laws. . . . . . . . . . .37
ARTICLE SIX - THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . .37
Section 601. Certain Duties and Responsibilities . . . . . . . . .37
Section 602. Notice of Defaults. . . . . . . . . . . . . . . . . .39
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . .39
Section 604. Not Responsible for Recitals or Issuance of Notes . .40
Section 605. May Hold Notes. . . . . . . . . . . . . . . . . . . .40
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . .41
Section 607. Compensation and Reimbursement. . . . . . . . . . . .41
Section 608. Corporate Trustee Required; Eligibility . . . . . . .42
vi
<PAGE>
Section 609. Resignation and Removal; Appointment of Successor . .42
Section 610. Acceptance of Appointment by Successor. . . . . . . .43
Section 611. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . . . .45
Section 612. Appointment of Authenticating Agent . . . . . . . . .45
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY. . . . . . . . . . . . . . . . . . . . . . . . .46
Section 701. Company to Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . . . . . . .46
Section 702. Preservation of Information; Communications
to Holders. . . . . . . . . . . . . . . . . . . . .47
Section 703. Reports by Trustee. . . . . . . . . . . . . . . . . .47
Section 704. Reports by Company. . . . . . . . . . . . . . . . . .48
ARTICLE EIGHT - CONSOLIDATION, MERGER AND SALES. . . . . . . . . . . . .49
Section 801. Company May Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . .49
Section 802. Successor Person Substituted for Company. . . . . . .50
ARTICLE NINE - SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . .50
Section 901. Supplemental Indentures without Consent of Holders. .50
Section 902. Supplemental Indentures with Consent of Holders . . .51
Section 903. Execution of Supplemental Indentures. . . . . . . . .52
Section 904. Effect of Supplemental Indentures . . . . . . . . . .52
Section 905. Reference in Notes to Supplemental Indentures . . . .52
Section 906. Record Date . . . . . . . . . . . . . . . . . . . . .52
Section 907. Effect on Senior Indebtedness . . . . . . . . . . . .53
ARTICLE TEN - COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . .53
Section 1001. Payment of Principal and Interest . . . . . . . . . .53
Section 1002. Maintenance of Office or Agency . . . . . . . . . . .53
Section 1003. Money for Note Payments to Be Held in Trust . . . . .53
Section 1004. Corporate Existence . . . . . . . . . . . . . . . . .55
Section 1005. Maintenance of Properties . . . . . . . . . . . . . .55
Section 1006. Restrictions on Dividends and Other Payments. . . . .56
Section 1007. [Intentionally Left Blank]. . . . . . . . . . . . . .56
Section 1008. Insurance . . . . . . . . . . . . . . . . . . . . . .56
Section 1009. Payment of Taxes and Other Claims . . . . . . . . . .56
Section 1010. Books and Records . . . . . . . . . . . . . . . . . .57
Section 1011. Statement by Officers as to Default . . . . . . . . .57
Section 1012. Waiver of Certain Covenants . . . . . . . . . . . . .57
ARTICLE ELEVEN - SUBORDINATION OF NOTES. . . . . . . . . . . . . . . . .57
Section 1101. Notes of Each Series Subordinated to
Senior Indebtedness . . . . . . . . . . . . . . . . .57
Section 1102. Subrogation . . . . . . . . . . . . . . . . . . . . .59
Section 1103. Obligation of Company Unconditional . . . . . . . . .59
vii
<PAGE>
Section 1104. Payments on Notes Permitted . . . . . . . . . . . . .60
Section 1105. Effectuation of Subordination by Trustee. . . . . . .60
Section 1106. Knowledge of Trustee. . . . . . . . . . . . . . . . .60
Section 1107. Trustee May Hold Senior Indebtedness. . . . . . . . .60
Section 1108. Rights of Holders of Senior
Indebtedness Not Impaired . . . . . . . . . . . . . .61
EXHIBIT A - FORM OF NOTE . . . . . . . . . . . . . . . . . . . . . . . A-1
viii
<PAGE>
INDENTURE, dated as of ___________, 199__ (the "Indenture"), between
COMMUNITY FIRST BANKSHARES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company"),
having executive offices located at 520 Main Avenue, Fargo, North Dakota 58124
and _____________________________________________, a _________________________
(hereinafter called the "Trustee"), having its principal corporate trust office
at __________________________________________________________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Subordinated
Notes (hereinafter called the "Notes"), to be issued in one or more series as
herein provided. All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders (as hereinafter defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders from time to time
of the Notes or of series thereof, as follows:
ARTICLE ONE - DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
Except as otherwise expressly provided in this Indenture or unless the
context otherwise requires, for all purposes of this Indenture:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act (as hereinafter defined), either directly or by reference
therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States and,
1
<PAGE>
except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted in
the United States at the date of such computation;
(4) the words "herein", "hereof", "hereto" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(5) the word "or" is always used inclusively (for example, the phrase
"A or B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"ACCELERATION EVENT" has the meaning specified in Section 502.
"ACQUIRED INDEBTEDNESS" means indebtedness of a Person existing at the time
such Person becomes a Subsidiary of the Company or assumed in connection with
the acquisition by the Company or a Subsidiary of the Company of assets from
such Person, and not incurred in connection with, or in anticipation of, such
Person becoming a Subsidiary of the Company or such acquisition.
"ACT", when used with respect to any Holder, has the meaning specified in
Section 104.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee pursuant
to Section 612 to act on behalf of the Trustee to authenticate Notes of one or
more series.
"AUTHORIZED NEWSPAPER" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
2
<PAGE>
"BOARD OF DIRECTORS" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"BOARD RESOLUTION" means a copy of one or more resolutions, certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, delivered to the Trustee. Where any provision hereof refers to
action to be taken pursuant to a Board Resolution (including establishment of
any series of the Notes and the forms and terms thereof), such action may be
taken by any committee, officer or employee of the Company authorized to take
such action (generally or in any particular respect) by a Board Resolution.
"BUSINESS DAY", with respect to any Place of Payment or other location,
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a Legal
Holiday in such Place of Payment or other location.
"CERTIFICATE OF AUTHENTICATION" means the certificate set forth in EXHIBIT
A or Section 612.
"CERTIFICATED NOTE" means a Note which is not a Global Note.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934 or, if at
any time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person, and any other obligor upon the Notes.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written request
or order, as the case may be, signed in the name of the Company by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President, a Vice President, the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, or
by another officer of the Company duly authorized to sign by a Board Resolution,
and delivered to the Trustee.
"CONSOLIDATED" when used in conjunction with any other defined term means
the aggregate amount of the items included within the defined term of the
Company on a consolidated basis, eliminating inter-company items.
"CONSOLIDATED SUBSIDIARY" means a Subsidiary of the Company the financial
statements of which are included in the financial statements of the Company and
its Subsidiaries.
3
<PAGE>
"CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of original execution of this Indenture
is located at ___________________________.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEFINITIVE NOTES" means Notes that are in the form of the Notes attached
hereto as EXHIBIT A and that do not include the information called for by
footnotes 1 and 2 thereof.
"DEPOSITORY" means, with respect to any Notes of any series issued in the
form of one or more Global Notes, the Person designated as Depository by the
Company in or pursuant to this Indenture, which Person must be, to the extent
required by applicable law or regulation, a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and any successor to such Person.
If at any time there is more than one such Person, "Depository" shall mean, with
respect to any Notes of any series, the qualifying entity which has been
appointed with respect to such Notes of such series.
"DERIVATIVE OBLIGATIONS" means any obligations of the Company to make
payment pursuant to the terms of any securities contracts and foreign currency
exchange contracts, derivative instruments, such as swap agreements (including
interest rate and currency and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts other than obligations on account of indebtedness for money
borrowed ranking pari passu with or subordinate to the Notes.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"GLOBAL NOTE" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as EXHIBIT A evidencing all or part of a series of
Notes, issued to the Depositary or its nominee for such series, and registered
in the name of such Depositary or nominee.
"GOVERNMENT OBLIGATIONS" means direct obligations of the United States of
America, or any Person controlled or supervised by and acting as an agency or
instrumentality of such government, in each case where the payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by such government and which are not callable or redeemable at the option of the
issuer or issuers thereof, and shall also include a depository receipt issued by
a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of or other amount
with respect to any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, PROVIDED that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the
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holder of such depository receipt from any amount received by the custodian
in respect of the Government Obligation or the specific payment of interest
on or principal of or other amount with respect to the Government Obligation
evidenced by such depository receipt.
"HOLDER", when used with respect to the Notes, means the Person in whose
name a Note is registered in the Note Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of any particular series of Notes established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument due to the appointment of one or more
separate Trustees for any one or more separate series of Notes pursuant to
Section 610, the term "Indenture" shall mean, with respect to such series of
Notes for which any such Person is Trustee, this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of any particular series of Notes
for which such Person is Trustee established as contemplated by Section 301,
exclusive, however, of any provisions or terms which relate solely to other
series of Notes for which such Person is not Trustee, regardless of when such
terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental hereto executed and
delivered after such Person had become such Trustee but to which such person, as
such Trustee, was not a party.
"INDEPENDENT PUBLIC ACCOUNTANTS" means a nationally recognized firm of
accountants that, with respect to the Company, are independent public
accountants within the meaning of the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder, who may be
the independent public accountants regularly retained by the Company or who may
be other independent public accountants. Such accountants or firm shall be
entitled to rely upon any Opinion of Counsel as to the interpretation of any
legal matters relating to the Indenture or certificates required to be provided
hereunder.
"INITIAL INTEREST ACCRUAL DATE" as to any Note means the date from which
interest shall begin to accrue in connection with the original issuance of such
Note, which shall be the date as of which such Note originally issued by the
Company to the initial purchaser thereof shall be dated, and which shall be the
date upon which it was originally sold to such initial purchaser as designated
by the Company Order requesting authentication and delivery thereof.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"ISSUE DATE" means the date on which the Notes are originally issued in
accordance with the terms of this Indenture.
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"LEGAL HOLIDAY" with respect to any Place of Payment or other location,
means a Saturday, a Sunday or a day on which banking institutions or trust
companies in such Place of Payment or other location are not authorized or
obligated to be open.
"MATURITY" means the date on which the principal of the Notes or an
installment of principal becomes due and payable as provided in this Indenture,
whether at the Stated Maturity or by declaration of acceleration.
"MONEY" with respect to any payment, deposit or other transfer pursuant to
or contemplated by the terms hereof, means United States dollars or other
equivalent unit of legal tender for payment of public or private debts in the
United States of America.
"NOTE" or "NOTES" means any note or notes of any series, as the case may
be, authenticated and delivered under this Indenture; provided, however, that if
at any time there is more than one Person acting as Trustee hereunder, the term
"Notes" as to which such Person is Trustee shall mean Notes authenticated and
delivered hereunder, exclusive, however, of Notes of any series as to which such
Person is not Trustee.
"NOTE REGISTER" AND "NOTE REGISTRAR" have the respective meanings specified
in Section 305.
"OFFICE OR AGENCY" means an office or agency of the Company maintained or
designated in a Place of Payment for the Notes pursuant to Section 1002 or any
other office or agency of the Company maintained or designated for the Notes
pursuant to Section 1002 or, to the extent designated or required by Section
1002 in lieu of such office or agency, the Corporate Trust Office of the
Trustee.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company, that complies with the requirements of
Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that complies with the requirements of Section 314
(e) of the Trust Indenture Act.
"OUTSTANDING", when used with respect to any Notes, means, as of the date
of determination, all Notes of any series theretofore authenticated and
delivered under this Indenture, except:
(1) any Note theretofore canceled by the Trustee or the Note Registrar or
delivered to the Trustee or the Note Registrar for cancellation;
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(2) any Note or portion thereof for whose payment at the Maturity thereof
Money in the necessary amount has been theretofore deposited pursuant
hereto with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of the
Notes;
(3) any Note with respect to which the Company has effected defeasance
pursuant to Clauses (1)(b) and (3) of Section 401 hereof; and
(4) any Note which has been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, unless there shall have been
presented to the Trustee proof satisfactory to it that such Note is
held by a bona fide purchaser in whose hands such Note is a valid
obligation of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes of any series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes of
such series owned by the Company or any other obligor upon such Notes or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making any such determination or relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee knows to be so owned shall be so disregarded. Notes so owned which
shall have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee (a) the pledgee's right
so to act with respect to such Notes and (b) that the pledgee is not the Company
or any other obligor upon the Notes or any Affiliate of the Company or such
other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or interest on any Note on behalf of the Company.
"PERIODIC OFFERING" means an offering of Notes of a series from time to
time the specific terms of which Notes, including without limitation the rate or
rates of interest (or formula for determining the rate or rates of interest), if
any, thereon, and the Stated Maturity or Maturities thereof, are to be
determined by the Company or its agents upon the issuance of such Notes.
"PERSON" means any individual, Corporation, partnership, joint venture,
joint stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PLACE OF PAYMENT" has the meaning set forth in Section 301.
"PREDECESSOR NOTE" of a Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the
purposes of this definition, any Note
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authenticated and delivered under Section 306 in exchange for or in lieu of a
lost, destroyed, mutilated or stolen Note shall be deemed to evidence the
same debt as the lost, destroyed, mutilated or stolen Note.
"REGULAR RECORD DATE" for the interest payable on any Note of any series on
any Interest Payment Date therefor means the date specified in EXHIBIT A as the
"Regular Record Date".
"RESPONSIBLE OFFICER" means any officer of the Trustee in its Corporate
Trust Office and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"RESTRICTED PAYMENT" has the meaning specified in Section 1006.
"RESTRICTIVE LEGEND" has the meaning set forth in Section 305(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, and
interest on (1) (a) all indebtedness of the Company for money borrowed
(including indebtedness of others guaranteed by the Company) other than the
Notes, whether outstanding on the date hereof or thereafter created, assumed
or incurred, and (b) any amendments, renewals, extensions, modifications and
refundings of any such indebtedness, unless in the case of either (a) or (b)
in the instrument creating or evidencing any such indebtedness or pursuant to
which it is outstanding it is provided that such indebtedness is not Senior
Indebtedness, and (2) Derivative Obligations. For the purposes of this
definition, "indebtedness for money borrowed" is defined as (a) any
obligation of the Company for the repayment of borrowed money, whether or not
evidenced by bonds, debentures, notes or other written instruments, (b) any
deferred payment obligation of the Company for the payment of the purchase
price of property or assets evidenced by a note or similar instrument, and
(c) any obligation of the Company for the payment of rent or other amounts
under a lease of property or assets which obligation is required to be
classified and accounted for as a capitalized lease on the balance sheet of
the Company under generally accepted accounting principles; PROVIDED,
HOWEVER, that the foregoing shall not include any obligation that constitutes
a trade payable or accrued liability arising in the ordinary course of
business.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on any Note
means a date fixed by the Trustee pursuant to Section 307.
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"STATED MATURITY" with respect to any Note or any installment of principal
thereof or interest thereon means the date established by this Indenture or any
supplemental indenture as the fixed date on which the principal of such Note or
such installment of principal or interest is due and payable.
"SUBSIDIARY" means any Corporation of which at the time of determination
the Company or one or more Subsidiaries owns or controls directly or indirectly
more than 50% of the shares of Voting Stock.
"TRANSACTION" has the meaning specified in Section 1015.
"TRANSFER RESTRICTIONS" has the meaning set forth in Section 305(b).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Notes of any series
shall mean the Trustee with respect to Notes of that series.
