Document:

Exhibit 4.5

 

SELECT INCOME REIT

 

TO

 

 

Indenture

 

Dated as of               , 20

 

Junior Subordinated Debt Securities

 

 

Certain Sections of this Indenture relating to Sections 310 through 318,
 inclusive, of the Trust Indenture Act of 1939:

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
§ 310(a)(1)
    	
 
    	
609
    
	
(a)(2)
    	
 
    	
609
    
	
(a)(3)
    	
 
    	
Not Applicable
    
	
(a)(4)
    	
 
    	
Not Applicable
    
	
(a)(5)
    	
 
    	
609
    
	
(b)
    	
 
    	
608
    
	
§ 311(a)
    	
 
    	
613
    
	
(b)
    	
 
    	
613
    
	
§ 312(a)
    	
 
    	
701
    
	
(b)
    	
 
    	
702
    
	
(c)
    	
 
    	
702
    
	
§ 313(a)
    	
 
    	
703
    
	
(b)
    	
 
    	
Article 15, Not Applicable
    
	
(c)
    	
 
    	
703
    
	
(d)
    	
 
    	
703
    
	
§ 314(a)
    	
 
    	
704
    
	
(b)
    	
 
    	
Article 15, Not Applicable
    
	
(c)
    	
 
    	
102
    
	
(d)
    	
 
    	
Article 15, Not Applicable
    
	
(e)
    	
 
    	
102
    
	
§ 315(a)
    	
 
    	
601, 603
    
	
(b)
    	
 
    	
602
    
	
(c)
    	
 
    	
601
    
	
(d)
    	
 
    	
601, 603
    
	
(e)
    	
 
    	
514
    
	
§ 316(a)(1)(A)
    	
 
    	
512
    
	
(a)(1)(B)
    	
 
    	
513
    
	
(a)(2)
    	
 
    	
Not Applicable
    
	
(b)
    	
 
    	
508
    
	
(c)
    	
 
    	
104
    
	
§ 317(a)(1)
    	
 
    	
503
    
	
(a)(2)
    	
 
    	
504
    
	
(b)
    	
 
    	
1003
    
	
§ 318
    	
 
    	
107
    

 

NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE ONE
    
	
 
    
	
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
    
	
 
    	
 
    	
 
    	
 
    
	
Section 101
    	
Definitions
    	
 
    	
1
    
	
Section 102
    	
Compliance Certificates and   Opinions
    	
 
    	
7
    
	
Section 103
    	
Form of Documents Delivered   to Trustee
    	
 
    	
8
    
	
Section 104
    	
Acts of Holders; Record Dates
    	
 
    	
8
    
	
Section 105
    	
Notices, Etc., to Trustee   and Company
    	
 
    	
10
    
	
Section 106
    	
Notice to Holders; Waiver
    	
 
    	
10
    
	
Section 107
    	
Conflict with Trust Indenture   Act
    	
 
    	
11
    
	
Section 108
    	
Effect of Headings and Table of   Contents
    	
 
    	
11
    
	
Section 109
    	
Successors and Assigns
    	
 
    	
11
    
	
Section 110
    	
Separability Clause
    	
 
    	
11
    
	
Section 111
    	
Benefits of Indenture
    	
 
    	
11
    
	
Section 112
    	
Governing Law
    	
 
    	
12
    
	
Section 113
    	
Legal Holidays
    	
 
    	
12
    
	
Section 114
    	
Language of Notices, Etc.
    	
 
    	
12
    
	
Section 115
    	
No Personal Liability
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE TWO
    
	
 
    
	
SECURITY FORMS
    
	
 
    	
 
    	
 
    	
 
    
	
Section 201
    	
Forms Generally
    	
 
    	
12
    
	
Section 202
    	
Form of Legend for Global   Securities
    	
 
    	
13
    
	
Section 203
    	
Form of Trustee’s   Certificate of Authentication
    	
 
    	
13
    
	
Section 204
    	
Securities in Global Form
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE THREE
    
	
 
    
	
THE SECURITIES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 301
    	
Amount Unlimited; Issuable in   Series
    	
 
    	
14
    
	
Section 302
    	
Denominations
    	
 
    	
18
    
	
Section 303
    	
Execution, Authentication,   Delivery and Dating
    	
 
    	
18
    
	
Section 304
    	
Temporary Securities
    	
 
    	
19
    
	
Section 305
    	
Registration, Registration of   Transfer and Exchange
    	
 
    	
20
    
	
Section 306
    	
Mutilated, Destroyed, Lost and   Stolen Securities
    	
 
    	
21
    
	
Section 307
    	
Payment of Interest; Interest   Rights Preserved
    	
 
    	
22
    
	
Section 308
    	
Persons Deemed Owners
    	
 
    	
23
    
	
Section 309
    	
Cancellation
    	
 
    	
23
    
	
Section 310
    	
Computation of Interest
    	
 
    	
24
    

 

i

 

	
Section 311
    	
CUSIP Numbers
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE FOUR
    
	
 
    
	
SATISFACTION AND DISCHARGE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 401
    	
Satisfaction and Discharge of   Indenture
    	
 
    	
24
    
	
Section 402
    	
Application of Trust Money
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE FIVE
    
	
 
    
	
REMEDIES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 501
    	
Events of Default
    	
 
    	
26
    
	
Section 502
    	
Acceleration of Maturity; Rescission   and Annulment
    	
 
    	
27
    
	
Section 503
    	
Collection of Indebtedness and   Suits for Enforcement by Trustee
    	
 
    	
28
    
	
Section 504
    	
Trustee May File Proofs of   Claim
    	
 
    	
28
    
	
Section 505
    	
Trustee May Enforce Claims   Without Possession of Securities
    	
 
    	
29
    
	
Section 506
    	
Application of Money Collected
    	
 
    	
29
    
	
Section 507
    	
Limitation on Suits
    	
 
    	
29
    
	
Section 508
    	
Unconditional Right of Holders   to Receive Principal, Premium and Interest
    	
 
    	
30
    
	
Section 509
    	
Restoration of Rights and   Remedies
    	
 
    	
30
    
	
Section 510
    	
Rights and Remedies Cumulative
    	
 
    	
30
    
	
Section 511
    	
Delay or Omission Not Waiver
    	
 
    	
31
    
	
Section 512
    	
Control by Holders
    	
 
    	
31
    
	
Section 513
    	
Waiver of Past Defaults
    	
 
    	
31
    
	
Section 514
    	
Undertaking for Costs
    	
 
    	
31
    
	
Section 515
    	
Waiver of Usury, Stay or   Extension Laws
    	
 
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE SIX
    
	
 
    
	
THE TRUSTEE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 601
    	
Certain Duties and   Responsibilities
    	
 
    	
32
    
	
Section 602
    	
Notice of Defaults
    	
 
    	
32
    
	
Section 603
    	
Certain Rights of Trustee
    	
 
    	
32
    
	
Section 604
    	
Not Responsible for Recitals or   Issuance of Securities
    	
 
    	
34
    
	
Section 605
    	
May Hold Securities
    	
 
    	
34
    
	
Section 606
    	
Money Held in Trust
    	
 
    	
34
    
	
Section 607
    	
Compensation and Reimbursement
    	
 
    	
34
    
	
Section 608
    	
Conflicting Interests
    	
 
    	
34
    
	
Section 609
    	
Corporate Trustee Required;   Eligibility
    	
 
    	
35
    
	
Section 610
    	
Resignation and Removal;   Appointment of Successor
    	
 
    	
35
    
	
Section 611
    	
Acceptance of Appointment by   Successor
    	
 
    	
36
    
	
Section 612
    	
Merger, Conversion,   Consolidation or Succession to Business
    	
 
    	
37
    
	
Section 613
    	
Preferential Collection of   Claims Against Company
    	
 
    	
38
    

 

ii

 

	
Section 614
    	
Appointment of Authenticating   Agent
    	
 
    	
38
    
	
Section 615
    	
Rules by Trustee
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE SEVEN
    
	
 
    
	
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
    
	
 
    	
 
    	
 
    	
 
    
	
Section 701
    	
Company to Furnish Trustee Names   and Addresses of Holders
    	
 
    	
40
    
	
Section 702
    	
Preservation of Information; Communications   to Holders
    	
 
    	
40
    
	
Section 703
    	
Reports by Trustee
    	
 
    	
41
    
	
Section 704
    	
Reports by Company
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE EIGHT
    
	
 
    
	
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 801
    	
Company   May Consolidate, Etc., Only on Certain Terms
    	
 
    	
41
    
	
Section 802
    	
Successor Substituted
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE NINE
    
	
 
    
	
SUPPLEMENTAL INDENTURES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 901
    	
Supplemental Indentures Without   Consent of Holders
    	
 
    	
42
    
	
Section 902
    	
Supplemental Indentures With   Consent of Holders
    	
 
    	
44
    
	
Section 903
    	
Execution of Supplemental   Indentures
    	
 
    	
45
    
	
Section 904
    	
Effect of Supplemental   Indentures
    	
 
    	
45
    
	
Section 905
    	
Conformity with Trust Indenture   Act
    	
 
    	
45
    
	
Section 906
    	
Reference in Securities to   Supplemental Indentures
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE TEN
    
	
 
    
	
COVENANTS
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1001
    	
Payment of Principal, Premium   and Interest
    	
 
    	
45
    
	
Section 1002
    	
Maintenance of Office or Agency
    	
 
    	
45
    
	
Section 1003
    	
Money for Securities Payments to   Be Held in Trust
    	
 
    	
46
    
	
Section 1004
    	
Statement by Officers as to   Default
    	
 
    	
47
    
	
Section 1005
    	
Existence
    	
 
    	
47
    
	
Section 1006
    	
Waiver of Certain Covenants
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE ELEVEN
    
	
 
    
	
REDEMPTION OF SECURITIES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1101
    	
Applicability of Article
    	
 
    	
48
    
	
Section 1102
    	
Election to Redeem; Notice to   Trustee
    	
 
    	
48
    
	
Section 1103
    	
Selection by Trustee of   Securities to Be Redeemed
    	
 
    	
48
    

 

iii

 

	
Section 1104
    	
Notice of Redemption
    	
 
    	
49
    
	
Section 1105
    	
Deposit of Redemption Price
    	
 
    	
50
    
	
Section 1106
    	
Securities Payable on Redemption   Date
    	
 
    	
50
    
	
Section 1107
    	
Securities Redeemed in Part
    	
 
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE TWELVE
    
	
 
    
	
SINKING FUNDS
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1201
    	
Applicability of Article
    	
 
    	
51
    
	
Section 1202
    	
Satisfaction of Sinking Fund   Payments with Securities
    	
 
    	
51
    
	
Section 1203
    	
Redemption of Securities for   Sinking Fund
    	
 
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE THIRTEEN
    
	
 
    
	
DEFEASANCE AND COVENANT DEFEASANCE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1301
    	
Company’s Option to Effect   Defeasance or Covenant Defeasance
    	
 
    	
52
    
	
Section 1302
    	
Defeasance and Discharge
    	
 
    	
52
    
	
Section 1303
    	
Covenant Defeasance
    	
 
    	
52
    
	
Section 1304
    	
Conditions to Defeasance or   Covenant Defeasance
    	
 
    	
53
    
	
Section 1305
    	
Deposited Money and Government   Obligations to Be Held in Trust; Miscellaneous Provisions
    	
 
    	
54
    
	
Section 1306
    	
Reinstatement
    	
 
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE FOURTEEN
    
	
 
    
	
SUBORDINATION OF SECURITIES
    
	
 
    
	
ARTICLE FIFTEEN
    
	
 
    
	
GUARANTEES
    

 

iv

 

INDENTURE, dated as of                     , 20     between Select Income REIT, a real estate investment trust organized and existing under the laws of the State of Maryland (herein called the “Company”) having its principal office at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and U.S. Bank National Association, a national banking organization organized and existing under the laws of the United States, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

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

 

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

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

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

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 101                                Definitions

 

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

 

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

 

(b)                                 all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

 

(c)                                  all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the Issue Date;

 

(d)                                 unless otherwise specifically set forth herein, all calculations or determinations of a Person shall be performed or made on a consolidated basis in accordance with generally accepted accounting principles;

 

 

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

 

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

 

Certain terms, used principally in Article Fourteen, are defined in that Article.

 

“Act,” when used with respect to any Holder, has the meaning specified in Section 104.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series.

 

“Authorized Newspaper” means a newspaper, in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in each place in connection with which the term is used or in the financial community of each such place.  Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.

 

“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.

 

“Board” means either the board of trustees of the Company or any duly authorized committee of that board.

 

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

 

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

 

2

 

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

 

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by a Managing Trustee, its Chief Executive Officer, its Chief Operating Officer, its Chief Financial Officer, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

“Corporate Trust Office” means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which on the date hereof is located at                                                    .

 

“corporation” means a corporation, association, partnership, limited liability, joint-stock or other company, real estate investment trust or business trust.

 

“Covenant Defeasance” has the meaning specified in Section 1303.

 

“Custodian” means any receiver, trustee, assignee, liquidator or other similar official under any Bankruptcy Law.

 

“Defaulted Interest” has the meaning specified in Section 307.

 

“Defeasance” has the meaning specified in Section 1302.

 

“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.

 

“Event of Default” has the meaning specified in Section 501.

 

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

 

“Expiration Date” has the meaning specified in Section 104.

 

“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 202 (or such legend as may be specified as contemplated by Section 301 for such Securities).

 

“Government Obligation” has the meaning specified in Section 1304.

 

3

 

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

 

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.  The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 301.

 

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

 

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

 

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

 

“Issue Date” means the date of initial issuance of the Securities pursuant to this Indenture.

 

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

 

“Notice of Default” means a written notice of the kind specified in Section 501(d).

 

“Officer’s Certificate” means a certificate signed on behalf of the Company by a Managing Trustee, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Controller, the President, a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company and delivered to the Trustee.

 

“Opinion of Counsel” means a written opinion of legal counsel addressed to the Trustee. The counsel may be an employee of or counsel to the Company or any Affiliate.

 

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

 

“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

 

(i)                                     Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

4

 

(ii)                                  Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(iii)                               Securities as to which Defeasance has been effected pursuant to Section 1302 or satisfaction and discharge has been effected pursuant to Article Four; and

 

(iv)                              Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, or whether a quorum is present at a meeting of Holders of Securities, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, or upon any such determination as to the presence of a quorum, only Securities that a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

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

 

“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.

 

5

 

“Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

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

 

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

 

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.

 

“Responsible Officer,” when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have responsibility for the administration of this Indenture.

 

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

 

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

 

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

 

“Senior Debt” has the meaning specified in Article Fourteen.

 

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

 

“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date

 

6

 

on which the principal of such Security or such installment of principal or interest is due and payable.

 

“Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.  For the purposes of this definition, “voting stock” means the equity interest that ordinarily has voting power for the election of directors, managers or trustees of an entity, or persons performing similar functions, whether at all times or only so long as no senior class of equity interest has such voting power by reason of any contingency.

 

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

 

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

 

“Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

 

Section 102                                Compliance Certificates and Opinions

 

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

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004) shall include,

 

(1)                                 a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

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

 

(3)                                 a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable him or

 

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her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

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

 

Section 103                                Form of Documents Delivered to Trustee

 

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

 

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

 

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

 

Section 104                                Acts of Holders; Record Dates

 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

 

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

 

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certificate or affidavit shall also constitute sufficient proof of his or her authority.  The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

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

 

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

 

The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series; provided, that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(b) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and

 

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of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

With respect to any record date set pursuant to this Section, the party hereto that sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto that sets such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.

