Document:

Exhibit 4.1

 

 

 

INDENTURE

 

 

Dated as of
                                ,
2006,

 

 

by and between

 

 

WINMARK CORPORATION, as obligor

 

 

and

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

a national banking association, as trustee

 

 

$50,000,000

 

 

Renewable Unsecured Subordinated Notes

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
  1

  
	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Other
  Definitions

  	
  6

  
	
  Section 1.3

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
  6

  
	
  Section 1.4

  	
  Rules of
  Construction

  	
  6

  
	
  ARTICLE II THE SECURITIES

  	
  7

  
	
  Section 2.1

  	
  Security
  Terms; Amount; Accounts; Interest; Maturity

  	
  7

  
	
  Section 2.2

  	
  Written
  Confirmation; Rejection; Rescission

  	
  10

  
	
  Section 2.3

  	
  Registrar
  and Paying Agent

  	
  11

  
	
  Section 2.4

  	
  Paying Agent
  to Hold Money in Trust

  	
  12

  
	
  Section 2.5

  	
  List of
  Holders

  	
  12

  
	
  Section 2.6

  	
  Transfer and
  Exchange

  	
  12

  
	
  Section 2.7

  	
  Payment of
  Principal and Interest; Principal and Interest Rights Preserved

  	
  13

  
	
  Section 2.8

  	
  Outstanding
  Securities

  	
  14

  
	
  Section 2.9

  	
  Treasury
  Securities

  	
  14

  
	
  Section 2.10

  	
  Defaulted
  Interest

  	
  14

  
	
  Section 2.11

  	
  Temporary
  Notes

  	
  15

  
	
  Section 2.12

  	
  Execution,
  Authentication And Delivery

  	
  15

  
	
  Section 2.13

  	
  Book-Entry
  Registration

  	
  16

  
	
  Section 2.14

  	
  Initial and
  Periodic Statements

  	
  17

  
	
  Section 2.15

  	
  Appointment
  of Agents

  	
  17

  
	
  ARTICLE III REDEMPTION AND REPURCHASE

  	
  17

  
	
  Section 3.1

  	
  Redemption
  of Securities at the Company’s Election

  	
  17

  
	
  Section 3.2

  	
  Repurchase
  of Securities at the Holder’s Request

  	
  18

  
	
  ARTICLE IV COVENANTS

  	
  20

  
	
  Section 4.1

  	
  Payment of
  Securities

  	
  20

  
	
  Section 4.2

  	
  Maintenance
  of Office or Agency

  	
  20

  
	
  Section 4.3

  	
  SEC Reports
  and Other Reports

  	
  21

  
	
  Section 4.4

  	
  Compliance
  Certificate

  	
  21

  
	
  Section 4.5

  	
  Stay,
  Extension and Usury Laws

  	
  22

  
	
  Section 4.6

  	
  Liquidation

  	
  22

  
	
  Section 4.7

  	
  Financial
  Covenants

  	
  23

  
	
  Section 4.8

  	
  Restrictions
  on Dividends and Certain Transactions with Affiliates

  	
  23

  
	
  Section 4.9

  	
  Securitization
  Transactions and Additional Indebtedness

  	
  23

  
	
  ARTICLE V SUCCESSORS

  	
  23

  
	
  Section 5.1

  	
  When the
  Company May Merge, etc.

  	
  23

  
	
  Section 5.2

  	
  Successor
  Entity Substituted

  	
  24

  
	
  ARTICLE VI DEFAULTS AND REMEDIES

  	
  24

  
	
  Section 6.1

  	
  Events of
  Default

  	
  24

  
	
  Section 6.2

  	
  Acceleration

  	
  25

  
	
  Section 6.3

  	
  Other
  Remedies

  	
  25

  
	
  Section 6.4

  	
  Waiver of
  Past Defaults

  	
  26

  
	
  Section 6.5

  	
  Control by
  Majority

  	
  26

  
	
  Section 6.6

  	
  Limitation
  on Suits

  	
  26

  
	
  Section 6.7

  	
  Rights of
  Holders to Receive Payment

  	
  27

  
	
  Section 6.8

  	
  Collection
  Suit by Trustee

  	
  27

  

 

 

	
  Section 6.9

  	
  Trustee May File
  Proofs of Claim

  	
  27

  
	
  Section 6.10

  	
  Priorities

  	
  28

  
	
  Section 6.11

  	
  Undertaking
  for Costs

  	
  28

  
	
  ARTICLE VII TRUSTEE

  	
  28

  
	
  Section 7.1

  	
  Duties of
  Trustee

  	
  28

  
	
  Section 7.2

  	
  Rights of Trustee

  	
  30

  
	
  Section 7.3

  	
  Individual
  Rights of Trustee

  	
  30

  
	
  Section 7.4

  	
  Trustee’s
  Disclaimer

  	
  31

  
	
  Section 7.5

  	
  Notice of
  Defaults

  	
  31

  
	
  Section 7.6

  	
  Reports by
  Trustee to Holders

  	
  31

  
	
  Section 7.7

  	
  Compensation
  and Indemnity

  	
  31

  
	
  Section 7.8

  	
  Replacement
  of Trustee

  	
  32

  
	
  Section 7.9

  	
  Successor
  Trustee by Merger, etc.

  	
  33

  
	
  Section 7.10

  	
  Eligibility;
  Disqualification

  	
  34

  
	
  Section 7.11

  	
  Preferential
  Collection of Claims Against Company

  	
  34

  
	
  ARTICLE VIII DISCHARGE OF INDENTURE

  	
  34

  
	
  Section 8.1

  	
  Termination
  of Company’s Obligations

  	
  34

  
	
  Section 8.2

  	
  Application
  of Trust Money

  	
  35

  
	
  Section 8.3

  	
  Repayment to
  Company

  	
  35

  
	
  Section 8.4

  	
  Reinstatement

  	
  35

  
	
  ARTICLE IX AMENDMENTS

  	
  36

  
	
  Section 9.1

  	
  Without
  Consent of Holders

  	
  36

  
	
  Section 9.2

  	
  With Consent
  of Holders

  	
  36

  
	
  Section 9.3

  	
  Compliance
  with Trust Indenture Act

  	
  37

  
	
  Section 9.4

  	
  Effect of
  Consents

  	
  38

  
	
  Section 9.5

  	
  Notation on
  or Exchange of Securities

  	
  38

  
	
  Section 9.6

  	
  Trustee to
  Sign Amendments, etc.

  	
  38

  
	
  ARTICLE X SUBORDINATION

  	
  38

  
	
  Section 10.1

  	
  Agreement to
  Subordinate

  	
  38

  
	
  Section 10.2

  	
  Liquidation;
  Dissolution; Bankruptcy

  	
  39

  
	
  Section 10.3

  	
  Default of
  Senior Debt

  	
  41

  
	
  Section 10.4

  	
  When
  Distribution Must Be Paid Over

  	
  42

  
	
  Section 10.5

  	
  Notice by
  Company

  	
  42

  
	
  Section 10.6

  	
  Subrogation

  	
  43

  
	
  Section 10.7

  	
  Relative
  Rights

  	
  43

  
	
  Section 10.8

  	
  Subordination
  May Not Be Impaired by the Company or Holders of Senior Debt

  	
  43

  
	
  Section 10.9

  	
  Distribution
  or Notice to Representative

  	
  45

  
	
  Section 10.10

  	
  Rights of
  Trustee and Paying Agent

  	
  45

  
	
  Section 10.11

  	
  Authorization
  to Effect Subordination

  	
  45

  
	
  Section 10.12

  	
  Article Applicable
  to Paying Agent

  	
  45

  
	
  Section 10.13

  	
  Miscellaneous

  	
  46

  
	
  ARTICLE XI MISCELLANEOUS

  	
  47

  
	
  Section 11.1

  	
  Trust
  Indenture Act Controls

  	
  47

  
	
  Section 11.2

  	
  Notices

  	
  47

  
	
  Section 11.3

  	
  Communication
  by Holders with Other Holders

  	
  49

  
	
  Section 11.4

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  49

  

 

ii

 

	
  Section 11.5

  	
  Statements
  Required in Certificate or Opinion

  	
  49

  
	
  Section 11.6

  	
  Rules by
  Trustee and Agents

  	
  50

  
	
  Section 11.7

  	
  Legal
  Holidays

  	
  50

  
	
  Section 11.8

  	
  No Recourse
  Against Others

  	
  50

  
	
  Section 11.9

  	
  Duplicate
  Originals

  	
  50

  
	
  Section 11.10

  	
  Governing
  Law

  	
  50

  
	
  Section 11.11

  	
  No Adverse
  Interpretation of Other Agreements

  	
  50

  
	
  Section 11.12

  	
  Successors

  	
  50

  
	
  Section 11.13

  	
  Severability

  	
  50

  
	
  Section 11.14

  	
  Counterpart Originals

  	
  51

  
	
  Section 11.15

  	
  Table of Contents,
  Headings, etc.

  	
  51

  

 

EXHIBITS:

 

A – Form of Note

 

 

iii

 

CROSS-REFERENCE
TABLE

 

	
  *Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  7.8; 7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  11.3

  
	
  (c)

  	
   

  	
  11.3

  
	
  313(a)

  	
   

  	
  7.6

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.6

  
	
  (c)

  	
   

  	
  7.6; 11.2

  
	
  (d)

  	
   

  	
  7.6

  
	
  314(a)

  	
   

  	
  4.3; 4.4;
  11.2

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.4

  
	
  (c)(2)

  	
   

  	
  11.4

  
	
  (c)(3)

  	
   

  	
  11.4; 1.1

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  11.5

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.1(b)

  
	
  (b)

  	
   

  	
  7.5; 11.2

  
	
  (c)

  	
   

  	
  7.1(a)

  
	
  (d)

  	
   

  	
  7.1(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(last sentence)

  	
   

  	
  2.9

  
	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.7

  
	
  (c)

  	
   

  	
  N.A.

  
	
  317(a)(1)

  	
   

  	
  6.8

  
	
  (a)(2)

  	
   

  	
  6.9

  
	
  (b)

  	
   

  	
  2.4

  
	
  318(a)

  	
   

  	
  11.1

  

 

N.A. means not applicable

* This Cross Reference Table is not part of
the Indenture 

 

 

THIS INDENTURE is hereby entered into as of
                                  ,
2006, by and between Winmark Corporation, a Minnesota corporation (the “Company”),
as obligor, and Wells Fargo Bank, National Association, a national banking
association, as trustee (the “Trustee”).

 

The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the renewable,
unsecured, subordinated debt securities of the Company issued pursuant to the
Company’s registration statement on Form S-1, declared effective by the
Securities and Exchange Commission on or about
                                            ,
2006 (the “Registration Statement”):

 

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1                                   Definitions.

 

“Account” means the record of beneficial ownership of a Security
maintained by the Registrar.

 

“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
“control” (including, with correlative meanings, the terms “controlling,” “controlled
by” and “under common control with”), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

 

“Agent” means any Registrar, Paying Agent or co-registrar of the
Securities or any Person appointed and retained by the Company to perform certain
of the duties or obligations, or exercise certain of the rights and
discretions, of the Company hereunder, on behalf of the Company pursuant to Section 2.15
hereof.

 

“Board of Directors” means the Board of Directors of the Company
or any authorized committee of the Board of Directors.

 

“Business Day” means any day other than a Legal Holiday.

 

“Company” means Winmark Corporation, a Minnesota corporation,
unless and until replaced by a successor in accordance with Article V
hereof and thereafter means such successor.

 

“Corporate Trust Office” means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office is, at the date as of which
this Indenture is originally dated, located at
                                                                                      ,
Attention:
                                                .

 

“Default” means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.

 

 

“Event of Default” has the meaning set forth in Section 6.1
hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

“Fiscal Year” means a year ending [December 31].

 

“GAAP” means, as of any date, generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession, which are in effect from time to time.

 

“Guarantee” means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.

 

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

 

“Indebtedness” means, with respect to any Person and without
duplication, any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the balance deferred and unpaid of the purchase price
of any property (including capital lease obligations) or the expenditure for
any services or representing any interest rate swap or other hedging
obligations, including without limitation, any such balance that constitutes an
accrued expense or an account or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and hedging obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and also includes, to the extent not otherwise included, (a) the
Guarantee of items that would be included within this definition, and (b) liability
for items that would arise by operation of a Person’s status as a general
partner of a partnership.

 

“Indenture” means this Indenture as amended or supplemented from
time to time.

 

“Interest Accrual Period” means, as to each Security, the period
from the later of the Issue Date of such Security or the last Payment Date upon
which an interest payment was made until and including the day before the
following Payment Date during which interest accrues on each Security with
respect to any Payment Date.

 

“Issue Date” means, with respect to any Security, the date on
which such Security is deemed registered on the books and records of the
Registrar, which shall be (i) the date the Company accepts funds for the
purchase of the Security if such funds are received prior to 12:01 p.m.
(Central Time) on a Business Day, or if such funds are not so received, on the
next Business Day, or (ii) the date that the Security is renewed as of the
Maturity Date pursuant to Section 2.1(e).

 

“Maturity Date” means, with respect to any Security, the date on
which the principal of such Security becomes due and payable as therein
provided.

 

2

 

“Maturity Record Date” means, with respect to any Security, as
of 11:59 p.m. of the date 15 days prior to the Maturity Date or Redemption
Date applicable to such Security.

 

“Notice of Maturity” means a written notice from the Company to
a Holder (as further described in Section 2.1(d)) that the Holder’s
Securities will be maturing on the related Maturity Date occurring within 15
days but not less than 10 days of the delivery of such notice.

 

“Obligations” means, with respect to any Indebtedness, any
principal, premium, interest (including Post-Petition Interest), penalties,
fees, indemnifications, reimbursements, damages and other liabilities or
amounts of whatever nature payable under the documentation governing, or with
respect to, any such Indebtedness.

 

“Officer” means the Chairman of the Board or principal executive
officer of the Company, the President or principal operating officer of the
Company, the Chief Financial Officer or principal financial officer of the
Company, the Treasurer, Controller or principal accounting officer of the
Company, Secretary or any Executive or Senior Vice-President of the Company.

 

“Officers’ Certificate” means a certificate signed by two
Officers, one of whom must be the principal executive officer, principal
operating officer, principal financial officer or principal accounting officer
of the Company; provided, however, that if the opinion of an accountant is
required pursuant to TIA § 314(c)(3), the certificate must be signed by an
Officer who is an accountant.

 

“Opinion of Counsel” means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.

 

“Pari Passu Debt” means any Indebtedness of the Company that is
payable on a pari passu basis
with the Securities.

 

“Payment Account” means the bank account designated by the
Holder to receive payments of interest and/or principal due on such Holder’s
Securities, as may be amended by the Holder by written notice to the
Registrar from time to time.

