Exhibit 10.1
HEARTLAND FINANCIAL USA, INC.,
as Issuer
INDENTURE
Dated as of October 10, 2003
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
8.25% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
DUE 2033
TABLE OF CONTENTS
Page
ARTICLE I. Definitions................................................ 1
Section 1.1 Definitions........................................ 1
ARTICLE II. Debentures................................................ 8
Section 2.1 Authentication and Dating...........................8
Section 2.2 Form of Trustee's Certificate of Authentication.....9
Section 2.3 Form and Denomination of Debentures.................9
Section 2.4 Execution of Debentures.............................9
Section 2.5 Exchange and Registration of Transfer
of Debentures......................................10
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures....12
Section 2.7 Temporary Debentures...............................13
Section 2.8 Payment of Interest and Additional Interest........13
Section 2.9 Cancellation of Debentures Paid, etc...............15
Section 2.10 Computation of Interest Rate.......................15
Section 2.11 Extension of Interest Payment Period...............16
Section 2.12 CUSIP Numbers......................................17
Section 2.13 Global Debentures..................................17
ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY......................19
Section 3.1 Payment of Principal, Premium and Interest; Agreed
Treatment of the Debentures........................19
Section 3.2 Offices for Notices and Payments, etc..............20
Section 3.3 Appointments to Fill Vacancies in Trustee's
Office.............................................20
Section 3.4 Provision as to Paying Agent.......................20
Section 3.5 Certificate to Trustee.............................21
Section 3.6 Additional Sums....................................22
Section 3.7 Compliance with Consolidation Provisions...........22
Section 3.8 Limitation on Dividends............................22
Section 3.9 Covenants as to the Trust..........................23
Section 3.10 Additional Junior Indebtedness.....................23
ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND
THE TRUSTEE......................................................23
Section 4.1 Securityholders' Lists.............................23
Section 4.2 Preservation and Disclosure of Lists...............24
ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN
EVENT OF DEFAULT.................................................25
Section 5.1 Events of Default..................................25
Section 5.2 Payment of Debentures on Default, Suit Therefor....27
Section 5.3 Application of Moneys Collected by Trustee.........28
Section 5.4 Proceedings by Securityholders.....................29
Section 5.5 Proceedings by Trustee.............................29
Section 5.6 Remedies Cumulative and Continuing; Delay or
Omission Not a Waiver..............................29
Section 5.7 Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders........................30
Section 5.8 Notice of Defaults.................................30
Section 5.9 Undertaking to Pay Costs...........................31
ARTICLE VI. CONCERNING THE TRUSTEE....................................31
Section 6.1 Duties and Responsibilities of Trustee.............31
Section 6.2 Reliance on Documents, Opinions, etc...............32
Section 6.3 No Responsibility for Recitals, etc................33
Section 6.4 Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debentures....33
Section 6.5 Moneys to be Held in Trust.........................33
Section 6.6 Compensation and Expenses of Trustee...............34
Section 6.7 Officers' Certificate as Evidence..................34
Section 6.8 Eligibility of Trustee.............................35
Section 6.9 Resignation or Removal of Trustee..................35
Section 6.10 Acceptance by Successor Trustee....................36
Section 6.11 Succession by Merger, etc..........................37
Section 6.12 Authenticating Agents..............................38
ARTICLE VII. CONCERNING THE SECURITYHOLDERS...........................39
Section 7.1 Action by Securityholders..........................39
Section 7.2 Proof of Execution by Securityholders..............39
Section 7.3 Who Are Deemed Absolute Owners.....................39
Section 7.4 Debentures Not Outstanding.........................40
Section 7.5 Revocation of Consents; Future Holders Bound.......40
ARTICLE VIII. SECURITYHOLDERS' MEETINGS...............................41
Section 8.1 Purposes of Meetings...............................41
Section 8.2 Call of Meetings by Trustee........................41
Section 8.3 Call of Meetings by Company or Securityholders.....41
Section 8.4 Qualifications for Voting..........................41
Section 8.5 Regulations........................................42
Section 8.6 Voting.............................................42
Section 8.7 Quorum; Actions....................................42
ARTICLE IX. SUPPLEMENTAL INDENTURES...................................43
Section 9.1 Supplemental Indentures without Consent of
Securityholders....................................43
Section 9.2 Supplemental Indentures with Consent of
Securityholders....................................45
Section 9.3 Effect of Supplemental Indentures..................45
Section 9.4 Notation on Debentures.............................46
Section 9.5 Evidence of Compliance of Supplemental Indenture
to be Furnished to Trustee.........................46
ARTICLE X. REDEMPTION OF SECURITIES...................................46
Section 10.1 Optional Redemption................................46
Section 10.2 Special Event Redemption...........................46
Section 10.3 Notice of Redemption; Selection of Debentures......46
Section 10.4 Payment of Debentures Called for Redemption........47
ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.........48
Section 11.1 Company May Consolidate, etc., on Certain Terms....48
Section 11.2 Successor Entity to be Substituted.................48
Section 11.3 Opinion of Counsel to be Given to Trustee..........48
ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE..................49
Section 12.1 Discharge of Indenture.............................49
Section 12.2 Deposited Moneys to be Held in Trust by Trustee....49
Section 12.3 Paying Agent to Repay Moneys Held..................50
Section 12.4 Return of Unclaimed Moneys.........................50
ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS...........................................50
Section 13.1 Indenture and Debentures Solely Corporate
Obligations........................................50
ARTICLE XIV. MISCELLANEOUS PROVISIONS.................................50
Section 14.1 Successors........................................50
Section 14.2 Official Acts by Successor Entity.................50
Section 14.3 Surrender of Company Powers.......................50
Section 14.4 Addresses for Notices, etc........................51
Section 14.5 Governing Law.....................................51
Section 14.6 Evidence of Compliance with Conditions Precedent..51
Section 14.7 Non-Business Days.................................51
Section 14.8 Table of Contents, Headings, etc..................52
Section 14.9 Execution in Counterparts.........................52
Section 14.10 Separability......................................52
Section 14.11 Assignment........................................52
Section 14.12 Acknowledgment of Rights..........................52
ARTICLE XV. SUBORDINATION OF DEBENTURES...............................53
Section 15.1 Agreement to Subordinate..........................53
Section 15.2 Default on Senior Indebtedness....................53
Section 15.3 Liquidation, Dissolution, Bankruptcy..............53
Section 15.4 Subrogation.......................................54
Section 15.5 Trustee to Effectuate Subordination...............55
Section 15.6 Notice by the Company.............................55
Section 15.7 Rights of the Trustee; Holders of Senior
Indebtedness......................................56
Section 15.8 Subordination May Not Be Impaired.................57
INDENTURE
THIS INDENTURE, dated as of October 10, 2003, between
Heartland Financial USA, Inc., a Delaware corporation (the
"Company"), and U.S. Bank National Association, a national
banking association organized under the laws of the United States
of America, as debenture trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issuance of its 8.25% Junior Subordinated
Deferrable Interest Debentures due 2033 (the "Debentures") under
this Indenture to provide, among other things, for the execution
and authentication, delivery and administration thereof, and the
Company has duly authorized the execution of this Indenture; and
WHEREAS, all acts and things necessary to make this
Indenture a valid agreement according to its terms, have been
done and performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the
Debentures by the holders thereof, the Company covenants and
agrees with the Trustee for the equal and proportionate benefit
of the respective holders from time to time of the Debentures as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 Definitions.
The terms defined in this Section 1.1 (except as herein
otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified
in this Section 1.1. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms
in accordance with generally accepted accounting principles and
the term "generally accepted accounting principles" means such
accounting principles as are generally accepted in the United
States at the time of any computation. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Additional Interest" means interest, if any, that shall
accrue on any interest on the Debentures the payment of which has
not been made on the applicable Interest Payment Date and which
shall accrue at the Coupon Rate, compounded quarterly (to the
extent permitted by law).
"Additional Junior Indebtedness" means, without duplication
and other than the Debentures, any indebtedness, liabilities or
obligations of the Company, or any Affiliate of the Company,
under debt securities (or guarantees in respect of debt
securities) initially issued to any trust, or a trustee of a
trust, partnership or other entity affiliated with the Company
that is, directly or indirectly, a finance subsidiary (as such
term is defined in Rule 3a-5 under the Investment Company Act of
1940) or other financing vehicle of the Company or any Affiliate
of the Company in connection with the issuance by that entity of
preferred securities or other securities that are eligible to
qualify for Tier 1 capital treatment (or its then equivalent) for
purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company (or, if
the Company is not a bank holding company, such guidelines
applied to the Company as if the Company were subject to such
guidelines); provided, however, that the inability of the Company
to treat all or any portion of the Additional Junior Indebtedness
as Tier 1 capital shall not disqualify it as Additional Junior
Indebtedness if such inability results from the Company having
cumulative preferred stock, minority interests in consolidated
subsidiaries, or any other class of security or interest which
the Federal Reserve now or may hereafter accord Tier 1 capital
treatment (including the Debentures) in excess of the amount
which may qualify for treatment as Tier 1 capital under
applicable capital adequacy guidelines.
"Additional Sums" has the meaning set forth in Section 3.6.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Applicable Depository Procedures" means, with respect to
any transfer or transaction involving a Global Debenture or
beneficial interest therein, the rules and procedures of the
Depositary for such Debenture, in each case to the extent
applicable to such transaction and as in effect from time to
time.
"Authenticating Agent" means any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant
to Section 6.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors or the
executive committee or any other duly authorized designated
officers of the Company.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification and delivered
to the Trustee.
"Business Day" means any day other than a Saturday, Sunday
or any other day on which banking institutions in the city in
which the Company's principal place of business is located, New
York City or Hartford, Connecticut are permitted or required by
any applicable law to close.
"Capital Securities" means undivided beneficial interests in
the assets of Heartland Financial Statutory Trust III which rank
pari passu with Common Securities issued by the Trust; provided,
however, that upon the occurrence of an Event of Default (as
defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise are subordinated to
the rights of holders of such Capital Securities.
"Capital Securities Guarantee" means the guarantee agreement
that the Company enters into with U.S. Bank National Association,
as guarantee trustee, or other Persons that operates directly or
indirectly for the benefit of holders of Capital Securities of
the Trust.
"Capital Treatment Event" means the receipt by the Company
and the Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of any
amendment to, or change (including any announced prospective
change) in, the laws, rules or regulations of the United States
or any political subdivision thereof or therein, or as the result
of any official or administrative pronouncement or action or
decision interpreting or applying such laws, rules or
regulations, which amendment or change is effective or which
pronouncement, action or decision is announced on or after the
date of original issuance of the Debentures, there is more than
an insubstantial risk that the Company will not, within 90 days
of the date of such opinion be entitled to treat an amount equal
to the aggregate liquidation amount of the Debentures as "Tier 1
Capital" (or its then equivalent) for purposes of the capital
adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Company (or if the Company is not a bank
holding company, such guidelines applied to the Company as if the
Company were subject to such guidelines); provided, however, that
the inability of the Company to treat all or any portion of the
liquidation amount of the Debentures as Tier 1 Capital shall not
constitute the basis for a Capital Treatment Event, if such
inability results from the Company having cumulative preferred
stock, minority interests in consolidated subsidiaries, or any
other class of security or interest which the Federal Reserve or
OTS, as applicable, may now or hereafter accord Tier 1 Capital
treatment in excess of the amount which may now or hereafter
qualify for treatment as Tier 1 Capital under applicable capital
adequacy guidelines; provided further, however, that the
distribution of Debentures in connection with the liquidation of
the Trust shall not in and of itself constitute a Capital
Treatment Event unless such liquidation shall have occurred in
connection with a Tax Event or an Investment Company Event.
"Certificate" means a certificate signed by any one of the
principal executive officer, the principal financial officer or
the principal accounting officer of the Company.
"Common Securities" means undivided beneficial interests in
the assets of the Trust which rank pari passu with Capital
Securities issued by the Trust; provided, however, that upon the
occurrence of an Event of Default (as defined in the
Declaration), the rights of holders of such Common Securities to
payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.
"Company" means Heartland Financial USA, Inc., a Delaware
corporation, and, subject to the provisions of Article XI, shall
include its successors and assigns.
"Company Order" means a written order signed in the name of
the Company by its Chairman of the Board of Directors, Vice
Chairman, Chief Executive Officer, President, Chief Financial
Officer, one of its Managing Directors or one of its Executive
Vice Presidents, Senior Vice Presidents or Vice Presidents, and
delivered to the Trustee.
"Coupon Rate" has the meaning set forth in Section 2.8.
"Debenture" or "Debentures" has the meaning stated in the
first recital of this Indenture.
"Debenture Register" has the meaning specified in Section
2.5.
"Declaration" means the Amended and Restated Declaration of
Trust of the Trust, as amended or supplemented from time to time.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning set forth in Section
2.8.
"Depositary" means an organization registered as a clearing
agency under the Exchange Act that is designated as Depositary by
the Company or any successor thereto. DTC will be the initial
Depositary.
"Distribution Period" has the meaning set forth in Section
2.8.
"Depository Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time
a Depositary effects book-entry transfers and pledges of
securities deposited with the Depositary.
"DTC" means The Depository Trust Company, a New York
corporation.
"Event of Default" means any event specified in Section 5.1,
continued for the period of time, if any, and after the giving of
the notice, if any, therein designated.
"Extension Period" has the meaning set forth in Section
2.11.
"Federal Reserve" means the Board of Governors of the
Federal Reserve System and any successor federal agency that is
primarily responsible for regulating the activities of bank
holding companies.
"Global Debenture" means a security that evidences all or
part of the Debentures, the ownership and transfers of which
shall be made through book entries by a Depositary.
"Indenture" means this instrument as originally executed or,
if amended or supplemented as herein provided, as so amended or
supplemented, or both.