 

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

 

Section 105                                Notices, Etc., to Trustee and Company

 

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

 

(1)                                 the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention:  ,                    or

 

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

 

Section 106                                Notice to Holders; Waiver

 

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.  Notwithstanding any other provision of this Indenture or any Security of any series other than a provision that expressly

 

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states that this paragraph is not applicable to the Securities of such series, when this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder of Securities in global form (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary for such Security (or its designee) pursuant to the customary procedures of such Depositary.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

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

 

Section 107                                Conflict with Trust Indenture Act

 

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

 

Section 108                                Effect of Headings and Table of Contents

 

The Article and Section headings herein and the Table of Contents hereof are for convenience only and shall not affect the construction hereof.

 

Section 109                                Successors and Assigns

 

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 110                                Separability Clause

 

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

 

Section 111                                Benefits of Indenture

 

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

 

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Section 112                                Governing Law

 

This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York.

 

Section 113                                Legal Holidays

 

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

 

Section 114                                Language of Notices, Etc.

 

Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

 

Section 115                                No Personal Liability

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SELECT INCOME REIT, DATED MARCH 9, 2012, AS AMENDED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SELECT INCOME REIT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SELECT INCOME REIT. ALL PERSONS DEALING WITH SELECT INCOME REIT IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SELECT INCOME REIT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

ARTICLE TWO

 

SECURITY FORMS

 

Section 201                                Forms Generally

 

The Securities of each series shall be in substantially the forms set forth in Exhibit A hereto or in such other form (including temporary or permanent global form) as shall be established by or pursuant to a Board Resolution or in one or more Officer’s Certificates or indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities

 

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as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities (or any such temporary global Security).

 

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

 

Section 202                                Form of Legend for Global Securities

 

Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

 

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

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO SELECT INCOME REIT OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

Section 203                                Form of Trustee’s Certificate of Authentication

 

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

 

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

 

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As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Authorized Signatory
    

 

Section 204                                Securities in Global Form

 

If Securities of or within a series are issuable in global form, as specified as contemplated by Section 301, then, notwithstanding clause (i) of Section 301 and the provisions of Section 302, any such Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges.  Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the Company Order to be delivered to the Trustee pursuant to Section 303 or Section 304.  Subject to the provisions of Section 303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order.  If a Company Order pursuant to Section 303 or Section 304 has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 102 and need not be accompanied by an Opinion of Counsel.

 

The provisions of the last sentence of Section 303 shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global from together with written instructions (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of Section 303.

 

Notwithstanding the provisions of Section 307, unless otherwise specified as contemplated by Section 301, payment of principal of and any premium and interest on any Security in permanent global form shall be made to the Person or Persons specified therein.

 

ARTICLE THREE

 

THE SECURITIES

 

Section 301                                Amount Unlimited; Issuable in Series

 

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

 

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The Securities may be issued in one or more series.  There shall be either (i) established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officer’s Certificate, or (ii) established in one or more Officer’s Certificates or indentures supplemental hereto, prior to the issuance of Securities of any series,

 

(a)                                 the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series, except to the extent that additional Securities of an existing series are being issued);

 

(b)                                 any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

 

(c)                                  the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest and the extent to which, or the manner in which, any interest payable on a temporary global Security on an Interest Payment Date will be paid if other than in the manner provided in Section 304;

 

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

 

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

 

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

 

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

 

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

 

(i)                                     if other than minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, the denominations in which Securities of such series shall be issuable;

 

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(j)                                    whether the amount of payments of principal, premium, if any, or interest, if any, on the Securities of the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more interest rate, currency, commodity, equity or other indices), and the manner in which such amounts shall be determined;

 

(k)                                 the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on any Securities of the series shall be payable, if other than the currency of the United States of America, and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of “Outstanding” in Section 101;

 

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

 

(m)                             if other than the principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

 

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

 

(o)                                 any addition to or change in the provisions related to satisfaction and discharge in Article Four or defeasance in Article Thirteen, or the inapplicability of such Articles or provisions therein to the Securities of such series;

 

(p)                                 if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more temporary or permanent Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 202 and any circumstances in addition to or in lieu of those set forth in clause (a) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

 

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(q)                                 any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502;

 

(r)                                    any addition to or change in the provisions set forth in Article Ten which applies to Securities of the series;

 

(s)                                   if applicable, that the Securities of the series are convertible into or exchangeable for any securities of any Person (including the Company), the period or periods within which, the price or prices at which and the terms and conditions upon which, and the limitations and restrictions, if any, upon which, any Securities of the series shall be so convertible or exchangeable, and any additions or changes to this Indenture, if any, to permit or facilitate such conversion or exchange;

 

(t)                                    the place or places where any Securities of the series may be surrendered for registration of transfer, where Securities of the series may be surrendered for exchange, where Securities of the series that are convertible or exchangeable may be surrendered for conversion or exchange, as applicable, and where notices and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served;

 

(u)                                 the form of the Securities of such series;

 

(v)                                 whether the Securities of such series are to be issued as Original Issue Discount Securities and the amount of discount with which such Securities may be issued;

 

(w)                               the guarantors, if any, of the Securities of such series, and the form and terms of the guarantees (including provisions relating to seniority or subordination of such guarantees and the release of the guarantors), if any, of any payment or other obligations on such Securities and any additions or changes to this Indenture to permit or facilitate guarantees of such Securities;

 

(x)                                 whether the Securities of such series are subject to subordination and the terms of such subordination;

 

(y)                                 if any payment or other obligations on Securities of such series are to be secured by any property, the nature of such security and provisions related thereto;

 

(z)                                  any restriction or condition on the transferability of the Securities of such series;

 

(aa)                          any addition or change in the provisions related to compensation and reimbursement of the Trustee which applies to Securities of such series;

 

(bb)                          provisions, if any, granting special rights to Holders of Securities of such series upon the occurrence of specified events;

 

(cc)                            any addition or change in the provisions related to supplemental indentures set forth in Sections 901, 902 and 904 which applies to Securities of such series; and

 

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(dd)                          any other terms of the Securities of such series (which terms shall not be inconsistent with the provisions of the TIA, but may modify, amend, supplement or delete any of the terms of this Indenture with respect to such series).

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officer’s Certificate referred to above or in any such indenture supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the series.

 

Section 302                                Denominations

 

Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, any Securities of such series, other than Securities issued in global form (which may be of any denomination), shall be issuable in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Section 303                                Execution, Authentication, Delivery and Dating

 

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President, one of its Vice Presidents or its Treasurer.  The signature of any of these officers on the Securities may be manual or facsimile.

 

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

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities.  If the forms or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,

 

(a)                                 if the forms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 201, that such forms have been established in conformity with the provisions of this Indenture;

 

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(b)                                 if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and

 

(c)                                  that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

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

 

Notwithstanding the provisions of Section 301 and of the two preceding paragraphs, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraphs at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

 

Each Security shall be dated the date of its authentication.

 

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.  Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

Section 304                                Temporary Securities

 

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

 

If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay.  After the preparation of

 

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

 

Section 305                                Registration, Registration of Transfer and Exchange

 

The Company shall cause to be kept at an office or agency to be maintained by the Company in accordance with Section 1002 a register (being the combined register of the Security Registrar and all transfer agents designated pursuant to Section 1002 for the purpose of registration of transfer of Securities and sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and the registration of transfers of Securities.  The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company maintained pursuant to Section 1002 for such purpose in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

 

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

 

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

 

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

 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or

 

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exchange of Securities, other than exchanges pursuant to Sections 304, 906 or 1107 not involving any transfer.

 

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

 

The provisions of clauses (a), (b) and (c) below shall apply only to Global Securities:

 

(a)                                 Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered under the Exchange Act and, in the case of each of (A) and (B), a successor Depositary is not appointed by the Company within 90 days after such notice is received by the Company or the Company becomes aware of such cessation, respectively, (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Security Registrar has received a written request from an owner of a beneficial interest in such Global Security to receive registered securities or (iii) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 301.

 

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

 

(c)                                  Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

 

Section 306                                Mutilated, Destroyed, Lost and Stolen Securities

 

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

 

If there shall be delivered to the Company and the Trustee (a) evidence to their satisfaction of the destruction, loss or theft of any Security and (b) such security or indemnity as

 

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may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

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

 

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

 

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

 

Section 307                                Payment of Interest; Interest Rights Preserved

 

Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

 

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

 

(a)                                 The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in

 

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trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided.  Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)                                 The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

 

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

 

Section 308                                Persons Deemed Owners

 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Section 309                                Cancellation

 

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

 

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except as expressly permitted by this Indenture.  All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order or, in the absence of such a Company Order, in the Trustee’s customary manner, which manner shall be communicated in writing to the Company.

 

Section 310                                Computation of Interest

 

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 311                                CUSIP Numbers

 

The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use such “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will notify the Trustee of any change “CUSIP” numbers.

 

ARTICLE FOUR

 

SATISFACTION AND DISCHARGE

 

Section 401                                Satisfaction and Discharge of Indenture

 

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

 

(a)                                 either

 

(i)                                     all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

 

(ii)                                  all such Securities not theretofore delivered to the Trustee for cancellation

 

(A)                               have become due and payable, or

 

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(B)                               will become due and payable at their Stated Maturity within one year, or

 

(C)                               are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

 

and the Company, in the case of (A), (B) or (C) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; provided that with respect to a Redemption Date, if all or a portion of the redemption price is based on or consists of a redemption premium that is required to be calculated based on a treasury rate or other floating or adjustable rate a specified number of days prior to the redemption date, the redemption price deposited shall be sufficient for purposes of this paragraph to the extent that the redemption price so deposited is calculated using an amount equal to such premium computed using such treasury rate or other floating or adjustable rate as of such specified number of days preceding the date of such deposit;

 

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

 

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

 

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge.

 

Section 402                                Application of Trust Money

 

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.

 

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ARTICLE FIVE

 

REMEDIES

 

Section 501                                Events of Default

 

“Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

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

 

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

 

(c)                                  default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series and continuance of such default for a period of 30 days; or

 

(d)                                 default in the performance of, or breach of, any covenant of the Company in this Indenture (other than a covenant a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least a majority in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(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, or (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; 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, or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days; or

 

(g)                                  any other Event of Default provided with respect to Securities of that series.

 

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Section 502                                Acceleration of Maturity; Rescission and Annulment

 

If an Event of Default (other than an Event of Default specified in Section 501(e) or 501(f)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than a majority of the principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.  If an Event of Default specified in clause (e) or (f) of Section 501 with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

 

At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

 

(a)                                 the Company has paid or deposited with the Trustee a sum sufficient to pay

 

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

 

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

 

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

 

(iv)                              all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(b)                                 all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

 

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

 

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Section 503                                Collection of Indebtedness and Suits for Enforcement by Trustee

 

The Company covenants that if

 

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

 

(b)                                 default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

 

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

 

If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem reasonably necessary to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

Section 504                                Trustee May File Proofs of Claim

 

In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding.  In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

 

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

 

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Section 505                                Trustee May Enforce Claims Without Possession of Securities

 

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

 

Section 506                                Application of Money Collected

 

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

FIRST: To the payment of all amounts due the Trustee under Section 607;

 

SECOND: To the extent provided in Article Fourteen, to the holders of Senior Debt of the Company in accordance with Article Fourteen;

 

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

 

FOURTH: To the Company.

 

Section 507                                Limitation on Suits

 

No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture or any Security of any series, unless

 

(a)                                 such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;

 

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

 

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

 

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(d)                                 the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

 

(e)                                  no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

 

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or any Security of any series to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture or any Security of any series, except in the manner herein or therein provided and for the equal and ratable benefit of all of such Holders.

 

Section 508                                Unconditional Right of Holders to Receive Principal, Premium and Interest

 

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

Section 509                                Restoration of Rights and Remedies

 

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

 

Section 510                                Rights and Remedies Cumulative

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

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Section 511                                Delay or Omission Not Waiver

 

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 512                                Control by Holders

 

The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that

 

(a)                                 such direction shall not be in conflict with any rule of law or with this Indenture, and

 

(b)                                 the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

Section 513                                Waiver of Past Defaults

 

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

 

(a)                                 in the payment of the principal of or any premium or interest on any Security of such series, or

 

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

 

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

 

Section 514                                Undertaking for Costs

 

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

 

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Section 515                                Waiver of Usury, Stay or Extension Laws

 

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

 

ARTICLE SIX

 

THE TRUSTEE

 

Section 601                                Certain Duties and Responsibilities

 

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act.  Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.  Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

Section 602                                Notice of Defaults

 

If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in clause (d) of Section 501 with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof.  For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

 

Section 603                                Certain Rights of Trustee

 

Subject to the provisions of Section 601:

 

(a)                                 the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

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(b)                                 any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board shall be sufficiently evidenced by a Board Resolution;

 

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

 

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

 

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

 

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

 

(g)                                  the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

 

(h)                                 the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(i)                                     the Trustee shall not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

 

(j)                                    the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and the Person employed to act hereunder.

 

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Section 604                                Not Responsible for Recitals or Issuance of Securities

 

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.  Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

 

Section 605                                May Hold Securities

 

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

Section 606                                Money Held in Trust

 

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

 

Section 607                                Compensation and Reimbursement

 

The Company agrees

 

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

 

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

 

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

 

Section 608                                Conflicting Interests

 

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the

 

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manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.  To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series [or a trustee under — list here any prior indentures between the Company and the Trustee that have not been satisfied and discharged and that may be excluded by the proviso to Section 310(b)(1) of the Trust Indenture Act].

 

Section 609                                Corporate Trustee Required; Eligibility

 

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series.  Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, and has a combined capital and surplus of at least $50,000,000.  If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

Section 610                                Resignation and Removal; Appointment of Successor

 

No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

 

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company.  If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

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

 

If at any time:

 

(1)                                 the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

(2)                                 the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

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(3)                                 the Trustee shall become incapable of acting or shall be adjudged bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611.  If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company.  If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders of Securities of such series and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106.  Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

Section 611                                Acceptance of Appointment by Successor

 

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

 

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an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (b) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (c) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

 

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

 

Section 612                                Merger, Conversion, Consolidation or Succession to Business

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.  In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any

 

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successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 613                                Preferential Collection of Claims Against Company

 

If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).  For purposes of Section 311(b)(4) and (6) of the Trust Indenture Act, the following terms shall mean:

 

(a)                                 “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

 

(b)                                 “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

 

Section 614                                Appointment of Authenticating Agent

 

The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  Any such appointment shall be evidenced by an instrument in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be promptly furnished to the Company.  Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority.  If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition

 

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so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607.

 

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

 

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

 

	
 
    	
 
    
	
 
    	
As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
As Authenticating Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Authorized Signatory
    

 

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If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities.

 

Section 615                                Rules by Trustee

 

The Trustee may make reasonable rules for any Act of Holders or a meeting of Holders of one or more series of Securities.

 

ARTICLE SEVEN

 

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 701                                Company to Furnish Trustee Names and Addresses of Holders

 

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

 

(a)                                 semi-annually, not later than 15 days after each Regular Record Date or in the case of any series of Securities on which semi-annual interest is not payable, not more than 15 days after such semi-annual dates specified by the Trustee, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the Regular Record Date or such semi-annual date, as the case may be, and

 

(b)                                 at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

 

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

 

Section 702                                Preservation of Information; Communications to Holders

 

The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar.  The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

 

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

 

Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be

 

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held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

Section 703                                Reports by Trustee

 

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

 

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

 

Section 704                                Reports by Company

 

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

 

ARTICLE EIGHT

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 801                                Company May Consolidate, Etc., Only on Certain Terms

 

The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person (other than a direct or indirect wholly owned subsidiary of the Company), and the Company shall not permit any Person (other than a direct or indirect wholly owned subsidiary of the Company) to consolidate with or merge into the Company, unless:

 

(a)                                 The Company is the surviving corporation (as defined herein) or, in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation, partnership or trust organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;

 

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

 

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

 

Section 802                                Successor Substituted

 

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease all or substantially all of the properties and assets of the Company in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 901                                Supplemental Indentures Without Consent of Holders

 

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

 

(a)                                 to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or

 

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

 

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

 

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

 

(e)                                  to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or

 

(f)                                   to add guarantees of or to secure all or any series of the Securities; or

 

(g)                                  to establish the forms or terms of Securities of any series as permitted by Sections 201 and 301; or

 

(h)                                 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or

 

(i)                                     to cure any ambiguity, to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture or to conform the terms hereof, as amended and supplemented, that are applicable to the Securities of any series to the description of the terms of such Securities in the offering memorandum, prospectus supplement or other offering document applicable to such Securities at the time of initial sale thereof; or

 

(j)                                    to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance (whether legal or covenant defeasance) or satisfaction and discharge of any series of Securities; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect; or

 

(k)                                 to prohibit the authentication and delivery of additional series of Securities; or

 

(l)                                     to add to or change or eliminate any provision of this Indenture as shall be necessary or desirable in accordance with any amendments to the Trust Indenture Act;

 

(m)                             to comply with the rules of any applicable Depositary; or

 

(n)                                 to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (n) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.