"UNITED STATES" except as otherwise provided herein, means the United
States of America (including the states thereof and the District of Columbia),
its territories and possessions and other areas subject to its jurisdiction.
"VICE PRESIDENT" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
"VOTING STOCK" means stock of a Corporation of the class or classes having
general voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers or trustees of such Corporation, PROVIDED
that, for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered Voting Stock
whether or not such event shall have happened.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
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have been complied with and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as
to which the furnishing of such documents or any of them is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of counsel or Opinion of Counsel or
representation of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Note, they may, but need not, be
consolidated and form one instrument.
SECTION 104. ACTS OF HOLDERS.
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Note, shall be sufficient for any purpose of
this Indenture and (subject to Section 315 of the Trust Indenture Act)
conclusive in favor of the Trustee and the Company and any agent of the
Trustee or the Company, if made in the manner provided in this Section.
Without limiting the generality of this Section, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depository
that is a Holder of a Global Note, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in or pursuant
to this Indenture to be made, given or taken by Holders, and a Depository
that is a Holder of a Global Note may provide its proxy or proxies to the
beneficial owners of interests in any such Global Note through such
Depository's standing instructions and customary practices.
The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any Global Note held by a
Depository entitled under the procedures of such Depository to make, give
or take, by a proxy or proxies duly appointed in writing, any request,
demand, authorization, direction, notice, consent, waiver or other action
provided in or pursuant to this Indenture to be made, given or taken by
Holders. If such a record date is fixed, the Holders on such record date
or their duly appointed proxy or proxies, and only such Persons, shall be
entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other action, whether or not such
Holders remain Holders after such record date. No such request, demand,
authorization, direction, notice, consent, waiver or other action shall be
valid or effective if made, given or taken more than 90 days after such
record date.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient and in
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accordance with such reasonable rules as the Trustee may determine; and the
Trustee may in any instance require further proof with respect to any of
the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of Notes held
by any Person, and the date of the commencement and the date of the
termination of holding the same, shall be proved by the Note Register.
(4) If the Company shall solicit from the Holders of any Notes of any
series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated
to), by Board Resolution, fix in advance a record date for the
determination of Holders of Notes of such series entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of Notes of such series of
record at the close of business on such record date shall be deemed to be
Holders for the purpose of determining whether Holders of the requisite
proportion of Outstanding Notes of such series have authorized or agreed or
consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Notes of
such series shall be computed as of such record date; PROVIDED that no such
authorization, agreement or consent by the Holders of Notes of any series
on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six
months after the record date.
(5) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or suffered to be done by the Trustee, any Note
Registrar, any Paying Agent or the Company in reliance thereon, whether or
not notation of such action is made upon such Note.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class
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postage prepaid, or sent by facsimile and U.S. mail, first-class postage
prepaid, to the Company addressed to the attention of its Chief Financial
Officer at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS OF NOTES; WAIVER.
Except as otherwise expressly provided in this Indenture, where this
Indenture provides for notice to Holders of Notes of any series of any event,
such notice shall be sufficiently given to Holders of Notes of such series if
in writing and mailed, first-class postage prepaid, to each Holder of a Note
of a series affected by such event, at such Holder's address as it appears in
the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.
In any case where notice to Holders of Notes of any series is given by
mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Note of a series shall affect the
sufficiency of such notice with respect to other Holders of Notes of such
series. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given or provided. In case by reason
of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Notes shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 107. LANGUAGE OF NOTICES.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language.
SECTION 108. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(d) thereof, such required provision shall control.
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SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 110. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 111. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes of any series
shall be invalid, illegal or unenforceable, either wholly or partially, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby, and such provisions shall be
given effect to the fullest extent permitted by law.
SECTION 112. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person, other than the parties hereto, any Note Registrar, any Paying
Agent, any Authenticating Agent and their respective successors hereunder and
the Holders of Notes, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 113. GOVERNING LAW.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable to agreements
made or instruments entered into and, in each case, performed in said state.
SECTION 114. LEGAL HOLIDAYS.
In any case where any Interest Payment Date or Stated Maturity of any
Note shall be a Legal Holiday at any Place of Payment, then (notwithstanding
any other provision of this Indenture) payment need not be made at such Place
of Payment on such date, but may be made on the next succeeding day that is a
Business Day at such Place of Payment with the same force and effect as if
made on the Interest Payment Date or at the Stated Maturity, and no interest
shall accrue on the amount payable on such date or at such time for the
period from and after such Interest Payment Date or Stated Maturity, as the
case may be.
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SECTION 115. SCHEDULES.
Any Schedules attached hereto are by this reference made a part hereof
with the same effect as if herein set forth in full.
SECTION 116. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute
but one and the same instrument.
ARTICLE TWO -- FORM OF NOTES
SECTION 201. FORMS GENERALLY.
Each Note of any series issued pursuant to this Indenture, including
Global Notes, shall be in substantially the form included in EXHIBIT A
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture or any indenture
supplemental hereto and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rule or regulation of any stock
exchange or national market system or as may, consistently herewith, be
determined by the officers executing such Note as evidenced by their
execution of such Note. The Notes shall be issuable without coupons in fully
registered form only. Any portion of the text of any Note may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of
the Note.
The Notes shall be printed, lithographed or engraved or produced by any
combination of these methods on a steel engraved border or steel engraved
borders or may be produced in any other manner, all as determined by the
officers of the Company executing such Notes, as evidenced by their execution
of such Notes.
SECTION 202. GLOBAL NOTES.
Notes issued hereunder may be issued as one or more Global Notes.
Ownership of beneficial interests in a Global Note will be limited to persons
who have accounts with the Depository ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a
Global Note will be shown on, and the transfer of the ownership interests
will be effected only through, records maintained by the Depository or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
Any endorsement of any Note in global form to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
Outstanding Notes represented thereby shall be made in such manner and by
such Person or Persons as shall be specified therein or in the Company Order
to be delivered pursuant to Section 303 or 304 with respect thereto. Subject
to the
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provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Global Note in permanent global form in the manner
and upon instructions given by the Person or Persons specified therein or in
the applicable Company Order. If a Company Order pursuant to Section 303 or
304 has been, or simultaneously is, delivered, any instructions by the
Company with respect to a Global Note shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
ARTICLE THREE -- THE NOTES
SECTION 301. TITLE AND TERMS; ISSUABLE IN SERIES.
The Notes may be issued in one or more series. There shall be established,
without the approval of any Holders or the Trustee, by or pursuant to authority
granted by one or more Board Resolutions, and, subject to Section 303, there
shall be set forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the initial issuance of Notes of any
series, all or any of the following, as applicable:
(1) the title of the Notes of the series (which shall distinguish
the Notes of the series from Notes of any other series);
(2) any limit upon the aggregate principal amount of the Notes of the
series which may be authenticated and delivered hereunder (except for Notes
authenticated and delivered upon registration of transfer of, or in lieu
of, other Notes of the series pursuant to Sections 304, 305, or 306 and
except for any Notes which, pursuant to Section 303, are deemed never to
have been authenticated and delivered hereunder) and the absence of such
limitation shall mean that the Company may issue from time to time
additional Notes of such series without limitation as to aggregate
principal amount;
(3) the Person to whom any interest on a Note of the series shall be
payable, if other than the Person in whose name that Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates, or the method by which such date or dates are
determined or extended, on which the principal or installments of principal
and premium, if any, of the Notes of the series is or are payable;
(5) the rate or rates (which may be fixed or variable) at which the
Notes of the series shall bear interest, if any, or the method by which
such rate or rates shall be determined,
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the date or dates from which such interest shall accrue, the Interest
Payment Dates on which such interest shall be payable, the Regular Record
Date for the interest payable on any Interest Payment Date and the
circumstances, if any in which the Company may defer interest payments and
the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(6) the place or places, if any, where the principal of (and premium,
if any) and interest on Notes of the series shall be payable, any Notes of
the series may be surrendered for registration of transfer or exchange and
notices and demands to or upon the Company with respect to the Notes of the
series and this Indenture may be served, other than or in addition to the
Corporate Trust Office of the Trustee;
(7) whether the Notes of the series will be convertible into shares
of capital stock and/or exchangeable for other securities, and if so, the
terms and conditions upon which such Notes will be so convertible or
exchangeable, and any deletions from or modifications or additions hereto
to permit or to facilitate the issuance of such convertible or exchangeable
Notes or the administration thereof;
(8) the identity of each Note Registrar and Paying Agent, if other
than or in addition to the Trustee;
(9) if the amount of principal of or any premium or interest on any
Notes of the series may be determined by reference to an index or pursuant
to a formula, the manner in which such amounts shall be determined;
(10) the applicability of, and any addition to or change in, the
definitions currently set forth herein;
(11) if other than denominations of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
Notes of the series shall be issuable;
(12) any other event or events of default applicable with respect to
Notes of the series in addition to or in lieu of those provided in Section
501 or any event or events of default provided in Section 501 which will
not be applicable to Notes of the series, and any change in the right of
the Trustee or the Holders to declare the principal of or any premium or
interest on such Notes due and payable;
(13) if less than the principal amount thereof, the portion of the
principal amount of Notes of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(14) whether the Notes of the series shall be issued in whole or in
part in the form of one or more Global Notes and, if so, (a) the Depositary
with respect to such Global Note
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or Notes and (b) the circumstances under which any such Global Note may be
exchanged for Notes registered in the name of, and any transfer of such
Global Note may be registered to, a Person other than such Depositary or
its nominee, if other than set forth in Section 305;
(15) if applicable, the period or periods within which or the date
or dates on which, the price or prices at which and the terms and
conditions upon which Notes of the series may be redeemed, in whole or
in part, at the option of the Company;
(16) any other covenant or warranty included for the benefit of the
Notes of the series in addition to (and not inconsistent with) those set
forth herein for the benefit of Notes of all series, or any other
covenant or warranty included for the benefit of Notes of the series in
lieu of any covenant or warranty set forth herein for the benefit of
Notes of all series, or any provision that any covenant or warranty set
forth herein for the benefit of Notes of all series shall not be fore the
benefit of Notes of such series, or any combination of such covenants,
warranties or provisions and the applicability, if any, of the provisions
of Section 1012 to such covenants and warranties; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions hereof, except as permitted by Section
901(5)).
All Notes of any one series (other than Notes offered in a Periodic
Offering) shall be substantially identical except as to denomination and
except as may otherwise be provided by or pursuant to the Board Resolution
referred to above and, subject to Section 303, set forth, or determined in
the manner provided, in the Officers' Certificate referred to above or in any
such indenture supplemental hereto. All Notes of any one series need not be
issued at the same time. Unless otherwise provided, Notes of a single series
may have different terms, and a series may be reopened, without the consent
of the Holders of Notes of such series, for issuance of additional Notes of
such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
With respect to Notes of a series offered in a Periodic Offering, such
Board Resolution and Officers' Certificate or supplemental indenture may
provide general terms or parameters for Notes of such series and provide
either that the specific terms of particular Notes of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a
Company Order as contemplated by Section 303.
The principal of and interest on the Notes of any series shall be payable
at the Office or Agency of the Company in Minneapolis, Minnesota ("PLACE OF
PAYMENT") maintained for such purposes pursuant to Section 1002; PROVIDED,
HOWEVER, that, at the option of the Company, payment of interest may be made
(subject to collection) (i) by check mailed to the address of the Person
entitled thereto as such address shall appear on the Note Register or (ii) by
wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register.
The Notes of each series shall be subordinated in right of payment to
Senior Indebtedness, whether outstanding at the date of this Indenture or
hereafter created, as provided in Article Eleven.
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SECTION 302. CURRENCY; DENOMINATIONS.
The principal of and interest on the Notes of each series shall be payable
in United States dollars or other equivalent unit of legal tender for payment of
public or private debts in the United States of America. In the absence of
any specification with respect to the Notes of any series, notes shall be
issuable in fully registered form only without coupons in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Notes shall be executed on behalf of the Company by its Chairman of the
Board, one of its Vice Chairmen of the Board, its Chief Executive Officer,
its President, its Chief Financial Officer, its Treasurer or one of its Vice
Presidents under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
At any time and from time to time after the execution and delivery
hereof, the Company may deliver Notes of any series executed by the Company
to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, or, in the case of Notes offered
in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents,
promptly confirmed in writing by the Company) acceptable to the Trustee as
may be specified from time to time by a Company Order for establishing the
specific terms of particular Notes being so offered, and the Trustee in
accordance with the Company Order shall authenticate and deliver such Notes.
If the form or forms or terms of the Notes of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Section 301, in authenticating such Notes and accepting the additional
responsibilities hereunder in relation to such Notes, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon
(a) an Opinion of Counsel stating:
(1) that the form or forms of such Notes have been established in
conformity with the provisions thereof,
(2) that the terms of such Notes have been established in conformity
with the provisions thereof,
(3) that authentication and delivery of such Notes and the execution
and delivery of the supplemental indenture, if any, by the Trustee will not
violate the terms hereof,
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(4) that the Company has the corporate power to issue, and has duly
authorized, such Notes;
(5) that such Notes, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles; and
(6) that the issuance of such Notes will not contravene the
certificate of incorporation or bylaws of the Company or result in any
violation of any of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement known to such Counsel by which
the Company or its assets is bound, the violation of which would have a
material adverse effect on the Company and its subsidiaries taken as a
whole;
(b) an executed supplemental indenture, if any;
(c) a copy of the Board Resolution; and
(d) an Officers' Certificate;
provided, however, that, with respect to Notes of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Notes of such series and that the opinions described in clauses (a)(2) and
(a)(5) above may state, respectively, that
(2) if the terms of such Notes are to be established pursuant to a
Company Order or pursuant to such procedures as may be specified from time
to time by a Company Order, all as contemplated by a Board Resolution or
action taken pursuant thereto, such terms will have been duly authorized by
the Company and established in conformity with the provisions hereof; and
(5) that such Notes, when executed by the Company, completed,
authenticated and delivered by the Trustee in accordance herewith, and
issued and delivered by the Company and paid for, all in accordance with
any agreement of the Company relating to the offering, issuance and sale of
such Notes, will be duly issued hereunder and will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting generally the enforcement of
creditors' rights and to general principles of equity.
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With respect to Notes of a series offered in a Periodic Offering, the
Trustee may rely conclusively, as to the authorization by the Company of any
of such Notes, the form or forms and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of
Counsel, Company Order and other documents delivered pursuant to Section 301
and this Section, as applicable, in connection with the first authentication
of a form of Notes of such series and it shall not be necessary for the
Company to deliver such Opinion of Counsel and other documents (except as may
be required by the specified other procedures, if any, referred to above) at
or prior to the time of authentication of each Note of such series unless and
until the Trustee receives actual notice that such Opinion of Counsel or
other documents have been superseded or revoked, and may assume compliance
with any conditions specified in such Opinion of Counsel (other than any
conditions to be performed by the Trustee). If such form or forms or terms
have been so established, the Trustee shall not be required to authenticate
such Notes if the issue of such Notes pursuant hereto will affect the
Trustee's own rights, duties or immunities under the Notes and this Indenture
or otherwise in a manner which is not reasonably acceptable to the Trustee.