 

“Payment Date” means (i) with respect to any Security for
which monthly interest payments are required to be made, the first day of the
following calendar month or such other date as is designated by the Holder
pursuant to subsection 2.1(c), (ii) with respect to any Security for
which interest is required to be made quarterly, semi-annually or annually, the
same day of the month as the quarterly, semi-annual or annual anniversary of the
Issue Date of the Security (except in the case where the Issue Date of a
Security is the 29th, 30th or 31st day of the
month and there is no like date in the anniversary month, in which case the
Payment Date for such month shall be the first day of the following month) and (iii) with
respect to each Security, the Maturity Date (or such date following the
Maturity Date on which payment is made pursuant to subsection 2.1(d) hereof),
the Repurchase Date or the Redemption Date of the Security; provided, that if
any such day in the preceding clauses (i) through (iii) is not a
Business Day, the Business Day immediately following such day.

 

3

 

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

 

“Post-Petition Interest” means interest accruing after the
commencement of any bankruptcy or insolvency case or proceeding with respect to
the Company or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, at the rate applicable to the
related Indebtedness, whether or not such interest is an allowable claim in any
such proceeding.

 

“Prospectus” means the prospectus included in the Registration
Statement at the time it was declared effective by the SEC, as supplemented by
any prospectus supplement (including interest rate supplements) relating to the
Securities that are filed with the SEC pursuant to Rule 424(b) under
the Securities Act. References herein to the Prospectus shall be deemed to
refer to and include the documents incorporated therein by reference.

 

“Receivables” means installment sale contracts, loans evidenced
by promissory notes secured by assets, leases, mortgages or other finance
receivables or instruments purchased, originated or owned by the Company or any
of its Affiliates.

 

“Redemption Notice” means a written notice from the Company to
the Holders (as further described in Section 2.1(f)) stating that the
Company is redeeming all or a specified portion of Securities pursuant to Section 3.1,
with a copy to the Registrar and the Trustee.

 

“Redemption Price” means, with respect to any Security to be
redeemed, the principal amount of such Security plus the interest accrued but
unpaid during the Interest Accrual Period up to and not including the
Redemption Date for such Security.

 

“Regular Record Date” means, with respect to each Payment Date,
as of 11:59 p.m. of the date 15 days prior to such Payment Date.

 

“Repayment Election” means a written notice from a Holder to the
Company (as further described in Section 2.1(d)) stating that repayment of
the Holder’s Securities is required in connection with the maturity of such
Securities.

 

“Repurchase Price” means, with respect to any Security to be
repurchased, the principal amount of such Security plus the interest accrued
but unpaid during the Interest Accrual Period up to and not including the
Repurchase Date for such Security, minus the Repurchase Penalty, if any.

 

“Repurchase Request” means a written notice from a Holder to the
Company (as further described in Section 2.1(g)) stating that such Holder
is making an irrevocable request for the Company to repurchase such Holder’s
Securities pursuant to Section 3.2.

 

“Responsible Officer” when used with respect to the Trustee,
means any officer in its Corporate Trust Office, or any other assistant officer
of the Trustee in its Corporate Trust Office customarily performing functions
similar to those performed by the Persons who at the time shall

 

4

 

be such officers, respectively, or to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security” or “Securities” means, the Company’s
renewable, unsecured, subordinated notes issued under this Indenture pursuant
to the Registration Statement.

 

“Senior Debt” means any Indebtedness other than the Securities
and any Pari Passu Debt (whether outstanding on the date hereof or thereafter
created) incurred by the Company (including its subsidiaries) whether such
Indebtedness is or is not specifically designated by the Company as being “Senior
Debt” in its defining instruments. “Senior Debt” includes, without limitation,
Indebtedness pursuant to that certain 364 Day Revolving Credit Agreement dated September 30,
2004, as amended, among the Company and LaSalle Bank National Association and
any note or notes issued thereunder and all other “Obligations” as defined
therein, in each case as any of the same may be amended, restated,
extended, increased, refinanced or otherwise modified from time to time.

 

“Subscription Agreement” means a Subscription Agreement entered
into by a Person under which such Person has committed to purchase certain
Securities as identified thereby and which is in substantially the form filed
as Exhibit 4.4 to the Registration Statement.

 

“Servicing Agent” means Sumner Harrington Ltd., a Minnesota
corporation.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.

 

“Total Permanent Disability” means a determination by a
physician approved by the Company that the Holder of a Security who is a
natural person, who was gainfully employed on a full time basis at the Issue
Date of such Security is unable to work on a full time basis during the
succeeding twenty-four months. For purposes of this definition, “working on a
full time basis” shall mean working at least forty hours per week.

 

“Trustee” means Wells Fargo Bank, National Association, a
national banking association, until a successor replaces it in accordance with
the applicable provisions of this Indenture and thereafter means the successor
serving hereunder.

 

“U.S. Government Obligations” means direct obligations of the
United States of America, or any agency or instrumentality thereof for the
payment of which the full faith and credit of the United States of America is
pledged.

 

“Written Confirmation” means a written confirmation of the
acceptance of a subscription for, or the transfer or pledge of, a Security or
Securities in the form of a transaction statement executed or issued by
the Company or its duly authorized Agent and delivered to the Holder of such
Security or Securities with a copy to the Registrar and the Trustee, which is
in substantially the form of Exhibit 4.3 to the Registration
Statement.

 

5

 

Section 1.2                                   Other
Definitions. 

 

	
  Term

  	
   

  	
  Defined in Section

  
	
  “Bankruptcy
  Law”

  	
   

  	
  6.1

  
	
  “Custodian”

  	
   

  	
  6.1

  
	
  “Event of
  Default”

  	
   

  	
  6.1

  
	
  “Legal
  Holiday”

  	
   

  	
  11.7

  
	
  “Paying
  Agent”

  	
   

  	
  2.3

  
	
  “Payment
  Blockage Period”

  	
   

  	
  10.3

  
	
  “Payment
  Notice”

  	
   

  	
  10.3

  
	
  “Redemption
  Date”

  	
   

  	
  2.1(f)

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Registration
  Statement”

  	
   

  	
  Introduction

  
	
  “Repurchase
  Date”

  	
   

  	
  3.2(d)

  
	
  “Repurchase
  Penalty”

  	
   

  	
  3.2(b)

  
	
  “Securities
  Register”

  	
   

  	
  2.3

  

 

Section 1.3                                   Incorporation
by Reference of Trust Indenture Act. 

 

(a)                                  Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms
used in this Indenture have the following meanings:

 

“indenture securities” means the
Securities;

 

“indenture security holder” means any
Holder of the Securities;

 

“indenture to be qualified” means this
Indenture;

 

“indenture trustee” or “institutional
trustee” means the Trustee;

 

“obligor” on the Securities means the Company or any successor
obligor upon the Securities.

 

(b)                                 All
other terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by a SEC rule under the TIA have
the meanings so assigned to them.

 

Section 1.4                                   Rules of
Construction. 

 

Unless the context otherwise requires: (a) a term has the meaning
assigned to it; (b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;

 

6

 

(c) references to GAAP, as of any date,
shall mean GAAP in effect in the United States as of such date; (d) “or”
is not exclusive; (e) words in the singular include the plural, and in the
plural include the singular; and (f) provisions apply to successive events
and transactions.

 

ARTICLE II

THE SECURITIES

 

Section 2.1                                   Security
Terms; Amount; Accounts; Interest; Maturity. 

 

(a)                                  Unlimited
Amount and Form of Security. The outstanding aggregate principal
amount of Securities to be issued hereunder (absent an amendment to the
Registration Statement) is limited to $50,000,000, provided, however, that the
Company and the Trustee may, without the consent of any Holder, increase such
aggregate principal amount of Securities which may be outstanding at any
time. The Securities are unsecured obligations of the Company and shall be
subordinate in right of payment to the Senior Debt of the Company as further
described in Article X. The Securities are an obligation and liability of
the Company, and not of any other Person, including, without limitation, any
shareholder, director, Officer, employee, Affiliate or Agent of the Company.
The Securities are not certificates of deposit or similar obligations of, and
are not guaranteed or insured by, any depository institution, the Federal
Deposit Insurance Corporation, any other governmental or private fund, any
securities insurer or any other Person.

 

In the event
issued in certificated form pursuant to Section 2.13(b): (i) the
Securities, together with the Trustee’s certificate of authentication, shall be
in substantially the form set forth as Exhibit A to this
Indenture, with any 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 as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities; (ii) any portion of the text of any Securities may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Securities; and (iii) the Securities may be subject to
notations, legends or endorsements required by law, stock exchange rule, or
agreements to which the Company is subject or usage.

 

(b)                                 Book-Entry;
Denominations; Term. Except as provided in Section 2.13(b), each
Security shall neither be issued as, nor evidenced by, a promissory note or
certificated security, but rather each Security shall be issued in book entry
or uncertificated form, in which the record of beneficial ownership of each
such Security shall be established and maintained as Accounts by the Registrar
pursuant to Section 2.13. In connection with the issuance of each Security
in book entry form in accordance with Section 2.13, each such
Security shall be deemed to be represented in an uncertificated form that
includes the same terms and provisions as those set forth in the form of
Security in Exhibit A to this Indenture, and the related Account
for each such Security shall be deemed to include these same terms and
provisions.

 

7

 

Each Security
shall be in such denominations as provided by this Indenture and as may be
designated from time to time by the Company, but in no event in an original
denomination less than $1,000. Separate purchases may not be cumulated to
satisfy the minimum denomination requirements. Each Security shall have a term
of three or six months, or one, two, three, four, five or ten years, as
designated by the Holder at the time of purchase, subject to the Company’s acceptance
thereof.

 

(c)                                  Interest
and Interest Payments. Each Security shall bear interest from and
commencing on its Issue Date at such rate of interest as the Company shall
determine from time to time, which rate may vary from Holder to Holder
depending upon the aggregate principal amount of Securities held by such Holder
and all immediate family members, as set forth in the Prospectus; provided,
however, that the interest rate of each Security will be fixed for the term of
such Security upon issuance, subject to change upon the renewal of the Security
at maturity. Interest on the Securities will compound daily based on a calendar
year consisting of 365 days and the Holder thereof may elect to have
interest paid monthly, quarterly, semi-annually, annually, or upon maturity,
which payments shall be made on the Payment Date, except that a Holder who
elects monthly payments may select the day of the month on which to
receive interest payments; provided that no interest shall be paid to a Holder
until the expiration of the Holder’s rescission right under Section 2.2(b) and,
if the monthly interest payment date selected by the Holder is within five
Business Days of the Issue Date of the Security, the first interest payment
will be made in the following month and will include all of the interest earned
since the Issue Date. If the Holder does not elect an interest payment option,
interest will be paid on the Maturity Date of the Note. A Holder may change
this election once during the term of the Security, subject to the Company’s
approval, which change shall be effective by the first Business Day following
the 45th day after receipt of written notice from the Holder
requesting such change.

 

(d)                                 Repayment
Election at Maturity. The Company will send each Holder of a Security
(existing as of the applicable Maturity Record Date) a Notice of Maturity
approximately 15 but not less than 10 days prior to the Maturity Date of the
Security held by such Holder reminding such Holder of the pending maturity of
the Security and reminding the Holder that the automatic renewal provision
described in Section 2.1(e) will take effect, unless (i) the
Company states in the Notice of Maturity that it will not allow the Holder to
renew the Security (in which case the Company shall pay the Holder principal
and accrued interest with regard to the Security on the Maturity Date), or (ii) the
Holder delivers a Repayment Election to the Company for the payment of all
principal and interest due on the Security as of the Maturity Date so that such
Repayment Election is received by the Company within 15 days after the Maturity
Date. Such Notice of Maturity shall also state that payment of principal of a
Security shall be made upon presentation of a Repayment Election requiring
payment of such Security and shall specify the place where such Repayment
Election may be presented. Upon or following the delivery of a Notice of
Maturity for a Security, the Holder thereof, in their discretion, may deliver
to the Company a Repayment Election; provided that such Repayment Election must
be delivered to the Company no later than 15 days after the Maturity Date. If a
Holder delivers a Repayment Election requiring repayment on or prior to the
15th day following the Maturity Date, no interest will accrue after the Maturity
Date and the

 

8

 

Holder will be sent payment
upon the later of the Maturity Date or five days following the date the Company
receives such Repayment Election from the Holder; provided that if the Company
has previously paid interest to the Holder for periods after the Maturity Date,
such interest shall be deducted from such payment.

 

The Notice of Maturity also shall state that the Holder may, and the
Holder may, submit a Repayment Election for the repayment of the maturing
Security and use all or a portion of the proceeds thereof to purchase a new
Security with a different term. To exercise this option, the Holder shall
complete a new Subscription Agreement for the new Security and send it along
with the Holder’s Repayment Election to the Company. The Issue Date of the new
Security shall be the Maturity Date of the maturing Security. Any proceeds from
the maturing Security that are not applied to the purchase of the new Security
shall be sent to the Holder of such maturing Security.

 

If a Security pays interest only on the Maturity Date, then the Notice
of Maturity also shall state that the Holder may, and the Holder may, submit an
“interest-only” Repayment Election in which the Holder requires the payment of
the accrued interest that such Holder has earned on the maturing Security up to
the Maturity Date and allows the principal amount of such maturing Security to
renew in the manner provided in subsection (e) below.

 

(e)                                  Automatic
Renewal. If a Holder of such Security has not delivered a Repayment
Election for repayment of the Security on or prior to the 15th day
following the Maturity Date, and the Company did not notify the Holder of its
intention to repay the Security in the Notice of Maturity, then such maturing
Security shall be extended automatically for an additional term equal to the
original term, and shall be deemed to be renewed by the Holder and the Company
as of the Maturity Date of such maturing Security. A maturing Security will
continue to renew as described herein absent a Redemption Notice or Repurchase
Request by the Holder or an indication by the Company that it will repay and
not allow the Security to be renewed in the Notice of Maturity. Interest on the
renewed Security shall accrue from the Issue Date thereof, which is the first
day of such renewed term (i.e., the Maturity Date of the maturing Security).
Such renewed Security will be deemed to have the identical terms and provisions
of the maturing Security, including provisions relating to payment, except that
the interest rate payable during the term of the renewed Security shall be the
interest rate which is being offered by the Company on other Securities having
the same term and to Persons holding the same aggregate principal amount of
Securities (including holdings of immediate family members, as described in the
Prospectus) as of the Issue Date of such renewal. If other Securities having
the same term are not then being issued on the Issue Date of such renewal, the
interest rate upon renewal will be the rate specified by the Company on or
before the Maturity Date of such Security, or the then existing rate of the
Security being renewed if no such rate is specified. If the maturing Security
pays interest only on the Maturity Date, then, except as provided in subsection (d) above,
all accrued interest thereon shall be added to the principal amount of the
renewed Security upon renewal.

 

9

 

Notwithstanding
the foregoing or anything in Section 2.1(d) to the contrary, if a
Repayment Election is given or is due at a time when the Company has determined
that a post-effective amendment to the Registration Statement was required but
not yet effective, the Company will provide notice to the Holder (including a
copy of the post-effective amendment to the Prospectus), and the Holder will be
entitled to rescind his or her Repayment Election, if made, or to make a
Repayment Election, if not previously made, by delivering a written rescission
of the earlier Repayment Election, or a Repayment Election, as the case may be,
to the Company no later than 10 days following the postmark date on the Company’s
notice of such post-effective amendment.