 

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Section 902                                Supplemental Indentures With Consent of Holders

 

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

 

(a)                                 change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

 

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

 

(c)                                  modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Section 611 and clause (h) of Section 901.

 

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

 

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

 

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Section 903                                Execution of Supplemental Indentures

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 904                                Effect of Supplemental Indentures

 

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

 

Section 905                                Conformity with Trust Indenture Act

 

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

 

Section 906                                Reference in Securities to Supplemental Indentures

 

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

ARTICLE TEN

 

COVENANTS

 

Section 1001                         Payment of Principal, Premium and Interest

 

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

 

Section 1002                         Maintenance of Office or Agency

 

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and

 

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this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

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

 

Section 1003                         Money for Securities Payments to Be Held in Trust

 

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

 

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal and any premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

 

The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

 

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

 

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Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

 

Section 1004                         Statement by Officers as to Default

 

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officer’s Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

 

Section 1005                         Existence

 

Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company.

 

Section 1006                         Waiver of Certain Covenants

 

Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to clause (r) of Section 301 or clause (b) or (h) of Section 901 for the benefit of the Holders of such series or in Section 1005, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

 

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ARTICLE ELEVEN

 

REDEMPTION OF SECURITIES

 

Section 1101                         Applicability of Article

 

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.

 

Section 1102                         Election to Redeem; Notice to Trustee

 

The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.  In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed (unless all of the Securities of a specified tenor are to be redeemed).  In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction.

 

Section 1103                         Selection by Trustee of Securities to Be Redeemed

 

If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.  If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days (subject to Section 1104) prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

 

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

 

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or

 

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in part.  In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

 

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

 

Section 1104                         Notice of Redemption

 

Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date, except that any notice of redemption may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a Defeasance of Securities pursuant to Article Thirteen hereof or a satisfaction and discharge of this Indenture pursuant to Article Four hereof.  In connection with any redemption of Securities, any such redemption may, at the Company’s discretion, be subject to satisfaction of one or more conditions precedent. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice may state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Company in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Company in its sole discretion) by the Redemption Date, or by the Redemption Date so delayed.

 

All notices of redemption shall state:

 

(a)                                 the Redemption Date,

 

(b)                                 the Redemption Price,

 

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

 

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

 

(e)                                  the place or places where such Securities are to be surrendered for payment of the Redemption Price,

 

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

 

(g)                                  the applicable “CUSIP” numbers, if any, and

 

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(h)                                 if applicable, that such redemption may be subject to satisfaction of one or more conditions precedent.

 

A notice of redemption published as contemplated by Section 106 need not identify the particular Registered Securities to be redeemed.

 

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

 

Section 1105                         Deposit of Redemption Price

 

Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

 

Section 1106                         Securities Payable on Redemption Date

 

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

 

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

 

Section 1107                         Securities Redeemed in Part

 

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

 

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ARTICLE TWELVE

 

SINKING FUNDS

 

Section 1201                         Applicability of Article

 

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities.

 

The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment”.  If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202.  Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

 

Section 1202                         Satisfaction of Sinking Fund Payments with Securities

 

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

 

Section 1203                         Redemption of Securities for Sinking Fund

 

Not less than 30 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered.  Not less than 15 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

 

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ARTICLE THIRTEEN

 

DEFEASANCE AND COVENANT DEFEASANCE

 

Section 1301                         Company’s Option to Effect Defeasance or Covenant Defeasance

 

The Company may, at its option, at any time, elect to have either Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case may be, upon compliance with the conditions set forth below in this Article.

 

Section 1302                         Defeasance and Discharge

 

Upon the Company’s exercise under Section 1301 hereof of the option to have this Section 1302 applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Securities on the date the conditions set forth in Section 1304 are satisfied (hereinafter “Defeasance”).  For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when such payments are due, (b) the Company’s obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (d) this Article.  Subject to compliance with this Article, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303.

 

Section 1303                         Covenant Defeasance

 

Upon the Company’s exercise of the option to have this Section 1303 applied to any Securities or any series of Securities, as the case may be, (a) the Company shall be released from its obligations with respect to such Securities under Section 801 and any covenants provided pursuant to clause (r) of Section 301, Section 1005, Section 1006 or clause (b) or (h) of Section 901 for the benefit of the Holders of such Securities and (b) the occurrence of any event specified in clause (d) of Section 501 (with respect to any of clause (c) of Section 801 and any such covenants provided pursuant to clause (r) of Section 301, Section 1005, Section 1006 or clause (b) or (h) of Section 901) shall not be deemed to be an Event of Default on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter “Covenant Defeasance”).  For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or Article, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

 

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Section 1304                         Conditions to Defeasance or Covenant Defeasance

 

The following shall be the conditions to the application of either Section 1302 or Section 1303, as applicable, to any Securities or any series of Securities, as the case may be:

 

(a)                                 The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (i) money in an amount, or (ii) Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (iii) a combination thereof, in each case sufficient to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of, and any premium (if any) and interest on, such Securities on the respective Stated Maturities or the applicable Redemption Date, in accordance with the terms of this Indenture and such Securities; provided that with respect to a Redemption Date, if all or a portion of the redemption price is based on or consists of a redemption premium that is required to be calculated based on a treasury rate or other floating or adjustable rate a specified number of days prior to the redemption date, the redemption price deposited shall be sufficient for purposes of the immediately preceding sentence to the extent that the redemption price so deposited is calculated using an amount equal to such premium computed using such treasury rate or other floating or adjustable rate as of such specified number of days preceding the date of such deposit.  As used herein, “Government Obligations” means, with respect to any series of Securities, securities that are (x) direct obligations of the government that issued the currency in which such series is denominated (or, if such series is denominated in euros, the direct obligations of any government that is a member of the European Monetary Union) for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case, are not callable or redeemable at the option of the issuer thereof and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Obligation where the relevant government is the United States of America or a specific payment of principal of or interest on any such Government Obligation held by such custodian for the account of the holder of such depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the such Government Obligation or the specific payment of principal of or interest on such Government Obligation evidenced by such depository receipt.

 

(b)                                 In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of this Indenture, there has been a change in the applicable Federal income tax law, in either case (i) or (ii) to the effect that the Holders of the Outstanding Securities of such series will not recognize gain or loss for Federal income tax purposes as a result of such deposit, Defeasance and discharge and will be subject to

 

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Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge had not occurred.

 

(c)                                  In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize gain or loss for Federal income tax purposes as a result of such deposit and Covenant Defeasance and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance had not occurred.

 

(d)                                 No Event of Default with respect to the Securities of such series shall have occurred and be continuing at the time of such deposit (other than an Event of Default resulting from transactions occurring contemporaneously with the borrowing of funds, or the borrowing of funds, to be applied to such deposit or other indebtedness which is being repaid, repurchased, redeemed, defeased (whether legal or covenant defeasance) or discharged, and, in each case, the granting of liens in connection therewith).

 

(e)                                  Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture or any agreement or instrument governing any other indebtedness which is being repaid, repurchased, redeemed, defeased (whether legal or covenant defeasance) or discharged) to which the Company is a party or by which the Company is bound.

 

(f)                                   The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the Defeasance or the Covenant Defeasance have been satisfied.

 

The Defeasance or Covenant Defeasance will be effective on the day on which all the applicable conditions above have been satisfied. Upon satisfaction of such conditions, the Trustee shall, upon written request, execute proper instrument(s) acknowledging such Defeasance or Covenant Defeasance.

 

Section 1305                         Deposited Money and Government Obligations to Be Held in Trust; Miscellaneous Provisions

 

Subject to the provisions of the last paragraph of Section 1003, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively, for purposes of this Section 1305, as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and premium (if any) and interest, but such money need not be segregated from other funds except to the extent required by law.

 

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The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

 

Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Obligations held by it as provided in Section 1304 hereof which, in the opinion or based on a report or certificate of a nationally recognized firm of independent public accountants, investment bank or appraisal firm expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Defeasance or Covenant Defeasance, as the case may be.

 

Section 1306                         Reinstatement

 

If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 1302 or 1303 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Thirteen until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1302 or 1303; provided, however, that if the Company makes any payment of principal of (and premium, if any) or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of the Securities of such series to receive such payment from the money held by the Trustee or the Paying Agent.

 

ARTICLE FOURTEEN

 

SUBORDINATION OF SECURITIES

 

[Subordination Provisions with respect to Senior Subordinated Debt Securities to be provided here.]

 

ARTICLE FIFTEEN

 

GUARANTEES

 

[Provisions for Subsidiary Guarantees to be provided here, if applicable.]

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.  In proving the existence of this Indenture it shall not be necessary to produce more than one copy.

 

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In Witness Whereof, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written.

 

	
 
    	
SELECT INCOME REIT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL   ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

56

 

EXHIBIT A

 

FORM OF REGISTERED SECURITY

 

[Face of Registered Security]

 

	
No.
    	
 
    	
$                   
    

 

Select Income REIT, a real estate investment trust organized under the laws of Maryland (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to                        , or registered assigns, the principal sum of                              Dollars on      [If the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon from       or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on                  and              in each year, commencing                  , at the rate of        % per annum, until the principal hereof is paid or made available for payment, provided that any principal and premium (if any), and any such installment of interest, which is overdue shall bear interest at the rate of        % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the                 or                 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

 

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

 

A-1

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in            , in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

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

 

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

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SELECT INCOME REIT, DATED MARCH 9, 2012, AS AMENDED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SELECT INCOME REIT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SELECT INCOME REIT. ALL PERSONS DEALING WITH SELECT INCOME REIT IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SELECT INCOME REIT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

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

 

	
Dated: 
    	
Select Income REIT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    

 

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

 

 

	
Dated:
    	
 
    

 

U.S. Bank National Association, As Trustee

 

	
By
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

A-2

 

[Reverse of Registered Security]

 

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

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail or pursuant to such rules and procedures of the Depositary that apply to such notices, [if applicable, insert — (1) on                  in any year commencing with the year           and ending with the year           through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert — on or after                  ,     ], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before                     ,     %, and if redeemed] during the 12-month period beginning           of the years indicated,

 

	
Year
    	
 
    	
Redemption Price For Redemption
   Through Operation of the Sinking
   Fund
    	
 
    	
Redemption Price For Redemption
   Otherwise Than Through
   Operation of the Sinking Fund
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

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

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail or pursuant to such rules and procedures of the Depositary that apply to such notices, (1) on                           in any year commencing with the year         and ending with the year         through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after                            ], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as  percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning                       of the years indicated,

 

A-3

 

	
Year
    	
 
    	
[Redemption Price For
   Redemption Through Operation of
   the Sinking Fund]
    	
 
    	
Redemption Price [For
   Redemption Otherwise Than
   Through Operation of the
   Sinking Fund]
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

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

 

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

 

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

 

[If the Security is subject to redemption of any kind, insert — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

The indebtedness evidenced by this Security is, to the extent set forth in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes.

 

[If applicable, insert — The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default

 

A-4

 

with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.]

 

[If the Security is not an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]

 

[If the Security is an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.  Such amount shall be equal to [— insert formula for determining the amount.] Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

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

 

A-5

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or the attorney of such Holder duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $         and any integral multiple of $                       in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

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

 

A-6EXHIBIT 10.1

 

STOCK PURCHASE AGREEMENT

 

PREFACE

 

AGREEMENT as of this 20th day of November, 2014, among each of the following (each a “Party” and collectively, the “Parties”): Castle Holding Corp., a Nevada corporation (the “Company”), Michael J. Studer (“MJS”), Kathleen E. Studer Pastore (“KEP”), Kristin A. Godsey (“KAG”), and Castle Holding Corp. Deferred Compensation Plan for the Benefit of George E. Hebert (CHCGRH”) collectively (the “Sellers”) and John Cappello (“JC”) and Cappello’s Inc. (“CI”) (collectively, the “Purchasers”) or their nominees.

 

RECITALS:

 

A. The Company is a holding company with no current active business other than managing a portfolio for its Preferred Shareholders.

 

B. As of the present date, there are 37,629,510 shares of issued common stock and 37,073,010 outstanding common stock of the Company as of December 31, 2013, of which Sellers own collectively 33,644,119 \ shares, making them the substantial majority holder of the Company. There are also 699,250 Class A Convertible preferred shares issued and outstanding. There currently exists a Letter of Intent (the “LOI”) dated June 6, 2014. Per the LOI the Sellers agree to sell 20,000,000 shares of common stock to the Purchasers for $200,000.00 and titled as to be directed by the Purchaser at the time of closing. The Purchaser on January 1, 2015 will also cause its License Agreement to be assigned to the Company for the issuance of 2,000,000 shares to be issued as directed by the Purchaser at the time of closing. The Purchaser will transfer to the Company 2,000,000 shares of Emergent Health Corp. to the Company for 2,000,000 shares of the Company common stock to be issued at the closing at the time of closing and titled as directed by the Purchaser. The Purchaser shall also be issued 3,000,000 shares, to be titled as directed by the Purchaser, at a price of $0.15 per share or $45,000.00 to be deposited in new Company account. The Sellers have the right to spin out one (1) subsidiary namely; Castle Advisors, Inc.to the Company shareholders, excluding Purchasers, at Sellers expense within one year after the closing. Be it known the Company has four other 100% owned inactive subsidiaries, Beverage King, LGP, Church Street Securities Corp., Wall Street Indians Ltd., and The Unlisted Stock Market Corporation, for which no current plans exist.

 

C. The Company is in need of infusion of a complete management team and additional capital to provide it the ability to substantially expand and execute a new business model.

 

D. The Purchasers are willing to make a substantial investment of time, effort and capital infusion in the common stock of the Company and to provide their good faith efforts to make the Company successful, all contingent upon the consummation of the transactions contemplated by this Agreement.

 

E. Post-closing the total Capitalization of the Company will be 44,073,010 shares of Common Stock outstanding.

 

	 
	
1

	

 

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

 

1. Recitals and Definitions. The recitals set forth above are incorporated by reference herein and made a part hereof as if fully rewritten.

 

2. Certain Defined Terms. As used herein, the terms below shall have the following meanings. Any of such terms, unless the context otherwise requires, may be used in the singular or plural, depending upon the reference.

 

“Affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.

 

“Balance Sheet” means the unaudited balance sheet of the Company as of September 30, 2013.

 

“Closing Date” means the business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself), or such other date as the Parties may mutually determine.

 

“Company Assets” means all of the properties and assets of the Company, whether personal, real or mixed, tangible or intangible, wherever located, including, but not limited to, all customer lists of the Company and all electronic records of the Company.

 

“Company Debt” means, with respect to the Company, obligations for borrowed money.

 

“Company Intellectual Property” means all Intellectual Property that is currently owned, licensed to and/or used by the Company in the Business as presently conducted and which shall not include any Intellectual Property relating to the Business.