The Company may establish by Company Order that the Notes of any series
to be issued hereunder shall be in the form of one or more Global Notes. The
Company shall execute and the Trustee shall, in accordance with this Section
and the Company Order with respect to such Notes, authenticate and deliver
one or more Global Notes in permanent form that (i) shall represent and shall
be denominated in an amount equal to the aggregate principal amount of the
Outstanding Notes to be represented by such Global Note or Notes, (ii) shall
be registered in the name of the Depository for such Global Note or Notes or
the nominee of such Depository, (iii) shall be delivered by the Trustee to
such Depository or pursuant to such Depository's instruction and (iv) shall
bear a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Notes in certificated form, this Note may
not be transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository" or to such
other effect as the Depository and the Trustee may agree.
Each Note of a series shall be dated the date of its authentication.
No Note of any series shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Note a Certificate of Authentication substantially in the form provided
for in EXHIBIT A or Section 612 executed by or on behalf of the Trustee by
the manual signature of one of its authorized officers or by an
Authenticating Agent. Such certificate upon any Note of any series shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
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SECTION 304. TEMPORARY NOTES.
Pending the preparation of Definitive Notes of any series, the Company
may execute and deliver to the Trustee and, upon Company Order, the Trustee
shall authenticate and deliver, in the manner provided in Section 303,
temporary Notes in lieu thereof which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Notes of any series in lieu of
which they are issued, in registered form and with such appropriate
insertions, omissions, substitutions and other variations as the officers of
the Company executing such Notes may determine, as conclusively evidenced by
their execution of such Notes.
Except in the case of temporary Global Notes, which shall be exchanged in
accordance with the provisions thereof, if temporary Notes of any series are
issued, the Company shall cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of Definitive Notes, such
temporary Notes shall be exchangeable for such Definitive Notes upon
surrender of such temporary Notes at an Office or Agency for such Notes,
without charge to any Holder thereof. Upon surrender for cancellation of any
one or more temporary Notes, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
Definitive Notes of authorized denominations. Unless otherwise provided in
or pursuant to this Indenture with respect to a temporary Global Note, until
so exchanged the temporary Notes shall in all respects be entitled to the
same benefits under this Indenture as Definitive Notes.
SECTION 305. REGISTRATION, TRANSFER AND EXCHANGE.
The Company shall cause to be kept a register (herein sometimes referred
to as the "NOTE REGISTER") at an Office or Agency maintained pursuant to
Section 1002 in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Notes of any
series and of transfers of the Notes. The Trustee is hereby initially
appointed as Note Registrar for the Notes. In the event that the Trustee
shall cease to be Note Registrar it shall have the right to examine the Note
Register at all reasonable times.
Upon surrender for registration of transfer of any Note of any series at
the Office or Agency of the Company, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes, denominated as authorized
in this Indenture, of a like aggregate principal amount bearing a number not
contemporaneously outstanding and containing identical terms and provisions.
At the option of the Holder, Notes of any series (except a Global Note
representing all of the Outstanding Notes) may be exchanged for other Notes,
in any authorized denominations, and of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such Office or Agency.
Whenever any Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Notes which the
Holder making the exchange is entitled to receive.
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Whenever any Notes are surrendered for exchange as contemplated by the
immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive.
No beneficial owner of an interest in a Global Note will be able to
transfer that interest except in accordance with the applicable procedures of
the Depository (in addition to any other procedures specified herein).
Notwithstanding the foregoing, except as otherwise provided in or
pursuant to this Indenture, no Global Note of any series shall be
exchangeable in whole or in part for Definitive Notes unless (i) the
Depository is at any time unwilling, unable or ineligible to continue as
Depository and a successor depository is not appointed by the Company within
90 days of the date the Company is so informed in writing, (ii) the Company
executes and delivers to the Trustee a Company Order to the effect that such
Global Note shall be so exchangeable, or (iii) an Event of Default has
occurred and is continuing with respect to the Global Note of any series
which entitles the Holders to accelerate the maturity thereof. If the
beneficial owners of interests in a Global Note of any series are entitled to
exchange such interests for Definitive Notes of such series of like tenor and
principal amount of any authorized form and denomination as specified as
contemplated by Section 304, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Company shall deliver to the Trustee Definitive Notes in such form and
denominations as are required by or pursuant to this Indenture, containing
identical terms and in aggregate principal amount equal to the principal
amount of such Global Note, executed by the Company. On or after the
earliest date on which such interests may be so exchanged, such Global Note
shall be surrendered by the Depository in accordance with instructions given
to the Trustee and the Depository (which instructions shall be in writing but
need not be contained in or accompanied by an Officers' Certificate or be
accompanied by an Opinion of Counsel) as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose. Promptly following any such exchange in part, such Global Note
shall be returned by the Trustee to such Depository in accordance with the
instructions of the Company referred to above. If a Note is issued in
exchange for any portion of a Global Note after the close of business at the
Office or Agency for such Note where such exchange occurs on or after (i) any
Regular Record Date for such Note and before the opening of business at such
Office or Agency on the next Interest Payment Date, or (ii) any Special
Record Date for such Note and before the opening of business at such Office
or Agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, interest shall not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Note, but shall be payable on such Interest Payment Date or proposed
date for payment, as the case may be, only to the Person to whom interest in
respect of such portion of such Global Note shall be payable in accordance
with the provisions of this Indenture.
Notwithstanding any other provision of this Indenture, a Global Note of
any series may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary.
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All Notes of any series issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company evidencing
the same debt and entitling the Holders thereof to the same benefits under
this Indenture as the Notes surrendered upon such registration of transfer or
exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Note Registrar for such
Note) be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Note Registrar duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304 or 905 not involving any transfer.
As used in this Section 305, the term "transfer" encompasses any sale,
pledge, transfer or other disposition of any Notes referred to herein.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If any mutilated Note, including a Global Note, is surrendered to the
Trustee, subject to the provisions of this Section, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Note containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee (1) evidence to
their satisfaction of the destruction, loss or theft of any Note, including a
Global Note if the destroyed, lost or stolen Note was a Global Note, and (2)
such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company's request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any
such destroyed, lost or stolen Note, a new Note of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing provisions of this Section, in case any
mutilated, destroyed, lost or stolen Note of any series has become or is
about to become due and payable for any reason, the Company in its discretion
may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
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Every new Note of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an additional original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any
and all other Notes of that series duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to
this Indenture, shall be exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 307. PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED.
Unless otherwise provided as contemplated by Section 301, any interest on
any Note of any series which shall be payable and is punctually paid or duly
provided for on any Interest Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered as of
the close of business on the Regular Record Date for such interest.
Any interest on any Note of any series which shall be payable, but shall
not be punctually paid or duly provided for, on any Interest Payment Date for
such Note (herein called "DEFAULTED INTEREST") shall forthwith cease to be
payable to the Holder thereof on the relevant Regular Record Date by virtue
of having been a Holder on such date; and such Defaulted Interest shall be
paid by the Company, at its election in each case, as provided in Clause (1)
or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Person in whose name such Note of such series (or a Predecessor Note
thereof) shall be registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on such Note and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of Money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to
the date of the proposed payment. Such Money when so deposited shall be
held in trust for the benefit of the Person entitled to such Defaulted
Interest. Thereupon, the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to the Holder of such Note (or a Predecessor Note thereof) at such Holder's
address as it appears in the Note Register not less than 10 days prior to
such Special Record Date. In addition to the mailing, the Trustee may, in
its discretion, in the name and at the expense of the Company cause a
similar notice to be published at least
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once in an Authorized Newspaper of general circulation in each Place of
Payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date and the failure of a Holder to
observe such published notice shall not entitle such Holder to additional
benefits or interest with respect to such Holder's Notes. Notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Person in whose name such Note of such series
(or a Predecessor Note thereof) shall be registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or national market system on which the Notes may be
listed, and upon such notice as may be required by such exchange or
national market system, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such payment shall
be deemed practicable by the Trustee.
At the option of the Company, interest on any Note may be paid (i) by
mailing a check to the address of the Person entitled thereto as such address
shall appear in the Note Register, or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Note Register.
Subject to the foregoing provisions of this Section and Section 305, each
Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer or
exchange, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Note is registered in the
Note Register as the owner of such Note for the purpose of receiving payment
of principal of and (subject to Sections 305 and 307) interest on such Note
and for all other purposes whatsoever, whether or not any payment with
respect to such Note shall be overdue, and neither the Company, nor the
Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Payments on Global Notes will be made to the Depository, or its nominee,
as the registered owner thereof. Neither the Company, the Trustee nor any
paying agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
No holder of any beneficial interest in any Global Note held on its behalf
by a Depositary shall have any rights under this Indenture with respect to such
Global Note or any Note represented
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thereby, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Note or
any Note represented thereby for all purposes whatsoever. Notwithstanding
the foregoing, with respect to any Global Note, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary Holder of such Global Note, or impair, as between a
Depositary and the owners of beneficial interests in such Global Note, the
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominees) as Holder of such Global Note. None of the
Company, the Trustee, any Paying Agent or the Note Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
SECTION 309. CANCELLATION.
All Notes surrendered for payment, registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to
the Trustee, and any such Notes, as well as Notes surrendered directly to the
Trustee for any such purpose, shall be canceled promptly by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be
canceled promptly by the Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes held by the
Trustee shall be destroyed by the Trustee, unless by a Company Order the
Company directs their return to it.
SECTION 310. AUTHENTICATION AND DELIVERY OF THE NOTES.
Forthwith upon the execution and delivery of this Indenture, or from time
to time thereafter, Notes may be executed by the Company and delivered to the
Trustee for authentication, and shall thereupon be authenticated and
delivered by the Trustee upon Company Order, Board Resolution, or indentures
supplemental hereto.
SECTION 311. COMPUTATION OF INTEREST.
Except as otherwise specified pursuant to Section 301 for the Notes of
any series, interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. Interest shall be payable to and excluding any
Interest Payment Date and interest shall be payable to and excluding the
Maturity.
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ARTICLE FOUR- SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect with respect to any series of Notes and
the Trustee, on receipt of such Company Order, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture as to such series of Notes, when
(1) either
(a) all Notes of such series theretofore authenticated and
delivered (other than (i) Notes which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306
and (ii) Notes for whose payment Money has theretofore been deposited
in trust with the Trustee or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(b) all Notes of such series not so theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will
become due and payable at their Stated Maturity within one year, and
the Company has irrevocably deposited or caused to be deposited with
the Trustee, as trust funds and/or obligations in trust for such
purpose, Money and/or Government Obligations which through the payment
of interest and principal in respect thereof in accordance with their
terms, without consideration of any reinvestment thereof, will provide
not later than the opening of business on the due dates of any payment
of principal and interest with respect thereto, or a combination
thereof, Money in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation, including the principal thereof and interest
thereon, to the date of such deposit (in the case of Notes which have
become due and payable) or to the Maturity thereof, as the case may
be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company, including amounts owing to the Trustee; and
(3) the Company has delivered to the Trustee a certificate of
Independent Public Accountants certifying as to the sufficiency of the
amounts deposited pursuant to subclause (b) of Clause (1) of this Section
for payment of the principal and interest on the dates such payments are
due, and an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein providing for or relating to the
satisfaction and discharge of this Indenture have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series of Notes, the obligations of the Company and the Trustee
to the Holders of Notes of other series not so satisfied and discharged, the
obligations of the Company to the Trustee under Section 607, the obligations
of the Trustee to any Authenticating Agent under Section 612 and, if Money
and/or Government Obligations shall have been deposited with the Trustee
pursuant to subclause (b) of Clause (1) of this Section, the obligations of
the Trustee under Section 402 and the last paragraph of Section 1003, shall
survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
Money and Government Obligations deposited with the Trustee pursuant to
Section 401 and all Money received by the Trustee in respect of Government
Obligations deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Notes of
each series and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the principal
and interest for whose payment such Money has or Government Obligations have
been deposited with or received by the Trustee; but such Money and Government
Obligations need not be segregated from other funds of the Trustee except to
the extent required by law.
ARTICLE FIVE - REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"EVENT OF DEFAULT" wherever used herein with respect to Notes of any
series, and unless otherwise provided with respect to Notes of any series
pursuant to Section 301, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest on any Note of such series
when such interest becomes due and payable, and continuance of such default
for a period of 10 days; or
(2) default in the payment of the principal of any Note of such
series when it becomes due and payable at its Maturity; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or the Notes of such series
(other than a covenant or warranty a default in the performance or the
breach of which is elsewhere in this Section specifically dealt with or
which expressly has been included herein solely for the benefit of a series
of one or more Notes other than such series), and continuance of such
default or breach for a period
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of 30 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Notes
of such series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) default in the payment at stated maturity of any indebtedness of
the Company or any Subsidiary for money borrowed (not described above in
paragraph (1) or (2)) in principal amount due at stated maturity in excess
of $2,000,000, and such default shall continue, without being cured, waived
or consented to and without such indebtedness being discharged, for a
period of 30 days beyond any applicable period of grace, PROVIDED, HOWEVER,
that the provisions of this Section 501(4) shall not apply to any
indebtedness of the Company or any Subsidiary under which the rights and
remedies of the lender in the event of default are limited to repossession
or sale of property securing such obligation, with no recourse to the
Company or any Subsidiary; or
(5) the occurrence of an event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there
may be secured or evidenced, any indebtedness of the Company or any
Subsidiary for money borrowed (not described above in paragraph (3)) (or
the payment of which is guaranteed by the Company), whether such
indebtedness now exists or shall hereafter be created, PROVIDED, HOWEVER,
that no such event of default shall constitute an Event of Default
hereunder unless such event of default results in the acceleration of such
indebtedness prior to its expressed maturity, which together with the
principal amount of any such other indebtedness so caused to be
accelerated, aggregates $2,000,000 or more at any one point in time and
such default shall not have been cured or waived and such acceleration
shall not have been rescinded or annulled, PROVIDED, HOWEVER, that the
provisions of this Section 501(5) shall not apply to any indebtedness of
the Company or any Subsidiary under which the rights and remedies of the
lender in the event of default are limited to repossession or sale of
property securing such obligation, with no recourse to the Company or any
Subsidiary; or
(6) the entry by a court or agency or supervisory authority having
competent jurisdiction of:
(a) a decree or order for relief in respect of the Company or
any Subsidiary in an involuntary proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(b) a decree or order adjudging the Company or any Subsidiary to
be insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of the Company or any
Subsidiary and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
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(c) a decree or order appointing any Person to act as a
custodian, receiver, liquidator, assignee, trustee or other similar
official of the Company or any Subsidiary or of any substantial part
of the property of the Company or any Subsidiary, as the case may be,
or ordering the winding up or liquidation of the affairs of the
Company or any Subsidiary and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or any Subsidiary of a voluntary
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or of a voluntary proceeding seeking to be adjudicated
insolvent or the consent by the Company or any Subsidiary to the entry of a
decree or order for relief in an involuntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any insolvency proceedings against it, or the filing
by the Company or any Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable law, or the consent by the
Company or any Subsidiary to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or similar official of the Company or any Subsidiary or
any substantial part of the property of the Company or any Subsidiary or
the making by the Company or any Subsidiary of an assignment for the
benefit of creditors, or the taking of corporate action by the Company or
any Subsidiary in furtherance of any such action;
(8) a final judgment, judicial decree or order for the payment of
money in excess of $1,000,000 shall be rendered against the Company or any
Subsidiary and such judgment, decree or order shall continue unsatisfied
for a period of 60 days without a stay of execution; or
(9) any other Event of Default provided with respect to the Notes of
such series pursuant to Section 301.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default specified in Subsection 501(6) or Subsection 501(7)
or any other Event of Default specified pursuant to Section 301 occurs and is
continuing (an "Acceleration Event"), then the Trustee or the Holders of not
less than 25% in principal amount of the outstanding Notes of any series may
declare the principal of all the Notes of such series, and the interest accrued
thereon, to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such amount shall become immediately due and payable; provided,
however, that any Event of Default specified in Subsection 501(7) shall result
in immediate and automatic acceleration of maturity of the outstanding Notes of
every series, and the principal of all the Notes of every series and the
interest accrued thereon shall be due and payable immediately without notice, as
if a declaration of acceleration, as contemplated in this Section 502, had been
made.