"Institutional Trustee" has the meaning set forth in the
Declaration.
"Interest Payment Date" means each March 31, June 30,
September 30 and December 31 during the term of this Indenture
and on the Maturity Date.
"Investment Company Event" means the receipt by the Company
and the Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of a
change in law or regulation or written change (including any
announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, which change or
prospective change becomes effective or would become effective,
as the case may be, on or after the date of the issuance of the
Debentures.
"Liquidation Amount" means the stated amount of $1,000.00
per Trust Security.
"Maturity Date" means October 10, 2033.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, any Managing
Director or any Vice President, and by the Treasurer, an
Assistant Treasurer, the Comptroller, an Assistant Comptroller,
the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee. Each such certificate shall include
the statements provided for in Section 14.6 if and to the extent
required by the provisions of such Section.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the
Company, or may be other counsel reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided
for in Section 14.6 if and to the extent required by the
provisions of such Section.
"OTS" means the Office of Thrift Supervision and any
successor federal agency that is primarily responsible for
regulating the activities of savings and loan holding companies.
"Outstanding" means, when used with reference to Debentures,
subject to the provisions of Section 7.4, as of any particular
time, all Debentures authenticated and delivered by the Trustee
or the Authenticating Agent under this Indenture, except:
(a) Debentures theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for
cancellation;
(b) Debentures, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as
its own paying agent); provided, however, that, if such
Debentures, or portions thereof, are to be redeemed prior to
maturity thereof, notice of such redemption shall have been given
as provided in Section 10.3 or provision satisfactory to the
Trustee shall have been made for giving such notice;
(c) Debentures paid pursuant to Section 2.6 or in lieu of
or in substitution for which other Debentures shall have been
authenticated and delivered pursuant to the terms of Section 2.6
unless proof satisfactory to the Company and the Trustee is
presented that any such Debentures are held by bona fide holders
in due course; and
(d) Debentures held in accordance with Section 7.4 hereof.
"Person" means an individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Security" of any particular Debenture means
every previous Debenture evidencing all or a portion of the same
debt as that evidenced by such particular Debenture; and, for the
purposes of this definition, any Debenture authenticated and
delivered under Section 2.6 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the
lost, destroyed or stolen Debenture.
"Principal Office of the Trustee," or other similar term,
means the office of the Trustee, at which at any particular time
its corporate trust business shall be principally administered,
which at the time of the execution of this Indenture shall be 225
Asylum Street, Goodwin Square, Hartford, Connecticut 06103.
"Redemption Date" means the Interest Payment Date fixed for
the redemption of Debentures.
"Redemption Price" means 100% of the principal amount of the
Debentures being redeemed, plus accrued and unpaid interest on
such Debentures to the Redemption Date.
"Responsible Officer" means, with respect to the Trustee,
any officer within the Principal Office of the Trustee, including
any vice-president, any assistant vice-president, any secretary,
any assistant secretary, the treasurer, any assistant treasurer,
any trust officer or other officer of the Principal Trust Office
of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as
amended from time to time or any successor legislation.
"Securityholder," "holder of Debentures," or other similar
terms, means any Person in whose name at the time a particular
Debenture is registered on the register kept by the Company or
the Trustee for that purpose in accordance with the terms hereof.
"Senior Indebtedness" means, with respect to the Company,
whether incurred on or prior to the date of this Indenture or
thereafter incurred, (i) the principal, premium, if any, and
interest in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by
the Company; (ii) all capital lease obligations of the Company;
(iii) all obligations of the Company issued or assumed as the
deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company
under any title retention agreement; (iv) all obligations of the
Company for the reimbursement of any letter of credit, any
banker's acceptance, any security purchase facility, any
repurchase agreement or similar arrangement, any interest rate
swap, any other hedging arrangement, any obligation under options
or any similar credit or other transaction; (v) all obligations
of the type referred to in clauses (i) through (iv) above of
other Persons for the payment of which the Company is responsible
or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v)
above of other Persons secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed
by the Company). Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (1) any Additional Junior
Indebtedness, (2) Debentures issued pursuant to this Indenture
and guarantees in respect of such Debentures, (3) trade accounts
payable of the Company arising in the ordinary course of business
(such trade accounts payable being pari passu in right of payment
to the Debentures), or (4) obligations with respect to which (a)
in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such
obligations are pari passu, junior or otherwise not superior in
right of payment to the Debentures and (b) the Company, prior to
the issuance thereof, has notified (and, if then required under
the applicable guidelines of the regulating entity, has received
approval from) the Federal Reserve (if the Company is a bank
holding company) or the OTS (if the Company is a savings and loan
holding company). Senior Indebtedness shall continue to be
Senior Indebtedness and be entitled to the subordination
provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.
"Special Event" means any of a Capital Treatment Event, an
Investment Company Event or a Tax Event.
"Subsidiary" means with respect to any Person, (i) any
corporation at least a majority of the outstanding voting stock
of which is owned, directly or indirectly, by such Person or by
one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries, (ii) any general partnership, joint
venture, limited liability company or similar entity, at least a
majority of the outstanding partnership or similar interests of
which shall at the time be owned by such Person, or by one or
more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner. For the
purposes of this definition, "voting stock" means shares,
interests, participations or other equivalents in the equity
interest (however designated) in such Person having ordinary
voting power for the election of a majority of the directors (or
the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by
reason of the occurrence of a contingency.
"Tax Event" means the receipt by the Company and the Trust
of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to or change (including
any announced prospective change) in the laws or any regulations
thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any
official administrative pronouncement (including any private
letter ruling, technical advice memorandum, field service advice,
regulatory procedure, notice or announcement, including any
notice or announcement of intent to adopt such procedures or
regulations (an "Administrative Action")) or judicial decision
interpreting or applying such laws or regulations, regardless of
whether such Administrative Action or judicial decision is issued
to or in connection with a proceeding involving the Company or
the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or
decision is enacted, promulgated or announced, in each case on or
after the date of original issuance of the Debentures, there is
more than an insubstantial risk that: (i) the Trust is, or will
be within 90 days of the date of such opinion, subject to United
States federal income tax with respect to income received or
accrued on the Debentures; (ii) interest payable by the Company
on the Debentures is not, or within 90 days of the date of such
opinion, will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes; or (iii) the
Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties
or other governmental charges. Provided, however, if the Company
may eliminate the results described in (i) through (iii) of such
Administrative Action or judicial decision interpreting or
applying such laws or regulations by taking some ministerial
action, such as filing a form or making an election, or pursuing
some other similar reasonable measure which has no adverse effect
on the Company, the Trustee, the Trust or the Holders of the
Capital Securities issued by the Trust, such Administrative
Action or judicial decision shall not be deemed a Tax Event.
"Trust" shall mean Heartland Financial Statutory Trust III,
a Connecticut statutory trust, or any other similar trust created
for the purpose of issuing Capital Securities in connection with
the issuance of Debentures under this Indenture, of which the
Company is the sponsor.
"Trust Agreement" means the Amended and Restated Declaration
of Trust, dated October 10, 2003, by and among U.S. Bank National
Association, as Institutional Trustee, Heartland Financial USA,
Inc., as Sponsor, and the Administrators named therein, and any
amendments or supplements thereto.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trust Securities" means Common Securities and Capital
Securities of the Trust.
"Trustee" means U.S. Bank National Association, and, subject
to the provisions of Article VI hereof, shall also include its
successors and assigns as Trustee hereunder.
ARTICLE II.
DEBENTURES
SECTION 2.1 Authentication and Dating.
Upon the execution and delivery of this Indenture, or from
time to time thereafter, Debentures in an aggregate principal
amount not in excess of $20,619,000 may be executed and delivered
by the Company to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said
Debentures to or upon the written order of the Company, signed by
its Chairman of the Board of Directors, Vice Chairman, the Chief
Executive Officer, the President, the Chief Financial Officer,
one of its Managing Directors or one of its Vice Presidents
without any further action by the Company hereunder. In
authenticating such Debentures, and accepting the additional
responsibilities under this Indenture in relation to such
Debentures, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying
upon:
(a) a copy of any Board Resolution or Board Resolutions
relating thereto and, if applicable, an appropriate record of any
action taken pursuant to such resolution, in each case certified
by the Secretary or an Assistant Secretary of the Company, as the
case may be and
(b) an Opinion of Counsel prepared in accordance with Section
14.6 which shall also state:
(1) that such Debentures, when authenticated and
delivered by the Trustee and issued by the Company in each case
in the mannerand subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, subject to or limited by applicable
bankruptcy, insolvency, reorganization, conservatorship,
receivership, moratorium and other statutory or decisional laws
relating to or affecting creditors' rights or the reorganization
of financial institutions (including, without limitation,
preference and fraudulent conveyance or transfer laws), heretofore
or hereafter enacted or in effect, affecting the rights of
creditors generally; and
(2) that all laws and requirements in respect of the
execution and delivery by the Company of the Debentures have been
complied with and that authentication and delivery of the Debentures
by the Trustee will not violate the terms of this Indenture.
The Trustee shall have the right to decline to authenticate
and deliver any Debentures under this Section if the Trustee,
being advised in writing by counsel, determines that such action
may not lawfully be taken or if a Responsible Officer of the
Trustee in good faith shall determine that such action would
expose the Trustee to personal liability to existing holders.
The definitive Debentures shall be typed, printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers
executing such Debentures, as evidenced by their execution of
such Debentures.
Section 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all
Debentures shall be in substantially the following form:
This is one of the Debentures referred to in the within-
mentioned Indenture.
U.S. Bank National Association, as Trustee
By________________________________________
Authorized Signer
Section 2.3 Form and Denomination of Debentures.
The Debentures shall be substantially in the form of
Exhibit A attached hereto. The Debentures shall be in
registered, certificated form without coupons and in minimum
denominations of $500,000.00 and any multiple of $1,000.00 in
excess thereof. Any attempted transfer of the Debentures in a
block having an aggregate principal amount of less than
$500,000.00 shall be deemed to be void and of no legal effect
whatsoever. Any such purported transferee shall be deemed not to
be a holder of such Debentures for any purpose, including, but
not limited to the receipt of payments on such Debentures, and
such purported transferee shall be deemed to have no interest
whatsoever in such Debentures. The Debentures shall be numbered,
lettered, or otherwise distinguished in such manner or in
accordance with such plans as the officers executing the same may
determine with the approval of the Trustee as evidenced by the
execution and authentication thereof.
Section 2.4 Execution of Debentures.
The Debentures shall be signed in the name and on behalf
of the Company by the manual or facsimile signature of its
Chairman of the Board of Directors, Vice Chairman, Chief
Executive Officer, President, Chief Financial Officer, one of its
Managing Directors or one of its Executive Vice Presidents,
Senior Vice Presidents or Vice Presidents. Only such Debentures
as shall bear thereon a certificate of authentication
substantially in the form herein before recited, executed by the
Trustee or the Authenticating Agent by the manual signature of an
authorized signer, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee or the Authenticating Agent upon any
Debenture executed by the Company shall be conclusive evidence
that the Debenture so authenticated has been duly authenticated
and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Debentures shall cease to be such officer before the
Debentures so signed shall have been authenticated and delivered
by the Trustee or the Authenticating Agent, or disposed of by the
Company, such Debentures nevertheless may be authenticated and
delivered or disposed of as though the Person who signed such
Debentures had not ceased to be such officer of the Company; and
any Debenture may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although
at the date of the execution of this Indenture any such person
was not such an officer.
Every Debenture shall be dated the date of its
authentication.
Section 2.5 Exchange and Registration of Transfer of
Debentures.
The Company shall cause to be kept, at the office or
agency maintained for the purpose of registration of transfer and
for exchange as provided in Section 3.2, a register (the
"Debenture Register") for the Debentures issued hereunder in
which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration and
transfer of all Debentures as in this Article II provided. The
Debenture Register shall be in written form or in any other form
capable of being converted into written form within a reasonable
time.
Debentures to be exchanged may be surrendered at the
Principal Office of the Trustee or at any office or agency to be
maintained by the Company for such purpose as provided in Section
3.2, and the Company shall execute, the Company or the Trustee
shall register and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange therefor
the Debenture or Debentures which the Securityholder making the
exchange shall be entitled to receive. Upon due presentment for
registration of transfer of any Debenture at the Principal Office
of the Trustee or at any office or agency of the Company
maintained for such purpose as provided in Section 3.2, the
Company shall execute, the Company or the Trustee shall register
and the Trustee or the Authenticating Agent shall authenticate
and make available for delivery in the name of the transferee or
transferees a new Debenture for a like aggregate principal
amount. Registration or registration of transfer of any
Debenture by the Trustee or by any agent of the Company appointed
pursuant to Section 3.2, and delivery of such Debenture, shall be
deemed to complete the registration or registration of transfer
of such Debenture.
All Debentures presented for registration of transfer or for
exchange or payment shall (if so required by the Company or the
Trustee or the Authenticating Agent) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company and the Trustee or the
Authenticating Agent duly executed by the holder or his attorney
duly authorized in writing.
No service charge shall be made for any exchange or
registration of transfer of Debentures, but the Company or the
Trustee may require payment of a sum sufficient to cover any tax,
fee or other governmental charge that may be imposed in
connection therewith.
The Company or the Trustee shall not be required to exchange
or register a transfer of any Debenture for a period of 15 days
next preceding the date of selection of Debentures for
redemption.
Notwithstanding anything herein to the contrary, Debentures
may not be transferred except in compliance with the restricted
securities legend set forth below, unless otherwise determined by
the Company, upon the advice of counsel experienced in securities
law, in accordance with applicable law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE
144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE
BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN
ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD
THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR
HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR
ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i)
IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION
3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE
SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN
$500,000.00 AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING AN
AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $500,000.00 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH
THE FOREGOING RESTRICTIONS.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures.