 

“Control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of stock or equity interests (as the case may be), as trustee or executor, by contract or credit arrangement or otherwise.

 

“Direct Claim” means a Claim against a Party by one or both of the other Parties.

 

“Disclosure Schedule” means the schedules executed and delivered by Warrantors to Purchasers which set forth the exceptions to the representations and warranties contained in Section 10 below.

 

“Encumbrance” means any lien, encroachment, easement, encumbrance, mortgage, restriction or other conflicting ownership or security interest.

  

	 
	
2

	

 

 “Financial Statements” means the unaudited balance sheet of the Company as September 30, 2013 and the unaudited consolidated statement of income, for the period ended September 30, 2013.

 

“GAAP” means generally accepted accounting principles under United States standards.

 

“Intellectual Property” means (i) all names, brands, logos and slogans embodying business or product goodwill or indications of origin, and all trademarks, corporate names, trade names, service marks, trade dress, domain names and universal resource locators, together with all translations, adaptations, derivations and combinations thereof and all applications, registrations and renewals in connection therewith, and all of the goodwill associated therewith; (ii) all patents, patent applications, patent disclosures, inventions (whether patentable or un-patentable and whether or not reduced to practice) and all improvements thereof; (iii) all websites, copyrights, and copyrightable works both published and unpublished, including all registrations, applications and renewals in connection therewith; (iv) all computer and electronic data processing programs and software programs (in both source code and object code form), data, databases and related documentation; (v) all inventions, improvements, developments, modifications, derivative works, know-how, trade secrets, and confidential information (including research and development, know-how formulas, compositions, manufacturing and production processes and techniques, methods, schematics, technology, technical data, designs, drawings, flowcharts, block diagrams, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals); (vi) all licenses, sublicenses, permissions and other agreements relating to any of the foregoing; and (vii) all other intellectual property rights (in whatever form or medium) relating to any of the foregoing (including remedies and recoveries against infringement hereof and rights of protection of interest therein under the laws of all jurisdictions).

 

“Knowledge” as it relates to a Party means the actual knowledge of any of the executive officers and senior management of that party.

 

“Leased Assets” collectively refers to the machinery, equipment and other personal property the Company leases to carry on its operations.

 

“Material Adverse Effect” or “Material Adverse Change” means any effect or change that is materially adverse to the financial condition, business, results of operations, assets or liabilities of the Company, taken as a whole, or to the ability of each Warrantor to consummate the transactions contemplated hereby; provided, however, that a Material Adverse Change shall not include (i) any change resulting from general economic conditions or conditions applying generally to the industries in which the Company operates, (ii) any change resulting from changes in the United States financial markets generally or (iii) any changes resulting from the announcement or pendency of the transactions contemplated hereby other than a material loss of customers and/or suppliers of the Company as a result therefor.

 

“Permitted Encumbrances” means (i) liens for current Taxes or special assessments not yet due or any Taxes being contested in good faith by appropriate proceedings or (ii) liens, easements, rights of way, encroachments, restrictions or similar conditions affecting or burdening the Company’s assets which individually or in the aggregate do not detract materially from the use or value of the assets of the Company,

 

	 
	
3

	

 

“Permits” means all licenses, permits, franchises, approvals, authorizations, consents or orders of, or filings with, any governmental authority, whether foreign, State or local, necessary for the conduct of, or relating to the operation of, the Business.

 

“Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group.

 

“Purchasers” means as described in preface.

 

“Seller” means as described in preface.

 

 “Tax” or “Taxes” means any State, local, foreign or other tax and such term shall include any interest, penalties or additions to Tax attributable thereto.

 

“Third-Party Claim” means a claim against a Party by a third-party.

 

“Warrantors” shall mean Sellers.

 

3. Corporate Actions.

 

(a) On the Closing Date, the Company, and the Seller shall cause the Company to: (i) authorize all the transactions contemplated herein, and (ii) amend and restate the Bylaws of the Company to specifically permit a secured loan to the Company not to exceed $100,000.00 from the funds held for the benefit of the Class A preferred shareholders. The loan would bear interest at 10% payable quarterly, would be due in one year, and would be secured by up to 800,000 shares of Emergent Corp. common stock.

 

4. Purchase of Common Stock of Company.

 

(a) Seller agrees that upon the acceptance by Seller on the Closing Date of the purchase price consideration for the shares of Common Stock to be sold to the Purchasers, that there shall be no monies owing by the Company to any of the Sellers or any of their respective Affiliates for any obligations accrued to the Company or employment compensation owing to Sellers.

 

(b) The Company agrees that effective upon the Closing Date, it shall commit for a period of at least two years to: (i) maintain the current Directors in non-chairman capacity performing their past duties. (ii) offer the ongoing portfolio management of the funds held for the benefit of the Class A preferred shareholders for two years to George R. Hebert “GH”. Such management shall be monitored by an appointed Executive Committee of three Directors.

  

	 
	
4

	

 

(c) Each of the Purchaser agree that: (i) they may without the prior consent of the Company sell their shares of capital stock : (A) but NOT for a period of 12 months following the Closing, but may transfer or gift to a trust, estate planned entity, family or friends and (B) thereafter shall not sell more than 20% of their respective holdings per 3 month period thereafter through the third anniversary of the Closing unless to an institutional investor or a similar entity or organization; and (ii) should the Company engage in a financing that requires as a condition to such financing that any of the Purchasers or Sellers lock up for sale any of their shares of capital stock (the “Lock-up”), then each of the Purchasers and Sellers agree to lock up their remaining shares of capital stock of the Company for the same period of time as is required of the Lock-up, and to execute the same documentation as is required by any of the Purchasers with respect to the Lock-up, provided that the percentage of shares to be locked up and the leak out, if any permitted under the Lock-up shall be no less favorable than that applicable to any of the Purchasers subject to the Lock-up. As part of the financing each may agree to sell certain of their shares through the financer/brokerage. Notwithstanding the foregoing, the above restrictions will not prohibit the transfer of shares by the foregoing persons or entities to persons with whom they have a preexisting relationship, provided the transferee as a condition to such transfer agrees to enter into similar transfer restrictions with the Company with respect to such shares, consistent with the transfer restrictions set forth in this Section 4(c), as determined by the Company. The lock-up shall exclude approximately 800,000 shares purchased by GH and MTS affiliates in the open market.

 

(d) Purchasers and Sellers agree the Company will not compensate the Directors aforementioned (b) until the Company is cash flow positive.

 

5. Key Agreements on Closing Date. Effective on the Closing Date the Company, immediately prior to the closing of the purchase of shares by each of the (Purchasers from the Sellers, the parties, as their respective interests shall appear, shall enter into the following agreements:

 

(a) The assignment to the Company of the License Agreement in the form attached hereto as Exhibit A; and

 

(b) A letter hereto attached as Exhibit B from the Purchaser to the Company evidencing it will perform the assignment of the License Agreement on January 1, 2015 so that it may cover its 2014 expenses and end its fiscal year December 31, 2014.

 

(c) An executed copy of a Majority Shareholder and Director Approval of this transaction as shown in Exhibit C.

 

6. Warrantors’ Deliveries for Closing Warrantors’ Deliveries. At Closing, Seller shall cause delivery to Purchasers all the following:

 

(a) Duly issued stock certificates transferring the Shares of Common stock to designees of the Purchaser.

  

	 
	
5

	

 

(b) Confirmation that the Company has taken the actions necessary to appoint a new board of directors to be comprised of members to be designated by Purchasers, to install the officers designated by Purchasers (and delivery of resignations, if any, as required).

 

(c) All books, records and Corporate Seal of the Company. Sellers may retain a copy of the books and records.

 

(d) In addition to the above deliveries, at and after Closing, Seller shall take all steps and actions as Purchasers may reasonably request (including execution of such additional documents and agreements and making of such additional deliveries) as may otherwise be necessary to deliver actual possession and control of the Shares to Purchasers and to carry out the other transactions contemplated by this Agreement.

 

7. Purchasers’ Deliveries. At Closing, Purchasers shall deliver to the Parties named in the documents below all the following:

 

(a) Wire of $200,000.00 to an escrow account to be mutually agreed upon by both the Purchaser and Seller. Or if settlement takes place in King of Prussia, PA as currently planned, payment directly by certified check to each of the Sellers as apportioned.

 

(b) In addition to the above deliveries, at and after Closing, Purchasers shall take all steps and actions as Sellers may reasonably request (including execution of such additional documents and agreements and making such additional deliveries) as may otherwise be necessary to carry out the transactions contemplated by this Agreement. Moreover, Seller will with a transition team open bank accounts, negotiate contracts with vendors, transition to new vendors and make the Company’s move to a new headquarters as seamless as possible.

 

8. Closing. Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated hereby (the “Closing”) will take place at such time and place on the Closing Date as may be mutually agreed to by the Parties (the “Closing Date”), which date shall be no later than October 15, 2014, and shall be effective as of the close of business on the Closing Date. Should the Closing not occur for any reason, then there shall be no liability of any of the parties to the other parties due to the failure to consummate the transactions contemplated herein. At the current time such closing is planned to take place in King of Prussia, PA so that all of the provisions of this agreement can be completed or set into motion for completion/

 

	 
	
6

	

 

9. Representations and Warranties Relating to the Company. The Warrantors jointly and severally represent and warrant to Purchasers with respect to Company as set forth below. The Purchasers acknowledge and agrees that the Warrantors’ representations and warranties to Purchasers with respect to Company shall be separate and independent and shall not be limited by reference to any other of their representations and warranties in this Agreement except as set forth in the disclosure schedule delivered by the Warrantors attached hereto (the “Disclosure Schedule”):

 

(a) No Claims. Sellers confirm that, effective upon Closing, they no outstanding claims against the Company in relation to any matter and there are no monies or other obligations owing from the Company to such person or entity or any of that person’s Affiliates.

 

(b) Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of Nevada. The Company is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of their respective properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary except where the failure to be so qualified or licensed has not had, and would not be reasonably likely to have, a Material Adverse Effect.

 

(c) Capitalization.

 

(i) Provided to management is a current shareholder’s list of the Company, representing all of the Common Stock of the Company issued and outstanding. All of such capital stock on the Closing Date shall have been duly authorized and validly issued and are fully paid and non-assessable, free and clear of any preemptive rights. No ownership interests in the Company have been reserved for issuance upon exercise of options. There are no preemptive or conversion rights or options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or obligating the Company to issue, sell or redeem any equity interests in the Company, except for the rights to the issuance of Common Stock pursuant to the Class A Preferred stockholders.

 

(ii) The Company has no equity interest in any other entity save five inactive subsidiaries, four of which will be retained by the Company.

 

(d) Real Property The Company does not own or lease any real property or guarantee any lease of real property.

 

(e) Contracts and Commitments. The Company is not a party to any material contracts such as:

 

(i) any consignment, distributor, dealer, manufacturer’s representative, sales agency, advertising representative or advertising or public relations contract, agreement or commitment which is reasonably likely to involve the payment by the Company after the date of this Agreement of more than $5,000 during the current fiscal year;

  

	 
	
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(ii) any contract, agreement or commitment (other than purchase orders) regarding the sale or other disposition of products or services by the Company, or for the purchase of raw materials, products or services by the Company, which is reasonably likely to involve the receipt or payment after the date of this Agreement of more than $10,000 during the current fiscal year;

 

(iii) any guarantee agreement for the benefit of any third-party;

 

(iv) any tax sharing agreements;

 

(v) any employment contracts, agreements (including noncompetition agreements and confidentiality agreements), arrangements and commitments applicable to any employees of the Company earning $5,000 per year or more (other than the contracts specifically attached as Exhibits to this Agreement);

 

(vi) any contract, agreement or commitment which provides for the incurrence by the Company of indebtedness for borrowed money or the placing of a lien on any of the Company’s assets;

 

(vii) any partnership or joint venture agreement.

 

(viii) any assignment, license or other agreement with respect to any form of intangible property including with respect to any invention or know-how used in or related to the Business (other than license agreements with respect to “off-the-shelf” software), which is reasonably likely to involve the payment after the date of this Agreement of more than $5,000 during the current or next succeeding fiscal year;

 

(ix) any contract between the Company and any of its Affiliates that will survive the Closing of this Agreement; or

 

(x) any other contract, agreement, commitment, understanding or instrument involving or reasonably likely to involve payment or receipt after the date of this Agreement of more than $5,000 in the aggregate in the current or next succeeding fiscal year.

 

(f) Permits. The Company has all Permits required to conduct the Business as now being conducted, other than such Permits the failure of which to have is not reasonably likely to have a Material Adverse Effect (the “Material Permits”). All Material Permits are valid and in full force and effect. There is not now pending or, to the Knowledge of the Warrantors, threatened, any action by or before any governmental or regulatory authority to revoke, cancel, rescind, modify, or refuse to renew in the ordinary course any Material Permit.

  

	 
	
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(g) No Conflict or Violation; Third-Party Consents.

 

(i) Neither the consummation by Warrantors of the transactions contemplated by this Agreement, nor compliance by Warrantors with any of the provisions of this Agreement, will to either Warrantor’s Knowledge:

 

(1) violate or conflict with any provision of the charter or bylaws of the Company;

 

(2) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any Encumbrance (other than Permitted Encumbrances) upon any assets of the Company under, any of the terms, conditions or provisions of any Material Contract, real property lease or Material Permit; or

 

(3) violate any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree or award.

 

(ii) The execution, delivery and performance of this Agreement by Warrantors does not, and the consummation of the transactions contemplated by this Agreement will not, to each Warrantor’s Knowledge, require any consent, approval, authorization or permit of, or filing with or notification to (i) any domestic or foreign governmental or regulatory authority; or (ii) any other third-party under any Material Contract, real property lease or Material Permit, except where failure to obtain such consent, approval, authorization, or permit or to so file or notify would not be reasonably likely to have a Material Adverse Effect, either individually, or in the aggregate.

 

(h) Financial Statements. The Company has heretofore delivered to Purchasers the Financial Statements, including the Balance Sheet and the unaudited consolidated statements of income and stockholders’ equity of the Company for the period ended on the date of the Balance Sheet (the Balance Sheet, together with such unaudited statements are referred to herein as the “Unaudited Financial Statements”). The Financial Statements have been accepted accordingly by Purchaser, and the Company. The Financial Statements:

 

(i) were prepared in accordance with the books and records of the Company;

 

(ii) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby; and

 

(iii) fairly present, in all material respects, the consolidated assets, liabilities (including all reserves) and financial position of the Company as of the respective dates thereof and the results of operations for the periods covered thereby, in each case subject to normal year-end adjustments and the absence of footnote disclosure and other presentation items.

 

	 
	
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(i) Absence of Certain Changes. Since the date of the Balance Sheet, and except to the extent codified in agreements appended as Exhibits hereto, there has not been:

 

(i) any Material Adverse Change;

 

(ii) any damage, destruction or casualty loss (whether or not covered by insurance) having, or which would be reasonably likely to have, a Material Adverse Effect; or

 

(iii) any cancellation of any material debts owed to or claims held by the Company. Neither the Company nor either Warrantor has:

 

(1) increased the rate of compensation or paid any bonus to any employee or consultant of the Company (or of the Warrantor providing services on behalf of the Company);

 

(2) sold any assets outside the ordinary course of business;

 

(3) made, or became obligated to make any capital expenditure in excess of $5,000;

 

(4) entered into any transactions outside the ordinary course of business;

 

(5) entered into any employment agreement involving a base salary in excess of $5,000;

 

(6) incurred any indebtedness other than trade payables arising in the ordinary course of business;

 

(7) made or pledged to make any charitable contribution;

 

(8) issued any debt or equity securities or any securities convertible into debt or equity securities;

 

(9) sold any of its Intellectual Property;

 

(10) any declaration of any dividend or making or committing to make any distribution to or for the benefit of either of the Warrantors or their Affiliates; or

 

(11) mortgaged or pledged any of its properties or assets.

