EXHIBIT 4.1
INDENTURE
AMERICAN CHURCH MORTGAGE COMPANY, as obligor
Series C Secured Investor Certificates
$20,000,000
HERRING BANK, as trustee
Dated as of ________ ___, 2008
<PAGE>
TABLE OF CONTENTS
CROSS-REFERENCE TABLE
.................................................... IV
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE .............
1
SECTION 1.1
DEFINITIONS ............................................
1
SECTION 1.2
OTHER DEFINITIONS ......................................
4
SECTION 1.3
INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT ......
4
SECTION 1.4
RULES OF CONSTRUCTION ..................................
5
ARTICLE II. THE
SECURITIES ......................................... 5
SECTION 2.1
UNLIMITED AMOUNT; ACCOUNTS; INTEREST; MATURITY .........
5
SECTION 2.2
TRANSACTION STATEMENT; RESCISSION ......................
6
SECTION 2.3
REGISTRAR AND PAYING AGENT .............................
6
SECTION 2.4
DEPOSIT OF PRINCIPAL AND INTEREST WITH PAYING AGENT ....
6
SECTION 2.5
LIST
OF HOLDERS ........................................ 7
SECTION 2.6
TRANSFER AND EXCHANGE ..................................
7
SECTION 2.7
PAYMENT OF PRINCIPAL AND INTEREST; PRINCIPAL AND
INTEREST RIGHTS PRESERVED ..............................
7
SECTION 2.8
RESERVED ...............................................
8
SECTION 2.9
OUTSTANDING SECURITIES .................................
8
SECTION 2.10
TREASURY
SECURITIES .................................... 9
SECTION 2.11
RESERVED
............................................... 9
SECTION 2.12
RESERVED
............................................... 9
SECTION 2.13
DEFAULTED
INTEREST ..................................... 9
SECTION 2.14
BOOK-ENTRY
REGISTRATION ................................ 9
SECTION 2.15
INITIAL
AND PERIODIC STATEMENTS ........................ 10
ARTICLE III. REDEMPTION
............................................. 10
SECTION 3.1
REDEMPTION OF SECURITIES AT THE COMPANY'S ELECTION .....
10
SECTION 3.2
REDEMPTION OF SECURITIES AT THE HOLDER'S ELECTION ......
11
SECTION 3.3
OFFER TO REDEEM SECURITIES UPON CHANGE OF THE
COMPANY'S ADVISOR ......................................
11
ARTICLE IV.
COVENANTS ..............................................
12
SECTION 4.1
PAYMENT OF SECURITIES ..................................
12
SECTION 4.2
MAINTENANCE OF OFFICE OR AGENCY ........................
12
SECTION 4.3
SEC
REPORTS AND OTHER REPORTS .......................... 13
SECTION 4.4
COMPLIANCE CERTIFICATE .................................
13
SECTION 4.5
STAY, EXTENSION AND USURY LAWS .........................
14
SECTION 4.6
LIQUIDATION ............................................
14
SECTION 4.7
FINANCIAL COVENANTS ....................................
14
SECTION 4.8
RESTRICTIONS ON DIVIDENDS AND CERTAIN TRANSACTIONS
WITH AFFILIATES ........................................
14
SECTION 4.9
COLLATERAL .............................................
15
<PAGE>
SECTION 4.10
APPOINTMENT AS ATTORNEY-IN-FACT ........................
16
ARTICLE V.
SUCCESSORS .............................................
18
SECTION 5.1
WHEN
THE COMPANY MAY MERGE, ETC. ....................... 18
SECTION 5.2
SUCCESSOR CORPORATION SUBSTITUTED ......................
18
ARTICLE VI.
DEFAULTS AND REMEDIES ..................................
19
SECTION 6.1
EVENTS OF DEFAULT ......................................
19
SECTION 6.2
ACCELERATION ...........................................
20
SECTION 6.3
OTHER REMEDIES .........................................
20
SECTION 6.4
WAIVER OF PAST DEFAULTS ................................
21
SECTION 6.5
CONTROL BY MAJORITY ....................................
21
SECTION 6.6
LIMITATION ON SUITS ....................................
21
SECTION 6.7
RIGHTS OF HOLDERS TO RECEIVE PAYMENT ...................
21
SECTION 6.8
COLLECTION SUIT BY TRUSTEE .............................
22
SECTION 6.9
TRUSTEE MAY FILE PROOFS OF CLAIM .......................
22
SECTION 6.10
PRIORITIES
............................................. 22
SECTION 6.11
UNDERTAKING FOR COSTS ..................................
23
ARTICLE VII. TRUSTEE
................................................ 23
SECTION 7.1
DUTIES OF TRUSTEE ......................................
23
SECTION 7.2
RIGHTS OF TRUSTEE ......................................
