I if AL. Must remain on file. Univ.of ill. Library 51 3/jT^ ALLIED PACKERS, INCORPORATED, AND THE EQUITABLE TRUST COMPANY OF NEW YORK, Trustee. ®ruHt Snimttur? Dated July 1, 1919. $25,000,000 TWENTY- YEAR CONVERTIBLE SINKING FUND SIX PER CENT DEBENTURE BONDS. Digitized by the Internet Archive in 2017 with funding from University of Illinois Urbana-Champaign Alternates https://archive.org/details/alliedpackersinc00alli_0 TABLE OF CONTENTS* PAGE Parties 1 Recitals : Authorization of bonds by Company 1 Place of Payment 1 Bonds to be redeemable and convertible 1 Form of Bond 2 Form of interest coupon 5 Form of Trustee’s certificate 5 Performance of conditions 5 Consideration 5 Purpose of Indenture 6 ARTICLE ONE. Form, Execution, Delivery and Registration of Bonds. Sec. 1. Text of bonds (i Denomination and numbering 6 Aggregate amount 6 Execution of bonds 6 Authentication of bonds by Trustee 6 Execution by former officers adopted 6 Authentication of coupons 6 Effect of Trustee’s authentication 7 Cancellation of coupons before authentication .... 7 Ownership of bonds and coupons 7 Sec. 2. Temporary bonds 7 Place of payment 8 Exchange for definitive bonds 8 Sec. 3. Replacing bonds, mutilated, destroyed or lost 8 Sec. 4. Registration and transfer books to be kept 8 Registration and transfer of bonds 9 Coupons remain negotiable 9 * The Table of Contents, the marginal notes and the article and section numbering appearing at the tops of the pages are not in the Trust Inden- ture as executed. ii ARTICLE TWO. Issuance of Bonds. PAGE Sec. 1. $16,000,000 bonds issuable upon delivery of Indenture 9 Sec. 2. $9,000,000 bonds reserved 10 Restrictions governing issuance of reserved bonds. ... 10 Quick assets to equal one and one-half times current liabilities 10 Net quick assets to equal one-half amount of out- standing bonds and bonds to be issued 10 Net earnings to equal twice annual bond interest charges 10 Term “Quick Assets of the Company” defined 10 Term “Current Liabilities of the Company” defined. 11 Term “Net Quick Assets of the Company” defined. . 11 Term “Net Earnings of the Company” defined.... 11 Term “Annual Bond Interest Charges” defined. ... 12 Terms “Subsidiary” and “Subsidiary Company” defined 12 Term “Controlled Company” defined 13 Sec. 3. Provisions governing authentication of bonds 13 Certified resolution of Board of Directors or Execu- tive Committee to be delivered to Trustee .... 13 Certificate to be delivered to Trustee 13 Contents of certificate 13 Certificate of certified public accountant to be delivered to Trustee 13 Sec. 4. Sale of reserved bonds for cash 14 Price . 14 Compensation to bankers or syndicates 14 Net proceeds of sale to be deposited and contract therefor delivered to Trustee 14 Authentication and delivery 14 Application of net proceeds of sale by Trustee .... 14 Sec. 5. Trustee entitled to rely upon documents furnished by Company 14 Trustee may make further inquiry 14 Trustee may be compelled to accept certificate .... 15 iii ARTICLE THREE. Particular Covenants of the Company. page Sec. 1. Covenant to pay principal and interest 15 — without deduction for taxes (other than Federal income taxes) 15 Interest payable only on presentation of coupons. . 15 Sec. 2. Covenant to maintain office or agency in City of New York 16 Sec. 3. Covenant to maintain franchises and properties ... 16 — and to pay taxes 16 Sec. 4. Covenant to use all lawful powers so that subsidiary companies shall: 16 (a) preserve corporate organization 17 (b) pay all taxes and claims for labor or materials. 17 (c) keep property in repair 17 (d) not increase the amount of capital stock unless pro rata part acquired by company 17 Controlled companies to be continued as such 17 Sec. 5. Covenant not to mortgage or pledge property except as stated 17 In case of breach of covenant bonds to have prior lien 18 Sec. 6. Covenant not to permit subsidiaries to mortgage or pledge property except as stated 19 Sec. 7. Covenant as to — (a) Ratio of quick assets to current liabilities... 19 — (b) Ratio of net quick assets to principal amount of outstanding bonds 19 Covenant to file with Trustee consolidated balance sheet and statement of quick assets and lia- bilities 19 •Sec. 8. Covenant to reimburse bondholders for Pennsyl- vania taxes (except succession or inheritance taxes) 20 iv PAGE Sec. 9. Covenant to reimburse bondholders for Massachu- setts income taxes not exceeding 6 per cent, per annum 21 ARTICLE FOUR. Redemption of Bonds. Sec. 1. Bonds redeemable at option of Company 21 Publication of Notice of Election 21 Contents of notice 22 Notice by mail 22 Bonds become due on redemption date 22 Sec. 2. Termination of trust on deposit of amount neces- sary to redeem and on provision to insure notice. 22 Application of deposited moneys 23 Disposition of unclaimed moneys 23 Sec. 3. Redeemed bonds to be cancelled 23 ARTICLE FIVE. Sinking Fund. Sec. 1. Creation of sinking fund 23 Company may deliver bonds to Trustee in lieu of money 24 Company may exceed sinking fund requirements. . 24 Converted bonds to be credited against sinking fund obligations 24 Sec. 2. Sinking fund to be applied to purchase of bonds . . 24 Moneys not applied to purchase of bonds to be applied to redemption thereof 25 Manner of effecting such redemption 25 Sec. 3. Sinking fund security for bonds 25 — until bonds designated for redemption 25 Repayment to Company upon conversion of desig- nated bonds 26 Sec. 4. Bonds purchased or redeemed from sinking fund to be cancelled 26 V ARTICLE SIX. PAGE Conversion of Bonds into Common Stock. Sec. 1. Bonds may be converted into common stock of Company 26 Rate of conversion 26 Notice of election to convert 26 Notice to constitute contract with Company 26 Sec. 2. Stock certificates to be issued on conversion of bonds. 27 Payment of stock taxes, if any 27 Sec. 3. Right of conversion suspended by closing stock transfer book 27 — and cut off 30 days prior to redemption 27 Sec. 4. Cash adjustment of interest and dividends 28 Method of determining cash adjustment 28 Current rate of dividends, defined 28 Date of conversion defined 28 Sec. 5. Covenant to provide stock for conversion require- ments 29 Sec. 6. Bonds surrendered for conversion to be cancelled. . . 29 Sec. 7. Right to convert bonds into subsequently authorized common stock sold or offered by Company at a price less than $77 per share 29 Notice to bondholders 29 Rate of conversion 29 Contents of notice 30 Company to have right to purchase fractions of shares at conversion price 30 Company to deliver full shares where aggregate fractions equal full shares 30 Excess fractions to be purchased by Company at conversion price 30 No right to convert bonds into stock issued in ex- change for property 30 — provided value of property fixed at true value and value of stock fixed at market price 31 vi ARTICLE SEVEN. Remedies of Trustee and Bondholders. Sec. 1. Sec. 2. Sec. 3. Sec. 4. Sec. 5. Sec. 6. Sec. PAGE Events of default: — non-payment of interest on the bonds — non-payment of instalment of sinking fund .... — non-observance of covenants — non-payment of Matthews-Laing, Ltd., bonds... — adjudication of bankruptcy or appointment of a receiver — voluntary bankruptcy or assignment for creditors. Declaration of maturity of bonds Waiver of default On default in — payment of interest — or of principal — company covenants to pay Trustee whole amount due Trustee may sue Trustee may bring action without production of bonds or coupons Application of moneys collected: — payment of costs and expenses — payment on bonds and coupons Majority of bondholders may require waiver of any de- fault except — in covenant for conversion — in payment of principal — in payment of interest unless prior to waiver all arrears paid Trustee only to have right of action — unless Trustee refuses to bring action — exception in case of action for payment of bonds matured — except in case of action to enforce right of con- version 31 31 31 31 32 32 32 33 33 33 33 34 34 34 34 34 34 35 35 35 35 36 vii PAGE Sec. 8. Delay not a waiver of default 36 Sec. 9. Parties having rights under Indenture 36 Sec. 10. Obligations under Indenture and Bonds are solely corporate 36 Sec. 11. Company to waive all rights under stay or extension laws 37 ARTICLE EIGHT. Concerning the Trustee. Sec. 1. Conditions of acceptance of trust: — compensation of Trustee 37 — may assume no default exists until notified 38 — not required to act unless indemnified 38 — not required to act unless requested by 25 per cent of bondholders 38 — discretion not affected 38 — protected in acting upon authority believed to be genuine 38 — not liable except for wilful misconduct or gross negligence 38 — action to be conclusive upon future holders .... 39 — recording, registering and filing unnecessary .... 39 — Trustee may accept as conclusive certificate under corporate seal 39 — Trustee to be reimbursed and indemnified ...... 