In case any Debenture shall become mutilated or be
destroyed, lost or stolen, the Company shall execute, and upon
its written request the Trustee shall authenticate and deliver, a
new Debenture bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost
or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of
them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Company and the Trustee
evidence to their satisfaction of the destruction, loss or theft
of such Debenture and of the ownership thereof.
The Trustee may authenticate any such substituted Debenture
and deliver the same upon the written request or authorization of
any officer of the Company. Upon the issuance of any substituted
Debenture, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses connected
therewith. In case any Debenture which has matured or is about
to mature or has been called for redemption in full shall become
mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case
of a mutilated Debenture) if the applicant for such payment shall
furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless and, in
case of destruction, loss or theft, evidence satisfactory to the
Company and to the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every substituted Debenture issued pursuant to the
provisions of this Section 2.6 by virtue of the fact that any
such Debenture is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debentures
duly issued hereunder. All Debentures shall be held and owned
upon the express condition that, to the extent permitted by
applicable law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debentures and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement
or payment of negotiable instruments or other securities without
their surrender.
Section 2.7 Temporary Debentures.
Pending the preparation of definitive Debentures, the
Company may execute and the Trustee shall authenticate and make
available for delivery temporary Debentures that are typed,
printed or lithographed. Temporary Debentures shall be issuable
in any authorized denomination, and substantially in the form of
the definitive Debentures in lieu of which they are issued but
with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by
the Company. Every such temporary Debenture shall be executed by
the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the
same effect, as the definitive Debentures. Without unreasonable
delay the Company will execute and deliver to the Trustee or the
Authenticating Agent definitive Debentures and thereupon any or
all temporary Debentures may be surrendered in exchange therefor,
at the principal corporate trust office of the Trustee or at any
office or agency maintained by the Company for such purpose as
provided in Section 3.2, and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in
exchange for such temporary Debentures a like aggregate principal
amount of such definitive Debentures. Such exchange shall be
made by the Company at its own expense and without any charge
therefor except that in case of any such exchange involving a
registration of transfer the Company may require payment of a sum
sufficient to cover any tax, fee or other governmental charge
that may be imposed in relation thereto. Until so exchanged, the
temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures
authenticated and delivered hereunder.
Section 2.8 Payment of Interest and Additional Interest.
Interest at the Coupon Rate and any Additional Interest on
any Debenture that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date for Debentures shall
be paid to the Person in whose name said Debenture (or one or
more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment
except that interest and any Additional Interest payable on the
Maturity Date shall be paid to the Person to whom principal is
paid. In the event that any Debenture or portion thereof is
called for redemption and the Redemption Date is subsequent to a
regular record date with respect to any Interest Payment Date and
prior to such Interest Payment Date, interest on such Debenture
will be paid upon presentation and surrender of such Debenture.
Each Debenture shall bear interest for the period beginning
on (and including) the date of original issuance and ending on
(but excluding) December 31, 2003, and for each successive period
beginning on (and including)December 31, 2003, and each
succeeding Interest Payment Date, and ending on (but excluding)
the next succeeding Interest Payment Date (each, a "Distribution
Period") at a rate of 8.25% per annum (the "Coupon Rate"),
applied to the principal amount thereof, until the principal
thereof becomes due and payable, and on any overdue principal and
to the extent that payment of such interest is enforceable under
applicable law (without duplication) on any overdue installment
of interest at the Coupon Rate compounded quarterly. Interest
shall be payable (subject to any relevant Extension Period)
quarterly in arrears on each Interest Payment Date with the first
installment of interest to be paid on December 31, 2003.
Any interest on any Debenture, including Additional
Interest, that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be
paid by the Company to the Persons in whose names such Debentures
(or their respective Predecessor Securities) are registered at
the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing at least
25 days prior to the date of the proposed payment of the amount
of Defaulted Interest proposed to be paid on each such Debenture
and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which
shall not be more than 15 nor less than 10 days prior to the date
of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payments.
The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at its address as
it appears in the Debenture Register, not less than 10 days prior
to such special record date. Notice of the proposed payment of
such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Debentures (or their
respective Predecessor Securities) are registered on such special
record date and shall be no longer payable.
The Company may make payment of any Defaulted Interest on
any Debentures in any other lawful manner after notice given by
the Company to the Trustee of the proposed payment method,
provided, however, the Trustee in its sole discretion deems such
payment method to be practical.
Any interest scheduled to become payable on an Interest
Payment Date occurring during an Extension Period shall not be
Defaulted Interest and shall be payable on such other date as may
be specified in the terms of such Debentures.
The term "regular record date" as used in this Section shall
mean the close of business on the 15th day next preceding the
applicable Interest Payment Date.
Subject to the foregoing provisions of this Section, each
Debenture delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Debenture
shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Debenture.
Section 2.9 Cancellation of Debentures Paid, etc.
All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if
surrendered to the Company or any paying agent, be surrendered to
the Trustee and promptly canceled by it, or, if surrendered to
the Trustee or any Authenticating Agent, shall be promptly
canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Indenture. All Debentures canceled by any Authenticating Agent
shall be delivered to the Trustee. The Trustee shall destroy all
canceled Debentures unless the Company otherwise directs the
Trustee in writing. If the Company shall acquire any of the
Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by
such Debentures unless and until the same are surrendered to the
Trustee for cancellation.
Section 2.10 Computation of Interest Rate.
The amount of interest payable for the Distribution Period
will be calculated by applying the Coupon Rate to the principal
amount outstanding at the commencement of the Distribution Period
and multiplying each such amount by the actual number of days in
the Distribution Period concerned divided by 360. In the event
that any date on which interest is payable on the Debentures is
not a Business Day, then payment of interest payable on such date
shall be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such
delay), with the same force and effect as if made on the date
such payment was originally payable. All percentages resulting
from any calculations on the Debentures will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% or .09876545 being rounded to 9.87655% or
..0987655) and all dollar amounts used in or resulting from such
calculation will be rounded to the nearest cent, with one-half
cent being rounded upward.
All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions relating, to the
payment and calculation of interest on the Debentures and
distributions on the Capital Securities by the Trustee or the
Institutional Trustee will (in the absence of willful default,
bad faith or manifest error) be final, conclusive and binding on
the Trust, the Company and all of the holders of the Debentures
and the Capital Securities, and no liability shall (in the
absence of willful default, bad faith or manifest error) attach
to the Trustee or the Institutional Trustee in connection with
the exercise or non-exercise by either of them or their
respective powers, duties and discretion.
Section 2.11 Extension of Interest Payment Period.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right, from time to time,
and without causing an Event of Default, to defer payments of
interest on the Debentures by extending the interest payment
period on the Debentures at any time and from time to time during
the term of the Debentures, for up to 20 consecutive quarterly
periods (each such extended interest payment period, an
"Extension Period"), during which Extension Period no interest
(including Additional Interest) shall be due and payable. No
Extension Period may end on a date other than an Interest Payment
Date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Debentures
(together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date;
provided further, however, that during any such Extension Period,
the Company shall not and shall not permit any Affiliate to (i)
declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
any of the Company's or such Affiliate's capital stock (other
than payments of dividends or distributions to the Company) or
make any guarantee payments with respect to the foregoing or (ii)
make any payment of principal or interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company
or any Affiliate that rank pari passu in all respects with or
junior in interest to the Debentures (other than, with respect to
clauses (i) or (ii) above, (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, in connection with
a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (b) as a result of
any exchange or conversion of any class or series of the
Company's capital stock (or any capital stock of a subsidiary of
the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for
any class or series of the Company's capital stock, (c) the
purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with
any stockholders' rights plan, or the issuance of rights, stock
or other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant thereto, (e) any
dividend in the form of stock, warrants, options or other rights
where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that
on which the dividend is being paid or ranks pari passu with or
junior to such stock and any cash payments in lieu of fractional
shares issued in connection therewith, or (f) payments under the
Capital Securities Guarantee. Prior to the termination of any
Extension Period, the Company may further extend such period,
provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity
Date. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional
Interest, the Company may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional
Interest shall be due and payable during an Extension Period,
except at the end thereof, but each installment of interest that
would otherwise have been due and payable during such Extension
Period shall bear Additional Interest to the extent permitted by
applicable law. The Company must give the Trustee notice of its
election to begin or extend such Extension Period at least 5
Business Days prior to the regular record date (as such term is
used in Section 2.8) immediately preceding the Interest Payment
Date with respect to which interest on the Debentures would have
been payable except for the election to begin or extend such
Extension Period.
Section 2.12 CUSIP Numbers.
The Company in issuing the Debentures may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as a convenience to
Securityholders; provided, however, that any such notice may
state that no representation is made as to the correctness of
such numbers either as printed on the Debentures or as contained
in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the
Debentures, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly
notify the Trustee in writing of any change in the CUSIP numbers.
Section 2.13 Global Debentures.
(a) Upon the election of the holder of Outstanding Debentures,
which election need not be in writing, the Debentures owned by
such holder shall be issued in the form of one or more Global
Debentures registered in the name of the Depositary or its
nominee. Each Global Debenture issued under this Indenture shall
be registered in the name of the Depositary designated by the
Company for such Global Debenture or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Debenture shall constitute a
single Debenture for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Debenture may be exchanged in whole or in part for
Debentures registered, and no transfer of a Global Debenture in
whole or in part may be registered, in the name of any Person
other than the Depositary for such Global Debenture or a nominee
thereof unless (i) such Depositary advises the Trustee and the
Company in writing that such Depositary is no longer willing or
able to properly discharge its responsibilities as Depositary
with respect to such Global Debenture, and no qualified successor
is appointed by the Company within ninety (90) days of receipt by
the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no
successor is appointed by the Company within ninety (90) days
after obtaining knowledge of such event, (iii) the Company
executes and delivers to the Trustee a Company Order stating that
the Company elects to terminate the book-entry system through the
Depositary or (iv) an Event of Default shall have occurred and be
continuing. Upon the occurrence of any event specified in clause
(i), (ii), (iii) or (iv) above, the Trustee shall notify the
Depositary and instruct the Depositary to notify all owners of
beneficial interests in such Global Debenture of the occurrence
of such event and of the availability of Debentures to such
owners of beneficial interests requesting the same. Upon the
issuance of such Debentures and the registration in the Debenture
Register of such Debentures in the names of the Holders of the
beneficial interests therein, the Trustee shall recognize such
holders of beneficial interests as Holders.
(c) If any Global Debenture is to be exchanged for other
Debentures or canceled in part, or if another Debenture is to be
exchanged in whole or in part for a beneficial interest in any
Global Debenture, then either (i) such Global Debenture shall be
so surrendered for exchange or cancellation as provided in this
Article II or (ii) the principal amount thereof shall be reduced
or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such
other Debenture to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate
adjustment made on the records of the Debenture registrar,
whereupon the Trustee, in accordance with the Applicable
Depository Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to
its records. Upon any such surrender or adjustment of a Global
Debenture by the Depositary, accompanied by registration
instructions, the Company shall execute and the Trustee shall
authenticate and deliver any Debentures issuable in exchange for
such Global Debenture (or any portion thereof) in accordance with
the instructions of the Depositary. The Trustee shall not be
liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on,
such instructions.
(d) Every Debenture authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a
Global Debenture or any portion thereof shall be authenticated
and delivered in the form of, and shall be, a Global Debenture,
unless such Debenture is registered in the name of a Person other
than the Depositary for such Global Debenture or a nominee
thereof.
(e) Debentures distributed to holders of Book-Entry Capital
Securities (as defined in the Trust Agreement) upon the
dissolution of the Trust shall be distributed in the form of one
or more Global Debentures registered in the name of a Depositary
or its nominee, and deposited with the Debentures registrar, as
custodian for such Depositary, or with such Depositary, for
credit by the Depositary to the respective accounts of the
beneficial owners of the Debentures represented thereby (or such
other accounts as they may direct). Debentures distributed to
holders of Capital Securities other than Book-Entry Capital
Securities upon the dissolution of the Trust shall not be issued
in the form of a Global Debenture or any other form intended to
facilitate book-entry trading in beneficial interests in such
Debentures.
(f) The Depositary or its nominee, as the registered owner
of a Global Debenture, shall be the Holder of such Global
Debenture for all purposes under this Indenture and the Debentures,
and owners of beneficial interests in a Global Debenture shall hold
such interests pursuant to the Applicable Depository Procedures.
Accordingly, any such owner's beneficial interest in a Global
Debenture shall be shown only on, and the transfer of such
interest shall be effected only through, records maintained by
the Depositary or its nominee or its Depositary Participants.
The Debentures registrar and the Trustee shall be entitled to
deal with the Depositary for all purposes of this Indenture
relating to a Global Debenture (including the payment of
principal and interest thereon and the giving of instructions or
directions by owners of beneficial interests therein and the
giving of notices) as the sole Holder of the Debenture and shall
have no obligations to the owners of beneficial interests
therein. Neither the Trustee nor the Debentures registrar shall
have any liability in respect of any transfers effected by the
Depositary.
(g) The rights of owners of beneficial interests in a Global
Debenture shall be exercised only through the Depositary and
shall be limited to those established by law and agreements
between such owners and the Depositary and/or its Depositary
Participants.
(h) No holder of any beneficial interest in any Global
Debenture held on its behalf by a Depositary shall have any rights
under this Indenture with respect to such Global Debenture, and such
Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the owner of such Global
Debenture for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests of a Global Debenture or maintaining, supervising or
reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification,
proxy or other authorization furnished by a Depositary or impair,
as between a Depositary and such holders of beneficial interests,
the operation of customary practices governing the exercise of
the rights of the Depositary (or its nominee) as holder of any
Debenture.
ARTICLE III.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal, Premium and Interest;
Agreed Treatment of the Debentures.
