Document:

ex4-3.htm

Exhibit 4.3

Telular Corporation

TO

_______________________

AS TRUSTEE

INDENTURE

DATED AS OF __________, 201_

SUBORDINATED DEBT SECURITIES

 

 

  

  

  

 

	
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	 	 	
1

	 
	
SECTION 1.1 DEFINITIONS

	 	 	
1

	 
	
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS

	 	 	
9

	 
	
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE

	 	 	
9

	 
	
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES

	 	 	
10

	 
	
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY

	 	 	
11

	 
	
SECTION 1.6 NOTICE TO HOLDERS; WAIVER

	 	 	
12

	 
	
SECTION 1.7 CONFLICT WITH TRUST INDENTURE ACT

	 	 	
12

	 
	
SECTION 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS

	 	 	
12

	 
	
SECTION 1.9 SUCCESSORS AND ASSIGNS

	 	 	
12

	 
	
SECTION 1.10 SEPARABILITY CLAUSE

	 	 	
12

	 
	
SECTION 1.11 BENEFITS OF INDENTURE

	 	 	
12

	 
	
SECTION 1.12 GOVERNING LAW

	 	 	
13

	 
	
SECTION 1.14 INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS

	 	 	
13

	 
	
SECTION 1.15 INDENTURE MAY BE EXECUTED IN COUNTERPARTS

	 	 	
13

	 
	
ARTICLE 2 SECURITY FORMS

	 	 	
14

	 
	
SECTION 2.1 FORMS GENERALLY

	 	 	
14

	 
	
SECTION 2.2 FORM OF FACE OF SECURITY

	 	 	
14

	 
	
SECTION 2.3 FORM OF REVERSE OF SECURITY

	 	 	
16

	 
	
SECTION 2.4 FORM OF LEGEND FOR GLOBAL SECURITIES

	 	 	
20

	 
	
SECTION 2.5 FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	 	 	
20

	 
	
SECTION 2.6 FORM OF CONVERSION NOTICE

	 	 	
21

	 
	
ARTICLE 3 THE SECURITIES

	 	 	
22

	 

 

  

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SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES

	  	  	
22

	  
	
SECTION 3.2 DENOMINATIONS

	  	  	
25

	  
	
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING

	  	  	
25

	  
	
SECTION 3.4 TEMPORARY SECURITIES

	  	  	
26

	  
	
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE

	  	  	
27

	  
	
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES

	  	  	
28

	  
	
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

	  	  	
29

	  
	
SECTION 3.8 PERSONS DEEMED OWNERS

	  	  	
30

	  
	
SECTION 3.9 CANCELLATION

	  	  	
30

	  
	
SECTION 3.10 COMPUTATION OF INTEREST

	  	  	
30

	  
	
ARTICLE 4 SATISFACTION AND DISCHARGE

	  	  	
31

	  
	
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE

	  	  	
31

	  
	
SECTION 4.2 APPLICATION OF TRUST MONEY

	  	  	
32

	  
	
ARTICLE 5 REMEDIES

	  	  	
32

	  
	
SECTION 5.1 EVENTS OF DEFAULT

	  	  	
32

	  
	
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

	  	  	
33

	  
	
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

	  	  	
34

	  
	
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM

	  	  	
35

	  
	
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES

	  	  	
35

	  
	
SECTION 5.6 APPLICATION OF MONEY COLLECTED

	  	  	
35

	  
	
SECTION 5.7 LIMITATION ON SUITS

	  	  	
36

	  

 

  

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SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST AND TO CONVERT

	  	  	
36

	  
	
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES

	  	  	
36

	  
	
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE

	  	  	
37

	  
	
SECTION 5.11 DELAY OR OMISSION NOT WAIVER

	  	  	
37

	  
	
SECTION 5.12 CONTROL BY HOLDERS

	  	  	
37

	  
	
SECTION 5.13 WAIVER OF PAST DEFAULTS

	  	  	
37

	  
	
SECTION 5.14 UNDERTAKING FOR COSTS

	  	  	
38

	  
	
SECTION 5.15 WAIVER OF USURY, STAY OR EXTENSION LAWS

	  	  	
38

	  
	
ARTICLE 6 THE TRUSTEE

	  	  	
38

	  
	
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES

	  	  	
38

	  
	
SECTION 6.2 NOTICE OF DEFAULTS

	  	  	
38

	  
	
SECTION 6.3 CERTAIN RIGHTS OF TRUSTEE

	  	  	
39

	  
	
SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

	  	  	
40

	  
	
SECTION 6.5 MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES

	  	  	
40

	  
	
SECTION 6.6 MONEY HELD IN TRUST

	  	  	
40

	  
	
SECTION 6.7 COMPENSATION AND REIMBURSEMENT

	  	  	
40

	  
	
SECTION 6.8 CONFLICTING INTERESTS

	  	  	
41

	  
	
SECTION 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY

	  	  	
41

	  
	
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

	  	  	
41

	  
	
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

	  	  	
43

	  
	
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS

	  	  	
44

	  
	
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

	  	  	
44

	  

 

  

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SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT

	  	  	
44

	  
	
ARTICLE 7 HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

	  	  	
46

	  
	
SECTION 7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

	  	  	
46

	  
	
SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS

	  	  	
46

	  
	
SECTION 7.3 REPORTS BY TRUSTEE

	  	  	
46

	  
	
SECTION 7.4 REPORTS BY COMPANY

	  	  	
47

	  
	
ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

	  	  	
47

	  
	
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS

	  	  	
47

	  
	
SECTION 8.2 SUCCESSOR SUBSTITUTED

	  	  	
48

	  
	
ARTICLE 9 SUPPLEMENTAL INDENTURES

	  	  	
48

	  
	
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

	  	  	
48

	  
	
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS

	  	  	
49

	  
	
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES

	  	  	
50

	  
	
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES

	  	  	
50

	  
	
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT

	  	  	
51

	  
	
SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES

	  	  	
51

	  
	
SECTION 9.7 SUBORDINATION UNIMPAIRED

	  	  	
51

	  
	
ARTICLE 10 COVENANTS

	  	  	
51

	  
	
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST

	  	  	
51

	  
	
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY

	  	  	
51

	  
	
SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST

	  	  	
52

	  

 

  

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SECTION 10.4 STATEMENT BY OFFICERS AS TO DEFAULT

	  	  	
53

	  
	
SECTION 10.5 EXISTENCE

	  	  	
53

	  
	
SECTION 10.6 MAINTENANCE OF PROPERTIES

	  	  	
53

	  
	
SECTION 10.7 PAYMENT OF TAXES AND OTHER CLAIMS

	  	  	
53

	  
	
SECTION 10.8 WAIVER OF CERTAIN COVENANTS

	  	  	
53

	  
	
ARTICLE 11 REDEMPTION OF SECURITIES

	  	  	
54

	  
	
SECTION 11.1 APPLICABILITY OF ARTICLE

	  	  	
54

	  
	
SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE

	  	  	
54

	  
	
SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED

	  	  	
54

	  
	
SECTION 11.4 NOTICE OF REDEMPTION

	  	  	
55

	  
	
SECTION 11.5 DEPOSIT OF REDEMPTION PRICE

	  	  	
56

	  
	
SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION DATE

	  	  	
56

	  
	
SECTION 11.7 SECURITIES REDEEMED IN PART

	  	  	
56

	  
	
ARTICLE 12 SINKING FUNDS

	  	  	
57

	  
	
SECTION 12.1 APPLICABILITY OF ARTICLE

	  	  	
57

	  
	
SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES

	  	  	
57

	  
	
SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND

	  	  	
57

	  
	
ARTICLE 13 DEFEASANCE AND COVENANT DEFEASANCE

	  	  	
57

	  
	
SECTION 13.1 COMPANY’S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE

	  	  	
57

	  
	
SECTION 13.2 DEFEASANCE AND DISCHARGE

	  	  	
58

	  
	
SECTION 13.3 COVENANT DEFEASANCE

	  	  	
58

	  
	
SECTION 13.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE

	  	  	
59

	  

 

  

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SECTION 13.5 DEPOSITED MONEY, U.S. GOVERNMENT OBLIGATIONS AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS

	  	  	
61

	  
	
SECTION 13.6 REINSTATEMENT

	  	  	
61

	  
	
ARTICLE 14 CONVERSION OF SECURITIES

	  	  	
62

	  
	
SECTION 14.1 APPLICABILITY OF ARTICLE

	  	  	
62

	  
	
SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE

	  	  	
63

	  
	
SECTION 14.3 NO FRACTIONAL SHARES

	  	  	
64

	  
	
SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE

	  	  	
64

	  
	
SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS

	  	  	
64

	  
	
SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK

	  	  	
65

	  
	
SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION

	  	  	
65

	  
	
SECTION 14.8 NONASSESSABILITY

	  	  	
65

	  
	
SECTION 14.9 PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS

	  	  	
66

	  
	
SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION

	  	  	
67

	  
	
SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION

	  	  	
67

	  
	
ARTICLE 15 SUBORDINATION OF SECURITIES

	  	  	
67

	  
	
SECTION 15.1 AGREEMENT OF SUBORDINATION

	  	  	
67

	  
	
SECTION 15.2 PAYMENTS TO HOLDERS

	  	  	
68

	  
	
SECTION 15.3 SUBROGATION OF SECURITIES

	  	  	
70

	  
	
SECTION 15.4 AUTHORIZATION TO EFFECT SUBORDINATION

	  	  	
71

	  
	
SECTION 15.5 NOTICE TO TRUSTEE

	  	  	
71

	  
	
SECTION 15.6 TRUSTEE’S RELATION TO SENIOR DEBT

	  	  	
71

	  
	
SECTION 15.7 NO IMPAIRMENT OF SUBORDINATION

	  	  	
72

	  
	
SECTION 15.8 CERTAIN CONVERSIONS/EXCHANGES DEEMED PAYMENT

	  	  	
72

	  

 

  

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SECTION 15.9 ARTICLE APPLICABLE TO PAYING AGENTS

	  	  	
72

	  
	
SECTION 15.10 SENIOR DEBT ENTITLED TO RELY

	  	  	
73

	  
	
SECTION 15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT

	  	  	
73

	  
	
SECTION 15.12 TRUST MONIES NOT SUBORDINATED

	  	  	
73

	  

 

  

vii

  

 

INDENTURE

 

     INDENTURE, dated as of __________, 201_, between Telular Corporation, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal executive office at 311 South Wacker Drive Suite 4300  Chicago, Illinois 60606-6622, and ____________________, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

     The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured subordinated debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as provided in this Indenture.

 

     All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

     For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof appertaining, as follows:

 

ARTICLE 1

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

SECTION 1.1 DEFINITIONS.

 

     For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

     (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 

     (2) all other terms used herein which are defined in the Trust Indenture Act, 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 of America, and, 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 in the United States of America as are generally accepted at the date of such computation;

 

     (4) all references to “$” refer to the lawful currency of the United States of America;

 

     (5) unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and

 

  

1

  

 

     (6) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

     “Act,” when used with respect to any Holder, has the meaning specified in Section 1.4.

 

     “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.

 

     “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series.

 

     “Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board empowered to act for it with respect to this Indenture.

 

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

     “Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

 

     “Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

 

     “Common Stock” includes any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company; provided, however, subject to the provisions of Section 14.9, shares issuable upon conversion of Securities shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, further, that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

 

     “Company” means the corporation 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.

 

     “Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its President, its Executive Vice President or a Vice President, and by its principal financial officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

  

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     “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.

 

     “Corporate Trust Office” means the corporate trust office of the Trustee at _______________________, Attention: Corporate Trust Department, or such other office, designated by the Trustee by written notice to the Company, at which at any particular time its corporate trust business shall be administered.

 

     “Corporation” means a corporation, association, company, joint-stock company or business trust.

 

     “Covenant Defeasance” has the meaning specified in Section 13.3.

 

     “Defaulted Interest” has the meaning specified in Section 3.7.

 

     “Defeasance” has the meaning specified in Section 13.2.

 

     “Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 3.1.

 

     “Designated Senior Debt” means the Company’s obligations under any particular Senior Debt in which the instrument creating or evidencing the same or the assumption or guarantee thereof (or related agreements or documents to which the Company is a party) expressly provides that such Senior Debt shall be “Designated Senior Debt” for purposes of this Indenture (provided that such instrument, agreement or other document may place limitations and conditions on the right of such Senior Debt to exercise the rights of Designated Senior Debt). If any payment made to any holder of any Designated Senior Debt or its Representative with respect to such Designated Senior Debt is rescinded or must otherwise be returned by such holder or Representative upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the reinstated Indebtedness of the Company arising as a result of such rescission or return shall constitute Designated Senior Debt effective as of the date of such rescission or return.

 

     “Euro” or “Euros” means the currency adopted by those nations participating in the third stage of the economic and monetary union provisions of the Treaty on European Union, signed at Maastricht on February 2, 1992.

 

     “European Economic Area” means the member nations of the European Economic Area pursuant to the Oporto Agreement on the European Economic Area dated May 2, 1992, as amended.

 

     “European Union” means the member nations of the European Union established by the Treaty of European Union, signed at Maastricht on February 2, 1992, which amended the Treaty of Rome establishing the European Community.

 

     “Event of Default” has the meaning specified in Section 5.1.

 

     “Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.

 

     “Expiration Date” has the meaning specified in Section 1.4.

 

  

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     “Foreign Government Obligation” means with respect to Securities of any series which are not denominated in the currency of the United States of America (x) any security which is (i) a direct obligation of the government which issued or caused to be issued the currency in which such security is denominated and for the payment of which obligations its full faith and credit is pledged or, with respect to Securities of any series which are denominated in euros, a direct obligation of any member nation of the European Union for the payment of which obligation the full faith and credit of the respective nation is pledged so long as such nation has a credit rating at least equal to that of the highest rated member nation of the European Economic Area, or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of a government specified in clause (i) above the payment of which is unconditionally guaranteed as a full faith and credit obligation by the such government, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Foreign Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any Foreign Government Obligation which is so specified and held, 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 depositary receipt from any amount received by the custodian in respect of the Foreign Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

 

     “Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 2.4 (or such legend as may be specified as contemplated by Section 3.1 for such Securities).

 

     “Holder” means a Person in whose name a Security is registered in the Security Register.

 

     “Indebtedness” means, with respect to any Person, and without duplication, (a) all indebtedness, obligations and other liabilities (contingent or otherwise) of such Person for borrowed money (including obligations of such Person in respect of overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection agreements, and any loans or advances from banks, whether or not evidenced by notes or similar instruments) or evidenced by bonds, debentures, notes or similar instruments (whether or not the recourse of the lender is to the whole of the assets of such person or to only a portion thereof), other than any account payable or other accrued current liability or obligation incurred in the ordinary course of business in connection with the obtaining of materials or services; (b) all reimbursement obligations and other liabilities (contingent or otherwise) of such Person with respect to letters of credit, bank guarantees or bankers’ acceptances; (c) all obligations and liabilities (contingent or otherwise) in respect of leases of such Person required, in conformity with generally accepted accounting principles, to be accounted for as capitalized lease obligations on the balance sheet of such Person and all obligations and other liabilities (contingent or otherwise) under any lease or related document (including a purchase agreement) in connection with the lease of real property which provides that such Person is contractually obligated to purchase or cause a third party to purchase the leased property and thereby guarantee a minimum residual value of the leased property to the lessor and the obligations of such Person under such lease or related document to purchase or to cause a third party to purchase such leased property; (d) all obligations of such Person (contingent or otherwise) with respect to an interest rate or other swap, cap or collar agreement or other similar instrument or agreement or foreign currency hedge, exchange, purchase or similar instrument or agreement; (e) all direct or indirect guaranties or similar agreements by such Person in respect of, and obligations or liabilities (contingent or otherwise) of such Person to purchase or otherwise acquire or otherwise assure a creditor against loss in respect of, indebtedness, obligations or liabilities of another person of the kind described in clauses (a) through (d) above; (f) any indebtedness or other obligations described in clauses (a) through (e) above secured by any

 

  

4

  

 

mortgage, pledge, lien or other encumbrance existing on property which is owned or held by such Person, regardless of whether the indebtedness or other obligation secured thereby shall have been assumed by such Person; and (g) any and all deferrals, renewals, extensions and refundings of, or amendments, modifications or supplements to, any indebtedness, obligation or liability of the kind described in clauses (a) through (f) above.

 

     “Indenture” means this instrument as originally executed and 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, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.1; provided, however, that if at any time more than one Person is acting as Trustee under this Indenture due to the appointment of one or more separate Trustees for any one or more separate series of Securities, “Indenture” shall mean, with respect to such series of Securities 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 particular series of Securities for which such Person is Trustee established as contemplated by Section 3.1, exclusive, however, of any provisions or terms which relate solely to other series of Securities 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; provided, further that in the event that this Indenture is supplemented or amended by one or more indentures supplemental hereto which are only applicable to certain series of Securities, the term “Indenture” for a particular series of Securities shall only include the supplemental indentures applicable thereto.

 

     “Interest,” when used with respect to an Original Issue Discount Security, which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

     “Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

 

     “Investment Company Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.

 

     “Maturity,” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, repurchase at the option of the Holder, upon redemption or otherwise.

 

     “Notice of Default” means a written notice of the kind specified in Section 5.1(4).

 

     “Officers’ Certificate” means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice President or a Vice President, and by the principal financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers’ Certificate given pursuant to Section 10.4 shall be the principal executive, financial or accounting officer of the Company.

 

  

5

  

 

     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Company, and who shall be reasonably acceptable to the Trustee.

 

     “Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

 

     “Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except (1) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (2) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (3) Securities as to which Defeasance has been effected pursuant to Section 13.2; and (4) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 3.1, (C) the principal amount of a Security denominated in one or more non-U.S. dollar currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.1, of the principal amount of such Security (or, in the case of a Security described in clause (A) or (B) above, of the amount determined as provided in such clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

     “Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

 

     “Payment Blockage Notice” has the meaning specified in Section 15.2.

 

     “Person” means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

  

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     “Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.

 

     “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

     “Record Date” means any Regular Record Date or Special Record Date.

 

     “Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

 

     “Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

 

     “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.

 

     “Representative” means the (a) indenture trustee or other trustee, agent or representative for any Senior Debt or (b) with respect to any Senior Debt that does not have any such trustee, agent or other representative, (i) in the case of such Senior Debt issued pursuant to an agreement providing for voting arrangements as among the holders or owners of such Senior Debt, any holder or owner of such Senior Debt acting with the consent of the required persons necessary to bind such holders or owners of such Senior Debt and (ii) in the case of all other such Senior Debt, the holder or owner of such Senior Debt.

 

     “Responsible Officer” means, when used with respect to the Trustee, an officer of the Trustee in the Corporate Trust Office assigned and duly authorized by the Trustee to administer its corporate trust matters.

 

     “Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

     “Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

 

     “Security Register” and “Security Registrar” have the respective meanings specified in Section 3.5.

 

     “Senior Debt” means the principal of, premium, if any, interest (including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding) and rent payable on or in connection with, and all fees, costs, expenses and other amounts accrued or due on or in connection with, Indebtedness of the Company, whether outstanding on the date of this Indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Company (including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the foregoing), unless in the case of any particular Indebtedness the instrument creating or evidencing the same or the assumption or guarantee thereof expressly provides that such Indebtedness shall not be senior in right of payment to the Securities or expressly provides that such Indebtedness is “pari passu” or “ junior” to the Securities.

 

  

7

  

 

Notwithstanding the foregoing, the term Senior Debt shall not include any Indebtedness of the Company to any Subsidiary of the Company. If any payment made to any holder of any Senior Debt or its Representative with respect to such Senior Debt is rescinded or must otherwise be returned by such holder or Representative upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the reinstated Indebtedness of the Company arising as a result of such rescission or return shall constitute Senior Debt effective as of the date of such rescission or return.

 

     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

 

     “Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

     “Subsidiary” means a Person of which at least a majority of the outstanding voting stock having the power to elect a majority of the board of directors of such Person (in the case of a corporation) is, or of which at least a majority of the equity interests (in the case of a Person which is not a corporation) are, at the time owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

 

     “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

     “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

 

     “U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, 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 depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

 

     “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.”

 

  

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SECTION 1.2 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 such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

 

     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 covenant or condition and the definitions herein relating thereto;

 

     (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

     (3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

     (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

 

SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

 

     In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

     Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

     Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

  

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SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.

 

     Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the Company copies of all such instrument or instruments delivered to the Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

 

     The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

 

     The ownership of Securities shall be proved by the Security Register.

 

     Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

 

     The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, vote, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

 

  

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     The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.2, (iii) any request to institute proceedings referred to in Section 5.7(2), or (iv) any direction referred to in Section 5.12, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

 

     With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

 

     Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

 

SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.

 

     Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

 

     (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (or by facsimile transmissions, provided that oral confirmation of receipt shall have been received) to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Department, or

 

     (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, personally delivered or sent via overnight courier to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company, Attention: Chief Financial Officer.

 

  

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SECTION 1.6 NOTICE TO HOLDERS; WAIVER.

 

     Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, or delivered by hand or overnight courier, to each Holder affected by such event, at its address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. Neither the failure to mail or deliver by hand or overnight courier any notice, nor any defect in any notice so mailed or delivered by hand or overnight courier, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

     In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

SECTION 1.7 CONFLICT WITH TRUST INDENTURE ACT.

 

     If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under the Trust Indenture Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act, which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

 

SECTION 1.8 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 1.9 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 1.10 SEPARABILITY CLAUSE.

 

     In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 1.11 BENEFITS OF INDENTURE.

 

     Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the holders of Senior Debt and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

  

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SECTION 1.12 GOVERNING LAW.

 

     THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

SECTION 1.13 LEGAL HOLIDAYS.

 

     In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security or the last date on which a Holder has the right to convert a Security at a particular conversion price shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) or, if applicable to a particular series of Securities, conversion need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, at the Stated Maturity or on such last day for conversion, as the case may be.

 

SECTION 1.14 INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS.

 

     No recourse for the payment of the principal of or premium, if any, or interest on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities.

 

SECTION 1.15 INDENTURE MAY BE EXECUTED IN COUNTERPARTS.

 

     This instrument 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 2

 

SECURITY FORMS

 

SECTION 2.1 FORMS GENERALLY.

 

     The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, 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 the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is 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 Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities. Any such Board Resolution or record of such action shall have attached thereto a true and correct copy of the form of Security referred to therein approved by or pursuant to such Board Resolution.

 

     The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

 

SECTION 2.2 FORM OF FACE OF SECURITY.

 

[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.]

 

Telular Corporation

	  	  	  
	  	  	  
	
NO. __________

	  	
$__________

	  	  	
CUSIP: ____________

 

     Telular Corporation, a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________________, or registered assigns, the principal sum of ____________________ dollars on __________ ____________ [IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT — , and to pay interest thereon from _________ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi- annually on ___________ and __________ in each year, commencing _______________, at the rate of ____% per annum, until the principal hereof is paid or made available for payment [IF APPLICABLE, INSERT — , provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such

 

  

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interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the ___________ or ___________ (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) 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 Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

 

[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand. [Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on any overdue interest shall be payable on demand.]]

 

     Payment of the principal of (and premium, if any) and [IF APPLICABLE, INSERT — any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in _____________________, 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 [IF APPLICABLE, INSERT — ; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register].

 

     Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

     Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

  

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	  	  	  	  	  
	
Dated:                                         

	
Telular Corporation

 

	  
	  	
By:  

	  	  
	  	  	
Title: 

	  	  
	
ATTEST:

	  	  	  	  
	
                                        

	  	  	  	  

 

SECTION 2.3 FORM OF REVERSE OF SECURITY.

 

     This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of ____________, 201_ (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and ______________________, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [IF APPLICABLE, INSERT — , limited in aggregate principal amount to $_________].

 

[IF APPLICABLE, INSERT — The Securities of this series are subject to redemption upon not less than [IF APPLICABLE, INSERT — 30] days’ notice by mail, [IF APPLICABLE, INSERT — (1) on _____________ in any year commencing with the year _____ and ending with the year _____ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [IF APPLICABLE, INSERT — on or after _____________, 20__], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [IF APPLICABLE, INSERT — on or before ______________, ___%, and if redeemed] during the 12-month period beginning ________ of the years indicated,

 

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	
REDEMPTION

	  	  	  	  	  	  	
REDEMPTION

	  
	
YEAR

	  	
PRICE

	  	  	
YEAR

	  	  	
PRICE

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  

 

and thereafter at a Redemption Price equal to _____% of the principal amount, together in the case of any such redemption [IF APPLICABLE, INSERT — (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[IF APPLICABLE, INSERT — The Securities of this series are subject to redemption upon not less than [if applicable, insert — 30] days’ notice by mail, (1) on _________ in any year commencing with

 

  

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the year _____ and ending with the year _____ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [IF APPLICABLE, INSERT — on or after __________], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning ________ of the years indicated,

 

	  	  	  	  	  
	  	  	
REDEMPTION PRICE FOR

	  	
REDEMPTION PRICE FOR

	  	  	
REDEMPTION THROUGH

	  	
REDEMPTION OTHERWISE THAN

	  	  	
OPERATION OF THE

	  	
THROUGH OPERATION OF THE

	
YEAR

	  	
SINKING FUND

	  	
SINKING FUND

	  	  	  	  	  

 

and thereafter at a Redemption Price equal to ___% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[IF APPLICABLE, INSERT — Notwithstanding the foregoing, the Company may not, prior to __________, redeem any Securities of this series as contemplated by [IF APPLICABLE, INSERT — clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ___% per annum.]