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At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the Money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Notes of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum of Money
sufficient to pay
(a) all overdue installments of any interest on all Notes of
such series,
(b) the principal of any Notes of such series which have become
due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by such Notes,
(c) to the extent that payment of such interest is lawful,
interest upon overdue installments of any interest at the rate borne
by such Notes, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the
principal of and interest on Notes of such series which shall have become
due solely by reason of such Acceleration Event, shall have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default occurs and is continuing,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Notes, the whole amount of money then due and
payable (including any amount of money payable as a result of acceleration) with
respect to such Notes, with interest upon any overdue principal and, to the
extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest at the same rate of interest as is payable on
the principal amount of the Notes, and, in addition thereto, such further amount
of Money as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay the Money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the Money so due
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and unpaid, and may prosecute such proceeding to judgment or final decree,
and may enforce the same against the Company or any other obligor upon such
Notes and collect the Money adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Notes, wherever situated.
If any Event of Default with respect to the Notes of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of such Notes by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the collection of all principal and
interest then due and payable hereunder (in the absence of any acceleration), or
the specific enforcement of any covenant or agreement in this Indenture or such
Notes or in aid of the exercise of any power granted herein or therein, or to
enforce any other proper remedy.
The rights and remedies under this Section 503 are in addition to the other
rights and remedies available under this Article 5 or otherwise legally
available.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
of any series or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes of
any series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of any overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Notes of any series for
which the Trustee acts as trustee and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents or counsel) and of
the Holders of Notes of such series allowed in such judicial proceeding,
and
(2) to collect and receive any Money or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Notes of such series to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders of Notes of such series, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 607.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Note of
any series any plan of reorganization, arrangement, adjustment or composition
affecting the Notes of such series or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a Note of
such series in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or any of the Notes of
any series may be prosecuted and enforced by the Trustee without the possession
of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery or judgment, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, shall be for
the ratable benefit of each and every Holder of a Note of such series in respect
of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any Money collected by the Trustee with respect to any series of Notes
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such Money on
account of principal or interest, upon presentation of the Notes of such series,
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 607;
SECOND: To the payment of amounts then due and unpaid to the holders
of Senior Indebtedness to the extent required by Article Eleven.
THIRD: In the case the principal of the Notes of such series shall
not have become due and payable, to the payment of the amounts then due and
unpaid upon the Notes of such series for interest in respect of which or
for the benefit of which such Money has been collected, in the order of the
Maturity of the installments of such interest, with interest, to the extent
that such interest is lawful and has been collected by the Trustee, upon
overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Notes for
interest;
FOURTH: In the case the principal of the Notes of such series shall
have become due and payable, to the payment of the amounts then due and
unpaid upon the Notes for principal and interest in respect of which or for
the benefit of which such Money has been collected, with interest, to the
extent that such interest is lawful and has been collected by the Trustee,
upon overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Notes for
principal and interest, respectively; and
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FIFTH: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATIONS ON SUITS.
No Holder of any Note of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Acceleration Event or Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes of such series shall have made written request to the
Trustee to institute proceedings in respect of such Acceleration Event or
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, fees, expenses and
liabilities to be incurred in compliance with such request (including
reasonable fees of counsel);
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Notes of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Note to accelerate amounts due under the Notes when
when the Trustee could not accelerate such amounts or otherwise exercise any
remedies which the Trustee could not have exercised hereunder, or any right to
affect, disturb or prejudice the rights of any other Holders, or to obtain or to
seek to obtain priority or preference over any other Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all such Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, but subject to those
limitations regarding acceleration which are applicable to the Trustee and which
are contained in Section 502, the Holder of any Note of any series shall have
the right, which is absolute and unconditional, to receive payment of the
principal of and (subject to Sections 305 and 307) interest on such Note on the
respective Stated Maturity or Maturities therefor specified in such Note and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
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SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Note of any series has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 306,
and subject to Sections 502 and 503, no right or remedy herein conferred upon or
reserved to the Trustee or to each and every Holder of a Note is intended to be
exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note of any
series to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to any Holder of a Note of any series may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
SECTION 512. CONTROL BY HOLDERS OF NOTES.
The Holders of a majority in principal amount of the Outstanding Notes of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Notes, PROVIDED
that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
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(3) subject to Section 601, the Trustee need not take any action
which might be unjustly prejudicial to the rights of the other Holders of
Notes not joining in such action.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series on behalf of the Holders of all the Notes of
such series may waive any past default hereunder and its consequences, except a
default
(1) in the payment of the principal of or interest on any Note of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note of such series.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants that (to the extent that it may lawfully do so) it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE SIX -- THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(1) With respect to Notes of any series, except during the continuance of
an Event of Default with respect to that series only,
(a) the Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon
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certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of
this Indenture.
(2) With respect to Notes of any series, in case an Event of Default has
occurred and is continuing with respect to that series only, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(3) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(a) this Subsection shall not be construed to limit the effect of
Subsection (1) of this Section;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding Notes
of any series, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to
the Notes of such series, provided such direction shall not be in conflict
with any rule of law or with this Indenture; and
(d) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(4) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
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SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default hereunder with respect
to the Notes of any series, the Trustee shall transmit to the Holders of Notes
of such series, in the manner and to the extent provided in Section 313 (b) of
the Trust Indenture Act, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a default in the payment of the principal of or interest
on any Note of such series, 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 and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders of Notes of such series; and PROVIDED, FURTHER, that in the case of any
default of the character specified in Section 501 (3) with respect to Notes of
such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence shall be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate and/or Opinion
of Counsel;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Notes of any series pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security
or indemnity against the costs, fees, expenses and liabilities which might
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be incurred by it, including reasonable fees of counsel, in complying with
such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine,
during business hours and upon reasonable notice, the books, records and
premises of the Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes of each series, except the
Trustee's Certificate of Authentication, shall be taken as the statements of the
Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Notes of any series,
except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Notes of any series and perform its
obligations hereunder. Neither the Trustee nor any Authenticating Agent shall
be accountable for the use or application by the Company of the Notes of any
series or the proceeds thereof. The Trustee shall not be responsible for any
statement made in any prospectus or similar document used to sell the Notes of
any series.
SECTION 605. MAY HOLD NOTES.
The Trustee, any Authenticating Agent, any Paying Agent, any Note Registrar
or any other Person that may be an agent of the Trustee or the Company, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note Registrar or such other Person.
SECTION 606. MONEY HELD IN TRUST.
Except as provided in Section 402 and Section 1003, Money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any Money received by it hereunder except as
otherwise agreed with the Company.
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SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable costs, expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to the Trustee's
negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the trust hereunder, including the
costs and expenses of defending themselves against any claim or liability
in connection with the exercise or performance of any of their powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Notes upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the payment of principal of and interest on Notes of any series. "Trustee"
for the purposes of this Section includes any predecessor Trustee, but
negligence or bad faith of any Trustee shall not be attributed to any other
Trustee.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable compensation and the expenses and disbursements of
reasonable compensation and the expenses and disbursements of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee and each predecessor Trustee.
SECTION 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia,
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authorized under such laws to exercise corporate trust powers, or any other
person permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the
Trust Indenture Act) of at least $50,000,000. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 609. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 610.
(2) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 610 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(3) The Trustee may be removed at any time with respect to Notes of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act
after written request therefor by the Company or any Holder of a
Note who has been a bona fide Holder of a Note for at least six
months, or
(b) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board
Resolution, may remove the Trustee, or (ii) subject to Section 315 (e) of
the Trust Indenture Act, any Holder of a Note who has been a bona fide
Holder of a Note for at least six months may, on behalf of such Holder and
all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
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(5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to Notes of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee with respect
to the Notes of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Notes of one or more
or all of such series and that at any time there shall be only one Trustee
with respect to the Notes of any particular series) and shall comply with
the applicable requirements of Section 610. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Notes of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 610, become the successor Trustee with respect to
the Notes of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Notes of any series shall have been so appointed by the Company or the
Holders of Notes of such series and accepted appointment in the manner
required by Section 610, any Holder of a Note of such series who has been a
bona fide Holder of a Note of such series for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Notes of such series.
(6) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Notes of any series and each
appointment of a successor Trustee by mailing written notice of such event
by first-class mail, postage prepaid, to the Holders of Notes of such
series as their names and addresses appear in the Note Register. Each
notice shall include the name of the successor Trustee with respect to the
Notes of such series and the address of its Corporate Trust Office.
SECTION 610. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(1) In case of the appointment hereunder of a successor Trustee with
respect to all Notes, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties hereunder of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder.
(2) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of one or more (but not all) series, the Company, the
retiring Trustee and each
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successor Trustee with respect to the Notes of one or more series shall
execute and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Notes of that or those
series to which the appointment of such successor Trustee relates, (b) if
the retiring Trustee is not retiring with respect to all Notes, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Notes of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee
and (c) shall add to or change any of the provisions hereof as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery
of such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Notes of that or those series to which the
appointment of such successor Trustee relates; but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held
by such retiring Trustee hereunder with respect to the Notes of that or
those series to which the appointment of such successor Trustee relates.
Whenever there is a successor Trustee with respect to one or more (but less
than all) series of Notes issued pursuant hereto, the terms "Indenture" and
"Notes" shall have the meanings specified in the provisos to the respective
definitions of those terms in Section 101 which contemplate such situation.
(3) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraphs (1) or (2) of this Section, as the case may be.
(4) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 611. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes
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of any series shall have been authenticated but not delivered by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
SECTION 612. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint one or more Authenticating Agents acceptable to the
Company with respect to one or more series of Notes which shall be authorized to
act on behalf of the Trustee to authenticate such Notes issued upon original
issue, exchange, registration of transfer, or pursuant to Section 306, and Notes
so authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of one or more series of Notes by the Trustee or the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a Certificate of Authentication executed on behalf of the Trustee by an
Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and, except as
provided in this Indenture, shall at all times be a Corporation that would be
permitted by the Trust Indenture Act to act as trustee under an indenture
qualified under the Trust Indenture Act, is authorized under applicable law and
by its charter to act as an Authenticating Agent and has a combined capital and
surplus (computed in accordance with Section 310(a) (2) of the Trust Indenture
Act) of at least $50,000,000. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, provided such Corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Notes
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Note Register. Any successor
Authenticating Agent, upon acceptance of its
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appointment hereunder, shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 607.
The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more series
pursuant to this Section, the Notes of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's Certificate of Authentication, an
alternate Certificate of Authentication in the following form:
This is one of the Notes described herein.
________________________________________________
As Authenticating Agent
By_____________________________________________
Authorized Signatory
Authentication Date
____________________
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
In accordance with Section 312 (a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(1) semi-annually on January 1 and July 1 of each year, a list, in
each case in such form as the Trustee may reasonably require, of the names
and addresses of Holders of Notes of any series for which the Trustee acts
as trustee as of the applicable date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
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PROVIDED, HOWEVER, that so long as the Trustee is the Note Registrar no such
list shall be required to be furnished for Notes of any series for which the
Trustee acts as Note Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
Every Holder of Notes of any series, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent nor any Note Registrar shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders of Notes in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(1) Within 60 days after May 15 of each year, if required by Section
313(a) of the Trust Indenture Act, the Trustee shall transmit, pursuant to
Section 313(c) of the Trust Indenture Act, a brief report dated as of such
May 15 with respect to any of the events specified in said Section 313 (a)
which may have occurred since the later of the immediately preceding May 15
and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(b)
of the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Sections 313(c) and 313(d) of the
Trust Indenture Act.
SECTION 704. REPORTS BY COMPANY.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it shall file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required
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pursuant to Section 13 of the Securities Exchange Act of 1934 in respect
of a Note listed and registered on a national securities exchange or
national market system as may be prescribed from time to time in such
rules and regulations; provided that notwithstanding the requirements of
such rules and regulations, so long as any Note is Outstanding the Company
shall file with the Trustee at a minimum (a) as soon as practicable, but in
any event no more than ninety (90) days, after the end of each fiscal year,
copies of a balance sheet and statements of income and retained earnings of
the Company as of the end of and for such fiscal year, audited by
Independent Public Accountants, and (b) as soon as practicable, but in any
event no more than forty-five (45) days, after the end of each quarterly
fiscal period, except for the last quarterly fiscal period in each fiscal
year, a summary statement (which need not be audited) of income and
retained earnings of the Company for such period;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company, as the case may be, with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations;
(3) transmit to the Holders of Notes of each series within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to paragraphs (a) and (b) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission;
PROVIDED that notwithstanding the requirements of such rules and
regulations, so long as the Company has a class of securities registered
pursuant to the Securities Exchange Act of 1934, the Company shall transmit
to the Holders of Notes of each series, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, the information,
documents and other reports of the Company as are furnished to the holders
of such class of securities registered under the Securities Exchange Act of
1934; PROVIDED FURTHER that so long as any Note is Outstanding, the Company
shall transmit to the Holders of Notes of each series at a minimum (a) as
soon as practicable, but in any event no more than ninety (90) days, after
the end of each fiscal year, copies of a balance sheet and statements of
income and retained earnings of the Company as of the end of and for such
fiscal year, audited by Independent Public Accountants, and (b) as soon as
practicable, but in any event no more than forty-five (45) days, after the
end of each fiscal quarterly period, except for the last quarterly fiscal
period in each fiscal year, a summary statement (which need not be audited)
of income and retained earnings of the Company for such period; and
(4) furnish to the Trustee the Officers' Certificates and notices
required by Section 1011 hereof.
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ARTICLE EIGHT - CONSOLIDATION, MERGER AND SALES
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Nothing contained in this Indenture shall prevent any consolidation or
merger of the Company with or into any other Person or Persons (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any conveyance, transfer or lease of the property of the Company as an
entirety or substantially as an entirety, to any other Person (whether or not
affiliated with the Company); PROVIDED, HOWEVER, that:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the entity formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a Person organized and existing under
the laws of the United States of America, any state thereof or the District
of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed by the successor Person and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all the Notes and the performance of every
other covenant of this Indenture on the part of the Company to be performed
or observed;
(2) immediately after giving effect to such transaction, no event
which, after notice or lapse of time, or both, would become an Event of
Default shall have occurred and be continuing; and
(3) either the Company or the successor Person shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, stating
that such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 802. SUCCESSOR PERSON SUBSTITUTED FOR COMPANY.
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and thereafter, except in the case of a lease to another Person, the predecessor
Person shall be released from all obligations and covenants under this Indenture
and the Notes.