(a) The Company covenants and agrees that it will duly and
punctually pay or cause to be paid the principal of and premium,
if any, and Interest and any Additional Interest on the
Debentures at the place, at the respective times and in the
manner provided in this Indenture and the Debentures. Each
installment of interest on the Debentures may be paid (i) by
mailing checks for such interest payable to the order of the
holder of Debentures entitled thereto as they appear on the
registry books of the Company if a request for a wire transfer
has not been received by the Company or (ii) by wire transfer to
any account with a banking institution located in the United
States designated in writing by such Person to the paying agent
no later than the related record date. Notwithstanding the
foregoing, so long as the Institutional Trustee, not in its
individual capacity but solely as Institutional Trustee for
Heartland Financial Statutory Trust III, is the holder of the
Debentures, the payment of the principal and Interest on the
Debentures shall be made by wire transfer of immediately
available funds to the Institutional Trustee, to be received not
later than 1:00 p.m., New York City time, on the Interest Payment
Date of such payment at the Principal Office of the Trustee for
distribution to the holders of the Capital Securities.
Notwithstanding any other provision of this Indenture to the
contrary, the Institutional Trustee shall not be required to
make, or cause to be made, distributions to the holders of the
Capital Securities, as aforesaid prior to the first Business Day
on which it is practicable for the Institutional Trustee to do so
in view of the time of day when the funds to be so transferred
were received by it if such funds were received after 1:00 p.m.,
New York City time.
(b) The Company will treat the Debentures as indebtedness, and
the amounts payable in respect of the principal amount of such
Debentures as interest, for all United States federal income tax
purposes. All payments in respect of such Debentures will be
made free and clear of United States withholding tax to any
beneficial owner thereof that has provided an Internal Revenue
Service Form W8 BEN (or any substitute or successor form)
establishing its non-United States status for United States
federal income tax purposes.
(c) As of the date of this Indenture, the Company has no present
intention to exercise its right under Section 2.11 to defer
payments of interest on the Debentures by commencing an Extension
Period.
(d) As of the date of this Indenture, the Company believes that
the likelihood that it would exercise its right under Section
2.11 to defer payments of interest on the Debentures by
commencing an Extension Period at any time during which the
Debentures are outstanding is remote because of the restrictions
that would be imposed on the Company's ability to declare or pay
dividends or distributions on, or to redeem, purchase or make a
liquidation payment with respect to, any of its outstanding
equity and on the Company's ability to make any payments of
principal of or interest on, or repurchase or redeem, any of its
debt securities that rank pari passu in all respects with (or
junior in interest to) the Debentures.
Section 3.2 Offices for Notices and Payments, etc.
So long as any of the Debentures remain outstanding, the
Company will maintain in Hartford, Connecticut, an office or
agency where the Debentures may be presented for payment, an
office or agency where the Debentures may be presented for
registration of transfer and for exchange as in this Indenture
provided and an office or agency where notices and demands to or
upon the Company in respect of the Debentures or of this
Indenture may be served. The Company will give to the Trustee
written notice of the location of any such office or agency and
of any change of location thereof. Until otherwise designated
from time to time by the Company in a notice to the Trustee, or
specified as contemplated by Section 2.5, such office or agency
for all of the above purposes shall be the office or agency of
the Trustee. In case the Company shall fail to maintain any such
office or agency in Hartford, Connecticut, or shall fail to give
such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be
served at the Principal Office of the Trustee.
In addition to any such office or agency, the Company may
from time to time designate one or more offices or agencies
outside Hartford, Connecticut, where the Debentures may be
presented for registration of transfer and for exchange in the
manner provided in this Indenture, and, the Company may from time
to time rescind such designation, as the Company may deem
desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain any such office or agency in
Hartford, Connecticut, for the purposes above mentioned. The
Company will give to the Trustee prompt written notice of any
such designation or rescission thereof.
Section 3.3 Appointments to Fill Vacancies in Trustee's
Office.
The Company, whenever necessary to avoid or fill a vacancy
in the office of Trustee, will appoint, in the manner provided in
Section 6.9, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 3.4 Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than
the Trustee, it will cause such paying agent to execute and deliver
to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provision of this Section 3.4;
(1) that it will hold all sums held by it as such agent
for the payment of the principal of and premium, if any, or interest,
if any, on the Debentures (whether such sums have been paid to it by
the Company or by any other obligor on the Debentures) in trust
for the benefit of the holders of the Debentures;
(2) that it will give the Trustee prompt written notice
of any failure by the Company (or by any other obligor on the
Debentures) to make any payment of the principal of and premium,
if any, or interest, if any, on the Debentures when the same
shall be due and payable; and
(3) that it will, at any time during the continuance of
any Event of Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such
paying agent.
(b) If the Company shall act as its own paying agent,it will,
on or before each due date of the principal of and premium, if
any, or interest, if any, on the Debentures, set aside, segregate
and hold in trust for the benefit of the holders of the
Debentures a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee in writing
of any failure to take such action and of any failure by the
Company (or by any other obligor under the Debentures) to make
any payment of the principal of and premium, if any, or interest,
if any, on the Debentures when the same shall become due and
payable.
Whenever the Company shall have one or more paying agents
for the Debentures, it will, on or prior to each due date of the
principal of and premium, if any, or interest, if any, on the
Debentures, deposit with a paying agent a sum sufficient to pay
the principal, premium or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled thereto
and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure
to act.
(c) Anything in this Section 3.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge with respect to the
Debentures, or for any other reason pay, or direct any paying
agent to pay to the Trustee all sums held in trust by the Company
or any such paying agent, such sums to be held by the Trustee
upon the trusts herein contained.
(d) Anything in this Section 3.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided
in this Section 3.4 is subject to Sections 12.3 and 12.4.
Section 3.5 Certificate to Trustee.
The Company will deliver to the Trustee on or before 120
days after the end of each fiscal year, so long as Debentures are
outstanding hereunder, a Certificate stating that in the course
of the performance by the signers of their duties as officers of
the Company they would normally have knowledge of any default
during such fiscal year by the Company in the performance of any
covenants contained herein, stating whether or not they have
knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature and
status thereof. The Trustee shall provide a copy of such
Certificate to any collateral manager for a securitized pool that
owns any of the Capital Securities upon request by or on behalf
of such manager.
Section 3.6 Additional Sums.
If and for so long as the Trust is the holder of all
Debentures and the Trust is required to pay any additional taxes,
duties, assessments or other governmental charges as a result of
a Tax Event, the Company will pay such additional amounts
("Additional Sums") on the Debentures as shall be required so
that the net amounts received and retained by the Trust after
paying taxes, duties, assessments or other governmental charges
will be equal to the amounts the Trust would have received if no
such taxes, duties, assessments or other governmental charges had
been imposed. Whenever in this Indenture or the Debentures there
is a reference in any context to the payment of principal of or
interest on the Debentures, such mention shall be deemed to
include mention of payments of the Additional Sums provided for
in this paragraph to the extent that, in such context, Additional
Sums are, were or would be payable in respect thereof pursuant to
the provisions of this paragraph and express mention of the
payment of Additional Sums (if applicable) in any provisions
hereof shall not be construed as excluding Additional Sums in
those provisions hereof where such express mention is not made;
provided, however, that the deferral of the payment of interest
during an Extension Period pursuant to Section 2.11 shall not
defer the payment of any Additional Sums that may be due and
payable.
Section 3.7 Compliance with Consolidation Provisions.
The Company will not, while any of the Debentures remain
outstanding, consolidate with, or merge into, or merge into
itself, or sell or convey all or substantially all of its
property to any other Person unless the provisions of Article XI
hereof are complied with.
Section 3.8 Limitation on Dividends.
If Debentures are initially issued to the Trust or a
trustee of such trust in connection with the issuance of Trust
Securities by the Trust (regardless of whether Debentures
continue to be held by such Trust) and (i) there shall have
occurred and be continuing an Event of Default, (ii) the Company
shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee, or (iii) the
Company shall have given notice of its election to defer payments
of interest on the Debentures by extending the interest payment
period as provided herein and such period, or any extension
thereof, shall be continuing, then the Company shall not, and
shall not allow any Affiliate of the Company to, (x) declare or
pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of
the Company's capital stock or its Affiliates' capital stock
(other than payments of dividends or distributions to the
Company) or make any guarantee payments with respect to the
foregoing or (y) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt
securities of the Company or any Affiliate that rank pari passu
in all respects with or junior in interest to the Debentures
(other than, with respect to clauses (x) and (y) above, (1)
repurchases, redemptions or other acquisitions of shares of
capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or
consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the
issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to
the applicable Extension Period, if any, (2) as a result of any
exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the
Company) for any class or series of the Company's capital stock
or of any class or series of the Company's indebtedness for any
class or series of the Company's capital stock, (3) the purchase
of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (4) any
declaration of a dividend in connection with any stockholders'
rights plan, or the issuance of rights, stock or other property
under any stockholders' rights plan, or the redemption or
repurchase of rights pursuant thereto, (5) any dividend in the
form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or
junior to such stock and any cash payments in lieu of fractional
shares issued in connection therewith, or (6) payments under the
Capital Securities Guarantee).
Section 3.9 Covenants as to the Trust.
For so long as the Trust Securities remain outstanding,
the Company shall maintain 100% ownership of the Common
Securities; provided, however, that any permitted successor of
the Company under this Indenture may succeed to the Company's
ownership of such Common Securities. The Company, as owner of
the Common Securities, shall, except in connection with a
distribution of Debentures to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, take all steps necessary
for the Company to cause the Trust (a) to remain a statutory
trust, (b) to otherwise continue to be classified as a grantor
trust for United States federal income tax purposes, and (c) to
cause each holder of Trust Securities to be treated as owning an
undivided beneficial interest in the Debentures.
Section 3.10 Additional Junior Indebtedness.
The Company shall not, and it shall not cause or permit
any Affiliate of the Company to, incur, issue or be obligated on
any Additional Junior Indebtedness, either directly or
indirectly, by way of guarantee, suretyship or otherwise, other
than: (i) Additional Junior Indebtedness that, by its terms, is
expressly stated to be either junior and subordinate or pari
passu in all respects to the Debentures, and (ii) Additional
Junior Indebtedness of which the Company has notified (and, if
then required under the applicable guidelines of the regulating
entity, has received approval from) the Federal Reserve, if the
Company is a bank holding company, or the OTS, if the Company is
a savings and loan holding company.
ARTICLE IV.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.1 Securityholders' Lists.
The Company covenants and agrees that it will furnish or
caused to be furnished to the Trustee:
(a) on each regular record date for the Debentures, a list,
in such form as the Trustee may reasonably require, of the names and
addresses of the Securityholders of the Debentures as of such
record date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished;
except that no such lists need be furnished under this Section
4.1 so long as the Trustee is in possession thereof by reason of
its acting as Debenture registrar.
Section 4.2 Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Debentures (1) contained in the most
recent list furnished to it as provided in Section 4.1 or (2)
received by it in the capacity of Debentures registrar (if so
acting) hereunder. The Trustee may destroy any list furnished to
it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case three or more holders of Debentures (hereinafter
referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant
has owned a Debenture for a period of at least 6 months preceding
the date of such application, and such application states that
the applicants desire to communicate with other holders of
Debentures with respect to their rights under this Indenture or
under such Debentures and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to
transmit, then the Trustee shall within 5 Business Days after the
receipt of such application, at its election, either:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
(2) inform such applicants as to the approximate number
of holders of Debentures whose names and addresses appear in the
information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.2, and as
to the approximate cost of mailing to such Securityholders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Securityholder whose
name and address appear in the information preserved at the time
by the Trustee in accordance with the provisions of subsection
(a) of this Section 4.2 a copy of the form of proxy or other
communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file
with the Securities and Exchange Commission, if permitted or
required by applicable law, together with a copy of the material
to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of all Debentures, as the case may
be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If said
Commission, as permitted or required by applicable law, after
opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, said Commission shall
find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all
such Securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Each and every holder of Debentures, by receiving and
holding the same, agrees with Company and the Trustee that
neither the Company nor the Trustee nor any paying agent shall be
held accountable by reason of the disclosure of any such
information as to the names and addresses of the holders of
Debentures in accordance with the provisions of subsection (b) of
this Section 4.2, regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a
request made under said subsection (b).
ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.1 Events of Default.
"Event of Default" wherever used herein, means any one of
the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the Company defaults in the payment of any interest upon
any Debenture when it becomes due and payable, and fails to cure
such default for a period of 30 days; provided, however, that a
valid extension of an interest payment period by the Company
in accordance with the terms of this Indenture shall not constitute
a default in the payment of interest for this purpose; or
(b) the Company defaults in the payment of all or any part of
the principal of (or premium, if any, on) any Debentures as and
when the same shall become due and payable either at maturity,
upon redemption, by declaration of acceleration or otherwise; or
(c) the Company defaults in the performance of, or breaches,
any of its covenants or agreements in this Indenture or in the terms
of the Debentures established as contemplated in this Indenture
(other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Outstanding Debentures, a
written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(d) a court of competent jurisdiction shall enter a decree or
order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part
of its property, or ordering the winding-up or liquidation of its
affairs and such decree or order shall remain unstayed and in
effect for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, shall consent to the
entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or shall make
any general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due; or
(f) the Trust shall have voluntarily or involuntarily
liquidated, dissolved, wound-up its business or otherwise
terminated its existence except in connection with (i) the
distribution of the Debentures to holders of such Trust
Securities in liquidation of their interests in the Trust, (ii)
the redemption of all of the outstanding Trust Securities or
(iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
If an Event of Default occurs and is continuing with respect
to the Debentures, then, and in each and every such case, unless
the principal of the Debentures shall have already become due and
payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Debentures then Outstanding
hereunder, by notice in writing to the Company (and to the
Trustee if given by Securityholders), may declare the entire
principal of the Debentures and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the
Debentures shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all
the Debentures and the principal of and premium, if any, on the
Debentures which shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if
any, and Additional Interest) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and
counsel, and all other amounts due to the Trustee pursuant to
Section 6.6, and if any and all Events of Default under this
Indenture, other than the non-payment of the principal of or
premium, if any, on Debentures which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied
as provided herein -- then and in every such case the holders of
a majority in aggregate principal amount of the Debentures then
outstanding, by written notice to the Company and to the Trustee,
may waive all defaults and rescind and annul such declaration and
its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment
or for any other reason or shall have been determined adversely
to the Trustee, then and in every such case the Company, the
Trustee and the holders of the Debentures shall be restored
respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Company, the Trustee and
the holders of the Debentures shall continue as though no such
proceeding had been taken.