 

(f)                                    Redemption
Notice from Company. Pursuant to Section 3.1, each Security shall be
redeemable by the Company at any time, without penalty, upon the delivery of a
Redemption Notice to the Holder of such Security. Such Redemption Notice shall
set forth a date for the redemption of such Security (the “Redemption Date”)
that is at least 30 days after the date that such Redemption Notice has been
delivered by the Company to the Holder hereunder.

 

(g)                                 Repurchase
Request by Holder. Pursuant to and subject to the limitations set forth in Section 3.2,
each Security shall be subject to repurchase at the request of the Holder upon
the delivery of a Repurchase Request to the Company. Subject to the limitations
on repurchase and the Repurchase Penalties described in Section 3.2, the
payment of interest and principal due upon the repurchase of a Security shall
be made to the Holder on a Repurchase Date that is within 10 days of the
delivery of such Repurchase Request to the Company or, in the case of a
repurchase of a Security in connection with the death or Total Permanent
Disability of a Holder, a Repurchase Date that is within 10 days after the
Company’s receipt of satisfactory establishment or such Holder’s death or Total
Permanent Disability.

 

(h)                                 Terms
of Securities. The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, and the Holders by accepting the Securities,
expressly agree to such terms and provisions and to be bound hereby and
thereby. In case of a conflict, the provisions of this Indenture shall control.

 

Section 2.2                                   Written
Confirmation; Rejection; Rescission. 

 

(a)                                  Except
with respect to an automatically renewed Security pursuant to Section 2.1(e),
a Security shall not be validly issued to a Person until the following have
occurred:  (i) such Person has
remitted good and available funds for the full principal amount of such
Security to the Company or a duly authorized Agent of the Company; (ii) a
Written Confirmation of the acceptance of the subscription is sent by the
Company or a duly authorized Agent of the Company to such Person; and (iii) an
Account is established by the Registrar in the name of such Person as the
Holder of such Security pursuant to Section 2.13 hereof. The Company or a
duly authorized Agent of the Company, in their sole discretion, may reject
any subscription from a Person for the purchase of Securities, in which event
any funds received from such Person pursuant to

 

10

 

such subscription shall be
promptly returned to such Person. No interest shall be paid on any funds
returned on a rejected subscription.

 

(b)                                 For
a period of five Business Days following the mailing by the Company of (i) a
Written Confirmation that evidences the valid issuance of a Security at the
time of original purchase (but not upon transfer or automatic renewal of a
Security), or (ii) notice from the Company that a Holder’s purchase of a
Security occurred at a time when a post-effective amendment to the Registration
Statement was required but not yet effective (which notice shall be accompanied
by a copy of the post-effective amendment to the Prospectus), such Holder shall
have the right to rescind the Security and receive repayment of the principal
by presenting a written request for such rescission to the Company. Such
written request for rescission (A) if personally delivered or delivered
via facsimile or electronic transmission, must be received by the Company on or
prior to the 5th Business Day following the mailing of such Written
Confirmation or post-effective amendment notice by the Company or (B) if
mailed must be postmarked on or before the 5th Business Day following the
mailing by the Company of such Written Confirmation or post-effective amendment
notice. Repayment of the principal shall be made within 10 days of the Company’s
receipt of such request from the Holder. No interest shall be paid on any such
rescinded Security.

 

Section 2.3                                   Registrar
and Paying Agent. 

 

(a)                                  The
Company shall maintain (i) an office or agency where Securities may be
presented for registration of transfer or for exchange (“Registrar”) and
(ii) an office or agency where Securities may be presented for
payment (“Paying Agent”). The Registrar shall keep a register of the
Securities and of their transfer and exchange, which shall include the name,
address for notices and Payment Account of the Holder and the payment election
information, principal amount, term and interest rate for each Security (the “Securities
Register”). The Company may appoint one or more co-registrars and one
or more additional paying agents. The term “Registrar” includes any
co-registrar, and the term “Paying Agent” includes any additional paying
agent. The Company may change any Paying Agent or Registrar without prior
notice to any Holder; provided that the Company shall promptly notify the
Holders and the Trustee of the name and address of any Agent not a party to
this Indenture. The Company may act as Paying Agent and/or Registrar. In
the event the Company uses any Agent other than the Company or the Trustee, the
Company shall enter into an appropriate agency agreement with such Agent, which
agreement shall incorporate the provisions of the TIA or provide that the
duties performed thereunder are subject to and governed by the provisions of
this Indenture. The agreement shall implement or be subject to the provisions
of this Indenture that relate to such Agent. The Company shall notify the
Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, or fails to give the foregoing notice,
the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 7.7 hereof. In no event shall the
Trustee be liable for the acts or omissions of any predecessor Paying Agent or
Registrar.

 

(b)                                 Pursuant
to Section 2.15, the Company hereby appoints the Servicing Agent as the
initial Registrar and as agent for service of notices and demands in connection
with

 

11

 

the Securities. The Servicing
Agent shall act as Registrar and agent for service of notices and demands in
connection with the Securities until such time as the Company gives the Trustee
written notice to the contrary. Also pursuant to Section 2.15, the Company
hereby appoints Wells Fargo Bank, National Association as the initial Paying
Agent.

 

Section 2.4                                   Paying
Agent to Hold Money in Trust. 

 

Prior to each Payment Date, the Company shall deposit with the Paying
Agent sufficient funds to pay principal and interest then so becoming due and
payable in cash. The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal or interest on the Securities, and will notify the Trustee
promptly in writing of any default by the Company in making any such payment.
While any such default continues, the Trustee shall require a Paying Agent (if
other than the Company) to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company) shall have no further liability for the money delivered to the
Trustee. If the Company acts as Paying Agent, then the Company shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent. The Company shall notify the Trustee in writing at least
five days before the Payment Date of the name and address of the Paying Agent
if a person other than the Trustee is named Paying Agent at any time or from
time to time.

 

Section 2.5                                   List
of Holders. 

 

The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA § 312(a). If the Trustee is
not the Registrar, the Registrar shall furnish to the Trustee within 10 days
after the end of each fiscal quarter during the term of this Indenture and at
such other times as the Trustee may request in writing, a copy of the
current Securities Register as of such date as the Trustee may reasonably
require and the Company shall otherwise comply with TIA § 312(a).

 

Section 2.6                                   Transfer
and Exchange. 

 

(a)                                  The
Securities are not negotiable instruments and cannot be transferred without the
prior written consent of the Company (which consent shall not be unreasonably
withheld). Requests to the Registrar for the transfer of any Security shall be:

 

(i)                                     made
to the Registrar in writing on a form supplied by the Registrar;

 

(ii)                                  duly
executed by the Holder of the Security, as reflected on the Registrar’s records
as of the date of receipt of such transfer request, or such Holder’s attorney
duly authorized in writing;

 

12

 

(iii)                               accompanied
by the written consent of the Company to the transfer (which consent may not
be unreasonably withheld); and

 

(iv)                              if
requested by the Company or the Registrar, an opinion of Holder’s counsel
(which counsel shall be reasonably acceptable to the requesting party) that the
transfer does not violate any applicable securities laws and/or a signature
guarantee.

 

(b)                                 Upon
transfer of a Security, the Company, or the Registrar on behalf of the Company,
will provide the new registered owner of the Security with a Written
Confirmation that will evidence the transfer of the Security in the Securities
Register and will establish a corresponding Account.

 

(c)                                  The
Company or the Registrar may assess reasonable service charges to a Holder
for any registration or transfer or exchange, and the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange pursuant to Section 9.5
hereof).

 

(d)                                 With
respect to the relevant Regular Record Date, the Company shall treat the
individual or entity listed on each Account maintained by the Registrar as the
absolute owner of the Security represented thereby for purposes of receiving
payments thereon and for all other purposes whatsoever.

 

Section 2.7                                   Payment
of Principal and Interest; Principal and Interest Rights Preserved. 

 

(a)                                  Each
Security shall accrue interest at the rate specified for such Security in the
Securities Register and such interest shall be payable on each Payment Date
following the Issue Date for such Security, until the principal thereof becomes
due and payable. Any installment of interest payable on a Security that is
caused to be punctually paid or duly provided for by the Company on the
applicable Payment Date shall be paid to the Holder in whose name such Security
is registered in the Securities Register on the applicable Regular Record Date
with respect to the Securities outstanding, by electronic deposit to such
Holder’s Payment Account as it appears in the Securities Register on such
Regular Record Date. The payment of any interest payable in connection with the
payment of any principal payable with respect to such Security on a Maturity
Date shall be payable as provided below. In the event any payments made by
electronic deposit are not accepted into the Holder’s Payment Account for any
reason, such funds shall be held in accordance with Sections 2.4 and 8.3
hereof. Any installment of interest not punctually paid or duly provided for
shall be payable in the manner and to the Holders as specified in Section 2.10
hereof.

 

(b)                                 Each
of the Securities shall have stated maturities of principal as shall be
indicated on such Securities or in the Written Confirmation and as set forth in
the Securities Register. The principal of each Security shall be paid in full
as of the Maturity Date thereof pursuant to Section 2.1(d), unless the
term of such Security is renewed pursuant to Section 2.1(e) hereof or
such Security becomes due and payable at an earlier

 

13

 

date by acceleration,
redemption, repurchase or otherwise. Interest on each Security shall be due and
payable on each Payment Date at the interest rate applicable to such Security
for the Interest Accrual Period related to such Security and such Payment Date.
Notwithstanding any of the foregoing provisions with respect to payments of
principal of and interest on the Securities, if the Securities have become or
been declared due and payable following an Event of Default, then payments of
principal of and interest on the Securities shall be made in accordance with Article VI
hereof. If definitive, certificated securities are issued, then the principal
payment made on any Security on any Maturity Date (or the Redemption Price or
the Repurchase Price of any Security required to be redeemed or repurchased,
respectively), and any accrued interest thereon, shall be payable on or after
the Maturity Date, Redemption Date or the Repurchase Date therefore at the
office or agency of the Company maintained by it for such purpose pursuant to Section 2.3
hereof or at the office of any Paying Agent for such Security.

 

(c)                                  All
computations of interest due with respect to any Security shall be made, unless
otherwise specified in the Security, based upon a 365-day year.

 

Section 2.8                                   Outstanding
Securities. 

 

(a)                                  The
Securities outstanding at any time are the outstanding principal balances of
all Accounts representing the Securities maintained by the Company or such other
entity as the Company designated as Registrar.

 

(b)                                 If
the principal amount of any Security is considered paid under Section 4.1
hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

(c)                                  Subject
to Section 2.9 hereof, a Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

 

Section 2.9                                   Treasury
Securities. 

 

In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or any Affiliate of the Company shall be considered as though
not outstanding, except that for purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.

 

Section 2.10                            Defaulted
Interest.

 

If the Company defaults in a payment of interest on any Security, it
shall pay the defaulted interest plus, to the extent lawful, any interest
payable on the defaulted interest, to the Holder of such Security on a
subsequent special Payment Date, which date shall be at the earliest
practicable date, but in all events within 15 days following the scheduled Payment
Date of the defaulted interest, in each case at the rate provided in the
Security. The Regular Record Date for the scheduled Payment Date shall be the
record date for the special Payment Date. Prior to any such special Payment
Date, the Company (or the Trustee, in the name of and at the expense of 

 

14

 

the Company) shall mail to Holder(s) a notice
that states the special Payment Date and the amount of such interest to be
paid.

 

Section 2.11                            Temporary
Notes.

 

If Securities are issued in certificated form in the limited
circumstances contemplated under Section 2.13(b), pending the preparation
of definitive Securities, the Company may execute, and direct that the
Trustee 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 are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Registrar without charge to the Holder.

 

Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of authorized denominations. Until so exchanged the temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities.

 

Section 2.12                            Execution,
Authentication And Delivery. 

 

(a)                                  Subject
to subsection (b) below, the Securities shall be executed on behalf
of the Company by an Officer and attested by its Secretary or Assistant
Secretary. 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 the time of
and from time to time after the execution and delivery of this Indenture, the
Company will deliver definitive or certificated forms of Securities, if any,
executed by the Company to the Trustee for authentication, together with a
direction from the Company for the authentication and delivery of such
Securities. The Trustee in accordance with such direction from the Company
shall authenticate and deliver such Securities as in this Indenture provided
and not otherwise. Securities issued hereunder shall be dated as of their Issue
Date.

 

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 an authentication
executed by or on behalf of the Trustee by manual signature, and such
authentication upon any Security shall be conclusive evidence, and the only
evidence, that such Security

 

15

 

has been duly authenticated and delivered hereunder and is entitled to
the benefits of the Indenture.

 

(b)                                 Notwithstanding
the preceding subsection (a) of this Section, in connection with the
issuance of each Security in book-entry form pursuant to Section 2.13,
each Security shall be deemed to be executed and attested to by the Company and
authenticated and delivered by the Trustee, in the same manner as provided in
the preceding subsection (a), upon the delivery by the Company (or the
Company’s duly authorized Agent) to the Holder of such Security of a Written
Confirmation, with a copy of such Written Confirmation delivered to the
Trustee, and the establishment by the Registrar of an Account for such Security
in the name of the Holder pursuant to Section 2.13 hereof.

 

Section 2.13                            Book-Entry
Registration. 

 

(a)                                  The
Registrar shall maintain a book-entry registration and transfer system through
the establishment and maintenance of Accounts for the benefit of Holders of
Securities as the sole method of recording the ownership and transfer of
ownership interests in such Securities. The registered owners of the Accounts
established by the Registrar in connection with the purchase or transfer of the
Securities shall be deemed to be the Holders of the Securities outstanding for
all purposes under this Indenture. The Company (or its duly authorized Agent)
shall promptly notify the Registrar of the acceptance of a subscriber’s order
to purchase a Security by providing a copy of the accepted Subscription
Agreement and the related Written Confirmation, and upon receipt of such
notices, the Registrar shall establish an Account for such Security by
recording a credit to its book-entry registration and transfer system to the
Account of the related Holder of such Security for the principal amount of such
Security owned by such Holder and issue a Written Confirmation to the Holder,
with a copy being delivered to the Trustee, on behalf of the Company. The
Registrar shall make appropriate credit and debit entries within each Account
to record all of the applicable actions under this Indenture that relate to the
ownership of the related Security and issue Written Confirmations to the
related Holders as set forth herein, with copies being delivered to the
Trustee, on behalf of the Company. For example, the total amount of any principal
and/or interest due and payable to the Holders of the Accounts maintained by
the Registrar as provided in this Indenture shall be credited to such Accounts
by the Registrar within the time frames provided in this Indenture, and the
amount of any payments of principal and/or interest distributed to the Holders
of the Accounts as provided in this Indenture shall be debited to such Accounts
by the Registrar. The Trustee may review the book-entry registration and
transfer system as it deems necessary to ensure the Registrar’s compliance with
the terms of the Indenture.

