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EXHIBIT 4.3
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NEURAL APPLICATIONS CORPORATION
TO
FIRST TRUST & SAVINGS BANK
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TRUST INDENTURE
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Dated as of August 1, 1997
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TABLE OF CONTENTS
(The Table of Contents is not part of the Indenture]
ARTICLE I ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES............... 2
Section 101. Amount, Execution and Delivery............................................. 2
Section 102. Execution.................................................................. 2
Section 103. Form, Denominations and Dating............................................. 2
Section 104. Calculation and Payment of Interest........................................ 2
Section 105. Payment of Principal....................................................... 3
Section 106. Exchange and Registration of Transfer ..................................... 3
Section 107. Mutilated, Destroyed, Lost and Stolen Debentures .......................... 3
Section 108. Cancellation and Destruction of Debentures ................................ 4
Section 109. Paying Agents.............................................................. 4
ARTICLE II COVENANTS OF THE COMPANY ............................................................ 5
Section 201. Payment of Principal and Interest.......................................... 5
Section 202. Letter of Credit; Substitute Letter of Credit ............................. 5
Section 203. Office or Agency for Certain Purposes ..................................... 5
Section 204. Pledge, Mortgage or Sale of Assets......................................... 5
Section 205. Appointments to Fill Vacancies in Trustee's Office ........................ 6
Section 206. Certificate to Trustee..................................................... 6
Section 207. Waiver of Certain Covenants................................................ 6
ARTICLE III DEBENTURE HOLDERS LISTS, COMMUNICATIONS TO DEBENTURE
HOLDERS, AND COMPANY AND TRUSTEE REPORTS................................................7
Section 301. Company to Furnish Trustee Information as to Names and Addresses of
Debenture Holders ............................................................7
Section 302. Preservation of Information; Communications to Debenture Holders .............7
Section 303. Reports by Company............................................................8
ARTICLE IV REDEMPTION OF DEBENTURES ...............................................................8
Section 401. Right of Redemption and Redemption Price ................................... 8
Section 402. Notice of Redemption..........................................................8
Section 403. Payment of Debentures Called for Redemption ................................ 9
Section 404. Deposit of Redemption Price...................................................9
ARTICLE V REMEDIES OF THE TRUSTEE AND DEBENTURE HOLDERS ON EVENT OF
DEFAULT.................................................................................9
Section 501. Events of Default Defined; Acceleration of Maturity; Waiver of Default ..... 9
Section 502. Collection of Indebtedness by Trustee; Call of Letter of Credit; Trustee
May Prove Debt..............................................................10
Section 503. Application of Proceeds .....................................................11
Section 504. Limitations on Suits by Debenture Holders ................................. 12
Section 505. Powers and Remedies Cumulative; Delay or Omission Not Waiver .............. 13
Section 506. Control by Debenture Holders; Waiver of Default ........................... 13
Section 507. Trustee to Give Notice of Defaults Known to It, but May Withhold in
Certain Circumstances........................................................13
Section 508. Right of Court to Require Filing of Undertaking to Pay Costs .............. 13
ARTICLE VI CONCERNING THE TRUSTEE ................................................................14
Section 601. Duties and Responsibilities of Trustee ......................................14
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Section 602. Certain Rights of Trustee....................................................15
Section 603. Trustee Exoneration From Responsibility ................................... 16
Section 604. Moneys Held by Trustee ......................................................16
Section 605. Compensation of Trustee .....................................................16
Section 606. Right of Trustee to Rely on Certificate of Certain Officers .................16
Section 607. Conflicting Interests........................................................16
Section 608. Persons Eligible for Appointment as Trustee .................................19
Section 609. Resignation and Removal of Trustee; Appointment of Successor ................19
Section 610. Acceptance of Appointment by Successor Trustee ..............................20
Section 611. Merger or Consolidation of Trustee...........................................21
Section 612. Preferential Collection of Claims Against Company ...........................21
ARTICLE VII CONCERNING THE DEBENTURE HOLDERS.......................................................24
Section 701. Evidence of Action Taken by Debenture Holders ...............................24
Section 702. Proof of Execution of Instruments and of Holding of Debentures ..............24
Section 703. When Deemed Absolute Owners..................................................25
Section 704. Debentures Owned by Company Deemed Not Outstanding...........................25
Section 705. Right of Revocation of Action Taken .........................................25
ARTICLE VIII DEBENTURE HOLDERS' MEETINGS............................................................25
Section 801. Purposes for Which Debenture Holders' Meetings May Be Called ................25
Section 802. Call of Meetings by Trustee..................................................26
Section 803. Company and Debenture Holders May Call Meetings .............................26
Section 804. Persons Entitled to Vote at Meeting .........................................26
Section 805. Determination of Voting Rights; Conduct and Adjournment of Meeting ..........26
Section 806. Counting Votes and Recording Action of Meeting ..............................27
Section 807. Meeting Does Not Hinder Exercise of Rights ..................................27
ARTICLE IX SUPPLEMENTAL INDENTURES................................................................27