Section 5.2 Payment of Debentures on Default, Suit Therefor.
The Company covenants that upon the occurrence of an Event
of Default pursuant to Section 5.1(a) or Section 5.1(b) then,
upon demand of the Trustee, the Company will pay to the Trustee,
for the benefit of the holders of the Debentures the whole amount
that then shall have become due and payable on all Debentures for
principal and premium, if any, or interest, or both, as the case
may be, with Additional Interest accrued on the Debentures (to
the extent that payment of such interest is enforceable under
applicable law and, if the Debentures are held by the Trust or a
trustee of such Trust, without duplication of any other amounts
paid by the Trust or a trustee in respect thereof); and, in
addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any other amounts due to the Trustee under Section
6.6. In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of
an express trust, shall be entitled and empowered to institute
any actions or proceedings at law or in equity for the collection
of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other
obligor on such Debentures and collect in the manner provided by
law out of the property of the Company or any other obligor on
such Debentures wherever situated the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor on the Debentures under Bankruptcy Law, or in case a
receiver or trustee shall have been appointed for the property of
the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other
obligor upon the Debentures, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and
payable as therein expressed or by declaration of acceleration or
otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 5.2, shall
be entitled and empowered, by intervention in such proceedings or
otherwise,
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of
the Debentures and, in case of any judicial proceedings,
(ii) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement
of all other amounts due to the Trustee under Section 6.6), and
of the Securityholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Debentures,
or to the creditors or property of the Company or such other
obligor, and unless prohibited by applicable law and regulations,
to vote on behalf of the holders of the Debentures in any election
of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or
Person performing similar functions in comparable proceedings,
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims, and
(iv) to distribute the same after the deduction of its
charges and expenses.
Any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such
payments directly to the Securityholders, to pay to the Trustee
such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other amounts
due to the Trustee under Section 6.6.
Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Debentures or the rights
of any holder thereof or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such
proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Debentures, may be enforced by the
Trustee without the possession of any of the Debentures, or the
production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable
benefit of the holders of the Debentures.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the holders of the Debentures, and
it shall not be necessary to make any holders of the Debentures
parties to any such proceedings.
Section 5.3 Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee pursuant to this
Article V shall be applied in the following order, at the date or
dates fixed by the Trustee for the distribution of such moneys,
upon presentation of the several Debentures in respect of which
moneys have been collected, and stamping thereon the payment, if
only partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses incurred by,
and reasonable fees of, the Trustee, its agents, attorneys and
counsel, and of all other amounts due to the Trustee under
Section 6.6;
Second: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid
upon Debentures for principal (and premium, if any), and interest
on the Debentures, in respect of which or for the benefit of
which money has been collected, ratably, without preference or
priority of any kind, according to the amounts due on such
Debentures for principal (and premium, if any) and interest,
respectively; and
Fourth: The balance, if any, to the Company.
Section 5.4 Proceedings by Securityholders.
No holder of any Debenture shall have any right to
institute any suit, action or proceeding for any remedy
hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default with respect to the
Debentures and unless the holders of not less than 25% in
aggregate principal amount of the Debentures then Outstanding
shall have given the Trustee a written request to institute such
action, suit or proceeding and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred thereby, and the Trustee
for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action, suit
or proceeding.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Debenture to receive
payment of the principal of, premium, if any, and interest, on
such Debenture when due, or to institute suit for the enforcement
of any such payment, shall not be impaired or affected without
the consent of such holder and by accepting a Debenture hereunder
it is expressly understood, intended and covenanted by the taker
and holder of every Debenture with every other such taker and
holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatsoever by virtue or by
availing itself of any provision of this Indenture to affect,
disturb or prejudice the rights of the holders of any other
Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of
Debentures. For the protection and enforcement of the provisions
of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or
in equity.
Section 5.5 Proceedings by Trustee.
In case of an Event of Default hereunder the Trustee may
in its discretion proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect
and enforce any of such rights, either by suit in equity or by
action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any
power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by
law.
Section 5.6 Remedies Cumulative and Continuing; Delay or
Omission Not a Waiver.
Except as otherwise provided in Section 2.6, all powers
and remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies
available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the
Debentures, and no delay or omission of the Trustee or of any
holder of any of the Debentures to exercise any right or power
accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 5.4, every
power and remedy given by this Article V or by law to the Trustee
or to the Securityholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
No delay or omission of the Trustee or any Securityholder to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to any Securityholder may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee (in
accordance with its duties under Section 6.1 hereof) or by such
holder, as the case may be.
Section 5.7 Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of
the Debentures affected (voting as one class) at the time
outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee with respect to such Debentures; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have
the right to decline to follow any such direction if the Trustee
shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or
if the Trustee being advised by counsel determines that the
action or proceeding so directed may not lawfully be taken or if
a Responsible Officer of the Trustee shall determine that the
action or proceedings so directed would involve the Trustee in
personal liability.
The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may on behalf of the
holders of all of the Debentures waive (or modify any previously
granted waiver of) any past default or Event of Default, and its
consequences, except a default (a) in the payment of principal
of, premium, if any, or interest on any of the Debentures, (b) in
respect of covenants or provisions hereof which cannot be
modified or amended without the consent of the holder of each
Debenture affected, or (c) in respect of the covenants contained
in Section 3.9; provided, however, that if the Debentures are
held by the Trust or a trustee of such trust, such waiver or
modification to such waiver shall not be effective until the
holders of a majority in Liquidation Amount of Trust Securities
of the Trust shall have consented to such waiver or modification
to such waiver, provided, further, that if the consent of the
holder of each outstanding Debenture is required, such waiver
shall not be effective until each holder of the Trust Securities
of the Trust shall have consented to such waiver. Upon any such
waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee
and the holders of the Debentures shall be restored to their
former positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as
permitted by this Section, said default or Event of Default shall
for all purposes of the Debentures and this Indenture be deemed
to have been cured and to be not continuing.
Section 5.8 Notice of Defaults.
The Trustee shall, within 90 days after the actual
knowledge by a Responsible Officer of the Trustee of the
occurrence of a default with respect to the Debentures, mail to
all Securityholders, as the names and addresses of such holders
appear upon the Debenture Register, notice of all defaults with
respect to the Debentures known to the Trustee, unless such
defaults shall have been cured before the giving of such notice
(the term "defaults" for the purpose of this Section 5.8 being
hereby defined to be the events specified in clauses (a), (b),
(c), (d), (e) and (f) of Section 5.1, not including periods of
grace, if any, provided for therein); provided, however, that,
except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Debentures, the
Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Trustee in good faith
determines that the withholding of such notice is in the
interests of the Securityholders.
Section 5.9 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of
any Debenture by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any
party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant;
provided, however, that the provisions of this Section 5.9 shall
not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder, or group of Securityholders,
holding in the aggregate more than 10% in principal amount of the
Debentures outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Debenture
against the Company on or after the same shall have become due
and payable.
ARTICLE VI.
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of Trustee.
With respect to the holders of Debentures issued
hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Debentures and after the curing or
waiving of all Events of Default which may have occurred, with
respect to the Debentures, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants shall be read into this Indenture
against the Trustee. In case an Event of Default with respect to
the Debentures has occurred (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except
that:
(a) prior to the occurrence of an Event of Default with
respect to Debentures and after the curing or waiving of all
Events of Default which may have occurred;
(1) the duties and obligations of the Trustee with
respect to Debentures shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations with
respect to the Debentures as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the
Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith, in accordance
with the direction of the Securityholders pursuant to Section
5.7, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
there is ground for believing that the repayment of such funds or
liability is not assured to it under the terms of this Indenture
or indemnity satisfactory to the Trustee against such risk is not
reasonably assured to it.
Section 6.2 Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.1:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, note, debenture or other
paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed), and any Board Resolution may be
evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection
and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by
this Indenture; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to the Debentures (that has not been cured
or waived) to exercise with respect to Debentures such of the
rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of
his own affairs;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, coupon or other paper or
document, unless requested in writing to do so by the holders of
not less than a majority in aggregate principal amount of the
outstanding Debentures affected thereby, provided, however, that
if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expense or liability as a
condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents (including any Authenticating Agent) or
attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or
attorney appointed by it with due care; and
(h) with the exceptions of defaults under Sections 5.1(a) or
5.1(b), the Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Debentures unless
a written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or any other obligor on
the Debentures or by any holder of the Debentures.
Section 6.3 No Responsibility for Recitals, etc.
The recitals contained herein and in the Debentures
(except in the certificate of authentication of the Trustee or
the Authenticating Agent) shall be taken as the statements of the
Company, and the Trustee and the Authenticating Agent assume no
responsibility for the correctness of the same. The Trustee and
the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Debentures.
The Trustee and the Authenticating Agent shall not be accountable
for the use or application by the Company of any Debentures or
the proceeds of any Debentures authenticated and delivered by the
Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.
Section 6.4 Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debentures.
The Trustee or any Authenticating Agent or any paying
agent or any transfer agent or any Debenture registrar, in its
individual or any other capacity, may become the owner or pledgee
of Debentures with the same rights it would have if it were not
Trustee, Authenticating Agent, paying agent, transfer agent or
Debenture registrar.
Section 6.5 Moneys to be Held in Trust.
Subject to the provisions of Section 12.4, all moneys
received by the Trustee or any paying agent shall, until used or
applied as herein provided, be held in trust for the purpose for
which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee and any
paying agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in
writing with the Company. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such
moneys shall be paid from time to time upon the written order of
the Company, signed by the Chairman of the Board of Directors,
the Chief Executive Officer, the President, the Chief Financial
Officer, a Managing Director, a Vice President, the Treasurer or
an Assistant Treasurer of the Company.
Section 6.6 Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such
compensation as shall be agreed to in writing between the Company
and the Trustee (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any
of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel
and of all Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence
or willful misconduct. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless
against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the
Trustee) incurred without negligence or willful misconduct on the
part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs
and expenses of defending itself against any claim of liability.
The obligations of the Company under this Section 6.6 to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Debentures upon
all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of
particular Debentures.
Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses or
renders services in connection with an Event of Default specified
in Sections 5.1(d), 5.1(e) or 5.1(f), the expenses (including the
reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses
of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the resignation
or removal of the Trustee and the defeasance or other termination
of this Indenture.
Notwithstanding anything in this Indenture or any Debenture
to the contrary, the Trustee shall have no obligation whatsoever
to advance funds to pay any principal of or interest on or other
amounts with respect to the Debentures or otherwise advance funds
to or on behalf of the Company.
Section 6.7 Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.1 and 6.2,
whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or omitting any
action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of
negligence or willful misconduct on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or willful misconduct on the part of
the Trustee, shall be full warrant to the Trustee for any action
taken or omitted by it under the provisions of this Indenture
upon the faith thereof.
Section 6.8 Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States
of America or any state or territory thereof or of the District
of Columbia or a corporation or other Person authorized under
such laws to exercise corporate trust powers, having (or whose
obligations under this Indenture are guaranteed by an affiliate
having) a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000.00) and subject to supervision or
examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 6.8 the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
records of condition so published.
The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control
with the Company, serve as Trustee.
In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 6.8, the
Trustee shall resign immediately in the manner and with the
effect specified in Section 6.9. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the
manner described by this Indenture.
Section 6.9 Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign by giving written notice of such
resignation to the Company and by mailing notice thereof, at the
Company's expense, to the holders of the Debentures at their
addresses as they shall appear on the Debenture Register. Upon
receiving such notice of resignation, the Company shall promptly
appoint a successor trustee or trustees by written instrument, in
duplicate, executed by order of its Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee
and one copy to the successor Trustee. If no successor Trustee
shall have been so appointed and have accepted appointment within
30 days after the mailing of such notice of resignation to the
affected Securityholders, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a
successor Trustee, or any Securityholder who has been a bona fide
holder of a Debenture or Debentures for at least six months may,
subject to the provisions of Section 5.9, on behalf of himself
and all others similarly situated, petition any such court for
the appointment of a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Trustee.
(b) In case at any time any of the following shall occur --
(1) the Trustee shall fail to comply with the provisions
of Section 6.8 after written request therefor by the Company or by
any Securityholder who has been a bona fide holder of a Debenture
or Debentures for at least 6 months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.8 and shall fail to resign after
written request therefor by the Company or by any such
Securityholder, or
(3) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
-- then, in any such case, the Company may remove the
Trustee and appoint a successor Trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the Trustee so removed
and one copy to the successor Trustee, or, subject to the
provisions of Section 5.9, any Securityholder who has been a bona
fide holder of a Debenture or Debentures for at least 6 months
may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint successor
Trustee.
(c) Upon prior written notice to the Company and the Trustee,
the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the
Trustee and nominate a successor Trustee, which shall be deemed
appointed as successor Trustee unless within ten (10) Business
Days after such nomination the Company objects thereto, in which
case, or in the case of a failure by such holders to nominate a
successor Trustee, the Trustee so removed or any Securityholder,
upon the terms and conditions and otherwise as in subsection (a)
of this Section 6.9 provided, may petition any court of competent
jurisdiction for an appointment of a successor.