24
SECTION 7.3
INDIVIDUAL RIGHTS OF TRUSTEE ...........................
25
SECTION 7.4
TRUSTEE'S DISCLAIMER ...................................
25
SECTION 7.5
NOTICE OF DEFAULTS .....................................
25
SECTION 7.6
REPORTS BY TRUSTEE TO HOLDERS ..........................
25
SECTION 7.7
COMPENSATION AND INDEMNITY .............................
26
SECTION 7.8
REPLACEMENT OF TRUSTEE .................................
27
SECTION 7.9
SUCCESSOR TRUSTEE BY MERGER, ETC. ......................
27
SECTION 7.10
ELIGIBILITY; DISQUALIFICATION ..........................
28
SECTION 7.11
PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY ......
28
ARTICLE VIII. DISCHARGE OF
INDENTURE ................................. 28
SECTION 8.1
TERMINATION OF COMPANY'S OBLIGATIONS ...................
28
SECTION 8.2
APPLICATION OF TRUST MONEY .............................
29
SECTION 8.3
REPAYMENT TO COMPANY
................................... 29
SECTION 8.4
REINSTATEMENT ..........................................
30
ARTICLE IX.
AMENDMENTS .............................................
30
SECTION 9.1
WITHOUT CONSENT OF HOLDERS .............................
30
SECTION 9.2
WITH
CONSENT OF HOLDERS ................................ 30
SECTION 9.3
COMPLIANCE WITH TRUST INDENTURE ACT ....................
31
SECTION 9.4
REVOCATION AND EFFECT OF CONSENTS ......................
31
SECTION 9.5
NOTATION ON OR EXCHANGE OF SECURITIES ..................
31
SECTION 9.6
TRUSTEE TO SIGN AMENDMENTS, ETC. .......................
31
ARTICLE X.
MISCELLANEOUS ..........................................
32
SECTION 10.1
TRUST
INDENTURE ACT CONTROLS ........................... 32
ii
<PAGE>
SECTION 10.2
NOTICES
................................................ 32
SECTION 10.3
COMMUNICATION BY HOLDERS WITH OTHER HOLDERS ............
33
SECTION 10.4
CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT .....
33
SECTION 10.5
STATEMENTS
REQUIRED IN CERTIFICATE OR OPINION .......... 33
SECTION 10.6
RULES BY
TRUSTEE AND AGENTS ............................ 33
SECTION 10.7
LEGAL
HOLIDAYS ......................................... 34
SECTION 10.8
NO
RECOURSE AGAINST OTHERS ............................. 34
SECTION 10.9
DUPLICATE
ORIGINALS .................................... 34
SECTION 10.10
GOVERNING LAW
.......................................... 34
SECTION 10.11
NO ADVERSE
INTERPRETATION OF OTHER AGREEMENTS .......... 34
SECTION 10.12
SUCCESSORS
............................................. 34
SECTION 10.13
SEVERABILITY
........................................... 34
SECTION 10.14
COUNTERPART
ORIGINALS .................................. 34
SECTION 10.15
TABLE OF
CONTENTS, HEADINGS, ETC. ...................... 35
SIGNATURES
........................................................
36
iii
<PAGE>
CROSS-REFERENCE TABLE
*Trust Indenture Act Section ...............................
Indenture
Section
310(a)(1) ..................................................
7.10
(a)(2) .....................................................
7.10
(a)(3) .....................................................
N.A.
(a)(4) .....................................................
N.A.
(a)(5) .....................................................
N.A.
(b) ........................................................
7.8; 7.10
(c) ........................................................
N.A.
311(a) .....................................................
7.11
(b) ........................................................
7.11
(c) ........................................................
N.A.
312(a) .....................................................
2.5
(b) ........................................................
11.3
(c) ........................................................
11.3
313(a) .....................................................
7.6
(b)(1) .....................................................
N.A.
(b)(2) .....................................................
7.6
(c) ........................................................
7.6; 11.2
(d) ........................................................
7.6
314(a) .....................................................
4.3; 4.4;
11.2
(b) ........................................................
4.9(c)
(c)(1) .....................................................
11.4
(c)(2) .....................................................
11.4
(c)(3) .....................................................
N.A.
(d) ........................................................
N.A.
(e) ........................................................
11.5
(f) ........................................................
N.A.
315(a) .....................................................
7.1(b)
(b) ........................................................
7.5; 11.2
(c) ........................................................
7.1(a)
(d) ........................................................
7.1(c)
(e) ........................................................
6.11
316(a)(last sentence) ......................................
2.10
(a)(1)(A) ..................................................
6.5
(a)(1)(B) ..................................................
6.4
(a)(2) .....................................................
N.A.
(b) ........................................................
6.7
(c) ........................................................
N.A.
317(a)(1) ..................................................