39 — to have prior lien for compensation, expenses and damages 39 — limitations upon liability 39 — right to deal in bonds 39 — Trustee to pay interest on moneys held by it only under special agreement 40 — protected in acting on advice of counsel 40 Sec. 2. Trustee may resign after giving notice 40 Sec. 3. Removal of Trustee 40 viii PAGE Sec. 4. Appointment of successor Trustee: — by bondholders 40 — by Company 40 Qualification of successor Trustee 41 Notice of appointment by Company 41 Bondholders’ appointee to supersede Company’s ap- pointee 41 Sec. 5. Successor Trustee shall accept appointment in writing 41 Sec. 6. Proof of holding, amount, and number of bonds. 41 Sec. 7. Merger or consolidation of Trustee or successors. 42 Sec. 8. “The Trustee” defined 42 ARTICLE NINE. Bondholders’ Acts, Holdings and Apparent Authority. Form of Instruments to be executed by bondholders 42 Proof of execution 42 Proof of amount, numbers, dates and ownership of bonds 43 ARTICLE TEN. Consolidation, Merger and Sale. Sec. 1. Consolidation or merger 43 Sale on condition 43 Sec. 2. Effect of consolidation, merger or sale 44 Sec. 3. Term “Company” to include successor corporations. 44 Sec. 4. Company may surrender powers conferred 44 ARTICLE ELEVEN. Cancellation op this Indenture. Sec. 1. Termination of Indenture when all bonds paid or converted 44 Sec. 2. Payment to Trustee for benefit of holders 45 Testimonium 46 Signatures and seals 46 Acknowledgments 47 Acknowledgments 48 Parties. Indenture, dated the first day of July, in the year nineteen hundred and nineteen, between Allied Pack- ers, Incorporated, a corporation organized and existing un- der the laws of the State of Delaware (hereinafter called the Company), party of the first part, and The Equitable Trust Company of New York, a corporation organized and exist- ing under the laws of the State of New York (hereinafter called the Trustee) , party of the second part. Whereas the Company, for its corporate purposes, by appro- priate resolutions of its board of directors and of its stockholders, company, duly adopted at meetings regularly called and held according to law, has determined to make an issue of bonds in the aggregate principal amount of $25,000,000, to be known as its Twenty-Year Convertible Sinking Fund Six Per Cent. Debenture Bonds, the definitive bonds to be coupon bonds, registrable as to principal, of the denomination of $1,000 each, to be dated July 1, 1919, to be payable July 1, 1939, to bear interest from July 1, 1919, at the rate of six per centum per annum, payable semi-annually on the first day of January and the first day of July in each year, to be payable as to principal at the office or agency of the Company, in the Borough of Manhattan, in the City of New York, in the State of payment. New York, and as to interest at said office or agency or (at the option of the holder or registered owner), at the office of Montreal Trust Company, in the City of Montreal, Canada, to be payable both as to principal and interest in gold coin of the United States of America, of or equal to the standard of weight and fineness as it existed on July 1, 1919, and both as to principal and interest without deduction for any tax or taxes (other than Fed- eral income taxes in excess of two per cent.) which the Company or the Trustee may be required to pay thereon or to retain there- from, under any present or future law of the United States of America, or of any state, county, municipality or other taxing authority therein; and Whereas said bonds are to be redeemable, in whole or in part, Bonds to be 7 1 7 redeemable and at the option of the Company, in the manner and at the price convertible, hereinafter provided, and are to be convertible, at the option 2 Form Bond. of of the holder or registered owner, upon the terms hereinafter set forth, into the common stock of the Company at the rate of thirteen shares of common stock for $1,000 principal amount of bonds. Whereas the bonds so to be issued (which are hereinafter termed the Bonds), and the coupons for interest to be thereto at- tached, and the certificate of authentication by the Trustee to be endorsed on the Bonds, are to be respectively in substantially the following forms: [form of bond.] No. $1,000 UNITED STATES OF AMERICA State of Delaware ALLIED PACKERS, INCORPORATED Twenty -Year Convertible Sinking Fund Six Per Cent. Debenture Bond. Allied Packers, Incorporated, a Delaware corporation (hereinafter called the Company), for value received, hereby promises to pay to the bearer or, if this bond be registered, to the registered holder hereof, on the first day of July, 1939, at the office or agency of the Company, in the Borough of Manhattan, in the City of New York, the sum of one thousand dollars, in gold coin of the United States of America, of or equal to the standard of weight and fineness as it existed on July 1, 1919, and to pay interest thereon from July 1, 1919, at said office or agency or (at the option of the holder or registered owner), at the office of Mon- treal Trust Company, in the City of Montreal, Canada, in like gold coin, at the rate of six per cent, per annum, at said office or agency, semi-annually on the first day of January and the first day of July in each year, but only upon presentation and surrender of the cou- pons hereto annexed as they shall severally mature. Both the principal and interest of this bond are payable with- out deduction for any tax or taxes (other than Federal income taxes in excess of two per cent.) which the Company or the 3 Trustee under the Indenture hereinafter mentioned may be re- quired to pay thereon or to retain therefrom under any present or future law of the United States of America, or of any state, county, municipality or other taxing authority therein. This bond is one of an authorized issue of bonds of the aggre- gate principal amount of $25,000,000, known as the Twenty- Year Convertible Sinking Fund Six Per Cent. Debenture Bonds of the Company, issued and to be issued under an Indenture, dated July 1, 1919, between the Company and The Equitable Trust Company of New York, Trustee, to which reference is hereby made for a statement of the rights of the holders or registered owners of the bonds issued thereunder. Except as provided in said Indenture, all rights of action on this bond and the coupons hereto appertaining are vested exclusively in the Trustee. The bonds of said issue are subject to redemption, in whole or in part, at the option of the Company, on any interest date, on at least sixty days’ prior notice by publication, as provided in said Indenture, at the face value thereof and accrued interest, plus a premium of ten per cent. The bonds are subject to like re- demption by operation of the sinking fund provided for in said Indenture. At the option of a holder or registered owner, this bond may be converted, under conditions and regulations prescribed in said Indenture, at any time prior to maturity (except when the books for the transfer of the common stock of the Company are closed, and except that in the case of bonds called for redemption the right of conversion shall expire thirty days prior to the date fixed for redemption) into thirteen shares of the common stock of the Company, as its common stock shall be constituted at the time of such conversion, with a cash adjustment of accrued interest and dividends as provided in said Indenture. In case an event of default as defined in said Indenture shall happen, the principal of the bonds may become or be declared due and payable in the manner and with the effect provided in said Indenture. This bond shall pass by delivery unless registered in the name of the owner at the office or agency of the Company in said Borough of Manhattan, such registration being noted hereon by 4 the Company. After such registration, no transfer shall be valid unless made at said office or agency by the registered owner in person or by attorney duly authorized and similarly noted hereon; but this bond may be discharged from registration by being in like manner transferred to bearer, and thereupon transferability by delivery shall be restored ; and this bond may again, from time to time, be registered or transferred to bearer as before. Such reg- istration, however, shall not affect the negotiability of the coupons, which shall continue to be payable to bearer and transferable by delivery merely, and payment thereof to bearer shall fully dis- charge the Company in respect of the interest therein mentioned, whether or not the bond be registered. No recourse shall be had for the payment of the principal or interest of this bond or any part thereof, or for any claim based hereon or otherwise in respect hereof or of the indebtedness repre- sented hereby or by the coupons appertaining hereto or of said In- denture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any suc- cessor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitu- tional provision, statute, or rule of law or by the enforcement of any assessment or otherwise, all such liability being by the acceptance hereof and as part of the consideration hereof expressly released, as provided in said Indenture. This bond shall not be valid or become obligatory for any purpose until it shall have been