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ARTICLE NINE - SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder of Notes of any series, the Company (when
authorized by or pursuant to a Board Resolution) and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, which shall conform with the requirements of the Trust Indenture Act as
then in effect and be in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Notes; or
(2) to add to or change any of the provisions of this Indenture to
change or eliminate any restrictions on the payment of principal of or
interest on Notes of any series or to permit or facilitate the issuance of
Notes of any series in uncertificated form, provided any such action shall
not adversely affect the interests of the Holders of Notes of any series in
any material respect; or
(3) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not adversely affect the
interests of the Holders of Notes of any series in any material respect; or
(4) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any Notes of any series pursuant to Article Four; provided
that any such action shall not adversely affect the interests of any Holder
of a Note of any series in any material respect; or
(5) to add to the covenants of the Company for the benefit of the
Holders of the Notes of each series (as shall be specified in such
supplemental indenture or indentures) or to surrender any right or power
herein conferred upon the Company; or
(6) to evidence and provide acceptance of the appointment of a
successor Trustee hereunder.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Notes of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee,
the Company (when authorized by or pursuant to a Board Resolution), and the
Trustee may enter into one or more indentures supplemental hereto (which
shall conform with the requirements of the Trust
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Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Notes of any series
under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture,
without the consent of the Holder of each Outstanding Note affected thereby,
shall
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any affected Note, or change the rate of
interest thereon, or change the Place of Payment, currency in which the
principal of or interest on any Note, is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the Outstanding
Notes of any series, the consent of the Holders of any series which is
required for any such supplemental indenture, or the consent of the Holders
of any series which is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, or Section 513 or
Section 1012, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Note affected
thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision hereof which has expressly been included solely for the benefit of one
or more particular series of Notes, or which modifies the rights of the Holders
of Notes of such series with respect to such covenant or other provision, shall
be deemed not to affect the rights hereunder of the Holders of Notes of any
other series.
It shall not be necessary for any Act of Holders of Notes under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
As a condition to executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
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Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Note of the series affected thereby theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 905. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Notes of
any series so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
SECTION 906. RECORD DATE.
If the Company shall solicit from the Holders of any series any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Holders of such series entitled to consent to any
supplemental indenture, agreement or instrument or any waiver, and shall
promptly notify the Trustee of any such record date. If a record date is
fixed those Persons who were Holders of such series at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
consent to such supplemental indenture, agreement or instrument or waiver or
to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. The record date shall be a date no
more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such solicitation is
completed. No such consent shall be valid or effective for more than six
months after such record date. Subject to applicable law, until any
supplemental indenture, agreement, instrument or waiver becomes effective, or
a consent to it by a Holder of a Note of such series shall cease to be valid
and effective as set forth in the preceding sentence, such consent is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's
Note.
SECTION 907. EFFECT ON SENIOR INDEBTEDNESS.
No supplemental indenture shall directly or indirectly modify the
provisions of Article Eleven in any manner which might terminate or impair the
rights and benefits of subordination provided to the holders of Senior
Indebtedness pursuant to Article Eleven.
ARTICLE TEN - COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
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The Company will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms thereof and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment an Office or Agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration, transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such Office or Agency. The
Company hereby initially designates the Corporate Trust Office of the Trustee
as its Office or Agency for each of the foregoing purposes. If at any time
the Company shall fail to maintain any such required Office or Agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it shall, on
or before each due date of the principal of or interest on the Notes of any
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum of Money sufficient to pay the principal or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and shall promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents, it shall, on or
prior to each due date of the principal of or interest on the Notes of any
series, deposit with any Paying Agent a sum of Money sufficient to pay the
principal or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled thereto, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company shall cause each Paying Agent other than the Trustee or the
Company to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of or
interest on Notes of any series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as provided in this Indenture;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal or
interest on the Notes of any series; and
53
<PAGE>
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such Money.
Any Money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Note of any series and remaining unclaimed for five years after such principal
or interest shall have become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust Money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in each Place of Payment, or to be mailed to Holders of
Notes, or both, notice that such Money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such Money then remaining will
be repaid to the Company.
SECTION 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and its
Subsidiaries, and shall comply with all statutes, rules, regulations and orders
of and restrictions imposed by governmental and administrative authorities and
agencies applicable to the Company and its Subsidiaries; PROVIDED, HOWEVER, that
the foregoing shall not obligate the Company to preserve any such right or
franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries and that the loss thereof is not disadvantageous in any material
respect to any Holder.
SECTION 1005. MAINTENANCE OF PROPERTIES.
The Company will:
(1) cause its properties and the properties of its Subsidiaries
(other than properties obtained by the Company or any Subsidiary through
foreclosure or other resolution of any loan or properties subject to valid
and binding leases with customers of the Company or any
54
<PAGE>
Subsidiary) used or useful in the conduct of the business of the
Company and its Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary facilities and
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted
at all times; PROVIDED, HOWEVER, that the foregoing shall not prevent
the Company or a Subsidiary from discontinuing the operation and
maintenance of any of its properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business
and not disadvantageous in any material respect to any Holder;
(2) take all appropriate steps to preserve, protect and maintain the
trademarks, trade names, copyrights, licenses and permits used in the
conduct of the business of the Company and its Subsidiaries; PROVIDED,
HOWEVER, that the foregoing shall not prevent the Company or a Subsidiary
from selling, abandoning or otherwise disposing of any such trademark,
trade name, copyright, license or permit if such sale, abandonment or
disposition is, in the judgment of the Company, desirable in the conduct of
its business and not disadvantageous in any material respect to any Holder;
and
(3) The Company and each of its Subsidiaries shall comply with all
statutes, laws, ordinances, or government rules and regulations to which it
is subject, noncompliance with which would materially adversely affect the
business, prospects, earnings, properties, assets or condition (financial
or otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 1006. RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS.
The Company shall not (i) declare or pay any dividend, either in cash or
property, on any shares of its capital stock (except dividends or other
distributions payable solely in shares of capital stock of the Company) or (ii)
purchase, redeem or retire any shares of its capital stock or any warrants,
rights or options to purchase or acquire any shares of its capital stock or
(iii) make any other payment or distribution, either directly or indirectly
through any Subsidiary, in respect of its capital stock (such dividends,
purchases, retirements, payments and distributions being herein collectively
called "RESTRICTED PAYMENTS") if, after giving effect thereto, an Event of
Default shall have occurred or be continuing. Notwithstanding the foregoing,
the Company may make a previously declared Restricted Payment if the declaration
of such Restricted Payment was permitted under this Section when made. For
purposes of this Section, the amount of any Restricted Payment payable in
property shall be deemed to be the fair market value of such property as
determined by the Board of Directors of the Company.
SECTION 1007. [INTENTIONALLY LEFT BLANK].
SECTION 1008. INSURANCE.
55
<PAGE>
Subject to the right to sell, abandon or otherwise dispose of any
building or property whenever in the opinion of the Company the retention
thereof is inadvisable or not necessary to the business of the Company and
its Subsidiaries, the Company will at all times cause all buildings,
equipment and other insurable properties owned or operated by it or any
Subsidiary to be properly insured and kept insured with responsible insurance
carriers, or adequately insured by means of proper inter-insurance contracts,
against loss or damage by fire and other hazards, to the extent that such
properties are usually insured by Corporations owning or operating properties
of a similar character; PROVIDED, HOWEVER, that the foregoing shall not
prevent the Company or any Subsidiary from maintaining any self-insurance
program covering minor risks if adequate reserves are maintained in
connection with such program.
SECTION 1009. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (2)
all lawful claims for labor, material and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves (in
the good faith judgment of the Board of Directors of the Company) have been
established.
SECTION 1010. BOOKS AND RECORDS.
The Company shall, and shall cause each Subsidiary to, at all times keep
proper books of record and account in which proper entries shall be made in
accordance with generally accepted accounting principles and, to the extent
applicable, regulatory accounting principles.
SECTION 1011. STATEMENT BY OFFICERS AS TO DEFAULT.
(1) The Company will deliver to the Trustee, within 45 days after the
end of each calendar quarter, an Officers' Certificate, stating whether or
not to the best knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and
conditions of this Indenture, (other than a term, provision or condition
specifically dealt with in Clause (2) of this Section 1011) setting forth
the arithmetical computations required to show compliance with the
provisions of Sections 1006 and 1007 during the previous year, and, if the
Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
(2) The Company will deliver to the Trustee, within five days after
the occurrence thereof, written notice of any event which after notice or
lapse of time or both would become an Event of Default pursuant to Clause
(4) of Section 501.
56
<PAGE>
SECTION 1012. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 through 1010 with respect to
the Notes of any series if before the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Notes of such series, by
Act of such Holders, either shall waive such compliance in such instance or
generally shall have waived compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN - SUBORDINATION OF NOTES
SECTION 1101. NOTES OF EACH SERIES SUBORDINATED TO SENIOR INDEBTEDNESS.
(1) The Company covenants and agrees, and each Holder of the Notes of
each series, by such Holder's acceptance thereof, likewise covenants and
agrees, and for purposes of Section 508 consents, that the indebtedness
represented by the Notes of such series and the payment of the principal of
and interest on each and all of such Notes is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in
right of payment to the prior payment in full of all Senior Indebtedness.
(2) Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency, reorganization or receivership
proceedings, or upon an assignment for the benefit of creditors or
marshaling of the assets and liabilities of the Company or otherwise,
except a distribution in connection with a merger or consolidation or a
conveyance or transfer of all or substantially all of the properties of the
Company which complies with the requirements of Article Eight, or if an
event of default shall have occurred and be continuing with respect to any
Senior Indebtedness, or if the principal of the Notes of any series shall
have been declared due and payable pursuant to Section 502 and such
declaration shall not have been rescinded and annulled as provided in said
Section 502, then:
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment of the full amount due thereon in respect
of principal and interest, or adequate provision shall be made for
such payment, before the Holders of any of the Notes of any series are
entitled to receive any payment on account of the principal of or
interest on the indebtedness evidenced by the Notes;
(b) any payment by, or distribution of assets of, the Company of
any kind or character, whether in cash, property or securities (other
than securities of the Company as reorganized or readjusted or
securities of the Company or any other
57
<PAGE>
corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided
in this Article with respect to the Notes, to the payment of all
Senior Indebtedness, provided that the rights of the holders of
Senior Indebtedness are not altered by such reorganization or
readjustment), to which the Holders of any of the Notes of any
series or the Trustee would be entitled except for the provisions
of this Article shall be paid or delivered by the person making
such payment or distribution, whether a trustee in bankruptcy,
a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full
of all Senior Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor) to the
holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders of the indebtedness evidenced by
the Notes of any series or to the Trustee under this instrument; and
(c) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities
of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in this Article with respect to the
Notes, to the payment of all Senior Indebtedness, provided that the
rights of the holders of Senior Indebtedness are not altered by such
reorganization or readjustment), shall be received by the Trustee or
the Holders of any of the Notes of any series before all Senior
Indebtedness is paid in full, such payment or distribution shall be
paid over to the holders of such Senior Indebtedness or their
representative or representatives or to the trustee or trustees under
any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably as aforesaid, for
application to the payment of all Senior Indebtedness remaining unpaid
until all such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness.
SECTION 1102. SUBROGATION.
Subject to the payment in full of all Senior Indebtedness, the Holders of
the Notes of each series shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash, property
or securities of the Company applicable to such Senior Indebtedness until all
amounts owing on such Notes shall be paid in full, and, as between the Company,
its creditors other than holders of Senior Indebtedness, and the Holders of the
Notes, no such payment or
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distribution made to the holders of Senior Indebtedness by virtue of this
Article which otherwise would have been made to the Holders of the Notes
shall be deemed to be a payment by the Company on account of the Senior
Indebtedness, and no such payments or distributions to the Holders of the
Notes of cash, property or securities otherwise distributable to the holders
of Senior Indebtedness shall, as between the Company, its creditors other
than the holders of Senior Indebtedness, and the Holders of the Notes, be
deemed to be a payment by the Company on account of the Notes, it being
understood that the provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes,
on the one hand, and the holders of Senior Indebtedness, on the other hand.
SECTION 1103. OBLIGATION OF COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of
the Notes of each series, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Notes of each series the
principal of and interest on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights, of the Holders of the Notes and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Note from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of
the trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating Trustee or agent or other person making any payment or distribution,
delivered to the Trustee or to the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1104. PAYMENTS ON NOTES PERMITTED.
Nothing contained in this Article or elsewhere in this Indenture, or in any
of the Notes of any series, shall affect the obligation of the Company to make,
or prevent the Company from making, payment of the principal of and interest on
the Notes in accordance with the provisions hereof and thereof, except as
otherwise provided in this Article.
SECTION 1105. EFFECTUATION OF SUBORDINATION BY TRUSTEE.
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Each Holder of Notes of each series, by such Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effect the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
SECTION 1106. KNOWLEDGE OF TRUSTEE.
Notwithstanding the provisions of this Article or any other provisions of
this Indenture, the Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of moneys
to or by the Trustee, or the taking of any other action by the Trustee, unless
and until the Trustee shall have received written notice thereof from the
Company, any Holder of the Notes, any Paying Agent of the Company or the holder
or representative of any class of Senior Indebtedness.
SECTION 1107. TRUSTEE MAY HOLD SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all the rights set forth in this Article
with respect to any Senior Indebtedness at the time held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder.
SECTION 1108. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
* * * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
COMMUNITY FIRST BANKSHARES, INC.
By
---------------------------------
Name:
Title:
Attest:
- --------------------
, AS TRUSTEE
------------------------------
By
---------------------------------
Name:
Title:
Attest:
- --------------------
61
<PAGE>
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the __ day of _________, 19__, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is the ______________ of Community First Bankshares, Inc., a Delaware
corporation, one of the persons described in and who executed the foregoing
instrument; and that he signed his name thereto by like authority.
______________________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the __ day of _________, 19__, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ______________ of ____________________, a ____________________,
one of the persons described in and who executed the foregoing instrument;
and that he signed his name thereto by like authority.
______________________________________
Notary Public
[NOTARIAL SEAL]
62
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EXHIBIT A - FORM OF NOTE
COMMUNITY FIRST BANKSHARES, INC.
___% SUBORDINATED NOTE DUE ____
$________________________ NO._____________________
Community First Bankshares, Inc., a Delaware corporation (herein called
the "Company"), for value received, hereby promises to pay to _________________
_______________________________________, or registered assigns, the principal
sum of ________________________ Dollars on _______________, and to pay
interest thereon at the rate of ____% per annum from the Initial Interest
Accrual Date or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, on ____________________ of each year,
commencing _____________ (each an "Interest Payment Date"), until the
principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, except as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest, which will be the 15th day of the month in
which the relevant Interest Payment Date occurs. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to
the Holder on such Regular Record Date and either may be paid to the Person
in whose name this Note (or one or more Predecessor Notes) is registered at
the close of business on a Special Record Date for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given
to the Holders not less than ten days prior to such Special Record Date, or
may be paid at any time in any other lawful manner, all as more fully
provided in the Indenture. Payment of the principal of and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in Minneapolis, Minnesota, or in such other office or agency as may
be established by the Company pursuant to the Indenture (initially the
principal corporate trust office of the Trustee in ____________________ (the
"Corporate Trust Office")), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that payment of interest may be made at the
option of the Company (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register or (ii) by
wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register. Payments of principal and interest at
maturity will be made against presentation of this Note at the Corporate
Trust Office (or such other office as may be established pursuant to the
Indenture), by check or wire transfer.
A-1
<PAGE>
Reference is hereby made to the further provisions of this Note set forth
on the reverse side hereof, which further provisions shall for all purposes
have the same effect as though fully set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee or an Authenticating Agent under the Indenture referred to on the
reverse hereof by the manual signature of one of its authorized officers,
this Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name by the manual or facsimile signature of its Chief Executive Officer, its
President or one of its Vice Presidents and attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries.