6.8
(a)(2) .....................................................
6.9
(b) ........................................................
2.4
318(a) .....................................................
11.1
N.A. means not applicable
* This Cross Reference Table is not part of the Indenture
iv
<PAGE>
THIS
INDENTURE is hereby entered into as of _____ __, 2008, by and
between
American Church Mortgage Company, a Minnesota corporation (the "Company"),
and
Herring Bank, as trustee (the "Trustee").
The
Company and the Trustee agree as follows for the benefit of each
other
and for the equal and
ratable benefit
of the Holders of the Series C
Secured
Investor
Certificates of
the Company issued pursuant to the Company's
registration statement on Form S-11 (Reg. No. 333-_________)
declared effective
by the Securities and Exchange Commission on _____ __, 2008 (the
"Registration
Statement"):
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Account"
means the record of beneficial ownership of a Security
maintained by the Registrar.
"Advisor"
means Church Loan Advisors, Inc., the Company's advisor.
"Advisory
Agreement"
means the Company's advisory agreement with the
Advisor pursuant to
which the Advisor
manages the business
and affairs of the
Company, as the same has been or may be amended from time to
time.
"Affiliate" of any
specified Person means any other Person
directly or
indirectly controlling
or controlled by or under direct or indirect common
control with
such specified Person. For the purposes of this definition,
"control" (including,
with correlative meanings, the terms "controlling,"
"controlled by" and
"under common control
with"), as used with
respect to any
Person, shall mean the
possession,
directly or indirectly, of the power to
direct or cause the
direction of the
management
or policies of such
Person,
whether through the ownership of voting securities, by agreement or
otherwise.
"Agent"
means any Registrar, Paying Agent or co-registrar of the
Securities.
"Board of
Directors"
means the Board of
Directors of the
Company or any
authorized committee of the Board of Directors.
"Business
Day" means any day other than a Legal Holiday.
"Company"
means American Church Mortgage Company, unless and until
replaced by a successor in accordance with Article V hereof and
thereafter means
such successor.
"Corporate
Trust Office" means the office of the Trustee at which the
corporate trust
business of the
Trustee shall,
at any particular time, be
principally
administered, which
office is, at the date as of which this
Indenture is
originally dated,
located at 1608 S.
Polk St., Amarillo,
Texas
79102, Attention: Catana Gray, Vice-President.
<PAGE>
"Default"
means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.
"Fiscal
Year" means initially a December 31 year end.
"GAAP"
means, as of any date, generally accepted accounting principles
set
forth in the opinions and pronouncements of the Accounting
Principles Board
of
the American Institute
of Certified
Public Accountants and statements and
pronouncements of the
Financial Accounting Standards Board or in such other
statements by such
other entity as
approved by a
significant
segment of the
accounting profession, which are in effect from time to time.
"Guarantee" means a
guarantee (other than
by endorsement
of negotiable
instruments for
collection
in the ordinary course of business), direct or
indirect, in any
manner (including,
without limitation,
letters of credit and
reimbursement
agreements in
respect thereof), of all or any part of any
Indebtedness.
"Holder"
means a Person in whose name a Security is registered.
"Indebtedness" means, with respect to any Person, any indebtedness
of such
Person, whether or not contingent, in respect of borrowed money or
evidenced by
bonds, notes,
debentures
or similar instruments or letters of credit (or
reimbursement
agreements in
respect thereof) or representing the balance
deferred and unpaid of the purchase price of any property (including capital
Lease obligations) or
representing
any hedging
obligations,
except any such
balance that
constitutes an accrued
expense or a trade payable, if and to the
extent any of the
foregoing indebtedness (other than letters of credit and
hedging obligations)
would appear as a
liability upon a
balance sheet of such
Person prepared in
accordance with GAAP,
and also includes, to
the extent not
otherwise included,
(a) the Guarantee of items that would be
included within
this definition, and
(b) liability for items that would arise by operation of a
Person's status as a general partner of a partnership.
"Indenture" means,
this Indenture as amended or supplemented from time to
time.
"Interest
Accrual Period" means, as to each Security, the period from the
later of the Issue Date of such Security or the day after the last
Payment Date
upon which an interest payment was made until the following
Payment Date
during
which interest accrues on each Security with respect to any Payment
Date.
"Issue
Date" means, with
respect to any Security, the date on which such
Security is deemed
registered on the books and records of the Registrar, which
shall be the date the Company accepts funds for the purchase of
the Security if
such funds are received prior to 12:01 p.m. (Central Time) on a
Business Day, or
if such funds are received after such time, on the next Business
Day.
"Maturity
Date" means, with respect to any Security, the date on which
the
principal of such Security becomes due and payable as therein
provided.