 

(b)                                 Book-entry
Accounts evidencing ownership of the Securities shall be exchangeable for
definitive or certificated forms of Securities in denominations of $1,000 and
any amount in excess thereof and fully registered in the names as each Holder
directs only if (i) the Company at its option advises the Trustee and the
Registrar in writing of its election to terminate the book-entry system, or (ii) after
the occurrence of any Event of Default, Holders of a majority of the aggregate
outstanding principal amount of the

 

16

 

Securities (as determined based
upon the latest quarterly statement provided to the Trustee pursuant to Section 2.5
hereof) advise the Trustee in writing that the continuation of the book-entry
system is no longer in the best interests of such Holders and the Trustee
notifies all Holders of the Securities, of such event and the availability of
certificated forms of securities to the Holders of Securities.

 

Section 2.14                            Initial
and Periodic Statements. 

 

(a)                                  Subject
to the rejection of a Subscription Agreement pursuant to Section 2.2(a),
the Registrar shall send Written Confirmations to initial purchasers,
registered owners, registered pledgees, former registered owners and former
pledgees, within two Business Days of its receipt of proper notice regarding
the purchase, transfer or pledge of a Security, with copies of such Written
Confirmations being delivered to the Trustee, on behalf of the Company.

 

(b)                                 The
Registrar shall send each Holder of a Security (and each registered pledgee)
via U.S. mail not later than 10 Business Days after each quarter end in which
such Holder had an outstanding balance in such Holder’s Account, a statement
which indicates as of the quarter end preceding the mailing: (i) the
balance of such Account; (ii) interest credited for the period; (iii) repayments,
redemptions or repurchases, if any, during the period; and (iv) the
interest rates paid on the Securities in such Account during the period. The
Registrar shall provide additional statements as the Holders or registered
pledgees of the Securities may reasonably request from time to time. The
Registrar may charge such Holders or pledgees requesting such statements a
fee to cover the charges incurred by the Registrar in providing such additional
statements.

 

Section 2.15                            Appointment
of Agents.

 

The Company may from time to time engage Agents to perform its
obligations and exercise its rights and discretion under the terms of this
Indenture. In each such case, the Company will provide the Trustee with a copy
of each agreement under which any such Agent is engaged and the name, address,
telephone number and capacity of the Agent appointed. If any such Agent shall
resign, or such Agent’s engagement is terminated by the Company, subsequent to
the Agent’s appointment by the Company under this Section 2.15, the
Company shall promptly notify the Trustee of such resignation or termination,
along with the name, address, telephone number and capacity of any successor
Agent. Notwithstanding any engagement of an Agent hereunder, the Company shall
remain obligated to fulfill each of its obligations under this Indenture.

 

ARTICLE III

REDEMPTION AND REPURCHASE

 

Section 3.1                                   Redemption
of Securities at the Company’s Election. 

 

(a)                                  The
Company may redeem, in whole or in part, any Security prior to the
scheduled Maturity Date of the Security by providing pursuant to Section 2.1(f) a
Redemption Notice to the Holder thereof listed on the records maintained by the
Registrar, which notice shall include the Redemption Date and the Redemption
Price to

 

17

 

be paid to the Holder on the
Redemption Date. No interest shall accrue on a Security to be redeemed under
this Section 3.1 for any period of time after the Redemption Date for such
Security, provided that the Company or the Paying Agent has timely tendered the
Redemption Price to the Holder.

 

(b)                                 The
Company shall have no mandatory redemption or sinking fund obligations with
respect to any of the Securities.

 

(c)                                  In
its sole discretion, the Company may offer certain Holders the ability to
extend the maturity of an existing Security through the redemption of such
Security and the issuance of a new Security. This redemption option shall not
be subject to the 30 day notice of redemption described in Section 2.1(f).

 

Section 3.2                                   Repurchase
of Securities at the Holder’s Request.

 

(a)                                  Repurchase
Upon Death or Disability. Subject to subsection (c) below, within
45 days of the death or Total Permanent Disability of a Holder who is a natural
person (including Securities held in an individual retirement account), the
estate of such Holder (in the event of death) or such Holder (in the event of
Total Permanent Disability) may request that the Company repurchase, in
whole and not in part, without penalty, the Security held by such Holder, by
delivering to the Company a Repurchase Request. If a Security is held jointly
by natural persons who are legally married, then a Repurchase Request may be
made when either registered Holder of such Security dies or becomes subject to
a Total Permanent Disability, the surviving Holder or the disabled Holder may request
that the Company repurchase in whole and not in part, without penalty, such
Security as jointly held by the Holders by delivering to the Company a
Repurchase Request. In the event a Security is held jointly by two or more
natural persons that are not legally married, neither of these persons shall
have the right to request that the Company repurchase such Security unless all
joint holders of such Security have either died or suffered a Total Permanent
Disability. If the Security is held by a Holder who is not a natural person,
such as a trust, partnership, corporation or other similar entity, the right to
request repurchase upon death or disability does not apply.

 

(b)                                 Repurchase
Upon Holder’s Election. Subject to subsection (c) below, a Holder
may request the Company to repurchase, in whole and not in part, the
Security held by such Holder by delivering a Repurchase Request to the Company.
Any such requested repurchase shall be made only at the Company’s discretion
and, if made, will be subject to an early Repurchase Penalty to be deducted
from the payment of such Holder’s Repurchase Price on the Repurchase Date. The
early repurchase penalty (the “Repurchase Penalty”) shall equal the
following:  (i) with respect to a
Security with a three month maturity, the interest accrued on a simple interest
basis on such Security from the Issue Date to the Repurchase Date at the
existing interest rate thereof, but not to exceed three months of simple
interest on such Security, or (ii) with respect to a Security with a
maturity of six months or longer, the interest accrued on a simple interest
basis on such Security from the Issue Date to the Repurchase Date at the
existing interest rate thereof, but not to exceed six months of simple interest
on such Security.

 

18

 

(c)                                  Limitation
on Repurchases. The Company will only be required to repurchase Securities
for which Repurchase Requests have been received pursuant to paragraph (a) above,
and, if accepted by the Company, paragraph (b) above, to the extent that
the aggregate Repurchase Price for all Securities for which Repurchase Requests
are then outstanding in any calendar quarter would not exceed the greater of (i) two
percent of the aggregate outstanding principal balance of all Securities as of
the last day of the previous calendar quarter or (ii) $1 million. For the
purposes of applying such limits on the aggregate Repurchase Price for
outstanding Repurchase Requests, such outstanding Repurchase Requests will be
honored in the order of the date received or, in the case of Repurchase
Requests made in connection with a Holder’s death or Total Permanent
Disability, the later of the date received or the date such death or Total
Permanent Disability is established to the reasonable satisfaction of the
Company, and to the extent any Repurchase Request is not paid in the quarter
received or so established due to such limitations, it will be honored in the
subsequent quarter, to the extent possible, subject to the applicability of
such limits on aggregate Repurchase Requests in each subsequent quarter. For
the avoidance of doubt, in the event that the Company would otherwise be
required to repurchase a Security hereunder in a given quarter by reason of the
priority of the Repurchase Request (as established in this Section) but for the
fact that the Repurchase Price exceeds the amount remaining under the forgoing
limitations (after giving effect to all other Repurchase Requests having
priority during such quarter), the Company may, at its option, effect a partial
repurchase of such Security, up to the portion of the Repurchase Price covered
by the amount remaining, and carry the Repurchase Request for the balance of
such Security forward as provided above.

 

(d)                                 Repurchase
Date. To the extent a Security for which a Repurchase Request has been
received during the then current calendar quarter is determined not to be
subject to the limitation in subsection (c) above and thus, will be
repurchased during the current quarter, then the Company shall designate a date
for the repurchase of such Security (the “Repurchase Date”), which date
shall not be more than 10 days after the Company’s receipt of the Repurchase
Request or, in the case of a Repurchase Request following the death or Total
Permanent Disability of the Holder, 10 days after the Company’s receipt of
satisfactory establishment of such Holder’s death or Total Permanent
Disability. On the Repurchase Date, the Company shall pay the Repurchase Price
to the Holder (or the estate of the Holder, in the case of a request following
death) in accordance with Section 2.7. With respect to a Security for
which a Repurchase Request has been received during a prior calendar quarter
and for which the Repurchase Price was not paid during such prior calendar
quarter, but rather the Repurchase Request has been carried over to and is
still outstanding in the current calendar quarter (because of the limitation in
subsection (c) above), the Company shall designate a Repurchase Date
not later than the tenth (10th) day after the start of such calendar
quarter, unless subsection (c) is again applicable, in which case
such obligation shall be met not later than the tenth (10th) day
after the start of the next calendar quarter during which such limitation is no
longer applicable. No interest shall accrue on a Security to be repurchased
under this Section 3.2 for any period of time on or after the Repurchase
Date for such Security, provided that the Company or the Paying Agent has
timely tendered the Repurchase Price to the Holder or the estate of the Holder,
as the case may be.

 

19

 

(e)                                  Waiver
and Modification of Repurchase Policies. The Company may waive or
reduce any early Repurchase Penalty in its sole discretion and may modify
at any time its policy on the repurchase of Securities at the request of
Holders; provided that no such modification shall adversely affect the rights
of Holders to the repurchase of Securities for which Repurchase Requests are
then outstanding.

 

ARTICLE IV

COVENANTS

 

Section 4.1                                   Payment
of Securities. 

 

(a)                                  Subject
to Article X, the Company shall duly pay the principal of and interest on
each Security on the dates and in the manner provided under this Indenture.
Principal and interest (to the extent such interest is paid in cash) shall be
considered paid on the date due if the Paying Agent, if other than the Company,
holds, at least one Business Day before that date, money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal and interest then due; provided, however, that principal and
interest shall not be considered paid within the meaning of this Section 4.1
if money is held by the Paying Agent for the benefit of holders of Senior Debt
pursuant to the provisions of Article X hereof. Such Paying Agent shall
return to the Company, no later than five days following the date of payment,
any money (including accrued interest, if any) that exceeds such amount of
principal and interest paid on the Securities in accordance with this Section 4.1.

 

(b)                                 Subject
to Article X, to the extent lawful, the Company shall pay interest
(including Post-Petition Interest in any proceeding under any Bankruptcy Law)
on overdue principal at the rate borne by the Securities, compounded
semi-annually; it shall pay interest (including Post-Petition Interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate, compounded
semi-annually.

 

Section 4.2                                   Maintenance
of Office or Agency. 

 

(a)                                  The
Company will maintain an office or agency (which may be an office of the
Trustee, Registrar or co-registrar) where Securities may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities 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.

 

(b)                                 The
Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company will give

 

20

 

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.

 

(c)                                  The
Company hereby designates its office at 4200 Dahlberg Drive, Suite 100,
Minneapolis, Minnesota 55422-4837, as one such office or agency of the Company
in accordance with Section 2.3.

 

Section 4.3                                   SEC
Reports and Other Reports. 

 

(a)                                  The
Company shall provide to the Trustee, within 45 days after filing with the SEC,
paper copies or, if such documents are readily available on the SEC’s website,
notification of the availability of, the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. The Company shall otherwise comply with the periodic
reporting requirements as set forth in TIA § 314(a), and the Company shall
file with the Trustee and the SEC, in accordance with the rules and
regulations prescribed by the SEC, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by such rules and
regulations. Notwithstanding anything to the contrary herein, the Trustee shall
have no duty to review such documents for purposes of determining compliance
with any provisions of the Indenture.

 

(b)                                 The
Company, or such other entity as the Company shall designate as Registrar,
shall provide the Trustee at intervals of not more than six months with
management reports which provide the Trustee with such information regarding
the Accounts maintained by the Company for the benefit of the Holders of the
Securities as the Trustee may reasonably request which information shall
include at least the following for the relevant time interval from the date of
the immediately preceding report: (i) the outstanding balance of each
Account at the end of the period; (ii) interest credited for the period; (iii) repayments,
repurchases and redemptions, if any, made during the period; and (iv) the
interest rate paid on each Security in such Account maintained by the Registrar
during the period.

 

(c)                                  Notwithstanding
any provision of this Indenture to the contrary, the Company shall not have any
obligation to maintain any of its securities (other than the Securities
hereunder), including without limitation its common stock, as securities
registered under the Exchange Act or the Securities Act, as amended, or as
securities listed and publicly traded on any national securities exchange.

 

Section 4.4                                   Compliance
Certificate. 

 

(a)                                  The
Company shall deliver to the Trustee, within 120 days after the end of each
Fiscal Year, beginning in [2006],
an Officers’ Certificate stating that a review of the activities of the Company
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has

 

21

 

kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of their knowledge the
Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action
the Company is taking or proposes to take with respect thereto) and that to the
best of their knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest, if any, on
the Securities are prohibited or if such event has occurred, a description of
the event and what action the Company is taking or proposes to take with
respect thereto.

 

(b)                                 So
long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the annual financial statements
delivered pursuant to Section 4.3 above shall be accompanied by a written
statement of the Company’s independent public accountants that in making the
examination necessary for certification of such financial statements nothing
has come to their attention which would lead them to believe that the Company
has violated the provisions of Section 4.1 of this Indenture or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.

 

(c)                                  The
Company will, so long as any of the Securities are outstanding, deliver to the
Trustee, forthwith upon any Officer becoming aware of any Default or Event of
Default, an Officers’ Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.

 

Section 4.5                                   Stay,
Extension and Usury Laws. 

 

The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury 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 beneficial
advantage of any such law, and covenants that it will not, by resort to any
such law, 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 has been enacted.

 

Section 4.6                                   Liquidation.

 

The Board of Directors or the stockholders of the Company shall not
adopt a plan of liquidation that provides for, contemplates or the effectuation
of which is preceded by (a) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company, otherwise
than substantially as an entirety (Section 5.1 of this Indenture being the
Section hereof which governs any such sale, lease, conveyance or other
disposition substantially as an entirety), and (b) the distribution of all
or substantially all of the proceeds of such sale,

 

22

 

lease, conveyance or other disposition and of
the remaining assets of the Company to the holders of capital stock of the
Company, unless the Company, prior to making any liquidating distribution
pursuant to such plan, makes provision for the satisfaction of the Company’s
Obligations hereunder and under the Securities as to the payment of principal
and interest.

 

Section 4.7                                   Financial
Covenants.

 

The Company covenants that, so long as any of the Securities are
outstanding, the Company will maintain a positive net worth, which includes all
equity held by the Company’s common and preferred stockholders and any
subordinated debt of the Company that is subordinate to these Securities.

 

Section 4.8                                   Restrictions
on Dividends.

 

(a)                                  The
Company covenants that, so long as any of the Securities are outstanding, it
shall not declare or pay any dividends or other payments of cash or other
property to its common or preferred stockholders (other than any dividend
payable in shares of or rights to acquire shares of the Company’s capital stock
on a pro rata basis to all stockholders), unless no Default or Event of Default
with respect to the Securities then exists or would exist immediately following
the declaration or payment of such dividend or other payment.