Date:
COMMUNITY FIRST BANKSHARES, INC.
By:
---------------------------------------
President
ATTEST:
- ------------------------------------
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the Indenture.
------------------------------------------
as Trustee
Authentication
Date: By
----------- ----------------------------------------
Authorized Signatory
A-2
<PAGE>
(Reverse of Note)
COMMUNITY FIRST BANKSHARES, INC.
____% SUBORDINATED NOTE DUE ____
THIS NOTE IS NOT A SAVINGS ACCOUNT OR A DEPOSIT AND IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OF THE UNITED STATES.
[Unless and until it is exchanged in whole or in part for Definitive Notes,
this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository. Unless
this Note is presented by an authorized representative of the Depository to the
issuer or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of ______________ or such other name as
may be requested by an authorized representative of the Depository (and any
payment is made to _____________ or such other entity as may be requested by an
authorized representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, ____________, has an interest herein.](1)
This Note is one of a duly authorized issue of Series__ Notes of the
Company ("Series _____ Notes") designated as its ____% Subordinated Notes due
____ limited in aggregate principal amount to $__________ issued and to be
issued under an Indenture dated as of __________, 199__ and a supplemental
indenture dated ______________ (herein called the "Indenture"), between the
Company and ________________________________________, as Trustee (herein
called the "Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder
of the Company, the Trustee and the Holders of all series of Notes of the
Company (collectively, the "Notes"), and the terms upon which the Notes are,
and are to be, authenticated and delivered.
The indebtedness of the Company evidenced by the Notes, including the
principal thereof and interest thereon (including post-default interest), (1)
is expressly subordinated, to the extent and in the manner set forth in the
Indenture, in right of payment of the prior payment in full of all of the
Company's obligations to holders of Senior Indebtedness, and (2) is unsecured
by any collateral, including the assets of the Company or any of its
Subsidiaries or Affiliates. Each Holder of the Notes, by acceptance thereof,
(a) agrees to and shall be bound by such provisions of the Indenture and all
other provisions of the Indenture; (b) authorizes and directs the Trustee to
take such action on such Holder's behalf as may be necessary or appropriate
to effectuate the subordination of the Notes as
- --------------------------
(1) This paragraph should be included only for a Global Note.
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<PAGE>
provided in the Indenture; and (c) appoints the Trustee as such Holder's
attorney-in-fact for any and all such purposes.
The Notes may not be redeemed by the Company prior to Maturity.
If an Acceleration Event with respect to the Series _____ Notes shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Series _____ Notes may declare the
principal of all Series _____ Notes due and payable in the manner and with
the effect provided in the Indenture. An "Acceleration Event" is an Event of
Default relating to bankruptcy, insolvency, or reorganization of the Company
as more specifically defined by the Indenture. The Indenture provides that
such declaration and its consequences may, in certain events, be annulled by
the Holders of a majority in principal amount of the Outstanding Series _____
Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Series _____ Notes under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of Series _____ Notes at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of Series
_____ Notes at the time Outstanding, on behalf of the Holders of all Series
_____ Notes, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Note.
No reference herein to the Indenture and no provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register
of the Company, upon surrender of this Note for registration of transfer at
the office or agency of the Company to be maintained for that purpose in
_____________________________), or at such other office or agency as may be
established by the Company for such purpose pursuant to the Indenture
(initially the principal corporate trust office of the Trustee in
___________________), duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company, and duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing,
and thereupon one or more new Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee
or transferees.
A-4
<PAGE>
Series _____ Notes are issuable only in fully registered form, without
coupons, in denominations of $1,000 or any amount in excess thereof which is
an integral multiple of $1,000. As provided in the Indenture, and subject to
certain limitations therein set forth, Series ____ Notes are exchangeable for
a like aggregate principal amount of Series ____ Notes in authorized
denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to the due presentment of this Note for registration of transfer or
exchange, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and
neither the Company, the Trustee, nor any such agent shall be affected by
notice to the contrary.
Interest on Series ____ Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. Interest shall be payable to and excluding any
Interest Payment Date.
The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
This Note shall not be valid until authenticated by the manual signature
of the Trustee or an Authenticating Agent.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
Each Holder of a Series ____ Note covenants and agrees by such Holder's
acceptance thereof to comply with and be bound by the foregoing provisions.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
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<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- ------------------------------------------------------------------------------
(Insert assignee's Soc. Sec. or Tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- ------------------------------------------------------------------------------
Date:
-----------------
Your Signature:
--------------------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee
A-6
<PAGE>
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES (2)
The following exchanges of a part of the Global Note for Definitive Notes
have been made:
<TABLE>
Principal Amount Signature of
Amount of decrease Amount of increase of this Global Note authorized officer
in in following such of
Principal Amount of Principal Amount of decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- ------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
- ------------------------
(2)This should be included only in a Global Note.
A-7
<PAGE>
EXHIBIT 4.11
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF ___% CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF COMMUNITY FIRST BANKSHARES, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Community First Bankshares, Inc., a corporation organized and existing
under the laws of Delaware (the "Corporation"), does hereby certify that
pursuant to authority vested in it by the provisions of the Certificate of
Incorporation, as amended, of the Corporation, the Board of Directors of the
Corporation, at a special meeting of the Board held on _______________, at which
meeting a quorum of directors was present and acting throughout, did adopt the
following resolution authorizing the creation and issuance of a series of
Preferred Stock designated as __% Cumulative Convertible Preferred Stock.
RESOLVED, that the Corporation hereby designates ______ shares of its
authorized but unissued Preferred Stock, par value $0.01, as ___ % Cumulative
Convertible Preferred Stock, which shall have the following designations,
preferences, rights, qualifications, limitations and restrictions in addition to
those set forth in the Certificate of Incorporation, as amended, of the
Corporation:
1. DESIGNATION; NUMBER OF SHARES; STATED VALUE.
(________________) shares of Preferred Stock shall be designated ___%
Cumulative Convertible Preferred Stock (hereinafter sometimes referred to as the
"Preferred Stock" or as this "Series").
2. DIVIDENDS.
(a) The holders of shares of Preferred Stock shall be entitled to
receive cumulative cash dividends, when and as declared by the Board of
Directors out of funds legally available therefor, at a rate of ___% per share
per annum and no more, before any dividend or distribution in cash or other
property (other than dividends payable in stock ranking junior to the Preferred
Stock as to dividends and upon liquidation, dissolution or winding-up) on any
class or series of stock of the Corporation ranking junior to the Preferred
Stock as to dividends or on liquidation, dissolution or winding-up shall be
declared or paid or set apart for payment.
(b) Dividends on the Preferred Stock shall be payable, when and as
declared by the Board of Directors, on ________, _______, ________ and ______ of
each year (each such date being hereinafter individually a "Dividend Payment
Date" and collectively the "Dividend Payment Dates"), except that if such date
is a Saturday, Sunday or legal holiday then such dividend shall be
<PAGE>
payable on the first immediately preceding calendar day which is not a
Saturday, Sunday or legal holiday, to holders of record as they appear on the
books of the Corporation on such respective dates, not exceeding sixty days
preceding such Dividend Payment Date, as may be determined by the Board of
Directors in advance of the payment of each particular dividend. Dividends
in arrears may be declared and paid at any time, without reference to any
regular Dividend Payment Date, to holders of record on such date as may be
fixed by the Board of Directors of the Corporation. Dividends declared and
paid in arrears shall be applied first to the earliest dividend period or
periods for which any dividends remain outstanding. The amount of dividends
payable per share of this Series for each dividend period shall be computed
by dividing by four the dividend due on the basis of the ___% annual rate.
Dividends payable on this Series for the initial dividend period and for any
period less than a full quarterly period shall be computed on the basis of a
360-day year of twelve 30-day months.
(c) Dividends on the Preferred Stock shall be cumulative and accrue
from and after the earliest date of original issuance of any shares of the
Series, whether or not declared by the Board of Directors. Accruals of
dividends shall not bear interest.
(d) No dividend may be declared on any other class or series of stock
ranking on a parity with the Preferred Stock as to dividends in respect of any
dividend period unless there shall also be or have been declared on the
Preferred Stock like dividends for all quarterly periods coinciding with or
ending before such quarterly period, ratably in proportion to the respective
annual dividend rates fixed therefor.
3. REDEMPTION.
(a) The shares of this Series shall not be redeemable by the
Corporation prior to ___________ unless the closing price of the Corporation's
Common Stock (determined in the manner set forth in the second sentence of
subparagraph (d)(iv) of paragraph 4 below) shall have equaled or exceeded ___%
of the conversion price per share of this Series (as defined in the following
sentence) for at least 30 consecutive trading days ending within five days prior
to the date notice of such redemption is given in accordance with subparagraph
(b) of this paragraph 3, in which case shares of this Series can be immediately
redeemed at the redemption prices set forth below. The "conversion price per
share of this Series" shall mean at any time the number obtained by dividing
$____ by the number of shares of Common Stock into which such share of Preferred
Stock is convertible at such time. On and after ___________, or earlier
pursuant to the first sentence of this subparagraph (a), the Corporation, at its
sole option, may redeem shares of this Series, in whole or in part, at any time
or from time to time, to the extent the Corporation has funds legally available
therefore at the redemption prices set forth below.
If redeemed during the period between the date of issuance of the Preferred
Stock to (but not including) __________, at $_______ per share, and if redeemed
during the twelve-month period beginning _______,
Year Price Per Share
---- ---------------
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<PAGE>
at the price indicated above, and from and after _________ at the price of
$______ per share, plus in each case accrued and unpaid dividends thereon to the
date fixed for redemption (the total sum so payable on any such redemption being
herein referred to as the "redemption price").
In the case of the redemption of a part only of the shares of this Series
at the time outstanding, the shares of this Series to be so redeemed shall be
selected by lot, pro rata (as nearly as may be), or in such other equitable
manner as the Board of Directors may determine.
(b) Notice of any redemption pursuant to this paragraph 3 shall be
mailed at least 30, but not more than 60, days in advance of the date designated
for such redemption (herein called the "redemption date") to the holders of
record of shares of this Series so to be redeemed at their respective addresses
as the same shall appear on the books of the Corporation. In order to
facilitate the redemption of shares of this Series, the Board of Directors may
fix a record date for the determination of holders of shares of this Series to
be redeemed not more than 60 days prior to the redemption date. Each such
notice shall state: (1) the redemption date; (2) the number of shares of this
Series to be redeemed and, if less than all the shares held by such holders are
to be redeemed, the number of such shares to be redeemed from such holders; (3)
the redemption price; (4) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (5) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date. If less than all the shares represented by any such surrendered
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares.
(c) The Corporation shall, on or prior to the date fixed for
redemption of any shares, but not earlier than 45 days prior to the date fixed
for redemption, deposit with its transfer agent or other redemption agent
selected by the Board of Directors, as a trust fund, a sum sufficient to redeem
the shares called for redemption, with irrevocable instructions and authority to
such transfer agents or other redemption agent to give or complete the notice of
redemption thereof and to pay to the respective holders of such shares, as
evidenced by a list of such holders certified by an officer of the Corporation,
the redemption price upon surrender of their respective share certificates.
Such deposit shall be deemed to constitute full payment of such shares to their
holders; and from and after the date of such deposit, notwithstanding that any
certificates for such shares shall not have been surrendered for cancellation,
the shares represented thereby shall no longer be deemed outstanding, the rights
to receive dividends and distributions shall cease to accrue from and after the
redemption date, and all rights of the holders of the shares of Preferred Stock
called for redemption, as stockholders of the Corporation with respect to such
shares, shall cease and terminate, except the right to receive the redemption
price, without interest, upon the surrender of their respective certificates,
and except the right to convert their shares into Common Stock as provided in
paragraph 4 hereof, until the close of business on the redemption date. In case
the holders of any shares shall
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<PAGE>
not, within six years after such deposit, claim the amount deposited for
redemption thereof, such transfer agent or other redemption agent shall, upon
demand, pay over to the Corporation the balance of such amount so deposited.
Thereupon, such transfer agent or other redemption agent shall be relieved of
all responsibility to the holders thereof and the sole right of such holders
shall be as general creditors of the Corporation. To the extent that shares
of Preferred Stock called for redemption are converted into Common Stock
prior to the date fixed for redemption, the amount deposited by the
Corporation to redeem such shares shall immediately be returned to the
Corporation. Any interest accrued on any funds so deposited shall belong to
the Corporation, and shall be paid to it from nine to time on demand.
(d) Redemption of any shares of this Series is subject to the prior
approval of any federal regulatory agency with jurisdiction over such matters.
4. CONVERSION.
(a) The holder of any shares of this Series at his option may at any
time (except that if any such share shall have been called for redemption, then,
as to such share, such right shall terminate at the close of business on the
date fixed for such redemption, unless default shall be made by the Corporation
in providing money for the payment of the redemption price of the shares called
for redemption) convert the shares of this Series into fully paid and
nonassessable shares of Common Stock at the rate of shares of Common Stock for
each share of this Series, subject to adjustment pursuant to the provisions of
subparagraph (d) of this paragraph 4. Shares of this Series surrendered for
conversion during the period from the close of business on any record date for
the payment of dividends next preceding any Dividend Payment Date to the opening
of business on such Dividend Payment Date shall (except in the case of shares
which have been called for redemption on a redemption date within such period)
be accompanied by payment acceptable to the Corporation of an amount equal to
the dividend payable on such Dividend Payment Date on the shares being
surrendered for conversion. A holder of Preferred Stock on the record date
preceding a Dividend Payment Date who (or whose transferee) converts shares of
Preferred Stock on a Dividend Payment Date, will receive the dividend payable on
such Preferred Stock by the Corporation on such date, and the converting holder
need not include payment in the amount of such dividend upon surrender of shares
of Preferred Stock for conversion. Such right of conversion shall be exercised
by the surrender of the shares so to be converted to the Corporation at any time
during normal business hours at the office or agency then maintained by it for
payment of dividends on the shares of this Series (the "Payment Office"),
accompanied by written notice of such holder's election to convert and (if so
required by the Corporation or any conversion agent) by instruments of transfer,
in form satisfactory to the Corporation and to any conversion agent, duty
executed by the registered holder or by his duly authorized attorney, and
transfer tax stamps or funds therefor, if required pursuant to subparagraph (i)
of this paragraph 4.
(b) As promptly as practicable after the surrender for conversion of
any shares of this Series in the manner provided in subparagraph (a) of this
paragraph 4 and the payment in cash of any mount required by the provisions of
subparagraphs (a) and (i) of this paragraph 4, the
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<PAGE>
Corporation will deliver or cause to be delivered at the Payment Office to or
upon the written order of the holder of such shares, certificates
representing the number of full shares of Common Stock issuable upon such
conversion, issued in such name or names as such holder may direct. Such
conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares, and all rights of
the holder of such shares as a holder of such shares shall case at such time
and the person or persons in whose name or names the certificates for such
shares of Common Stock are to be issued shall be treated for all purposes as
having become the record holder or holders thereof at such time and such
conversion shall be at the conversion rate in effect at such time; provided,
however, that any such surrender and payment on any date when the stock
transfer books of the Corporation shall be closed shall constitute the person
or persons in whose name or names the certificates for such shares of Common
Stock are to be issued as the record holder or holders thereof for all
purposes immediately prior to the close of business on the next succeeding
day on which such stock transfer books are opened and such conversion shall
be at the conversion rate in effect at such time on such succeeding day.