Section 901. Supplemental Indentures Without Consent of Debenture Holders.................27
Section 902. Supplemental Indentures with Consent of Debenture Holders....................28
Section 903. Effect of Supplemental Indentures............................................29
Section 904. Notation on Debentures in Respect of Supplemental Indentures.................29
ARTICLE X CONSOLIDATION, MERGER, AND SALE........................................................29
Section 1001. Company May Consolidate or Merge on Certain Terms............................29
Section 1002. Sale of Assets by the Company................................................29
ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;
UNCLAIMED MONEYS.......................................................................30
Section 1101. Satisfaction and Discharge of Indenture......................................30
Section 1102. Application by Trustee of Funds Deposited for Payment of Debentures..........30
Section 1103. Defeasance and Discharge of Indenture and the Debentures.....................30
Section 1104. Legal Defeasance and Discharge...............................................30
Section 1105. Covenant Defeasance..........................................................31
Section 1106. Conditions to Legal or Covenant Defeasance. ............................. 31
Section 1107. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions....................................................32
Section 1108. Reinstatement................................................................32
Section 1109. Return of Unclaimed Moneys...................................................33
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ARTICLE XII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS..............................................................................33
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ARTICLE XIII MISCELLANEOUS PROVISIONS AND DEFINITIONS...............................................33
Section 1301. Successors...................................................................33
Section 1302. Benefit of Indenture Restricted to Parties and Debenture Holders.............33
Section 1303. Payments Due on Sundays and Holidays.........................................33
Section 1304. Notices and Demands on Company and Trustee ..................................33
Section 1305. Laws of Iowa to Govern.......................................................34
Section 1306. Officers' Certificates and Opinions of Counsel; Statements to
Be Contained Therein........................................................34
Section 1307. Counterparts.................................................................34
Section 1308. Definitions..................................................................34
Section 1311. TIA Not Applicable...........................................................36
EXHIBITS TO INDENTURE
Exhibit A - Form of Debenture
Exhibit B - Letter of Credit
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TRUST INDENTURE
THIS TRUST INDENTURE (the "Indenture") dated as of August 1, 1997, is
entered into by and between NEURAL APPLICATIONS CORPORATION, a Delaware
corporation (hereinafter referred to as the "Company") and FIRST TRUST & SAVINGS
BANK, a state banking association duly organized and existing under the laws of
the State of Iowa (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the issuance of a series of
debentures to be designated 8.75% Senior Secured Debentures due 2002 (the
"Debentures") in an aggregate principal amount not to exceed Nine Million
Dollars ($9,000,000); and
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be issued and delivered, the Company has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, the Debentures and the Certificate of Authentication to be borne
by each of same are to be substantially in the form set forth as Exhibit A to
this Indenture; and
WHEREAS, all things have been done which are necessary to make the
Debentures, when executed, issued and delivered by the Company hereunder, the
valid obligations of the Company and to constitute this Indenture a valid
contract for the security of the Debentures, in accordance with the terms of the
Debentures and this Indenture;
GRANTING CLAUSE
NOW, THEREFORE, to secure the payment of the principal of and interest on
the Debentures and the performance of the covenants therein and herein contained
and to declare the terms and conditions on which the Debentures are secured, and
in consideration of the premises and of the purchase of the Debentures by the
Holders thereof, the Company by these presents does grant, convey, assign,
transfer, mortgage, pledge and confirm to the Trustee the rights of the Trustee
pursuant to the Irrevocable Standby Letter of Credit (the "Letter of Credit") as
more specifically described in Sections 202 of this Indenture and in the Letter
of Credit (a copy of which is attached hereto as Exhibit B), to assure the
payment of the principal and interest of the Debentures for the purposes herein
expressed.
NOW, THEREFORE, in consideration of the premises and of the purchase and
acceptance of the Debentures by the Holders thereof and of the sum of One Dollar
duly paid by the Trustee at the execution of these presents, the receipt whereof
is hereby acknowledged, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of all present and future Holders of the
Debentures as follows:
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ARTICLE I
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 101. Amount, Execution and Delivery. Debentures for an aggregate
principal sum of up to Nine Million Dollars ($9,000,000) may be executed by the
Company and delivered to the Holders of the Debentures upon the execution of
this Indenture or from time to time thereafter subject to the terms and
conditions of this Indenture.
Section 102. Execution. The Debentures shall be signed on behalf of the
Company by its President or a Vice President and by its Treasurer or an
Assistant Treasurer. Such signatures may be manual or facsimile signatures and
may be imprinted or otherwise reproduced on the Debentures.
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 disposed of by the
Company, such Debentures may nevertheless 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 shall bind the Company; and any Debenture signed
on behalf of the Company by any such person who at the actual date of the
execution of the Debenture shall be a proper officer of the Company, although at
the date of the execution of this Indenture any such person shall not have been
such an officer, may likewise be authenticated and delivered or disposed of and
shall bind the Company.