authenticated by the Certificate of the Trustee under said Indenture hereon endorsed. In witness whereof, said Allied Packers, Incorporated, has caused this bond to be signed in its name by its President or one of its Vice-Presidents and its corporate seal to be hereunto affixed and to be attested by its Secretary or one of its Assistant Secre- taries, and coupons for said interest to be attached hereto, bearing the facsimile signature of its Treasurer, all as of the first day of July, 1919. Allied Packers, Incorporated, by Vice-President. Attest : Assistant Secretary. , 6 [form of interest coupon.] $30 , 19 , unless the bond Form oC interest coupon. No. On the first day of hereinafter mentioned shall be called for previous redemption, Allied Packers, Incorporated, at its office or agency in the Borough of Manhattan, in the City of New York, or (at the option of the holder), at the office of Montreal Trust Company, in the City of Montreal, Canada, will pay to bearer thirty dollars, United States gold coin, without deduction for taxes (other than Federal income taxes in excess of two per cent. ) , being six months’ interest then due on its Twenty-Year Convertible Sinking Fund Six Per Cent. Deben- ture Bond No. Treasurer. Form of Trustee’s certificate. [form of trustee’s certificate.] This is one of the bonds described in the within-mentioned Indenture. The Equitable Trust Company of New York, Trustee, by And Whereas the Company has determined to execute an in- performance 1 J of conditions denture in the form of this Indenture, and all requirements of law relating to the authorization of the issuance and sale of bonds con- vertible into common stock, as in this Indenture provided, have been complied with, and all things necessary to make the Bonds, when authenticated by the Trustee and issued under this Inden- ture, the valid, binding and legal obligations of the Company, and to make this Indenture a valid, binding and legal agreement, have been done and performed: Now, THEREFORE, THIS INDENTURE WITNESSETH, that, for and Consideration, in consideration of the premises and of the acceptance or pur- chase of the Bonds by the holders and registered owners thereof, and of the sum of one hundred dollars, lawful money of the United States of America, to it paid by the Trustee at or before ARTICLE ONE Section 1. 0 Purpose of Indenture. Text of Bonds. Denomination and numbering. A sb refute amount. Execution of Bonds Authentication of Bonds by Trustee. Execution by former officers adopted. Authentication of coupons. the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee, for the equal benefit of all present and future holders and registered owners of the Bonds and of the coupons thereto appertaining, without preference, priority or distinction of any of the Bonds over any of the others by reason of priority in time of issue or negotiation thereof, or otherwise, as follows: ARTICLE ONE. Form, Execution, Delivery and Registration of Bonds. Section 1. The Bonds and the interest coupons appertain- ing thereto shall be substantially of the tenor and purport above recited. The definitive Bonds shall be in the denomination of one thousand dollars each, and shall be numbered consecutively from 1 upwards. The aggregate principal amount of all the Bonds which may be issued and outstanding under this Indenture at any one time shall not exceed $25,000,000. The Bonds shall be executed in the name and on behalf of the Company by its President or one of its Vice-Presidents and its corporate seal shall be there- unto affixed and shall be attested by its Secretary or one of its Assistant Secretaries. The Bonds shall then be delivered to the Trustee for authentication by it, and thereupon, as provided in Article Two hereof and not otherwise, the Trustee shall authenti- cate and deliver the same. In case the officers who shall have signed any of the Bonds shall cease to be such officers of the Company before the Bonds so signed shall have been actually authenticated and delivered by the Trustee, such Bonds may, nevertheless, be adopted by the Company and be issued, authen- ticated and delivered, as though the persons who signed such Bonds had not ceased to be such officers of the Company; and also any Bonds may be signed on behalf of the Company by such persons as at the actual time of the execution of such Bonds shall be the proper officers of the Company, although at the date of such Bonds such persons may not have been such officers of the Company. The coupons to be attached to the Bonds shall be au- thenticated by the facsimile signature of the present treasurer or 7 ARTICLE ONE Sections 1, 2. of any future treasurer of the Company, and the Company may adopt and use for that purpose the signature of any person who shall have been such treasurer, notwithstanding the fact that he may have ceased to be such treasurer at the time when the Bonds shall be actually authenticated and delivered. Only such of the Bonds as shall bear thereon endorsed a certificate substantially in the form hereinbefore recited, executed by the Trustee, shall be issued under this Indenture or entitled to any right or benefit hereunder, and such authentication by the Trustee of any such Bond executed on behalf of the Company as afore- said shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefit of the trusts hereby created. Be- fore authenticating or delivering any Bond, all coupons thereto appertaining then matured shall be cut off and cancelled by the Trustee and delivered to the Company. The Company and the Trustee may deem and treat the bearer of any Bond which shall not be registered as to principal, and the bearer of any coupon for interest on any Bond, whether such Bond shall have been so reg- istered or not, as the absolute owner of such Bond or coupon for the purpose of receiving payment thereof and for all other pur- poses whatsoever, and the Company and the Trustee shall not be affected by any notice to the contrary. The Company and the Trustee may deem and treat the registered owner of any Bond which has been registered as to principal as the absolute owner of such Bond for all purposes except the payment of coupons, and the Company and the Trustee shall not be affected by any notice to the contrary. Section 2. Until the definitive Bonds shall be prepared, the Company may execute and, upon the request of the Company, the Trustee shall authenticate and deliver, in lieu of definitive Bonds and subject to the same provisions, limitations and conditions, one or more temporary printed, lithographed or typewritten Bonds of the denomination of $1,000 or of any multiple thereof, substan- tially of the tenor hereinbefore recited, but without coupons, and with appropriate omissions, insertions and variations, as may be required. Anything in this Indenture, or in the form of Bond or Effect of Trustee’s authentication. Cancellation of coupons before authentication. Ownership of Bonds and coupons. Temporary Bonds. Place of payment. Exchange for definitive bonds. Replacing Bonds mutilated, destroyed or lost. Registration and transfer hooks to be kept. ARTICLE ONE Sections 2, 3, 4. 8 coupon above recited, to the contrary notwithstanding, the interest on such temporary Bonds shall be payable only at said office or agency of the Company in the Borough of Manhattan, in the City of New York. Upon surrender of said temporary Bonds for exchange, the Company, at its own expense, shall prepare and execute, and, upon cancellation of said surrendered temporary Bonds, the Trus- tee shall authenticate and shall deliver in exchange therefor, definitive Bonds for the same aggregate principal amount as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits of this Indenture as the definitive Bonds to be issued and authenticated hereunder, and interest, when and as payable, shall be paid and notation of such payment endorsed thereon. Section 3. In case any Bond, with the coupons thereto ap- pertaining, or any temporary Bond without coupons, shall be- come mutilated or be destroyed or lost, the Company, in its dis- cretion, may issue, and thereupon the Trustee shall authenti- cate and deliver, a new Bond of like tenor, date and amount and bearing the same number, in exchange and substitution for, and upon cancellation of, the mutilated Bond and its coupons, or the mutilated temporary Bond without coupons, or in lieu of and substitution for the Bond and its coupons, or the temporary Bond without coupons, so destroyed or lost; provided, however, that the applicant for such substituted Bond shall have furnished to the Company and to the Trustee evidence of the de- struction or loss of such Bond and its coupons, or of such temporary Bond without coupons, so destroyed or lost, which evidence shall be satisfactory to the Company and to the Trustee, in their discretion, and shall also furnish indemnity satisfactory to the Company and to the Trustee, in their discretion, and shall comply with such other reasonable regulations as they or either of them may prescribe. Section 4. The Company will keep, at an office or agency to be