 

	 
	
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(j) Litigation. There is no administrative proceeding, action, order, writ, injunction, judgment or decree outstanding or any claim, suit, litigation or arbitration action (collectively, “Actions”) pending, or to either Warrantor’s Knowledge: (a) threatened against the Company, or (b) threatened that seeks to delay, limit or enjoin the transactions contemplated by this Agreement.

 

(k) Compliance with Law. The Company, to each Warrantor’s Knowledge, has not violated any laws, statutes, ordinances, regulations, rules and orders of any foreign, federal, state or local government and any other governmental department or agency, and any judgment, decision, decree, writ, injunction or order of any court or governmental agency, department or authority (collectively, “Laws”), except where such violation or lack of compliance is not reasonably likely to have a Material Adverse Effect. The Company has not received any notice to the effect that, or otherwise been advised that, the Company is not in such compliance with any Laws.

 

(l) Intellectual Property Rights.

 

(i) The Company currently owns no right, title, and interest in (free and clear of all Encumbrances) any Company Intellectual Property, or is licensed or otherwise possesses legally enforceable and unencumbered rights to use in the manner in which it is using it.

 

(m) Employees. There are no written employment agreements or severance or termination agreements accruing to the benefit of any employee or independent contractor of the Company involving $5,000 or more except for the Employment Agreements.

 

(n) Employee Benefit Plans.

 

(i) Except as for the Castle Holding Corp. Deferred Compensation Plans for the benefit of George R. Hebert and Michael T. Studer, the Company does not maintain or contribute (or has an obligation to contribute) to any “employee benefit plan” for the benefit of employees or former employees) including, without limitation, incentive, bonus, deferred compensation, medical, severance, disability, death, stock (individually, an “Employee Benefit Plan” and collectively, the “Employee Benefit Plans”)

 

(ii) No charge, complaint, action, suit, proceeding hearing, investigation, claim or demand with respect to the administration (including the making of statutory contributions to) or investment of the assets of any Employee Benefit Plan (other than routine claims for benefits) is pending or, to the Warrantors’ Knowledge, threatened, except for any such charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand which is not reasonably likely to have a Material Adverse Effect.

 

(o) Labor Relations. There are no collective bargaining agreements relating to the relationship of the Company with any employee thereof. There are no strikes, work stoppages or labor disputes pending or, to the Warrantors’ Knowledge, threatened, against the Company.

  

	 
	
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(p) Environmental Compliance. The Company has complied with all Environmental Requirements, except where failure to comply would not be reasonably likely to have a Material Adverse Effect, and the Company has not received any notice of violation or noncompliance, penalty assessment, order, complaint or notice of investigation or administrative or other proceedings regarding any liabilities (whether accrued, absolute, contingent, unliquidated, or otherwise), or of any notices of any potential corrective, investigatory, or remedial obligations, arising under Environmental Requirements relating to the Company. For the purposes of this Agreement, “Environmental Requirements” means all present governmental requirements relating to the discharge of air pollutants, water pollutants, or process waste water or petroleum products or otherwise relating to environmental or hazardous substances.

 

(q) Tax Matters. To each Warrantor’s Knowledge, all Tax Returns required to be filed prior to the date of this Agreement with respect to the Company, or any of its income, properties, franchises or operations have been filed, each such Tax Return has been prepared in compliance with all applicable laws and regulations. All Taxes due and payable by or with respect to the Company has been paid or accrued on the Closing Balance Sheet or will be accrued on its books and records. In accordance with this, Seller shall provide copies of tax returns for the past three years.

 

(r) Affiliate Transactions. There are no current contracts, agreements, arrangements or transactions between the Company and either Warrantor or any of Warrantors’ Affiliates. None of the Affiliate transactions shall remain in place following the Closing.

 

(s) Assets; Identification of Customers and Suppliers.

 

(i) The Company has no Assets and Leased Assets which consist of machinery and equipment that are actively used by the Company to run its Business. There are no vehicles owned, leased or used by the Company. The Company has good and marketable title to all of the Company Assets, free and clear of any Encumbrances except for Permitted Encumbrances.

 

(ii) To each Warrantor’s Knowledge, since the Balance Sheet date no current material supplier to the Company of items essential to the conduct of the Business will or has threatened to terminate its respective business relationship with it for any reason.

 

(t) Personal Property Leases. There is no lease or other agreement with an annual rent exceeding $1,000, under which the Company is lessee of, or holds or operates, any machinery, equipment, vehicle or other tangible personal property owned by a third person and used in or relating to the Business (an “Equipment Lease”). There are no claims for breach or indemnification or notice of default or termination under any Equipment Lease.

 

(u) Change in Control Payments. The Company does not have any plans, programs, agreements or arrangements to which it is a party, or to which it is subject, pursuant to which payments (or acceleration of benefits) may be required upon, or may become payable directly or indirectly as a result of, a change of control of the Company.

 

(v) Insurance. The Company has no material insurance policy (including policies providing property, casualty, liability, and workers’ compensation coverage and bond and surety arrangements) with respect to which Company is a party, a named insured, or otherwise the beneficiary of coverage (the “Insurance Contracts”) .

 

	 
	
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(w) Brokers. No person will be entitled to any brokerage commissions, finder’s fees or similar compensation arising out of or due to any act of the Company, or Purchaser in connection with the transactions contemplated by this Agreement.

 

(x) No Encumbrances. Purchaser on the Closing Date shall have good and valid title to the Common Stock to be standing its name on the Closing Date, free and clear of all Encumbrances. When the Shares are purchased and sold hereunder and upon delivery by Sellers to Purchasers of certificates for the Shares at Closing pursuant to this Agreement, Purchasers will have good title to the Shares, free and clear of any Encumbrances.

 

(y) Foreign Corrupt Practices. To the best of each Warrantor’s Knowledge through the Closing Date, neither the Company nor the Warrantor nor any of their Affiliates or any of their officers, directors, employees, stockholders, agents, distributors or shareholders or other persons associated with or acting on their behalf (the “Group”) has, and covenants and agrees that they will not, in connection with the transactions contemplated by this Agreement or in connection with any other business transactions involving the Purchasers taken any action that could be deemed to violate the United States’ Foreign Corrupt Practices Act.

 

(z) Representations and Warranties Relating to Purchasers. Each Purchaser severally hereby represents and warrants to Warrantors as follows as to such Purchaser:

 

(i) Brokers. There are no claims for brokerage commissions, finder’s fees or similar compensation arising out of or due to any act of Purchasers in connection with the transactions contemplated by this Agreement.

 

(ii) Litigation. There is no Action pending or threatened that seeks to delay, limit or enjoin the transactions contemplated by this Agreement.

 

(iii) Authorization. Each Party has all requisite power and authority, and has taken all action necessary, to execute and deliver this Agreement, and to perform his or her obligations hereunder. This Agreement has been duly executed and delivered by the Parties and is the legal, valid and binding obligation of Party, enforceable against Purchasers in accordance with its terms, subject to each general principles of equity and except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws of general application relating to creditors’ rights generally

 

(iv) Reverse Split. Purchasers have no intention to effect a reverse split of the capital stock of the Company for the next two years after the closing date.

  

	 
	
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(v) No Conflict or Violation. None of Purchasers’ execution, delivery or performance of this Agreement, or compliance with any of the provisions hereof, will:

 

(1) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any encumbrance upon any of the assets of Purchaser under, any of the terms, conditions or provisions of any contract, indebtedness, note, bond, indenture, security or pledge agreement, commitment, license, lease, franchise, permit, agreement, or other instrument or obligation:

 

a. to which the Purchaser is a party; or

 

b.  by which Purchaser’s assets are bound; or

 

(2) violate any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree or award (as to which no representation is made), except in the case of clauses (i) and (ii), for such violations, conflicts, breaches, defaults, terminations, accelerations or Encumbrances as are not reasonably likely to have a material adverse effect on Purchaser’s ability to consummate the transactions contemplated by this Agreement.

 

10. Indemnification

 

(a) Survival of Representations. The representations and warranties of the Parties contained herein shall survive the consummation of the transactions contemplated by this Agreement for the period ending 540 days after the Closing Date except for the representations and warranties set out in Sections 10(b) and (c) hereof (the “Designated Sections”), which shall survive the Closing and continue in full force and effect indefinitely (each of the periods set out in this Section 10 during which the representations and warranties shall survive and continue in full force and effect shall be referred to as a “Survival Period”). No claim for breaches of representations and warranties may be made after the applicable survival period expires.

 

(b) Indemnifications. Each Warrantor shall indemnify, save and hold harmless Purchasers, their Affiliates, and agents (for purposes of this Section 10, all of which shall constitute “Purchasers” and to the extent of entitlement for indemnification, may be herein referred to as a “Purchasers Indemnified Party”) from and against all costs, losses, liabilities, obligations, damages, lawsuits, claims, demands, and expenses (whether or not arising out of Third-Party Claims), and caused by:

 

(i) any breach of any representation or warranty made by either Warrantor in this Agreement;

 

(ii) any breach of any covenant or agreement made by either Warrantor in this Agreement which requires performance after Closing; or

 

	 
	
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(iii) the operations of the Company prior to Closing. Notwithstanding anything to the contrary herein, each Warrantor will have no liability (for indemnification or otherwise) under this Section 10(b) until the total of all Damages actually incurred or suffered by Purchasers hereunder exceeds $5,000 in the aggregate, in which case Purchasers shall be entitled to indemnification for the entire amount of Damages.

 

Notwithstanding anything to the contrary contained in this Agreement or this Agreement, in no event shall Warrantors have any liability (for indemnification or otherwise) under this Section 10 for any costs, losses, liabilities, obligations, damages, lawsuits, claims, demands, and expenses, which in the aggregate exceeds twenty-five percent (25%) of the purchase price paid by Purchasers to Sellers (the “Cap Amount”) under this Agreement, provided however, that the Cap Amount shall not apply to breach of any Representations and Warranties set out in the Designated Sections.

 

(c) By Purchasers. Each Purchaser shall severally indemnify and save and hold harmless each Warrantor (for purposes of this Section 10, and to the extent of entitlement for indemnification, sometimes referred to as “Warrantor Indemnified Party”) from and against any and all Damages actually incurred or suffered by a Warrantor through the end of the Survival Period and caused by:

 

(i) any breach of any representation or warranty made by such Purchaser in this Agreement;

 

(ii) any breach of any covenant or agreement made by such Purchaser in this Agreement which requires performance after Closing; or

 

(iii) the operation of the Company from and after Closing, provided that each Purchaser’s maximum liability hereunder shall not exceed twenty-five percent (25%) of the Purchase Price to be paid by Purchasers to Sellers for his or her common stock.

 

(d) Timeliness of Claims. No Claim shall be deemed properly and timely made:

 

(i) in the case of a Direct Claim, unless the alleged Damages shall have been actually incurred prior to the expiration of the Survival Period; and

 

(ii) in the case of a Third-Party Claim, unless the Third-Party Claim shall have been actually asserted by the third-party prior to the expiration of the Survival Period.

 

	 
	
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(e) Notice of Claims. If a claim for Damages (a “Claim”) is to be made by a Party entitled to indemnification hereunder (the “Indemnified Party”) against the other Party (the “Indemnifying Party”), the Indemnified Party shall give written notice (a “Claim Notice”) to the Indemnifying Party requesting indemnification and specifying the basis on which indemnification is sought and the amount of asserted Damages within a reasonable time after the Indemnified Party suffers such Damages for which indemnification may be sought under this Section 10. If any lawsuit or enforcement action is filed against an Indemnified Party, written notice thereof shall be given to the Indemnifying Party as promptly as practicable (and in any event within fifteen (15) calendar days after the service of the citation or summons). The failure of any Indemnified Party to give timely notice hereunder shall not affect rights to indemnification hereunder, except to the extent that the Indemnifying Party demonstrates actual damage caused by such failure.

 

(f) Defense Against Third-Party Claims. After a Claims Notice with respect to a Third-Party Claim has been given, if the Indemnifying Party provides notice in writing to the Indemnified Party that the Indemnifying Party elects to assume the defense, at its expense, in accordance with this Section 10(f), then the Indemnifying Party shall be entitled, if it so elects:

 

(i) to take control of the defense and investigation of such lawsuit or action;

 

(ii) to employ and engage attorneys of its own choice to handle and defend the same (unless the named parties to such action or proceeding include both the Indemnifying Party and the Indemnified Party and the Indemnified Party has been advised in writing by counsel that there may be one or more legal defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, in which event the Indemnified Party shall be entitled at the Indemnifying Party’s cost, risk and expense, to separate counsel of its own choosing reasonably satisfactory to the Indemnifying Party); and

 

(iii) to compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the Indemnified Party (such consent not to be unreasonably withheld) unless the proposed settlement:

 

(1) relates solely to monetary damages for which the Indemnitor shall be responsible; and

 

(2) includes as an unconditional term thereof the release of the Indemnified Party from all liability with respect to such Third-Party Claim.

 

	 
	
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If the Indemnifying Party fails to assume the defense of such claim within thirty (30) calendar days after receipt of the Claim Notice, the Indemnified Party against which such claim has been asserted will (upon delivering notice to such effect to the Indemnifying Party) have the right to undertake, the defense, compromise or settlement of such claim on behalf of and for the account and risk of the Indemnifying Party; provided, however, that such Claim shall not be compromised or settled without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. In the event the Indemnified Party assumes the defense of the claim, the Indemnified Party will keep the Indemnifying Party reasonably informed of the progress of any such defense, compromise or settlement.

 

(g) Subrogation. Upon payment in full of any Claim, regardless of how such payment is effected and whether it results from a judgment or settlement, the Indemnifying Party shall be subrogated to the extent of such payment to the rights of the Indemnified Party against any unaffiliated person or entity with respect to the subject matter of such Claim.

 

(h) Certain Benefits. The amount of any indemnification payable under this Section 10 shall be net of the receipt of any insurance proceeds paid or payable to the Indemnified Party under any policy or policies of insurance covering the loss giving rise to the claim. The Indemnified Party will use reasonable efforts to collect any such insurance and will account to the Indemnifying Party therefor. The Parties agree to respond within a reasonable time to any inquiry by the other Party as to the status of any such insurance payment. All indemnification payments pursuant to this Section 10 shall be deemed adjustments to the Purchase Price.

 

(i) Exclusive Remedy. The Parties acknowledge and agree that the foregoing indemnification provisions in this Section 10 shall be the exclusive remedy of Purchasers and Warrantors with respect to the transactions contemplated by this Agreement; provided, however, that the foregoing will not limit the remedy of specific performance, obtaining an injunction or other equitable remedy, which may be sought in connection with a breach of any covenant or agreement contained in this Agreement.

 

11. Agreements Pending the Closing

 

(a) Conduct of Business Pending the Closing. From the date hereof through the Closing Date, Warrantors shall cause the Company to operate in the ordinary course of business and in accordance with past practice (except as it relates to transactions specifically contemplated by this Agreement) and Warrantor will not take (and shall cause the Company to not take) any action inconsistent with this Agreement or with the consummation of the Closing. Without limiting the generality of the foregoing, except as specifically contemplated by this Agreement or consented to in writing by Purchasers, which consent shall not be unreasonably withheld, Warrantors shall cause the Company to not:

 

(i) amend its organizational documents or articles of association;

 

(ii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any equity interests in the Company;

 

	 
	
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(iii) extend, materially modify, terminate or renew any Material Contract or Real Property Lease, except in the ordinary course of business;

 

(iv) sell, assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of or encumber any of the assets of the Company, or any interests therein, except for Permitted Encumbrances, dispositions in the ordinary course of business and sales, assignments, transfers, conveyances, leases, mortgages, pledges, dispositions or Encumbrances involving less than $5,000;

 

(v) cancel any of the insurance policies of the Company except where such policies are replaced by substantially comparable coverage with a new policy;

 

(vi) declare, set aside or pay any dividend or make any other distribution with respect to the capital stock of the Company or otherwise.