 

(b)                                 The
Company covenants that, so long as any of the Securities are outstanding, it
shall not guarantee, endorse or otherwise become liable for any obligations of
any of the Company’s Affiliates.

 

Section 4.9                                   Securitization
Transactions and Additional Indebtedness.

 

Except as otherwise provided in Section 4.8(b), the Company shall
not be prohibited, restricted or otherwise limited from incurring or
refinancing any Indebtedness subsequent to the date hereof, which Indebtedness
will have such terms and provisions as the Company and the lender thereof may agree
upon without any restriction or limitation hereunder and such Indebtedness will
likely be senior in right of payment to the Securities.

 

ARTICLE V

SUCCESSORS

 

Section 5.1                                   When
the Company May Merge, etc.

 

(a)                                  The
Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions to another corporation, Person or entity
unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation, limited liability
company or limited partnership organized or existing under the laws of the
United States, any state thereof or the District of Columbia; (ii) the
entity or Person

 

23

 

formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made assumes all the obligations of the Company pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee,
under the Securities and this Indenture; and (iii) immediately after such
transaction no Default or Event of Default exists.

 

(b)                                 The
Company shall deliver to the Trustee prior to the consummation of the proposed
transaction an Officers’ Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture. The Trustee shall be entitled to conclusively rely upon
such Officers’ Certificate and Opinion of Counsel.

 

Section 5.2                                   Successor
Entity Substituted. 

 

Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor entity or Person formed by such
consolidation or into or with which the Company, is merged or to which such
sale, lease, conveyance or other disposition 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 entity or Person
has been named as the Company herein, and upon such succession and
substitution, the Company shall be released from all of its obligations and
liabilities under this Indenture and the Securities.

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

Section 6.1                                   Events
of Default. 

 

An “Event of Default” occurs if:

 

(a)                                  the
Company fails to pay interest on a Security when the same becomes due and
payable and such failure continues for a period of 15 days, whether or not such
payment is prohibited by the provisions of Article X hereof;

 

(b)                                 the
Company fails to pay the principal amount of any Security when the same becomes
due and payable on any Payment Date, and such failure continues for a period of
10 days, whether or not prohibited by the provisions of Article X hereof;

 

(c)                                  the
Company fails to observe or perform any material covenant, condition or
agreement on the part of the Company under this Indenture or the breach by
the Company of any material representation or warranty of the Company under
this Indenture, and such failure or breach continues unremedied for a period of
30 days after the Company’s receipt of written notice of such failure or
breach;

 

(d)                                 the
Company defaults in any other material financial obligation of the Company and
such default continues unremedied for a period of 30 days after the Company’s
receipt of written notice of such default;

 

24

 

(e)                                  the
Company pursuant to or within the meaning of any Bankruptcy Law (i) commences
a voluntary case; (ii) consents to the entry of an order for relief
against it in an involuntary case; (iii) consents to the appointment of a
custodian of it or for all or substantially all of its property; (iv) makes
a general assignment for the benefit of its creditors; or (v) admits in
writing its inability to pay debts as the same become due; or

 

(f)                                    a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (i) is for relief against the Company in an involuntary case; (ii) appoints
a custodian of the Company or for all or substantially all of its property; (iii) orders
the liquidation of the Company, and in each case the order or decree remains
unstayed and in effect for 120 consecutive days.

 

The term “Bankruptcy Law” means Title 11 of the U.S. Code or any
similar federal or state law for the relief of debtors. The term “custodian”
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

 

A Default under clause (c) of this Section 6.1 (except for a
Default with respect to Section 4.6 or 5.1) is not an Event of Default
until the Trustee or the Holders of at least a majority in principal amount of
the then outstanding Securities notify the Company in writing of the Default
and the Company does not cure the Default or such Default is not waived within
30 days after receipt of the notice pursuant to Section 6.4. The notice
must specify the Default, demand that it be remedied and state that the notice
is a “Notice of Default.”

 

Section 6.2                                   Acceleration.

 

If an Event of Default (other than an Event of Default specified in
clauses (e) or (f) of Section 6.1) occurs and is continuing, the
Trustee by notice to the Company or the Holders of at least a majority in
principal amount of the then outstanding Securities by written notice to the
Company and the Trustee may declare the unpaid principal of and any
accrued interest on all the Securities to be due and payable. Upon such
declaration, all unpaid principal of and accrued interest on all Securities
shall be due and payable immediately; provided, however, that if any
Indebtedness or Obligation is outstanding pursuant to, or with respect to, the
Senior Debt, such a declaration of acceleration by the Holders shall not become
effective until the earlier of (i) the day which is five Business Days
after the receipt by each of the Company and the holders of Senior Debt of such
written notice of acceleration or (ii) the date of acceleration of any
Indebtedness under any Senior Debt; and provided, further, that, so long as any
Senior Debt is outstanding, any such declaration by the Trustee or the Holders
shall not become effective if any period during which the Company is not
permitted to make payment on account of the Securities pursuant to Section 10.3
is then in effect. If an Event of Default specified in clause (e) or (f) of
Section 6.1 occurs, all unpaid principal of and accrued interest on all
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.

 

Section 6.3                                   Other
Remedies. 

 

If an Event of Default occurs and is continuing, the Trustee may, after
a declaration of acceleration under Section 6.2 above, pursue any
available remedy to collect the payment of

 

25

 

principal or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture. The
Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.

 

Section 6.4                                   Waiver
of Past Defaults. 

 

Holders of a majority in principal amount of the then outstanding
Securities by notice to the Trustee may, on behalf of the Holders of all
Securities, waive any existing Default or Event of Default and its consequences
under this Indenture, including without limitation a rescission of an
acceleration pursuant to Section 6.2, except for a continuing Default or
Event of Default in the payment of interest on or the principal of any Security
held by a non-consenting Holder, or except for a waiver that would conflict
with any judgment or decree. Upon actual receipt of any such notice of waiver
by a Responsible Officer of the Trustee, 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 Event of Default or impair any right consequent
thereon.

 

Section 6.5                                   Control
by Majority. 

 

The Holders of a majority in principal amount of the then outstanding
Securities may 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 it, provided, that indemnification for the Trustee’s fees
and expenses, in a form reasonably satisfactory to the Trustee, shall have
been provided. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may involve the
Trustee in personal liability.

 

Section 6.6                                   Limitation
on Suits. 

 

A Holder may pursue a remedy with respect to this Indenture only
if:

 

(a)                                  the
Holder gives to the Trustee written notice of a continuing Event of Default;

 

(b)                                 the
Holders of at least a majority in principal amount of the then outstanding
Securities make a written request to the Trustee to pursue the remedy;

 

(c)                                  such
Holder or Holders offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;

 

(d)                                 the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer and, if requested, the provision of indemnity; and

 

26

 

(e)                                  during
such 60 day period the Holders of a majority in principal amount of the then
outstanding Securities do not give the Trustee a direction inconsistent with
the request.

 

A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.

 

Section 6.7                                   Rights
of Holders to Receive Payment. 

 

Notwithstanding any other provision of this Indenture, but subject to Article X
hereof, the right of any Holder of a Security to receive payment of principal
and interest on the Security, on or after the respective due dates expressed in
the Security, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of the Holder.

 

Section 6.8                                   Collection
Suit by Trustee. 

 

If an Event of Default specified in Section 6.1(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal and interest remaining unpaid on the Securities and
interest on overdue principal and, to the extent lawful, interest and 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.

 

Section 6.9                                   Trustee
May File Proofs of Claim.

 

The Trustee is authorized to
file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor upon the Securities),
its creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on
any such claims and any custodian 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 to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.7 hereof out of the estate
in any such proceeding, shall be denied for any reason, payment of the same
shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Securities may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder

 

27

 

thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

Section
6.10                            Priorities.

 

If the Trustee
collects any money pursuant to this Article, it shall, subject to the
provisions of Article X hereof, pay out the money in the following order:

 

(a)                                  First:
to the Trustee, its agents and attorneys for amounts due under
Section 7.7, including payment of all compensation, expenses and
liabilities incurred, and all advances made, if any, by the Trustee and the
costs and expenses of collection;

 

(b)                                 Second:
to holders of Senior Debt to the extent required by Article X hereof;

 

(c)                                  Third:
to (i) Holders for amounts due and unpaid on the Securities for principal and
interest, and (ii) holders of Pari Passu Debt for amounts due and unpaid on
such Pari Passu Debt for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities and/or such Pari Passu Debt for principal and interest,
respectively; and

 

(d)                                 Fourth:
to the Company or to such party as a court of competent jurisdiction shall
direct.

 

The Trustee
may fix a record date and payment date for any payment to Holders.

 

Section
6.11                            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 or omitted by it as a Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit
by Holders of more than ten percent (10%) in principal amount of the then
outstanding Securities.

 

ARTICLE VII

TRUSTEE

 

Section
7.1                                   Duties
of Trustee.

 

(a)                                  If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.

 

(b)                                 Except
during the continuance of an Event of Default:

 

28

 

(i)                                     The
duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee.

 

(ii)                                  In
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon resolutions, statements, reports, documents, orders,
certificates, opinions or other instruments furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any
of the above that are specifically required to be furnished to the Trustee pursuant
to this Indenture, the Trustee shall examine them to determine whether they
substantially conform to the requirements of this Indenture.

 

(c)                                  The
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

 

(i)                                     This
paragraph does not limit the effect of paragraph (b)(i) and (b)(ii) of
this Section.

 

(ii)                                  The
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proven that the Trustee was negligent in
ascertaining the pertinent facts.

 

(iii)                               The
Trustee shall not be liable to the Holders with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.5.

 

(d)                                 Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of
this Section.

 

(e)                                  No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or incur any liability. The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense.

 

(f)                                    The
Trustee shall not be liable for interest on any money received by it, except as
the Trustee may agree in writing with the Company or, except with respect to
any money held by the Trustee over a holiday or weekend, in which event the
Trustee shall remit to the Company the interest earnings on such money at a
rate equal to the then current rate for money market funds invested by the
Trustee; provided that the Company has directed the Trustee to invest such
money. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

 

29

 

Section 7.2                                   Rights
of Trustee. 

 

(a)                                  The
Trustee may conclusively rely upon any document believed by it to be genuine
and to have been signed or presented to it by the proper Person. The Trustee
need not investigate any fact or matter stated in the document. The Trustee
shall have no duty to inquire as to the performance of the Company’s covenants
in Article IV hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or any Event of Default except 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 Sections 4.3(a), 4.3(b) and 4.4(b) 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).

 

(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel. 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 from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

 

(c)                                  The
Trustee may act through agents, attorneys, custodians or nominees and shall not
be responsible for the misconduct or negligence or the supervision of any
agents, attorneys, custodians or nominees appointed by it with due care.

 

(d)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.

 

(e)                                  Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficient if signed by an
Officer of the Company.

 

(f)                                    The
Trustee shall not be deemed to have notice of an Event of Default for any
purpose under this Indenture unless notified of such Event of Default by the
Company, the Paying Agent (if other than the Company) or a Holder of the
Securities.

 

Section 7.3                                   Individual
Rights of Trustee. 

 

The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11.

 

30

 

Section 7.4                                   Trustee’s
Disclaimer. 

 

The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company’s use of the proceeds from the Securities or any
money paid to the Company or upon the Company’s direction under any provision
hereof, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee and it shall not be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.

 

Section 7.5                                   Notice
of Defaults. 

 

If an Event of Default occurs and is continuing and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to Holders a notice
of the Event of Default within 90 days after it occurs or as soon as
practicable after it is known to a Responsible Officer of the Trustee. Except
in the case of an Event of Default in payment on any Security, the Trustee may
withhold the notice if and so long as the Responsible Officer of the Trustee in
good faith determines that withholding the notice is in the interests of the
Holders.

 

Section 7.6                                   Reports
by Trustee to Holders. 

 

(a)                                  Within
60 days of the end of each Fiscal Year, commencing with the fiscal year ending December 31,
2006, the Trustee shall mail to Holders (with a copy to the Company) a brief
report dated as of such reporting date that complies with TIA § 313(a) (but
if no event described in TIA § 313(a) has occurred within the 12
months preceding the reporting date, no report need be prepared or
transmitted). The Trustee also shall comply with TIA § 313(b). The Trustee
shall also transmit by mail all reports as required by TIA § 313(c).

 

(b)                                 Commencing
at the time this Indenture is qualified under the TIA, a copy of each report
mailed to Holders under this Section 7.6 (at the time of its mailing to
Holders) shall be filed with the SEC and each stock exchange, if any, on which
the Securities are listed. The Company shall promptly notify the Trustee if and
when the Securities are listed on any stock exchange.

 

Section 7.7                                   Compensation
and Indemnity. 

 

(a)                                  The
Company shall pay to the Trustee from time to time reasonable compensation for
its acceptance of this Indenture and its performance of the duties and services
required hereunder. The Trustee’s compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee promptly upon request for all reasonable disbursements, advances
and expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee’s agents and counsel.

 

31

 

(b)                                 The
Company shall indemnify the Trustee against any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in Section 7.7(d).
The Trustee shall notify the Company promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder, except to the extent the
Company is prejudiced thereby. The Company shall defend the claim and the
Trustee shall reasonably cooperate in such defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
one such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.

 

(c)                                  The
obligations of the Company to pay compensation under Section 7.7(a) through
the date of termination, and for indemnification under Section 7.7(b) shall
survive the satisfaction and discharge of this Indenture.

 

(d)                                 The
Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own negligence, bad faith or
willful misconduct.

 

(e)                                  To
secure the Company’s payment obligations in this Section, the Trustee shall
have a lien prior to the Securities on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on the
Securities or to pay Senior Debt. Such lien shall survive the satisfaction and
discharge of this Indenture.

 

(f)                                    When
the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

 

Section 7.8                                   Replacement
of Trustee. 

 

(a)                                  A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.8.

 

(b)                                 The
Trustee may resign at any time and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority of the aggregate
principal amount of the outstanding Securities may remove the Trustee
(including any successor Trustee) at any time by so notifying the Trustee and
the Company in writing. The Company may remove the Trustee if:

 

(i)                                     the
Trustee fails to comply with Section 7.10;

 

(ii)                                  the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

 

(iii)                               a
Custodian or public officer takes charge of the Trustee or its property;

 

32

 

(iv)                              the
Trustee becomes incapable of acting as Trustee under this Indenture, or

 

(v)                                 the
Company so elects, provided such replacement Trustee is qualified.

 

(c)                                  If
the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trustee.

 

(d)                                 If
a successor Trustee does not take office within 30 days after notice that the
Trustee has resigned or has been removed, the Company or the Trustee or the
Holders of at least a majority in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.

 

(e)                                  If
the Trustee after written request by any Holder who has been a Holder for at
least six months fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

 

(f)                                    A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to all Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, provided all sums owing to the Trustee hereunder have
been paid and subject to the lien provided for in Section 7.7.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company’s obligations to pay compensation under Section 7.7(a) through
the date of termination, and for indemnification under Section 7.7(b) hereof
shall continue for the benefit of the retiring Trustee.