(d) Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by
the successor Trustee as provided in Section 6.10.
Section 6.10 Acceptance by Successor Trustee.
Any successor Trustee appointed as provided in Section 6.9
shall execute, acknowledge and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations
with respect to the Debentures of its predecessor hereunder, with
like effect as if originally named as Trustee herein; but,
nevertheless, on the written request of the Company or of the
successor Trustee, the Trustee ceasing to act shall, upon payment
of any amounts then due it pursuant to the provisions of Section
6.6, execute and deliver an instrument transferring to such
successor Trustee all the rights and powers of the Trustee so
ceasing to act and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee thereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to
such successor Trustee all such rights and powers. Any Trustee
ceasing to act shall, nevertheless, retain a lien upon all
property or funds held or collected by such Trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor Trustee is appointed, the Company, the
retiring Trustee and the successor Trustee shall execute and
deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Debentures as to which the
predecessor Trustee is not retiring shall continue to be vested
in the predecessor Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the Trust hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be
Trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee.
No successor Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor
Trustee shall be eligible under the provisions of Section 6.8.
In no event shall a retiring Trustee be liable for the acts
or omissions of any successor Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 6.10, the Company shall mail notice of
the succession of such Trustee hereunder to the holders of
Debentures at their addresses as they shall appear on the
Debenture Register. If the Company fails to mail such notice
within 10 Business Days after the acceptance of appointment by
the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Company.
Section 6.11 Succession by Merger, etc.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided such corporation shall be otherwise eligible and
qualified under this Article.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the
Debentures shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee, and deliver such
Debentures so authenticated; and in case at that time any of the
Debentures shall not have been authenticated, any successor to
the Trustee may authenticate such Debentures either in the name
of any predecessor hereunder or in the name of the successor
Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debentures or in this
Indenture provided that the certificate of the Trustee shall
have; provided, however, that the right to adopt the certificate
of authentication of any predecessor Trustee or authenticate
Debentures in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or
consolidation.
Section 6.12 Authenticating Agents.
There may be one or more Authenticating Agents appointed
by the Trustee upon the request of the Company with power to act
on its behalf and subject to its direction in the authentication
and delivery of Debentures issued upon exchange or registration
of transfer thereof as fully to all intents and purposes as
though any such Authenticating Agent had been expressly
authorized to authenticate and deliver Debentures; provided,
however, that the Trustee shall have no liability to the Company
for any acts or omissions of the Authenticating Agent with
respect to the authentication and delivery of Debentures. Any
such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States
or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of at least
$50,000,000.00 and being subject to supervision or examination by
federal, state, territorial or District of Columbia authority.
If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority,
then for the purposes of this Section 6.12 the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately
in the manner and with the effect herein specified in this
Section.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or
any corporation succeeding to all or substantially all of the
corporate trust business of any Authenticating Agent, shall be
the successor of such Authenticating Agent hereunder if such
successor corporation is otherwise eligible under this Section
6.12 without the execution or filing of any paper or any further
act on the part of the parties hereto or such Authenticating
Agent.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time terminate the agency of any
Authenticating Agent with respect to the Debentures by giving
written notice of termination to such Authenticating Agent and to
the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating
Agent shall cease to be eligible under this Section 6.12, the
Trustee may, and upon the request of the Company shall, promptly
appoint a successor Authenticating Agent eligible under this
Section 6.12, shall give written notice of such appointment to
the Company and shall mail notice of such appointment to all
holders of Debentures as the names and addresses of such holders
appear on the Debenture Register. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities with
respect to the Debentures of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any
Authenticating Agent shall have no responsibility or liability
for any action taken by it as such in accordance with the
directions of the Trustee.
ARTICLE VII.
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Action by Securityholders.
Whenever in this Indenture it is provided that the holders
of a specified percentage in aggregate principal amount of the
Debentures may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or
the taking of any other action) the fact that at the time of
taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by such
Securityholders in person or by agent or proxy appointed in
writing, or (b) by the record of such holders of Debentures
voting in favor thereof at any meeting of such Securityholders
duly called and held in accordance with the provisions of Article
VIII, or (c) by a combination of such instrument or instruments
and any such record of such a meeting of such Securityholders or
(d) by any other method the Trustee deems satisfactory.
If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, the Company
may, at its option, as evidenced by an Officers' Certificate, fix
in advance a record date for such Debentures for the
determination of Securityholders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or
other action or revocation of the same, but the Company shall
have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same may be given
before or after the record date, but only the Securityholders of
record at the close of business on the record date shall be
deemed to be Securityholders for the purposes of determining
whether Securityholders of the requisite proportion of
outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, and for that
purpose the outstanding Debentures shall be computed as of the
record date; provided, however, that no such authorization,
agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six
(6) months after the record date.
Section 7.2 Proof of Execution by Securityholders.
Subject to the provisions of Section 6.1, 6.2 and 8.5,
proof of the execution of any instrument by a Securityholder or
his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the
Trustee or in such manner as shall be satisfactory to the
Trustee. The ownership of Debentures shall be proved by the
Debenture Register or by a certificate of the Debenture
registrar. The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved
in the manner provided in Section 8.6.
Section 7.3 Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of
any Debenture, the Company, the Trustee, any Authenticating
Agent, any paying agent, any transfer agent and any Debenture
registrar may deem the Person in whose name such Debenture shall
be registered upon the Debenture Register to be, and may treat
him as, the absolute owner of such Debenture (whether or not such
Debenture shall be overdue) for the purpose of receiving payment
of or on account of the principal of, premium, if any, and
interest on such Debenture and for all other purposes; and
neither the Company nor the Trustee nor any Authenticating Agent
nor any paying agent nor any transfer agent nor any Debenture
registrar shall be affected by any notice to the contrary. All
such payments so made to any holder for the time being or upon
his order shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Debenture.
Section 7.4 Debentures Not Outstanding.
In determining whether the holders of the requisite
aggregate principal amount of Debentures have concurred in any
direction, consent or waiver under this Indenture, Debentures
which are owned by the Company or any other obligor on the
Debentures or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company or any other obligor on the Debentures shall be
disregarded and deemed not to be outstanding for the purpose of
any such determination; provided, however, that for the purposes
of determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver, only Debentures which a
Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as outstanding for the
purposes of this Section 7.4 if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right to vote such
Debentures and that the pledgee is not the Company or any such
other obligor or Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.
Section 7.5 Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.1, of the taking of any action
by the holders of the percentage in aggregate principal amount of
the Debentures specified in this Indenture in connection with
such action, any holder (in cases where no record date has been
set pursuant to Section 7. 1) or any holder as of an applicable
record date (in cases where a record date has been set pursuant
to Section 7.1) of a Debenture (or any Debenture issued in whole
or in part in exchange or substitution therefor) the serial
number of which is shown by the evidence to be included in the
Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at the Principal
Office of the Trustee and upon proof of holding as provided in
Section 7.2, revoke such action so far as concerns such Debenture
(or so far as concerns the principal amount represented by any
exchanged or substituted Debenture). Except as aforesaid any
such action taken by the holder of any Debenture shall be
conclusive and binding upon such holder and upon all future
holders and owners of such Debenture, and of any Debenture issued
in exchange or substitution therefor or on registration of
transfer thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE VIII.
SECURITYHOLDERS' MEETINGS
SECTION 8.1 Purposes of Meetings.
A meeting of Securityholders may be called at any time and
from time to time pursuant to the provisions of this Article VIII
for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or
to give any directions to the Trustee, or to consent to the waiving
of any default hereunder and its consequences, or to take any
other action authorized to be taken by Securityholders pursuant
to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.2; or
(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount
of such Debentures under any other provision of this Indenture or
under applicable law.
Section 8.2 Call of Meetings by Trustee.
The Trustee may at any time call a meeting of
Securityholders to take any action specified in Section 8.1, to
be held at such time and at such place as the Trustee shall
determine. Notice of every meeting of the Securityholders,
setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting,
shall be mailed to holders of Debentures affected at their
addresses as they shall appear on the Debentures Register and, if
the Company is not a holder of Debentures, to the Company. Such
notice shall be mailed not less than 20 nor more than 180 days
prior to the date fixed for the meeting.
Section 8.3 Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a Board
Resolution, or the holders of at least 10% in aggregate principal
amount of the Debentures, as the case may be, then outstanding,
shall have requested the Trustee to call a meeting of
Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within
20 days after receipt of such request, then the Company or such
Securityholders may determine the time and the place for such
meeting and may call such meeting to take any action authorized
in Section 8.1, by mailing notice thereof as provided in Section
8.2.
Section 8.4 Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a
Person shall (a) be a holder of one or more Debentures with
respect to which the meeting is being held or (b) a Person
appointed by an instrument in writing as proxy by a holder of one
or more such Debentures. The only Persons who shall be entitled
to be present or to speak at any meeting of Securityholders shall
be the Persons entitled to vote at such meeting and their counsel
and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 8.5 Regulations.
Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Securityholders, in regard to proof
of the holding of Debentures and of the appointment of proxies,
and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by Securityholders as provided in
Section 8.3, in which case the Company or the Securityholders
calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority
vote of the meeting.
Subject to the provisions of Section 7.4, at any meeting
each holder of Debentures with respect to which such meeting is
being held or proxy therefor shall be entitled to one vote for
each $1,000.00 principal amount of Debentures held or represented
by him; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Debenture challenged as not
outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to
vote other than by virtue of Debentures held by him or
instruments in writing as aforesaid duly designating him as the
Person to vote on behalf of other Securityholders. Any meeting
of Securityholders duly called pursuant to the provisions of
Section 8.2 or 8.3 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum,
and the meeting may be held as so adjourned without further
notice.
Section 8.6 Voting.
The vote upon any resolution submitted to any meeting of
holders of Debentures with respect to which such meeting is being
held shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy
and the serial number or numbers of the Debentures held or
represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of
Securityholders shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports
of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the
facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 8.2.
The record shall show the serial numbers of the Debentures voting
in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
Section 8.7 Quorum; Actions.
The Persons entitled to vote a majority in principal
amount of the Debentures then outstanding shall constitute a
quorum for a meeting of Securityholders; provided, however, that
if any action is to be taken at such meeting with respect to a
consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the holders of
not less than a specified percentage in principal amount of the
Debentures then outstanding, the Persons holding or representing
such specified percentage in principal amount of the Debentures
then outstanding will constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of
Securityholders, be dissolved. In any other case the meeting may
be adjourned for a period of not less than 10 days as determined
by the permanent chairman of the meeting prior to the adjournment
of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by
the permanent chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 8.2,
except that such notice need be given only once not less than 5
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Debentures then outstanding which shall
constitute a quorum.
Except as limited by the provisos in the first paragraph of
Section 9.2, any resolution presented to a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid
may be adopted by the affirmative vote of the holders of a
majority in principal amount of the Debentures then outstanding;
provided, however, that, except as limited by the provisos in the
first paragraph of Section 9.2, any resolution with respect to
any consent, waiver, request, demand, notice, authorization,
direction or other action which this Indenture expressly provides
may be given by the holders of not less than a specified
percentage in principal amount of the Debentures then outstanding
may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid only by
the affirmative vote of the holders of a not less than such
specified percentage in principal amount of the Debentures then
outstanding.
Any resolution passed or decision taken at any meeting of
holders of Debentures duly held in accordance with this Section
shall be binding on all the Securityholders, whether or not
present or represented at the meeting.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of
Securityholders.
The Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto, without the consent
of the Securityholders, for one or more of the following
purposes:
(a) to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor
Person of the covenants, agreements and obligations of the
Company, pursuant to Article XI hereof;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the
holders of Debentures as the Board of Directors shall consider to
be for the protection of the holders of such Debentures, and to
make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the
enforcement of all or any of the remedies provided in this
Indenture as herein set forth; provided, however, that in respect
of any such additional covenant restriction or condition such
supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make
such other provisions in regard to matters or questions arising
under this Indenture; provided that any such action shall not
materially adversely affect the interests of the holders of the
Debentures;
(d) to add to, delete from, or revise the terms of Debentures,
including, without limitation, any terms relating to the
issuance, exchange, registration or transfer of Debentures,
including to provide for transfer procedures and restrictions
substantially similar to those applicable to the Capital
Securities as required by Section 2.5 (for purposes of assuring
that no registration of Debentures is required under the
Securities Act); provided however, that any such action shall not
adversely affect the interests of the holders of the Debentures
then outstanding (it being understood, for purposes of this
proviso, that transfer restrictions on Debentures substantially
similar to those that were applicable to Capital Securities shall
not be deemed to materially adversely affect the holders of the
Debentures);
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures
and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee;
(f) to make any change (other than as elsewhere provided in this
paragraph) that does not adversely affect the rights of any
Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and
terms and conditions of the Debentures, to establish the form of
any certifications required to be furnished pursuant to the terms
of this Indenture or the Debentures, or to add to the rights of
the holders of Debentures.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer and
assignment of any property thereunder, but the Trustee shall not
be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 9.1 may be executed by the Company and the Trustee
without the consent of the holders of any of the Debentures at
the time outstanding, notwithstanding any of the provisions of
Section 9.2.
Section 9.2 Supplemental Indentures with Consent of
Securityholders.