If the last day for the exercise of the conversion right shall be other
than a business day, then such conversion right may be exercised on the next
succeeding business day.
(c) Except as provided in the second and third sentence of
subparagraph (a) of this paragraph 4, no adjustments in respect of or payments
of dividends on shares surrendered for conversion or any dividend on the Common
Stock issued upon conversion shall be made upon the conversion of any shares of
this Series; provided, however, that if any shares shall be converted subsequent
to the record date preceding a Dividend Payment Date but on or prior to such
Dividend Payment Date (except shares called for redemption between such record
date and Dividend Payment Date) the registered holder of such shares at the
close of business on such record date shall be entitled to receive the dividend
payable on such shares on such Dividend Payment Date notwithstanding the
conversion thereof or the Corporation's default in payment of the dividend due
on such Dividend Payment Date.
(d) The initial conversion rate shall be ____ shares of Common Stock
per share of this Series (equivalent to a conversion price of $_____ per share).
The conversion rate shall be subject to adjustment as follows:
(i) In case the Corporation shall (A) pay a dividend or make a
distribution in shares of its capital stock (whether shares of Common Stock
or of capital stock of any other class), (B) subdivide its outstanding
shares of Common Stock, (C) combine its outstanding shares of Common Stock
into a smaller number of shares, (D) issue by reclassification of its
shares of Common Stock (whether by merger or consolidation or otherwise)
any shares of capital stock of the Corporation, or (E) take any action with
the same effect as any of the foregoing, the conversion privilege and the
conversion rate in effect immediately prior to such action shall be
adjusted so that the holder of any shares of this Series thereafter
surrendered for conversion shall be entitled to receive (subject to further
adjustments pursuant to subparagraphs (d)(ii) and (d)(iii) hereof) the
number of shares of
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<PAGE>
capital stock of the Corporation (or of the corporation surviving or
resulting from any merger or consolidation) which he would have owned
immediately following such action had such share been converted
immediately prior thereto. An adjustment made pursuant to this
subparagraph (d)(i) shall become effective retroactively immediately
after the record date in the case of a dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an
adjustment made pursuant to this subparagraph (d)(i), the holder of any
shares thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock of the
Corporation, the Board of Directors (whose determination shall be
conclusive) shall determine the allocation of the adjusted conversion
rate between or among shares of such classes of capital stock.
(ii) In case the Corporation shall issue rights or warrants to
all holders of its Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the current market
price per share (as determined pursuant to subparagraph (d)(iv) below) on
the record date mentioned below, other than pursuant to a dividend
reinvestment plan, the conversion rate shall be adjusted so that the same
shall equal the rate determined by multiplying the conversion rate in
effect immediately prior to the date of issuance of such rights or warrants
by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants
plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be the number
of shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered would purchase at such
current market price. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants. For the purposes of this
paragraph 4(d)(ii), the issuance of rights or warrants to subscribe for or
purchase stock or securities convertible into shares of Common Stock shall
be deemed to be the issuance of rights or warrants to purchase the shares
of Common Stock into which such stock or securities are convertible at an
aggregate offering price equal to the aggregate offering price of such
stock or securities plus the minimum aggregate amount (if any) payable upon
conversion of such stock or securities into Common Stock.
(iii) In case the Corporation shall distribute to all holders of
its Common Stock evidences of its indebtedness or assets (excluding any
cash dividend paid from retained earnings of the Corporation) or rights or
warrants to subscribe to securities of the Corporation (excluding those
referred to in subparagraph (d)(ii) above), then in each such case the
conversion rate shall be adjusted so that the same shall equal the rate
determined by multiplying the conversion rate in effect immediately prior
to the date of such distribution by a fraction of which the numerator shall
be the current market price per share (determined as provided in
subparagraph (d)(iv) below) of the Common Stock on the record date
mentioned below, and of which the denominator shall be such current market
price per share of Common
-6-
<PAGE>
Stock less the then fair market value (as determined by the Board of
Directors of the Corporation, whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so distributed or
of such subscription rights or warrants applicable to one share of Common
Stock. Such adjustment shall become effective retroactively immediately
after the record date for the determination of stockholders entitled to
receive such distribution.
(iv) For the purpose of any computation under subparagraphs
(d)(ii) and (d)(iii) above, the current market price per share of Common
Stock on any date shall be deemed to be the average of the daily closing
prices for 30 consecutive trading days commencing 45 trading days before
the day in question. The "closing price" on any day shall mean the
reported last sale price on such day or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices, in each case on the New York Stock Exchange, or, if the Common
Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading, or, if not listed or admitted to trading on any
national securities exchange, then in the over-the-counter market as
reported on Nasdaq or a similar reporting service, or, if no such
quotations are available, the fair market price as determined by the
Corporation (whose determination shall be conclusive).
(v) In any case in which this subparagraph (d) shall require
that an adjustment be made retroactively immediately following a record
date, the Corporation may elect to defer (but only until five business days
following the mailing by the Corporation of the certificate of independent
public accountants described in subparagraph (d)(vii) below) issuing to the
holder of any shares converted after such record date (x) the shares of
Common Stock and other capital stock of the Corporation issuable upon such
conversion over and above (y) the shares of Common Stock and other capital
stock of the Corporation issuable upon such conversion only on the basis of
the conversion rate prior to adjustment.
(vi) No adjustment in the conversion rate shall be required
unless such adjustment would require an increase or decrease of at least 1%
in such rate; provided, however, that any adjustments which by reason of
this subparagraph (d)(vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment; and, provided
further, that adjustment shall be required and made in accordance with the
provisions of this paragraph 4 (other than this subparagraph (d)(vi)) not
later than such time as may be required in order to preserve the tax-free
nature of a distribution to the holders of shares of Common Stock. All
calculations under this paragraph 4 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be. Anything in this
paragraph 4 to the contrary notwithstanding, the Corporation shall be
entitled to make such increases in the conversion rate in addition to those
required by this subparagraph (d) as it in its discretion shall determine
to be advisable in order that any stock dividends, subdivision of shares,
distribution of rights to purchase stock or securities, or distribution of
securities
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<PAGE>
convertible into or exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable.
(vii) Whenever the conversion rate is adjusted as herein
provided, the Corporation shall promptly (x) file with each conversion
agent a certificate of a firm of independent public accountants selected by
the Board of Directors (who may be the regular accountants employed by the
Corporation) setting forth the conversion rate after such adjustment and
setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be conclusive evidence of the correctness of such
adjustment. and (y) mail or cause to be mailed a notice of such adjustment
to the holders of shares of this Series at their last addresses as they
shall appear upon the books of the Corporation.
(viii) The term "Common Stock" shall mean the Corporation's
Common Stock, par value $.01 per share, as the same exists at the date of
filing of this Certificate of Designations, Preferences and Rights of the
Preferred Stock, or any other class of stock resulting from successive
changes or reclassifications of such Common Stock consisting solely of
changes in par value, or from par value to no par value, or from no par
value to par value. In the event that at any time as a result of an
adjustment made pursuant to subparagraph (d)(i) above, the holder of any
share thereafter surrendered for conversion shall become entitled to
receive any shares of the Corporation other than shares of its Common
Stock, thereafter the conversion rate of such other shares so receivable
upon conversion of any share shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in subparagraphs (d)(i)
through (d)(vii) above, and the provisions of subparagraphs (a) through (e)
and subparagraphs (e) through (k) of this paragraph 4 with respect to the
Common Stock shall apply on like or similar terms to any such other shares.
(e) No fractional shares of stock shall be issued upon the conversion
of any share or shares of this Series. If more than one such share of this
Series shall be surrendered for conversion at the same time by the same holder,
the number of full shares which shall be
issuable upon the conversion thereof shall be computed on the basis of the
aggregate number of shares so surrendered. If any fractional interest in a
share of Common Stock would, except for the provisions of this subparagraph (e),
be deliverable upon the conversion of any share or shares, the Corporation shall
in lieu of delivering the fractional share therefor, adjust such fractional
interest by payment to the holder of such surrendered share or shares of an
amount in cash equal (computed to the nearest cent) to the current market value
of such fractional interest on the last business day prior to the date of
conversion, computed on the basis of the last reported sale price on such day
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices, in each case on the New York Stock
Exchange, or, if the Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or, if not listed or admitted to trading
on any national securities exchange, then in the over the-counter market as
reported by Nasdaq or a similar reporting
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<PAGE>
service, or if no such quotations are available, the fair market price as
determined by the Corporation (whose determination shall be conclusive).
(f) If either of the following shall occur, namely: (i) any
consolidation or merger to which the Corporation is a party, other than a
consolidation or a merger in which consolidation or merger the Corporation is a
continuing corporation and which does not result in any reclassification of, or
change (other than a change in par value or from par value to no par value or
from no put value to par value, or as a result of a subdivision or combination)
in, outstanding shares of the Common Stock, or (ii) any sale or conveyance to
another corporation of the property of the Corporation as an entirety or
substantially as an entirety; then the holder of each share of Preferred Stock
then outstanding shall have the right to convert such share into the kind and
amount of shares of stock and other securities and property receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon conversion of such share immediately prior to such
consolidation, merger, sale or conveyance, subject to adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this paragraph 4. In any such event, effective provision shall be made in the
articles or certificate of incorporation of the resulting or surviving
corporation or other corporation issuing or delivering such shares of stock or
other securities or property or otherwise, so that the provisions set forth
herein for the protection of the conversion fights of the Preferred Stock shall
thereafter be applicable, as nearly as reasonably may be, to any such other
shares of stock and other securities and property deliverable upon conversion of
the Preferred Stock remaining outstanding or other convertible stock or
securities received by the holders in place thereof; and any such resulting or
surviving corporation or other corporation issuing or delivering such shares or
other securities or property shall expressly assume the obligation to deliver,
upon the exercise of the conversion privilege, such shares of stock or other
securities or property as the holders of the Preferred Stock remaining
outstanding, or other convertible stock or securities received by the holders in
place thereof, shall be entitled to receive, pursuant to the provisions hereof,
and to make provision for the protection of the conversion right as above
provided. In case shares, securities or other property other than Common Stock
shall be issuable or deliverable upon conversion as aforesaid, then all
references to Common Stock in this paragraph 4(f) shall be deemed to apply, so
far as provided and as nearly as is reasonable, to any such shares of stock and
other securities and property. The provisions of this subparagraph (f) shall
similarly apply to successive consolidations, mergers, sales or conveyances.
(g) The Corporation covenants that it will at all times reserve and
keep available, solely for the purpose of issue upon conversion of the shares of
this Series, such number of shares of Common Stock as shall be issuable upon the
conversion of all such outstanding shares; provided, that nothing contained
herein shall be construed to preclude the Corporation from satisfying its
obligations in respect of the conversion of the shares by delivery of purchased
shares of Common Stock which are held in the treasury of the Corporation. For
the purpose of this subparagraph (g), the full number of shares of Common Stock
issuable upon the conversion of all outstanding shares of this Series shall be
computed as if at the time of computation of such number of shares of Common
Stock all outstanding shares of this Series were held by a single holder.
-9-
<PAGE>
The Corporation covenants that if any shares of Common Stock, required to
be reserved for purposes of conversion of the shares of this Series, require
registration with or approval of any governmental authority under any Federal or
state law before such shares may be issued upon conversion, the Corporation will
cause such shares to be duly registered or approved, as the case may be.
The Corporation will endeavor to list the shares of Common Stock required
to be delivered upon conversion of shares prior to such delivery upon each
national securities exchange or market upon which the outstanding Common Stock
is listed or traded at the time of such delivery.
The Corporation covenants that all shares of Common Stock which shall be
issued upon conversion of the shares will upon issue be fully paid and
non-assessable and not subject to any preemptive rights.
(h) Before taking any action which would cause an adjustment reducing
the conversion price per share of this Series below the then par value of the
Common Stock, the Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Common Stock at the
conversion rate as so adjusted. If as a result of conversion of the shares of
this Series it becomes necessary to authorize additional shares of Common Stock,
the Corporation covenants that it will take such action at such time as is
necessary by amendment of the Corporation's Certificate of Incorporation.
(i) The Corporation shall pay any and all issue or other taxes
payable in respect of any issue or delivery of shares of Common Stock upon
conversion. However, if any such certificate is to be issued in a name other
than that of the holder of the share or shares converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount of any
tax which may be payable in respect of any transfer involved in such issuance or
shall establish to the satisfaction of the Corporation that such tax has been
paid.
(j) Notwithstanding anything elsewhere contained in this Certificate,
any funds which at any time shall have been deposited by the Corporation or on
its behalf with any paying agent for the purpose of paying dividends on or the
redemption price of any of the shares of this Series and which shall not be
required for such purposes because of the conversion of such shares, as provided
in this paragraph 4, shall be, upon delivery to the paying agent of evidence
satisfactory to it of such conversion, after such conversion be repaid to the
Corporation by the paying agent.
(k) In case:
(i) the Corporation shall take any action which would require
an adjustment in the conversion rate pursuant to subparagraph (d) of this
paragraph 4; or
-10-
<PAGE>
(ii) the Corporation shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or of any other rights and notice
thereof shall be given to holders of Common Stock; or
(iii) there shall be any capital reorganization or
reclassification of the Common Stock (other than a subdivision or
combination of the outstanding Common Stock and other than a change in par
value or from par value to no par value or from no par value to par value
of the Common Stock), or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or any sale or transfer of all or substantially
all of the assets of the corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Corporation;
then the Corporation shall cause to be filed with any conversion agent, and
shall cause to be given to the holders of the shares of this Series at least ten
days prior to the applicable date hereinafter specified, a notice setting forth
(x) the date on which a record is to be taken for the purpose of any
distribution or grant to holders of Common Stock, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such distribution or grant are to be determined or (y) the date on which such
reorganization, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up. Failure to give
such notice or any defect therein shall not affect the legality or validity of
the proceedings described in clauses (i) through (iv) of this subparagraph (k).
5. VOTING.
The shares of this Series shall not have any voting powers either general
or special, except as set forth in this Certificate of Designations, Preferences
and Rights in the Corporation's Certificate of Incorporation, or as otherwise
provided by law. In exercising such voting rights, each share of Preferred
Stock shall be entitled to one vote.
6. LIQUIDATION RIGHTS.
Upon the dissolution. liquidation or winding-up of the Corporation, whether
voluntary or involuntary, the holders of the shares of this Series shall be
entitled to receive, before any payment or distribution of the assets of the
Corporation or proceeds thereof (whether capital or surplus) shall be made to or
set apart for the holders of the Common Stock or any other class or series of
stock ranking junior to the shares of this Series upon liquidation, the amount
of $______ per share, plus a sum equal to all dividends on such shares (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution, but such holders shall not be entitled to any further payment.
-11-
<PAGE>
If, upon any liquidation, dissolution or winding-up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders
of shares of the Preferred Stock and any other class or series of Preferred
Stock ranking on a parity with the Preferred Stock as to payments upon
liquidation, dissolution or winding-up shall be insufficient to pay in full the
preferential amount aforesaid, then such assets or the proceeds thereof, shall
be distributed among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full. For the purposes of this paragraph 6, the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all the property or assets of
the Corporation to, or a consolidation or merger of the Corporation with, one or
mom other corporations (whether or not the Corporation is the corporation
surviving such consolidation or merger) shall not be deemed to be a liquidation,
dissolution or winding-up, unless such voluntary sale, conveyance, lease,
exchange or transfer shall be in connection with a plan of liquidation,
dissolution or winding-up.