maintained by it in the Borough of Manhattan, in the City of New York, or at some bank or trust company in said Borough, a sufficient register or registers for the registration and transfer of the Bonds, which register or registers shall at all times be 9 ARTICLE ONE— Section 4. ARTICLE TWO— Section 1. open for inspection by the Trustee; and, upon presentation for such purpose, the Company will, under such reasonable regula- tions as it may prescribe, register as to principal any Bond. The holder of any Bond may have the ownership thereof regis- tered at said office or agency, and such registration noted on the Bond. After such registration no transfer shall be valid unless made at said office or agency by the registered holder in person or by his attorney thereunto duly authorized and similarly noted on the Bond. Upon presentation to the registrar of the Company, at said office or agency, of any Bond registered as to principal, accompanied by delivery of a written instrument of transfer in form approved by the Company, executed by the registered holder in person or by his attorney thereunto duly authorized, such Bond shall be transferred upon such register and such transfer shall be noted by such registrar upon the Bond. The registered holder of any Bond registered as to principal shall also have the right to cause the same to be registered as payable to bearer, in which case transferability by delivery shall be restored, and thereafter the principal of such Bond, when due, shall be payable to the person pre- senting the same. Any Bond registered as payable to bearer may be registered again in the name of the holder with the same effect as a first registration thereof. Successive regis- trations and transfers, as aforesaid, may be made from time to time as desired, and each registration of a Bond shall be noted by the registrar thereon. The registration of any Bond, however, shall not affect the negotiability by delivery merely of coupons appertaining to such Bond, but every such coupon shall continue to pass by delivery and shall remain payable to bearer, and pay- ment thereof to bearer shall fully discharge the Company in respect of the interest therein mentioned whether or not such Bond be registered. ARTICLE TWO. Issuance of Bonds. Section 1. $16,000,000, principal amount, of Bonds, forth- with upon the execution and delivery of this Indenture and without Registration and Transfer of Bonds. Coupons remain negotiable $16,000,000 Bonds issuable upon delivery of Indenture, ARTICLE TWO Sections 1, 2. 10 further action on the part of the Company, shall be authenticated by the Trustee and delivered on the written order of the Company, signed by its President or one of its Vice-Presidents, or its Treasurer or one of its Assistant Treasurers, and by its Secretary or one of its Assistant Secretaries. $9,000,000 Bonds reserved. Restrictions governing issuance of reserved bonds: — quick assets to equal one and one-half times current liabilities; — net quick assets to equal one-half amount of out- standing bonds and bonds to be issued; — net earnings to equal twice annual bond interest charges. Term “quick as- sets of the Company’’ defined. Section 2. $9,000,000, principal amount, of Bonds, being the remainder of the Bonds authorized to be issued under this Inden- ture, shall be authenticated and delivered by the Trustee from time to time, subject to the restrictions hereinafter in this Article provided, viz.: (1) The value of the quick assets of the Company shall be at least one and one-half times the current • liabilities of the Company. (2) The net quick assets of the Company shall be at least one-half the principal amount of the Bonds then outstanding and the Bonds the authentication and de- livery of which shall then be requested. (3) The net earnings of the Company for a period of twelve consecutive calendar months ending not more than ninety days prior to the application for the authentication and delivery of such reserved Bonds shall have amounted to at least twice the annual bond interest charges of the Company. The term “quick assets of the Company” as used above and elsewhere in this Indenture, shall be as shown in a consolidated balance sheet of the Company and its subsidiaries and shall include (1) cash and cash items; (2) merchandise manufactured, or in process of manufacture, and raw materials, including livestock, and supplies of all kinds, all taken at market value, and advance payments made thereon, less the amount of negotiated drafts and bills of exchange drawn against merchandise which are excluded from current liabilities under the definition thereof hereinafter in clause (d) contained; (3) accounts receivable which shall have been created not more than one year prior to the date of such 11 ARTICLE TWO Section 2. consolidated balance sheet, and bills receivable which shall mature not more than one year subsequent to that date, such accounts receivable and bills receivable to include only those which in the opinion of the Treasurer or an Assistant Treasurer of the Company are good and collectible; provided, however, that accounts receivable or bills receivable from Governments, and not in litigation, shall be deemed quick assets irrespective of the date of creation or of maturity; (4) prepaid interest, insurance premi- ums and rentals; (5) shares of stock, bonds and other securities (except securities pledged as collateral for the Five Per Cent. Serial Collateral Trust Notes issued under the Trust Agreement dated July 1, 1919, between the Company and Central Union Trust Company of New York, as Trustee) which in the opinion of the Board of Directors or the Executive Committee of the Company are readily marketable, taken at their fair market value as determined by said Board or Committee, but not including shares of stock, bonds or other securities issued by corporations the assets and liabilities of which are included in said consolidated balance sheet. The term “current liabilities of the Company” as used above and elsewhere in this Indenture, shall be as shown in said con- solidated balance sheet and shall be deemed to mean and include all liabilities of the Company and its subsidiaries (including taxes accrued, as estimated) whether or not due, excluding (a) liabili- ties evidenced by the Bonds issued under this Indenture and by the said Five Per Cent. Serial Collateral Trust Notes; (b) liabili- ties evidenced by the Six Per Cent. Twenty-Year Bonds of Matthews-Laing, Ltd., issued under the Trust Deed dated Decem- ber 1, 1911, between said Company and The Royal Trust Com- pany, as Trustee; and (c) negotiated drafts or bills of exchange drawn on account of merchandise sold to purchasers other than subsidiaries or controlled companies. The term “net quick assets of the Company” as used above and elsewhere in this Indenture shall be deemed to mean the excess of the quick assets of the Company over the current liabilities of the Company. The term “net earnings of the Company,” as used above and Term “current liabilities of the Company” defined. Term “net quick assets of the Company” defined. Term “net earnings of the Company" defined. I U. OF ILL LIB. ARTICLE TWO Section 2. 12 Term “annual bond Interest charges” defined. Terms "subsidiary’’ and "subsidiary company” defined. elsewhere in this Indenture, shall be the amount remaining after deducting from the earnings of the Company, and its subsidiaries and its pro rata share in the earnings of controlled companies, (a) interest on the said Six Per Cent. Twenty-Year Bonds of Matthews-Laing, Ltd. (but such interest shall be deducted only if the Company acquires the property and assets of Matthews- Blackwell, Ltd. — successor to said Matthews-Laing, Ltd. — a con- tract for the purchase of such property and assets having here- tofore been made by the Company) ; (b) interest on said Five Per Cent. Serial Collateral Trust Notes; (c) all other interest charges except the annual bond interest charges; and (d) all oper- ating expenses, including (but without limiting the generality of the foregoing) taxes, rentals, insurance, and reasonable and proper expenditures for current maintenance and repairs. The term “annual bond interest charges” as used in this Article shall mean the annual interest charges on all Bonds then outstanding hereunder, and all Bonds the authentication and delivery of which shall then be applied for. The term “subsidiary” or “subsidiary company,” as used above and elsewhere in this Indenture, shall mean any company ninety-five per cent or more of the outstanding capital stock of which is at the time owned by the Company, either directly or through one or more other companies. It shall not, however, be deemed to include a corporation all of the capital stock of which, or all of the capital stock of which except directors’ shares, shall be owned by a controlled company. A company all of the prop- erty and assets of which, or ninety-five per cent, or more of the outstanding capital stock of which, will be acquired by the Company or by a subsidiary immediately upon the authenti- cation and