2
<PAGE>
"Maturity
Record Date" means,
with respect to any
Security, as of
11:59
p.m. on the date fifteen (15) days prior to the Maturity Date or
Redemption Date
applicable to such Security.
"Obligations" means
any principal, interest (including Post-Petition
Interest), penalties, fees, indemnifications, reimbursements, damages and
other
liabilities payable under the documentation governing any
Indebtedness.
"Officer"
means the Chairman of the Board or principal executive officer
of the Company, the
President or operating
officer of the
Company, the Chief
Financial Officer or principal financial officer of the Company,
the Treasurer,
any Assistant
Treasurer,
Controller
or principal officer of the Company,
Secretary or any Vice-President of the Company.
"Officer's
Certificate" means a certificate signed by an Officer.
"Opinion
of Counsel" means an opinion from legal counsel who is
reasonably
acceptable to the
Trustee. The counsel
may be an employee of or counsel to the
Company or the Trustee.
"Payment
Date" means the last day of each calendar quarter, or if such
day
is not a Business Day, the Business Day immediately following such
day and, with
respect to a specific
Security, the Maturity
Date or Redemption
Date of such
Security.
"Person"
means any individual,
corporation,
partnership, joint
venture,
association,
joint stock
company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Post-Petition Interest" means interest accruing after the
commencement of
any bankruptcy or insolvency case or proceeding with respect to the Company or
any receivership,
liquidation,
reorganization
or other similar case or
proceeding in connection therewith, at the rate applicable to such
Indebtedness,
whether or not such interest is an allowable claim in any such
proceeding.
"Prospectus" means the
prospectus relating to
the Securities,
including
any prospectus supplement, forming part of the Registration
Statement.
"Redemption Date" has the meaning given in Article III hereof.
"Redemption Price" means, with respect to any Security to be
redeemed, the
principal amount of
such Security plus the
interest accrued but
unpaid during
the Interest Accrual Period up to the Redemption Date for such
security.
"Regular
Record Date" means,
with respect to each Payment
Date, as of
11:59 p.m. on the date fifteen (15) days prior to such Payment
Date.
"Responsible Officer"
when used with respect
to the Trustee,
means any
officer in its Corporate Trust Office, or any other assistant officer of the
Trustee in its Corporate Trust Office customarily performing functions similar
to those performed by the Persons who at the time shall be such officers,
respectively, or to
whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular
subject.
3
<PAGE>
"SEC"
means the U.S. Securities and Exchange Commission.
"Security"
or "Securities" means,
the Company's Series C Secured Investor
Certificates issued under this Indenture pursuant to the
Registration Statement.
"TIA"
means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in
effect on the date on which this Indenture is qualified
under the TIA.
"Trustee"
means Herring Bank, until a successor replaces it in accordance
with the applicable
provisions
of this Indenture and thereafter means the
successor serving hereunder.
"U.S.
Government
Obligations"
means direct obligations of the United
States of America, or
any agency or instrumentality thereof for the payment of
which the full faith and credit of the United States of America is
pledged.
Section 1.2 Other Definitions.
Term .................................. Defined in Section
"Bankruptcy Law" ......................
6.1
"Collateral" ..........................
4.9(a)
"Custodian" ...........................
6.1
"Event of Default" ....................
6.1
"Legal Holiday" .......................
10.7
"Paying Agent" ........................
2.3
"Registrar" ...........................
2.3
"Registration Statement" ..............
Introduction
"Securities Register" .................
2.3
"Transfer" ............................
4.9(h)
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever
this Indenture refers to a provision of the TIA, the provision
is
incorporated by
reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means any Holder of the Securities;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the
Securities
means the Company or any successor
obligor upon the Securities.
4
<PAGE>
All
other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule
under the TIA
have the meanings so assigned to them.
Section 1.4 Rules of Construction.
Unless the
context otherwise requires: (a) a term has the meaning assigned
to it; (b) an accounting term not otherwise defined has the meaning assigned
to
it in accordance with
GAAP; (c) references to GAAP, as of any date, shall mean
GAAP in effect in the United States as of such date and
consistently
applied;
(d) "or" is not exclusive; (e) words in the singular include
the plural, and in
the plural include the singular; and (f) provisions apply to
successive events
and transactions.
ARTICLE II.
THE
SECURITIES
Section 2.1 Unlimited Amount; Accounts; Interest; Maturity.
(a)
The outstanding
aggregate principal amount of Securities outstanding
at any time is limited to $20,000,000, provided, however, that the Company and
the Trustee may,
without the consent of
any Holder, increase
such aggregate
principal amount of
Securities
which may be outstanding at any time. The
Securities may be subject to notations, legends or endorsements
required by law,
stock exchange rule, agreements to which the Company is subject or
usage.