 

[IF APPLICABLE, INSERT — The sinking fund for this series provides for the redemption on ___________, in each year beginning with the year _____ and ending with the year _____ of [IF APPLICABLE, INSERT — not less than $__________ (“mandatory sinking fund”) and not more than] $___________ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [IF APPLICABLE, INSERT — mandatory] sinking fund payments may be credited against subsequent [IF APPLICABLE, INSERT — mandatory] sinking fund payments otherwise required to be made IF APPLICABLE, INSERT — , in the inverse order in which they become due].]

 

[IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[IF APPLICABLE, INSERT — The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.]

 

[IF THE SECURITY IS CONVERTIBLE INTO COMMON STOCK OF THE COMPANY, INSERT — Subject to the provisions of the Indenture, the Holder of this Security is entitled, at its option, at any time on or before [INSERT DATE] (except that, in case this Security or any portion hereof shall be called for redemption, such right shall terminate with respect to this Security or portion hereof, as the case may be, so called for redemption at the close of business on the first

 

  

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Business Day next preceding the date fixed for redemption as provided in the Indenture unless the Company defaults in making the payment due upon redemption), to convert the principal amount of this Security (or any portion hereof which is $1,000 or an integral multiple thereof), into fully paid and non-assessable shares (calculated as to each conversion to the nearest 1/100th of a share) of the Common Stock of the Company, as said shares shall be constituted at the date of conversion, at the conversion price of $_____________ principal amount of Securities for each share of Common Stock, or at the adjusted conversion price in effect at the date of conversion determined as provided in the Indenture, upon surrender of this Security, together with the conversion notice hereon duly executed, to the Company at the designated office or agency of the Company in ____________, accompanied (if so required by the Company) by instruments of transfer, in form satisfactory to the Company and to the Trustee, duly executed by the Holder or by its duly authorized attorney in writing.

 

     Such surrender shall, if made during any period beginning at the close of business on a Regular Record Date and ending at the opening of business on the Interest Payment Date next following such Regular Record Date (unless this Security or the portion being converted shall have been called for redemption on a Redemption Date during the period beginning at the close of business on a Regular Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day), also be accompanied by payment in funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Security then being converted. Subject to the aforesaid requirement for payment and, in the case of a conversion after the Regular Record Date next preceding any Interest Payment Date and on or before such Interest Payment Date, to the right of the Holder of this Security (or any Predecessor Security) of record at such Regular Record Date to receive an installment of interest (with certain exceptions provided in the Indenture), no adjustment is to be made on conversion for interest accrued hereon or for dividends on shares of Common Stock issued on conversion. The Company is not required to issue fractional shares upon any such conversion, but shall make adjustment therefor in cash on the basis of the current market value of such fractional interest as provided in the Indenture. The conversion price is subject to adjustment as provided in the Indenture. In addition, the Indenture provides that in case of certain consolidations or mergers to which the Company is a party or the sale of substantially all of the assets of the Company, the Indenture shall be amended, without the consent of any Holders of Securities, so that this Security, if then outstanding, will be convertible thereafter, during the period this Security shall be convertible as specified above, only into the kind and amount of securities, cash and other property receivable upon the consolidation, merger or sale by a holder of the number of shares of Common Stock into which this Security might have been converted immediately prior to such consolidation, merger or sale (assuming such holder of Common Stock failed to exercise any rights of election and received per share the kind and amount received per share by a plurality of non-electing shares). In the event of conversion of this Security in part only, a new Security or Securities for the unconverted portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[IF THE SECURITY IS CONVERTIBLE INTO OTHER SECURITIES OF THE COMPANY, SPECIFY THE CONVERSION FEATURES.]

 

     The indebtedness evidenced by this Security is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Debt of the Company, and this Security is issued subject to such provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate

 

  

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to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes.

 

[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]

 

[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to — INSERT FORMULA FOR DETERMINING THE AMOUNT. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]

 

     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 the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of more than 50% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

     As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than a majority in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

     No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place 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 Security is registrable in the Security Register, upon surrender of this Security for registration of transfer

 

  

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at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

     The Securities of this series are issuable only in registered form without coupons in denominations of $_____ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, 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 due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

     All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

SECTION 2.4 FORM OF LEGEND FOR GLOBAL SECURITIES.

 

     Unless otherwise specified as contemplated by Section 3.1 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

SECTION 2.5 FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION.

 

     The Trustee’s certificates of authentication shall be in substantially the following form:

 

     This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.

	  	  	  	  	  
	  
	  	
as Trustee

 

	  
	  	
By:  

	  	  
	  	  	
Authorized Officer 

	  
	  	  	  	  
	  

 

  

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SECTION 2.6 FORM OF CONVERSION NOTICE

 

     Conversion notices shall be in substantially the following form:

 

To Telular Corporation:

 

     The undersigned owner of this Security hereby irrevocably exercises the option to convert this Security, or portion hereof (which is $1,000 or an integral multiple thereof) below designated, into shares of Common Stock of the Company in accordance with the terms of the Indenture referred to in this Security, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares and any Securities representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If this Notice is being delivered on a date after the close of business on a Regular Record Date and prior to the opening of business on the related Interest Payment Date (unless this Security or the portion thereof being converted has been called for redemption on a Redemption Date during the period beginning at the close of business on a Regular Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day), this Notice is accompanied by payment, in funds acceptable to the Company, of an amount equal to the interest payable on such Interest Payment Date of the principal of this Security to be converted. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect hereto. Any amount required to be paid by the undersigned on account of interest accompanies this Security.

 

Principal Amount to be Converted (in an integral multiple of $1,000, if less than all)

	  	  	  
	  	  	  
	
U.S. $

	  	  
	
Dated:

	  	  
	  	  	  
	  	  	
Signature(s) must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17Ad-15.

	  	  	  
	  	  	  
	  	  	
 

Signature Guaranty

 

     Fill in for registration of shares of Common Stock and Security if to be issued otherwise than to the registered Holder.

 

	  	  	  
	  	  	  
	  	  	  
	
 

Name

	  	
 

Social Security or Other Taxpayer

Identification Number

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	
Please print Name and Address

(including zip code)

	  	  

 

  

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[The above conversion notice is to be modified, as appropriate, for conversion into other securities or property of the Company.]

 

ARTICLE 3

 

THE SECURITIES

 

SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.

 

     The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 3.3, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

 

     (1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);

 

     (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Securities which, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder);

 

     (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

 

     (4) the date or dates on which the principal of any Securities of the series is payable;

 

     (5) the rate or rates (which may be fixed or variable) at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date (or the method for determining the dates and rates);

 

     (6) the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;

 

     (7) the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;

 

  

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     (8) the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

     (9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable;

 

     (10) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;

 

     (11) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 1.1;

 

     (12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

 

     (13) if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;

 

     (14) if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

 

     (15) if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 13.2 or Section 13.3 or both such Sections, or any other defeasance provisions applicable to any Securities of the series, and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced;

 

     (16) if applicable, the terms of any right to convert or exchange Securities of the series into shares of Common Stock of the Company or other securities or property;

 

  

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     (17) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 2.4 and any circumstances in addition to or in lieu of those set forth in clause (2) of the last paragraph of Section 3.5 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

 

     (18) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 5.2;

 

     (19) any addition to or change in the covenants set forth in Article 10 which applies to Securities of the series;

 

     (20) any Authenticating Agents, Paying Agents, Security Registrars or such other agents necessary in connection with the issuance of the Securities of such series, including, without limitation, exchange rate agents and calculation agents;

 

     (21) if applicable, the terms of any security that will be provided for a series of Securities, including provisions regarding the circumstances under which collateral may be released or substituted;

 

     (22) if applicable, the terms of any guaranties for the Securities and any circumstances under which there may be additional obligors on the Securities;

 

     (23) any addition to or change in or modification to the subordinated provisions of this Indenture relating to the Securities of that series (including the provisions of Article 15), or different subordination provisions, including a different definition of “Senior Debt” or “Designated Senior Debt,” will apply to Securities of the series; and

 

     (24) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1(5)).

 

     All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 3.3) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto.

 

     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.

 

     The Securities shall be subordinated in right of payment to Senior Debt as provided in Article 15.

 

  

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SECTION 3.2 DENOMINATIONS.

 

     The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 3.1. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

 

SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

 

     The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its principal financial officer, its President, one of its Executive Vice Presidents or one of its Vice Presidents, attested by its Treasurer, its Secretary or one of its Assistant Treasurers or Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.

 

     Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

 

     At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, a copy of such Board Resolution, the Officers’ Certificate setting forth the terms of the series and an Opinion of Counsel, with such Opinion of Counsel stating,

 

     (1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture;

 

     (2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and

 

     (3) that such Securities, 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 in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

     If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

  

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     Notwithstanding the provisions of Section 3.1 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

 

     Each Security shall be dated the date of its authentication.

 

     No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.9, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

     Neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Security, check, advice of payment or redemption notice, and any such document may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Company nor the Trustee shall be liable for any inaccuracy in such numbers.

 

SECTION 3.4 TEMPORARY SECURITIES.

 

     Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

 

     If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.

 

  

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SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.

 

     The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

     Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

 

     At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.

 

     All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

 

     Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or its attorney duly authorized in writing.

 

     No service charge shall be made for any registration of transfer or exchange of Securities, 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 Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

 

     If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

     The provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Securities:

 

     (1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

 

  

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     (2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless

 

(A) such Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act,

 

(B) there shall have occurred and be continuing an Event of Default with respect to such Global Security or

 

(C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 3.1.

 

     (3) Subject to clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

 

     (4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

 

SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

 

     If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

     If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) 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 Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

     In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

     Upon the issuance of any new Security 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 Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security 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 Securities of that series duly issued hereunder.

 

     The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

 

     Except as otherwise provided as contemplated by Section 3.1 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

 

     Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

 

     (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series 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 prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 1.6, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are 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 on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice

 

  

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as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

     Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

     Subject to the provisions of Section 14.2, in the case of any Security (or any part thereof) which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Security the principal of (or premium, if any, on) which shall become due and payable, whether at Stated Maturity or by declaration of acceleration or otherwise prior to such Interest Payment Date), interest whose Stated Maturity is on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion and such interest (whether or not punctually paid or duly provided for) shall be paid to the Person in whose name that Security (or any one or more Predecessor Securities) is registered at the close of business on such Regular Record Date. Except as otherwise expressly provided in the immediately preceding sentence or in Section 14.2, in the case of any Security (or any part thereof) which is converted, interest whose Stated Maturity is after the date of conversion of such Security (or such part thereof) shall not be payable.

 

SECTION 3.8 PERSONS DEEMED OWNERS.

 

     Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 3.7) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

SECTION 3.9 CANCELLATION.

 

     All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of in accordance with its customary procedures.

 

SECTION 3.10 COMPUTATION OF INTEREST.

 

     Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

  

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ARTICLE 4

 

SATISFACTION AND DISCHARGE

 

SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.

 

     This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

 

     (1) either

 

(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Trustee or the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or

 

(B) all such Securities not 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, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

 

     (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

 

     (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive.

 

  

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SECTION 4.2 APPLICATION OF TRUST MONEY.

 

     Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities 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 any premium and interest for whose payment such money has been deposited with the Trustee.

 

ARTICLE 5

 

REMEDIES

 

SECTION 5.1 EVENTS OF DEFAULT.

 

     “Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article 15 or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless in the Board Resolution, supplemental indenture or Officers’ Certificate establishing such series, it is provided that such series shall not have the benefit of said Event of Default:

 

     (1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

 

     (2) default in the payment of the principal of or any premium on any Security of that series at its Maturity; or

 

     (3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or

 

     (4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 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 Securities of that 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

 

     (5) the entry by a court having jurisdiction in the premises of

 

(A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or

 

  

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(B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

 

     (6) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or

 

     (7) any other Event of Default provided with respect to Securities of that series in the Board Resolution, supplemental indenture or Officers’ Certificate establishing that series.

 

SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

 

     Unless the Board Resolution, supplemental indenture or Officers’ Certificate establishing such series provides otherwise, if an Event of Default (other than an Event of Default specified in Section 5.1(5) or 5.1(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), and premium, if any, together with accrued and unpaid interest, if any, 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 principal amount (or specified amount), and premium, if any, together with accrued and unpaid interest, if any, thereon, shall become immediately due and payable. If an Event of Default specified in Section 5.1(5) or 5.1(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), and premium, if any, together with accrued and unpaid interest, if any, thereon, shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable. Any payments by the Company on the Securities following any such acceleration will be subject to the subordination provisions of Article 15 to the extent provided therein.

 

  

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     At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that 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 sufficient to pay

 

(A) all overdue interest on all Securities of that series,

 

(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and

 

(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 with respect to Securities of that series, other than the non-payment of the principal of Securities of that series that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.

 

     No such rescission shall affect any subsequent default or impair any right consequent thereon.

 

SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

 

     The Company covenants that if

 

     (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

 

     (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

     If an Event of Default with respect to Securities 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

 

  

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Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.

 

     In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.7. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

 

SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

 

     All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

 

SECTION 5.6 APPLICATION OF MONEY COLLECTED.

 

     Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities 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 under Section 6.7;

 

     SECOND: Subject to Article 15, to the payment of the amounts then due and unpaid for principal of and any premium, if any, and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium, if any, and interest, respectively; and

 

     THIRD: The balance, if any, to the Company or any other Person or Persons entitled thereto.

 

  

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SECTION 5.7 LIMITATION ON SUITS.

 

     No Holder of any Security 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 Event of Default with respect to the Securities of that series;

 

     (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

     (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

 

     (4) the Trustee for 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 Securities of that 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 to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

 

SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST AND TO CONVERT.

 

     Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 3.7) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date), to convert such Securities in accordance with Article 14 to the extent that such right to convert is applicable to such Security, and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.

 

     If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

  

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SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.

 

     Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

SECTION 5.11 DELAY OR OMISSION NOT WAIVER.

 

     No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy 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 the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.

 

SECTION 5.12 CONTROL BY HOLDERS.

 

     The Holders of a majority in principal amount of the Outstanding Securities 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 Securities of such series, provided that

 

     (1) such direction shall not be in conflict with any rule of law or with this Indenture and the Trustee shall not have determined that the action so directed would be unjustly prejudicial to Holders of Securities of that series, or any other series, not taking part in such direction; and

 

     (2) the Trustee may take any other action deemed proper by the trustee that is not inconsistent with such direction or this Indenture.

 

SECTION 5.13 WAIVER OF PAST DEFAULTS.

 

     The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except

 

     (1) a default in the payment of the principal of or any premium or interest on any Security of such series as and when the same shall become due and payable by the terms thereof, otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest, principal and premium, if any, has been deposited with the Trustee), or

 

     (2) to the extent such right is applicable to such Security, a failure by the Company on request to convert any Security into Common Stock; or

 

  

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     (3) in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

 

     Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

SECTION 5.14 UNDERTAKING FOR COSTS.

 

     In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or in any suit for the enforcement of the right to convert any Security in accordance with Article 14.

 

SECTION 5.15 WAIVER OF USURY, STAY OR EXTENSION LAWS.

 

     The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, 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 (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

ARTICLE 6

 

THE TRUSTEE

 

SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.

 

     The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, 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. 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 6.2 NOTICE OF DEFAULTS.

 

     If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that except in the case of a default in the payment of principal of (or premium, if any) or interest on any Securities of such series or in the payment of any sinking fund installment or any conversion right applicable to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors and/or Responsible Officers of

 

  

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the Trustee in good faith determine that the withholding of such notice is in the interests of the holders of Securities of such series; provided, further, however, that in the case of any default of the character specified in Section 5.1(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

 

     Except with respect to Section 10.1, the Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Article 10. In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Sections 5.1(1), 5.1(2) and 5.1(3) (defaults in payments on the Securities) or (ii) any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge.

 

     Delivery of reports, information and documents to the Trustee under Section 7.4 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officers’ Certificates).

 

SECTION 6.3 CERTAIN RIGHTS OF TRUSTEE.

 

     Subject to the provisions of Section 6.1:

 

     (1) in the absence of bad faith on the part of the Trustee, the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed 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 Company Order, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

 

     (3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) is entitled to and may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;

 

     (4) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

     (5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

  

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     (6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; 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 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

 

     The recitals contained herein and in the Securities, except the Trustee’s certificates 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, sufficiency or priority of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

 

SECTION 6.5 MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES.

 

     The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

     Subject to the limitations imposed by the Trust Indenture Act, nothing in this Indenture shall prohibit the Trustee from becoming and acting as trustee under other indentures under which other securities, or certificates of interest of participation in other securities, of the Company are outstanding in the same manner as if it were not Trustee hereunder.

 

SECTION 6.6 MONEY HELD IN TRUST.

 

     Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

 

SECTION 6.7 COMPENSATION AND REIMBURSEMENT.

 

     The Company agrees:

 

     (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

  

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     (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

 

     (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

 

     When the Trustee incurs expenses or renders services after an Event of Default specified in Section 5.1(5) or Section 5.1(6) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any applicable bankruptcy, insolvency, reorganization or similar law.

 

SECTION 6.8 CONFLICTING INTERESTS.

 

     If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act and there is an Event of Default under the Securities of that series, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series.

 

SECTION 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

 

     There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has (or if the Trustee is a member of a bank holding company system, then its bank holding company has) a combined capital and surplus of at least $50,000,000. If any such Person or bank holding company publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person or bank holding company shall be deemed to be its combined capital and surplus asset forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series 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 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

 

     No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11. The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may

 

  

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petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

     The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.

     If at any time:

 

     (1) the Trustee shall fail to comply with Section 6.8 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

     (2) the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

     (3) 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,

 

(A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or

 

(B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

     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 the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, then a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities 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 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, the retiring Trustee may petition, or any Holder who has been a bona fide Holder of a Security of such series for at least six months may petition, on behalf of himself and all others similarly situated, any court of competent jurisdiction for the appointment of such successor Trustee with respect to the Securities of such series.

 

  

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     The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

 

     In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

     In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which

 

     (1) 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 Securities of that or those series to which the appointment of such successor Trustee relates,

 

     (2) if the retiring Trustee is not retiring with respect to all Securities, 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 Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and

 

     (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, 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 Securities 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 Securities of that or those series to which the appointment of such successor Trustee relates.

 

  

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     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 the first or second preceding paragraph, as the case may be.

 

     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 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

 

     Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee (including the administration of the trust created by this Indenture), shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. In the event that any Securities shall not have been authenticated by such predecessor Trustee, any such successor Trustee may authenticate and deliver such Securities in either its own name or that of a predecessor Trustee, with the full force and effect which this Indenture provides for the certificate of authentication of the Trustee.

 

SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

 

     If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

 

SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT.

 

     The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities 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 Securities 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 shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having (or if the Authenticating Agent is a member of a bank holding company system, its bank holding company has) a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in

 

  

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accordance with the provisions of this Section, such Authenticating Agent 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 continue to be an Authenticating Agent, 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 to 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 to 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 give notice of such appointment in the manner provided in Section 1.6 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. 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 Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.7.

 

     If an appointment with respect to one or more series is made pursuant to this Section 6.12, the Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

 

     This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	  	  	  	  	  
	  	  	  
	  	  	
, 

	  	
as Trustee 

	  
	  	  	  	  
	  
	  	  	  
	  	
By:  

	  	  
	  	  	
as Authenticating Agent 

	  
	  	  	  	  
	  
	  	  	  
	  	
By:  

	  	  
	  	  	
Authorized Officer 

	  
	  	  	  	  

 

  

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ARTICLE 7

 

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

SECTION 7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

 

     The Company will furnish or cause to be furnished to the Trustee

 

     (1) semi-annually, not later than 15 days after the Regular Record Date for each respective series of Securities, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of such Regular Record Date, as the case may be, or if there is no Regular Record Date for such series of Securities, semi-annually, 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 that no such list need be furnished by the Company to the Trustee so long as the Trustee is acting as Security Registrar.

 

SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

 

     The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.

 

     The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

SECTION 7.3 REPORTS BY TRUSTEE.

 

     The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

 

     Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year, commencing with the first July 15 after the first issuance of Securities pursuant to this Indenture.

 

     A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.

 

  

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SECTION 7.4 REPORTS BY COMPANY.

 

     The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to the Trust Indenture Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.

 

ARTICLE 8

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

 

     The Company shall not consolidate with or merge into any other Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

 

     (1) in case the Company shall consolidate with or merge into another Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person 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 corporation, limited liability company, partnership or trust, shall be organized and validly 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 and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and the conversion rights shall be provided for in accordance with Article 14, if applicable, or as otherwise specified pursuant to Section 3.1, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person (if other than the Company) formed by such consolidation or into which the Company shall have been merged or by the Person which shall have acquired the Company’s assets;

 

     (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

 

     (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

  

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SECTION 8.2 SUCCESSOR SUBSTITUTED.

 

     Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.1, 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, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE 9

 

SUPPLEMENTAL INDENTURES

 

SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

 

     Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

     (1) to evidence the succession of another Person to the Company, or successive successions, and the assumption by any such successor of the covenants of the Company herein and in the Securities in compliance with Article 8; or

 

     (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or

 

     (3) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or

 

     (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or

 

     (5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination

 

(A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or

 

  

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(B) shall become effective only when there is no such Security Outstanding; or

 

     (6) to secure the Securities, including provisions regarding the circumstances under which collateral may be released or substituted; or

 

     (7) to add or provide for a guaranty of the Securities or additional obligors on the Securities; or

 

     (8) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or

 

     (9) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or

 

     (10) to cure any ambiguity, 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, provided that such action pursuant to this clause (10) shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or

 

     (11) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Articles 4 and 13, provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect.

 

SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

 

     With the consent of the Holders of a majority in principal amount of the Outstanding Securities 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 a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

 

     (1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or change the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or modify the provisions of this Indenture with respect to the subordination of such series of Securities in a manner

 

  

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adverse to the Holders of Securities of such series, or, in the case of Securities of any series that are convertible into Securities or other securities of the Company, adversely affect the right of Holders to convert any of the Securities of such series other than as provided in or pursuant to this Indenture, or

 

     (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

 

     (3) modify any of the provisions of this Section, Section 5.13 or Section 10.8, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 10.8, or the deletion of this proviso, in accordance with the requirements of Sections 6.11 and 9.1(8), or

 

     (4) if applicable, make any change that adversely affects the right to convert any security as provided in Article 14 or pursuant to Section 3.1 (except as permitted by Section 9.1(9)) or decrease the conversion rate or increase the conversion price of any such security.

 

     A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

 

     It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.

 

     In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.

 

     Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

  

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SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.

 

     Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

 

SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

 

     Securities of any series 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 Securities 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 Securities of such series.

 

SECTION 9.7 SUBORDINATION UNIMPAIRED.

 

     No provision in any supplemental indenture that affects the superior position of the holders of Senior Debt shall be effective against holders of Senior Debt.

 

ARTICLE 10

 

COVENANTS

 

SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

 

     The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

 

SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.

 

     The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, where Securities of that series may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities of that series 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. 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. Unless otherwise provided in a supplemental indenture or pursuant to Section 3.1 hereof, the Place of Payment for any series of Securities shall be the Corporate Trust Office of the Trustee.

 

     The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

  

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SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

 

     If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

 

     Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, on or prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, 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 will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

 

     The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

     Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for a period ending on the earlier of the date that is ten Business Days prior to the date such money would escheat to the State or two years after such principal, premium or interest has 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 Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in each Place of Payment, 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, any unclaimed balance of such money then remaining will be repaid to the Company.

 

  

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SECTION 10.4 STATEMENT BY OFFICERS AS TO DEFAULT.

 

     The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, 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 (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. The fiscal year of the Company currently ends on December 31; and the Company will give the Trustee prompt written notice of any change of its fiscal year.

 

SECTION 10.5 EXISTENCE.

 

     Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence.

 

SECTION 10.6 MAINTENANCE OF PROPERTIES.

 

     The Company will cause all properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as, and to the extent, 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 nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such 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 the Holders.

 

SECTION 10.7 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 upon the income, profits or property of the Company, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company; 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 (i) whose amount, applicability or validity is being contested in good faith by appropriate proceedings or (ii) if the failure to pay or discharge would not have a material adverse effect on the assets, business, operations, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole.