7. NO PURCHASE, RETIREMENT OR SINKING FUND.
The shares of this Series shall not be subject to the operation of any
purchase, retirement or sinking fund.
8. STATUS.
Shares of this Series which have been issued and reacquired in any manner
by the Corporation shall, upon compliance with any applicable provisions of the
General Corporation Law of the State of Delaware, have the status of authorized
and unissued shares of Preferred Stock and may be reissued as a part of this
Series or as part of a new series of Preferred Stock to be established by the
Board of Directors or as part of any other series of Preferred Stock the terms
of which do not prohibit such reissue.
9. PRIORITY.
The Common Stock of the Corporation, now or hereafter issued, shall rank
junior to the Preferred Stock as to payment of dividends and as to distributions
of assets upon liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary.
10. SPECIAL RIGHTS ON DEFAULT.
(a) If at any time the Corporation shall have failed to pay dividends
in full on the Preferred Stock, thereafter and until dividends in full,
including all accumulated and unpaid dividends to the next preceding Dividend
Payment Date on the Preferred Stock outstanding, shall have been declared and
set apart for payment or paid, (i) the Corporation shall not redeem less than
all the Preferred Stock at such time outstanding, and (ii) neither the
Corporation nor any subsidiary shall purchase or otherwise acquire any Preferred
Stock except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
Preferred
-12-
<PAGE>
Stock upon such terms as the Board of Directors in their sole discretion,
after consideration of the annual dividend rate and other rights and
preferences of this Series, shall determine (which determination shall be
final and conclusive) will result in fair and equitable treatment to all
stockholders of the Corporation, provided that nothing shall prevent the
Corporation from completing the purchase or redemption of shares of Preferred
Stock for which a purchase contract was entered into, or notice of redemption
of which was initially given, prior to such default.
(b) Whenever, at any time or times, dividends payable on the shares
of this Series shall be in arrears in an amount equal to at least six full
quarterly dividends on the shares of this Series at the time outstanding, the
holders of the outstanding shares of this Series shall have the exclusive right,
voting separately as a class with holders of shares of any one or more other
series of Preferred Stock ranking on a parity with this Series either as to
dividends or the distribution of assets upon liquidation, dissolution or
winding-up and upon which like voting rights have been conferred and am
exercisable, to elect two directors of the Corporation (and to exercise any
right of removal or replacement of such directors) at the Corporation's next
annual meeting of stockholders and at each subsequent annual meeting of
stockholders. At elections for such directors, the presence, in person or by
proxy, of the holders of a majority of the outstanding shares of this Series
(together with the holders of shares of any one or mom other series of Preferred
Stock ranking on a parity with respect to the election of such additional
directors) shall be required and be sufficient to constitute a quorum of such
class for the election of such directors. At elections for such directors or
adjournments thereof, (1) the absence of a quorum of this Series (together with
the holders of shares of any one or more other series of Preferred Stock ranking
on a parity with respect to the election of such additional directors) shall not
prevent the election of the directors to be elected otherwise than pursuant to
this subparagraph (b), and the absence of a quorum of stock other than this
Series, (together with the holders, of shares of any one or more other series of
Preferred Stock ranking on a parity with respect to the election of such
additional directors) shall not prevent the election of the directors to be
elected pursuant to this subparagraph (b), and (2) in the absence of such quorum
either of this Series or of the stock other than this Series or both, a majority
of the holders present in person or by proxy, of the class or classes of stock
which lack a quorum shall have a power to adjourn the meeting for the election
of directors whom they are entitled to elect, from time to time without notice
other than announcement at the meeting, until a quorum shall be present. At
elections for such directors, each holder of this Series shall be entitled to
one vote for each share held (the holders of shares of any other series of
Preferred Stock ranking on such a parity being entitled to such number of votes,
if any, for each share of stock held as may be granted to them). Upon the
vesting of such right of the holders of this Series, the maximum authorized
number of members of the Board of Directors shall automatically be increased by
two and the two vacancies so created shall be filled by vote of the holders of
the outstanding shares of this Series (together with the holders of shares of
any one or more other series of Preferred Stock ranking on a parity with respect
to the election of such additional directors) as hereinafter set forth. The
right of the holders of this Series, voting separately as a class to elect
(together with the holders of shares of any one or more other series of
Preferred Stock ranking on a parity with respect to the election of such
additional directors) members of the Board of Directors of the Corporation as
aforesaid shall continue until such time as all dividends in arrears on this
Series shall have been paid in full, at which time such right shall immediately
terminate,
-13-
<PAGE>
except as herein or by law expressly provided, subject to revesting in the
event of each and every subsequent default of the character above mentioned.
Each director elected by the holders of shares of this Series shall
continue to serve as such director until such time as all dividends in arrears
on this Series shall have been paid in full, at which time the term of office of
all persons elected as directors by the holders of shares of this Series shall
immediately terminate and the number of members of the Board of Directors of the
Corporation shall be reduced accordingly. Any director elected by the holder of
shares of this Series may be removed from office only by a vote of the majority
of the outstanding shares of this Series. If the office of any director elected
by the holders of this Series voting as a class becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office, or
otherwise, the remaining director elected by the holders of this Series voting
as a class may choose a successor who shall hold office for the unexpired term
in respect of which such vacancy occurred. Whenever the term of office of the
directors elected by the holders of this Series voting as a class shall end and
the special voting powers vested in the holders of this Series as provided in
this subparagraph (b) shall have expired, the number of directors shall be such
number as may be provided for in the By-Laws irrespective of any increase made
pursuant to the provisions of this subparagraph (b).
11. RELATIVE RIGHTS OF PREFERRED STOCK.
So long as any of the Preferred Stock is outstanding, the Corporation will
not:
(a) Declare, or pay, or set apart for payment, any dividends (other
than dividends payable in stock ranking junior to the Preferred Stock as to
dividends and upon liquidation, dissolution or winding-up) or make any
distribution in cash or other property on any other class or series of stock or
any warrant, right, call or option exercisable or exchangeable or convertible
into any class or series of stock of the Corporation ranking junior to the
Preferred Stock either as to dividends or upon liquidation, dissolution or
winding-up or any warrant, fight, call or option exercisable or exchangeable or
convertible into any such junior class or series and will not redeem, purchase
or otherwise acquire any shares of any such junior class or series if at the
time of making such dilatation, payment, distribution, redemption, purchase or
acquisition the Corporation shall be in default with respect to any dividend
payable on, or any obligation to retire shares of, Preferred Stock; and
(b) The Corporation will not permit any corporation or other entity
controlled directly or indirectly by the Corporation to purchase or otherwise
acquire or redeem any class or series of stock or any warrant, right, call or
option exercisable or exchangeable or convertible into any such class or series
of stock of the Corporation ranking junior to the Preferred Stock either as to
dividends or upon liquidation, dissolution or winding-up if at the time of such
acquisition or redemption the Corporation shall be in default with respect to
any dividend payable on, or on any obligation to retire shares of Preferred
Stock; and
-14-
<PAGE>
(c) Without the affirmative vote or consent of the holders of at
least 66-2/3 % of all the Preferred Stock at the time outstanding, voting
separately as a class, given in person or by proxy, either in writing or by
resolution adopted either at an annual meeting or special meeting called for the
purpose, (i) authorize, create, or issue, or increase the authorized or issued
amount, of any class or series of stock ranking prior to the Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding-up or (ii)
amend, alter or repeal (whether by merger, consolidation or otherwise) any of
the provisions of the Corporation's Certificate of Incorporation, or of this
Certificate of Designations, Preferences and Rights of the Preferred Stock, so
as to materially and adversely affect the preferences, special rights,
privileges or powers of the Preferred Stock; provided, however, that any
increase in the authorized Preferred Stock or the creation and issuance of other
series of Preferred Stock ranking in a parity with or junior to the Preferred
Stock shall not be deemed to materially and adversely affect such preferences,
rights, privileges or powers.
IN WITNESS WHEREOF, Community First Bankshares, Inc. has caused this
Certificate of Designations, Preferences and Rights to be signed by its
President and Chief Financial Officer and attested by its Secretary this _____
day of _______________, ____,
COMMUNITY FIRST BANKSHARES, INC.
By
----------------------------------------
President and Chief Financial Officer
Attest:
- ----------------------------
Secretary
-15-
<PAGE>
[LOGO]
NUMBER COMMUNITY SHARES
FIRST Bankshares, Inc. -----
CUSIP
-----
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE SEE REVERSE
SIDE FOR
CERTAIN
DEFINITIONS
THIS CERTIFIES THAT
SPECIMEN
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF [ ]
PREFERRED STOCK, OF THE PAR VALUE OF $0.01 PER SHARE, OF
------------- -------------
- ----------------------- COMMUNITY FIRST BANKSHARES, INC. -----------------------
------------- -------------
TRANSFERABLE ON THE BOOKS OF THE CORPORATION BY THE HOLDER HEREOF IN PERSON OR
BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY
ENDORSED. THIS CERTIFICATE IS NOT VALID UNLESS COUNTERSIGNED AND REGISTERED BY
THE TRANSFER AGENT AND REGISTRAR.
IN WITNESS WHEREOF, THE SAID CORPORATION HAS CAUSED THIS CERTIFICATE TO BE
SIGNED BY ITS DULY AUTHORIZED OFFICERS AND TO BE SEALED WITH THE SEAL OF THE
CORPORATION.
DATED:
------------------
/s/ illegible SEAL /s/ illegible
-------------------- --------------------
SECRETARY PRESIDENT
Countersigned and Registered:
NORWEST BANK MINNESOTA, N.A.
Transfer Agent and Registrar
By
Authorized Signature
<PAGE>
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS
A STATEMENT OF THE POWERS, DESIGNATION, PREFERENCES, AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE
COMPANY OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
SUCH PREFERENCES AND/OR RIGHTS.
- --------------------------------------------------------------------------------
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UTMA - Custodian
---------- -----------
(Cust) (Minor)
TEN EN - tenants by entireties under Uniform Transfer to Minors
JT TEN - as joint tenants with right Act
of survivorship and not as --------------------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED ________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
______________________________________________________________________ SHARES
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT _________________________ ATTORNEY TO
TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED BANK WITH FULL POWER OF
SUBSTITUTION IN THE PREMISES.
DATED
-----------------------------------
-----------------------------------
NOTICE: THE SIGNATURE TO THIS
ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED
<PAGE>
[LINDQUIST & VENNUM P.L.L.P. LETTERHEAD]
EXHIBIT 5.1
November 21, 1997
Community First Bankshares, Inc.
520 Main Avenue
Fargo, North Dakota 58124-0001
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed by Community First Bankshares, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
proposed offer and sale from time to time of up to $150,000,000 of common stock,
$.01 par value, preferred stock, $.01 par value, and debt securities of the
Company (collectively, the "Securities"), please be advised that as counsel to
the Company, upon examination of such corporate documents and records as we have
deemed necessary or advisable for the purposes of this opinion, it is our
opinion that:
1. The Company is a validly existing corporation in good standing under
the laws of the State of Delaware.
2. The Securities being offered by the Company are duly authorized and,
when issued and when paid for as contemplated by the Registration Statement,
will be validly issued, fully paid and nonassessable Securities of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
<PAGE>
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Nine Months Ended September 30, Year ended December 31,
------------------------------ -----------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income before taxes & extraordinary
item and cumulative effect of
accounting change . . . . . . . . . $ 50,907 $ 40,457 $ 50,517 $ 47,161 $ 36,681 $ 29,030 $ 23,654
Add: fixed charges. . . . . . . . . . 88,221 71,371 97,736 85,426 55,229 47,271 50,870
------ ------ ------ ------ ------ ------ ------
Earnings including interest
expense - deposits. . . . . . . . . (a) 137,128 111,828 148,253 132,587 91,910 76,301 74,524
Less: interest expense - deposits . . (71,827) (60,074) (81,655) (71,780) (46,560) (42,873) (47,727)
-------- -------- -------- -------- -------- -------- --------
Earnings excluding interest
expense - deposits. . . . . . . . . (b) $ 65,301 $ 51,754 $ 66,598 $ 60,807 $ 45,350 $ 33,428 $ 26,797
- ------ - ------ - ------ - ------ - ------ - ------ - ------
- ------ - ------ - ------ - ------ - ------ - ------ - ------
Fixed charges:
Interest expense - deposits . . . . $ 71,827 $ 60,074 $ 81,655 $ 71,780 $ 46,560 $ 42,873 $ 47,727
Interest expense - borrowings . . . 14,394 9,450 13,579 11,111 6,908 4,398 3,143
Interest expense on capital leases. 0 0 0 0 0 0 0
Dividends on preferred stock
(gross) . . . . . . . . . . . . . 0 1,847 2,502 2,535 1,761 0 0
- ----- ----- ----- ----- - -
Fixed charges including interest
expense - deposits. . . . . . . . . (c) 86,221 71,371 97,736 85,426 55,229 47,271 50,870
Less: interest expense - deposits . . (71,827) (60,074) (81,655) (71,780) (46,560) (42,873) (47,727)
-------- -------- -------- -------- -------- -------- --------
Fixed charges excluding interest
expense - deposits. . . . . . . . . (d) $ 14,394 $ 11.297 $ 16,081 $ 13,646 $ 8,669 $ 4,398 $ 3,143
- ----- - ----- - ------ - ------ - ----- - ----- - -----
- ----- - ----- - ------ - ------ - ----- - ----- - -----
Preferred dividends . . . . . . . . . $ 0 $ 1,208 $ 1,610 $ 1,610 $ 1,091 $ 0 $ 0
Effective tax rate. . . . . . . . . . 32.78% 34.59% 35.65% 36.49% 38.04% 37.12% 36.13%
Preferred dividends - grossed
up (1 - tax rate) . . . . . . . . . $ 0 $ 1,847 2,502 $ 2,535 $ 1,761 $ 0 $ 0
Earnings to combined fixed charges
and preferred stock dividends:
Excluding interest on
deposits ((b)/(d)). 4.54x 4.58x 4.14x 4.46x 5.23x 7.60x 8.53x
Including interest on
deposits ((a)/(c)). 1.59x 1.57x 1.52x 1.55x 1.66x 1.61x 1.46x
CALCULATION OF FULLY DILUTED
EARNINGS WITH REGARD TO
CONVERTIBLE DEBENTURES
Nine Months Ended June 30, Year ended December 31,
-------------------------- -----------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income before taxes . . . . . . . . . $ 50,907 $ 40,457 $ 50,517 $ 47,161 $ 36,681 $ 29,030 $ 23,654
Interest expense on convertible
debentures. . . . . . . . . . . . . 0 0 86 137 415 126 0
- - -- --- --- --- -
Adjusted income before interest
on convertible debentures . . . . . 50,907 40,457 50,603 47,298 37,096 29,156 23,654
Adjusted income tax provision . . . . 16,676 13,995 18,058 17,259 14,106 10,822 8,546
------ ----- ------ ------ ------ ------ -----
Adjusted net income . . . . . . . . . $ 34,231 $ 26,462 $ 32,545 $ 30,039 $ 22,990 $ 18,334 $ 15,108
- ------ - ------ - ------ - ------ - ------ - ------ - ------
- ------ - ------ - ------ - ------ - ------ - ------ - ------
</TABLE>