Section 103. Form, Denominations and Dating. The Debentures to be issued
pursuant to this Indenture shall be identified as 8.75% Senior Secured
Debentures due 2002. Each of the Debentures shall be substantially in the form
of the 8.75% Senior Secured Debenture due 2002 attached hereto as Exhibit A. The
Debentures may have such letters, numbers, or other marks of identification and
such legends or endorsements placed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto, or to conform to usage.
The Debentures shall be issuable as registered Debentures without coupons
in denominations of Fifty Thousand Dollars ($50,000), or multiples thereof.
Every Debenture shall be dated from the date of its issuance and shall bear
interest from such date, said interest and the principal sum of such Debenture
to be paid pursuant to the payment terms of such Debenture.
Section 104. Calculation and Payment of Interest.
Each Debenture shall bear interest at the rate of 8.75% per annum from the
date of its original issuance. Interest shall be computed on the basis of a
360-day year of twelve 30-day months. Interest shall be payable on March 31 and
September 30 of each year beginning on March 31, 1998 (each such date an
"Interest Payment Date").
The person in whose name any Debenture is registered at the close of
business on any Record Date (as hereinafter defined) with respect to interest
payable on an Interest Payment Date shall be entitled to receive the interest
payable on such Interest Payment Date (subject to the provisions of Article IV,
in the case of any Debenture or Debentures, or portion thereof, redeemed on a
date subsequent to the relevant Record Date and prior to such Interest Payment
Date) notwithstanding the cancellation of such Debenture upon any registration
or transfer or exchange subsequent to the Record Date and prior to such Interest
Payment Date; provided, however, that if and to the extent of Default in the
payment of the interest due on such Interest Payment Date, such defaulted
interest shall be paid to the persons in whose names Outstanding Debentures are
registered at the close of business on a subsequent Record Date
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(which shall be not less than fifteen (15) days prior to the date of payment of
such defaulted interest) which the Company shall establish for such payment by
notice given by mail on behalf of the Company to the Holders of Debentures and
the Trustee not less than ten (10) days preceding such Record Date. Payment of
any defaulted interest may be made in any other lawful manner if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
sentence, such payment shall be deemed practicable by the Trustee. The term
"Record Date" as used in this Section with respect to any Interest Payment Date
shall mean the March 15 or September 15 immediately preceding such Interest
Payment Date.
Section 105. Payment of Principal. Principal of, and interest accrued to
maturity on, the Debentures shall be considered paid on the date due, whether
such principal and interst are due at maturity, upon acceleration or otherwise,
if the Company shall deposit funds sufficient to pay the principal of and
accrued interest on the Debentures with the Trustee at or before 10:00 a.m.
Central Time on such date. The Trustee shall promptly return to the Company any
funds deposited with the Trustee by the Company that are in excess of the amount
necessary to pay the principal of, and accrued interest on, the Debentures.
Section 106. Exchange and Registration of Transfer. Debentures may be
exchanged for a like aggregate principal amount of Debentures of other
authorized denominations. The Debentures to be exchanged shall be surrendered at
the office or agency to be maintained by the Company in accordance with Section
203, and the Company shall execute in exchange therefor the Debenture or
Debentures which the Debenture Holder making the exchange shall be entitled to
receive.
The Company shall keep, at the office or agency to be maintained by the
Company in accordance with Section 203, a register or registers in which,
subject to such reasonable regulations as it may prescribe, the Company shall
register Debentures and shall register the transfer of Debentures as in this
Article provided. Upon due presentment for registration of transfer of any
Debenture at such office or agency (including compliance with the conditions to
transfer noted on the form of Debenture attached hereto as Exhibit A), the
Company shall execute and register and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Debenture or
Debentures for a like aggregate principal amount. The Trustee shall deliver the
authenticated Debenture or Debentures to the Company for delivery to the
transferee or transferees.
All Debentures presented or surrendered for registration of transfer or for
exchange, redemption or payment (if so required by the Company or the Trustee)
shall be duly endorsed by, or accompanied by a written instrument or instruments
of transfer, in form satisfactory to the Company and the Trustee, duly executed
by the Holder or by such Holder's attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto.
The Company shall not be required to exchange or register any transfer of
any Debentures from and after the mailing date of the notice of redemption
provided for in Section 402.
Section 107. Mutilated, Destroyed, Lost and Stolen Debentures. In case any
Debentures shall become mutilated or be destroyed, lost or stolen, the Company,
in the case of a mutilated Debenture shall, and in the case of a destroyed,
lost, or stolen Debenture in its discretion may, execute and deliver, a new
Debenture bearing a number not contemporaneously Outstanding, in exchange and
substitution for the mutilated Debenture, or in lieu and substitution for the
Debenture so destroyed, lost or stolen and the Trustee shall authenticate any
such substituted Debenture and deliver the same upon the written request or
authorization of any officer of the Company. In every case the applicant for a
substituted Debenture
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shall furnish to the Company and to the Trustee such reasonable 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 to the Trustee evidence to their satisfaction of the
destruction, loss, or theft of such Debenture and of the ownership thereof. Upon
the issue 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 in respect of which a
notice of redemption under Section 402, has been mailed shall become mutilated
or be destroyed, lost, or stolen, the Company may, instead of issuing a
substitute Debenture, pay 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 to the Trustee such reasonable security or indemnity as they may
require to save each of them harmless, and, in case of destruction, loss, or
theft, evidence satisfactory to the Company and the Trustee of the destruction,
loss, or theft of such Debenture and of the ownership thereof.