 

Section 7.9                                   Successor
Trustee by Merger, etc. 

 

If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.

 

Section 7.10                            Eligibility;
Disqualification. 

 

(a)                                  There
shall at all times be a Trustee hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any state or territory thereof or of the District of Columbia authorized
under such laws to exercise corporate trustee power, shall be subject to
supervision or examination by Federal, state, territorial or District of
Columbia authority and shall have a combined capital and surplus of at least
$5,000,000 as set forth in its most recent published annual report of
condition.

 

33

 

(b)                                 This
Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1) and
(2). The Trustee shall be subject to TIA § 310(b).

 

Section 7.11                            Preferential
Collection of Claims Against Company. 

 

The Trustee shall be subject to TIA § 311(a), excluding any
creditor relationship listed in TIA § 311(b). A Trustee who has resigned
or been removed shall be subject to TIA § 311(a) to the extent
indicated therein.

 

ARTICLE VIII

DISCHARGE OF INDENTURE

 

Section 8.1                                   Termination
of Company’s Obligations. 

 

(a)                                  This
Indenture shall cease to be of further effect (except that the Company’s
obligations to pay compensation under Section 7.7(a) through the date
of termination, and for indemnification under Section 7.7(b) and its
obligations under Section 8.4, and the Company’s, Trustee’s and Paying
Agent’s obligations under Section 8.3 shall survive) when, without
violating Article X hereof, all outstanding Securities have been paid in
full and the Company has paid all sums payable by the Company hereunder. In
addition, the Company may terminate all of its obligations under this Indenture
if, without violating Article X hereof:

 

(i)                                     the
Company irrevocably deposits in trust with the Trustee or, at the option of the
Trustee, with a trustee reasonably satisfactory to the Trustee and the Company
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, money or U.S. Government Obligations sufficient
(as certified by an independent public accountant designated by the Company) to
pay principal and interest on the Securities to maturity or redemption, as the
case may be, and to pay all other sums payable by it hereunder, provided that (A) the
trustee of the irrevocable trust shall have been irrevocably instructed to pay
such money or the proceeds of such U.S. Government Obligations to the Trustee
and (B) the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Obligations to the payment of
said principal and interest with respect to the Securities;

 

(ii)                                  the
Company delivers to the Trustee an Officers’ Certificate stating that all
conditions precedent to satisfaction and discharge of this Indenture have been
complied with; and

 

(iii)                               no
Default or Event of Default with respect to the Securities shall have occurred
and be continuing on the date of such deposit.

 

Then, this Indenture shall cease to be of
further effect (except as provided in this paragraph), and the Trustee, on
demand of the Company, shall execute proper instruments acknowledging
confirmation of and discharge under this Indenture. The Company may make the
deposit only if Article X hereof does not prohibit such payment.

 

34

 

However, the Company’s obligations in
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 4.2, 7.7(c), 7.8, 8.3 and 8.4 and the Trustee’s
and Paying Agent’s obligations in Section 8.3 shall survive until the
Securities are no longer outstanding. Thereafter, only the Company’s
obligations to pay compensation under Section 7.7(a) through the date
of termination, and for indemnification under Section 7.7(b), its
obligations under Section 8.4 and the Company’s, Trustee’s and Paying
Agent’s obligations in Section 8.3 shall survive.

 

(b)                                 After
such irrevocable deposit made pursuant to this Section 8.1 and
satisfaction of the other conditions set forth herein, the Trustee upon written
request shall acknowledge in writing the discharge of the Company’s obligations
under this Indenture except for those surviving obligations specified above.

 

(c)                                  In
order to have money available on a payment date to pay principal or interest on
the Securities, the U.S. Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in
such amounts as will provide the necessary money. U.S. Government Obligations
shall not be callable at the issuer’s option.

 

Section 8.2                                   Application
of Trust Money. 

 

The Trustee or a trustee satisfactory to the Trustee and the Company
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 8. 1. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal and interest on the Securities.

 

Section 8.3                                   Repayment
to Company. 

 

(a)                                  The
Trustee and the Paying Agent shall promptly pay to the Company upon written
request any excess money or securities held by them at any time.

 

(b)                                 The
Trustee and the Paying Agent shall pay to the Company upon written request any
money held by them for the payment of principal or interest on the Securities
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided, however, that the Company shall have either
caused notice of such payment to be mailed to each Holder entitled thereto no
less than 30 days prior to such repayment or within such period shall have
published such notice in a newspaper of widespread circulation published in Hennepin
County, Minnesota. After payment to the Company, Holders entitled to the money
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.

 

Section 8.4                                   Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.2 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise

 

35

 

prohibiting such application, the Company’s
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money
or U.S. Government Obligations in accordance with Section 8.2; provided,
however, that if the Company has made any payment of interest on or principal
of any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment, as long as no money is owed to the Trustee by the Company, from
the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE IX

AMENDMENTS

 

Section 9.1                                   Without
Consent of the Holders. 

 

The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Holder:

 

(a)                                  to
cure any ambiguity, defect or inconsistency;

 

(b)                                 to
comply with Section 5.1;

 

(c)                                  to
provide for the issuance of uncertificated Securities or certificated
Securities in excess of an aggregate outstanding principal balance of
$50,000,000;

 

(d)                                 to
make any change that does not adversely affect the legal rights hereunder of
any Holder, including but not limited to, an increase in the aggregate dollar
amount of Securities which may be outstanding under this Indenture;

 

(e)                                  make
any change in Section 3.2; provided, however, that no such change shall
adversely affect the rights of any outstanding or issued Security; or

 

(f)                                    to
comply with any requirements of the SEC in connection with the qualification of
this Indenture under the TIA.

 

Section 9.2                                   With
Consent of the Holders. 

 

(a)                                  The
Company and the Trustee may amend this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of
the then outstanding Securities. The Holders of a majority in principal of the
then outstanding Securities may also waive on behalf of all Holders any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Securities. However, without the consent of the Holder of each
Security affected, an amendment or waiver under this Section may not:

 

(i)                                     reduce
the aggregate principal amount of Securities whose Holders must consent to an
amendment, supplement or waiver;

 

36

 

(ii)                                  reduce
the rate of or change the time for payment of interest, including default
interest, on any outstanding Security;

 

(iii)                               reduce
the principal of or change the fixed maturity of any Security or alter the
redemption provisions or the price at which the Company shall offer to purchase
such Security pursuant to Section 3.1 of Article III hereof;

 

(iv)                              make
any Security payable in money other than that stated in the Prospectus;

 

(v)                                 modify
or eliminate the right of the estate of a Holder or a Holder to cause the
Company to repurchase a Security upon the death or Total Permanent Disability
of a Holder pursuant to Article III; provided, however, that the Company
may not modify or eliminate such right, as it may be in effect on the Issue
Date, of any Security which was issued with such right, and after an amendment
under this subsection 9.2(a)(v) becomes effective, the Company shall
mail to the Holders of each Security then outstanding a notice briefly
describing the amendment;

 

(vi)                              make
any change in Section 6.4 or 6.7 hereof or in this sentence of this Section 9.2;

 

(vii)                           make
any change in Article X that materially adversely affects the rights of
any Holders; or

 

(viii)                        waive a
Default or Event of Default in the payment of principal of or interest on any
Security (except a rescission of acceleration of the Securities by the Holders
of at least a majority in aggregate principal amount of the Securities and a
waiver of the payment default that resulted from such acceleration).

 

(b)                                 It
shall not be necessary for the consent of the Holders under this Section to
approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof.

 

(c)                                  After
an amendment or waiver under this Section becomes effective, the Company
shall mail to the Holders of each Security affected thereby a notice briefly
describing the amendment or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture or waiver. Subject to Sections
6.4 and 6.7 hereof, the Holders of a majority in principal amount of the
Securities then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Securities.

 

Section 9.3                                   Compliance
with Trust Indenture Act. 

 

If at the time this Indenture shall be qualified under the TIA, every
amendment to this Indenture or the Securities shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.

 

37

 

Section 9.4                                   Effect
of Consents. 

 

(a)                                  Until
an amendment or waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the
consenting Holder’s Security, even if notation of the consent is not made on
any Security. An amendment or waiver becomes effective in accordance with its
terms and thereafter binds every Holder.

 

(b)                                 The
Company may fix a record date for determining which Holders must consent to
such amendment or waivers. If the Company fixes a record date, the record date
shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 2.5, or (ii) such
other date as the Company shall designate.

 

Section 9.5                                   Notation
on or Exchange of Securities. 

 

The Trustee may place an appropriate notation about an amendment or
waiver on any Security, if certificated, or any Account statement. Failure to
make any notation or issue a new Security shall not affect the validity and
effect of such amendment or waiver.

 

Section 9.6                                   Trustee
to Sign Amendments, etc. 

 

The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article IX if, in the Trustee’s reasonable
discretion, the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing or refusing to sign such amendment or supplemental
indenture, the Trustee shall be entitled to receive, if requested, an indemnity
reasonably satisfactory to it and to receive and, subject to Section 7.1,
shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel (or written advice of counsel) as conclusive evidence that
such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms. The Company may not sign
an amendment or supplemental indenture until its Board of Directors approves
it.

 

ARTICLE X

SUBORDINATION

 

Section 10.1                            Agreement
to Subordinate. 

 

(a)                                  The
Company agrees, and each Holder by accepting a Security consents and agrees,
that the Indebtedness evidenced by the Securities and the payment of the
principal of, and interest on and other amounts owing with respect to, the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article, to the prior indefeasible payment in full, in cash,
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt, of all Obligations due in respect of Senior Debt of the Company whether
outstanding on the date hereof or hereafter incurred and to the expiration of
any commitment of any holder of Senior Debt to extend credit

 

38

 

accommodations to the Company,
and that the subordination is for the benefit of the holders of Senior Debt.

 

(b)                                 For
purposes of this Article X, a payment or distribution on account of the
Securities may consist of cash, property or securities, by set-off or
otherwise, and a payment or distribution on account of any of the Securities
shall include, without limitation, any redemption, purchase or other
acquisition of the Securities.

 

(c)                                  The
Holders agree that the Securities are unsecured, and agree that no Holder nor
the Trustee will, unless and until all of the Senior Debt shall have been fully
paid and satisfied and all obligations of the holders of the Senior Debt to extend
credit accommodations to the Company have terminated (i) accept any
security interest from the Company or from any other Person or permit any
Person (other than the Company) to become primarily or secondarily obligated
for the Securities and (ii) in the event any Holder or the Trustee does
obtain any such security interest for the Securities or any such primary or
secondary obligations, at the request of any holder of the Senior Debt, each
Holder hereby agrees to execute and deliver to such holder, and authorizes such
holder to prepare and file where permitted by law, such termination statements
and releases as such holder shall reasonably request or require to release the
Holder’s or Trustee’s security interest in or lien against such property or
such primary or secondary obligations. No Holder nor the Trustee shall
challenge, and irrevocably waives any right it may have to challenge, the
attachment, validity, perfection, priority or extent of the Senior Debt, or any
lien of any holder of Senior Debt or any representative thereof in any
collateral, in any judicial, administrative or alternative dispute resolution
proceeding.

 

Section 10.2                            Liquidation;
Dissolution; Bankruptcy. 

 

(a)                                  Upon
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon (i) any
dissolution or winding-up or total or partial liquidation or reorganization of
the Company whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (ii) any bankruptcy or insolvency case or
proceeding or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
assets, (iii) any assignment for the benefit of creditors or any other
marshaling of assets of the Company, all obligations due, or to become due, in
respect of Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) shall first
indefeasibly be paid in full, or provision shall have been made for such
payment, in cash, cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before any payment is made on account of the principal
of or interest on the Securities, except that Holders may receive securities
that are subordinated to at least the same extent as the Securities are to
(x) Senior Debt and (y) any securities issued in exchange for Senior Debt.
Upon any such dissolution, winding-up, liquidation or reorganization, any
payment 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 under this Indenture would be entitled, except for the
provisions hereof, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such

 

39

 

payment or distribution, or by
the Holders of the Securities or by the Trustee under this Indenture if
received by them, directly to the holders of Senior Debt (in order of priority,
and when of equal priority, pro rata to such holders of equal priority on the
basis of the amounts of Senior Debt held by such holders) or their representative
or representatives, or to the trustee or trustees under any indenture pursuant
to which any of such Senior Debt may have been issued, as their interests may
appear, for application to the payment of Senior Debt remaining unpaid until
all such Senior Debt has been indefeasibly paid in full and all commitments to
extend credit accommodations to the Company shall have expired, or provisions
shall have been made for such payment, in cash, cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Debt (as evidenced by their
prior written consent thereto), after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Senior Debt. For
purposes of determining the priority of distributions to holders of Senior Debt
under this Agreement, any holder of Senior Debt or representative for any such
holder that has been granted by the Company an express security interest or
lien (other than a right of set off ) in all of the inventory, accounts receivable
and general intangibles (the “Priority Collateral”) of the Company shall have
priority over the holder of any Senior Debt that has not been granted such a
lien or security interest, in the absence of a written agreement to the
contrary signed by the holders of Senior Debt that is secured by Priority
Collateral or their representatives. As of the date of this Agreement, (a) LaSalle
Bank National Association (“LaSalle”) is entitled to the priority of
distributions to holders of Senior Debt under this Agreement under the
preceding sentence and (b) the Company is prohibited under its credit
documents with LaSalle from granting an express lien in any of the Priority
Collateral to any Person other than LaSalle.

 

(b)                                 If
the Trustee does not file a proper claim or proof of debt in the form required
in any proceeding of the type specified in Section 6.9 prior to 30 days
before the expiration of the time to file such claims or proofs, then any
holder of Senior Debt or representative thereof shall have the right to demand,
sue for, collect and receive the payments and distributions in respect of the
Securities which are required to be paid or delivered to the holders of Senior
Debt as provided in this Article X and to file and prove all claims
therefor and to take all such other action in the name of the Holders or
otherwise, as such holder of Senior Debt may determine to be necessary or
appropriate for the enforcement of the provisions of this Article X.

 

(c)                                  For
purposes of this Article X, the words “cash, property or securities” shall
be deemed to include securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are
subordinated, to at least the same extent as the Securities, to the payment of
all Senior Debt or to the payment of all securities issued in exchange therefor
to the holders of Senior Debt. The consolidation of the Company with, or the
merger of the Company with or 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 in Article V shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section if such other corporation shall, as part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article V.

 

40

 

Section 10.3                            Default
of Senior Debt. 