(b)
Except as
provided in Section 2.14 hereof, each Security shall not
be evidenced by a promissory note. The record of beneficial ownership of the
Securities shall
be maintained and updated by the Registrar through the
establishment and maintenance of Accounts. Initially, each Security shall be
in
such denominations as
may be designated from time to time by the Company. Each
Security shall have a
term of not less than thirteen (13) years and not greater
than twenty
(20) years as shall be designated by the Holder at the time of
purchase, subject to the Company's acceptance thereof.
(c)
Each Security
shall bear interest
from and commencing on
its Issue
Date at such rate of interest as the Company shall determine from time to time,
as set forth in the Prospectus. The interest rate of each Security
will be fixed
for the term of such Security upon issuance, subject to change upon the
renewal
of the Security at maturity. Interest on the Securities will
not compound. The
Company shall pay the Holders interest on the Securities
quarterly on the
last
day of each quarter
during which each such Security is outstanding. To the
extent any applicable interest payment date is not a Business Day,
then interest
shall be paid instead on the next succeeding Business Day.
(d)
The Company will give each Holder of a Security a written
notice
approximately thirty
(30) but not less than ten (10) days prior to the Maturity
Date of the Security held by such Holder reminding such Holder of the Maturity
Date of the Security.
If the Company is
offering renewal of
Securities,
the
Company will
provide such Holder with a schedule of interest rates then in
effect and a form for the Holder to use to notify the Company
whether the Holder
wishes to renew the
Security. To be
effective,
a notice of
renewal must be
returned to the Company (or
5
<PAGE>
its agent) not later than the Maturity Date of the maturing
Security. Unless a
Security is properly
renewed, no interest
will accrue after the
Maturity Date
for such Security.
If a Security is not
renewed, the Company shall pay the
Holder the principal amount on the maturing Security, together with accrued but
unpaid interest thereon, within ten (10) days after the Maturity
Date.
(e)
If the Company
is offering renewal of Securities and a Holder renews
a Security, then
interest shall
continue to accrue
from the first day of such
renewal term at the applicable rate then in effect. Such Security, as renewed,
will continue in all its provisions, including provisions relating
to payment.
(f)
The terms and provisions contained in the Securities shall
constitute, and are
hereby expressly made,
a part of this Indenture and to the
extent applicable, the
Company and the Trustee, by their execution and delivery
of this Indenture, and the Holders by accepting the Securities,
expressly agree
to such terms and provisions and to be bound thereby. In case of a
conflict, the
provisions of this Indenture shall control.
Section 2.2 Transaction Statement; Rescission.
(a)
A Security shall
not be validly issued until a written confirmation
of the acceptance
of a Subscription in the form of a transaction statement
executed by a duly
authorized
officer or agent of
the Company is sent to
the
purchaser thereof and
an Account is established by the Registrar in the name of
such purchaser or transferee.
(b)
For a period of
five (5) days following delivery of a Prospectus to
a Holder in regard to issuance of a Security at the time of
original purchase,
but not upon transfer,
the Holder shall have
the right to rescind the Security
and receive payment of
the principal by
presenting
a written request to the
Company. Payment
of the principal shall be made within ten (10) days of the
Company's receipt of
such request from the Holder. No interest shall be paid on
any such rescinded Security.
Section 2.3 Registrar and Paying Agent.
The
Trustee shall maintain (i) an office or agency where Securities may
be
presented for registration of transfer or for exchange
("Registrar") and (ii) an
office or agency where Securities may be presented for payment
("Paying Agent").
The Registrar shall
keep a register of the Securities and of their transfer and
exchange, which
shall include the name, address for notices and payment of
principal and interest
to the Holder,
principal amount and
interest rate for
each Security, and
such other information as the Company shall request that the
Registrar maintain
with regard to Holders or the Securities (the "Securities
Register"). The
Registrar shall not be
required to maintain any records beyond
those (i) specifically required by the terms of this Indenture,
(ii) reasonably
requested in writing
by the Company and (iii) and as are or become required to
be maintained by applicable law.
Section 2.4 Deposit of Principal and Interest With Paying
Agent.
Prior to
each Payment
Date, the Company shall deposit with the Paying
Agent sufficient
funds to pay
principal and interest then becoming due and
payable in cash.
6
<PAGE>
Section 2.5 List of Holders.
The
Trustee shall preserve in as current a form as is reasonably
practicable the most
recent list available
to it of the names and addresses of
Holders and shall otherwise comply with TIA ss.312(a). If the
Trustee is not the
Registrar, the
Registrar shall
furnish to the Trustee each quarter during the
term of this Indenture
and at such other
times as the
Trustee may request
in
writing, a list in
such form and as of such date as the Trustee may reasonably
require of the names,
addresses and Account balances of Holders, and the
aggregate principal
amount outstanding and the Company shall
otherwise comply
with TIA ss.312(a).