With the consent (evidenced as provided in Section 7.1) of
the holders of not less than a majority in aggregate principal
amount of the Debentures at the time outstanding affected by such
supplemental indenture (voting as a class), the Company, when
authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debentures;
provided, however, that no such supplemental indenture shall
without the consent of the holders of each Debenture then
outstanding and affected thereby (i) change the fixed maturity of
any Debenture, or reduce the principal amount thereof or any
premium thereon, or reduce the rate or extend the time of payment
of interest thereon, or reduce any amount payable on redemption
thereof or make the principal thereof or any interest or premium
thereon payable in any coin or currency other than that provided
in the Debentures, or impair or affect the right of any
Securityholder to institute suit for payment thereof or impair
the right of repayment, if any, at the option of the holder, or
(ii) reduce the aforesaid percentage of Debentures the holders of
which are required to consent to any such supplemental indenture;
provided further, however, that if the Debentures are held by a
trust or a trustee of such trust, such supplemental indenture
shall not be effective until the holders of a majority in
Liquidation Amount of Trust Securities shall have consented to
such supplemental indenture; provided further, however, that if
the consent of the Securityholder of each outstanding Debenture
is required, such supplemental indenture shall not be effective
until each holder of the Trust Securities shall have consented to
such supplemental indenture.
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental
indenture.
Promptly after the execution by the Company and the Trustee
of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, prepared by the Company, setting forth in
general terms the substance of such supplemental indenture, to
the Securityholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 9.2 to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Section 9.3 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant
to the provisions of this Article IX, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company
and the holders of Debentures shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of
any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
Section 9.4 Notation on Debentures.
Debentures authenticated and delivered after the execution
of any supplemental indenture pursuant to the provisions of this
Article IX may bear a notation as to any matter provided for in
such supplemental indenture. If the Company or the Trustee shall
so determine, new Debentures so modified as to conform, in the
opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental
indenture may be prepared and executed by the Company,
authenticated by the Trustee or the Authenticating Agent and
delivered in exchange for the Debentures then outstanding.
Section 9.5 Evidence of Compliance of Supplemental Indenture
to be Furnished to Trustee.
The Trustee, subject to the provisions of Sections 6.1 and
6.2, shall, in addition to the documents required by Section
14.6, receive an Officers' Certificate and an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article
IX. The Trustee shall receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed
pursuant to this Article IX is authorized or permitted by, and
conforms to, the terms of this Article IX and that it is proper
for the Trustee under the provisions of this Article IX to join
in the execution thereof
ARTICLE X.
REDEMPTION OF SECURITIES
Section 10.1 Optional Redemption.
The Company shall have the right (subject to the receipt
by the Company of prior approval (i) if the Company is a bank
holding company, from the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve
or (ii) if the Company is a savings and loan holding company,
from the OTS if then required under applicable capital guidelines
or policies of the OTS), to redeem the Debentures, in whole or in
part, but in all cases in a principal amount with integral
multiples of $1,000.00, on any Interest Payment Date on or after
October 10, 2008, at the Redemption Price.
Section 10.2 Special Event Redemption.
If a Special Event shall occur and be continuing, the
Company shall have the right (subject to the receipt by the
Company of prior approval (i) if the Company is a bank holding
company, from the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve
or (ii) if the Company is a savings and loan holding company,
from the OTS if then required under applicable capital guidelines
or policies of the OTS) to redeem the Debentures in whole, but
not in part, at any Interest Payment Date, within 120 days
following the occurrence of such Special Event at the Redemption
Price.
Section 10.3 Notice of Redemption; Selection of Debentures.
In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of the Debentures,
it shall cause to be mailed a notice of such redemption at least
30 and not more than 60 days prior to the Redemption Date to the
holders of Debentures so to be redeemed as a whole or in part at
their last addresses as the same appear on the Debenture
Register. Such mailing shall be by first class mail. The notice
if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice
by mail or any defect in the notice to the holder of any
Debenture designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of
any other Debenture.
Each such notice of redemption shall specify the CUSIP
number, if any, of the Debentures to be redeemed, the Redemption
Date, the Redemption Price at which Debentures are to be
redeemed, the place or places of payment, that payment will be
made upon presentation and surrender of such Debentures, that
interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date
interest thereon or on the portions thereof to be redeemed will
cease to accrue. In the event that any date on which the
Redemption Price is payable is not a Business Day, then payment
of the Redemption Price payable on such date shall be made on the
next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), with the
same force and effect as if made on the date such payment was
originally payable. If less than all the Debentures are to be
redeemed, the notice of redemption shall specify the number of
the Debentures to be redeemed. In case the Debentures are to be
redeemed in part only, the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon
surrender of such Debenture, a new Debenture or Debentures in
principal amount equal to the unredeemed portion thereof will be
issued.
Prior to 10:00 a.m. New York City time on the Redemption
Date, the Company will deposit with the Trustee or with one or
more paying agents an amount of money sufficient to redeem on the
Redemption Date all the Debentures so called for redemption at
the appropriate Redemption Price, together with accrued interest
to the Redemption Date.
If all, or less than all, the Debentures are to be redeemed,
the Company will give the Trustee notice not less than 45 nor
more than 60 days, respectively, prior to the Redemption Date, as
to the aggregate principal amount of Debentures to be redeemed
and the Trustee shall select, in such manner as in its sole
discretion it shall deem appropriate and fair, the Debentures or
portions thereof (in integral multiples of $1,000.00) to be
redeemed.
Section 10.4 Payment of Debentures Called for Redemption.
If notice of redemption has been given as provided in
Section 10.3, the Debentures or portions of Debentures with
respect to which such notice has been given shall become due and
payable on the Redemption Date and at the place or places stated
in such notice at the applicable Redemption Price, together with
interest accrued to the Redemption Date, and on and after said
date (unless the Company shall default in the payment of such
Debentures at the Redemption Price, together with interest
accrued to said date) interest on the Debentures or portions of
Debentures so called for redemption shall cease to accrue. On
presentation and surrender of such Debentures at a place of
payment specified in said notice, such Debentures or the
specified portions thereof shall be paid and redeemed by the
Company at the applicable Redemption Price, together with
interest accrued thereon to the Redemption Date.
Upon presentation of any Debenture redeemed in part only,
the Company shall execute and the Trustee shall authenticate and
make available for delivery to the holder thereof, at the expense
of the Company, a new Debenture or Debentures of authorized
denominations, in principal amount equal to the unredeemed
portion of the Debenture so presented.
ARTICLE XI.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.1 Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in the Debentures
shall prevent any consolidation or merger of the Company with or
into any other Person (whether or not affiliated with the
Company) or successive consolidations or mergers in which the
Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other
disposition of the property or capital stock of the Company or
its successor or successors as an entirety, or substantially as
an entirety, to any other Person (whether or not affiliated with
the Company, or its successor or successors) authorized to
acquire and operate the same; provided, however, that the Company
hereby covenants and agrees that, upon any such consolidation,
merger (where the Company is not the surviving corporation),
sale, conveyance, transfer or other disposition, the due and
punctual payment of the principal of (and premium, if any) and
interest on all of the Debentures in accordance with their terms,
according to their tenor, and the due and punctual performance
and observance of all the covenants and conditions of this
Indenture to be kept or performed by the Company, shall be
expressly assumed by supplemental indenture satisfactory in form
to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company
shall have merged, or by the entity which shall have acquired
such property.
Section 11.2 Successor Entity to be Substituted.
In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition by the successor
entity, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium if any, and
interest on all of the Debentures and the due and punctual
performance and observance of all of the covenants and conditions
of this Indenture to be performed or observed by the Company,
such successor entity shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as
the Company, and thereupon the predecessor entity shall be
relieved of any further liability or obligation hereunder or upon
the Debentures. Such successor entity thereupon may cause to be
signed, and may issue in its own name, any or all of the
Debentures issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor
entity instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and
deliver any Debentures which previously shall have been signed
and delivered by the officers of the Company, to the Trustee or
the Authenticating Agent for authentication, and any Debentures
which such successor entity thereafter shall cause to be signed
and delivered to the Trustee or the Authenticating Agent for that
purpose. All the Debentures so issued shall in all respects have
the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with
the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof.
Section 11.3 Opinion of Counsel to be Given to Trustee.
The Trustee, subject to the provisions of Sections 6.1
and 6.2, shall receive, in addition to the Opinion of Counsel
required by Section 9.5, an Opinion of Counsel as conclusive
evidence that any consolidation, merger, sale, conveyance,
transfer or other disposition, and any assumption, permitted or
required by the terms of this Article XI complies with the
provisions of this Article XI.
ARTICLE XII.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 12.1 Discharge of Indenture.
When
(a) the Company shall deliver to the Trustee for cancellation
all Debentures theretofore authenticated (other than any
Debentures which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section
2.6) and not theretofore canceled, or
(b) all the Debentures not theretofore canceled or delivered
to the Trustee for cancellation shall have become due and payable,
or are by their terms to become due and payable within 1 year or
are to be called for redemption within one (1) year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee, in
trust, funds, which shall be immediately due and payable,
sufficient to pay at maturity or upon redemption all of the
Debentures (other than any Debentures which shall have been
destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.6) not theretofore canceled or
delivered to the Trustee for cancellation, including principal
and premium, if any, and interest due or to become due to such
date of maturity or redemption date, as the case may be, but
excluding, however, the amount of any moneys for the payment of
principal of, and premium, if any, or interest on the Debentures
(1) theretofore repaid to the Company in accordance with the
provisions of Section 12.4, or (2) paid to any state or to the
District of Columbia pursuant to its unclaimed property or
similar laws, and if in the case of either clause (a) or clause
(b) the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease
to be of further effect except for the provisions of Sections
2.5, 2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall
survive until such Debentures shall mature and be paid.
Thereafter, Sections 6.6 and 12.4 shall and the Trustee, on
demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with, and at the cost and
expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture.
The Company agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the
Trustee in connection with this Indenture or the Debentures.
Section 12.2 Deposited Moneys to be Held in Trust by Trustee.
Subject to the provisions of Section 12.4, all moneys
deposited with the Trustee pursuant to Section 12.1 shall be held
in trust in a non-interest bearing account and applied by it to
the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the
holders of the particular Debentures for the payment of which
such moneys have been deposited with the Trustee, of all sums due
and to become due thereon for principal, and premium, if any, and
interest.
Section 12.3 Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Debentures (other
than the Trustee) shall, upon demand of the Company, be repaid to
it or paid to the Trustee, and thereupon such paying agent shall
be released from all further liability with respect to such
moneys.
Section 12.4 Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any
paying agent for payment of the principal of, and premium, if
any, or interest on Debentures and not applied but remaining
unclaimed by the holders of Debentures for two (2) years after
the date upon which the principal of, and premium, if any, or
interest on such Debentures, as the case may be, shall have
become due and payable, shall, subject to applicable escheatment
laws, be repaid to the Company by the Trustee or such paying
agent on written demand; and the holder of any of the Debentures
shall thereafter look only to the Company for any payment which
such holder may be entitled to collect, and all liability of the
Trustee or such paying agent with respect to such moneys shall
thereupon cease.
ARTICLE XIII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 13.1 Indenture and Debentures Solely Corporate
Obligations.
No recourse for the payment of the principal of or
premium, if any, or interest on any Debenture, or for any claim
based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture, or in
any such Debenture, or because of the creation of any
indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, officer or director, as
such, past, present or future, of the Company or of any successor
Person of the Company, either directly or through the Company or
any successor Person of the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, it being expressly
understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Debentures.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
SECTION 14.1 Successors.
All the covenants, stipulations, promises and agreements
of the Company in this Indenture shall bind its successors and
assigns whether so expressed or not.
Section 14.2 Official Acts by Successor Entity.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and
performed with like force and effect by the like board,
committee, officer or other authorized Person of any entity that
shall at the time be the lawful successor of the Company.
Section 14.3 Surrender of Company Powers.
The Company by instrument in writing executed by authority
of at least 2/3 (two-thirds) of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved
to the Company and thereupon such power so surrendered shall
terminate both as to the Company, and as to any permitted
successor.
Section 14.4 Addresses for Notices, etc.
Any notice, consent, direction, request, authorization,
waiver or demand which by any provision of this Indenture is
required or permitted to be given, made, furnished or served by
the Trustee or by the Securityholders on or to the Company may be
given or served in writing by being deposited postage prepaid by
registered or certified mail in a post office letter box
addressed (until another address is filed by the Company, with
the Trustee for the purpose) to the Company at 1398 Central
Avenue, Dubuque, Iowa 52001, Attention: John K. Schmidt. Any
notice, consent, direction, request, authorization, waiver or
demand by any Securityholder or the Company to or upon the
Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the office of
the Trustee, addressed to the Trustee, 225 Asylum Street, Goodwin
Square, Hartford, Connecticut, 06103 Attention: Vice President,
Corporate Trust Services, with a copy to U.S. Bank National
Association, P.O. Box 778, Boston, Massachusetts 02102-0778,
Attention: Earl W. Dennison, Corporate Trust Services. Any
notice, consent, direction, request, authorization, waiver or
demand on or to any Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in
writing at the address set forth in the Debenture Register.
Section 14.5 Governing Law.
This Indenture and each Debenture shall be deemed to be a
contract made under the law of the State of New York, and for all
purposes shall be governed by and construed in accordance with
the law of said State, without regard to conflict of laws
principles thereof.
Section 14.6 Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that in the opinion of the signers all
conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall
include (1) a statement that the person making such certificate
or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in
the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition
has been complied with; and (4) a statement as to whether or not
in the opinion of such person, such condition or covenant has
been complied with.
Section 14.7 Non-Business Days.
In any case where the date of payment of interest on or
principal of the Debentures will be a day that is not a Business
Day, the payment of such interest on or principal of the
Debentures need not be made on such date but may be made on the
next succeeding Business Day with the same force and effect as if
made on the original date of payment, and no interest shall
accrue for the period from and after such date.
Section 14.8 Table of Contents, Headings, etc.
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms
or provisions hereof.
Section 14.9 Execution in Counterparts.
This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same
instrument.