Every substituted Debenture issued pursuant to this Section 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 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 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 108. Cancellation and Destruction of Debentures. All Debentures
surrendered for payment, redemption, exchange, or registration of transfer
shall, if surrendered to the Company or any paying agent, be delivered to the
Trustee for cancellation, or, if surrendered to the Trustee, shall be canceled
by it, and no Debentures shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee shall destroy,
or make appropriate arrangements for the destruction of, canceled Debentures and
deliver a certificate of such destruction to the Company. 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 109. Paying Agents. The Company shall serve as Paying Agent for
payments of interest on the Debentures and the Trustee shall serve as Paying
Agent for payments of principal of, and accrued interest on, the Debentures at
maturity, upon redemption, upon acceleration or otherwise (each, in such
capacity, the "Paying Agent").
ARTICLE II
COVENANTS OF THE COMPANY
Section 201. Payment of Principal and Interest. The Company will duly and
punctually pay or cause to be paid the principal of and interest on each of the
Debentures at the times and place and in the manner specified in this Indenture
and in the Debentures.
Section 202. Letter of Credit; Substitute Letter of Credit.
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(a) The Company shall obtain in favor of the Trustee, for the benefit of
the Holders of the Debentures, and maintain until the earlier of November 29,
2002 or such time as the principal amount and all interest payable pursuant to
the Debentures have been paid in full, an Irrevocable Standby Letter of Credit
(the "Letter of Credit") in substantially the form attached hereto as Exhibit B,
providing for payment to the Trustee, for the benefit of the Holders of the
Debentures, of the Outstanding principal amount of the Debentures, plus all
interest due and unpaid pursuant to the Debentures, and all costs of collection
recoverable hereunder or pursuant to the Debenture, upon a Notice of
Acceleration as provided for by Article V below and call by the Trustee as
required by the Letter of Credit. The amount of the Letter of Credit shall at
all times total at least one hundred seven percent (107%) of the Outstanding
principal amount of the Debentures.
(b) Subject to the terms and conditions hereof, at any time before
December 31 of any year commencing in 1999 the Company may, at its option,
obtain a substitute Letter of Credit meeting the conditions contained below (a
"Substitute Letter of Credit"), in replacement of or substitution for the Letter
of Credit then in effect. Any Substitute Letter of Credit shall be a letter of
credit in favor of the Trusteee, for the benefit of the Holders of the
Debentures, (i) the terms of which shall in all material respects be the same as
those of the original Letter of Credit and (ii) the issuer of which shall be a
bank, trust company or financial lender with assets in excess of $1 billion and
with long-term obligations rated by Standard & Poors or a similar rating service
of A (or the equivalent) or better. In order for such letter of credit to
qualify as a Substitute Letter of Credit, the Company shall deliver to the
Trustee at least forty-five (45) days prior to the effective date of such
proposed Substitute Letter of Credit (iii) a copy of such proposed Substitute
Letter of Credit, (iv) a copy of the agreement pursuant to which such Substitute
Letter of Credit is proposed to be issued and (v) evidence that the issuer meets
the qualifications contained in (ii) above. Unless the Trustee shall have given
written notice to the Company within such forty-five (45) day period that the
Substitute Letter of Credit does not, in the Trustee's reasonable opinion, meet
the qualifications listed above, then upon the effective date of any qualifying
Substitute Letter of Credit and the receipt thereof, the Trustee shall surrender
the Letter of Credit previously in effect to the issuer thereof. Thereafter, any
Substitute Letter of Credit shall be deemed the Letter of Credit for all
purposes of this Indenture.
Section 203. Office or Agency for Certain Purposes. As long as any of the
Debentures remain Outstanding, the Company will maintain an office or agency (or
offices or agencies) in the City of Coralville, Iowa, or in such other city in
the State of Iowa as the Company shall notify the Trustee and the Holders of
Debentures in writing, where the Debentures may be presented for registration of
transfer and exchange as in this Indenture provided, and where notices and
demands to or upon the Company in respect to the Debentures or this Indenture
may be served. The principal office of the Company shall be the office or agency
for the registration or transfer and exchange of Debentures unless the Company
shall maintain some other office or agency for such purpose and shall give the
Trustee written notice of the location thereof.