delivery of Bonds reserved under the provisions of this Section 2 shall be deemed a subsidiary for the purpose of determining the right of the Company to require the authenti- cation and delivery of such Bonds. The fact that the property and assets or the stock of such company will be thus acquired by the Company, or by a subsidiary, shall be sufficiently estab- lished by a certificate executed by the President or a Vice- President, and by the Treasurer or an Assistant Treasurer of 13 ARTICLE TWO Sections 2, 3, 4. the Company, which shall set forth the terms of such acquisi- tion and state that upon the authentication and delivery of such Bonds the Company will be enabled forthwith to effect such acquisition. The term “controlled company,” as used above and elsewhere in this Indenture, shall mean any company, other than a sub- sidiary company, 51% or more of the outstanding capital stock of which, having voting power, is at the time owned by the Com- pany, either directly or through one or more other companies. In computing the amount of earnings, expenses and interest charges all inter-company revenue, expenses and interest charges of every nature shall be excluded. Section 3. Before any of the Bonds reserved under Section 2 of this Article are authenticated and delivered, there shall be delivered to the Trustee a certified copy of a resolution of the Board of Directors or Executive Committee of the Company calling for the authentication and delivery of a specified amount of Bonds and a certificate signed by (a) its President or a Vice-President, and (b) its Treasurer or an Assistant Treasurer, showing: First, the value of the quick assets and the amount of the current liabilities of the Company at the close of the last preceding fiscal year or (at the option of the Company) at a date subsequent thereto; Second, the net earnings of the Company for a period of twelve consecutive calendar months ending not more than ninety days prior to the application for the authentication and delivery of such reserved Bonds, and the annual bond interest charges of the Company. The foregoing certificate shall be accompanied by the certifi- cate of a certified public accountant or a firm of certified public accountants satisfactory to the Trustee certifying to the correctness thereof. Section 4. Anything herein contained to the contrary notwithstanding, the Company shall have the right at any time, Term "controlled company” defined. Provisions govern- ing: authentication of bonds: — certified resolution of Board of Directors or Exec- utive Committee to be delivered to Trustee ; — certificate to be delivered to Trustee; — contents of certificate; — certificate of cer- tified public accountant to be delivered to Trustee. ARTICLE TWO Sections 4, 5. 14 Sale of reserved bonds for cash. Price Compensation to bankers or syndicates. Net proceeds of sale to be deposited and contract there- for delivered to Trustee. Authentication and delivery. Application of net proceeds of sale by Trustee. and from time to time, to sell for cash any or all of the Bonds reserved under the provisions of Section 2 of this Article at such price or prices as may be approved by the Board of Directors or the Executive Committee of the Company, not less in any case than the face value of the Bonds so sold with the interest accrued thereon (provided that the Company may in any case contract to pay and pay reasonable compensation to bonkers or syndicates in connection with the sale or underwriting of said Bonds or any thereof) ; and upon deposit with the Trustee in cash of the net proceeds of such sale (any such banker’s or syndicates’ compensation being deducted), and the delivery to the Trustee of the original or a verified copy of the contract under which such Bonds shall have been sold, the Trustee shall authenticate said Bonds and deliver them to the Company, or upon its written order signed by its President or one of its Vice-Presidents, or its Treasurer or one of its Assistant Treasurers, and by its Secretary or one of its Assistant Secretaries. The net proceeds of any sale of Bonds made as permitted by this Section shall be paid out from time to time only as, and upon and subject to the restrictions, and upon submission to the Trus- tee of the proof in this Article provided with reference to the authentication and delivery of Bonds reserved under the provi- sions of said Section 2. Trustee entitled to rely upon documents fur- nished by Com- pany. Trustee may make further inquiry. Section 5. The written orders, certificates and copies of resolutions provided for in this Article may be received by the Trustee as conclusive evidence of anything pertaining to the right to authenticate and deliver Bonds or pay out deposited moneys pursuant to this Article and shall be deemed and taken to be full authority and protection to the Trustee for all action or non-action by the Trustee on the faith thereof. The Trustee, however, before authenticating or delivering any Bonds or pay- ing out any moneys upon the faith of any certificate furnished under the provisions of this Article, may, but shall not under any circumstances be required to, make further inquiry with regard to any statement or statements of facts contained therein, and if satisfied that any material statement of fact so inquired ARTICLE TWO— Section 5. ARTICLE THREE— Section 1. 15 into is substantially untrue or inaccurate the Trustee shall not be obliged to accept the certificate containing such statement or to authenticate or deliver any Bonds or to pay out any moneys tadem°n n iaed elnB upon the faith thereof. If the Trustee shall refuse to authenti- obliged t? ay be cate or deliver any Bonds or pay out any moneys upon the accept certificate, ground that it is satisfied that some material statement of fact in such certificate contained is substantially untrue or inaccurate, the Trustee shall, if the Company so request and furnish it adequate indemnity against all liability, cause the books and records of the Company and its subsidiaries to be examined through its own officers or any competent agent whom it may select, and, if such officers or agent, after such examination shall report that such material statement is substantially true or ac- curate, the Trustee shall be obliged to accept such certificate. The reasonable expenses of every such examination shall be paid by the Company. ARTICLE THREE. Particular Covenants op the Company. The Company covenants with the Trustee as hereinafter in this Article set forth: Section 1 . The Company will duly and punctually pay the principal of each and every of the Bonds, and the interest accruing thereon, at the dates and places and in the manner mentioned in the Bonds and in the coupons thereto appertaining, according to the true intent and meaning thereof, without deduction from either principal or interest for any tax or taxes (other than Federal in- come taxes in excess of two per cent.) which the Company or the Trustee may be required to pay thereon or to retain therefrom under any present or future law of the United States of America, or of any state, county, municipality or other taxing authority therein. The interest shall be payable only upon presentation and surrender of the respective coupons annexed to the Bonds as such coupons respectively shall mature. When and as paid, all coupons shall forthwith be cancelled. Covenant to pay principal and interest. — without deduc- tion for Taxes (other than Federal income taxes). Interest payable only on presenta- tion of coupons. ARTICLE THREE Sections 2, 3, 4. 16 Covenant to main- tain office or agency in City of New York. Section 2. At all times, until the principal of all of the Bonds shall have been paid, provided for or converted into com- mon stock of the Company pursuant to the provisions of Article Six hereof, the Company either will keep an office or an agency in the Borough of Manhattan, in the City of New York, where notices and demands in respect to the Bonds and coupons may be served, and by written notice will designate such office or agency to the Trustee, or will designate by written notice to the Trustee a bank or trust company in said Borough for such purpose. In default of any such office or agency, or of such designation, de- mands may be made and notices may be served at the office in said Borough of the Trustee. The Company will also keep an office or agency in said Borough where notices of election to convert Bonds into common stock of the Company pursuant to the provisions of said Article Six may be served, of which office the Company will give written notice to the Trustee; and until it shall have given written notice to the Trustee as aforesaid, said notices may be served at the office in said Borough of the Trustee. Covenant to main- tain franchises and properties: — and to pay taxes. Section 3. The Company will (except as otherwise per- mitted by this Indenture) diligently preserve all the rights and franchises to it granted and upon it conferred, in so far as they shall continue to be advantageous to the Company, and shall and