 

SECTION 10.8 WAIVER OF CERTAIN COVENANTS.

 

     Except as otherwise specified as contemplated by Section 3.1 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 3.1(19), 9.1(2), 9.1(7), 10.6 or 10.7 for the benefit of the Holders of such series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the

 

  

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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 11

 

REDEMPTION OF SECURITIES

 

SECTION 11.1 APPLICABILITY OF ARTICLE.

 

     Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for such Securities) in accordance with this Article.

 

SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.

 

     The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities. In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.

 

SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

 

     If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

 

     If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities that have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection.

 

     The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

 

  

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     The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

 

     For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

 

SECTION 11.4 NOTICE OF REDEMPTION.

 

     Notice of redemption shall be given by first-class mail, postage prepaid, mailed not fewer than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to each Holder of Securities to be redeemed, at its address appearing in the Security Register.

 

     All notices of redemption shall state:

 

     (1) the Redemption Date,

 

     (2) the Redemption Price (including accrued interest, if any),

 

     (3) if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,

 

     (4) in case any Security is to be redeemed in part only, that on and after the Redemption Date, upon surrender of such Security, the Holder of such Security will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

 

     (5) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

 

     (6) the place or places where each such Security is to be surrendered for payment of the Redemption Price,

 

     (7) if applicable, the conversion price, the date on which the right to convert the principal of the Securities or the portions thereof to be redeemed will terminate, and the place or places where such Securities may be surrendered for conversion,

 

     (8) that the redemption is for a sinking fund, if such is the case, and

 

     (9) the CUSIP number or numbers and/or common codes of the Security being redeemed.

 

  

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     Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and shall be irrevocable.

 

SECTION 11.5 DEPOSIT OF REDEMPTION PRICE.

 

     On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

 

     If any Security called for redemption is converted, any money deposited with the Trustee or with a Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject to the right of any Holder of such Security to receive interest as provided in the last paragraph of Section 3.7) be paid to the Company on Company Request, or if then held by the Company, shall be discharged from such trust.

 

SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION DATE.

 

     Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.1, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.7.

 

     If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

 

SECTION 11.7 SECURITIES REDEEMED IN PART.

 

     Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

 

  

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ARTICLE 12

 

SINKING FUNDS

 

SECTION 12.1 APPLICABILITY OF ARTICLE.

 

     The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 3.1 for such Securities.

 

     The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment.” If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

 

SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

 

     The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND.

 

     Not fewer than 60 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 12.2 and will also deliver to the Trustee any Securities to be so delivered. Not fewer than 30 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7.

 

ARTICLE 13

 

DEFEASANCE AND COVENANT DEFEASANCE

 

SECTION 13.1 COMPANY’S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.

 

     The Company may elect, at its option at any time, to have Section 13.2 or Section 13.3 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 3.1 as being

 

  

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defeasible pursuant to such Section 13.2 or 13.3, in accordance with any applicable requirements provided pursuant to Section 3.1 and upon compliance with the conditions set forth below in this Article. Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities.

 

SECTION 13.2 DEFEASANCE AND DISCHARGE.

 

     Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations, and the provisions of Article 15 shall cease to be effective, with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder:

 

     (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.4 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due,

 

     (2) the Company’s obligations with respect to such Securities under Sections 3.4, 3.5, 3.6, 10.2 and 10.3, and, if applicable, Article 14,

 

     (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder, and

 

     (4) this Article.

 

     Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 13.3 applied to such Securities.

 

SECTION 13.3 COVENANT DEFEASANCE.

 

     Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be,

 

     (1) the Company shall be released from its obligations under Sections 10.6 and 10.7 and any covenants provided pursuant to Sections 3.1(19), 9.1(2) or 9.1(7) for the benefit of the Holders of such Securities,

 

     (2) the occurrence of any event specified in Section 5.1(4) (with respect to any of Sections 10.6 and 10.7 and any such covenants provided pursuant to Section 3.1(19), 9.1(2) or 9.1(7)) and the occurrence of any Event of Default specified pursuant to Section 3.1 shall be deemed not to be or result in an Event of Default, and

 

     (3) the provisions of Article 15 shall cease to be effective,

 

  

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in each case with respect to such Securities or any series of Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.1(4) and the occurrence of any Event of Default specified pursuant to Section 3.1) or Article 15, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

 

SECTION 13.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

 

     The following shall be the conditions to the application of Section 13.2 or Section 13.3 to any Securities or any series of Securities, as the case may be:

 

     (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 6.9 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities,

 

(A) in the case of Securities of a series denominated in currency of the United States of America, (i) cash in currency of the United States of America in an amount, or (ii) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, an amount in cash, or (iii) a combination thereof, or

 

(B) in the case of Securities of a series denominated in currency other than that of the United States of America, (i) cash in the currency in which such series of Securities is denominated in an amount, or (ii) Foreign Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, an amount in cash, or (iii) a combination thereof,

 

in each case sufficient, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities.

 

     (2) For Securities denominated in United States dollars, in the event of an election to have Section 13.2 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that

 

(A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or

 

  

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(B) since the date of this instrument, there has been a change in the applicable Federal income tax law,

 

in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

 

     (3) For Securities denominated in United States dollars, in the event of an election to have Section 13.3 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.

 

     (4) The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.

 

     (5) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 5.1(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).

 

     (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).

 

     (7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.

 

     (8) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.

 

     (9) At the time of such deposit,

 

(A) no default in the payment of any principal of or premium or interest on any Senior Debt shall have occurred and be continuing,

 

(B) no event of default with respect to any Senior Debt shall have resulted in such Senior Debt becoming, and continuing to

 

  

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be, due and payable prior to the date on which it would otherwise have become due and payable (unless payment of such Senior Debt has been made or duly provided for), and

 

(C) no other event of default with respect to any Senior Debt shall have occurred and be continuing permitting (after notice or lapse of time or both) the holders of such Senior Debt (or a trustee on behalf of such holders) to declare such Senior Debt due and payable prior to the date on which it would otherwise have become due and payable.

 

     (10) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

 

SECTION 13.5 DEPOSITED MONEY, U.S. GOVERNMENT OBLIGATIONS AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS

 

     Subject to the provisions of the last paragraph of Section 10.3, all money, U.S. Government Obligations and Foreign Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 13.6, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 13.4 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. Money, U.S. Government Obligations and Foreign Government Obligations so held in trust shall not be subject to the provisions of Article 15.

 

     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Section 13.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

 

     Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money, U.S. Government Obligations or Foreign Government Obligations held by it as provided in Section 13.4 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.

 

SECTION 13.6 REINSTATEMENT.

 

     If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with

 

  

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respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 13.5 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

 

ARTICLE 14

 

CONVERSION OF SECURITIES

 

SECTION 14.1 APPLICABILITY OF ARTICLE.

 

     The provisions of this Article shall be applicable to the Securities of any series which are convertible into shares of Common Stock of the Company, and the issuance of such shares of Common Stock upon the conversion of such Securities, except as otherwise specified as contemplated by Section 3.1 for the Securities of such series.

 

  

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SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE.

 

     In order to exercise a conversion privilege, the Holder of a Security of a series with such a privilege shall surrender such Security to the Company at the office or agency maintained for that purpose pursuant to Section 10.2, accompanied by a duly executed conversion notice to the Company substantially in the form set forth in Section 2.6 stating that the Holder elects to convert such Security or a specified portion thereof. Such notice shall also state, if different from the name and address of such Holder, the name or names (with address) in which the certificate or certificates for shares of Common Stock, which shall be issuable on such conversion, shall be issued. Securities surrendered for conversion shall (if so required by the Company or the Trustee) be duly endorsed by or accompanied by instruments of transfer in forms satisfactory to the Company and the Trustee duly executed by the Holder or its attorney duly authorized in writing; and Securities so surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date to the opening of business on the next succeeding Interest Payment Date (excluding Securities or portions thereof called for redemption during the period beginning at the close of business on a Regular Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day) shall also be accompanied by payment in funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security then being converted, and such interest shall be payable to such Holder notwithstanding the conversion of such Security, subject to the provisions of Section 3.7 relating to the payment of Defaulted Interest by the Company. As promptly as practicable after the receipt of such notice and of any payment required pursuant to a Board Resolution and, subject to Section 3.3, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto setting forth the terms of such series of Security, and the surrender of such Security in accordance with such reasonable regulations as the Company may prescribe, the Company shall issue and shall deliver, at the office or agency at which such Security is surrendered, to such Holder or on its written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Security (or specified portion thereof), in accordance with the provisions of such Board Resolution, Officers’ Certificate or supplemental indenture, and cash as provided therein in respect of any fractional share of such Common Stock otherwise issuable upon such conversion. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date on which such notice and such payment, if required, shall have been received in proper order for conversion by the Company and such Security shall have been surrendered as aforesaid (unless such Holder shall have so surrendered such Security and shall have instructed the Company to effect the conversion on a particular date following such surrender and such Holder shall be entitled to convert such Security on such date, in which case such conversion shall be deemed to be effected immediately prior to the close of business on such date) and at such time the rights of the Holder of such Security as such Security Holder shall cease and the person or persons in whose name or names any certificate or certificates for shares of Common Stock of the Company shall be issuable upon such conversion shall be deemed to have become the Holder or Holders of record of the shares represented thereby. Except as set forth above and subject to the final paragraph of Section 3.7, no payment or adjustment shall be made upon any conversion on account of any interest accrued on the Securities (or any part thereof) surrendered for conversion or on account of any dividends on the Common Stock of the Company issued upon such conversion.

 

     In the case of any Security which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Company, a new Security or Securities of the same series, of authorized denominations, in aggregate principal amount equal to the unconverted portion of such Security.

 

  

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SECTION 14.3 NO FRACTIONAL SHARES.

 

     No fractional share of Common Stock of the Company shall be issued upon conversions of Securities of any series. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered. If, except for the provisions of this Section 14.3, any Holder of a Security or Securities would be entitled to a fractional share of Common Stock of the Company upon the conversion of such Security or Securities, or specified portions thereof, the Company shall pay to such Holder an amount in cash equal to the current market value of such fractional share computed, (i) if such Common Stock is listed or admitted to unlisted trading privileges on a national securities exchange or market, on the basis of the last reported sale price regular way on such exchange or market on the last trading day prior to the date of conversion upon which such a sale shall have been effected, or (ii) if such Common Stock is not at the time so listed or admitted to unlisted trading privileges on a national securities exchange or market, on the basis of the average of the bid and asked prices of such Common Stock in the over-the-counter market, on the last trading day prior to the date of conversion, as reported by the National Quotation Bureau, Incorporated or similar organization if the National Quotation Bureau, Incorporated is no longer reporting such information, or if not so available, the fair market price as determined by the Board of Directors. For purposes of this Section, “trading day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday other than any day on which the Common Stock is not traded on the Nasdaq Global Stock Market, or if the Common Stock is not traded on the Nasdaq Global Stock Market, on the principal exchange or market on which the Common Stock is traded or quoted.

 

SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE.

 

     The conversion price of Securities of any series that is convertible into Common Stock of the Company shall be adjusted for any stock dividends, stock splits, reclassifications, combinations or similar transactions in accordance with the terms of the supplemental indenture or Board Resolutions setting forth the terms of the Securities of such series.

 

     Whenever the conversion price is adjusted, the Company shall compute the adjusted conversion price in accordance with terms of the applicable Board Resolution or supplemental indenture and shall prepare an Officers’ Certificate setting forth the adjusted conversion price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at each office or agency maintained for the purpose of conversion of Securities pursuant to Section 10.2 and, if different, with the Trustee. The Company shall forthwith cause a notice setting forth the adjusted conversion price to be mailed, first class postage prepaid, to each Holder of Securities of such series at its address appearing on the Security Register and to any conversion agent other than the Trustee.

 

SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS.

 

     In case:

 

     (1) the Company shall declare a dividend (or any other distribution) on its Common Stock payable otherwise than in cash out of its retained earnings (other than a dividend for which approval of any shareholders of the Company is required) that would require an adjustment pursuant to Section 14.4; or

 

     (2) the Company shall authorize the granting to all or substantially all of the holders of its Common Stock of rights, options or warrants to subscribe for or purchase

 

  

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any shares of capital stock of any class or of any other rights (other than any such grant for which approval of any shareholders of the Company is required); or

 

     (3) of any reclassification of the Common Stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock, or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any shareholders of the Company is required), or of the sale of all or substantially all of the assets of the Company; or

 

     (4) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;

 

then the Company shall cause to be filed with the Trustee, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the Security Register, at least 20 days (or 10 days in any case specified in clause (1) or (2) above) prior to the applicable record date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights, options or warrants, 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 dividend, distribution, rights, options or warrants are to be determined, or (ii) the date on which such reclassification, Consolidation, merger, share exchange, sale, 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, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up. If at any time the Trustee shall not be the conversion agent, a copy of such notice shall also forthwith be filed by the Company with the Trustee.

 

SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK.

 

     The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of Securities, the full number of shares of Common Stock of the Company then issuable upon the conversion of all outstanding Securities of any series that has conversion rights.

 

SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION.

 

     Except as provided in the next sentence, the Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of its Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of its Common Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid.

 

SECTION 14.8 NONASSESSABILITY.

 

     The Company covenants that all shares of its Common Stock that may be issued upon conversion of Securities will upon issue in accordance with the terms hereof be duly and validly issued and fully paid and nonassessable.

 

  

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SECTION 14.9 PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

 

     In case of any consolidation or merger of the Company with or into any other Person, any merger of another Person with or into the Company (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company) or any conveyance, sale, transfer or lease of all or substantially all of the assets of the Company, the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental indenture providing that the Holder of each Security of a series then Outstanding that is convertible into Common Stock of the Company shall have the right thereafter (which right shall be the exclusive conversion right thereafter available to said Holder), during the period such Security shall be convertible, to convert such Security only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease by a holder of the number of shares of Common Stock of the Company into which such Security might have been converted immediately prior to such consolidation, merger, conveyance, sale, transfer or lease, assuming such holder of Common Stock of the Company (i) is not a Person with which the Company consolidated or merged with or into or which merged into or with the Company or to which such conveyance, sale, transfer or lease was made, as the case may be (a “Constituent Person”), or an Affiliate of a Constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease (provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer, or lease is not the same for each share of Common Stock of the Company held immediately prior to such consolidation, merger, conveyance, sale, transfer or lease by others than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (“Non-electing Share”), then for the purpose of this Section 14.9 the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease by the holders of each Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-electing Shares). Such supplemental indenture shall provide for adjustments which, for events subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article or in accordance with the terms of the supplemental indenture or Board Resolutions setting forth the terms of such adjustments. The above provisions of this Section 14.9 shall similarly apply to successive consolidations, mergers, conveyances, sales, transfers or leases. Notice of the execution of such a supplemental indenture shall be given by the Company to the Holder of each Security of a series that is convertible into Common Stock of the Company as provided in Section 1.6 promptly upon such execution.

 

     Neither the Trustee nor any conversion agent, if any, shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental indenture relating either to the kind or amount of shares of stock or other securities or property or cash receivable by Holders of Securities of a series convertible into Common Stock of the Company upon the conversion of their Securities after any such consolidation, merger, conveyance, transfer, sale or lease or to any such adjustment, but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Opinion of Counsel with respect thereto, which the Company shall cause to be furnished to the Trustee upon request.

 

  

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SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION.

 

     Neither the Trustee nor any conversion agent shall at any time be under any duty or responsibility to any Holder of Securities of any series that is convertible into Common Stock of the Company to determine whether any facts exist which may require any adjustment of the conversion price, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, whether herein or in any supplemental indenture, any resolutions of the Board of Directors or written instrument executed by one or more officers of the Company provided to be employed in making the same. Neither the Trustee nor any conversion agent shall be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock of the Company, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Securities and neither the Trustee nor any conversion agent makes any representation with respect thereto. Subject to the provisions of Section 6.1, neither the Trustee nor any conversion agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of its Common Stock or stock certificates or other securities or property upon the surrender of any Security for the purpose of conversion or to comply with any of the covenants of the Company contained in this Article 14 or in the applicable supplemental indenture, resolutions of the Board of Directors or written instrument executed by one or more duly authorized officers of the Company.

 

SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.

 

     Any funds which at any time shall have been deposited by the Company or on its behalf with the Trustee or any other paying agent for the purpose of paying the principal of, and premium, if any, and interest, if any, on any of the Securities (including, but not limited to, funds deposited for the sinking fund referred to in Article 12 hereof and funds deposited pursuant to Article 13 hereof) and which shall not be required for such purposes because of the conversion of such Securities as provided in this Article 14 shall after such conversion be repaid to the Company by the Trustee upon the Company’s written request.

 

ARTICLE 15

 

SUBORDINATION OF SECURITIES

 

SECTION 15.1 AGREEMENT OF SUBORDINATION.

 

     Except as otherwise provided in a supplemental indenture or pursuant to Section 3.1, the Company covenants and agrees, and each Holder of Securities issued hereunder by its acceptance thereof likewise covenants and agrees, that all Securities shall be issued subject to the provisions of this Article 15; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions.

 

     The payment of the principal of, premium, if any, and interest on all Securities (including, but not limited to, the redemption price with respect to the Securities called for redemption in accordance with Article 11 as provided in the Indenture) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full of all Senior Debt, whether outstanding at the date of this Indenture or thereafter incurred.

 

     No provision of this Article 15 shall prevent the occurrence of any default or Event of Default hereunder.

 

  

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SECTION 15.2 PAYMENTS TO HOLDERS.

 

     No payment shall be made with respect to the principal of, or premium, if any, or interest on the Securities (including, but not limited to, the redemption price with respect to the Securities to be called for redemption in accordance with Article 11 as provided in the Indenture), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 15.5, if:

 

     (i) a default in the payment of principal, premium, if any, interest, rent or other obligations due on any Senior Debt occurs and is continuing (or, in the case of Senior Debt for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Debt) (a “Payment Default”), unless and until such default shall have been cured or waived or shall have ceased to exist; or

 

     (ii) a default, other than a Payment Default, on any Designated Senior Debt occurs and is continuing that then permits holders of such Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of the default (a “Payment Blockage Notice”) from a holder of Designated Senior Debt, a Representative of Designated Senior Debt or the Company (a “Non-Payment Default”).

 

     If the Trustee receives any Payment Blockage Notice pursuant to clause (ii) above, no subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until at least 365 days shall have elapsed since the initial effectiveness of the immediately prior Payment Blockage Notice. No Non-Payment Default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice.

 

     The Company may and shall resume payments on and distributions in respect of the Securities upon the earlier of:

 

     (1) in the case of any Payment Default, the date upon which the Payment Default is cured or waived or ceases to exist, or

 

     (2) in the case of a Non-Payment Default, the earlier of (a) the date upon which such Non-Payment Default is cured, waived or ceases to exist or (b) 179 days after the date on which the applicable Payment Blockage Notice is received by the Trustee,

 

unless this Article 15 otherwise prohibits the payment or distribution at such time.

 

     Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, reorganization, liquidation, receivership or other proceedings, or upon an assignment for the benefit of creditors or any marshalling of the assets and liabilities of the Company, or otherwise, all amounts due or to become due upon all Senior Debt shall first be paid in full in cash or other payment satisfactory to the holders of such Senior Debt, or payment thereof in accordance with its terms provided for in cash or other payment satisfactory to the holders of such Senior Debt, before any payment is made on account of the principal of, premium, if any, or interest on the Securities (except payments made pursuant to Article 4 from monies deposited with the Trustee pursuant thereto prior to commencement of proceedings for such dissolution, winding-up, liquidation, reorganization, assignment for the benefit of creditors or the marshalling of assets and liabilities of the Company); and upon any such dissolution, winding-up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities

 

  

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of the Company or bankruptcy, insolvency, receivership or other proceeding, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled, except for the provision of this Article 15, shall (except as aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Debt (pro rata to such holders on the basis of the respective amounts of Senior Debt held by such holders, or as otherwise required by law or a court order) or their Representative or Representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Debt may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Debt in full, in cash or other payment satisfactory to the holders of such Senior Debt, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt, before any payment or distribution or provision therefor is made to the Holders of the Securities or to the Trustee.

 

     For purposes of this Article 15, the words, “cash, property or securities” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article 15 with respect to the Securities to the payment of all Senior Debt which may at the time be outstanding; provided that (i) the Senior Debt is assumed by the new corporation, if any, resulting from any reorganization or readjustment, and (ii) the rights of the holders of Senior Debt (other than leases which are not assumed by the Company or the new corporation, as the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article 8 shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 15.2 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article 8.

 

     In the event of the acceleration of the Securities because of an Event of Default, no payment or distribution shall be made to the Trustee or any Holder of Securities in respect of the principal of, premium, if any, or interest on the Securities (including, but not limited to, the redemption price with respect to the Securities called for redemption in accordance with Article 11 as provided in the Indenture), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 15.5, until all Senior Debt has been paid in full in cash or other payment satisfactory to the holders of Senior Debt or such acceleration is rescinded in accordance with the terms of this Indenture. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the acceleration.

 

     In the event that, notwithstanding the foregoing provisions, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (including, without limitation, by way of setoff or otherwise), prohibited by the foregoing, shall be received by the Trustee or the Holders of the Securities before all Senior Debt is paid in full in cash or other payment satisfactory to the holders of such Senior Debt, or provision is made for such payment thereof in accordance with its terms in cash or other payment satisfactory to the holders of such Senior Debt, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Debt or their Representative or Representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Debt may have been issued, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in full in cash or other payment

 

  

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satisfactory to the holders of such Senior Debt, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Debt.

 

     Nothing in this Section 15.2 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.7. This Section 15.2 shall be subject to the further provisions of Section 15.5.

 

SECTION 15.3 SUBROGATION OF SECURITIES.

 

     Subject to the payment in full of all Senior Debt, the rights of the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article 15 (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to other indebtedness of the Company to substantially the same extent as the Securities are subordinated and is entitled to like rights of subrogation) to the rights of the holders of Senior Debt to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Debt until the principal, premium, if any, and interest on the Securities shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article 15, and no payment over pursuant to the provisions of this Article 15, to or for the benefit of the holders of Senior Debt by Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment by the Company to or on account of the Senior Debt; and no payments or distributions of cash, property or securities to or for the benefit of the Holders of the Securities pursuant to the subrogation provisions of this Article 15, which would otherwise have been paid to the holders of Senior Debt shall be deemed to be a payment by the Company to or for the account of the Securities. It is understood that the provisions of this Article 15 are and are intended solely for the purposes of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Debt, on the other hand.

 

     Nothing contained in this Article 15 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Debt, and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities 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 Securities and creditors of the Company other than the holders of the Senior Debt, nor shall anything herein or therein prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 15 of the holders of Senior Debt 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 15, the Trustee, subject to the provisions of Section 6.1, and the Holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon and all other facts pertinent thereto or to this Article 15.

 

  

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SECTION 15.4 AUTHORIZATION TO EFFECT SUBORDINATION.

 

     Each Holder of a Security by the holder’s acceptance thereof authorizes and directs the Trustee on the holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 15 and appoints the Trustee to act as the holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 5.4 hereof at least 30 days before the expiration of the time to file such claim, the holders of any Senior Debt or their representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Securities.

 

SECTION 15.5 NOTICE TO TRUSTEE.

 

     The Company shall give prompt written notice in the form of an Officers’ Certificate to a Responsible Officer of the Trustee and to any Paying Agent of any fact known to the Company which would prohibit the making of any payment of monies to or by the Trustee or any Paying Agent in respect of the Securities pursuant to the provisions of this Article 15. Notwithstanding the provisions of this Article 15 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article 15, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office from the Company (in the form of an Officers’ Certificate) or a Representative or a holder or holders of Senior Debt or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 6.1, shall be entitled in all respects to assume that no such facts exist; provided that if on a date not fewer than two Business Days prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitation, the payment of the principal of, or premium, if any, or interest on any Security) the Trustee shall not have received, with respect to such monies, the notice provided for in this Section 15.5, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date.

 

     Notwithstanding anything in this Article 15 to the contrary, nothing shall prevent any payment by the Trustee to the Holders of monies deposited with it pursuant to Section 4.1, and any such payment shall not be subject to the provisions of Section 15.1 or 15.2.

 

     The Trustee, subject to the provisions of Section 6.1, shall be entitled to rely on the delivery to it of a written notice by a Representative or a person representing himself to be a holder of Senior Debt (or a trustee on behalf of such holder) to establish that such notice has been given by a Representative or a holder of Senior Debt or a trustee on behalf of any such holder or holders. The Trustee shall not be required to make any payment or distribution to or on behalf of a holder of Senior Debt pursuant to this Article 15 unless it has received satisfactory evidence as to the amount of Senior Debt held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article 15.

 

SECTION 15.6 TRUSTEE’S RELATION TO SENIOR DEBT.