Section 204. Pledge, Mortgage or Sale of Assets. The Company shall not
pledge, mortgage, grant a security interest in, agree to the placement of any
lien upon, or, other than in the ordinary course of its business, sell, any of
its assets; provided, that the Company may grant a security interest in, or
agree to the placement of a lien upon, any asset or assets if such security
interest is granted or lien incurred to secure all or part of the purchase
price, or to secure indebtedness incurred to pay all or part of the purchase
price, of such asset or assets; and provided, further, that (a) any such
security interest or lien shall be confined solely to the asset or assets so
acquired and, if required by the terms of the instrument originally creating
such security interest or lien, other assets which are an improvement to or are
acquired for specific use in connection with such acquired assets or assets,
together with any proceeds, including insurance proceeds, thereof and (b) any
such security interest or lien shall be created within 120 days after the
acquisition of such asset or assets; and provided, further, that in the event
that the Company merges with another corporation (as permitted by Section 1001),
the covenant contained in this Section 204 shall
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not apply to any pledge, mortgage, security interest or lien that existed upon
the assets of such other corporation prior to such merger and was not created in
contemplation of such merger, even if, after the merger, such pledge, mortgage,
security interest or lien shall also apply to assets owned by the Company prior
to the merger.
Section 205. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 609, a Trustee, so that
there shall at all times be a Trustee hereunder.
Section 206. Certificate to Trustee. The Company will deliver to the
Trustee on or before April 1 in each year (beginning with 1998) an Officers'
Certificate stating:
(a) That the signing officers have conducted a review of the
activities of the Company during the preceding year to determine whether there
has been any Default by the Company in the performance of any covenants
contained in this Article II, and Sections 1001 or 1002, and further stating
whether or not they have obtained knowledge of any such Default and, if so,
specifying each such Default of which the signers have knowledge and the nature
thereof;
(b) That the Company is not required to file any reports with the
Securities and Exchange Commission (the "Commission") pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or, if the Company is required to file any reports with the Securities and
Exchange Commission, it has timely filed all such reports and has provided the
Trustee with a copy of each such report; and
(c) The identity of each director duly elected by the stockholders
of the Company and the identity of each officer duly appointed by the board of
directors of the Company as of such date.
Section 207. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Section 204 with respect to the Debentures if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Debentures, by act of such Holders, either shall waive such
compliance in such instance or generally shall have waived compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE III
DEBENTURE HOLDERS LISTS, COMMUNICATIONS TO
DEBENTURE HOLDERS, AND COMPANY AND TRUSTEE REPORTS
Section 301. Company to Furnish Trustee Information as to Names and
Addresses of Debenture Holders. The Company shall furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of Debentures. The Company
shall also furnish or cause to be furnished to the Trustee an updated list
reflecting any changes in the names or addresses of any of the Debenture Holders
within fifteen (15) days after such change is furnished or caused to be
furnished to the Company.
Section 302. Preservation of Information; Communications to Debenture
Holders.
(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 contained in the most recent list
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furnished to it as provided in Section 301. The Trustee may destroy any list
furnished to it as provided in Section 301 upon receipt of a new list so
furnished.
(b) In case three (3) 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 six (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
the Debentures, and is accompanied by a copy of the communication which such
applicants propose to transmit, then the Trustee shall, within five (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 Section 302(a); 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
Section 302(a), and as to the approximate cost of mailing to such
Debenture Holders the communication specified in such application.
(c) 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 Debenture Holder whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
302(a), a copy of the 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 the provision for the payment, of the reasonable expenses of
mailing, unless within five (5) days after such tender the Trustee shall mail to
such applicants 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
Debentures or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion.
(d) Each and every Holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee 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 Section 302(b), 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 Section 302(b).
Section 303. Reports by Company.
(a) If the Company is required to file reports with the Commission, the
Company agrees to file with the Trustee, within fifteen (15) days after the
Company is required to file the same with the Commission, copies of the annual
reports and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.
(b) The Company agrees, if required by law to do so, to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be required from
time to time by such rules and regulations.
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(c) The Company agrees to transmit to the Holders of Debentures as the
names and addresses of such Holders appear upon the registration books of the
Company, within thirty (30) days after filing thereof with the Trustee, such
summaries of any information, documents, and Reports required to be filed by the
Company pursuant to Section 303(a) or (b) as may be required by rules and
regulations prescribed from time to time by the Commission.
(d) The Company agrees to transmit to the Holders of Debentures as the
names and addresses of such Holders appear upon the registration books of the
Company, within thirty (30) days after receipt by the Company thereof, a copy of
any audited annual financial statements of the Company.
ARTICLE IV
REDEMPTION OF DEBENTURES
Section 401. Right of Redemption and Redemption Price.
(a) Debentures may be redeemed in the manner, at the time and at the
redemption prices specified in this Article.
(b) The Company may, at its option, redeem all, but not part, of the
Debentures, prior to maturity, at any time within one hundred eighty (180) days
after the closing of a public offering of the common stock of the Company,
registered pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), that results in net proceeds to the Company of at least Fifteen Million
Dollars ($15,000,000), at a price of at least Eight Dollars ($8.00) per share,
subject to adjustment for splits, reverse stock splits and stock dividends (a
"Qualifying Public Offering").
(c) Redemption shall be made only upon notice as set forth in Section
402, at a redemption price equal to One Hundred Percent (100%) of the principal
amount plus accrued but unpaid interest to the date fixed for redemption.