 

(vii) make any loans or advances to any partnership, firm or corporation, or, except for expenses incurred by, or immaterial advances to, agents or employees in the ordinary course of business, to any individual;

 

(viii) increase the compensation payable or to become payable to the management, officers or employees of the Company;

 

(ix) grant any severance or termination pay to, or enter into any employment or severance agreement with any officer or other employee of the Company other than the employee and consulting agreements contemplated in this Agreement,

 

(x) establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except, in each case, as may be consistent with past practice in the conduct of the Business, contemplated by this Agreement or required by law or existing contracts; or

 

(xi) enter into any agreement, or otherwise become obligated, to do any action prohibited hereunder.

 

(b) Access. Until the Closing or the earlier termination of this Agreement, Warrantors shall cause the Company to afford to Purchasers, and their authorized representatives, such access, during normal business hours, to all properties, books, records and corporate documents pertaining to the Company as Purchasers may reasonably request. Purchasers shall hold and shall cause all of its Affiliates, employees and independent contractors to hold all non-published, confidential or proprietary information obtained from a Warrantor or the Company in strict confidence and shall not use any such information other than as permitted by, and not disclose any such information other than in accordance with any confidentiality agreement between Purchasers and the Company entered into in connection with the transactions contemplated hereby.

 

	 
	
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(c) Notices and Consents. Each of the Parties will cooperate in good faith with each other and give the notices to, make the filings with, and use its commercially reasonable efforts to obtain the authorizations, consents, and approvals of governments and governmental agencies required to consummate the transactions contemplated herein.

 

(d) Further Assurances.

 

(i) Upon the terms and subject to the conditions contained herein, each of the Parties hereto agrees:

 

(1) to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement;

 

(2) to execute any further documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder; and

 

(3) to cooperate with each other in connection with the foregoing.

 

(ii) Each Warrantor shall cause as of the Closing Date the delivery of all books and records of the Company to Purchasers. Warrantors shall be entitled to maintain one copy of all of such books and records for archival purposes, subject to their confidentiality obligations hereunder. Warrantors shall cause the delivery of all software programs and software records used historically by the Company in connection with the operation of its business. Warrantors shall cooperate fully with Purchasers and the Company in providing to the best of Warrantors’ ability following the Closing Date any information in the possession or control of Warrantors (whether in written format or if known to them but not in writing) as they shall reasonably request regarding any of the historical operations or information pertaining to the Company.

 

(iii) On or following the Closing Date, should Warrantors receive any correspondence or other communications from any person or entity regarding the Company or any of its activities outside the scope of this Agreement they shall no later than the next business day forward a copy of the communication to the Company by e-mail in PDF format or Federal Express (if in writing) or advise the Company by telephone if the communication was oral. If the communication is of a nature that could be reasonably determined to require immediate attention, then Warrantors shall use their best efforts to notify Company or Purchasers immediately of the communication.

 

	 
	
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(iv) Warrantors shall indemnify and hold harmless Purchasers and the Company from and against any and all claims for compensation by any of them or their Affiliates accrued through the Closing Date that have not been satisfied through the Closing Date, save for accrued compensation commencing on the last pay period and running through the Closing Date.

 

(v) Each Warrantor shall maintain the confidentiality of any confidential information that was provided to the Company prior to the Closing Date and which is known to Warrantor.

 

(vi) Each Warrantor shall cooperate fully with Purchasers and Company in providing such information in his or its possession or control, and in providing access to its personnel to cooperate to the fullest extent possible to enable the Company in completion of any audit(s) it may seek to have performed with respect to its financial statements. Warrantors shall not be entitled to no compensation in connection with the foregoing.

 

(vii) Warrantors shall terminate any agreements between them (or any of its Affiliates other than the Company) and the Company effective as of the Closing Date (save for the Employment Agreement and License Agreement attached as exhibits hereto).

 

(viii) Each Warrantor shall cause the transfer to the Company of any domain name registration standing in their name or the name of any of their Affiliates and related to the operations of the Company and shall cause the execution of all documentation required to effect that transfer with the registrar of the domain name and further agree to cooperate as necessary to cause the transfer to be effective by the Closing Date or as soon thereafter as is reasonably practicable.

 

(ix) The Parties agree to cooperate with each other following the Closing Date to carry out the purpose and intent of this Agreement, including but not limited to the delivery of information and records and the execution of such documentation reasonably required to carry out the purpose and intent of this Agreement and the covenants contained herein.

 

12. Post-Closing Covenants

 

(a) Further Action. In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any of the other Parties reasonably may request.

 

(b) Expenses. Except as otherwise specified in this Agreement, each Party hereto shall pay its own legal, accounting, out-of-pocket and other expenses incident to this Agreement and to any action taken by such Party in preparation for carrying this Agreement into effect.

 

(c) Publicity. Without the other Parties’ consent, which will not be unreasonably withheld, no Party will issue any press release or make any other public statement relating to the transactions contemplated hereby unless required by law, regulation, court order or the rules of any applicable stock exchange or of any applicable regulatory authority and any such release or statement shall be subject to prior review by the other Parties.

 

	 
	
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13. Conditions to Closing

 

(a) Conditions to Obligations of Each Party. The obligations of each Party to consummate the transactions provided for hereby are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions:

 

(i) No Injunctions or Restraints; Illegality. No statute, rule, regulation, executive order, decree, ruling, temporary restraining order, preliminary or permanent injunction or other order shall have been enacted, entered, promulgated, enforced or issued by any court or governmental authority of competent jurisdiction or shall otherwise be in effect which prohibits, restrains, enjoins or restricts the consummation of the transactions provided for hereby.

 

(ii) No Proceedings or Litigation. No Action by any governmental authority or other person shall have been instituted which prevents the consummation of the transactions contemplated hereby.

 

(iii) Governmental Approvals. Company and Purchasers shall have received all other material authorizations, consents, and approvals of governments and governmental agencies and other third parties whose approval is required.

 

(iv) Settlement of Balances. Documentation confirming settlement of any and all balances between any of Warrantors and the Company shall have been duly provided.

 

(b) Additional Conditions to Obligations of Purchasers. The obligations of Purchasers to consummate the transactions provided for hereby are also subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions:

 

(i) Representations, Warranties and Covenants. All representations and warranties of Warrantors contained in this Agreement shall be true and correct in all material respects at and as of the date of this Agreement and at and as of the Closing Date, and Warrantors and the Company shall have performed and satisfied all agreements and covenants required hereby to be performed by them prior to or on the Closing Date.

 

(ii) Closing Documents and Deliveries. Warrantors shall have delivered to Purchasers the items specified in Section 6, except to the extent expressly waived by Purchasers.

 

	 
	
21

	

 

(c) Additional Conditions to Obligations of Warrantor. The obligations of Warrantors to consummate the transactions provided for hereby are also subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions:

 

(i) Representations, Warranties and Covenants. All representations and warranties of Purchasers contained in this Agreement shall be true and correct in all material respects at and as of the date of this Agreement and at and as of the Closing Date, and Purchasers shall have performed and satisfied all agreements and covenants required hereby to be performed by it prior to or on the Closing Date.

 

(ii) Closing Documents and Deliveries. Purchasers shall have delivered to the Warrantors the items specified in Section 7, except to the extent expressly waived by Warrantors.

 

14. Termination; Effect of Termination

 

(a) Termination. At any time before the Closing, this Agreement may be terminated by:

 

(i) mutual written consent of the Parties;

 

(ii) Purchasers, if there has been a material breach of a representation, a warranty or a covenant herein by the Warrantors, if such breach has not been cured within five (5) calendar days after notice thereof has been given to such other Parties;

 

(iii) Warrantors, if there has been a material breach of a representation, a warranty or a covenant herein by the Purchasers, if such breach has not been cured within five (5) calendar days after notice thereof has been given to such other Parties; or

 

(iv) any Party if the Closing does not occur on or before October 31, 2014 (or such later date as the Parties shall mutually agree), unless the failure of the Closing to occur by such date shall be due to the action or failure to act of such Party seeking to terminate this Agreement, which action or failure to act constitutes a breach of this Agreement.

 

(b) Effect of Termination. In the event of the termination of this Agreement pursuant to Section 14(a), written notice thereof shall forthwith be given to the other Parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void and of no further force or effect, and no Party hereto (or any of its Affiliates, directors, officers, agents or representatives) shall have any liability or obligation hereunder (except for any liability of any Party then in breach); provided, however, that the provisions of this Section 16 shall survive any such termination.

 

	 
	
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15. Miscellaneous

 

(a) Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any Party without the prior written consent of any of the other Parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, and no other person shall have any right, benefit or obligation under this Agreement as a third-party beneficiary or otherwise.

 

(b) Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given, delivered and received:

 

(i) when delivered, if delivered personally by a commercial messenger delivery service with verification of delivery;

 

(ii) four days after mailing, when sent by registered or certified mail, return receipt requested and postage prepaid;

 

(iii) one business day after delivery to a private courier service, when delivered to a private courier service providing documented overnight service;

 

(iv) on the date of delivery if delivered by facsimile or email and electronically confirmed before 5:00 p.m. (local time) on any business day; or

 

(v) on the next business day if delivered by facsimile or email and electronically confirmed either after 5:00 p.m. (local time) or on a non-business day, in each case addressed to Purchasers and Warrantors at the address set forth below, and otherwise to the other Parties the party entitled to notice at the address set forth below their signature:

 

	
To Purchasers, at:

	
c/o John Cappello

10102 Valley Forge Circle, King of Prussia, PA 19406

	 	 
	
To Warrantor, at:

	
c/o Michael T. Studer

18 E. Sunrise Highway, Suite 311

Freeport, NY 11520

	 
	
Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.

 

	 
	
23

	

 

(c) Choice of Law, Jurisdiction and Venue. This Agreement shall be construed, interpreted and the rights of the Parties determined in accordance with the Laws of Nevada. In any action between the Parties, each of the Parties irrevocably consents to submitting any and all disputes arising from or in connection with this Agreement to arbitration under the auspices of the American Arbitration Association (“AAA”) The arbitration tribunal shall apply AAA rules in effect at the time of the arbitration, provided that the arbitrator shall be selected by the following means. Should the Parties agree upon an arbitrator then that arbitrator shall serve. Should either Purchasers or Warrantors demand an arbitration (the date of sending such notice being the Demand Date), and should they fail to agree upon an arbitrator within 5 business days following such demand, then each of Purchasers and Warrantors shall designate an arbitrator who is authorized to arbitrate disputes under the auspices of the AAA (“Authorized Arbitrator”), within 15 business days following the Demand Date by delivering notice to the other Party of such designation; if only one of Purchasers and Warrantors designates such an arbitrator within such 15 business day period, then that arbitrator shall serve to arbitrate the dispute; if both Purchasers and Warrantors timely designate their respective arbitrators, then those two designees shall mutually agree upon an Authorized Arbitrator within 25 business days following the Demand Date, who shall serve as arbitrator for the dispute, or failing to agree then thereafter the arbitrator shall be designated in accordance with the rules of the AAA. The arbitration shall be conducted in Nevada, with Purchasers on the one hand and the Warrantors on the other hand splitting equally the cost and fees associated with the Authorized Arbitrator, and with the prevailing party (i.e., Purchasers on the one hand and Warrantors, collectively, on the other hand) entitled to reimbursement from the other party (or parties in the case of Warrantors).

 

(d) Entire Agreement; Amendments and Waivers. This Agreement, together with all exhibits and schedules hereto and thereto (including the Disclosure Schedules), constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), or shall such waiver constitute a continuing waiver unless otherwise expressly provided.

 

(e) Counterparts. This Agreement may be executed in one or more counterparts, whether by original, photocopy, facsimile or e-mail in PDF format, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(f) Invalidity. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument.

 

(g) Third-Party Beneficiaries. Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the Parties hereto and the Company.

  

(h) Joint Drafting. The Parties have participated jointly in the negotiation and drafting of this Agreement and the other agreements and documents to be executed by the Parties in connection herewith. In the event an ambiguity or question of intent or interpretation arises, this Agreement and the other agreements and documents to be executed by the Parties in connection herewith shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement and the other agreements and documents to be executed by the Parties in connection herewith.

 

(i) The Parties’ know that JC is not an attorney and is involved in Emergent Health Corp. This can be viewed as a conflict of interest and as such should make you alert as to terms and conditions in the transaction. He has modified the documents to represent the transaction and to save the parties’ attorney’s fees. Notwithstanding each party is advised to retain an attorney to review, negotiate and represent their interests in the transactions contemplated herein.

 

	 
	
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

  

	
COMPANY:

	
 

	
SELLERS:

	
 

	
 

	
 

	
 

	
 

	
CASTLE HOLDING Corp.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 /s/ George R. Hebert

	
 

	
By:

	
/s/ George R. Hebert

	
Its:

	
President and Director

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
CI:

	
 

	
 

	
CASTLE HOLDING CORP. DEFERRED COMPENSATION PLAN FOR BENEFIT OF GEORGE R. HEBERT

	
 

	
 

	
 

	
 

	
 

	
Cappello’s Inc.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ John Capello

	
 

	
By:

	
/s/ George R. Hebert

	
Its:

	
President

	
 

	
 

	
President & Director

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ John Capello

	
 

	
 

	
 

	
 

	
JOHN CAPPELLO

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ Michael J. Studer 

	
 

	
 

	
 

	
 

	
MICHAEL J. STUDER (by Michael T. Studer, Attorney in Fact)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ Kathleen E. Studer Pastore

	
 

	
 

	
 

	
 

	
KATHLEEN E. STUDER PASTORE (by Michael T. Studer, Attorney in Fact)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ Kristin A. Studer Godsey

	
 

	
 

	
 

	
 

	
KRISTIN A STUDER GODSEY (by Michael T. Studer, Attorney in Fact)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

SIGNATURE PAGE

 

	 
	
25

	

  

 

EXHIBIT A

 

LICENSE AGREEMENT

 

 

	 
	
26

	

 

LICENSE AGREEMENT

 

This agreement (“Agreement”) is made and entered into this 26th day of August, 2014 (the “Effective Date”) by and between Cappellos, Inc., a corporation of the State of South Carolina, having its principal place of business at 10102B Valley Forge Circle, King of Prussia, Pennsylvania 19406, (hereinafter, referred to as “LICENSOR”) and Emergent Health Corporation, a corporation organized and existing under the laws of the State of Nevada, having its current principal place of business at 10102B Valley Forge Circle, King of Prussia, Pennsylvania 19406 (hereinafter, referred to as “LICENSEE”) (collectively “the Parties”).

 

WHEREAS, LICENSOR has developed proprietary technology and know-how covering compositions and treatments for promoting the quality of life including health, wellness and wellbeing as defined below under the “Technology”; and

 

WHEREAS, LICENSEE desires to acquire for itself a license as set forth herein to use the Technology;

 

WHEREAS, LICENSOR is the owner of certain patents and patent applications relating to the Technology as defined below under the “Patent Rights”; and

 

WHEREAS, LICENSEE desires to acquire for itself a license as set forth herein to make, have made, use, offer to sell and sell, Products (defined below) covered by the Patent Rights and/or using the Technology;

 

NOW, THEREFORE, in consideration of the mutual covenants and the conditions contained herein, the Parties agree as follows:

 

I. Definitions.

 

1.1 “Technology” means LICENSOR’s proprietary technical data, know-how, Patent Rights, trade secrets, processing and formulation technology, existing as of the Effective Date, and all improvements and updates to the Licensed Products listed in Appendix 2, but excluding a proprietary skin care formulation currently under development by LICENSOR (the “Excluded Product”).“Patent Rights” means those U. S. patents and patent applications that are owned by LICENSOR as of the Effective Date, namely, those identified in Appendix 1, and any continuations, divisionals, reissues and re-examinations thereof.