Section 2.6 Transfer and Exchange.
(a)
The Securities are not negotiable instruments and cannot be
transferred without
the prior written
consent of the Company. Requests to the
Registrar for the transfer of any Account maintained for the
benefit of a Holder
shall be:
(1) made to the
Company in writing on a form supplied by the
Company;
(2) duly
executed by the current holder of the Account, as
reflected on the Registrar's records as of the date of receipt
of such transfer
request, or his attorney duly authorized in writing;
(3) accompanied
by the written consent of the Company to the
transfer; and
(4) if requested
by the Company,
an opinion of Holder's
counsel
(which counsel shall be reasonably acceptable to the Company) that
the transfer
does not violate any applicable securities laws and/or a signature
guarantee.
(b)
Upon
transfer of a Security, the Company will provide the new
registered owner
of the Security with a transaction statement which will
evidence the transfer of the Account in the Securities
Register.
(c)
The Company or
the Trustee may assess
service charges to a Holder
for any registration
or transfer or exchange, and the Company may require
payment of a sum
sufficient to cover
any transfer tax or similar governmental
charge payable in
connection therewith
(other than any such
transfer taxes or
similar governmental
charge payable upon exchange pursuant to Section 9.5
hereof).
(d)
The Company
shall treat the individual or entity listed on each
Account maintained
by the Registrar as the absolute owner of the Security
represented thereby for purposes of receiving payments thereon and
for all other
purposes whatsoever.
Section 2.7 Payment of Principal and Interest; Principal and Interest Rights
Preserved.
(a)
Each Security
shall accrue
interest at the rate
specified for such
Security in the
Securities Register
and such interest shall be payable on each
Payment Date following
the Issue Date for
such Security,
until the
principal
thereof has been paid. Any installment of interest payable on a
Security that is
caused to be punctually paid or duly provided for by the
Company
7
<PAGE>
on the applicable
Payment Date shall be
paid by the Paying Agent to the Holder
in whose name such
Security is registered
in the Securities Register on the
applicable Regular
Record Date with respect to the Securities outstanding, by
the Paying Agent mailing a check for the amount of such interest
payment to the
Holder's address as it appears in the Securities Register on such
Regular Record
Date. The Paying
Agent shall not be required to make any payment or partial
payment of
principal if the Paying Agent does not have funds on
deposit and
received from the Company in an amount sufficient to pay Holders amounts
due to
them on a Payment
Date, but shall make
full payments of interest to the extent
that sufficient funds
are on deposit to make such payments. Any installment of
interest not punctually paid or duly provided for shall be payable
in the manner
and to the Holders as specified in Section 2.13 hereof.
(b)
Each of the
Securities shall have stated maturities of principal as
shall be indicated on such Securities and as set forth in the Securities
Register. The
principal of each
Security and any
accrued but unpaid
interest
thereon shall be paid in full no later than five (5) days following
the Maturity
Date thereof unless
the term of such
Security is extended
pursuant to Section
2.1 hereof or such
Security becomes
due and payable at an earlier date by
acceleration,
redemption or
otherwise.
Notwithstanding
any of the
foregoing
provisions with
respect to payments of principal of and interest on the
Securities, if the
Securities
have become or been declared due and payable
following an Event of Default, then payments of principal of and
interest on the
Securities shall be made in accordance with Article 6 hereof.
(c)
All computations of interest due with
respect to any Security shall
be made, unless otherwise specified in the Security, based upon a
365 day year.
(d)
In the event
that any check mailed
to a Holder for the
purpose of
payment of principal
or interest is returned to the Paying Agent for want of an
accurate address or is not presented for payment, the funds represented thereby
shall be held and disbursed as provided in Section 8.3 hereof.
(e)
The Company or
the Trustee may withhold from any payment of interest
amounts required by the Internal Revenue Service or other taxing
authority to be
so withheld,
including, without
limitation, upon the
failure of any Holder to
provide the Company or the Trustee with his or her tax
identification number.
Section 2.8 Reserved.
Section 2.9 Outstanding Securities.
(a)
The Securities
outstanding at any
time are the outstanding balances
of all Accounts
representing the
Securities maintained
by the Company or such
other entity as the Company designated as Registrar.
(b)
If the
principal amount of any Security is
considered
paid under
Section 4.1 hereof, it
ceases to be
outstanding and
interest on it ceases
to
accrue.
(c)
Subject
to Section
2.10 hereof, a Security does not cease to be
outstanding because
the Company or an Affiliate of the Company holds the
Security.
8
<PAGE>
Section 2.10 Treasury Securities.
In
determining
whether the holders of
the required principal
amount of
Securities have concurred in any direction, waiver or consent, Securities
owned
by the Company or any Affiliate of the Company shall be considered
as though not
outstanding, except
that for purposes of determining whether the Trustee shall
be protected
in relying on any such direction, waiver or consent, only
Securities that a
Responsible Officer of
the Trustee actually
knows to be so
owned shall be so disregarded.