Section 402. Notice of Redemption. In case the Company shall desire to
exercise its option to redeem all of the Debentures in accordance with Section
401 above, it shall fix a date for redemption, which date shall be not later
than one hundred eighty (180) after the closing date of the Qualifying Public
Offering, and shall mail or cause to be mailed a notice of such redemption at
least thirty (30) days prior to the date fixed for redemption to the Holders of
Debentures at their last addresses as the same appear on the registry books.
Such mailing shall be by first class mail. 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 shall not affect
the validity of the proceeding for the redemption of that Debenture or any other
Debenture.
The notice of redemption shall specify the date fixed for redemption
and the redemption price at which Debentures are to be redeemed, and shall state
that payment of the redemption price of the Debentures, together with accrued
interest to the date fixed for redemption, will be made at the office or agency
to be maintained by the Company in accordance with Section 203, upon
presentation and surrender of such Debentures and that, unless the Company
defaults in making the redemption payment, from and after the redemption date
named in the notice of redemption interest will cease to accrue on the
Debentures.
Section 403. Payment of Debentures Called for Redemption. If the giving
of notice of redemption shall have been completed as above provided, the
Debentures shall become due and payable on the date and at the place stated in
such notice at the applicable redemption price, together with interest
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accrued to the date fixed for redemption, and on and after such date of
redemption (unless the Company defaults in the payment of such Debentures)
interest on the Debentures shall cease to accrue, and such Debentures shall be
deemed not to be Outstanding hereunder and shall not be entitled to any benefit
under this Indenture except to receive payment of the redemption price, together
with accrued interest to the date fixed for redemption. On presentation and
surrender of such Debentures at said place of payment in said notice specified,
such Debentures shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption.
Section 404. Deposit of Redemption Price. At or before 10:00 a.m.
Central Time on the date of redemption, the Company shall deposit with the
Trustee an amount of money, sufficient to pay the applicable redemption price of
and accrued interest on the Debentures. The Trustee shall promptly return to the
Company any money deposited with the Trustee by the Company in excess of the
amounts necessary to pay the applicable redemption price of and accrued interest
on, the Debentures.
ARTICLE V
REMEDIES OF THE TRUSTEE AND DEBENTURE HOLDERS
ON EVENT OF DEFAULT
Section 501. Events of Default Defined; Acceleration of Maturity;
Waiver of Default. The following events shall be Events of Default:
(a) Default in the payment when due of any interest upon any of the
Debentures as and when the same shall become due and payable, and continuance of
such Default for a period of forty five (45) days; or
(b) Default in payment when due of principal on any of the Debentures
at maturity, upon redemption or otherwise, and continuance of such Default for a
period of ten (10) days; or
(c) Failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture for a period of ninety (90) days after the date
on which written notice of such failure, requiring the Company to remedy the
same, shall have been given to the Company and the Trustee by Holders of at
least twenty-five percent (25%) in aggregate principal amount of the Debentures
at the time Outstanding; or
(d) If the Company shall:
(1) Admit in writing its inability to pay its debts
generally as they become due; or
(2) File a petition in bankruptcy or a petition to take
advantage of any insolvency act; or
(3) Make an assignment for the benefit of its creditors;
or
(4) Consent to the appointment of a receiver of itself or
of the whole or any substantial part of its property;
or
(e) If the Company shall, on a petition in bankruptcy filed against it,
be adjudicated a bankrupt or a court of competent jurisdiction shall enter an
order or decree appointing, without the consent of the Company, a receiver of
the Company or of the whole or substantially all of its property, or approving a
petition filed against it seeking reorganization or arrangement of the Company
under the federal bankruptcy laws or any other applicable law or statute of the
United States of America or any
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State thereof, and such adjudication, order, or decree shall not be vacated or
set aside or stayed within sixty (60) days from the date of entry thereof; or
(f) The occurrence of any Event of Default under the terms of the
Debentures.
If an Event of Default has occurred and is continuing, the Trustee by
written notice to the Company, or the Holders of at least twenty-five percent
(25%) in aggregate principal amount of the Debentures at the time Outstanding by
written notice to the Company and the Trustee (such written notice to the
Company or to the Company and the Trustee, as applicable, a "Notice of
Acceleration"), may declare the principal of all Debentures to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable. This provision, however, is subject to the
condition that if, at any time after the principal of the Debentures shall have
been so declared due and payable, the Company shall voluntarily pay to the
Holders of the Debentures a sum sufficient to pay all interest theretofore due
and payable upon all the Debentures and the expenses of the Trustee, and any and
all Events of Default under this Indenture or the Debentures, other than
nonpayment of principal on Debentures which shall have become due solely as the
result of such Notice of Acceleration, shall have been remedied, 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 on behalf of the Holders of all of the Debentures 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 Event of Default, or shall impair any right consequent thereon.