 

1.2 “Best Efforts” means reasonable commercial efforts in promoting and otherwise advancing the sale of Licensed Products.

 

1.3 “Effective Date” is defined in the first paragraph of this Agreement.

 

1.4 “Licensed Products” means any and all products, methods, formulations and processes utilizing any of the Technology. As of the Effective Date, Licensed Products include all those products listed in Appendix 2.

 

	 
	
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1.5 “Net Sales” means LICENSEE’s gross revenues attributed to any sale, transfer, delivery, provision or other disposition of Licensed Products calculated at the then current retail price to consumers, excluding taxes and freight. Licensed Products shall be considered sold when shipped or transferred. All sales of Licensed Products by or through LICENSEE, its agents or distributors must originate within the Territory and accrue under Net Sales.

 

1.6 “Term” shall mean the period beginning on the Effective Date and continuing up to the expiration of the last to expire of the Patent Rights, unless terminated earlier as set forth herein.

 

1.7 “Territory” shall mean the United States of America.

 

1.8 “USD” means United States Dollars.

 

II.  License Grant.

 

2.1 LICENSOR hereby grants to LICENSEE a non-transferable (except as provided herein), exclusive, non-sublicensable, license to make, have made, use, offer to sell and sell Licensed Products within the Territory, during the Term.

 

2.2 The licenses granted under this Agreement are limited to those specifically set forth in Paragraph 2.1 and except as otherwise specifically provided, no license is granted under any other patents or technology now or hereinafter owned by LICENSOR.

 

III.  Royalties.

 

3.1 LICENSEE shall pay LICENSOR a royalty based on a graduated declining royalty rate applied to incremental Net Sales of the Licensed Products, collectively, in each calendar year. The applicable royalty rates applied to incremental Net Sales are set forth in the table below:

 

TABLE

 

	
Incremental Yearly Net Sales

	
 

	
Incremental 
Royalty Rates

	
$0.00 to $1,000,000

	
 

	
5%

	
$1,000,001 to $2,000,000

	
 

	
4%

	
$2,000,001 to $3,000,000

	
 

	
3%

	
$3,000,001 to $5,000,000

	
 

	
2%

	
$5,000,001 and Above

	
 

	
1%

 

	 
	
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The royalty rates set forth above apply anew for each calendar year during the Term. For the avoidance of doubt, each January 1st during the Term, Net Sales are reset to $0.00 and begin to accrue royalties at the rate of 5% of Net Sales. As a further clarification, for example, total Net Sales of $2,500,000 during a calendar year will accrue a royalty payment of $105,000 USD.

 

IV.  Royalty payments and reports.

 

4.1 Any and all royalties payable to LICENSOR by LICENSEE must be paid within thirty (30) days of the close of each calendar quarter within which royalties were earned. All royalties payable hereunder shall be paid in USD.

 

4.2 LICENSEE shall prepare and issue to LICENSOR verified report statements for each calendar quarter showing separately: (1) the total number of Licensed Products sold, transferred, delivered, provided or otherwise disposed of by LICENSEE for each Licensed Product; (2) the total Net Sales price of Licensed Products sold, transferred, delivered, provided or otherwise disposed of by LICENSEE for each Licensed Product; and (3) the royalties accrued during the previous calendar quarter and payable to LICENSOR by LICENSEE for each Licensed Product. If no sales, transfers, deliveries or disposition of Licensed Products were made during any reporting period, a report to that effect must be filed.

 

4.3 LICENSEE shall keep for three (3) years after the date of submission of each royalty report statement, true and accurate records and books of account containing all the data reasonably required for the full computation and verification of LICENSEE’s Net Sales, (including deductions taken) and royalties to be paid as well as other information reasonably requested by LICENSOR, if any, to be given in the statements provided by LICENSEE to LICENSOR. Once each calendar year, LICENSEE shall permit an auditor chosen by LICENSOR to inspect such records and books of account at LICENSEE’s premises during normal business hours, provided five (5) business days prior notice is given to LICENSEE and all expenses associated with such inspection are borne by LICENSOR.

 

4.4 If further to such audit or inspection LICENSOR should determine that the amount of royalties due was greater than the amount reported and/or paid by LICENSEE, LICENSOR shall promptly furnish to LICENSEE a copy of the examination report setting forth the amount of the deficiency, and showing in reasonable detail, the basis upon which such deficiency was determined. LICENSEE shall promptly remit to LICENSOR a sum equal to the deficiency within thirty (30) days from the date of remittance of the examination report. In the event that the amount of underpayment of royalties due LICENSOR by LICENSEE exceeds five (5%) percent of the royalties actually paid to LICENSOR for the applicable period, then the costs and expenses for such audit shall be borne by LICENSEE.

 

V.  Reversion of Rights.

 

5.1 Within thirty (30) days after the end of each calendar year during the Term, the Net Sales of each Licensed Product shall be calculated and provided to Licensor in a written report with each Licensed Product listed next to its respective Net Sales for the prior calendar year. The first report shall be due no later than January 31, 2015.

 

5.2 The Net Sales of each Licensed Product sold during calendar year 2014, namely, from January 1, 2014 to December 31, 2014, shall serve as a “Base Sales” number from which Net Sales of each Licensed Product shall be compared in each following calendar year during the Term. In the event the Base Sales of any one or more of the Licensed Products do not increase by 15% per year over each prior calendar year, (“Underperforming Licensed Products”) then subject to Section 5.4 below, at LICENSOR’s option and sole discretion, LICENSOR may terminate the license for such Underperforming Licensed Product(s) or convert the license from an exclusive license to a non-exclusive license for such Underperforming Licensed Products.

 

	 
	
29

	

 

5.3 As an example, if the total aggregate Net Sales of a Licensed Product during calendar year 2014 is one thousand dollars ($1,000 USD). In order to maintain the exclusivity of the license for that Licensed Product in calendar year 2016, LICENSEE must sell one thousand one hundred fifty dollars ($1,150 USD) of that Licensed Product in calendar year 2015, or pay the incremental royalty based on deemed Net Sales of one thousand one hundred fifty dollars (irrespective of the amount actually sold). The Net Sales required in calendar year 2016 to maintain exclusivity would be one thousand three hundred twenty two dollars and fifty cents ($1,322.50 USD).

 

5.4 LICENSEE may maintain an exclusive license for any Underperforming Licensed Products which do not increase in Net Sales by 15% over the prior calendar year by paying to LICENSOR all royalties that would otherwise be due and payable based on Net Sales which would have achieved the 15% year over year increase in Net Sales. Such “gross up” royalty must be paid in full by January 31 of each calendar year to maintain exclusivity for that calendar year.

 

VI.  Use of Patent Rights.

 

6.1 In addition to the provisions of Article V above, in the event LICENSEE fails to use any of the Patent Rights during any calendar year beginning January 1, 2015, by: (i) not selling at an arm’s length transaction at least twenty five hundred dollars ( $2,500 USD) of any Licensed Product covered by any issued or pending claim of the Patent Rights, (and prorated for partial years if the Licensed Product in question was not ready for production for the full year), or (ii) not paying a minimum royalty as if such minimum amount of product sales were achieved (increasing by 15% per year) then the license granted for the Patent Rights not used by LICENSEE for any such Licensed Product shall terminate and revert to LICENSOR on January 31st of the following calendar year. Alternatively, LICENSOR may convert the exclusive license to a non-exclusive license for any such Licensed Product at LICENSOR’s sole discretion. Notwithstanding the foregoing, Licensed Products covered by the claims of US Patent 7,445,783 and US Patent 7,803,357 must establish Net Sales under each such patent in the amount of one hundred thousand dollars ($100,000 USD) each during the 2017 calendar year. Such Net Sales during 2017 shall serve as the Base Sales number subject to the terms of Article V above and applicable to year over year increases of 15% in calendar year 2018 and beyond.

 

VII. Patent Prosecution and Maintenance

 

7.1 During the Term, LICENSOR agrees to keep LICENSEE informed of the progress of the Patent Rights in the U.S. Patent Office. The Parties acknowledge that LICENSOR shall direct and control all aspects of the prosecution and maintenance of the Patent Rights using patent counsel of its choice. LICENSEE agrees to pay all reasonable costs and fees attributable to the Patent Rights including patent maintenance fees, government fees and attorney fees within thirty (30) days of receiving an invoice for such costs and fees.

 

VIII. Improvements to Technology.

 

8.1 LICENSEE shall grant LICENSOR a non-exclusive license to make, have made, use, offer to sell and sell any improvements or updates to LICENSOR’s Technology that is applicable to the Licensed Products. The parties will negotiate in good faith the terms and conditions of such license.

 

	 
	
30

	

 

IX.  Confidentiality.

 

9.1 During the term of this Agreement, it may be necessary for one Party (“Discloser”) to disclose to the other Party (“Receiver”), orally or in writing, technical and business information which the Discloser considers confidential (“Information”), for purposes of carrying out the Parties’ respective obligations under this Agreement. The Receiver shall maintain the Information in confidence, shall take all reasonable precautions to prevent disclosure of Information to third parties, and shall use Information only for the purposes provided for in this Agreement. However, the Receiver shall have no obligation under this section with respect to any specific portion of Information which is readily available to the public at the time of disclosure by the Discloser or is required to be disclosed by law or government regulation, as determined in good faith by counsel to the Receiver, provided that the Receiver provides reasonable prior notice of such required disclosure to the Discloser.

 

9.2 Notwithstanding termination of this Agreement, the obligations of confidentiality and non-use of the Receiver under Section 6.1 shall survive for a period of three (3) years from the date of termination of this Agreement, or upon written release of such obligations by the Discloser; whichever is earlier. Following termination of the obligations of confidentiality set forth in this section, the Receiver shall be completely free of any express or implied obligations restricting disclosure and use of Information for which the termination of commitments applies, subject to the LICENSOR’S Patent Rights.

 

9.3 Except as otherwise expressly set forth herein, neither this Agreement nor the disclosure of Information hereunder shall be deemed by implication, or otherwise, to vest in the Receiver any present or future rights in any patents, trade secrets, or other property of the Discloser.

 

9.4 For the purposes of this section, Information supplied by the Discloser to the Receiver pursuant to this Agreement shall not be deemed to be publicly available due to such disclosure or already in the possession of the receiving Party due to such disclosure or because disclosures concerning the same general subject matter are in the public domain or in the prior possession of the Receiver.

 

9.5 The Receiver may disclose Information to its employees and other service providers to Receiver with a need to know, only to the extent necessary to enable them to comply with, or monitor compliance with the terms of this Agreement, or to otherwise meet their service responsibilities to the Receiver, provided that the Receiver shall remain responsible for compliance with the terms of this Agreement.

 

9.6 Nothing herein shall prevent either Party from disclosing Information in response to any form of validly issued legal process or investigative demand from a court or government entity of competent jurisdiction calling for the disclosure of such Information, provided that, to the extent feasible, the Receiver served with such process or demand gives notice to the Discloser of the process or demand sufficiently in advance of the requested disclosure to permit either or both Parties to oppose the process or demand, if appropriate, or to seek to condition any such disclosure upon the entry of a suitable Agreement or protective order respecting the confidentiality of the Information to be disclosed. The Party whose Information is being disclosed shall be responsible for the cost of obtaining such a protective order or limitation.

 

9.7 The Parties may disclose the existence of this Agreement to their customers or potential customers in connection with sales of the Licensed Products, as well as to their professional advisers and current and potential future financing sources. LICENSOR and LICENSEE may disclose the actual terms of this Agreement in the course of its business to third parties having a need to know.

 

	 
	
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X.  Representations, Warranties and Disclaimers.

 

10.1 Each of the Parties represents and warrants that it has authority to enter into this Agreement and to perform its obligations under this Agreement and that it has been duly authorized to execute and to deliver this Agreement.

 

10.2 LICENSOR does not warrant the validity of any Patent Rights and any patents issuing from the Patent Rights. LICENSOR warrants that it is presently not aware that the practice and/or utilization of the Technology: (a) is infringed by intellectual property rights of any third party, or (b) infringes the intellectual property rights of any third parties. LICENSOR further represents and warrants that with the exception of the Excluded Technology all other technology owned by it embodied in the Licensed Products is being licensed to LICENSEE hereunder.

 

10.3 Nothing in this Agreement shall be deemed to be a representation or warranty by LICENSOR of the accuracy, safety, or usefulness for any purpose of any Technology, including any technical information, techniques or practices at any time made available by LICENSOR; nor to the patentability or validity of any patent application or granted patents licensed by LICENSOR. Except as otherwise agreed between the parties, LICENSOR shall have no liability whatsoever to LICENSEE or any other person for or on account of any injury, loss, or damage, of any kind or nature, sustained by, or any damage assessed or asserted against, or any other liability incurred by or imposed on LICENSEE or any other person arising out of or in connection with or resulting from (a) the production, use, or sale of any composition, formulation, apparatus, product or method; or (b) any advertising or other promotional activities with respect to any of the foregoing provided by LICENSEE.

 

LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN OR OTHERWISE SPECIFICALLY PROVIDED WITH RESPECT TO ANY PRODUCTS SOLD OR TECHNOLOGY PROVIDED TO LICENSEE BY LICENSOR, INCLUDING BUT NOT LIMITED TO ANY AND ALL IMPLIED WARRANTIES, AND ANY AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LICENSOR SHALL NOT HAVE ANY LIABILITIES OR RESPONSIBILITIES WHATSOEVER WITH RESPECT TO LICENSED PRODUCTS.

 

XI.  Enforcement.

 

11.1 If LICENSEE becomes aware of any infringement of the Patent Rights by a third party, LICENSEE will promptly notify LICENSOR in writing and shall provide to LICENSOR any information LICENSEE has in support of such belief (the “Infringement Notice”).

 

11.2 LICENSOR shall have the right, but not the obligation, to institute such action as it deems appropriate to terminate the infringement of LICENSOR Technology through negotiation, litigation and/or alternative dispute resolution means, at its sole discretion and at its sole cost. The right to institute such an action shall be exclusive to LICENSOR, except as noted below. LICENSOR shall have the right to select and to control counsel in any action initiated by LICENSOR. Upon request and subject to LICENSEE’s reasonable approval, LICENSEE shall lend its name to the action or join as a party in any such action, and provide assistance as may be reasonably necessary to conduct the action; LICENSOR shall reimburse LICENSEE its reasonable out-of-pocket costs for rendering such assistance. LICENSOR has the right to settle such action at its sole discretion; any recovery of damages shall be retained by LICENSOR. In the event LICENSOR agrees that the Patent Rights are being infringed and that LICENSOR does not elect to notify any potential infringer of any infringement of the Patent Rights within 45 days following the date of delivery of an Infringement Notice, then LICENSEE shall have the right to pursue the purported infringer, at its sole cost and expense, and in such event: (i) LICENSOR shall use its Best Efforts to cooperate in the prosecution of any such action at no cost to LICENSOR; and (ii) any recovery by way of settlement or judgment after decuction of LICENSEE’S costs of such action shall be divided equally between LICENSOR and LICENSEE,

 

	 
	
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XII. Indemnification.