 

(a)                                  (i) In
the event and during the continuation of any default in the payment of
principal of (or premium, if any) or interest on any Senior Debt, or any amount
owing from time to time under or in respect of Senior Debt or in the event that
any nonpayment default or event of default with respect to any Senior Debt
shall have become or been declared due and payable prior to the date on which
it would otherwise have become due and payable, or (ii) in the event that
any other nonpayment default or event of default (however described or
denominated) with respect to any Senior Debt shall have occurred and be
continuing permitting the holders of such Senior Debt (or a trustee or
representative on behalf of the holders thereof) to declare such Senior Debt due
and payable prior to the date on which it would otherwise have become due and
payable, then the Company shall not make, and the Holders and the Trustee shall
not receive, any payment, direct or indirect (including any payment which may
be payable by reason of the payment of any other Indebtedness of the Company
being subordinated to the payment of the Securities) (other than securities
that are subordinated to at least the same extent as the Securities are to (x)
Senior Debt and (y) any securities issued in exchange for Senior Debt) on
account of any Securities unless and until (A) such default or event of
default shall have been waived in writing by the holders or representatives of
the relevant Senior Debt or shall have ceased to exist or such acceleration
shall have been rescinded, or (B) in case of any nonpayment default or
event of default specified in clause (ii) above, during the period (a “Payment
Blockage Period”) commencing on the date the Company and the Trustee
receive written notice (a “Payment Notice”) of such default or event of
default (which notice shall be binding on the Trustee and the Holders as to the
occurrence of such an default or event of default) from a holder of the Senior
Debt to which such default relates and ending on the earliest of (I) 179 days
after such date, (II) the date, if any, on which such Senior Debt to which such
default relates is discharged and any commitment of the holder(s) of such
Senior Debt to extend credit accommodations to the Company shall have expired
or such default is waived in writing by the holders of such Senior Debt and (C) the
date on which the Trustee receives written notice from the holder of such
Senior Debt to which such default relates terminating the Payment Blockage
Period. Notwithstanding the foregoing, during any Payment Blockage Period, the
Company shall make payments for rescinded subscriptions under Section 2.2(b) (including
subscriptions that occur at a time when a post-effective amendment to the
Registration Statement was required but not yet effective); provided that the
Company shall not issue any new Securities, or renew any existing Securities,
at any time when the Company is prohibited from making payments upon Securities
pursuant to this Agreement. Notwithstanding the foregoing, payment on the
Securities, may not be blocked pursuant to clause (B) of the first
sentence of this paragraph for more than 180 days in any period of 360 days;
provided that the foregoing limitation shall not apply to any holder of Senior
Debt that did not give or join in the relevant Payment Blockage Notice (but
rather shall, with respect to such holder, apply only from and after the giving
of any Payment Blockage Notice by such other holder or representative thereof).
For all purposes of this Section 10.3, no default or event of default
which existed or was commencing with respect to the Senior Debt to which a
Payment Blockage Period relates on the date such Payment Blockage Period
commenced shall be or be made the basis for

 

41

 

the commencement or any
subsequent Payment Blockage Period unless such default or event of default is
cured or waived for a period of not less than 180 consecutive days.

 

(b)                                 Subject
to the provisions of Sections 6.9 and 10.7, neither the Trustee nor the Holders
may take any action to assert, demand, sue for, collect, enforce or realize
upon the Securities or the related Obligations or any part thereof (each, an
“Enforcement Action”) in any period during which the Company is not permitted to
make payment on account of the Securities pursuant to Section 10.3, unless
and only to the extent that the commencement of a legal action may be required
to toll the running of any applicable statute of limitations. The Trustee shall
notify each holder of Senior Debt prior to exercising any Enforcement Action.

 

Section 10.4                            When
Distribution Must Be Paid Over. 

 

(a)                                  If
the Trustee or any Holder receives any (i) payment with respect to the
Securities, whether in cash, property or securities which the Company is
prohibited from making under Section 10.3 (other than securities that are
subordinated to at least the same extent as the Securities are to (x) Senior
Debt and (y) any securities issued in exchange for Senior Debt) or (ii) any
realization upon or proceeds of any Enforcement Action, or any insurance
proceeds or condemnation awards with respect to the Company or its property,
such realization proceeds or awards shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of Senior Debt (in order of their priority, and when
of equal priority, pro rata to such holders of equal priority on the basis of
the amounts of Senior Debt held by such holders) for application to the payment
of all Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to indefeasibly pay such Obligations in full, in cash, cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt, in such order of application determined by the holders of the Senior Debt
in accordance with the terms of such Senior Debt, and after giving effect to
any concurrent cash payment or distribution to or for the other holders of
Senior Debt.

 

(b)                                 With
respect to the holders of Senior Debt, the Trustee undertakes to perform only
such obligations on the part of the Trustee as are specifically set forth in
this Article X, 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 shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or, if
permitted by this Agreement, the Company or any other Person money or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article X,
except if such payment is made as a result of the willful misconduct or
negligence of the Trustee.

 

Section 10.5                            Notice
by Company. 

 

The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of any
Obligations with respect to the Company to violate this Article (and the
Company shall furnish a copy of such notice to the

 

42

 

holders of the Senior Debt and their
representatives), but failure to give such notice shall not affect the
subordination of the Securities to the Senior Debt provided in this Article.

 

Section 10.6                            Subrogation.

 

Unless and until the Senior Debt is indefeasibly paid in full, in cash,
cash equivalents or otherwise in a manner satisfactory to the holders of such
Senior Debt (as evidenced by their prior written consent thereto) and all
commitments of the holders of such Senior Debt to extend credit accommodations
to the Company shall have expired, the Holders shall not exercise any right
they may have to be subrogated to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt.

 

Section 10.7                            Relative
Rights. 

 

(a)                                  This
Article defines the relative rights of Holders and holders of Senior Debt.
Nothing in this Indenture shall:

 

(i)                                     impair,
as between the Company and Holders, the obligations of the Company, which are
absolute and unconditional, to pay principal of and interest on the Securities
in accordance with their terms; or

 

(ii)                                  affect
the relative rights of Holders and creditors of the Company other than their
rights in relation to holders of Senior Debt;

 

(iii)                               prevent
the Trustee or any Holder from exercising its available remedies upon a Default
or Event of Default at any time when such exercise is not prohibited by this
Article, subject to the rights of holders and owners of Senior Debt to receive distributions
and payments otherwise payable to Holders.

 

(b)                                 If
the Company fails because of this Article to pay principal of or interest
on a Security on the due date, the failure is still a Default or Event of
Default, unless cured by payment within 30 days after the Company’s right to
make payments on the Securities has resumed in accordance with Section 10.3.

 

Section 10.8                            Subordination
May Not Be Impaired by the Company or Holders of Senior Debt. 

 

(a)                                  No
right of any present or future holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Securities and the
Obligations related thereto shall be prejudiced or impaired by any act or
failure to act or delay in acting by any such holder or by the Company, the
Trustee or any Agent or by the failure of the Company or the Trustee to comply
with this Indenture, regardless of any knowledge thereof which any such holder
may have or otherwise be charged with.

 

(b)                                 Without
limiting the effect of the preceding paragraph, any holder of Senior Debt may
at any time and from time to time without the consent of or notice to any
Holder or to the Trustee, without impairing or releasing any of the rights of
any holder of

 

43

 

Senior Debt under this
Indenture, upon or without any terms or conditions and in whole or in part:

 

(i)                                     change
the manner, place or term of payment, or change or extend the time of payment
of, renew, increase or alter any Senior Debt or any other liability of the
Company to such holder, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the provisions of this Article X
shall apply to the Senior Debt as so changed, extended, increased, renewed or
altered;

 

(ii)                                  notwithstanding
the provisions of Section 5.1 hereof, sell, exchange, release, surrender,
realize upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, any Senior Debt or any other liability of the Company or any other
Person to such holder or any other liabilities incurred directly or indirectly
in respect thereof or hereof or any offset thereagainst;

 

(iii)                               exercise
or refrain from exercising any rights or remedies against the Company or any
other Person or otherwise act or refrain from acting or, for any reason, fail
to file, record or otherwise perfect any security interest in or lien on any
property of the Company or any other Person;

 

(iv)                              settle
or compromise or release any Senior Debt or any other liability of the Company
or any other Person to such holder, or any security therefor, or any liability
incurred directly or indirectly in respect thereof;

 

(v)                                 retain
or obtain, or refrain from retaining or obtaining, a security interest in any
property to secure any of the Senior Debt; and

 

(vi)                              retain
or obtain, or refrain from retaining or obtaining any primary or secondary
obligation with respect to any Senior Debt.

 

(c)                                  All
rights and interests under this Indenture of any holder of Senior Debt and all
agreements and obligations of the Trustee, the Holders, and the Company under Article VI
and under this Article X shall remain in full force and effect
irrespective of (i) any lack of validity or enforceability of any
agreement or instrument relating to any Senior Debt or (ii) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Trustee, any Holder, or the Company.

 

(d)                                 Any
holder of Senior Debt is hereby authorized to demand specific performance of
the provisions of this Article X, whether or not the Company shall have
complied with any of the provisions of this Article X applicable to it, at
any time when the Trustee or any Holder shall have failed to comply with any of
these provisions. The Trustee and the Holders irrevocably waive any defense
based on the adequacy of a remedy at law that might be asserted as a bar to
such remedy of specific performance.

 

44

 

Section 10.9                            Distribution
or Notice to Representative. 

 

(a)                                  Whenever
a distribution is to be made or a notice given to any holder of Senior Debt,
the distribution may be made and the notice given to the duly appointed
representative of such holder.

 

(b)                                 Upon
any payment or distribution of assets of the Company referred to in this Article X,
the Trustee and the Holders shall be entitled to rely upon, with respect to any
holder of Senior Debt, any certificate of any representative of such holder
believed by the Trustee or the Holder in good faith to be genuine or for the
purpose of ascertaining the Persons entitled to participate in such
distribution and the holders of the Senior Debt and other Indebtedness of the
Company.

 

Section 10.10                     Rights of
Trustee and Paying Agent. 

 

(a)                                  Notwithstanding
the provisions of this Article X 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 or distribution by the Trustee,
or the taking of any action by the Trustee, and the Trustee or Paying Agent may
continue to make payments on the Securities unless it shall have received at
its Corporate Trust Office at least five Business Days prior to the date of
such payment written notice of facts that would cause the payment of any
Obligations with respect to the Securities to violate this Article, which
notice, unless specified by a holder of Senior Debt as such, shall not be
deemed to be a Payment Notice. The Trustee may conclusively rely on such notice
believed by it in good faith to be genuine. Only the Company or a holder of
Senior Debt may give the notice. As between the Company and the Trustee,
nothing in this Article X shall apply to amounts due to, or impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.7
hereof.

 

(b)                                 The
Trustee in its individual or any other capacity may hold Senior Debt with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights.

 

Section 10.11                     Authorization
to Effect Subordination. 

 

Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Debt and the Holders,
the subordination as provided in this Article X, and appoints the Trustee
his attorney-in-fact for any and all such purposes.

 

Section 10.12                     Article Applicable
to Paying Agent. 

 

In case at any time any Paying Agent (other than the Trustee or the
Company) shall have been appointed by the Company and be then acting hereunder,
the term “Trustee” as used in this Article X shall in such case (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 X in addition to or in place
of the Trustee.

 

45

 

Section 10.13                     Miscellaneous.

 

(a)                                  The
agreements contained in this Article X shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any of the
Senior Debt is rescinded or must otherwise be returned by any holder of Senior
Debt upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.

 

(b)                                 The
Trustee shall notify all holders of Senior Debt (of whose identity the Trustee
has received reasonable advance written notice) of the existence of any Default
or Event of Default under Section 6.1 promptly after a Responsible Officer
of the Trustee actually becomes aware thereof; provided, however, that at least
five Business Days prior to the notification of any holder of Senior Debt under
this Section 10.13, the Trustee shall provide the Company with notice of
its intent to provide such notification, provided further, however, that no
defect in the form or delivery of the Trustee’s notice to the Company shall
preclude the timely notice by the Trustee to the holders of Senior Debt.

 

(c)                                  The
provisions of this Article and of any related defined terms and any other
provisions of this Indenture that benefit the holders of the Senior Debt shall
not be terminated, modified, rescinded, amended or annulled without the prior
written consent of each holder of Senior Debt or, to the extent permitted by
the documentation governing the relevant Senior Debt, by any lesser portion of
such Senior Debt or by any representative of such Senior Debt.

 

(d)                                 Each
Holder acknowledges and agrees that, to the extent the terms and provisions of
this Article are inconsistent with any other provision of this Agreement
or with the Securities or any other documents or instruments evidencing
obligations under this Agreement or the Securities, such other provision shall
be subject to this Article.

 

(e)                                  This
Article shall be effective and may not be terminated or otherwise revoked
by any Holder until the Senior Debt shall have been fully paid and discharged
and all obligations of any holder the Senior Debt to extend credit
accommodations to the Company have been terminated. This is a continuing
agreement of subordination and each holder of Senior Debt may continue, at any
time and without notice to any Holder or the Trustee, to extend credit or other
financial accommodations and loan monies to or for the benefit of the Company
in reliance hereon. No obligation of any Holder under this Article shall
be affected by the death or incapacity of, or written revocation by, the such
Holder or any other subordinated party, pledgor, endorser, or guarantor, if
any.

 

(f)                                    Each
Holder agrees that the no holder of the Senior Debt shall have any liability to
such Holder for, and waives any claim which the Holder may now or hereafter
have against, such holder of the Senior Debt arising out of any and all actions
which such holder of the Senior Debt in good faith takes or omits to take
(including, without limitation, actions with respect to any security for the
Senior Debt, actions with respect to the occurrence of a default upon the
Senior Debt, actions with respect to the foreclosure upon, sale, release, or
depreciation of, or failure to realize upon, any security for the Senior Debt
and actions with respect to the collection of any claim for all or any part of

 

46

 

the Senior Debt from any
guarantor or other party) with respect to the documents evidencing the Senior
Debt or to the collection of the Senior Debt or the valuation, use, protection
or release of any security for the Senior Debt. Each Holder hereby waives any
and all right to require the marshalling of assets in connection with the
exercise of any of the remedies permitted by applicable law or agreement.
Notwithstanding anything to the contrary, each Holder hereby agrees that all
payments received by any holder of the Senior Debt may be applied, in whole or
in part, to any of the Senior Debt, as such holder, in its sole discretion,
deems appropriate.

 

(g)                                 This
Article and the terms, covenants and conditions hereof shall bind and
inure to the benefit of each holder of Senior Debt, each Holder, the Trustee,
the Company and their respective successors and assigns. This Article sets
forth the entire understanding of the parties hereto relating to the subject
matter hereof, and all prior understandings and negotiations, written or oral,
are merged into and superseded by this Article. The remedies provided in this Article are
cumulative and not exclusive of any remedies provided by law.

 

(h)                                 Each
Holder hereby acknowledges that (i) it has had the opportunity to be
advised by counsel in connection with this Article, (ii) no holder of the
Senior Debt has any fiduciary relationship to the Holders, and (iii) no
joint venture exists between the Holders and the holders of the Senior Debt.