 

     The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 15 in respect of any Senior Debt at any time held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.

 

  

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     With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 15, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and, subject to the provisions of Section 6.1, the Trustee shall not be liable to any holder of Senior Debt (i) for any failure to make any payments or distributions to such holders or (ii) if it shall pay over or deliver to Holders of Securities, the Company or any other Person money or assets to which any holder of Senior Debt shall be entitled by virtue of this Article 15 or otherwise.

 

SECTION 15.7 NO IMPAIRMENT OF SUBORDINATION.

 

     No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company, the Trustee or any Holder of Securities with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with.

 

SECTION 15.8 CERTAIN CONVERSIONS/EXCHANGES DEEMED PAYMENT.

 

     For the purposes of this Article 15 only, (1) the issuance and delivery of junior securities upon conversion or exchange of Securities in accordance with Article 14 or otherwise (except upon conversion of the Securities in accordance with their terms) shall not be deemed to constitute a payment or distribution on account of the principal of (or premium, if any) or interest on Securities or on account of the purchase or other acquisition of Securities, and (2) the payment, issuance or delivery of cash (except in satisfaction of fractional shares pursuant to Section 14.3), property or securities (other than junior securities) upon conversion or exchange of a Security shall be deemed to constitute payment on account of the principal of such Security. For the purposes of this Section 15.8, the term “junior securities” means (a) shares of any stock of any class of the Company, or (b) securities of the Company which are subordinated in right of payment to all Senior Debt which may be outstanding at the time of issuance or delivery of such securities to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. Nothing contained in this Article 15 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than holders of Senior Debt and the Holders of Securities, the right, which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article 14.

 

SECTION 15.9 ARTICLE APPLICABLE TO PAYING AGENTS.

 

     If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article shall (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that the first paragraph of Section 15.5 shall not apply to the Company or any Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.

 

     The Trustee shall not be responsible for the actions or inactions of any other Paying Agents (including the Company if acting as its own Paying Agent) and shall have no control of any funds held by such other Paying Agents.

 

  

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SECTION 15.10 SENIOR DEBT ENTITLED TO RELY.

 

     The holders of Senior Debt (including, without limitation, Designated Senior Debt) shall have the right to rely upon this Article 15, and no amendment or modification of the provisions contained herein shall diminish the rights of such holders unless such holders shall have agreed in writing thereto.

 

SECTION 15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.

 

     Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee and the Holders shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities of the Company or bankruptcy, insolvency, receivership or other like proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article.

 

SECTION 15.12 TRUST MONIES NOT SUBORDINATED.

 

     Notwithstanding anything contained herein to the contrary, payments from money, U.S. Government Obligations and/or Foreign Government Obligations held in trust under Article 4 or Article 13 by the Trustee for the payment of the principal of, premium, if any, and interest on the Securities shall not be subordinated to the prior payment in full of any Senior Debt of the Company or subject to the restrictions set forth in this Article 15, and none of the Holders shall be obligated to pay over any such amount to the Company or any holder of Senior Debt of the Company or any other creditor of the Company.

 

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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.

 

	  	  	  	  	  
	  	
Telular Corporation

 

	  
	  	
By:  

	  	  
	  	  	
Title: 

	  	  
	  
	  
	  	  	
, 

	  	
as Trustee

 

	  
	  	
By:  

	  	  
	  	  	
Title: 

	  	  
	  

 

74ex10-1.htm

Exhibit 10.1

 

FIRST AMENDED AND RESTATED

DEVELOPMENT LINE OF CREDIT AGREEMENT

 

THIS FIRST AMENDED AND RESTATED DEVELOPMENT LINE OF CREDIT AGREEMENT (this “Agreement”), dated as of June 7, 2011, is entered into by and among the borrowing entities identified on Exhibit A attached hereto (jointly and severally, “Borrower”), DIVERSIFIED RESTAURANT HOLDINGS, INC., a Nevada corporation, acting as “Borrowing Agent” for Borrower, and RBS CITIZENS, N.A., a national banking association, and its successors and assigns (“Lender”).

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

 

1.           Loan Terms.

 

(a)           (i)  Amount of DLOC Loan.  Subject to the terms and conditions set forth in this Agreement, Lender shall make a loan to Borrower in the maximum principal amount of Six Million and no/100 Dollars ($6,000,000) (the “DLOC Loan”), which is the maximum aggregate amount of DLOC Advances that may be made and converted to a Term Loan pursuant to this Agreement.  Borrower’s obligation to repay the DLOC Loan shall be evidenced by a promissory note substantially in the form attached hereto as Exhibit B-1 (the “DLOC Note”).  During the DLOC Draw Period, DLOC Advances will be made in accordance with Section 2 of this Agreement.  From and after the Term Loan Effective Date, no additional DLOC Advances will be available.  Notwithstanding any provision of this Agreement and the Loan Documents to the contrary, during the DLOC Draw Period the DLOC Loan is a straight line of credit and not a revolving line of credit and, accordingly, principal amounts paid and prepaid may not be re-borrowed or re-advanced.  The DLOC Advances will be converted to a Term Loan on the Term Loan Effective Date, as provided in this Agreement.

 

(ii)  Amount of 2nd DLOC Loan.  Subject to the terms and conditions set forth in this Agreement, Lender shall make a loan to Borrower in the maximum principal amount of Seven Million and no/100 Dollars ($7,000,000) (the “2nd DLOC Loan”), which is the maximum aggregate amount of 2nd DLOC Advances that may be made and converted to a Term Loan pursuant to this Agreement.  Borrower’s obligation to repay the 2nd DLOC Loan shall be evidenced by a promissory note substantially in the form attached hereto as Exhibit B-2 (the “2nd DLOC Note”).  During the 2nd DLOC Draw Period, 2nd DLOC Advances will be made in accordance with Section 2 of this Agreement.  From and after the Term Loan Effective Date, no additional 2nd DLOC Advances will be available.  Notwithstanding any provision of this Agreement and the Loan Documents to the contrary, during the 2nd DLOC Draw Period the 2nd DLOC Loan is a straight line of credit and not a revolving line of credit and, accordingly, principal amounts paid and prepaid may not be re-borrowed or re-advanced.  The 2nd DLOC Advances will be converted to a Term Loan on the Term Loan Effective Date, as provided in this Agreement.

 

(iii)  Amount of LOC Loan.  Subject to the terms and conditions set forth in this Agreement, Lender shall make a loan to Borrower in the maximum principal amount of One Million and no/100 Dollars ($1,000,000) (the “LOC Loan”), which is the maximum aggregate amount of LOC Advances that may be made pursuant to this Agreement.  Borrower’s obligation to repay the LOC Loan shall be evidenced by a promissory note substantially in the form attached hereto as Exhibit B-3 (the “LOC Note” and together with the DLOC Note and the 2nd DLOC Note, collectively, the “Note”).  LOC Advances will be made in accordance with Section 2 of this Agreement.  The LOC Loan is a revolving line of credit and, accordingly, principal amounts paid and prepaid may be re-borrowed or re-advanced up to the LOC Maturity Date.  Borrower must not have any outstanding Advances on the LOC Loan for at least ninety (90) consecutive days during in each twelve (12) month period following the date of this Agreement.

 

  

  

  

(b)           Maturity Dates.

 

(i)           DLOC Loan.

 

(a)  Each DLOC Advance together with any accrued and unpaid interest shall, in the aggregate, be converted to a Term Loan on the Term Loan Effective Date.

 

(b)  The Term Loan shall not amortize beyond the DLOC Maturity Date, and shall be due and payable in full on May 5, 2017 (the “DLOC Maturity Date”).

 

(c)  On the DLOC Maturity Date, in addition to any required Monthly Payment, Borrower shall also pay accrued and unpaid interest with respect to the DLOC Loan, together with any other amounts payable under this Agreement and the other Loan Documents in connection with the DLOC Loan.

 

(ii)           2nd DLOC Loan.

 

(a)  Each 2nd DLOC Advance together with any accrued and unpaid interest shall, in the aggregate, be converted to a Term Loan on the Term Loan Effective Date.

 

(b)  The Term Loan shall not amortize beyond the 2nd DLOC Maturity Date, and shall be due and payable in full on June 7, 2018 (the “2nd DLOC Maturity Date”).

 

(c)  On the 2nd DLOC Maturity Date, in addition to any required Monthly Payment, Borrower shall also pay accrued and unpaid interest with respect to the 2nd DLOC Loan, together with any other amounts payable under this Agreement and the other Loan Documents in connection with the 2nd DLOC Loan.

 

(iii)           LOC Loan.

 

(a)  The LOC Loan shall be due and payable in full on June 7, 2013 (the “LOC Maturity Date”).

 

(c)  On the LOC Maturity Date, in addition to any required Monthly Payment, Borrower shall also pay accrued and unpaid interest with respect to the LOC Loan, together with any other amounts payable under this Agreement and the other Loan Documents in connection with the LOC Loan.

 

  

  

  

(c)           Payments.

 

(i)            Interest on each Advance with respect to the DLOC Loan, the 2nd DLOC Loan and the LOC Loan shall be due and payable in arrears on the fifth (5th) day of each month following the Closing Date.  Borrower hereby authorizes Lender to automatically deduct from any deposit account of Borrower each monthly payment of interest and any other fees Lender may assess Borrower from time to time pursuant to this Agreement.  If the funds in the account are insufficient to cover any payment due to Lender, Lender will not be obligated to advance funds to cover the payment.  Failure of Lender to charge any account or to give any notice shall not affect the obligation of Borrower to pay all amounts due hereunder or under the Note.

 

(ii)           With respect to the Term Loan, Borrower hereby authorizes Lender to automatically deduct from any deposit account of Borrower for each Monthly Payment based upon the Term Loan Period, payable on or before the eighth (8th) day of each month, beginning on the eighth (8th) day of the first (1st) month following the Term Loan Effective Date and continuing on the last day of each succeeding month thereafter (each a “Term Loan Payment Date”) until the applicable Maturity Date, along with any other fees Lender may assess Borrower from time to time pursuant to this Agreement.  All outstanding payments of interest, principal, and other sums shall be paid in full on the applicable Maturity Date.  If the funds in the account are insufficient to cover any payment due to Lender, Lender will not be obligated to advance funds to cover the payment.  Failure of Lender to charge any account or to give any notice shall not affect the obligation of Borrower to pay all amounts due hereunder or under the Note.

 

(iii)   Borrower shall pay Lender a fee in an amount equal to one-quarter percent (0.25%) per annum on the unused portion of the LOC Loan, DLOC Loan or the 2nd DLOC Loan during the LOC Loan Draw Period, the DLOC Draw Period or the 2nd DLOC Draw Period, as applicable, calculated using the average balance of the LOC Note DLOC Note or the 2nd DLOC Note, such fee to be payable quarterly in arrears on the last day of March, June, September and December.  The fee payable on the 2nd DLOC Loan shall commence on 9/30/11.  Any unused fee that has accrued and not been paid shall be due and payable on the Term Loan Effective Date.

 

	
  

	
(d)

	
Interest.

 

(i)           LIBOR Advantage Rate Interest:

 

(a)  Interest shall be set and accrue beginning on the first date an Advance is made by Lender to Borrower and shall bear interest at a rate per annum equal to the sum of the LIBOR Advantage Rate for such LA Interest Period plus the LA Margin.

 

(b)  Upon the occurrence of an Event of Default and while such Event of Default is continuing, the Interest Rate on the Loan shall increase by five percent (5.0%) per annum over the existing Interest Rate, compounded annually (the “Default Rate”).

 

(c)  Notwithstanding any provision to the contrary in this Agreement, in no event shall the Interest Rate charged on the Loan exceed the maximum rate of interest permitted under applicable state and/or federal usury law.  Any payment of interest that would be deemed unlawful under applicable law for any reason shall be deemed received on account of, and will automatically be applied to reduce, the principal sum outstanding on the Loan and any other sums (other than interest) due and payable to Lender under this Agreement, and the provisions of this Agreement shall be deemed amended to provide for the highest rate of interest permitted under applicable law.

 

  

  

  

(d)  The principal sum outstanding on the Loan shall bear interest at the Interest Rate.  All computations of interest shall be computed upon the basis of the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

 

(ii)           LIBOR Rate Interest.

 

(a)  Interest on the outstanding principal amount of the Loan, when classified as a LIBOR Rate Loan, shall accrue during each LIBOR Interest Period at a rate per annum equal to the sum of the Adjusted LIBOR Rate for such LIBOR Interest Period plus the LIBOR Rate Margin and shall be due and payable on each Interest Payment Date and on the Maturity Date, and shall be due and payable on each Interest Payment Date and on the Maturity Date, with monthly principal payments in the amount as set forth in a written payment schedule provided by Lender to Borrower.  Interest shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

 

(b)  Automatic Rollover of LIBOR Rate Loan.  Upon the expiration of a LIBOR Interest Period, the LIBOR Rate Loan shall automatically be continued as a LIBOR Rate Loan at the then applicable Adjusted LIBOR Rate and in an amount equal to the principal amount of the expiring LIBOR Rate Loan less any Principal Repayment Amount made by Borrower; provided, however, that no portion of the outstanding principal amount of a LIBOR Rate Loan may be continued as a LIBOR Rate Loan when any Event of Default has occurred and is continuing.  If any Event of Default has occurred and is continuing (if Lender does not otherwise elect to exercise any right to accelerate the Loan hereunder), the LIBOR Rate Loan shall automatically be continued as a Prime Rate Loan on the first day of the next Interest Period.

 

(c)  Additional LIBOR Rate Terms Affecting the Loan.  Additional LIBOR Rate terms affecting the Loan are set forth on Schedule 1(d)(ii) attached hereto and made a part hereof.  Capitalized terms used and not defined in Schedule 1(d)(ii) shall have the meanings given to those terms in Section 11 of this Agreement.

 

(e)          Use of Proceeds.  Each Advance shall be used in connection with the development and operation of Buffalo Wild Wings franchised locations and the development and operation of Bagger Dave’s locations as follows:

 

(i)           up to seventy percent (70%) of the development cost for Buffalo Wild Wings locations; or

 

  

  

  

(ii)           up to sixty percent (60%) of the development cost for Bagger Dave’s locations; or

 

(iii)           purchases of real estate, limited to the lesser of eighty percent (80%) of appraised value of the said real estate or eighty percent (80%) of the purchase price of said real estate.  Any DLOC Advance or 2nd DLOC Advance related to the purchase of real estate (“Real Estate Advance”) shall be subject to receipt of satisfactory real estate appraisals, environmental reports, construction monitoring (including architectural inspection) (collectively, the “Real Estate Due Diligence”) and such other items as may be required by Lender including, but not limited to the filing of mortgages (including leasehold mortgages), in Lender’s sole discretion

 

Borrower acknowledges that appropriate documentation, as requested by Lender, may be required prior to any Advance and that no more than twenty-five percent (25%) of the DLOC Loan or 2nd DLOC Loan shall be apportioned to Bagger Dave’s locations.  No Advance shall be used for personal, family, or household purposes.

 

(f)           Transaction Costs; Reimbursement of Expenses.  On the Closing Date, Borrower shall pay Lender a sum equal to all of Lender’s transaction-related expenses, including attorneys’ fees and costs and fees for real estate evaluations, background checks, transaction related travel, any and all required due diligence and Lender’s closing fee, all of which will be in addition to any commitment or related fees due to Lender.  In addition, Borrower shall reimburse Lender for all fees, costs and expenses incurred by Lender in connection with the exercise of Lender’s rights and duties under this Agreement and the other Loan Documents, the preservation and protection of the Collateral, and the enforcement or attempted enforcement of Borrower’s obligations under the Loan Documents, including, without limitation, attorneys’ fees.  Further, Borrower shall reimburse Lender for all trustee, receiver and property manager fees and commissions and all costs, expenses and charges incurred by those parties in connection with this Agreement, the other Loan Documents, and the Collateral.  Unless specified otherwise in this Section, all of Lender’s costs, expenses and charges (collectively, the “Reimbursement Expenses”) shall be payable by Borrower to Lender within five (5) days after demand from Lender and, if not paid when due, shall accrue interest at the Default Rate.  The Reimbursement Expenses shall be Obligations under this Agreement and shall be secured by the Lien of this Agreement and the Security Agreement.

 

(g)           Right of Lender to Make Advance.  At the sole option of Lender, and regardless of whether or not required conditions precedent have been satisfied, Lender may disburse an Advance to itself to pay any interest, fees, costs, expenses, and other amounts from time to time due and payable to Lender pursuant to the Loan Documents.  In no event shall Lender have any obligation to make such disbursements.  The making of any such Advance by Lender to itself shall not be a cure or waiver of any Event of Default of Borrower under the Loan Documents.

 

2.           Conditions to Advances.  The obligation of Lender to make an Advance is subject to the satisfaction of each of the following conditions, unless waived in writing by Lender, as determined in its sole and absolute discretion:

 

(a)           No Default; Representations.  At the time of the request for an Advance and at the time the Advance is to be made, no Event of Default under any of the Loan Documents shall have occurred and be continuing or would occur as a result of the making of such Advance.  At the time of the request for the Advance and at the time the Advance is to be made, all representations and warranties of Borrower and Guarantor in the Loan Documents shall be true, correct and complete.

 

  

  

  

(b)           Payment of Costs, Expenses and Fees.  All costs, expenses and fees to be paid by Borrower under the Loan Documents on or before the date of the Advance will have been paid in full to Lender.

 

            (c)           No Material Adverse Effect.  Lender shall have determined, in its sole judgment, that there has been no Material Adverse Effect on the financial condition or prospects of Borrower, any Guarantor, the Business or the Property.  “Material Adverse Effect” is defined as a change which (a) materially impairs or is reasonably expected to impair the ability of Borrower or Guarantor to pay and perform their obligations under the Loan Documents to which they are a party; or (b) materially impairs or is reasonably expected to materially impair the ability of Lender to enforce its rights and remedies under any Loan Document; or (c) has or is reasonably expected to have any material adverse effect on the Collateral, the lien of Lender in such Collateral or the priority of such lien; or (d) is prejudicial to any Business, operations or financial condition of Borrower or any Guarantor.

 

(d)           Borrower Delivery Requirements for each Advance.  In order to request an Advance, Borrower or Borrowing Agent shall deliver to Lender the “Request for Advance and Compliance Certificate” attached as Exhibit C (“Advance Request”) printed on Borrower’s letterhead with the amount of the Advance being requested, the intended use, Borrower’s loan number and the identification of Borrower’s contact in connection with the Advance, including his/her office phone number along with invoices to support the requested amount and to insure that the requested Advance will meet the advance limitations described in Section 1(e).  For purposes of the written request, cellular phone numbers for the contact person are not in compliance with Lender’s requirements.  In addition, Borrower shall provide full and complete account information where Lender shall deposit the Advance if such account is different than the account from which Borrower’s automatic payments are made to Lender.

 

So long as the above conditions in Sections 2(a) through 2(d) are satisfied on or before Noon (central standard time) on a Business Day, the Advance for approved invoices will be funded no later than the next Business Day, except in the case of a Real Estate Advance, in which case Lender shall have a reasonable time to fund the Real Estate Advance following receipt of satisfactory Real Estate Due Diligence.  Borrower may not request more than five (5) Advances with respect to the DLOC Loan or the 2nd DLOC Loan in any calendar month.  There is no minimum amount required to be requested.  In no event shall the amount of the collective Advances exceed the amount of the Loan.  Each Advance will be deposited into Borrower’s or Borrowing Agent’s account identified in Section 2(d) above.

 

3.           Prepayment.  Borrower may, at any time during the term of the Loan, prepay all of the outstanding principal of the DLOC Loan or the 2nd DLOC Loan in full, but not in part or prepay the outstanding principal of the LOC Loan in full or in part.  Concurrently with any such prepayment, Borrower shall pay all accrued interest on such principal amount being prepaid as of the date of prepayment, any other amounts payable under this Agreement and an amount equal to any breakage costs incurred in connection with the termination of any interest rate swap agreement, interest rate cap agreement and interest rate collar agreement, or any other agreement or arrangement entered into between Borrower and Lender and designed to protect Borrower against fluctuations in interest rates or currency exchange rates.

 

  

  

  

4.           Representations and Warranties.  Borrower hereby warrants and represents to Lender on the Closing Date, at the time an Advance is made, and upon the Term Loan Effective Date, the following:

 

(a)           Organization and Qualification.  Borrower is duly organized, validly existing and in good standing under the laws of the state in which it was incorporated, has the power and authority to carry on its business and to enter into and perform all documents relating to this transaction, and is qualified and licensed to do business in each jurisdiction in which such qualification or licensing is required.  All information provided to Lender with respect to Borrower and its operations is true and correct.

 

(b)           Due Authorization.  The execution, delivery and performance by Borrower, and Guarantor as applicable, of the Loan Documents (i) have been duly authorized by all necessary company action, (ii) do not contravene any law, regulation, ordinance, order, or decree of any Governmental Authority, (iii) do not contravene any provision of the Organizational Documents of Borrower, (iv) do not violate any agreement or instrument by which Borrower is bound (with the permitted exception of the AMC Grand Blanc, Inc. lease), and (v) will not result in the creation of a Lien on any assets of Borrower except the Lien granted to Lender pursuant to this Agreement and the Security Agreement.  Borrower has duly executed and delivered to Lender the Loan Documents and they are valid and binding obligations of Borrower enforceable according to their respective terms, except as they may be limited by equitable principles and by bankruptcy, insolvency or similar laws affecting the rights of creditors generally.  No notice to, or consent by, any Governmental Authority is needed in connection with this transaction.

 

(c)           Guaranty Agreement.  Each Guarantor has duly executed and delivered to Lender a Guaranty Agreement (the “Guaranty”) and it is a valid and binding obligation of each Guarantor enforceable according to its terms, except as limited by equitable principles and by bankruptcy, insolvency or similar laws affecting the rights of creditors generally. Borrower further represents that it will provide notice to Lender of any event resulting in the emergence of a Future Guarantor and Borrower shall direct such Future Guarantor to execute and deliver to Lender a Guaranty.

 

(d)           Litigation.  Except as set forth in Schedule 4(d), there is no claim, litigation, proceeding, investigation or inquiry, administrative or judicial, pending or threatened against or affecting Borrower or its shareholders, officers, Properties or assets that is an uninsured claim.

 

(e)           Business.  Borrower is not a party to or subject to any agreement or restriction that may have a Material Adverse Effect on Borrower’s Business, Property or prospects.

 

(f)           Licenses, etc.  Borrower has obtained any and all licenses, permits, franchises, authorizations from each Governmental Authority, patents, trademarks, copyrights or other rights necessary for the ownership of the Property and the advantageous conduct of its Business.  Borrower possesses adequate licenses, patents, patent applications, copyrights, trademarks, trademark applications, and trade names to continue to conduct its business as heretofore conducted by it, without any conflict with the rights of any other person or entity.  All of the foregoing is in full force and effect and none of the foregoing are in known conflict with the rights of others.

 

(g)           Laws and Taxes.  Borrower is in material compliance with all laws, regulations, rulings, orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon Borrower by any law or by any Governmental Authority, court or agency.  Borrower has filed all required tax returns and reports that are now required to be filed by it in connection with any federal, state and local tax, duty or charge levied, assessed or imposed upon Borrower or its assets, including unemployment, social security, and real estate taxes.  Borrower has paid all taxes which are now due and payable.  No taxing authority has asserted or assessed any additional tax liabilities against Borrower which are outstanding on this date.

 

  

  

  

(h)           Title.  Borrower has good and marketable title to the assets reflected on the most recent balance sheet submitted to Lender prior to the Closing Date and the Collateral, free and clear from all liens and encumbrances of any kind, except for (collectively, the “Permitted Liens”) (a) current taxes and assessments not yet due and payable, (b) liens and encumbrances, if any, reflected or noted on such balance sheet submitted to Lender prior to the Closing Date or notes thereto, (c) assets disposed of in the ordinary course of business, (d) any security interests, pledges, assignments or mortgages granted to Lender to secure the repayment or performance of the Obligations, (e) pledges and deposits of money securing statutory obligations under workmen’s compensation, unemployment insurance, social security or public liability laws or similar legislation (excluding liens under ERISA), (f) pledges or deposits of money securing bids, tenders, contracts (other than contracts for the payment of money) or leases to which Borrower is a party as lessee made in the ordinary course of business, (g) inchoate and unperfected workers, mechanics’ or similar Liens arising in the ordinary course of business, and (h) the liens and encumbrances listed on Schedule 3(h).

 

(i)           Subsidiaries and Partnerships.  Except as set forth on Schedule 4(i), Borrower has no Subsidiaries and is not a party to any partnership agreement or joint venture agreement.