 

12.1 Except as otherwise provided herein or otherwise agreed between the parties, LICENSEE agrees that with respect to LICENSOR, LICENSEE shall assume responsibility as to LICENSEE’s manufacture, use, marketing and sale of Licensed Products and for any loss or claim (including defense costs and attorney’s fees), arising from LICENSEE’s manufacture, use, marketing or sale of Licensed Products, and LICENSEE’s breach of any warranty, covenant or agreement by LICENSEE contained herein. LICENSEE further agrees to indemnify and hold harmless LICENSOR, its affiliated companies, and any of their agents, officers, directors, and employees from and against any liability, claim, administrative action, cause of action, suit, damages, and expenses (including reasonable attorney fees and costs) including but not limited to any damages for personal injuries, including death and property damage and any other costs of whatsoever nature incurred by LICENSOR arising from the manufacture, use, marketing and sale of Licensed Products by LICENSEE. LICENSOR shall be responsible for all damages caused by its material breach of this Agreement. Additionally, neither Party shall be liable in any circumstances whatsoever (including liability for negligence or other tortious act or omission) for (a) any loss of profit, loss of contract or loss of goodwill, or (b) any indirect or consequential loss.

 

XIII. Assignability.

 

13.1 This Agreement shall inure to the benefit and be binding on any successors and assignees of LICENSOR and any assignees of LICENSEE approved by LICENSOR, which consent shall not be unreasonably withheld.

 

13.2 The rights and licenses granted by LICENSOR in this Agreement are personal to LICENSEE and may not be assigned without the written consent of LICENSOR, subject to the terms of Section 13.1 above. This Agreement is entered into because of LICENSOR’s reliance upon the knowledge, experience, skill, and integrity of LICENSEE and LICENSOR considers that it is personal in nature to LICENSEE. Except as otherwise provided herein, this Agreement, the licenses and any other rights hereunder granted to LICENSEE and/or any duties to be performed by LICENSEE hereunder may not be assigned, transferred, sublicensed, encumbered or otherwise disposed of without first obtaining the consent in writing of LICENSOR, which shall not be unreasonably withheld. In the event that LICENSOR shall grant such consent, any and all future assignments, transfers, sublicenses, encumbrances or other disposals of any new party’s rights and/or duties under this Agreement shall not occur without written consent from LICENSOR, which may be withheld in LICENSOR’s sole discretion. Any attempted assignments without LICENSOR’S consent shall be void and shall automatically terminate all rights of LICENSEE under this Agreement.

 

XIV. Term and Termination.

 

14.1 The term of the license granted pursuant to Paragraph 2.1 hereof is defined in Section 1.7.

 

14.2 Notwithstanding any other provisions of this Agreement, this Agreement shall be subject to termination by LICENSOR by written notice to LICENSEE, by LICENSOR at any time selected by LICENSOR, following the occurrence of any one or more of the following events:

 

(i) if LICENSEE shall at any time make any report required in this Agreement that is false in any material respect as a result of LICENSEE’s intentional misconduct, recklessness or gross negligence); or

 

	 
	
33

	

 

(ii) if LICENSEE fails to make any payments required by this Agreement on the date required, and such failure is not cured within thirty (30) business days of the date of delivery of written notice of such failure; or

 

(iii) if LICENSEE receives a notice that any of the Licensed Products are subject to a recall, regulatory, government, or legal action (“Action”) excluding those arising from LICENSOR Technology; and (a) LICENSEE has knowingly acted in a reckless, negligent, or malicious manner to cause such Action, and (b) LICENSEE is unwilling or unable to remedy such situation to the reasonable satisfaction of LICENSOR within thirty (30) days after written notice by LICENSOR; in such event the termination shall be limited to the Licensed Products subject to such recall.

 

14.3 Notwithstanding the other provisions of this Agreement, this Agreement shall be subject to termination by a party (“the terminating party”) by written notice to the other party at any time selected by the terminating party, following the occurrence of any one or more of the following events:

 

(i) if the other party shall commit any material breach of any of its material representations, warranties, covenants, or agreements contained herein, and shall fail to remedy such breach within thirty (30) days after written notice to the other party from the terminating party of such breach; or

 

(ii) if the other party ceases to do business; or

 

(iii) if the other party becomes subject to any voluntary insolvency, cession, bankruptcy, or similar proceedings, or the other party becomes subject to any involuntary insolvency, cession, bankruptcy, or similar proceeding and such proceeding remains undischarged for a period of one year, or an assignment for the benefit of creditors is made by the other party, or a receiver is appointed to administer the assets of the other party, or the assets of the other party are liquidated, or in the case the other party is LICENSEE, any distress, execution, or attachment is levied on such of its manufacturing or other equipment as is used in the production and distribution of the Licensed Products and remains undischarged for a period of ninety (90) days.

 

14.4 Termination or expiration of this Agreement shall not relieve either party of any obligations accruing prior to such termination or expiration, including the obligation of LICENSEE to pay accrued royalties through the effective date of Termination, and Termination or expiration of this Agreement shall not affect those provisions of this Agreement which by their nature are intended to survive termination of this Agreement, such as Article IV (Royalty Payment and Reports), Article IX (Confidentiality) and Article XII (Indemnification). On Termination should LICENSOR not tender payment to LICENSEE of its cost of all finished Licensed Products within twenty business days following notification by LICENSEE to LICENSOR of LICENSEE’S cost of finished Licensed Products on hand on termination, then LICENSEE shall be permitted for a period of six months to sell such inventory (and complete production to finished goods inventory as needed to fulfill existing orders for Licensed Products as of the date of Termination of this Agreement), and to the extent of any sales of any such finished Products, LICENSEE shall remit to LICENSOR the applicable royalties thereon, as if this Agreement was in full force and effect as of the date of making such sales.

 

	 
	
34

	

 

XV. Patent Marking

 

15.1 LICENSEE shall mark Licensed Products with sufficient patent markings to preserve all rights and remedies that are available under law. Upon LICENSEE’s written request, LICENSOR shall furnish a list of those patent marking(s) that will discharge LICENSEE’s obligation under this Paragraph. It shall be LICENSEE’s responsibility to ensure compliance with applicable law.

 

XVI. Miscellaneous.

 

16.1 This Agreement shall be governed by the laws of the State of Pennsylvania, United States of America, without giving effect to the conflict of laws principles thereof.

 

16.2  This Agreement, including the Appendices attached hereto, contains the entire understanding of the Parties with respect to the subject matter herein contained and supersedes all previous written or verbal agreements relating to this subject matter between the Parties. The Parties may, from time to time during the continuance of the Agreement, modify any of the provisions of the Agreement, but only by an instrument in writing duly agreed to and executed by authorized representatives of the Parties.

 

16.3 Neither LICENSOR nor LICENSEE shall be liable to the other for any failure to comply with any terms of the Agreement to the extent any such failure is caused directly or indirectly by fire, strike, union disturbance, injunction or other labor problems, war (whether or not declared), riots, insurrection, government restrictions or other government acts, or other causes beyond the control of or without fault on the part of either LICENSOR or LICENSEE. However, LICENSEE shall continue to be obligated to pay LICENSOR when due any and all amounts which it shall have duly become obligated to pay in accordance with the terms of this Agreement. Upon the occurrence of any event of the type referred to in this Section, the Party affected thereby shall give prompt notice thereof to the other Party, together with a description of such event and the duration for which such Party expects its ability to comply with the provisions of this Agreement to be affected thereby. The Party affected shall thereafter devote its best efforts to remedy to the extent possible the condition giving rise to such event and to resume performance of its obligations hereunder as promptly as possible.

 

16.4 The Parties agree to execute, acknowledge and deliver all such further instruments, and to do all such other acts, as may be necessary and appropriate in order to effectuate the licenses contemplated by this Agreement.

 

16.5 The headings, section captions or titles of Articles, Sections or Paragraphs appearing in this Agreement are provided for convenience and are not to be used in construing this Agreement.

 

16.6 LICENSEE shall use its Best Efforts to promote, market and distribute Licensed Products in the Territory.

 

16.7 In the event either Party shall at any time waive any of its rights under this Agreement, or the waiver by either Party of any breach of any provision hereof by the other Party, or the performance by the other Party of any of its obligations hereunder shall not be construed to be a waiver of any succeeding breach of such provision or a waiver of the same rights or obligations or a waiver of any other rights or obligations or the provision itself.

 

	 
	
35

	

 

16.8 Any notice required or permitted to be given hereunder shall be in the English language and transmitted via the following: facsimile (with confirmation copy mailed afterwards), express delivery (e.g., Federal Express), registered mail, or delivered by hand. Any such notice shall be deemed to have been delivered on the date of its receipt as evidenced by written and dated acknowledgement of receipt of delivery by the receiving Party. All such notices shall be sent to the respective Parties at the following addresses:

 

To LICENSOR:

 

Cappellos, Inc 

10102 Valley Forge Circle 

King of Prussia, PA 19404 

Attention: John V. Cappello

 

To LICENSEE:

 

	
To Company at:

	
Emergent Health Corp. (It’s headquarters)

 

16.9 The illegality or partial illegality of any or all of this Agreement, or any provision thereof, will not affect the validity of the remainder of the Agreement, or any such provision thereof, and the illegality or partial illegality of the Agreement or provision thereof will not affect the validity of the Agreement or provision thereof in any jurisdiction in which such determination of illegality or partial illegality has not been made. In the event of invalidity or partial invalidity of this Agreement or a provision thereof, the Parties shall conduct good faith negotiations directed toward mutually agreeable modifications which come as close as legally acceptable to the original intent of the Parties at the Effective Date.

 

16.10 The appendices attached to this Agreement, each when executed and/or delivered, are incorporated by reference into and made a part of this Agreement.

 

16.11 This Agreement does not constitute LICENSEE as the agent or legal representative of LICENSOR, or LICENSOR as the agent or legal representative of LICENSEE for any purpose whatsoever. LICENSEE is not granted any right or authority to assume or to create any obligation or responsibility, expressed or implied, on behalf of or in the name of LICENSOR or to bind LICENSOR in any manner or thing whatsoever, nor is LICENSOR granted any right or authority to assume or create any obligation or responsibility, expressed or implied, on behalf of or in the name of LICENSEE or to bind LICENSEE in any manner or thing whatsoever. No joint venture or partnership between LICENSEE and LICENSOR is intended or shall be inferred.

 

	 
	
36

	

 

16.12 This Agreement may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument.

 

16.13 In evaluating and entering into this Agreement, neither LICENSOR nor LICENSEE relied and are not relying on any representations, warranties or other statements, whether oral or written, of the other, except those representations and warranties specifically set forth in this Agreement.

 

16.14 The form of this Agreement has been negotiated by or on behalf of LICENSEE and LICENSOR, each of which was represented by attorneys who have carefully negotiated the provisions hereof. Each party acknowledges that it has been advised to, and has had the opportunity to consult with its personal attorney prior to entering into this Agreement.

 

This Agreement is hereby executed by the Parties by their duly authorized representatives.

 

	
AGREED TO AND ACCEPTED:

		 		
	 			 		
	
LICENSOR

	
 

	
LICENSEE

	 			 		
	
CAPELLOS, INC. 

	
 

	
EMERGENT HEALTH CORPORATION

	
 

	
 

	
 

	
By:

	
/s/ John V. Cappello

	
 

	
By:

	
/s/ John V. Cappello

	
 

	
 

	
John V. Cappello 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	Title:	
President

	
 

	
Title:

	
President

	
 

 

	 
	
37

	

  

APPENDIX 1

 

	 
	
Type

	
Title

	
App. No.

	
Filing Date

	
Pat. No.

	
Issue Date

	
Status

	
Provisional

	
Dietary Supplements Including Glucan and Fulvic Acid

	
61/798,283

	
3/15/2013

	 	 	
Pending

	
Utility - Non-Provisional

	
Dietary Supplements Including Ellagitannins and Ellagic Acid

	
13/757,744

	
2/2/2013

	 	 	
Pending

	
Utility - Non-Provisional

	
Anti-Aging Formulations

	
13/723,503

	
12/21/2012

	 	 	
Pending

	
Utility - Non-Provisional

	
Anti-Aging Formulations

	
13/357,280

	
1/24/2012

	 	 	
Pending

	
Utility - Non-Provisional

	
Compositions for Producing Satiety

	
12/710,161

	
2/22/2010

	 	 	
Pending

	
Utility - Non-Provisional

	
Formulations for Promoting Stem Cell Nutrition

	
13/425,563

	
3/21/2012

	
8,334,131

	
12/18/2012

	
Issued

	
Utility - Non-Provisional

	
Topical and Transdermal Treatments Using Urea Formulation

	
12/290,744

	
11/3/2008

	
7,803,357

	
9/28/2010

	
Issued

	
Utility - Non-Provisional

	
Blue-Green Algae Composition

	
11/788,693

	
4/19/2007

	
7,473,427

	
1/6/2009

	
Issued

	
Utility - Non-Provisional

	
Topical and Transdermal Treatments Using Urea Formulation

	
11/590,037

	
10/30/2006

	
7,445,783

	
11/4/2008

	
Issued

 

	 
	
38

	

  

APPENDIX 2

 

Licensed Products include those proprietary products and formulations which are listed below under their current commercial names and/or trademarks for identification purposes only:

 

JDI MultiTM 

Vita-StimTM 

NeuStemTM 

ResoluCanTM 

NeuvitaleTM 

Hungarest® 

Infinity Anti-AgingTM 

Infinity Plus Anti-AgingTM 

Miracle SerumTM 

EmergentO2 Water OxygenatorTM 

Cardio ForteTM 

VERAL – The Manly Aid 

Cancx® 

Nutracide®

 

Licensed Products further include any products obtained from LICENSOR’s proprietary sources.

 

	 
	
39

	

 

EXHIBIT B

 

LICENSE AGREEMENT ASSIGNMENT LETTER

 

 

	 
	
40

	

 

Cappellos, Inc. 

10102 B Valley Forge Circle 

King of Prussia, PA 19406 

Office: 484-518-9000 Cell: 484-919-3472 Fax: 484-392-7054

 

 

 

October 10, 2014

 

Castle Holding Corp. 

Attention George Hebert, President 

18 East Sunrise Drive 

Suite 311 

Freeport, NY 11520

 

Dear George,

 

This is to confirm that after December 31, 2014 the Cappellos, Inc. License Agreement that licenses Intellectual Properties and products to Emergent Health Corp. will be assigned to either Castle Holding Corp. or a subsidiary thereof.

 

We trust this documentation will be sufficient to provide for the issuance of the 2,000,000 shares of Castle Holding Corp. at the closing of the transaction as reported on June 12, 2014 in an 8 K filed by Castle Holding Corp. with the SEC via EDGAR filing.

 

Sincerely,

 

John V. Cappello, D.O., M.B.A. 

President 

 

	 
	
41

	

  

EXHIBIT C

 

MAJORITY SHAREHOLDER AND DIRECTOR RESOLUTION

 

 

	 
	
42

	

 

CERTIFIED RESOLUTIONS 

OF THE 

BOARD OF DIRECTORS 

OF 

CASTLE HOLDING CORP.

 

THE UNDERSIGNED, Michael T. Studer, being the duly elected and acting Secretary of Castle Holding Corp., a Nevada corporation (the “Corporation”), does hereby certify that on October 7, 2014, unanimous action was taken by the Board of Directors in lieu of a special meeting of the Board of Directors, and that the following resolutions were unanimously adopted and remain in full force and effect as of the date of this certificate.

 

IT IS THEREFORE RESOLVED that the Corporation approves execution of the Stock Purchase Agreement between Castle Holding Corp., the Sellers, and the Purchasers (John Cappello and Cappello's Inc.)

 

FURTHER RESOLVED that the president and treasurer, George R. Hebert and Michael T. Studer, respectively, are hereby authorized and directed to execute any documents on behalf of the Corporation in connection with this transaction.

 

IN WITNESS THEREOF, the undersigned has executed this certificate this 7th day of October 2014.

  

	 	
CASTLE HOLDING CORP.

	 
	 	 	 	 
		By:	/s/ Michael T. Studer	 
	 	 	Michael T. Studer	 
	 	 	Secretary and Director	 
	 	 	 	 

  

Also present:

 

/s/ George R. Hebert

George R. Hebert, President and Director

  

/s/ Teresa M. Hebert

Teresa M. Hebert, Director

 

 

 

43

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