will at all times maintain, preserve and keep its plants, includ- ing fixtures and appurtenances, and every part thereof, in good repair, working order and condition, and will from time to time make all needful and proper repairs, renewals and replacements. The Company will promptly pay and discharge all taxes, assessments and governmental charges lawfully levied or im- posed upon it, as well as all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a lien or charge upon its property; provided, however, that the Company shall have the right in good faith to contest any such tax, assessment, charge or claim, and pending such contest, to delay or refuse payment thereof. ?a°wfui ant owers US so a11 Section 4. The Company will exercise all lawful powers which that subsidiary companies shall: 17 ARTICLE THREE Sections 4, 5. as stockholder or otherwise it may possess, to the end that each subsidiary of the Company shall (a) preserve its corporate organ- ization (except as otherwise permitted by this Indenture) and do no act by which it might incur a forfeiture of its corporate existence; (b) promptly pay and discharge all taxes, assessments and govern- mental charges lawfully levied or imposed upon it, as well as all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a lien or charge upon its property ; provided, however, that it shall have the right, in good faith to contest any such tax, assessment, charge or claim and, pending such contest, to delay or refuse payment thereof ; (c) keep its property and plants, if any, in good repair, working order and condition ; and (d) not increase the amount of its capital stock issued and outstanding, unless forthwith upon the issue thereof there shall be made effective provision that such additional stock so issued (or such part of such additional stock as shall equal the ratio of the amount of the capital stock of said subsidiary owned by the Company immediately pre- ceding the issue of such additional stock to all of the capital stock of said subsidiary outstanding at that time) shall forthwith upon the issue thereof be acquired by the Company. In case any con- trolled company shall increase the amount of its capital stock issued and outstanding, forthwith upon the issue thereof there shall be made effective provision for the acquisition by the Com- pany of such part of such additional stock so issued, if any, as shall be necessary in order that such controlled company shall continue to be a controlled company. Section 5. Until all of the Bonds shall have been paid, pro- vided for or converted into common stock of the Company as aforesaid, the Company will not mortgage or pledge any of its property, except that in accordance with ordinary business practice the Company may pledge government obligations, ware- house receipts, livestock, and other property to secure acceptances (including foreign letters of credit issued by banks or bankers in favor) of the Company or any subsidiary. Nothing herein contained shall prevent the Company from purchasing property subject to any mortgage or other lien or from executing pur- — (a) preserve cor- porate organization — (b) pay all taxes and claims for labor or materials — (c) keep property in repair — (d) not increase the amount of capi- tal stock unless pro rata part acquired by Company. Controlled com- panies to be con- tinued as such. Covenant not to mortgage or pledge property except as stated. ARTICLE THREE Sections 5, 6. 18 chase-money mortgages or other instruments of charge, provided that the obligations secured by any such purchase-money mort- gage or other instrument shall not exceed 75% of the purchase price of the property covered thereby; and further that, if any property acquired by the Company shall at the time of the acquisition thereof be subject to mortgage, the Company shall not execute a purchase-money mortgage or other instru- ment of charge for any part of the consideration payable by it for such property, except to an amount which, together with such prior mortgage indebtedness will not exceed 75% of the purchase price of such property, including in the purchase price the prin- cipal amount of such prior mortgage indebtedness. Nor shall any- thing herein contained prevent the Company from depositing cash or pledging additional collateral with the trustee under the Trust Agreement dated July 1, 1919, securing the Company’s Five-Year Serial, Collateral Trust Notes in connection with the issuance of additional bonds as provided in said Trust Agree- ment. In case of a breach of any of the covenants in this Section 5 set forth, in addition to any other provisions of this Indenture in respect of such breach, the Company hereby creates a lien and charge upon any and all property mortgaged or pledged in violation of any such covenant prior and superior to the lien in favor of any other note, bond, or debt secured by any mortgage or pledge not herein permitted; and to make this pro- vision and undertaking fully effectual the Company hereby in- cludes under, and secures by, any mortgage, pledge or deed of trust hereafter made or executed by it in violation of any such covenant any and all Bonds issued hereunder then or at any time thereafter outstanding, with the same force and effect as though each and every such Bond were specifically named and included in any such future mortgage, pledge or deed of trust, in priority to any and all obligations issued under and secured by such future mortgage, pledge or deed of trust. Section 6. Until all the Bonds shall have been paid, pro- vided for or converted into common stock of the Company as 19 ARTICLE THREE Sections 6, 7. aforesaid, the Company will not suffer or permit any subsidiary to mortgage or pledge any of its property, except that in accord- ance with ordinary business practice government obligations, ware- house receipts, livestock, and other property may be pledged to secure acceptances (including foreign letters of credit issued by banks or bankers in favor) of such subsidiary. Nothing herein contained shall prevent any subsidiary from mortgaging any of its property to the Company or to any other subsidiary or from acquiring property subject to mortgage or other liens, or from executing purchase-money mortgages or other instruments of charge, provided that the obligations secured by any such pur- chase-money mortgage or other instruments of charge shall not exceed 75% of the purchase price of the property covered thereby; and further that, if any property acquired by such subsidiary shall at the time of the acquisition thereof be subject to mortgage, such subsidiary shall not execute a purchase-money mortgage or other instrument of charge for any part of the consideration payable by it for such property, except to an amount which, together with such prior mortgage indebtedness will not exceed 75% of the purchase price of such property, including in the purchase price the principal amount of such prior mortgage indebtedness. Section 7. Until all of the Bonds shall have been paid, pro- vided for or converted into common stock of the Company as afore- said (a) the quick assets of the Company shall at all times be maintained in an amount at least equal to one and one-half times the current liabilities of the Company; and (b) the net quick assets of the Company shall be maintained in an amount at least equal to one-half the principal amount of the Bonds then out- standing. The Company shall file with the Trustee within four months after the close of each fiscal year a consolidated balance sheet of the Company and its subsidiaries as of the end of the immediately preceding fiscal year, in which shall be set forth in reasonable detail the financial condition of the Company and its subsidiaries as of the end of said fiscal year, and a statement showing the Covenant not to permit subsidiaries to mortgage or pledge property except as stated. Covenant as to — (a) ratio of quick assets to current liabilities — (b) ratio of net quick assets to principal amount of outstanding bonds. Covenant to file with Trustee con- solidated balance sheet and state- ment of quick assets and liabilities. ARTICLE THREE Sections 7, 8. 