 

(j)           Defaults.  Borrower is in compliance with all Franchise Agreements, Lease Agreements, and other material agreements applicable to it and the Property and Collateral and there does not now exist any default or violation of or under any of the terms, conditions or obligations of (a) its Organizational Documents, or (b) any indenture, mortgage, deed of trust, franchise, lease, permit, contract agreement or other instrument to which Borrower is a party or by which it is bound, and the consummation of the transactions contemplated hereunder will not result in such default or violation.

 

(k)           ERISA.  Borrower and all individuals or entities who along with Borrower would be treated as a single employer under ERISA or the Internal Revenue Code of 1986, as amended (an “ERISA Affiliate”), are in compliance with all of their obligations to contribute to any “employee benefit plan” as that term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, and any regulations promulgated thereunder from time to time (“ERISA”).  Borrower and each of its ERISA Affiliates are in full compliance with ERISA, and there exists no event described in Section 4043(b) thereof (“Reportable Event”).

 

(l)            Insurance.  Borrower has obtained, shall maintain or cause to be maintained at all times, insurance for Borrower, the Property, the Business and Collateral as set forth in Section 5(b) of this Agreement.

 

(m)          Environmental Laws.  Borrower, its Business operations (including, but not limited to, the business and franchises) and its assets (including, but not limited to the Collateral, the Business and the Property) are and shall be in compliance with all Environmental Laws.  “Environmental Laws” means all present and future federal, state and local laws (including common law) and ordinances and rules, regulations, requirements, orders, directives, injunctions and decrees of any Governmental Authority, relating to Hazardous Materials or the protection of public and worker health and safety or the environment in the jurisdictions where the Properties are located or where any Hazardous Materials used, generated or disposed of with respect to the Properties by Borrower are located.  “Hazardous Materials” means any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.

 

  

  

  

(n)           Financial Statements.  Borrower represents that all financial statements provided to Lender, either prior to or contemporaneously herewith, are true, correct and complete in all material respects, and that there has been no material adverse change in the financial condition or prospects of Borrower, any Guarantor or the Business since the date of such financial statements.  Borrower shall provide to Lender any and all additional financial information and materials as Lender may request concerning Borrower, Guarantor, the Collateral, the Property or the Business, all of which shall be in form and substance satisfactory to Lender in all respects.  All of the financial statements and other information and materials delivered or caused to be delivered by Borrower to Lender have been and shall be prepared in accordance with GAAP and shall be accurate and complete in all respects.

 

(o)           Persons with Disabilities; Accessibility.  The Collateral and the Property presently do, and the Collateral and Property at all times shall, strictly comply to the extent applicable with the requirements of the Americans with Disabilities Act of 1990 as may be amended, all state and local laws and ordinances related to accessibility for persons with disabilities and all rules, regulations, and orders issued pursuant thereto including, without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (collectively, “Access Laws”).  Notwithstanding any provisions set forth herein or in any other document regarding Lender’s approval of alterations of the Property, Borrower shall not alter the Property in any manner which would increase Borrower’s responsibilities for compliance with the applicable Access Laws without the prior written approval of Lender.  The foregoing shall apply to tenant improvements constructed by Borrower or by any of their tenants.  Lender may condition any such approval upon receipt of a certificate of Access Law compliance from an architect, engineer or other person acceptable to Lender.  Further, Borrower agrees to give prompt written notice to Lender of the receipt by Borrower of any complaints related to violation of any Access Laws and of the commencement of any proceedings or investigations which relate to compliance with applicable Access Laws.

 

(p)           Lease Agreements and Franchise Agreements.  The Lease Agreements and the Franchise Agreements each have an initial term, without exercised options, greater than or equal to the term of the Loan, except as identified on Schedule 4(p).  Borrower agrees to seek the prior consent of Lender prior to choosing not to exercise an available option to extend a Lease Agreement or Franchise Agreement.

 

The representations and warranties contained in this Section 4 are true, correct and complete in all material respects, and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make such representation or warranty not misleading.

 

  

  

  

5.           Affirmative Covenants.  Borrower covenants with, and represents and warrants to, Lender that, from and after the execution date of this Agreement until the Obligations are paid and satisfied in full:

 

(a)           Financial Statements.

 

(i)           Borrower will maintain a standard and modern system for accounting in accordance with GAAP and will prepare and furnish to lender:

 

(1)           within one hundred twenty (120) days after each fiscal year end, audited consolidating and consolidated year-end financial statements for Borrower and any Affiliates prepared by an independent certified public accountant in accordance with GAAP (subject to standard exceptions) in the United States, consistently applied, in form and substance reasonably satisfactory to Lender, along with a Compliance Certificate, the form of which is attached hereto as Exhibit C;

 

(2)           within sixty (60) days after each quarter end, compiled quarterly financial statements for Borrower and any Affiliates prepared in accordance with GAAP (subject to standard exceptions) in the United States, consistently applied, including year-to-date financial results, and comparisons to the previous year’s financial results for such period, in form and substance reasonably satisfactory to Lender, together with a Compliance Certificate, the form of which is attached hereto as Exhibit C;

 

(3)           within sixty (60) days after each quarter end, individual Property store sales reports;

 

(4)           within thirty (30) days after filing but no later than October 31 of any year, copies of federal tax returns filed by the Personal Guarantor, along with a personal financial statement in form and substance reasonably acceptable to Lender for such Personal Guarantor.

 

(ii)           Borrower shall give representatives of Lender access to its books and records at all reasonable times, including permission to examine, copy and make abstracts from any such books and records and such other information which might be helpful to Lender in evaluating the status of the Loan as it may reasonably request from time to time.

 

(iii)           If at any time Borrower has any subsidiaries which have financial statements that could be consolidated with those of Borrower under GAAP, the financial statements required above shall be the financial statements of Borrower and all such subsidiaries prepared on a consolidated and consolidating basis.

 

  

  

  

(b)           Insurance.  At its own expense, Borrower shall obtain and maintain:

 

(i)           insurance against (a) loss, destruction or damage to its Property and Business of the kinds included within the classification “All Risks of Physical Loss” and such insurance shall be maintained in an amount which, after the application of any deductible, shall be equal to the full insurable value of the Property and the tangible Collateral.  The term “full insurable value” shall mean the actual replacement cost of the Property and the Collateral (without taking into account any depreciation, and exclusive of excavations, footings and foundations, landscaping and paving) determined annually by an insurer, a recognized independent insurance broker or an independent appraiser selected by Lender and paid by Borrower.  Such All Risks of Physical Loss insurance shall also include business interruption coverage for a minimum twelve (12) months’ loss of income, including coverage for all amounts due under the Note with Lender named as a loss payee with respect to those payments, (b) Commercial General Liability insurance covering bodily injury, death, property damage, products liability and liability from the sale of liquor, beer or wine (if applicable) in such amounts as are generally available at commercially reasonable premiums and are generally required by institutional lenders for businesses and assets comparable to the Property, Business and Collateral but in any event for a combined single limit of at least $1,000,000.00 per occurrence, and $3,000,000.00 in the aggregate, (c) statutory workers’ compensation insurance with respect to any work in connection with the Property and Business or on or about the Collateral and Property, (d) if any Property is in an area identified by the Federal Emergency Management Agency as having special flood hazards, flood insurance in an amount equal to the full insurable value or the maximum limit of coverage available for the Collateral and the Property under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, or the National Flood Insurance Reform Act of 1994, as each may be amended from time to time, and (e) if any Property is in an area subject to earthquakes, earthquake insurance equal to the full insurable value of the Property.  All such policies shall (i) be issued by financially sound and reputable insurers with a rating of at least “A” or better by both Standard & Poor’s Ratings Service and Moody’s Investors Service (or such other credit rating agencies as may be designated by Lender) or a general policy rating of “A-“ or better and a financial class of VIII or better by A.M. Best Company, Inc., (ii) name Lender as a “lender loss payee”, “additional insured” or “mortgagee”, as applicable, and (iii) shall provide for thirty (30) days prior written notice to Lender before such policy is altered, canceled or terminated.  All of the insurance policies required hereby shall be evidenced by one or more Certificates of Insurance delivered to Lender by Borrower on or before the Closing Date and at such other times as Lender may request from time to time.

 

(ii)           any and all other insurance required under any of Borrower’s Franchise Agreements and Lease Agreements.

(c)           Taxes.  Borrower shall pay when due all taxes, assessments and other governmental charges imposed upon it or its assets, franchises, business, income or profits before any penalty or interest accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which by law might be a lien or charge upon any of its assets, provided that (unless any material item or property would be lost, forfeited or materially damaged as a result thereof) no such charge or claim need be paid if it is being diligently contested in good faith, if Lender is notified in advance of such contest and if Borrower establishes an adequate reserve or other appropriate provision required by GAAP and deposits with Lender cash or bond in an amount acceptable to Lender.

 

(d)           Compliance with Laws.  Borrower shall comply with all federal, state and local laws, regulations and orders applicable to Borrower or its assets including but not limited to all environmental laws, in all respects material to Borrower’s Business, assets or prospects and shall immediately notify Lender of any violation of any rule, regulation, statute, ordinance, order or law relating to the public health or the environment and of any complaint or notifications received by Borrower regarding any environmental or safety and health rule, regulation, statute, ordinance or law.  Borrower shall obtain and maintain any and all licenses, permits, franchises, authorizations from Governmental Authorities, patents, trademarks, copyrights or other rights necessary for the ownership of its Property and the advantageous conduct of its Business and as may be required from time to time by applicable law.

 

  

  

  

(e)           Renewal of Lease Agreements and Franchise Agreements.  Borrower agrees to take all actions necessary to renew the Lease Agreements and Franchise Agreements that may require renewal during the term of the Loan or enter into a comparable lease in the franchise territory, including, but not limited to those identified on Schedule 4(p).

 

(f)           Other Amounts Deemed Loans.  If Borrower fails to pay any tax, assessment, governmental charge or levy or to maintain insurance within the time permitted or required by this Agreement, or to discharge any Lien prohibited hereby, or to comply with any other Obligation, Lender may, but shall not be obligated to, pay, satisfy, discharge or bond the same for the account of Borrower.  To the extent permitted by law and at the option of Lender, all monies so paid by Lender on behalf of Borrower shall be deemed Obligations and Borrower’s payments under this Agreement may be increased to provide for payment of such Obligations plus interest thereon.

 

(g)           Inspection Rights.  Upon reasonable notice during customary business hours, Lender or its duly authorized representative shall have the right to visit all the facilities of Borrower, meet with managers and inspect all records and files relevant to the operation of the Business, subject to the following limitations:

 

(i)           Lender may conduct such inspection only one time in any twelve (12) month period unless there is an Event of Default, in which case, Lender has the right to conduct an unlimited number of inspections; and

 

(ii)           the costs of such inspection shall be borne equally between Borrower and Lender, unless the inspections occur during an Event of Default, in which case the entire cost of such inspections shall be borne by Borrower.

 

(h)           Death or Permanent Disability of Operator.  Upon the death or permanent disability of Operator (and the inability of Borrower to obtain Lender’s approval of a suitable replacement within ninety (90) days of the event of death or disability), Lender shall have the option to require Borrower to pay all outstanding principal, interest and any other amounts due Lender pursuant to the Obligations.

 

(i)           Operating Accounts.  Except for the Florida Entities, Borrower and all Entity Guarantors shall maintain with Lender each of their primary operating and store deposit accounts, so long as Lender has a branch within five (5) miles of such store, and at the option of Lender, shall enter into agreements permitting Lender to deposit all advances made hereunder and debit all fees, charges and expenses in respect of the Obligations.

 

(j)           Further Assurances.  Borrower shall execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further assurances and other agreements or instruments, and take or cause to be taken all such other action, as shall be reasonably necessary from time to time to give full effect to the Loan Documents and the transactions contemplated thereby.  In connection with any assignment or transfer of all or any portion of the Obligations or Collateral by Lender to any other person or entity, and such other person or entity shall thereupon become vested with all the rights in respect of such Obligations or Collateral, Borrower agrees to execute, acknowledge and deliver or cause to be executed, acknowledged and delivered any and all other agreements, documents or instruments requested by Lender and/or its assignee or transferee.

 

  

  

  

6.           Negative Covenants.  Borrower covenants with, and represents and warrants to, Lender that, from and after the execution date of this Agreement until the Obligations are paid and satisfied in full:

 

(a)           Limitation on Liens.  Borrower will not create or suffer to exist any Lien in respect of any property of any character of Borrower including, but not limited to, the Collateral (whether owned on the date hereof or hereafter acquired) except for Permitted Liens.

 

(b)           Limitation on Transactions.  Borrower may enter into transactions so long as they are with members of Borrower, a Guarantor or any Affiliate or with officers, shareholders, or management employees of a Borrower, Guarantor, or any Affiliate, so long as payments under any such transaction are subordinate to the payments due to Lender under the Loan Documents.

 

(c)           Limitation on Investments.  Borrower will not form or acquire any Subsidiary or acquire any interest in any business enterprise other than the Business.

 

(d)           Limitation on Borrower’s Consolidation, Merger and Sales.  Borrower will not sell, lease, assign, or transfer all, substantially all or any material portion of the assets of Borrower, or enter into or approve any liquidation, dissolution, combination, consolidation or merger involving Borrower, or any reclassification or recapitalization of Borrower.

 

(e)           Limitation on Disposition of Assets.  Borrower will not sell or otherwise dispose of any assets (other than the sale of inventory in the ordinary course of business and the disposition of obsolete or inoperable equipment) of Borrower unless the following conditions are satisfied:  (i) the assets are sold at fair value, (ii) the assets are obsolete or are not necessary to operate the Business, (iii) the proceeds from the sale or disposition are one hundred percent (100%) in cash, and (iv) the proceeds are, within ten (10) days of receipt, applied, with Lender’s written approval, to permanently reduce the amount outstanding on the Note or are reinvested in assets used in the Business.

 

(f)           Change in the Business.  Borrower will not authorize, approve or otherwise change in any substantive way the Business of Borrower.

 

(g)           Limitation on Distributions.  Borrower shall not distribute any Excess Cash to the shareholders of Borrower, as shareholders, if:

 

(i)           any Event of Default has occurred and is continuing;

 

(ii)           any due and payable payment required to be made by Borrower to Lender under this Agreement is outstanding;

 

(iii)           there were any overdue payments required to be made by Borrower to Lender within the twelve (12) month period immediately preceding the proposed date of distribution, regardless of whether Lender declared an Event of Default;

 

(iv)           Borrower is not in strict compliance with all obligations and covenants contained in this Agreement; or

 

(v)           the distribution would reduce Borrower’s liquidity to an extent that could be reasonably expected to damage the day-to-day operations of Borrower.

 

  

  

  

(h)           Limitations on Development.  Neither Borrower, Guarantor nor any Affiliate of Borrower or Guarantor shall develop any other Business locations (signing a lease agreement or franchise agreement or acquiring the property on which a Business will be located) without Lender’s consent, if:

 

(i)           any Event of Default has occurred and is continuing;

 

(iii)           Borrower is not in strict compliance with all obligations and covenants contained in this Agreement; or

 

(iv)           the distribution would reduce Borrower’s liquidity to an extent that could be reasonably expected to damage the day-to-day operations of Borrower.

 

(i)           Limitation on Payment of Management Expenses.  Borrower shall not pay any Management Expenses unless (a) each Property is open for business to the general public and (b) Borrower is current on all of its payments and other obligations to Lender.

 

(j)           Limitation on Indebtedness.  Borrower will not create, assume, incur, or suffer to exist any Indebtedness other than liabilities incurred by Borrower in the ordinary course of conducting its business and loans related to the acquisition of real estate located at 2055 Badlands Dr., Brandon, Florida in an amount not to exceed Two Million Five Hundred Seventy-Three Thousand Sixty and no/100 Dollars ($2,573,060.00).

 

(k)           Margin Securities.  No amount advanced to Borrower under the Note shall be used for the purpose of purchasing or carrying any “margin stock” or “margin security,” as such terms are used in Regulations U and X of the Board of Governors of the Federal Reserve System, 12 CFR 221 and 224.

 

7.           Financial Covenants.

 

(a)           Debt Service Coverage Ratio.  Borrower shall cause to be maintained as of the end of each fiscal quarter a Debt Service Coverage Ratio for the trailing twelve (12) month period of greater than or equal to 1.20 to 1.0.

 

(b)           Lease Adjusted Leverage Ratio (tested on a quarterly basis).  Borrower shall not cause the Lease Adjusted Leverage Ratio of Borrower on a consolidated basis to be greater than the Applicable Ratio, said ratio to be tested on a quarterly basis for the trailing twelve (12) month period.  “Applicable Ratio” shall mean 5.75:1.00 for calculations made on or before December 31, 2010; 5.50:1.00 for calculations made on or before December 31, 2011; and 5.00:1.00 for calculations made thereafter.

 

(c)           Lease Adjusted Leverage Ratio (tested at the time of each Advance).  Borrower shall not cause the Lease Adjusted Leverage Ratio of Borrower on a consolidated basis to be greater than the Applicable Ratio, said ratio to be tested on a quarterly basis for the trailing twelve (12) month period.  “Applicable Ratio” shall mean 5.25:1.00 for calculations made on or before December 31, 2010; 5.00:1.00 for calculations made on or before December 31, 2011; and 4.50:1.00 for calculations made thereafter.

 

(d)           Adjustments for New Businesses.  The Debt Service Coverage Ratio and the Lease Adjusted Leverage Ratio will be modified so that calculation of such ratios will not include results from Businesses open for a period of less than twelve (12) months.  In addition, all figures for Businesses in their second year of operation will be adjusted so that such figures are tested on annualized basis rather than a trailing twelve (12) month basis.

 

  

  

  

8.           Events of Default.  Upon the occurrence of any of the following events (each, an “Event of Default”), Borrower hereby agrees to refuse any payment under an Inter-Affiliate Loan, and Lender may, at its option, without any demand or notice whatsoever, declare the Note and all Obligations to be fully due and payable in their aggregate amount, together with accrued interest and all prepayment premiums, fees, and charges applicable thereto:

 

(a)           Except as otherwise provided in this Agreement, any failure to make any payment when due of principal or accrued interest under this Agreement, the Note or any other Obligation and such nonpayment remains uncured for a period of ten (10) days thereafter;

 

(b)           Any representation or warranty of Borrower, or Guarantor as applicable, set forth in this Agreement, the Loan Documents or in any agreement, instrument, document, certificate or financial statement evidencing, guarantying, securing or otherwise related to, this Agreement or any other Obligation is materially inaccurate or misleading;

 

(c)           Borrower fails to observe or perform any other term or condition of this Agreement, the Loan Documents or any other term or condition set forth in any agreement, instrument, document, certificate or financial statement evidencing, guarantying or otherwise related to this Agreement, the Loan Documents or any other Obligation, or Borrower otherwise defaults in the observance or performance of any covenant or agreement set forth in any of the foregoing for a period of thirty (30) days after notice to Borrower of such failure or default;

 

(d)           A default or an event of default occurs under the Security Agreement, the Guaranty or any other Loan Document;

 

(e)           The death, permanent disability, legal incompetence or dissolution of any Borrower, Operator or of any Guarantor of the Obligations (and the inability of Borrower to obtain Lender’s approval of a suitable replacement within ninety (90) days of the event of death or disability), or the merger or consolidation of any of the foregoing with a third party, or the lease, sale or other conveyance of a material part of the assets or business of any of the foregoing to a third party outside the ordinary course of its business, or the lease, purchase or other acquisition of a material part of the assets or business of a third party by any of the foregoing;

 

(f)           The occurrence of any event that causes a Material Adverse Effect on Borrower’s or Guarantors’ business operations (including, but not limited to, the Businesses), financial condition, assets or Collateral;

 

(g)           The creation of any Lien (except a lien to Lender and the Permitted Liens) on, the institution of any garnishment proceedings by attachment, levy or otherwise against, the entry of a judgment against, or the seizure of, any of the property of Borrower or any Guarantor hereof including, without limitation, the Collateral for a period of thirty (30) days after notice of such default to Borrower;

 

  

  

  

(h)           A commencement by Borrower or any Guarantor of the Obligations of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or the entry of a decree or order for relief in respect of Borrower or any Guarantor of the Obligations in a case under any such law or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of Borrower or any Guarantor of the Obligations, or for any substantial part of the property of Borrower or any Guarantor of the Obligations, or ordering the wind-up or liquidation of the affairs of Borrower or any Guarantor of the Obligations; or the filing of a petition initiating an involuntary case in which Borrower or any Guarantor is the debtor under any such bankruptcy, insolvency or similar law; or the making by Borrower or any Guarantor of the Obligations of any general assignment for the benefit of creditors; or the failure of Borrower or any Guarantor of the Obligations generally to pay its debts as such debts become due; or the taking of action by Borrower or any Guarantor of the Obligations in furtherance of any of the foregoing;

 

(i)           Any sale, conveyance or transfer of any rights in the Collateral securing the Obligations, or any destruction, loss or damage of or to any material portion of the Collateral;

 

(j)           The occurrence of a default or an event of default under one or more of the Franchise Agreements or Lease Agreements or any other material agreement to which Borrower is a party for a period of thirty (30) days after notice of such default to Borrower; or

 

(k)           The occurrence of any Event of Default beyond any applicable grace or cure period under any loan agreement and loan documents evidencing and/or securing any of the Obligations owed by Borrower, an Affiliate or any Guarantor to Lender.

 

9.             Remedies.  In addition to any other remedy permitted by law, Lender may at any time after the occurrence and during the continuance of an Event of Default, without notice, apply the Collateral to the Note or such other Obligations, whether due or not, and Lender may, at its option, proceed to enforce and protect its rights by an action at law or in equity or by any other appropriate proceedings; provided that the Note and the Obligations shall be accelerated automatically and immediately if the Event of Default arises under Section 8(i) above.  Borrower shall pay all costs of collection incurred by Lender, including its reasonable attorney’s fees, if this Agreement is referred to an attorney for collection, whether or not payment is obtained before entry of judgment, which costs and fees are Obligations secured by the Collateral.

 

Lender’s rights and remedies hereunder are cumulative, and may be exercised together, separately, and in any order.  No delay on the part of Lender in the exercise of any such right or remedy shall operate as a waiver.  No single or partial exercise by Lender of any right or remedy shall preclude any other further exercise of it or the exercise of any other right or remedy.  No waiver or indulgence by Lender of any Event of Default is effective unless in writing and signed by Lender, nor shall a waiver on one occasion be construed as a waiver of any other occurrence in the future.

 

10.           Miscellaneous.

 

            (a)           Surveys and Environmental Reports.  Intentionally omitted.

 

(b)           Entire Agreement.  This Agreement constitutes the complete and exclusive agreement and understanding between Lender and Borrower, and supersedes all prior agreements and understandings relating to the subject matter hereof.  No usage of trade, course of performance, or course of dealing evidence may be used by a party to contradict, explain, supplement, or otherwise affect this Agreement, and no extrinsic evidence may be used by a party to resolve or introduce an ambiguity in the Agreement.

 

  

  

  

            (c)           Severability.  The declaration of invalidity of any provision of this Agreement shall not affect any part of the remainder of the provisions.

 

(d)           Assignment.  Borrower may not assign any of its rights, remedies or obligations described in this Agreement without the prior written consent of Lender, which consent may be withheld in Lender’s sole discretion.  Lender may assign some or all of its rights and remedies described in this Agreement without notice to, or prior consent from, Borrower.

 

(e)           Waiver of Borrower.  Borrower, and any Guarantor hereof, hereby waives demand, presentment, protest and notice of dishonor, notice of protest and notice of default except as otherwise specified in this Agreement.  Borrower, including but not limited to all co-makers and accommodation makers of the Note, hereby waives all suretyship defenses including but not limited to all defenses based upon impairment of collateral and all suretyship defenses described in Section 3-605 of the Uniform Commercial Code (the “UCC”).  Such waiver is entered to the full extent permitted by Section 3-605 (i) of the UCC.

 

(f)           Waiver; Amendments.

 

(i)  No failure or delay by Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of Lender under the Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or any Loan Document or consent to any departure by Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 10(f)(ii) of this Agreement, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

 

(ii)  No Loan Document, this Agreement or provision thereof may be waived, amended or modified except, in the case of this Agreement, by an agreement or agreements in writing entered into by Borrower and Lender or, in the case of any other Loan Document, by an agreement or agreements in writing entered into by the parties thereto with the consent of Lender.

 

(g)           Jury Waiver.  BORROWER, AND ANY GUARANTOR HEREOF, WAIVES THE RIGHT TO A TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(h)           Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without reference to principles of conflicts of law.

 

(i)           Notices.  Except as otherwise specifically provided herein, all notices, requests, consents, and other communications hereunder must be in writing and delivered (i) if to Lender, RBS Citizens, N.A., 28 State Street, Boston, MA  02109, Attn: Christopher J. Wickles, Senior Vice President, and (ii) if to Borrower, to the address set forth on the signature page of this Agreement.  All communications hereunder shall be in writing and shall be deemed given upon the earlier of receipt, one (1) Business Day after being sent by facsimile transmission or by reputable overnight courier, or three (3) Business Days after being sent by certified mail.  Each party, by notice so given, may specify a different notice address.  Any notice of change of address shall be effective only upon receipt.