Section 502. Collection of Indebtedness by Trustee; Call of Letter of
Credit; Trustee May Prove Debt. The Trustee covenants that upon (a) the
acceleration of the maturity of the Debentures pursuant to Section 501 hereof or
(b) the occurrence of an Event of Default under Section 501(b) above, the
Trustee shall, within five (5) business days, deliver to the institution issuing
the Letter of Credit (the "Issuing Institution") such drafts and other documents
as shall be required pursuant to the Letter of Credit to call and obtain payment
of the amount that then shall have become due and payable pursuant hereto and
pursuant to the Debentures for principal and interest, with interest upon the
overdue principal and (to the extent legally enforceable under applicable law)
upon overdue installments of interest at the rate borne by the Debentures; 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 expenses or liabilities
incurred by the Trustee hereunder other than through its gross negligence or bad
faith.
In case the Issuing Institution shall fail forthwith to pay such
amounts upon presentment of such drafts and documents, the Trustee, in its own
name as trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the collection of
the sums so due and unpaid from and by the Issuing Institution, and may
prosecute any such action or proceeding to judgment or final decree and may
enforce any such judgment or final decree against the Issuing Institution
pursuant to the Letter of Credit, and may collect in the manner provided by law
from the Issuing Institution, the moneys adjudged or decreed to be payable
pursuant to the Letter of Credit.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company under the federal bankruptcy laws or any other
applicable law relative to the Company, its creditors, or its property, or in
case a receiver or trustee shall have been appointed for its property or in case
of any other judicial proceedings relative to the Company, its creditors, or its
property, the Trustee, irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to this Section 502, shall be entitled and empowered, by intervention
in such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of principal, premium, if any, and interest owing and unpaid in
respect of the Debentures, and to file such other papers or documents as
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may be necessary or advisable in order to have the claims of the Trustee and the
Debenture Holders allowed in any judicial proceeding relative to the Company,
its creditors, or its property, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute the same
after the deduction of its charges and expenses; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by each of the
Debenture Holders to make such payments to the Trustee on behalf of the Holders,
and, in the event that the Trustee shall consent to the making of such payments
directly to the Debenture Holders, to pay to the Trustee any amount due it for
compensation and expenses, including counsel fees incurred by it up to the date
of such distribution; provided, however, that nothing in this Indenture shall be
deemed to give to the Trustee any right to accept or consent to any plan of
reorganization or otherwise by action of any character in any such proceeding to
waive or change in any way any right of any Debenture Holders.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures or under the Letter of Credit, may be enforced by
the Trustee without the possession of any of the Debentures, or of the
production thereof on 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 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 proceedings 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 503. Application of Proceeds. Any moneys collected by the
Trustee pursuant to Section 502 shall be applied in the order following, at the
date or dates fixed by the Trustee for the distribution of such moneys:
(a) To the payment of costs and expenses of collection, and of all
amounts payable to the Trustee under Section 605;
(b) In case the principal of the Outstanding Debentures shall not have
become and be then due and payable, to the payment of interest on the
Debentures, in the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate per annum expressed
in the Debentures, such payments to be made ratably to the persons entitled
thereto, without discrimination or preference;
(c) In case the principal of the Outstanding Debentures shall have
become and shall be then due and payable, to the payment of the whole amount
then owing and unpaid upon all the Debentures for principal and interest, with
interest on the overdue principal and interest (to the extent that such interest
has been collected by the Trustee) upon overdue installments of interest at the
rate per annum expressed in the Debentures; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Debentures, then, to the payment of such principal and interest, without
preference or priority of principal over interest, or of interest over principal
or of any installment of interest over any other installment of interest, or of
any Debenture over any other Debenture, ratably to the aggregate of such
principal and accrued and unpaid interest.
(d) To the payment of the remainder, if any, to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.
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Section 504. Limitations on Suits by Debenture Holders. No Debenture
Holder shall have the right by virtue or by availing of any provision of the
Debentures or this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to the Debentures or this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holder or Holders of at least 25% in principal amount
of the Debentures make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders of at least 25% in principal amount
of the Debentures offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 90
days after receipt of the request and the offer of indemnity and, if
requested, the provision of indemnity; and
(e) during such 90 period the Holder or Holders of a majority
in principal amount of the Debentures do not give the Trustee a
direction inconsistent with the request;
it being understood and intended, and being expressly covenanted by the Holder
of every Debenture with every other Holder and the Trustee, that no one or more
Holders of Debentures shall have any right in any manner whatever by virtue or
by availing of any provision of this Indenture to affect, disturb, or prejudice
the rights of the Holders of any other of such 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 this Section 504, each and every Debenture Holder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Notwithstanding any provision of this Indenture, however, the right of
any Holder of any Debenture to receive payment on the principal of, and premium,
if any, and interest on, such Debenture, on and after the respective due dates
thereof as provided in such Debenture and this Indenture, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
Section 505. Powers and Remedies Cumulative; Delay or Omission Not
Waiver. All powers and remedies given by this Article V to the Trustee or to the
Debenture Holders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the Debenture Holders, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee or any
Holder of any of the Debentures to exercise any right or power accruing upon any
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 504, every power
and remedy given by this Article or by law to the Trustee or to the Debenture
Holders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Debenture Holders.