20 Covenant to re- imburse bondholders for Pennsylvania taxes (except suc- cession or inherit- ance taxes). amount of the quick assets of the Company and the amount of the current liabilities of the Company at the end of said fiscal year. Section 8. The Company covenants that it will reimburse the holder or registered owner of any of the Bonds for any amount not exceeding four mills per dollar per annum which such holder or registered owner shall have paid for taxes (other than succession or inheritance taxes) assessed or imposed by the Commonwealth of Pennsylvania (but not by any county or other political subdivision thereof) upon such Bonds or upon the holder or registered owner thereof by reason of the ownership of such Bonds. Such reim- bursement shall be made only upon written request to the Company or at its office or agency in the Borough of Manhattan, City of New York, within sixty (60) days from the date of the payment of such taxes. Such request shall be accompanied by an affidavit of such holder or registered owner setting forth the number of each of the Bonds upon which said tax has been so paid, the county in which such tax was assessed, and the amount at which said Bond or Bonds were valued in the return thereof for the purposes of such taxation, and also setting forth the amount of the tax paid on said Bond or Bonds and the date on which the same was paid, and that such tax was paid by the person making such affidavit as the holder or registered owner thereof and as a resident of the Commonwealth of Pennsylvania. The Company hereby covenants and agrees with every holder or registered owner of such Bond or Bonds making such request and with the Trustee severally, that within fifteen days after the receipt of such affidavit at its office or agency as aforesaid the Company will pay to him a sufficient sum to reimburse him for the tax so paid. The Company shall not be liable to reimburse any such holder or registered owner for any such taxes unless such request shall be made within the period named and it shall in no event be liable to reimburse any holder or registered owner for any interest or penalty assessed upon or paid by him in addition to the amount of said taxes as originally assessed. ARTICLE THREE— Section 9. ARTICLE FOUR— Section 1. 21 Section 9. The Company covenants that it will reimburse the holder or registered owner of any of the Bonds for any amount not exceeding six per centum (6%) per annum which such holder or registered owner shall have paid for income taxes assessed or imposed by the Commonwealth of Massachusetts upon such holder or registered owner as a resident of said Commonwealth on account of interest received on such Bonds. Such reimbursement shall be made only upon written request to the Company at its office or agency in the Borough of Manhattan, City of New York, within sixty (60) days from the date of the payment of such taxes. Such request shall be accompanied by an affidavit made by such holder or registered owner which shall set forth the numbers and principal amounts of said Bonds, the fact of owner- ship, when such taxes were imposed and that such taxes were assessed upon and paid by the holder or registered owner as a resi- dent of the Commonwealth of Massachusetts owning said Bonds. The Company shall not be liable to reimburse any such holder or regis- tered owner for any such taxes unless such request shall be made within the period named and it shall in no event be liable to reim- burse any holder or registered owner for any interest or penalty as- sessed upon or paid by him in addition to the amount of said taxes as originally assessed. Covenant to r imburse bond- holders for Ma chusetts incoin taxes not excee 6% per annum. ARTICLE FOUR. Redemption of Bonds. Section 1. The Company may, at its election, on any interest date, pay off and redeem any or all of the Bonds at the face value thereof and accrued interest, plus a premium of ten per cent. (10%) of the face value thereof. In case the Company shall elect to exercise such right of redemption, it shall give notice thereof by publication at least once a week for eight successive weeks prior to the interest date on which such payment and re- demption is to be made, the first publication to be made not less than sixty (60) days nor more than ninety (90) days prior to Bonds redeenui at option of Company. ARTICLE FOUR Sections 1, 2. 22 Contents of notice. Notice by mail. Bonds become due on redemption date. such redemption date, in one daily newspaper of general circu- lation published in the Borough of Manhattan, in the City of New York, and in one daily newspaper of general circulation pub- lished in the City of Chicago, in the State of Illinois, stating such election on the part of the Company and specifying, in case less than all of the Bonds are to be redeemed, the numbers of the Bonds to be redeemed (which, previously to the publication of such notice, shall have been designated by lot under the direc- tion of the Trustee), and stating that the interest on the Bonds in such notice designated for redemption shall cease on such re- demption date, and requiring that said Bonds be presented at the office of the Trustee on said date for payment and redemption. A similar notice shall be mailed by the Company, postage pre- paid, at least eight weeks prior to said date fixed for redemption, to all registered holders of Bonds to be redeemed whose addresses shall appear upon the transfer register or registers of the Com- pany. Notice having been so published, the Bonds so designated for redemption shall on the interest date designated in such notice become due and payable at the redemption price aforesaid; and from and after the date of redemption so designated (unless the Company shall make default in payment of the Bonds) interest on the Bonds so designated for redemption shall cease to accrue, and upon presentation at the office of the Trustee of the Bonds specified in said notice in accordance with said notice, together with all coupons thereto appertaining maturing on and after said date of redemption, the Bonds shall be paid by the Company at the redemption price aforesaid. If not so paid upon presentation thereof, said Bonds shall continue to bear interest at the rate there- in expressed until payment. Termination of trust on deposit of amount necessary to redeem and on provision to in- sure notice. Section 2. On deposit with the Trustee of the amount neces- sary so to redeem all of the Bonds outstanding, and on delivery to the Trustee of (1) proof satisfactory to the Trustee that notice of redemption thereof on a specified redemption date has been pub- lished as aforesaid, or (2) proof satisfactory to the Trustee that arrangements have been made insuring to the satisfaction of the ARTICLE FOUR— Sections 2, 3. ARTICLE FIVE— Section 1. 23 Trustee that such notice will be so published, or (3) a written in- strument executed by the Company, under its corporate seal, and expressed to be irrevocable, authorizing the Trustee to give such notice for and on behalf of the Company, and on payment to the Trustee of all costs, charges and expenses in relation thereto, then the Trustee shall cancel and satisfy this Indenture. The Trustee shall apply the moneys so deposited with it to the payment at the redemption price aforesaid of the Bonds so called for redemption, but shall in no event be liable beyond the amount so deposited with it. Any moneys so deposited which shall not be required for the purpose for which such deposit was made shall be repaid to the Company upon its written request; and upon like request any such moneys remaining unclaimed by the holders of Bonds and coupons for six years after the specified redemption date shall be paid by the Trustee to the Company; provided, however, that the Trustee, before being required to make any such payment, may, at the expense of the Company, cause notice that said moneys have not been so called for and that after a date named therein they will be returned to the Company to be published once a week in each of four successive weeks in a daily newspaper of general circulation published in said Borough of Manhattan. Section 3. All Bonds redeemed or paid pursuant to the pro- visions of this Article Four and the appurtenant coupons shall be canceled. ARTICLE FIVE. Sinking Fund. Section 1. The Company covenants and agrees that on the thirty-first day of December in each year, commencing with the year 1921, it will pay to the Trustee, as and for a sinking fund to be applied as hereinafter in this Article Five provided, an amount equal to two per centum ( 2 %) of the principal amount of all Bonds theretofore authenticated and delivered by the Trustee pur- suant to the provisions of Article Two hereof. Application o posited money Disposition ol claimed m out Redeemed bon be cancelled Creation of si ing fund. ARTICLE FIVE Sections 1, 2. 