 

  

  

  

(j)            Successors and Assigns.  This Agreement shall inure to the benefit of and shall bind the parties hereto, their heirs, legal representatives, successors and permitted assigns.

 

(k)           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

 

(l)            Lender Discussions with Franchisor.  On the occurrence of an Event of Default beyond any applicable grace or cure period, Borrower hereby authorizes Lender to discuss with Buffalo Wild Wings International, Inc., or its successors or assigns (“Franchisor”) Borrower’s financial condition, operations and any other matters relating to Borrower, the Business or the Property.  Borrower further (i) consents to the release to Lender by Franchisor of any information relating to the foregoing matters, and (ii) instructs Franchisor to release any information relating to the foregoing matters upon the request of Lender.

 

(m)           Loan Sales; Participations.  Borrower agrees that Lender may elect, at any time in its sole discretion, to assign, convey, sell, transfer, securitize or grant a participation in (a “Disposition”) all or any portion of Lender’s rights and obligations under this Agreement and the other Loan Documents, including any and all servicing rights, and that any such Disposition may be to one or more financial institutions, private investors, public securities marketplace, trust and/or other entities, in Lender’s sole discretion (“Additional Creditors”).  Borrower further agrees that whether or not the Loan or any interest therein is sold or transferred, Lender may disseminate to any actual or potential Additional Creditors and to any servicer of the Loan, Governmental Authority, securities rating agency, bond insurer, and any other Person in connection with a Disposition (“Other Disposition Parties”), all financial and other information and materials which have been or shall be provided to or known by Lender with respect to this Agreement, the other Loan Documents, the Loan, Borrower, its business operations (including, but not limited to, the Enterprises), or their assets (including, but not limited to, the Collateral and Properties).  Borrower shall promptly execute and deliver to Lender any estoppel certificates or other documents requested by Lender in connection with a Disposition of the Loan within fifteen (15) days from the date of such request.  The indemnity and hold harmless obligations of Borrower under this Agreement and the other Loan Documents also shall also inure to the benefit of the Additional Creditors and the Other Disposition Parties and their respective owners, directors, managers, officers, employees, and agents.

 

(n)           Grammatical Interpretation; Construction.  The headings of sections and subsections and divisions in this Agreement and the other Loan Documents are only for convenience of reference and will not govern the interpretation of any of the provisions of this Agreement or the other Loan Documents.  All grammatical changes shall be made to this Agreement and the other Loan Documents to maximize the rights and benefits belonging to Lender, including, without limitation, so that the singular shall include the plural and the masculine the feminine and vice versa.

 

(o)           Time is of the Essence.  Time is of the essence with respect to this Agreement and the other Loan Documents.

 

  

  

  

(p)           Joint and Several Liability.  If more than one person is liable for any indebtedness, liabilities and obligations to Lender described in this Agreement or the other Loan Documents or grants Lender a Lien against their assets (x) their liability shall be joint and several in nature and affect their jointly and/or severally-owned assets and (y) except as prohibited by applicable state law, each person waives (a) any right to require Lender to: (i) proceed against any other person, (ii) proceed against or exhaust any security received from any other person, or (iii) pursue any other remedy whatsoever; (b) any defense arising by reason of the application by any other person of the proceeds of any borrowing; (c) any defense resulting from the absence, impairment or loss of any right of reimbursement, subrogation, contribution or other right or remedy of any person against any other person, or any security, whether resulting from an election by Lender to foreclose upon security by non-judicial sale, or otherwise; (d) any setoff or counterclaim of any other person or any defense which results from any disability or other defense of any other person or the cessation or stay of enforcement from any cause whatsoever of the liability of any other person (including, without limitation, the lack of validity or enforceability of any Loan Document); (e) any right to exoneration of sureties which would otherwise be applicable; (f) any right of subrogation or reimbursement and, if there are any guarantors of the Obligations, any right of contribution, and right to enforce any remedy which Lender now has or may hereafter have against any other person and any benefit of, and any right to participate in, any security now or hereafter received by Lender; (g) all presentments, diligence, demands for performance, notices of non-performance, notices delivered under this Agreement or any other Loan Document, protests, notice of dishonor, and notices of acceptance of the Note and of the existence, creation or incurring of new or additional Obligations and notices of any public or private foreclosure sale; (h) the benefit of any statute of limitations to the extent permitted by law; (i) any appraisement, valuation, stay, extension, moratorium, redemption or similar law or similar rights for marshaling; (j) any right to be informed by Lender of the financial condition of any other person or any change therein or any other circumstances bearing upon the risk of nonpayment or nonperformance of the Obligations; and (k) the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Agreement or any other Loan Document, and agrees that the Obligations of each person shall not be affected by any circumstances, whether or not referred to in this Agreement or any other Loan Document, which might otherwise constitute a legal or equitable discharge of any person.  Each person has the ability and assumes the responsibility for keeping informed of the financial condition of any other person and of other circumstances affecting such nonpayment and nonperformance risks.  Without limiting the generality of any of the foregoing, each person hereby waives any right to be reimbursed by any other person for any payment of the Obligations made directly or indirectly by either person or from any property of any person, whether arising by way of any statutory, contractual or other right of subrogation, contribution, indemnification or otherwise.

 

(q)           Capital Adequacy.  Borrower shall pay directly to Lender from time to time on request such amounts as Lender may determine to be necessary to compensate Lender or its parent or holding company for any costs which it determines are attributable to the maintenance by Lender or its parent or holding company, pursuant the requirement of any Governmental Authority, of capital in respect of maintaining its loans (such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of Lender or its parent or holding company to a level below that which such Lender or its parent or holding company could have achieved but for such requirement of the Governmental Authority).  Lender will notify Borrower that it is entitled to compensation pursuant to this Section as promptly as practicable after it determines to request such compensation.  Such notice to Borrower will set forth in reasonable detail the basis and amount of the request for compensation.  Any request for additional compensation under this Section shall be paid by Borrower within thirty (30) days of the receipt by Borrower of the notice described in this Section.

 

  

  

  

(r)           Lost Note.  Borrower shall, if the Note is mutilated, destroyed, lost or stolen (a “Lost Note”), promptly deliver to Lender, upon receipt from Lender of an affidavit in a form reasonably acceptable to Lender and Borrower stipulating that such Note has been mutilated, destroyed, lost or stolen, in substitution therefor, a new promissory note containing the same terms and conditions as such Lost Note with a notation thereon of the unpaid principal and accrued and unpaid interest.  Borrower shall provide fifteen (15) days’ prior notice to Lender before making any payments to third parties in connection with a Lost Note.

 

(s)           Cross-Collateral.  All Loans and Advances by Lender to Borrower or an Affiliate under this Agreement, the Loan Documents or any other loan agreement or loan documents between such parties constitute one transaction, and all Indebtedness and the Obligations of Borrower or an Affiliate to Lender under this Agreement, the Loan Documents or any other loan agreement or loan documents, present and future, constitute one obligation secured by the Collateral of the Loan or the Collateral of an Affiliate loan and security held and to be held by Lender hereunder and by virtue of all other assignments and security agreements between Borrower and Lender now and hereafter existing, as may be amended, restated, supplemented, extended or renewed.

 

11.           Definitions.  All financial terms used herein but not defined on the exhibits, in the Security Agreement or any other Loan Document have the meanings given to them by GAAP.  All other undefined terms have the meanings given to them in the Uniform Commercial Code as adopted in the state whose law governs this instrument.  The following definitions are used herein:

 

“2nd DLOC Advance” means each disbursement of the 2nd DLOC Loan made during the 2nd DLOC Draw Period pursuant to this Agreement upon the satisfaction or waiver of the conditions precedent to such 2nd DLOC Advance set forth in Section 2 of this Agreement.

 

“2nd DLOC Draw Period” means the eighteen (18) month period from the Closing Date to the Term Loan Effective Date.

 

“2nd DLOC Loan” has the meaning set forth in Section 1(a)(ii) of this Agreement.

 

“2nd DLOC Maturity Date” has the meaning set forth in Section 1(b)(ii)(b) of this Agreement.

 

“2nd DLOC Note” has the meaning set forth in Section 1(a)(ii) of this Agreement.

 

“Access Laws” has the meaning set forth in Section 4(o) of this Agreement.

 

“Account” means Account No. 4505419176 maintained by Lender in the name of Borrowing Agent.

 

“Additional Creditors” has the meaning set forth in Secton 10(m) of this Agreement.

“Adjusted LIBOR Rate” means, relative to a LIBOR Rate Loan, a rate per annum determined by dividing (x) the LIBOR Rate for such LIBOR Interest Period by (y) a percentage equal to one hundred percent (100%) minus the LIBOR Reserve Percentage.

 

“Advance” or “Advances” means any DLOC Advance, 2nd DLOC Advance or LOC Advance.

 

  

  

  

“Advance Request” has the meaning set forth in Sction 2(d) of this Agreement.

 

            “Affiliate” means, as to Borrower, (a) any person or entity which, directly or indirectly, is in control of, is controlled by or is under common control with, Borrower, or (b) any person who is a director, officer or employee (i) of Borrower or (ii) of any person described in the preceding clause (a); provided, however, that this definition shall not include TM Apple Co., Inc. or Ansley Group, LLC.

 

“Borrower” has the meaning given to such term in the Introduction to this Agreement.

 

“Borrowing Agent” means Diversified Restaurant Holdings, Inc., a Nevada corporation, who has the authority from each Borrower to act on its behalf for limited purposes, including but not limited to, making requests to Lender, providing payments due under the Loan, and other communications with Lender as necessitated by the Loan Documents.

 

“Business” means (i) the current and future Buffalo Wild Wings franchised restaurants operated by Borrower or an Affiliate pursuant to a Franchise Agreement, (ii) the current and future Bagger Dave’s restaurants operated by Borrower or an Affiliate, (iii) Bagger Dave’s Franchising Corporation’s franchise and licensing business, (iv) real estate owned by Borrower or an Affiliate, (v) restaurant management services provided by Borrower, Guarantor or an Affiliate, and (vi) ownership or operations of other concepts within the hospitality industry.

 

“Business Day” means:

(a)           any day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in Boston, Massachusetts;

(b)           when such term is used to describe a day on which a borrowing, payment, prepayment or repayment is to be made in respect of a LIBOR Rate Loan, any day which is (i) neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in New York City, and (ii) a London Banking Day; and

(c)           when such term is used to describe a day on which an interest rate determination is to be made in respect of a LIBOR Rate Loan, any day which is a London Banking Day.

            “Closing Date” means May 5, 2010 with respect to the DLOC Loan and the date of this Agreement with respect to the 2nd DLOC Loan and the LOC Loan.

 

“Collateral” means all property of Borrower in which Lender has a lien, security interest or collateral assignment pursuant to the terms of this Agreement or any other Loan Document.

 

        “Debt Service Coverage Ratio” means for the period in question, on a consolidated basis for Borrower and all Affiliates, the calculation described as a ratio of (i) (a) EBITDA, less (b) cash taxes, less (c) maintenance capital expenditures ($10,000 per store), less (d) distributions, less (e) changes in Borrower shareholder notes, divided by (ii) Interest Expense and Principal Payments of the Indebtedness.  For purposes of this calculation, “Interest Expense and Principal Payments of the Indebtedness” shall include payments under all loan arrangements between Borrower and all Affiliates and its members/shareholders, whether now existing or hereafter arising and whether or not reflected on Borrower’s internal financial statements.

 

  

  

  

“Default Rate” has the meaning set forth in Section 1(d)(i)(b) of this Agreement.

 

“Disposition” has the meaning set forth in Section 10(m) of this Agreement.

 

“DLOC Advance” means each disbursement of the DLOC Loan made during the DLOC Draw Period pursuant to this Agreement upon the satisfaction or waiver of the conditions precedent to such DLOC Advance set forth in Section 2 of this Agreement.

 

“DLOC Draw Period” means the eighteen (18) month period from the Closing Date to the Term Loan Effective Date.

 

“DLOC Loan” has the meaning set forth in Section 1(a)(i) of this Agreement.

 

“DLOC Note” has the meaning set forth in Section 1(a)(i) of this Agreement.

 

“Earnings Before Interest and Taxes” means for any period the sum of (i) net income (or loss) for such period (excluding extraordinary gains and losses), plus (ii) all interest expense for such period, plus (iii) all charges against income for such period for federal, state and local taxes.

 

           “EBITDA” means for any period the sum of (i) Earnings Before Interest and Taxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period.

 

           “Entity Guarantor” means Diversified Restaurant Holdings, Inc., a Nevada corporation, AMC Group, Inc., a Michigan corporation; AMC Wings, Inc., a Michigan corporation, AMC Burgers, Inc., a Michigan corporation, and Bagger Dave’s Franchising Corporation, a Michigan corporation, Bagger Dave’s Franchising Corporation, a Michigan corporation.

 

“Environmental Laws” has the meaning set forth in Section 4(m) of this Agreement.

 

“ERISA” has the meaning set forth in Section 4(k) of this Agreement.

 

“ERISA Affiliate” has the meaning set forth in Section 4(k) of this Agreement.

 

“Event of Default” has the meaning set forth in Section 8 of this Agreement.

 

“Excess Cash” means Borrower’s net income under GAAP less (a) all payments to lenders, (b) reserves for capital improvements, replacements and contingencies, and (c) any other amounts reasonably necessary to be retained by Borrower for the effective maintenance of the Business as determined in good faith by Operator.

 

“Florida Entities” shall include Buckeye Group, LLC, Buckeye Group II, LLC, MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC Riverview, Inc., AMC Ft. Myers, Inc., AMC Lakeland, Inc., and any future entities affiliated with Borrower organized or conducting business in the State of Florida.

 

  

  

  

            “Franchise Agreements” means the agreements listed on Schedule 1 between Buffalo Wild Wings International, Inc. and Borrower or an Affiliate of Borrower for the operation of a Buffalo Wild Wings Business at a Property.

 

“Franchisor” has the meaning set forth in Section 10(l) of this Agreement.

 

“Funded Debt” of any person as of any date means the sum of all current and long-term obligations (including all current and long-term obligations with respect to capital leases) of such person as of such date.

 

“Funding Date” means May 5, 2010 for the DLOC Loan, June 7, 2011 for the 2nd DLOC Loan, and June 7, 2011 for the LOC Loan.

“Future Guarantor” is defined as any person who becomes a twenty-five percent (25%) or greater owner in any Borrower or Entity Guarantor.

 

“GAAP” means generally accepted accounting principles as in effect from time to time.

 

“Governmental Authority” means any nation, sovereign or government; any state or other political subdivision thereof; any agency, authority or instrumentality thereof or of any such state or political subdivision; and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity and any self-regulatory organization.

 

“Guarantor” means, jointly and severally, the Personal Guarantor and the Entity Guarantor.

 

            “Guaranty” has the meaning set forth in Section 4(c) of this Agreement.

 

“Hazardous Materials” has the meaning set forth in Section 4(m) of this Agreement.

 

“Hedge Agreement” means any hedge agreement, interest rate swap, cap, collar or floor agreement or any other interest rate management devise entered into by Borrower with Lender or any Person in connection with any Indebtedness of Borrower that is designed to protect Borrower against fluctuations in interest rates or currency exchange rates.

 

“Hedging Obligations” means, with respect to Borrower, all liabilities of Borrower to Lender or any other Person under a Hedge Agreement.

“Indebtedness” means (i) all items (except items of capital stock, of capital surplus, of general contingency reserves or of retained earnings, deferred income taxes, and amount attributable to minority interest if any) which in accordance with generally accepted accounting principles would be included in determining total liabilities on a consolidated basis (if Borrower should have a subsidiary) as shown on the liability side of a balance sheet as at the date as of which indebtedness is to be determined, (ii) all indebtedness secured by any mortgage, pledge, lien or conditional sale or other title retention agreement to which any property or asset owned or held is subject, whether or not the indebtedness secured thereby shall have been assumed (excluding non-capitalized leases which may amount to title retention agreements but including capitalized leases), and (iii) all indebtedness of others which Borrower or any subsidiary has directly or indirectly guaranteed, endorse (otherwise than for collection or deposit in the ordinary course of business), discounted or sold with recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which Borrower or any subsidiary has agreed to apply or advance funds (whether by way of loan, stock purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable and all net obligations under any interest rate swap or other interest rate management device or any Hedge Agreement.

 

  

  

  

“Interest Payment Date” means the last Business Day of each LIBOR Interest Period or, in the case of Prime Rate Loans, any day on which a payment of principal is due hereunder.

“Interest Rate” means an amount per annum equal to the sum of the LIBOR Advantage Rate and the LA Margin, or the LIBOR Rate and the LIBOR Rate Margin, as applicable.

 

“LA Interest Period” means, with respect to any LIBOR Advantage Loan, the period commencing on and including the date hereof (the “Start Date”) and ending on but excluding the date which numerically corresponds to such date one month later, and thereafter, each one month period ending on the day of such month that numerically corresponds to the Start Date.  If an LA Interest Period is to end in a month for which there is no day which numerically corresponds to the Start Date, the LA Interest Period will end on the last day of such month.  Notwithstanding the date of commencement of any LA Interest Period, interest shall only begin to accrue as of the Closing Date.

 

“LA Margin” and “LIBOR Rate Margin” means:

 

	
If the Lease Adjusted Leverage Ratio is less than 4.50

	
3.0%

	 	 
	
If the Lease Adjusted Leverage Ratio is greater than or equal to 4.5 but less than 5.0

	
3.5%

	 	 
	
If the Lease Adjusted Leverage Ratio is greater than or equal to 5.0

	
4.0%

 

“Lease Adjusted Leverage Ratio” as of any date means the ratio of (a) the sum of (i) Funded Debt as of such date and (ii) Third Party Rent for the twelve (12) month period ending on such date multiplied by eight (8), to (b) the sum of EBITDA and Third Party Rent for the twelve (12) month period ending on such date.

 

“Lease Agreements” means the Lease Agreements listed on Schedule 2, which agreements are by and between the parties so indicated on such Schedule.

 

“Lender” has the meaning given to such term in the introduction to this Agreement.

 

“LIBOR Advantage Loan” shall mean any loan or advance for which the applicable rate of interest is based upon the LIBOR Advantage Rate.

 

“LIBOR Advantage Rate” means, relative to any LA Interest Period, the offered rate for delivery in two London Banking Days of deposits of U.S. Dollars for a term coextensive with the designated LA Interest Period which the British Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day on which such LA Interest Period commences.  If the first day of any LA Interest Period is not a day which is both a (i) Business Day, and (ii) a London Banking Day, the LIBOR Advantage Rate shall be determined by reference to the next preceding day which is both a Business Day and a London Banking Day.  If for any reason the LIBOR Advantage Rate is unavailable and/or Lender is unable to determine the LIBOR Advantage Rate for any LA Interest Period, Lender may, at its discretion, either: (a) select a replacement index based on the arithmetic mean of the quotations, if any, of the interbank offered rate by first class banks in London or New York for deposits with comparable maturities or (b) accrue interest at a rate per annum equal to Lender’s Prime Rate as of the first day of any LA Interest Period for which the LIBOR Advantage Rate is unavailable or cannot be determined.

 

  

  

  

“LIBOR Interest Period” means, in the case of a LIBOR Rate Loan:

(i)           initially, the period beginning on (and including) the Funding Date and ending on (but excluding) October 5, 2010 with respect to the DLOC Loan and the period beginning on (and including) the Funding Date and ending on (but excluding) June 1, 2011 with respect to the 2nd DLOC Loan and the LOC Loan (the “Stub Period”); and

 

(ii)           then, each period commencing on (and including) the last day of the applicable Stub Period and ending on (but excluding) the day which numerically corresponds to such date one month thereafter (or, if such month has no numerically corresponding day, the last Business Day of such month); and

 

(iii)           thereafter, each period commencing on the last day of the next preceding LIBOR Interest Period and ending one month thereafter;

 

provided, however, that

 

(a)           if Borrower has or may incur Hedging Obligations with Lender in connection with the Loan, the LIBOR Interest Period shall be of the same duration as the relevant period set under the applicable Hedge Agreement;

 

(b)           if such LIBOR Interest Period would otherwise end on a day which is not a Business Day, such LIBOR Interest Period shall end on the next following Business Day unless such day falls in the next calendar month, in which case such LIBOR Interest Period shall end on the first preceding Business Day; and

 

(c)           no LIBOR Interest Period may end later than the termination of this Agreement.

 

“LIBOR Rate” means, relative to any LIBOR Interest Period for a LIBOR Rate Loan, the offered rate for deposits of U.S. Dollars in an amount approximately equal to the amount of the LIBOR Rate Loan for a one month period which the British Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day which is two London Banking Days prior to the beginning of such LIBOR Interest Period.  If Lender cannot determine such offered rate by the British Bankers’ Association, Lender may, in its discretion, select a replacement index based on the arithmetic mean of the quotations, if any, of the interbank offered rate by first class banks in London or New York for deposits in comparable amounts and maturities.

 

  

  

  

“LIBOR Rate Loan” means the Loan for the period(s) when the rate of interest applicable to the Loan is calculated by reference to the LIBOR Rate in the manner set forth herein.

 

“LIBOR Reserve Percentage” means, relative to any day of any LIBOR Interest Period, the maximum aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) under any regulations of the Board of Governors of the Federal Reserve System (the “Board”) or other governmental authority having jurisdiction with respect thereto as issued from time to time and then applicable to assets or liabilities consisting of “Eurocurrency Liabilities”, as currently defined in Regulation D of the Board, having a term approximately equal or comparable to such Interest Period.

“Lien” means any security interest, mortgage, pledge, assignment, lien or other encumbrance of any kind, including interests of vendors or lessors under conditional sale contracts or capital leases.

 

“Loan” means the DLOC Loan, the 2nd DLOC Loan or the LOC Loan, as applicable.

 

“Loan Documents” means each and every document or agreement executed by any party evidencing, guarantying or securing any of the Obligations, including, but not limited to, this Agreement, the Note, the Security Agreement, any Hedge Agreement, the Trademark Security Agreement, the Guaranty, the Undertaking Letter and any insurance policy, as each may be amended or restated from time to time; “Loan Document” means any one of the Loan Documents.

 

“LOC Advance” means each disbursement of the LOC Loan made pursuant to this Agreement upon the satisfaction or waiver of the conditions precedent to such LOC Advance set forth in Section 2 of this Agreement.

 

“LOC Loan” has the meaning set forth in Section 1(a)(iii) of this Agreement.

 

“LOC Maturity Date” has the meaning set forth in Section 1(b)(ii)(b) of this Agreement.

 

“LOC Note” has the meaning set forth in Section 1(a)(iii) of this Agreement.

 

“London Banking Day” means any day on which dealings in U.S. Dollar deposits are transacted in the London interbank market.

 

“Lost Note” has the meaning set forth in Section 10(r) of this Agreement.

 

“Management Expenses” means any and all expenses not directly attributable to a particular franchised store, including salaries, bonuses or other compensation to non-store level personnel.

 

“Material Adverse Effect” has the meaning set forth in Section 2(c) of this Agreement.

 

“Maturity Date” means the DLOC Maturity Date, the 2nd DLOC Maturity Date or the LOC Maturity Date, as applicable.

 

  

  

  

“Monthly Payment” means the monthly payment due each month during the Term Loan Period which shall be calculated based on the use attributed to each DLOC Advance as follows:  (a) eighty-four (84) months for equipment and leaseholds; (b) one hundred forty-four (144) months for leasehold mortgages; or (c) one hundred eighty (180) months for fee simple real estate.

 

“Note” has the meaning set forth in Section 1(a)(iii) of this Agreement.

 

“Obligation(s)” means all loans, advances, indebtedness and each and every other obligation or liability of Borrower owed to Lender, however created, of every kind and description whether now existing or hereafter arising and whether direct or indirect, primary or as guarantor or surety, absolute or contingent, liquidated or unliquidated, matured or unmatured, participated in whole or in part, created by trust agreement, lease overdraft, agreement or otherwise, whether or not secured by additional collateral, whether originated with Lender or owed to others and acquired by Lender by purchase, assignment or otherwise, and including, without limitation, all loans, advances, indebtedness and each and every obligation or liability arising under this Agreement, all obligations to perform or forbear from performing acts, and agreements, instruments and documents evidencing, guarantying, securing or otherwise executed in connection with any of the foregoing, together with any amendments, modifications and restatements thereof, and all expenses and attorneys’ fees incurred by Lender hereunder or any other document, instrument or agreement related to any of the foregoing.

 

“Operator” means T. Michael Ansley, an individual residing in Michigan.