Section 14.10 Separability.
In case any one or more of the provisions contained in
this Indenture or in the Debentures shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Indenture or of such Debentures, but
this Indenture and such Debentures shall be construed as if such
invalid or illegal or unenforceable provision had never been
contained herein or therein.
Section 14.11 Assignment.
The Company will have the right at all times to assign any
of its rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company, provided that,
in the event of any such assignment, the Company will remain
liable for all such obligations. Subject to the foregoing, this
Indenture is binding upon and inures to the benefit of the
parties hereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.
Section 14.12 Acknowledgment of Rights.
The Company agrees that, with respect to any Debentures
held by the Trust or the Institutional Trustee of the Trust, if
the Institutional Trustee of the Trust fails to enforce its
rights under this Indenture as the holder of Debentures held as
the assets of such Trust after the holders of a majority in
Liquidation Amount of the Capital Securities of such Trust have
so directed such Institutional Trustee, a holder of record of
such Capital Securities may, to the fullest extent permitted by
law, institute legal proceedings directly against the Company to
enforce such Institutional Trustee's rights under this Indenture
without first instituting any legal proceedings against such
trustee or any other Person. Notwithstanding the foregoing, if
an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest (or
premium, if any) or principal on the Debentures on the date such
interest (or premium, if any) or principal is otherwise payable
(or in the case of redemption, on the redemption date), the
Company agrees that a holder of record of Capital Securities of
the Trust may directly institute a proceeding against the Company
for enforcement of payment to such holder directly of the
principal of (or premium, if any) or interest on the Debentures
having an aggregate principal amount equal to the aggregate
Liquidation Amount of the Capital Securities of such holder on or
after the respective due date specified in the Debentures.
ARTICLE XV.
SUBORDINATION OF DEBENTURES
SECTION 15.1 Agreement to Subordinate.
The Company covenants and agrees, and each holder of
Debentures by such Securityholder's acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject
to the provisions of this Article XV; and each holder of a
Debenture whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions.
The payment by the Company of the principal of, and premium,
if any, and interest on all Debentures shall, to the extent and
in the manner hereinafter set forth, be subordinated and junior
in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of
this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence
of any default or Event of Default hereunder.
Section 15.2 Default on Senior Indebtedness.
In the event and during the continuation of any default by
the Company in the payment of principal, premium, interest or any
other payment due on any Senior Indebtedness of the Company
following any grace period, or in the event that the maturity of
any Senior Indebtedness of the Company has been accelerated
because of a default, then, in either case, no payment shall be
made by the Company with respect to the principal (including
redemption) of, or premium, if any, or interest on the
Debentures.
In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is
prohibited by the preceding paragraph of this Section 15.2, such
payment shall, subject to Section 15.7, be held in trust for the
benefit of, and shall be paid over or delivered to, the holders
of Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any
of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the
holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing
on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior
Indebtedness.
Section 15.3 Liquidation, Dissolution, Bankruptcy.
Upon any payment by the Company or distribution of assets
of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution,
winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all
Senior Indebtedness of the Company shall first be paid in full,
or payment thereof provided for in money in accordance with its
terms, before any payment is made by the Company, on account of
the principal (and premium, if any) or interest on the
Debentures. Upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, which the
Securityholders or the Trustee would be entitled to receive from
the Company, except for the provisions of this Article XV, shall
be paid by the Company, or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making
such payment or distribution, or by the Securityholders or by the
Trustee under this Indenture if received by them or it, directly
to the holders of Senior Indebtedness (pro rata to such holders
on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay
such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the
Trustee.
In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by
the foregoing, shall be received by the Trustee before all Senior
Indebtedness is paid in full, or provision is made for such
payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or the
trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been
issued. as their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior
Indebtedness, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its
terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior
Indebtedness.
For purposes of this Article XV, the words "cash, property
or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XV
with respect to the Debentures to the payment of all Senior
Indebtedness, that may at the time be outstanding, provided that
(i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company into, another corporation or
the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article XI of this Indenture
shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in
Article XI of this Indenture. Nothing in Section 15.2 or in this
Section shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.6 of this Indenture.
Section 15.4 Subrogation.
Subject to the payment in full of all Senior Indebtedness,
the Securityholders shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company,
applicable to such Senior Indebtedness until the principal of
(and premium, if any) and interest on the Debentures shall be
paid in full. For the purposes of such subrogation, no payments
or distributions to the holders of such Senior Indebtedness of
any cash, property or securities to which the Securityholders or
the Trustee would be entitled except for the provisions of this
Article XV, and no payment over pursuant to the provisions of
this Article XV to or for the benefit of the holders of such
Senior Indebtedness by Securityholders or the Trustee, shall, as
between the Company, its creditors other than holders of Senior
Indebtedness of the Company, and the holders of the Debentures be
deemed to be a payment or distribution by the Company to or on
account of such Senior Indebtedness. It is understood that the
provisions of this Article XV are and are intended solely for the
purposes of defining the relative rights of the holders of the
Securities, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as
between the Company, its creditors other than the holders of
Senior Indebtedness, and the holders of the Debentures, the
obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the
same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the
holders of the Debentures and creditors of the Company, other
than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the holder of any
Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XV of the holders of such
Senior Indebtedness in respect of cash, property or securities of
the Company, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee, subject to the
provisions of Article VI of this Indenture, and the
Securityholders shall be entitled to conclusively rely upon any
order, or decree made by any court of competent jurisdiction in
which such dissolution, winding-up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or
to the Securityholders, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders
of Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article XV.
Section 15.5 Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such
Securityholder's behalf to take such action as may be necessary
or appropriate to effectuate the subordination provided in this
Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
Section 15.6 Notice by the Company.
The Company shall give prompt written notice to a
Responsible Officer of the Trustee at the Principal Office of
the Trustee of any fact known to the Company that would prohibit
the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this
Article XV. Notwithstanding the provisions of this Article XV or
any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would
prohibit the making of any payment of monies to or by the Trustee
in respect of the Debentures pursuant to the provisions of this
Article XV, unless and until a Responsible Officer of the Trustee
at the Principal Office of the Trustee shall have received
written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the
provisions of Article VI of this Indenture, shall be entitled in
all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice
provided for in this Section at least two (2) Business Days prior
to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on
any Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice
to the contrary that may be received by it within two (2)
Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery
to it of a written notice by a Person representing himself to be
a holder of Senior Indebtedness (or a trustee or representative
on behalf of such holder), to establish that such notice has been
given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a
holder of such Senior Indebtedness to participate in any payment
or distribution pursuant to this Article XV, the Trustee may
request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this
Article XV, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
Section 15.7 Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article XV in respect of any
Senior Indebtedness at any time held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article XV, and no implied covenants or obligations with respect
to the holders of such Senior Indebtedness shall be read into
this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Article VI of this
Indenture, the Trustee shall not be liable to any holder of such
Senior Indebtedness if it shall pay over or deliver to
Securityholders, the Company or any other Person money or assets
to which any holder of such Senior Indebtedness shall be entitled
by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.6.
Section 15.8 Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company, or by any act or
failure to act, in good faith, by any such holder, or by any
noncompliance by the Company, with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to the
Trustee or the Securityholders, without incurring responsibility
to the Securityholders and without impairing or releasing the
subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of such
Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior
Indebtedness; (iii) release any Person liable in any manner for
the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company, and any
other Person.
Signatures appear on the following page
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers
thereunto duly authorized, as of the day and year first above
written.
HEARTLAND FINANCIAL USA, INC.
By:/s/ Lynn B. Fuller
_______________________________
Name: Lynn B. Fuller
_____________________________
Title: President and
Chief Executive Officer
____________________________
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Earl W. Dennison, Jr.
_______________________________
Name: Earl W. Dennison, Jr.
_____________________________
Title: Vice President
____________________________
EXHIBIT A
FORM OF JUNIOR SUBORDINATED DEBENTURE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE
144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE
BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE- CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN
ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD
THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR
HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE
OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY
INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE,
A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR
(ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN
$500,000.00 AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING AN
AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $500,000.00 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH
THE FOREGOING RESTRICTIONS.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
8.25% Junior Subordinated Deferrable Interest Debenture
of
Heartland Financial USA, Inc.
October 10, 2003
Heartland Financial USA, Inc., a Delaware corporation (the
"Company" which term includes any successor Person under the
Indenture hereinafter referred to), for value received promises
to pay to U.S. Bank National Association, not in its individual
capacity but solely as Institutional Trustee for Heartland
Financial Statutory Trust III (the "Holder") or registered
assigns, the principal sum of Twenty Million Six Hundred Nineteen
Thousand ($20,619,000) on October 10, 2033, and to pay interest
on said principal sum from the date of original issuance, or from
the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of
each year commencing December 31, 2003, at an annual rate equal
to 8.25% (the "Coupon Rate") beginning on (and including) the
date of original issuance and ending on (but excluding) December
31, 2003 and for each successive period beginning on (and
including) December 31, 2003, and each succeeding Interest
Payment Date, and ending on (but excluding) the next succeeding
Interest Payment Date (each a "Distribution Period"). The Coupon
Rate will be applied to the principal amount hereof, until the
principal hereof is paid or duly provided for or made available
for payment, and on any overdue principal and (without
duplication) on any overdue installment of interest at the same
rate per annum, compounded quarterly, from the dates such amounts
are due until they are paid or made available for payment. The
amount of interest payable for any period will be computed on the
basis of the actual number of days in the Distribution Period
concerned divided by 360. In the event that any date on which
interest is payable on this Debenture is not a Business Day, then
a payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), with the
same force and effect as if made on the date the payment was
originally payable. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities)
is registered at the close of business on the regular record date
for such interest installment, which shall be fifteen days prior
to the day on which the relevant Interest Payment Date occurs.
Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on
such regular record date and may be paid to the Person in whose
name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date.
All percentages resulting from any calculations on the
Debentures will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-
millionths of a percentage point rounded upward (e.g., 9.876545%
or .09876545 being rounded to 9.87655% or .0987655), and all
dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded
upward).
The principal of and interest on this Debenture shall be
payable at the office or agency of the Trustee (or other paying
agent appointed by the Company) maintained for that purpose in
any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made by
check mailed to the registered holder at such address as shall
appear in the Debenture Register if a request for a wire transfer
by such holder has not been received by the Company or by wire
transfer to an account appropriately designated by the holder
hereof. Notwithstanding the foregoing, so long as the holder of
this Debenture is the Institutional Trustee, the payment of the
principal of and interest on this Debenture will be made in
immediately available funds at such place and to such account as
may be designated by the Trustee.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right, from time to time,
and without causing an Event of Default, to defer payments of
interest on the Debentures by extending the interest payment
period on the Debentures at any time and from time to time during
the term of the Debentures, for up to 20 consecutive quarterly
periods (each such extended interest payment period, an
"Extension Period"), during which Extension Period no interest
(including Additional Interest) shall be due and payable. No
Extension Period may end on a date other than an Interest Payment
Date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Debentures
(together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date;
provided further, however, that during any such Extension Period,
the Company shall not and shall not permit any Affiliate to (i)
declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
any of the Company's or such Affiliate's capital stock (other
than payments of dividends or distributions to the Company) or
make any guarantee payments with respect to the foregoing or (ii)
make any payment of principal of or interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the
Company or any Affiliate that rank pari passu in all respects
with or junior in interest to the Debentures (other than, with
respect to clauses (i) and (ii) above, (a) repurchases,
redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of one
or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock
purchase plan or in connection with the issuance of capital stock
of the Company (or securities convertible into or exercisable for
such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension
Period, (b) as a result of any exchange or conversion of any
class or series of the Company's capital stock (or any capital
stock of a subsidiary of the Company) for any class or series of
the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in
connection with any stockholders' rights plan, or the issuance of
rights, stock or other property under any stockholders' rights
plan, or the redemption or repurchase of rights pursuant thereto,
(e) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari
passu with or junior to such stock and any cash payments in lieu
of fractional shares issued in connection therewith, or
(f) payments under the Capital Securities Guarantee). Prior to
the termination of any Extension Period, the Company may further
extend such period, provided that such period together with all
such previous and further consecutive extensions thereof shall
not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and
upon the payment of all accrued and unpaid interest and
Additional Interest, the Company may commence a new Extension
Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension
Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. The
Company must give the Trustee notice of its election to begin or
extend such Extension Period at least five (5) Business Days
prior to the regular record date (as such term is used in Section
2.8 of the Indenture) immediately preceding the Interest Payment
Date with respect to which interest on the Debentures would have
been payable except for the election to begin or extend such
Extension Period.
Subject to the Company having received prior approval of the
Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, the Company may
redeem this Debenture prior to the Maturity Date in the manner
and at the times set forth in the Indenture.
The indebtedness evidenced by this Debenture is, to the
extent provided in the Indenture, subordinate and junior in right
of payment to the prior payment in full of all Senior
Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his or her attorney-in-fact
for any and all such purposes. Each holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each
such holder upon said provisions.
This Debenture shall be deemed to be a contract made under
the law of the State of New York, and for all purposes shall be
governed by and construed with the law of said State, without
regard to conflict of laws principles thereof.
This Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the certificate of
authentication hereon shall have been signed by or on behalf of
the Trustee.
Capitalized terms used and not defined in this Debenture
shall have the meanings assigned in the Indenture duly executed
and dated as of the date of original issuance of this Debenture
between the Trustee and the Company. The Indenture contains a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures and of the terms upon which the
Debentures are, and are to be, authenticated and delivered.
(continued)
IN WITNESS WHEREOF, the Company has duly executed this
certificate.
HEARTLAND FINANCIAL USA, INC.
By:
Name:___________________________
Title:__________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-
mentioned Indenture.
U.S. Bank National Association,
as Trustee
By:______________________________
Authorized Officer