24 Company may deliver bonds to Trustee in lieu of money. Company may ex- ceed sinking fund requirements. Converted bonds to be credited against sinking fund obligations. In respect of any of the payments required to be made for account of the sinking fund, the Company shall have the right to deliver to the Trustee Bonds previously issued hereunder and disposed of by the Company and thereafter again acquired by the Company, with all unmatured coupons thereunto apper- taining, in lieu of the moneys so required to be paid or any part thereof, and the obligation to make the payments above required shall be satisfied and discharged to an amount equal to the principal amount of the Bonds so delivered. The fact that Bonds have been disposed of by the Company and thereafter again acquired by it shall be sufficiently established by the affi- davit to this effect of the Treasurer or an Assistant Treasurer of the Company. The Company shall have the right to make such payments, in whole or in part, before the date on which the same are required to he made. It shall also have the right to exceed said sinking fund requirements in any year and to have the excess payments credited against its said sinking fund obligation in such years as the Company shall designate. In case any of the Bonds shall be converted into common stock of the Company pursuant to the provisions of Article Six hereof, an amount equal to the principal amount of the Bonds so con- verted shall be credited on said sinking fund obligation in such years as the Company shall designate. Sinking fund to be applied to purchase of bonds. Section 2. All moneys received by the Trustee for the sinking fund shall be applied by it from time to time, as soon as reasonably practicable after the receipt thereof, to the purchase of Bonds issued under this Indenture at the best price obtainable by the Trustee, not exceeding the redemption price, such pur- chase to be made by the Trustee after it shall, in any usual manner to be determined by it in its discretion, have invited by advertisement, at the cost and expense of the Company, tenders of Bends for sale to the sinking fund within said limit as to price. If the Trustee shall not prior to February 15 in any year obtain tenders of Bonds (at not exceeding said redemption price) to an amount sufficient to exhaust the available moneys 25 ARTICLE FIVE Sections 2, 3. in the sinking fund, it may thereafter purchase at public or private sale, at the best price or prices obtainable by it considering the amount or amounts of Bonds purchased, not exceeding said re- demption price, such an additional amount of Bonds as shall 6e sufficient to exhaust said moneys. The moneys in the sinking fund not applied to the purchase of Bonds as aforesaid on or before the 28th day of February in any year shall (unless the amount be less than $25,000) be applied by the Trustee to the redemption of Bonds, on the next succeeding first day of July, at the redemption price aforesaid, the Bonds so to be redeemed to be designated by lot under the direction of the Trustee. The Bonds so to be redeemed having been so designated, the Trustee shall give notice to the Company to that effect, specifying the numbers thereof, and the Company shall forthwith give notice of such redemption as in said Article Four provided to be given for the redemption of Bonds pursuant to said Article; or the Trustee may, at the expense of the Company, give such notice. Said notice having been published as in said Article Four provided, the Bonds so designated for redemption shall on the date speci- fied in said notice become due and payable at said redemption price. From and after the date of redemption so designated (unless default shall be made in the payment of said Bonds) interest on the Bonds so designated for redemption shall cease to accrue, and on presentation of the Bonds specified in the notice of redemption in accordance with said notice, with all appurtenant coupons maturing on and after said redemption date, said Bonds shall be paid by the Trustee at the redemption price aforesaid. Section 3. Until the designation by lot of Bonds for redemption as aforesaid, all moneys in the sinking fund shall be held by the Trustee as security for all the Bonds outstand- ing under this Indenture; but from and after such designation all such moneys to the extent required for the purpose shall be held for the payment of the Bonds so designated for redemp- tion. In case after such designation any of the Bonds so desig- Moneys not applied to purchase of bonds to be applied to redemp- tion thereof. Manner of effecting such redemption. Sinking fund — until bonds desig- nated for redemp- tion. Repayment to Com- pany upon conver- sion of desig- nated bonds. Bonds purchased or redeemed from sinking fund to be cancelled. Bonds may be converted into common stock of Company : — rate of conver- — notice of elec- tion to convert; — notice to con- stitute contract with Company. ARTICLE FIVE— Sections 3, 4. ARTICLE SIX— Section 1. 26 nated for redemption shall be converted into common stock of the Company pursuant to the provisions of Article Six hereof, then, upon the request of the Company, the Trustee shall repay to the Company out of the moneys theretofore paid to it for the sinking fund an amount equal to the redemption price of the Bonds so converted. Section 4. All Bonds purchased or redeemed by the appli- cation of moneys in the sinking fund shall be cancelled and shall be delivered to the Company on its written request. ARTICLE SIX. Conversion of Bonds into Common Stock. Section 1. The Company covenants that the holder of any of the Bonds issued hereunder shall have the right, to be exercised in the manner and subject to the regulations in this Article pre- scribed, to exchange any of such Bonds and to convert the same into the common stock of the Company as the stock of the Company shall be constituted at the time of such conversion at the rate of thirteen shares of such stock for each $1,000, face amount, of Bonds; provided, that the holder of such Bonds shall have given to the Company written notice of his election to convert the same on a date specified in such notice, which date shall be at least five days after the date of giving such notice, and provided that at the time of giving such notice the holder of such Bonds shall have deposited with the Company at its office or agency in the City of New York the Bonds to be converted as stated in said notice, together with all then unmatured coupons appertaining to such Bonds, and, in the case of a Bond registered as to principal, shall have transferred the same to the Company or to bearer. Every such notice of election to convert shall constitute a contract between the holder of such Bonds and the Company whereby such bondholder shall be deemed to subscribe for the amount of the common stock of the Company which he will be entitled to receive upon such conversion and in satisfaction of such subscription and in payment of the stock 27 ARTICLE SIX Sections 1, 2, 3. to be received upon such conversion to surrender the Bonds deposited as aforesaid and to release the Company from all liability thereon; and whereby the Company shall be deemed to agree that the amount originally paid to it for such Bonds together with the surrender thereof and the extinguishment of liability thereon shall constitute full payment of such subscription for the stock to be issued upon such conversion. Section 2. The Company shall deliver from time to time to the respective holders or registered owners of Bonds in respect of which any notice as aforesaid shall have been given, or to their respective assigns, and in exchange therefor, stock certificates repre- senting the number of shares of stock into which such Bonds shall be convertible. The stock certificates so delivered shall be in the names of the respective holders or registered owners of Bonds so surrendered for conversion, (or in such names as they may direct, in which case they shall pay all stock transfer taxes that may be payable in respect thereof). The Company shall pay the amount of any and all taxes which may be imposed in respect of any issue or delivery of stock pursuant to the provisions of this Article Six and which shall be payable in order that such stock may be issued in the name of the respective holders or registered owners of the Bond or Bonds so surrendered for conversion. Stock certificates to be Issued on conversion of bonds. Payment of stock taxes, if any. Section 3. The Company shall not be required to convert any Bond issued hereunder into its common stock while its books for the transfer of said stock shall be closed for any purpose, and the right of conversion hereinbefore and in the Bonds provided for shall be suspended during such period; provided, however, that the right of conversion shall not in any case be so suspended for a longer period than thirty (30) days, nor during the last thirty (30) days of the conversion period. In the case of Bonds called for redemption pursuant to the provisions of Article Four or of Article Five hereof, said right of conversion shall continue up to the thirtieth day next preceding the date fixed for such redemption, and said right of conversion shall not be suspended by a closing of the books for the transfer of said common stock during the thirty (30) days next preceding said thirtieth day. Right of conversion suspended by closing stock transfer books, — and cut off 30 days prior to redemption. ARTICLE SIX Section 4. 28 Cash adjustment of Interest and dividends. Method of determin- ing cash adjust- ment. Current rate of dividends, defined. Date of conver- sion defined. Section 4. At the time of any such conversion, a cash adjustment shall be made between the Company and the holder or registered owner of any Bond surrendered on such conver- sion in respect of the interest accrued on such Bond and any dividends on the shares of stock to be delivered in exchange there- for. To make such cash adjustment, the Company shall, at the time of such conversion, pay to the holder or registered owner of the Bond so converted, interest not previously paid on said Bond at the rate of six per cent. (6