 

“Organizational Documents” means any articles, bylaws, certificates, operating agreements, limited liability company agreements or similar organizational documents of Borrower.

 

“Other Disposition Parties” has the meaning set forth in Section 10(m) of this Agreement.

 

“Permitted Liens” has the meaning set forth in Section 4(h) of this Agreement.

 

“Personal Guarantor” means T. Michael Ansley, an individual residing in Michigan and any Future Guarantor.

 

“Principal Repayment Amount” means the regularly scheduled reductions in the outstanding principal of the DLOC Loan and the 2nd DLOC Loan to be made on each Interest Period Date, as set forth in a written payment schedule provided by Lender to Borrower upon the conversion of any DLOC Advances or 2nd DLOC Advances to a Term Loan.

 

“Property” means the Buffalo Wild Wings and Bagger Dave’s properties listed on Schedule 3 attached hereto and made a part hereof.

 

“Reportable Event” has the meaning set forth in Section 4(k) of this Agreement.

 

“Security Agreement” means that certain Security Agreement executed by Borrower in favor of Lender, as the same may be amended or restated from time to time.

 

“Subsidiary” means any corporation, limited liability company or other entity in which Borrower owns a majority of the voting equity interests or has the ability to control or direct management of the business of such entity.

 

  

  

  

“Term Loan” means the amortizing term loan that results from a conversion of DLOC Advances or 2nd DLOC Advance in accordance with Section 2.

 

“Term Loan Effective Date” means any date of Borrower’s choosing and in no event later than eighteen (18) months after the respective Closing Date for the DLOC Loan and the 2nd DLOC Loan, on which date there shall be an automatic conversion of Advances with respect to the DLOC Loan and the 2nd DLOC Loan, respectively, to a Term Loan.

“Term Loan Payment Date” has the meaning set forth in Section 1(c)(ii) of this Agreement.

 

“Term Loan Period” means, with respect to a Term Loan, a period equal to eighty-four (84) months minus the number of months elapsed from the Closing Date through the Term Loan Effective Date, and shall commence on the first day of the month immediately following the Term Loan Effective Date.

 

“Third Party Rent” of any person for any period means all operating lease expense for such period paid to third parties which are not Affiliates of such person.

 

“Undertaking Letter” shall mean that certain Undertaking Letter dated May 5, 2010 by and among Lender, Borrower and Operator, as may be amended from time to time.

 

[Remainder of page intentionally left blank.]

 

  

  

  

IN WITNESS WHEREOF, an authorized officer of Lender, each Borrower and the Borrowing Agent have executed this Agreement as of the date first written above.

 

LENDER:

RBS CITIZENS, N.A.,

a national banking association

By:              /s/ Christopher J. Wickles                                                   

Name:        Christopher J. Wickles

Title:          Sr. Vice President

BORROWER:

FLYER ENTERPRISES, INC.

ANKER, INC.

TMA ENTERPRISES OF NOVI, INC.

AMC GRAND BLANC, INC.

AMC PETOSKEY, INC.

AMC TROY, INC.

AMC FLINT, INC.

AMC PORT HURON, INC.

AMC CHESTERFIELD, INC.

AMC MARQUETTE, INC.

MCA ENTERPRISES BRANDON, INC.

AMC NORTH PORT, INC.

AMC RIVERVIEW, INC.

BERKLEY BURGERS, INC.

TROY BURGERS, INC.

ANN ARBOR BURGERS, INC.

AMC TRAVERSE CITY, INC.

BRIGHTON BURGERS, INC.

each, a Michigan corporation

 

AMC FT. MYERS, INC.

AMC LAKELAND, INC.

each, a Florida corporation

 

TMA ENTERPRISES OF FERNDALE, LLC

AMC WARREN, LLC

BUCKEYE GROUP, LLC

BUCKEYE GROUP II, LLC

each, a Michigan limited liability company

By:              /s/ David G. Burke                                                   

Name:         David G. Burke

Title:           Chief Financial Officer

  

  

  

BORROWING AGENT:

DIVERSIFIED RESTAURANT HOLDINGS, INC.,

a Nevada corporation

By:              /s/ David G. Burke                                                              

Name:         David G. Burke

Title:           Chief Financial Officer

 

	
ADDRESS FOR NOTICE FOR EACH BORROWER AND THE BORROWING AGENT:

Attn:  T. Michael Ansley

27680 Franklin Road

Southfield, MI  48034

 

	 	
WITH A COPY TO (which copy is intended only as information and does not constitute legal notice hereunder):

Fahey Schultz Burzych Rhodes PLC

Attn:  Mark J. Burzych, Esq.

4151 Okemos Road

Okemos, MI 48864

 

STATE OF MICHIGAN

COUNTY OF OAKLAND

Acknowledged by David G. Burke, as the Chief Financial Officer of Berkley Burgers, Inc., Ann Arbor Burgers, Inc., Troy Burgers, Inc., Flyer Enterprises, Inc., Anker, Inc., TMA Enterprises of Novi, Inc., AMC Grand Blanc, Inc., AMC Petoskey, Inc., AMC Troy, Inc., AMC Flint, Inc., AMC Port Huron, Inc., AMC Chesterfield, Inc., AMC Marquette, Inc., MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC Riverview, Inc., Diversified Restaurant Holdings, Inc., AMC Ft. Myers, Inc., AMC Lakeland, Inc., AMC Traverse City, Inc., Brighton Burgers, Inc., TMA Enterprises of Ferndale, LLC, AMC Warren, LLC, Buckeye Group, LLC and Buckeye Group II, LLC, before me on the 27th day of May, 2011.

       Signature  /s/ Kathleen Marie Howe                                                                                     

       Printed name  Kathleen Marie Howe                                                                                     

       Notary public, State of Michigan, County of Wayne

       My commission expires 5/22/2017

       Acting in the County of Oakland

 

  

  

  

EXHIBIT A

 

BORROWING ENTITIES

 

	
  

	
n

	
Berkley Burgers, Inc.

	
  

	
n

	
Ann Arbor Burgers, Inc.

	
  

	
n

	
Troy Burgers, Inc.

	
  

	
n

	
Flyer Enterprises, Inc.

	
  

	
n

	
Anker, Inc.

	
  

	
n

	
TMA Enterprises of Novi, Inc.

	
  

	
n

	
TMA Enterprises of Ferndale, LLC

	
  

	
n

	
AMC Warren, LLC

	
  

	
n

	
AMC Grand Blanc, Inc.

	
  

	
n

	
AMC Petoskey, Inc.

	
  

	
n

	
AMC Troy, Inc.

	
  

	
n

	
AMC Flint, Inc.

	
  

	
n

	
AMC Port Huron, Inc.

	
  

	
n

	
AMC Chesterfield, Inc.

	
  

	
n

	
AMC Marquette, Inc.

	
  

	
n

	
MCA Enterprises Brandon, Inc.

	
  

	
n

	
Buckeye Group, LLC

	
  

	
n

	
Buckeye Group II, LLC

	
  

	
n

	
AMC North Port, Inc.

	
  

	
n

	
AMC Riverview, Inc.

	
  

	
n

	
AMC Ft. Myers, Inc.

	
  

	
n

	
AMC Lakeland, Inc.

	
  

	
n

	
AMC Traverse City, Inc.

	
  

	
n

	
Brighton Burgers, Inc.

  

  

  

EXHIBIT B-1

 

FORM OF DLOC NOTE

 

	$6,000,000.00 	May 5, 2010

 

FOR VALUE RECEIVED, the borrowing entities identified on Exhibit A attached hereto (jointly and severally, the “Borrower”), promise to pay to the order of RBS Citizens, N.A., a national banking association (the “Lender”), the principal sum of Six Million and no/100 Dollars ($6,000,000.00) or such lesser amount that is the aggregate unpaid principal amount of the DLOC Loan made by Lender to Borrower pursuant to Article 1 of the Credit Agreement (as hereinafter defined), in immediately available funds at the office of Lender, 28 State Street, Boston, MA  02109, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Credit Agreement.

 

Lender is hereby authorized to record based on the loan payment schedule attached hereto, or to otherwise record in accordance with its usual practice (including, without limitation in Lender’s electronic data processing system), the date and amount of each advance and the date and amount of each interest and principal payment hereunder.

 

This Note is issued pursuant to, and is entitled to the benefits of, the Development Line of Credit Agreement dated of even date herewith (which, as it may be amended or modified and in effect from time to time, is herein called the “Credit Agreement”), between Borrower and Lender, to which Credit Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated.  Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Credit Agreement.

 

	 	FLYER ENTERPRISES, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	 	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	ANKER, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	 	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

 

  

  

  

	 	TMA ENTERPRISES OF NOVI, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	TMA ENTERPRISES OF FERNDALE, LLC,	 
	 	a Michigan limited liability company	 
	 	 	 	 
	 	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   Manager	 
	 	 	 	 

	 	AMC WARREN, LLC,	 
	 	a Michigan limited liability company	 
	 	 	 	 
	 	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   Manager	 
	 	 	 	 

	 	AMC GRAND BLANC, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	 	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	AMC PETOSKEY, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	 	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	AMC TROY, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

 

  

  

  

	 	AMC FLINT, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	AMC PORT HURON, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	AMC CHESTERFIELD, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	AMC MARQUETTE, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	MCA ENTERPRISES BRANDON, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	BUCKEYE GROUP, LLC,	 
	 	a Michigan limited liability company	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   Manager	 
	 	 	 	 

        

  

  

  

	 	BUCKEYE GROUP II, LLC,	 
	 	a Michigan limited liability company	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   Manager	 
	 	 	 	 

	 	AMC NORTH PORT, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	AMC RIVERVIEW, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	BERKLEY BURGERS, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	TROY BURGERS, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

	 	ANN ARBOR BURGERS, INC.,	 
	 	a Michigan corporation	 
	 	 	 	 
	
 

	
By: 

	/s/ T. Michael Ansley	 
	 	Name: T. Michael Ansley	 
	 	Title:   President	 
	 	 	 	 

   

  

  

  

STATE OF __________________

COUNTY OF ________________

 

Acknowledged by T. Michael Ansley, the President of Berkley Burgers, Inc., Ann Arbor Burgers, Inc., Troy Burgers, Inc., Flyer Enterprises, Inc., Anker, Inc., TMA Enterprises of Novi, Inc., AMC Grand Blanc, Inc., AMC Petoskey, Inc., AMC Troy, Inc., AMC Flint, Inc., AMC Port Huron, Inc., AMC Chesterfield, Inc., AMC Marquette, Inc., MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC Riverview, Inc., as the Manager of TMA Enterprises of Ferndale, LLC, AMC Warren, LLC, Buckeye Group, LLC and Buckeye Group II, LLC, before me on the _______ day of May, 2010.

 

 

 

 

      Signature _____________________________________________                                                                                   

 

       Printed name ___________________________________________

 

       Notary public, State of Michigan, County of Wayne _____________

       My commission expires ___________________________________

       Acting in the County of ___________________________________

 

 

  

  

  

Exhibit A to DLOC Note

	
  

	
n

	
Berkley Burgers, Inc.

	
  

	
n

	
Ann Arbor Burgers, Inc.

	
  

	
n

	
Troy Burgers, Inc.

	
  

	
n

	
Flyer Enterprises, Inc.

	
  

	
n

	
Anker, Inc.

	
  

	
n

	
TMA Enterprises of Novi, Inc.

	
  

	
n

	
TMA Enterprises of Ferndale, LLC

	
  

	
n

	
AMC Warren, LLC

	
  

	
n

	
AMC Grand Blanc, Inc.

	
  

	
n

	
AMC Petoskey, Inc.

	
  

	
n

	
AMC Troy, Inc.

	
  

	
n

	
AMC Flint, Inc.

	
  

	
n

	
AMC Port Huron, Inc.

	
  

	
n

	
AMC Chesterfield, Inc.

	
  

	
n

	
AMC Marquette, Inc.

	
  

	
n

	
MCA Enterprises Brandon, Inc.

	
  

	
n

	
Buckeye Group, LLC

	
  

	
n

	
Buckeye Group II, LLC

	
  

	
n

	
AMC North Port, Inc.

	
  

	
n

	
AMC Riverview, Inc.

	
  

	
n

	
AMC Ft. Myers, Inc.

	
  

	
n

	
AMC Lakeland, Inc.

	
  

	
n

	
AMC Traverse City, Inc.

	
  

	
n

	
Brighton Burgers, Inc.

 

  

  

  

EXHIBIT B-2

FORM OF 2ND DLOC NOTE

 

	$7,000,000.00	__________________, 2011

 

FOR VALUE RECEIVED, the borrowing entities identified on Exhibit A attached hereto (jointly and severally, the “Borrower”), promise to pay to the order of RBS Citizens, N.A., a national banking association (the “Lender”), the principal sum of Seven Million and no/100 Dollars ($7,000,000.00) or such lesser amount that is the aggregate unpaid principal amount of the 2nd DLOC Loan made by Lender to Borrower pursuant to Article 1 of the Credit Agreement (as hereinafter defined), in immediately available funds at the office of Lender, 28 State Street, Boston, MA  02109, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Credit Agreement.

 

Lender is hereby authorized to record based on a loan payment schedule to be provided to Borrower, or to otherwise record in accordance with its usual practice (including, without limitation in Lender’s electronic data processing system), the date and amount of each advance and the date and amount of each interest and principal payment hereunder.

 

This 2nd DLOC Note is issued pursuant to, and is entitled to the benefits of, the First Amended and Restated Development Line of Credit Agreement dated of even date herewith (which, as it may be amended or modified and in effect from time to time, is herein called the “Credit Agreement”), between Borrower and Lender, to which Credit Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this 2nd DLOC Note may be prepaid or its maturity date accelerated.  Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Credit Agreement.

 

FLYER ENTERPRISES, INC.

ANKER, INC.

TMA ENTERPRISES OF NOVI, INC.

AMC GRAND BLANC, INC.

AMC PETOSKEY, INC.

AMC TROY, INC.

AMC FLINT, INC.

AMC PORT HURON, INC.

AMC CHESTERFIELD, INC.

AMC MARQUETTE, INC.

MCA ENTERPRISES BRANDON, INC.

AMC NORTH PORT, INC.

AMC RIVERVIEW, INC.

BERKLEY BURGERS, INC.

TROY BURGERS, INC.

ANN ARBOR BURGERS, INC.

AMC TRAVERSE CITY, INC.

BRIGHTON BURGERS, INC.

each, a Michigan corporation

 

  

  

  

AMC FT. MYERS, INC.

AMC LAKELAND, INC.

each, a Florida corporation

TMA ENTERPRISES OF FERNDALE, LLC

AMC WARREN, LLC

BUCKEYE GROUP, LLC

BUCKEYE GROUP II, LLC

each, a Michigan limited liability company

By:             /s/ David G. Burke                                                          

Name:        David G. Burke

Title:          Chief Financial Officer

 

STATE OF Michigan

COUNTY OF Oakland

 

Acknowledged by David G. Burke, the Chief Financial Officer of Berkley Burgers, Inc., Ann Arbor Burgers, Inc., Troy Burgers, Inc., Flyer Enterprises, Inc., Anker, Inc., TMA Enterprises of Novi, Inc., AMC Grand Blanc, Inc., AMC Petoskey, Inc., AMC Troy, Inc., AMC Flint, Inc., AMC Port Huron, Inc., AMC Chesterfield, Inc., AMC Marquette, Inc., MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC Riverview, Inc., AMC Ft. Myers, Inc., AMC Lakeland, Inc., AMC Traverse City, Inc., Brighton Burgers, Inc., TMA Enterprises of Ferndale, LLC, AMC Warren, LLC, Buckeye Group, LLC and Buckeye Group II, LLC, before me on the 27th day of May, 2011.

       Signature  /s/ Kathleen Marie Howe                                                                                     

       Printed name  Kathleen Marie Howe                                                                                     

       Notary public, State of Michigan, County of Wayne

       My commission expires 5/22/2017

       Acting in the County of Oakland

 

  

  

  

Exhibit A to 2nd DLOC Note

	
  

	
n

	
Berkley Burgers, Inc.

	
  

	
n

	
Ann Arbor Burgers, Inc.

	
  

	
n

	
Troy Burgers, Inc.

	
  

	
n

	
Flyer Enterprises, Inc.

	
  

	
n

	
Anker, Inc.

	
  

	
n

	
TMA Enterprises of Novi, Inc.

	
  

	
n

	
TMA Enterprises of Ferndale, LLC

	
  

	
n

	
AMC Warren, LLC

	
  

	
n

	
AMC Grand Blanc, Inc.

	
  

	
n

	
AMC Petoskey, Inc.

	
  

	
n

	
AMC Troy, Inc.

	
  

	
n

	
AMC Flint, Inc.

	
  

	
n

	
AMC Port Huron, Inc.

	
  

	
n

	
AMC Chesterfield, Inc.

	
  

	
n

	
AMC Marquette, Inc.

	
  

	
n

	
MCA Enterprises Brandon, Inc.

	
  

	
n

	
Buckeye Group, LLC

	
  

	
n

	
Buckeye Group II, LLC

	
  

	
n

	
AMC North Port, Inc.

	
  

	
n

	
AMC Riverview, Inc.

	
  

	
n

	
AMC Ft. Myers, Inc.

	
  

	
n

	
AMC Lakeland, Inc.

	
  

	
n

	
AMC Traverse City, Inc.

	
  

	
n

	
Brighton Burgers, Inc.

 

  

  

  

EXHIBIT B-3

 

FORM OF LOC NOTE

 

	$1,000,000.00	__________________, 2011

 

FOR VALUE RECEIVED, the borrowing entities identified on Exhibit A attached hereto (jointly and severally, the “Borrower”), promise to pay to the order of RBS Citizens, N.A., a national banking association (the “Lender”), the principal sum of One Million and no/100 Dollars ($1,000,000.00) or such lesser amount that is the aggregate unpaid principal amount of the LOC Loan made by Lender to Borrower pursuant to Article 1 of the Credit Agreement (as hereinafter defined), in immediately available funds at the office of Lender, 28 State Street, Boston, MA  02109, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Credit Agreement.

 

Lender is hereby authorized to record based on a loan payment schedule to be provided to Borrower, or to otherwise record in accordance with its usual practice (including, without limitation in Lender’s electronic data processing system), the date and amount of each advance and the date and amount of each interest and principal payment hereunder.

 

This LOC Note is issued pursuant to, and is entitled to the benefits of, the First Amended and Restated Development Line of Credit Agreement dated of even date herewith (which, as it may be amended or modified and in effect from time to time, is herein called the “Credit Agreement”), between Borrower and Lender, to which Credit Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this LOC Note may be prepaid or its maturity date accelerated.  Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Credit Agreement.

 

FLYER ENTERPRISES, INC.

ANKER, INC.

TMA ENTERPRISES OF NOVI, INC.

AMC GRAND BLANC, INC.

AMC PETOSKEY, INC.

AMC TROY, INC.

AMC FLINT, INC.

AMC PORT HURON, INC.

AMC CHESTERFIELD, INC.

AMC MARQUETTE, INC.

MCA ENTERPRISES BRANDON, INC.

AMC NORTH PORT, INC.

AMC RIVERVIEW, INC.

BERKLEY BURGERS, INC.

TROY BURGERS, INC.

ANN ARBOR BURGERS, INC.

AMC TRAVERSE CITY, INC.

BRIGHTON BURGERS, INC.

each, a Michigan corporation

 

AMC FT. MYERS, INC.

AMC LAKELAND, INC.

each, a Florida corporation

 

  

  

  

TMA ENTERPRISES OF FERNDALE, LLC

AMC WARREN, LLC

BUCKEYE GROUP, LLC

BUCKEYE GROUP II, LLC

each, a Michigan limited liability company

By:             /s/ David G. Burke                                                          

Name:        David G. Burke

Title:          Chief Financial Officer

 

STATE OF Michigan

COUNTY OF Oakland

Acknowledged by David G. Burke, the Chief Financial Officer of Berkley Burgers, Inc., Ann Arbor Burgers, Inc., Troy Burgers, Inc., Flyer Enterprises, Inc., Anker, Inc., TMA Enterprises of Novi, Inc., AMC Grand Blanc, Inc., AMC Petoskey, Inc., AMC Troy, Inc., AMC Flint, Inc., AMC Port Huron, Inc., AMC Chesterfield, Inc., AMC Marquette, Inc., MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC Riverview, Inc., AMC Ft. Myers, Inc., AMC Lakeland, Inc., AMC Traverse City, Inc., Brighton Burgers, Inc., TMA Enterprises of Ferndale, LLC, AMC Warren, LLC, Buckeye Group, LLC and Buckeye Group II, LLC, before me on the 27th day of May, 2011.

       Signature  /s/ Kathleen Marie Howe                                                                                     

       Printed name  Kathleen Marie Howe                                                                                     

       Notary public, State of Michigan, County of Wayne

       My commission expires 5/22/2017

       Acting in the County of Oakland

 

  

  

  

Exhibit A to LOC Note

	
  

	
n

	
Berkley Burgers, Inc.

	
  

	
n

	
Ann Arbor Burgers, Inc.

	
  

	
n

	
Troy Burgers, Inc.

	
  

	
n

	
Flyer Enterprises, Inc.

	
  

	
n

	
Anker, Inc.

	
  

	
n

	
TMA Enterprises of Novi, Inc.

	
  

	
n

	
TMA Enterprises of Ferndale, LLC

	
  

	
n

	
AMC Warren, LLC

	
  

	
n

	
AMC Grand Blanc, Inc.

	
  

	
n

	
AMC Petoskey, Inc.

	
  

	
n

	
AMC Troy, Inc.

	
  

	
n

	
AMC Flint, Inc.

	
  

	
n

	
AMC Port Huron, Inc.

	
  

	
n

	
AMC Chesterfield, Inc.

	
  

	
n

	
AMC Marquette, Inc.

	
  

	
n

	
MCA Enterprises Brandon, Inc.

	
  

	
n

	
Buckeye Group, LLC

	
  

	
n

	
Buckeye Group II, LLC

	
  

	
n

	
AMC North Port, Inc.

	
  

	
n

	
AMC Riverview, Inc.

	
  

	
n

	
AMC Ft. Myers, Inc.

	
  

	
n

	
AMC Lakeland, Inc.

	
  

	
n

	
AMC Traverse City, Inc.

	
  

	
n

	
Brighton Burgers, Inc.

  

  

  

EXHIBIT C

 

FORM OF REQUEST FOR ADVANCE AND COMPLIANCE CERTIFICATE

REQUEST FOR ADVANCE AND COMPLIANCE CERTIFICATE

 

RBS Citizens, N.A.

28 State Street

Boston, MA  02109

	
Re:

	
Request for an Advance in connection with that certain DLOC Loan, 2nd DLOC Loan and LOC Loan pursuant to the First Amended and Restated Development Line of Credit Agreement dated _____________________, 2011 (the “Agreement”), between the borrowing entities identified on Exhibit A attached hereto (jointly and severally, the “Borrower”) and RBS Citizens, N.A., a national banking association (“Lender”), as the same may be amended or restated from time to time

 

	
1.

	
Borrower hereby requests a DLOC Advance, 2nd DLOC Advance or LOC Advance [circle one] under the Agreement in the amount of ______________________ and ___/100 Dollars ($_________________), and requests that the disbursement of funds be deposited into Borrower’s account #____________________ in accordance with the Draw Authorization and Distribution on file with Lender.  Borrower acknowledges that it may request only five (5) draws per calendar month with respect to the DLOC Loan and the 2nd DLOC Loan and there is no minimum amount required to be requested.

	
2.

	
Borrower acknowledges that the Advance by Lender is subject to satisfaction of all conditions to the disbursement of funds and availability of Advances in the Agreement.

	
3.

	
Borrower hereby represents, warrants and certifies to Lender as follows:

(a)            All representations and warranties of Borrower in the Loan Documents are true and correct in all material respects as of the date hereof and will be true and correct in all material respects as of the making of the requested Advance.

(b)            Borrower is in compliance in all material respects with all of its obligations, duties and covenants under the Loan Documents, including but not limited to the Financial Covenants set forth in Section 7 of the Agreement.

(c)            No event has occurred which, with the passage of time and/or the giving of notice, would constitute an Event of Default under the Loan Documents.

(d)            All conditions to the disbursement of funds requested herein, as set forth in Section 2 of the Agreement, have been fulfilled.

(e)            Since the Closing Date, no event has occurred that has had or could reasonably be expected to have a Material Adverse Effect on Borrower, the Business, Guarantor or the Property.

(f)            Disbursement of the funds requested herein will not result in a violation of any of Borrower’s financial covenants in any of the Loan Documents.

  

  

  

	
4.

	
Borrower certifies that the statements made herein are, and the information in any documents submitted herewith is, true and has duly caused this Request for Advance and Compliance Certificate to be signed on its behalf by an authorized officer.

	
5.