 

(i)                                     The
validity, construction and enforceability of this Article shall be
governed by the internal laws of the State of Minnesota, without giving effect
to conflict of laws principles thereof. At the option of any holder of the
Senior Debt commencing such action, this Article may be enforced in any
Federal or Minnesota State Court sitting in Hennepin County; and each Holder
consents to the jurisdiction and venue of any such court and waives any
argument that venue in such forums is not convenient. Each Holder, and each
holder of the Senior Debt by its acceptance hereof, irrevocably waives any and
all right to trial by jury in any action or proceeding to enforce or defend any
rights under this Article, and agree that any such action or proceeding shall
be tried before a court and not before a jury.

 

ARTICLE XI

MISCELLANEOUS

 

Section 11.1                            Trust
Indenture Act Controls. 

 

If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA § 318(c), the imposed duties shall control.

 

Section 11.2                            Notices.

 

(a)                                  Any
notice, instruction, direction, request or other communication by the Company,
the Trustee or any other holder of Senior Debt to the others is duly given if
in writing and delivered in person or mailed by first-class mail (registered or
certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the other’s address:

 

47

 

If to the Company:

 

Winmark Corporation

4200 Dahlberg Drive, Suite 100

Minneapolis, MN 55422-4837

Attention: 
                                

Telecopier:
                              

 

With a copy to:

 

Lindquist & Vennum PLLP

4200 IDS Center

80 South 8th Street

Minneapolis, MN 55402

Attention: 
Jonathan Levy

Telecopier: 
(612) 371-3207

 

If to the Trustee:

 

Wells Fargo Bank, National Association

                                                        

                                                        

Attention: 
                                      

Telecopier: 
                                    

 

If to LaSalle Bank National Association:

 

50 South Sixth Street

Minneapolis, MN  55402

Attention:  Peter Pricco

Telecopier: (612) 752-9881

 

If to a holder of Senior Debt, such address as such holder of Senior
Debt shall have provided in writing to the Company and the Trustee.

 

(b)                                 The
Company, the Trustee or a holder of Senior Debt by notice to the Company and
the Trustee may designate additional or different addresses for subsequent
notices or communications.

 

(c)                                  All
notices and communications (other than those sent to Holders) shall be deemed
to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

 

(d)                                 Any
notice or communication to a Holder shall be mailed by first-class mail to his
address shown on the register kept by the Registrar. Failure to mail a notice
or

 

48

 

communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other
Holders.

 

(e)                                  If
a notice or communication is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.

 

(f)                                    If
the Company mails a notice or communication to Holders, it shall mail a copy to
the Trustee and each Agent at the same time.

 

Section 11.3                            Communication
by Holders with Other Holders. 

 

Holders may communicate pursuant to TIA § 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Trustee shall be subject to § 312(b). The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA § 312(c).

 

Section 11.4                            Certificate
and Opinion as to Conditions Precedent. 

 

Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)                                  an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 11.5)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and

 

(b)                                 an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 11.5) stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.

 

Section 11.5                            Statements
Required in Certificate or Opinion. 

 

Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) shall include:

 

(a)                                  a
statement that the Person making such certificate or opinion has read such
covenant or condition;

 

(b)                                 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;

 

(c)                                  a
statement that, in the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion
whether such covenant or condition has been complied with; and

 

(d)                                 a
statement whether, in the opinion of such Person, such condition or covenant
has been complied with.

 

49

 

Section 11.6                            Rules by
Trustee and Agents. 

 

The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.

 

Section 11.7                            Legal
Holidays. 

 

A “Legal Holiday” is a Saturday, a Sunday or a day on which banking
institutions in the State of Minnesota or at a place of payment are authorized
or obligated by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.

 

Section 11.8                            No
Recourse Against Others. 

 

No director, officer, employee, agent, manager or stockholder of the
Company as such, shall have any liability for any Obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of such Obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability.

 

Section 11.9                            Duplicate
Originals. 

 

The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.

 

Section 11.10                     Governing
Law. 

 

THE INTERNAL LAW OF THE STATE OF MINNESOTA
SHALL GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS THEREOF.

 

Section 11.11                     No Adverse
Interpretation of Other Agreements. 

 

This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.

 

Section 11.12                     Successors.

 

All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.

 

Section 11.13                     Severability.

 

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.

 

50

 

Section 11.14                     Counterpart
Originals. 

 

The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

 

Section 11.15                     Table of
Contents, Headings, etc. 

 

The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions thereof.

 

[remainder of page blank]

 

51

 

SIGNATURES:

 

IN WITNESS WHEREOF, the parties hereto have caused to be duly executed
as of the day and year first written above, this Indenture.

 

	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, a national banking association,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

52Exhibit 4.2

 

THIS RENEWABLE UNSECURED
SUBORDINATED NOTE (THE “NOTE”) OF WINMARK CORPORATION (THE “COMPANY”) IS
SUBJECT TO THE TERMS OF THE INDENTURE, WHICH AMONG OTHER PROVISIONS, CONTAINS
REQUIREMENTS FOR THE HOLDER TO TRANSFER THIS NOTE, INCLUDING THE PRIOR CONSENT
OF THE COMPANY TO ANY SUCH TRANSFER. THE INDENTURE HAS BEEN FILED AS EXHIBIT
4.1 TO THE COMPANY’S REGISTRATION STATEMENT ON FORM S-1 DECLARED EFFECTIVE BY
THE SECURITIES AND EXCHANGE COMMISSION ON OR ABOUT                                     ,
2006, PURSUANT TO WHICH THIS NOTE HAS BEEN ISSUED BY THE COMPANY.

 

THE COMPANY MAY REDEEM THIS
NOTE, IN WHOLE OR IN PART, IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.

 

WINMARK CORPORATION

 

Incorporated Under the Laws
of Minnesota

 

RENEWABLE UNSECURED SUBORDINATED
NOTE

 

	
  Registered No.: 

  	
   

  	
  Registered Principal
  Amount: $

  
	
   

  	
   

  	
   

  
	
  Issue Date: 

  	
   

  	
  Interest Rate: 

  
	
   

  	
   

  	
   

  
	
  Term: 

  	
   

  	
  Interest Payment Schedule:
  

  
	
   

  	
   

  	
   

  
	
  Maturity Date: 

  	
   

  	
  Payment Date (for
  interest): 

  

 

Winmark Corporation, a
corporation created under the laws of the State of Minnesota (the “Company,”
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to                                                                               ,
or registered assigns, the principal sum of                         
Dollars ($                )
on the Maturity Date and to pay accrued and unpaid interest hereon from the
Issue Date set forth above, or from the most recent Payment Date to which
interest has been paid or duly provided for, beginning on the first Payment
Date after the Issue Date (the “Initial Payment Date”) and on each subsequent
Payment Date thereafter at the Interest Rate set forth above, until the
principal hereof is paid or made available for payment; provided, however, that
if the Payment Date is within five (5) Business Days of the Issue Date, then
the first payment will be made in the following month and will include the
interest earned since the Issue Date. Interest shall accrue on the principal
amount for the period from the later of the Issue Date of this Note or the last
Payment Date upon which an interest payment was made until and including the
day before the following Payment Date. Initially capitalized terms used but not
defined herein shall have the respective meanings given such terms in the
Indenture. The principal hereof is subject to optional redemption by the
Company and optional repurchase at the request of the Holder, as provided in
the Indenture, and if not so redeemed or repurchased, shall be due and payable
in full on the Maturity Date, which also shall constitute a Payment Date.

 

The principal and interest
so payable and punctually paid or duly provided for on any Payment Date, as
provided in the Indenture, will be paid to the Person in whose name this Note
is registered (the “Holder”) at the close of business on the Regular Record
Date for such Payment Date. Payment of the principal of and interest on this
Note will be made at the office of the Paying Agent, or in such other office as
may be selected in accordance with the Indenture, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company, payment of interest may be made in United States dollars by wire
or by check mailed to the address of the Person entitled thereto as such
address shall appear in the Securities Register.

 

Reference is hereby made to
the further provisions of this Note 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 or on behalf of the Trustee referred
to on the reverse hereof by manual or facsimile signature, this Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

 

No recourse shall be had for
the payment of the principal or interest of this Note against any Company
incorporator, stockholder, Officer, director, employee, Affiliate or Agent by
virtue of any statute or by enforcement of any assessment or otherwise.

 

IN WITNESS WHEREOF, the
Company has caused this Renewable Unsecured Subordinated Note to be signed in
its name by the manual or facsimile signature of its President and attested to
by the manual or facsimile signature of its Secretary.

 

	
  Dated:

  	
   

  	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  , Secretary

  	
   

  
											

 

CERTIFICATE OF
AUTHENTICATION

 

This Note is one of the
Renewable Unsecured Subordinated Notes, referred to in the within-mentioned
Indenture.

 

	
  Dated:

  	
   

  	
   

  	
  Wells Fargo Bank, National
  Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  

 

 

REVERSE SIDE OF NOTE

 

This Note is one of a duly
authorized issue of Renewable Unsecured Subordinated Notes of the Company
designated as its Renewable Unsecured Subordinated Notes (the “Notes”) in the
maximum aggregate principal amount of up to $50,000,000, issued and to be issued
under an Indenture, dated as of                               ,
2006 (the “Indenture”), between the Company and Wells Fargo Bank, National
Association, as Trustee (the “Trustee,” which term includes any successor
Trustee under the Indenture). Reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitation of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders, and for a statement of the terms upon which the Notes
are, and are to be, authenticated and delivered. Capitalized and certain other
terms used herein and not otherwise defined have the meanings set forth in the
Indenture.

 

The Notes are general
unsecured obligations of the Company. The payment of the principal of and
interest on this Note is expressly subordinated, as provided in the Indenture,
to the payment of all Senior Debt and, by the acceptance of this Note, the
Holder hereof agrees, expressly for the benefit of the present and future holders
of Senior Debt, to be bound by the provisions of the Indenture relating to such
subordination and authorizes and appoints as such Holder’s attorney-in-fact,
the Trustee, to take such action on such Holder’s behalf as may be necessary or
appropriate to effectuate such subordination. The Company may, at its option,
at any time redeem this Note either in whole or from time to time in part prior
to the Maturity Date by providing at least thirty (30) days written notice to
the Holder.

 

If this Note shall be redeemed
by a call for redemption and payment be duly provided hereof as specified in
the Indenture, interest shall cease to accrue on this Note.

 

This Note may be transferred
and exchanged only as provided in the Indenture. This Note may not be assigned,
transferred or otherwise alienated without the prior written consent of the
Company and shall be subject to the Company’s right to demand and receive an
opinion of Holder’s legal counsel (which counsel shall be reasonably acceptable
to the Company) that the transfer does not violate any applicable securities
laws. The Company may also require a signature guarantee.

 

Approximately fifteen (15)
but not less than ten (10) days prior to the Maturity Date, the Company will
send the Holder a Notice of Maturity to notify the Holder of the Maturity Date.
Except as otherwise provided in the Indenture, if in the Notice of Maturity the
Company does not notify the Holder of its intention to repay this Note, and
unless within fifteen (15) days after the Maturity Date, the Holder has not
demanded repayment of this Note, this Note shall be automatically renewed for
an additional term equal to the term of the maturing Note and shall be deemed
to have been renewed by the Holder and the Company as of the Maturity Date,
such that a new Note shall be deemed to have been issued as of such Maturity
Date. This Note will continue to renew as described herein absent some action
permitted under the Indenture and this Note by either the Holder or the
Company. Interest on the renewed Note shall accrue from the Issue Date thereof,
which is the first day of such renewed term. This renewed Note will be deemed
to have identical terms and provisions as the maturing Note, including
provisions relating to payment, except that the interest rate payable during
the term of the renewed Note shall be the interest rate which is being offered
by the Company on other Notes with the same term as of the Issue Date of such
renewal. If other Notes with the same term are not then being offered on the
Issue Date of such renewal, the interest rate upon renewal will be the rate
specified by the Company on or before the Maturity Date, or the Note’s existing
rate if no such rate is specified. If the Company gives notice to the Holder of
the Company’s intention to repay the Note at maturity, the Company shall pay
the Holder the principal amount and accrued and unpaid interest thereon on the
Maturity Date, and, provided such payment is timely made, no interest will
accrue after the Maturity Date. Otherwise, if the Holder requests repayment
within fifteen (15) days after the Maturity Date, no interest will accrue after
the Maturity Date and the Holder will be sent payment upon the later of the
Maturity Date or five (5) days following the date the Company receives such notice
from Holder; provided that any interest paid to the Holder accruing after the
Maturity Date shall be deducted from such payment.

 

If an Event of Default shall
occur and be continuing, the outstanding principal of this Note may be declared
due and payable in the manner and with the effect provided in the Indenture. The
Company shall pay all costs of collection, whether or not judicial proceedings
are instituted, in the manner provided in the Indenture. The

 

 

Indenture provides that such declaration and its consequences may, in
certain events, be waived by the Holders of a majority in principal amount of
the Notes outstanding.

 

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 under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the Notes
at the time outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages of aggregate principal amount of the Notes at
the time outstanding, on behalf of the Holders of all of the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.

 

No reference herein to the
Indenture and no provision of this Note or of the Indenture or amendment or
modification hereof or thereof shall alter or impair the obligation of the
Company to pay the principal of and interest on this Note at the times, place
and rate and in the coin or currency herein prescribed.

 

In the event of a
consolidation or merger of the Company into, or of the transfer of its assets
substantially as an entirety to, a successor entity in accordance with the
Indenture, such successor entity shall assume payment of the Notes and the
performance of every covenant of the Indenture on the part of the Company, and
in the event of any such transfer, the Company (or the successor entity in the
event of a subsequent consolidation, merger or transfer) shall be discharged
from all obligations and covenants in respect of the Notes and the Indenture
and may be dissolved and liquidated, all as more fully set forth in the
Indenture.

 

The Notes are originally
issuable in such denominations as may be designated from time to time by the
Company, but in no event in an original denomination less than $1,000. Subject
to the provisions of the Indenture (including without limitation Section 2.6
thereof), the transfer of this Note is registerable in the Securities Register,
upon surrender of this Note for registration of transfer at the office or
agency of the Registrar duly endorsed by or accompanied by a written instrument
of transfer in the form printed on this Note or in another form satisfactory to
the Company and the Registrar duly executed by the Holder hereof or such Holder’s
attorney, duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. The Registrar may assess
service charges for any such registration or transfer or exchange, and the
Registrar 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 Note 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 Note is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.

 

This Note shall be governed
by and construed in accordance with the laws of the State of Minnesota, without
giving effect to the conflict of law provisions thereof.

 

 

FORM OF
ASSIGNMENT

 

(To be executed by the
registered holder if such holder desires to transfer this Note)

 

FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers unto

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

(Please print name and
address of transferee)

 

this Note, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint                                     ,
as Attorney-in-Fact, to transfer the within Note on the books kept for
registration thereof, with full power of substitution.

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
  Signature: 

  	
   

  	
   

  
	
   

  	
  (Signature must conform in
  all

  
	
   

  	
  respects to name of holder
  as

  
	
   

  	
  specified on the face of
  the Note)

  
	
   

  
	
   

  
	
  Social Security

  
	
  or Other Identifying

  
	
  Number of Transferee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed:

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