Section 2.11 Reserved.
Section 2.12 Reserved.
Section 2.13 Defaulted Interest.
If the
Company defaults in a payment of
interest or principal on any
Security, it shall pay
the defaulted interest
or principal plus, to the extent
lawful, any interest
payable thereon at the
rate provided in the Security, to
the Holder of such Security as of a subsequent special record date, which date
shall be at the earliest practicable date, but in all events within
fifteen (15)
days following the scheduled Payment Date of the defaulted
interest. The Company
shall, with written
notification to the Trustee, fix or cause to be fixed each
such special record
date and payment date.
Prior to any such
special record
date, the Company (or the Trustee, in the name of and at the expense
of the
Company) shall mail to
Holder(s) a notice that states the special record date,
the related payment
date and the amount of principal, interest and additional
accrued interest to be paid.
Section 2.14 Book-Entry Registration.
(a)
The Registrar
shall maintain a book-entry registration and transfer
system through
the establishment of Accounts for the benefit of Holders of
Securities as the sole
method of recording the ownership and transfer of
ownership interests in
such Securities. The
registered owners of
the Accounts
established by the Registrar in connection with the purchase or transfer of
the
Securities shall be
deemed to be the Holders of the Securities outstanding for
all purposes under this Indenture. The Company shall promptly notify
(or cause
an agent to notify) the Registrar of the acceptance of a
subscriber's
order to
purchase a Security and the Registrar shall credit its book-entry
registration
and transfer system to
the Account of each
Security purchaser,
the principal
amount of such Security owned of record by the purchaser.
(b)
Book-entry
accounts representing
interests in the
Securities shall
not be exchangeable
for Securities fully registered in the names of the Holders
thereof unless (a) the
Company at its option
advises the Trustee in writing of
its election to terminate the book-entry system, or (b) after the
occurrence of
any Event of Default,
Holders of a majority of the Securities then outstanding
(as determined based upon the latest statement provided to the Trustee
pursuant
to Section 4.3(d) hereof) advise the Trustee in writing that the
continuation of
the book-entry system is no longer in the best interests of such
Holders and the
Trustee notifies
all Holders of the Securities, as the case may be, of such
event and the availability of definitive notes to the Holders of
Securities, as
the case may be, requesting such notes in definitive form.
9
<PAGE>
(c)
The Registrar
shall issue fully registered Securities if required by
the administrator of
an Individual
Retirement Account or
similar tax deferred
account in which the Holder has acquired Securities. The Registrar may charge a
Holder a $10 fee per Securities issuance.
Section 2.15 Initial and Periodic Statements.
(a)
The Trustee
shall provide an initial book entry acknowledgement to
initial purchasers and
registered owners,
within thirty (30)
business days of
the purchase, transfer or pledge of a Security.
(b)
The Trustee shall send each Holder of a Security (and each
registered pledgee) via U.S. mail not later than ninety (90)
Business Days after
each year end in which such Holder had an outstanding balance in such holder's
Account, a statement
which indicates as of
the year end preceding the mailing:
(i) the balance of such Account; (ii) interest credited; (iii)
withdrawals made,
if any; (iv) the
interest rate payable on such Security; and (v) any other
information required
on IRS Form 1099. The Trustee or the Company shall provide
additional statements
as the Holders of the Securities may reasonably request
from time to time. The Company or the Trustee may charge such
Holders requesting
such statements
a fee to cover the
charges incurred by the Company or the
Trustee in providing such additional statements.
ARTICLE III.
REDEMPTION
Section 3.1 Redemption of Securities at the Company's Election.
(a)
At any
time and from time to time, the Company, in its sole
discretion, may redeem
any number or all of the Securities by providing thirty
(30) days' written notice to the Holders thereof. The Company may redeem any or
all of the Securities
pursuant to this paragraph and need not redeem the
Securities on a pro
rata or other basis.
The Company shall provide the Holders
of any Securities to be redeemed pursuant to this paragraph with
notice thereof,
which notice
shall set forth the date for such
redemption
(the "Redemption
Date") and set forth the Redemption Price for the Securities to be redeemed.
Each such notice shall also include the amount of interest and
principal to be
paid to the Holder
on the Redemption Date. No interest shall accrue on a
Security to be redeemed under this Section 3.1 for any
period of time after the
Redemption Date for such Security, provided that the Company has
timely tendered
the Redemption Price to the Holder.
(b)
The Company shall have no mandatory redemption or sinking fund
obligations with respect to any of the Securities.
(c)
In its sole
discretion,
the Company may offer
certain Holders
the
ability to extend the maturity of an existing Security through the
redemption of
the current Security and the issuance of a new Security.