	
Capitalized terms used herein and not otherwise defined shall have the meaning given to such term in the Agreement.

Date:______________________                                                                                           ________________________,

       a ________________

       By:_______________________________

       Name:_____________________________

       Title:_______________________________

  

  

  

EXHIBIT A TO

REQUEST FOR ADVANCE AND COMPLIANCE CERTIFICATE

	
  

	
n

	
Berkley Burgers, Inc.

	
  

	
n

	
Ann Arbor Burgers, Inc.

	
  

	
n

	
Troy Burgers, Inc.

	
  

	
n

	
Flyer Enterprises, Inc.

	
  

	
n

	
Anker, Inc.

	
  

	
n

	
TMA Enterprises of Novi, Inc.

	
  

	
n

	
TMA Enterprises of Ferndale, LLC

	
  

	
n

	
AMC Warren, LLC

	
  

	
n

	
AMC Grand Blanc, Inc.

	
  

	
n

	
AMC Petoskey, Inc.

	
  

	
n

	
AMC Troy, Inc.

	
  

	
n

	
AMC Flint, Inc.

	
  

	
n

	
AMC Port Huron, Inc.

	
  

	
n

	
AMC Chesterfield, Inc.

	
  

	
n

	
AMC Marquette, Inc.

	
  

	
n

	
MCA Enterprises Brandon, Inc.

	
  

	
n

	
Buckeye Group, LLC

	
  

	
n

	
Buckeye Group II, LLC

	
  

	
n

	
AMC North Port, Inc.

	
  

	
n

	
AMC Riverview, Inc.

	
  

	
n

	
AMC Ft. Myers, Inc.

	
  

	
n

	
AMC Lakeland, Inc.

	
  

	
n

	
AMC Traverse City, Inc.

	
  

	
n

	
Brighton Burgers, Inc.

  

  

  

EXHIBIT D

FORM OF

COMPLIANCE CERTIFICATE

This certificate is given by ________________, the ______________of _____________ (“Borrower”) pursuant to Section 2(d) of the First Amended and Restated Development Line of Credit Agreement dated _______________________, 2011, by and between Borrower and RBS Citizens, N.A. (as may be amended or restated from time to time, the “Credit Agreement”).  Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

The undersigned hereby certifies to Lender as follows:

	
  

	
(a)

	
All representations and warranties of Borrower in the Loan Documents are true and correct in all material respects as of the date hereof.

	
  

	
(b)

	
Borrower is in compliance in all material respects with all of its obligations, duties and covenants under the Loan Documents.

	
  

	
(c)

	
No event has occurred which, with the passage of time and/or the giving of notice, would constitute an Event of Default under the Loan Documents.

	
  

	
(d)

	
Since the Closing Date, no event has occurred that has had or could reasonably be expected to have a Material Adverse Effect on Borrower, the Business, Guarantor or the Property.

	
  

	
(e)

	
Borrower is in compliance with the covenants contained in Section 7 of the Credit Agreement as demonstrated by the calculation of such covenants below. In calculating the covenants below, the Debt Service Coverage Ratio and the Lease Adjusted Leverage Ratio will be modified so that calculation of such ratios will not include results from Businesses open for a period of less than twelve (12) months.  In addition all figures for Businesses in their second (2nd) year of operation will be adjusted so that such figures are tested on annualized basis rather than a trailing twelve (12) month basis.

DEFINITIONS

Debt Service Covenant:

Borrower shall cause to be maintained as of the end of each fiscal quarter a Debt Service Coverage Ratio for the trailing twelve (12) month period of greater than or equal to 1.20 to 1.0.

Lease Adjusted Leverage Ratio Covenant (quarterly basis):

Borrower shall not cause the Lease Adjusted Leverage Ratio of Borrower on a consolidated basis to be greater than the Applicable Ratio, said ratio to be tested on a quarterly basis for the trailing twelve (12) month period.  “Applicable Ratio” shall mean 5.75:1.00 for calculations made on or before December 31, 2010; 5.25:1.00 for calculations made on or before December 31, 2011; and 5.00:1.00 for calculations made thereafter.

 

  

  

  

CALCULATIONS

 

Debt Service Coverage Ratio

 

	(1)  EBITDA (on a consolidated basis, net of extraordinary gains and losses, calculated on a trailing twelve (12) month period)  	 
	 	 
	(2)  distributions and maintenance capital expenditures ($10,000 per store per year open more than 12 months)  	 
	 	 
	(A)  Subtotal (1) minus (2)	 
	 	 
	(3) interest expense	 
	 	 
	(4) CMLTD paid (including payments relating to Seller Notes)	 
	 	 
	(B) Subtotal (3) plus (4)	 
	 	 
	Debt Service Coverage Ratio:  (A) divided by (B)	 

                                                                                                         

Maximum Lease Adjusted Leverage Ratio

 

	(1) Total Funded Debt (including pro rata advances under the Loan, Inter-Affiliate Loans and Real Estate debt)	 
	 	 
	(2) third party rent expense for the twelve (12) month period ending on such date multiplied by eight (8) 	 
	 	 
	(A) Subtotal (1) plus (2)	 
	 	 
	(B) EBITDAR = EBITDA + rent expense for the twelve (12) month period ending on such date  	 
	 	 
	Maximum Lease Adjusted Leverage Ratio:  (A) divided by (B)	 

Date:______________________                                                                                           ________________________,

       a ________________

       By:_______________________________

       Name:_____________________________

       Title:_______________________________

  

  

  

Schedule 1

 

FRANCHISE AGREEMENTS

 

	
Franchisee

	
Location

	
Effective Date

	
Initial

Term

	
Renewal Terms

	
Buckeye Group II, LLC

	
4067 Clark Road

Sarasota, FL 34238

	
July 8, 2005

	
20

	
10, 5

	
AMC Troy, Inc.

	
1873 East Big Beaver Road

Troy, MI 48083

	
Nov. 5, 2007

	
20

	
10, 5

	
TMA Enterprises of Novi, Inc.

	
44375 12 Mile Road

Novi, MI 48375

	
Oct. 23, 2001

	
10

	
10

	
TMA Enterprises of Ferndale, LLC

	
280 West Nine Mile Road

Ferndale, MI 48220

	
Sept. 29, 2004

	
15

	
10, 5

	
AMC Grand Blanc, Inc.

	
5251 Trillium Circle Avenue #102

Grand Blanc, MI 48439

	
March 26, 2007

	
20

	
10, 5

	
AMC Warren, LLC

	
29287 Mound Road

Warren, MI 48092

	
Feb. 13, 2006

	
20

	
10, 5

	
AMC Port Huron, Inc.

	
4355 24th Avenue, Suite 1

Port Huron, MI 48059

	
July 7, 2008

	
20

	
10, 5

	
AMC Petoskey, Inc.

	
2180 Anderson Road, Suite 110

Petoskey, MI 49770

	
June 11, 2007

	
20

	
10, 5

	
Flyer Enterprises, Inc.

	44671 Mount Road 

Sterling Heights, MI 48314

	Jan. 29, 2009	5	5
	
MCA Enterprises Brandon, Inc.

	
2055 Badlands Drive

Brandon, FL 33511

	
July 18, 2003

	
20

	
10, 5

	
Anker, Inc.

	
3190 West Silver Lake Road

Fenton, MI 48430

	
Oct. 10, 2000

	
10

	
10

	
AMC Riverview, Inc.

	
10607 Big Bend Road

Riverview, FL 33579

	
Sept. 28, 2006

	
20

	
10, 5

	
AMC North Port, Inc.

	
4301 Aiden Lane

North Port, FL 34287

	
Sept. 28, 2006

	
20

	
10, 5

	
AMC Flint, Inc.

	
G-3192 South Linden Road

Flint, MI 48507

	
July 7, 2008

	
20

	
10, 5

	
AMC Chesterfield, Inc.

	
51364 Gratiot Avenue

Chesterfield Township, MI 48051

	
Oct. 20, 2009

	
20

	
10, 5

	
AMC Marquette, Inc.

	
2492 US Highway 41 West

Marquette, MI 49855

	
Oct. 20, 2009

	
20

	
10, 5

	
Buckeye Group, LLC

	
13416 Boyette Road

Lithia, FL

	
Oct. 18, 2004

	
15

	
10, 5

	
Berkley Burgers, Inc.

	
2972 Coolidge Highway

Berkley, MI 48072

 

	
N/A

	  	  
	
Ann Arbor Burgers, Inc.

	
859 W. Eisenhower Parkway

Ann Arbor, MI 48103

 

	
N/A

	  	  

 

  

  

  

	
 

Franchisee

	
 

Location

	
 

Effective Date

	
Initial

Term

	
Renewal

Terms

	
Troy Burgers, Inc.

	
26062 Novi Road

Novi, MI  48375

 

	
N/A

	  	  
	
AMC Ft. Myers, Inc.

	
9390 Dynasty Dr., #101

Ft. Myers, FL 33905

	  	  	  
	
AMC Lakeland, Inc.

	
3750 US Highway 98

Lakeland, FL  33810

	  	  	  
	
AMC Traverse City, Inc.

	
3480 South Airport Road West

Garfield Township, MI  49684

	  	  	  
	
Brighton Burgers, Inc.

	
110 East Grand River

Brighton, MI  48116

	
N/A

	  	  

 

  

  

  

Schedule 1(d)(ii)

ADDITIONAL TERMS AFFECTING LIBOR RATE LOAN

1.           Voluntary Prepayment of the LIBOR Rate Loan.  When classified as a LIBOR Rate Loan, the Loan may be prepaid upon the terms and conditions set forth herein.  Borrower acknowledges that additional obligations may be associated with any such prepayment under the terms and conditions of any applicable Hedging Contracts.  Borrower shall give Lender, no later than 10:00 a.m., New York City time, at least four (4) Business Days notice of any proposed prepayment of the LIBOR Rate Loan, specifying the proposed date of payment and the principal amount to be paid.  Each partial prepayment of the principal amount of the LIBOR Rate Loan shall be in an integral multiple of $10,000 and accompanied by the payment of all charges outstanding on the LIBOR Rate Loan (including the LIBOR Breakage Fee) and of all accrued interest on the principal repaid to the date of payment.

2.           LIBOR Breakage Fee.  Upon any prepayment of a LIBOR Rate Loan on any day that is not the last day of the relevant Interest Period (regardless of the source of such prepayment and whether voluntary, by acceleration or otherwise), Borrower shall pay an amount (“LIBOR Breakage Fee”), as calculated by Lender, equal to the amount of any losses, expenses and liabilities (including without limitation any loss of margin and anticipated profits) that Lender may sustain as a result of such default or payment.  Borrower understands, agrees and acknowledges that:  (i) Lender does not have any obligation to purchase, sell and/or match funds in connection with the use of the LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate Loan, (ii) the LIBOR Rate may be used merely as a reference in determining such rate, and (iii) Borrower has accepted the LIBOR Rate as a reasonable and fair basis for calculating the LIBOR Breakage Fee and other funding losses incurred by Lender.  Borrower further agrees to pay the LIBOR Breakage Fee and other funding losses, if any, whether or not Lender elects to purchase, sell and/or match funds.

3.           LIBOR Rate Lending Unlawful.  If Lender shall determine (which determination shall, upon notice thereof to Borrower be conclusive and binding on Borrower) that the introduction of or any change in or in the interpretation of any law, rule, regulation or guideline, (whether or not having the force of law) makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for Lender to make, continue or maintain the Loan as, or to convert the Loan into, a LIBOR Rate Loan, then any such LIBOR Rate Loan shall, upon such determination, forthwith be suspended until Lender shall notify Borrower that the circumstances causing such suspension no longer exist, and all LIBOR Rate Loans of such type shall automatically convert into Prime Rate Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law and assertion.

4.           Increased Costs.  If, on or after the date hereof, the adoption of any applicable law, rule or regulation or guideline (whether or not having the force of law), or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

 

(a)   shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System of the United States) against assets of, deposits with or for the account of, or credit extended by, Lender or shall impose on Lender or on the London interbank market any other condition affecting the LIBOR Rate Loan or its obligation to make the LIBOR Rate Loan; or

 

  

  

  

(b)   shall impose on Lender any other condition affecting the LIBOR Rate Loan or its obligation to make the LIBOR Rate Loan,

 

and the result of any of the foregoing is to increase the cost to Lender of making or maintaining the Loan as a LIBOR Rate Loan, or to reduce the amount of any sum received or receivable by Lender under this Agreement with respect thereto, by an amount deemed by Lender to be material, then, within fifteen (15) days after demand by Lender, Borrower shall pay to Lender such additional amount or amounts as will compensate Lender for such increased cost or reduction.

 

5.           Increased Capital Costs.  If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects or would affect the amount of capital required or expected to be maintained by Lender, or person controlling Lender, and Lender determines (in its sole and absolute discretion) that the rate of return on its or such controlling person’s capital as a consequence of its commitments or the Loan made by Lender is reduced to a level below that which Lender or such controlling person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by Lender to Borrower, Borrower shall immediately pay directly to Lender additional amounts sufficient to compensate Lender or such controlling person for such reduction in rate of return.  A statement of Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on Borrower.  In determining such amount, Lender may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable.

 

6.           Taxes.  All payments by Borrower of principal of, and interest on, the LIBOR Rate Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by Lender’s net income or receipts (such non-excluded items being called “Taxes”).  In the event that any withholding or deduction from any payment to be made by Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then Borrower will

 

      (a)   pay directly to the relevant authority the full amount required to be so withheld or deducted;

 

      (b)   promptly forward to Lender an official receipt or other documentation satisfactory to Lender evidencing such payment to such authority; and

 

      (c)   pay to Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by Lender will equal the full amount Lender would have received had no such withholding or deduction been required.

 

  

  

  

Moreover, if any Taxes are directly asserted against Lender with respect to any payment received by Lender hereunder, Lender may pay such Taxes and Borrower will promptly pay such additional amount (including any penalties, interest or expenses) as is necessary in order that the net amount received by Lender after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount Lender would have received had not such Taxes been asserted.

 

If Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to Lender the required receipts or other required documentary evidence, Borrower shall indemnify Lender for any incremental Taxes, interest or penalties that may become payable by Lender as a result of any such failure.

 

7.           Unavailability of LIBOR Rate.  In the event that Borrower shall have requested a LIBOR Rate Loan and Lender, in its sole discretion, shall have determined that U.S. dollar deposits in the relevant amount and for the relevant LIBOR Interest Period are not available to Lender in the London interbank market; or by reason of circumstances affecting Lender in the London interbank market, adequate and reasonable means do not exist for ascertaining the LIBOR Rate applicable to the relevant LIBOR Interest Period; or the LIBOR Rate no longer adequately and fairly reflects Lender’s cost of funding loans, upon notice from Lender to Borrower the obligations of Lender under this Agreement to make or continue any loans as, or to convert any loans into, LIBOR Rate Loans of such duration shall forthwith be suspended until Lender shall notify Borrower that the circumstances causing such suspension no longer exist.

 

  

  

  

Schedule 2

 

LEASE AGREEMENTS

 

	
Tenant

	
Location

	
Landlord

	
Approx. Expire Date

(without exercise of

options)

	
Berkley Burgers, Inc.

	
2972 Coolidge Highway

Berkley, MI 48072

 

	
TM Apple Co., LLC

	
January/February 2023

	
Ann Arbor Burgers, Inc.

	
859 W. Eisenhower Parkway

Ann Arbor, MI 48103

 

	
8600 Associates Limited Partnership

 

	
April/May 2018

	
Troy Burgers, Inc.

	
26062 Novi Road

Novi, MI  48375

 

	
Novi Town Center Investors, LLC

	
April/May 2020

	
Flyer Enterprises, Inc.

	
44671 Mound Rd.

Sterling Heights, MI 48314

 

	
AIG Baker Sterling Heights, LLC

 

	
December 2009

	
Anker, Inc

	
3190 Silver Lake Rd.

Fenton, MI 48430

 

	
Terra Management Company

 

	
March 2011

	
TMA Enterprises of Novi, Inc

	
44375 Twelve Mile Rd.

Novi, MI 48377

 

	
PLC Novi West Development, LLC

 

	
April 2014

	
TMA Enterprises of Ferndale, LLC

 

	
280 W. Nine Mile Rd.

Ferndale, MI 48220

	
Basco Enterprises, Inc.

	
December 2014

	
AMC Warren, LLC

	
29287 Mound Rd.

Warren, MI 48092

 

	
Grand/Sakwa Warren Commercial Parcel D LLC

 

	
April/May 2016

	
AMC Grand Blanc, Inc.

	
8251 Trillium Circle Ave.

Suite 102

Grand Blanc, MI 48439

 

	
Trillim Circle, LLC

	
January/February 2018

	
AMC Petoskey, Inc.

	
2180 Anderson Rd.

Ste. 110

Petoskey, MI 49770

 

	
Petoskey Investment Group, LLC

	
August/September 2018

	
AMC Troy, Inc.

	
1873 E. Big Beaver Rd.

Troy, MI 48083

 

	
Troy Sports Center LLC

	
March, 2018

	
AMC Flint, Inc.

	
G-3192 South Linden Road

Flint, MI 48507

 

	
Ramco-Gershenson Properties, L.P.

 

	
January/February 2019

	
AMC Port Huron, Inc.

	
4355 24th Avenue

Ste. 1

Port Huron, MI 48059

 

	
Walter Sparling and Mary L. Sparling

	
August/September 2018

 

  

  

  

	
 

Tenant

	
 

Location

	
 

Landlord

	
Approx. Expire Date

(without exercise of

options)

	
AMC Chesterfield, Inc.

	
51364 Gratiot Avenue

Chesterfield, MI  48501

	
Chesterfield Development Company, LLC

	
____ 2020

	
AMC Marquette, Inc

	
2492 U.S. Highway 41 West

Marquette, MI

 

	
Centrup Hospitality, LLC

	
_____ 2025

	
MCA Enterprises Brandon, Inc.

	
2055 Badlands Drive

Brandon, FL 33511

 

	
Florida Wings Group, LLC

	
August/September 2024

	
Buckeye Group, LLC

	
13416 Boyette Rd.

Riverview, FL 33569

 

	
River Springs, LLC

	
February, 2017

	
Buckeye Group II, LLC

	
4067 Clark Rd

Sarasota, FL 34238

 

	
Bullseye Properties, Inc.

	
June/July 2015

	
AMC North Port, Inc.

	
4301 Aidan Lane

North Port, FL 34287

 

	
North Port Gateway, LLC

	
June/July/August 2016

	
AMC Riverview, Inc

	
10607 Big Bend Rd.

Riverview, FL 33579

 

	
Shoppes of Southbay, LLC

	
August/September/October 2016

	
AMC Ft. Myers, Inc.

	
9390 Dynasty Dr., #101

Ft. Myers, FL 33905

 

	  	  
	
AMC Lakeland, Inc.

	
3750 US Highway 98

Lakeland, FL  33810

 

	  	  
	
AMC Traverse City, Inc.

	
3480 South Airport Road West

Garfield Township, MI  49684

 

	  	  
	
Brighton Burgers, Inc.

	
110 East Grand River

Brighton, MI  48116

 

	  	  

 

  

  

  

Schedule 4

 

PROPERTIES

 

	
Berkley Burgers, Inc.

	
2972 Coolidge Highway

	  	
Berkley, MI 48072

 

	
Ann Arbor Burgers, Inc.

	
859 W. Eisenhower Parkway

	  	
Ann Arbor, MI 48103

 

	
Troy Burgers, Inc.

	
26062 Novi Road

	
 

	
Novi, MI  48375

 

	
Flyer Enterprises, Inc.  #3065

	
44671 Mound Rd.

	  	
Sterling Heights, MI 48314

 

	
Anker, Inc.  #3101

	
3190 Silver Lake Rd.

	  	
Fenton, MI 48430

 

	
TMA Enterprises of Novi, Inc.  #3130

	
44375 Twelve Mile Rd.

	  	
Novi, MI 48377

 

	
TMA Enterprises of Ferndale, LLC  #3239

	
280 W. Nine Mile Rd.

	  	
Ferndale, MI 48220

 

	
AMC Warren, LLC  #3312

	
29287 Mound Rd.

	  	
Warren, MI 48092

 

	
AMC Grand Blanc, Inc.  #3383

	
8251 Trillium Circle Ave.

	  	
Suite 102

	  	
Grand Blanc, MI 48439

 

	
AMC Petoskey, Inc.  #3360

	
2180 Anderson Rd., Ste. 110

	  	
Petoskey, MI 49770

 

	
AMC Troy, Inc.  #3407

	
1873 E. Big Beaver Rd.

	  	
Troy, MI 48083

 

	
AMC Flint, Inc. #3441

	
G-3192 South Linden Road

	  	
Flint, MI 48507

 

	
AMC Port Huron, Inc. #3442

	
4355 24th Avenue, Ste. 1

	  	
Port Huron, MI 48059

 

	
AMC Chesterfield, Inc. # 3505

	
51364 Gratiot Avenue

	  	
Chesterfield, MI  48501

 

	
AMC Marquette, Inc. # 3508

	
2492 U.S. Highway 41 West

	  	
Marquette, MI

 

 

  

  

  

 

	
MCA Enterprises Brandon, Inc.  #3189

	
2055 Badlands Drive

	  	
Brandon, FL 33511

 

	
Buckeye Group, LLC  #3254

	
13416 Boyette Rd.

	  	
Riverview, FL 33569

 

	
Buckeye Group II, LLC  #3269

	
4067 Clark Rd.

	  	
Sarasota, FL 34238

 

	
AMC North Port, Inc. #3341

	
4301 Aidan Lane

	  	
North Port, FL 34287

 

	
AMC Riverview, Inc.  #3345

	
10607 Big Bend Rd.

	  	
Riverview, FL 33579

 

	
AMC Ft. Myers, Inc. #3543

	
9390 Dynasty Dr., #101

	  	
Ft. Myers, FL 33905

 

	
AMC Lakeland, Inc. #3559

	
3750 US Highway 98

	  	
Lakeland, FL 33810

 

	
AMC Traverse City, Inc. #3556

	
3480 South Airport Road West

	  	
Garfield Township, MI 49684

 

	
Brighton Burgers, Inc.

	
110 East Grand River

	  	
Brighton, MI 48116

 

	  	  

  

  

  

SCHEDULE 4(d)

 

LITIGATION

 

 

Flyer Enterprises, Inc.

Lipson, Neilson, Cole, Seltzer & Garin, P.C. v. Flyer Enterprises, Inc., et. al.

Jurisdiction – Oakland County, MI – The 48th Judicial District Court

Case No. – 20-31570-GC-3

 

Insured Claims

AMC Port Huron, Inc.

 Robert Bailey, III and Ray Cole v. AMC Port Huron, Inc., et. al.

Jurisdiction -  St. Clair County, MI

Case No. – K-10000638

AMC North Port, Inc.

Joseph Brady Tarantino v. AMC North Port, Inc., et. al.

Jurisdiction – Sarasota County, FL

Case No. – 2008-CA-9189-NC

AMC Warren, LLC

James Hanserd, Jr. v. AMC Warren, LLC

Jurisdiction – Macomb County, MI

Case No. – 2010-410-NO

 

  

  

  

SCHEDULE 4(h)

 

PERMITTED LIENS

 

 

1) AMC Group, Inc.  (a Guarantor)

UCC lien in favor of US Bancorp

Filed with the Michigan Department of State on January 27, 2009, file no. 2009013260-5

 

2) AMC Group, Inc.  (a Guarantor)

UCC lien in favor of US Bancorp

Filed with the Michigan Department of State on May 26, 2009, file no. 2009078129-4

3) AMC Wings, Inc.  (a Guarantor)

Promissory Note dated February 1, 2010, in favor of T. Michael Ansley ($1,331,716.00)

Promissory Note dated February 1, 2010, in favor of Jason T. Curtis ($206,828.00)

Promissory Note dated February 1, 2010, in favor of Mark C. Ansley ($24,506.00)

Promissory Note dated February 1, 2010, in favor of Michael R. Lichocki ($54,923.00)

Promissory Note dated February 1, 2010, in favor of Steven A. Menker ($768,944.00)

Promissory Note dated February 1, 2010, in favor of Thomas D. Ansley ($747,674.00)

  

  

  

Schedule 4(i)

 

SUBSIDIARIES AND PARTNERSHIPS

 

 

  

  

  

Schedule 4(p)

 

LEASE AGREEMENTS AND FRANCHISE AGREEMENTS

WITH TERM LESS THAN LOAN TERM

 

Lease Agreements

AMC Warren, LLC

Buckeye Group, LLC

TMA Enterprises of Ferndale, LLC

TMA Enterprises of Novi, Inc.

Flyer Enterprises, Inc.

Anker, Inc.

AMC Riverview, Inc.

AMC North Port, Inc.

 

Franchise Agreements

TMA Enterprises of Novi, Inc.

Flyer Enterprises, Inc.

Anker, Inc.

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