This redemption
option
shall not be subject to the thirty (30) day notice of redemption described in
this section.
10
<PAGE>
Section 3.2 Redemption of Securities at the Holder's Election.
(a)
Subject to
paragraph (b) below,
within forty-five (45)
days of the
death of a Holder who is a natural person, the personal representative of the
estate of such Holder may require the Company to redeem, in whole and not in
part, without penalty,
the Security held by
such Holder, by
delivering to the
Company a certified
copy of the Holder's death certificate and an irrevocable
written election (a
"Redemption Election")
requiring the Company
to make such
redemption. In the
event a Security
is held jointly by two or more natural
persons (including,
without limitation, joint owners that are not legally
married), the Company shall redeem such Security upon proper notice
if either of
joint Holders of such Security has died. If the Security is held by
a Holder who
is not a natural
person, such as a
trust, partnership,
corporation
or other
similar entity, the right of redemption upon death does not apply,
except in the
case of the death of a natural person who is the beneficial
owner of
Securities
held of record in an individual retirement account.
(b)
The Company
will not be required
to redeem Securities
pursuant to
Redemption Elections received pursuant to paragraph (a) above to
the extent that
such redemptions exceed $25,000 in the aggregate for all holders in
any calendar
quarter. For the
purposes of such limit on aggregate Redemption Elections,
Redemption Elections
will be honored in the order received, and any Redemption
Election not paid in the quarter received due to this limitation
will be honored
in the subsequent
quarter, to the extent
possible, as such
limit on aggregate
Redemption Elections will also apply to the subsequent quarter.
(c)
Subject to
Section 3.2(b),
upon receipt of a
Redemption
Election
pursuant to Section 3.2(a), the Company shall designate the
Redemption Date for
the Security to be
redeemed, which
Redemption
Date shall be no more
than ten
(10) days after the Company's receipt of the Redemption Election,
and shall pay
the Redemption
Price to the estate of the Holder in accordance with the
provisions set forth
in Section 2.7
hereof. No interest shall accrue on a
Security to be redeemed under this Section 3.2 for any
period of time after the
Redemption Date for such Security, provided that the Company has
timely tendered
the Redemption
Price to the estate of the Holder. Securities for which
redemption is
delayed pursuant to Section 3.2(b) will continue to accrue
interest until the
Company establishes
a Redemption Date therefor and the
Security is redeemed.
(d)
The Company may at its option and in
its sole discretion
and from
time to time accept for redemption Securities tendered to it by
Holders and may
impose such
conditions
thereon as it deems
appropriate,
including an early
redemption penalty with regard thereto.
Section 3.3 Offer to Redeem Securities Upon Change of the Company's
Advisor.
(a)
If the Company
terminates the Advisory Agreement for any reason, the
Company shall provide all Holders with a notice thereof within ten (10) days
of
such termination, pursuant to which the Company shall offer to
redeem all of the
Securities outstanding
as of the date of the termination of the Advisory
Agreement. Each Holder
shall have thirty (30) days from the date of such notice
to provide the Company with a Redemption Election with regard to the
Securities
owned by such Holder,
upon timely
receipt of which the
Company shall
become
bound to
11
<PAGE>
redeem the electing Holder's Securities. This Section 3.3 shall not
apply in the
case that the Advisor terminates or elects not to renew the
Advisory Agreement.
(b)
Upon receipt of
a Redemption Election
pursuant to Section
3.3(a),
the Company
shall designate the Redemption Date for each Security to be
redeemed, which
Redemption
Date shall be no more
than ten (10) days after the
Company's receipt of the Redemption Election, and shall pay the
Redemption Price
to the Holder in accordance with the provisions set forth in
Section 2.7 hereof.
No interest shall accrue on a Security to be redeemed under this
Section 3.3 for
any period of time after the Redemption Date for such Security, provided that
the Company has timely tendered the Redemption Price to the
Holder.
ARTICLE IV.
COVENANTS
Section 4.1 Payment of Securities.
(a)
Principal and
interest (to the extent such interest is paid in cash)
shall be considered
paid on the date due if the Paying Agent, if other than the
Company, holds at least one Business Day before that date money
deposited by the
Company in immediately
available funds and designated for and sufficient to pay
all principal
and interest then due. Such Paying Agent shall return to the
Company, no later than
five (5) days
following the date of payment, any money
(including accrued
interest) that exceeds such amount of principal and interest
paid on the Securities in accordance with this Section 4.1.
(b)
To the extent
lawful, the Company shall pay interest (including
Post-Petition Interest
in any proceeding
under any Bankruptcy
Law) on overdue
principal at the rate borne by the Securities; it shall pay interest
(including
Post-Petition Interest
in any proceeding
under any Bankruptcy
La