Section 506. Control by Debenture Holders; Waiver of Default. The
Holders of a majority in aggregate principal amount of the Debentures 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; provided, however, that subject to
the provisions of Section 601, the Trustee shall have the right to decline to
follow any such direction if the Trustee,
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having been advised by counsel, shall determine that the action so directed may
not be lawfully taken or if a responsible officer shall determine that the
action so directed would be unduly prejudicial to the Debenture Holders not
taking part in such direction. Prior to the giving of a Notice of Acceleration
as provided in Section 501, the Holders of a majority in aggregate principal
amount of the Debentures at the time Outstanding may on behalf of the Holders of
all the Debentures waive any past Default or Event of Default hereunder and its
consequences, except a Default in the payment of the principal of or interest on
any of the Debentures. In the case of any such waiver, 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.
Section 507. Trustee to Give Notice of Defaults Known to It, but May
Withhold in Certain Circumstances. The Trustee shall, within ninety (90) days
after the occurrence of a Default, mail to the Debenture Holders, as the names
and addresses of such Holders appear upon the registration books of the Company,
notice of each Default hereunder known to the Trustee, unless such Events of
Default have been cured before the giving of such notice; provided, that, except
in the case of default in the payment of the principal or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as responsible officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Debenture Holders.
Section 508. Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Debenture by
such Holder's 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 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,
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; but this
Section 508 shall not apply to any suit instituted by the Trustee, or any suit
instituted by any Debenture Holder, or group of Debenture Holders, holding in
the aggregate more than twenty-five percent (25%) in principal amount of the
Debentures Outstanding, or to any suit instituted by any Debenture Holder for
the enforcement of the payment of the principal of and premium, if any, or
interest, on any Debenture on or after the due date expressed in such Debenture.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 601. Duties and Responsibilities of Trustee. The Trustee, prior
to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties as
are specifically set forth in this Indenture. In case an Event of Default 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 person would exercise or use
under the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders, or other instruments, furnished to the
Trustee pursuant to any provision of this Indenture, shall examine them to
determine whether they conform to the requirements of this Indenture.
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:
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(a) Prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default which may have occurred:
(1) The duties and obligations of the Trustee 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 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 or judgment made in
good faith by a responsible officer, 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
Holders of not less than a majority in principal amount of the Debentures at the
time Outstanding 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 reasonable ground for belief that the
repayment of such funds or liability is not reasonably assured to it.
Section 602. Certain Rights of Trustee. Except as otherwise provided in
Section 601:
(a) The Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, bond 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 instrument signed in the name of
the Company by the President or any Vice President and the Secretary or an
Assistant Secretary or Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors of the Company 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 and any opinion of counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered, or omitted by it hereunder in good faith and in accordance with
such 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 Debenture Holders, pursuant to the provision of this
Indenture, unless such Debenture Holders shall have offered to the Trustee
reasonable
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security or indemnity against the costs, expenses, and liabilities which may be
incurred therein or thereby; nothing herein contained shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default (which
has not been cured or waived) to exercise 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 person would exercise or use under the circumstances in
the conduct of such person's own affairs;
(e) The Trustee shall not be liable for any action taken, suffered, 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;
(f) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the acts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, or other paper documents, unless
requested in writing to do so by the Holders of not less than a majority in
aggregate principal amount of the Debentures then Outstanding; provided, 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 expenses or liabilities 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 or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney employed with due care by the
Trustee; and
(h) The Trustee shall not be required to see that insurance on the
property of the Company is effected or maintained, or to keep itself informed as
to the performance or observance by the Company of any covenant or condition
herein contained.
Section 603. Trustee Exoneration From Responsibility. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of such Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture, or for the use or application of any
moneys received by any paying agent other than the Trustee.
Section 604. Moneys Held by Trustee. All moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall not be under any
liability for interest on any moneys received by it hereunder except as it may
agree with the Company to pay thereon. 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 its
President or any Vice President or its Treasurer or an Assistant Treasurer, its
Secretary or an Assistant Secretary.
Section 605. Compensation of Trustee. The Company covenants and agrees
to pay to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and, except as
otherwise expressly provided, 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
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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 bad faith.
Section 606. Right of Trustee to Rely on Certificate of Certain
Officers. Except as otherwise provided in Section 601, 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
suffering any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith 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 bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered, or
omitted by it under the provisions of this Indenture upon the faith thereof.
Section 607. Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 607, it shall, within ninety (90) days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign in the manner and with the effect specified in
this Section 609.
(b) In the event that the Trustee shall fail to comply with the
provisions of Section 607(a), the Trustee shall, within ten (10) days after the
expiration of such ninety (90) day period, transmit notice of such failure to
the Debenture Holders as the names and addresses of such Holders may appear upon
the registration books of the Company.
(c) For the purpose of this Section 607, the Trustee shall be deemed to
have a conflicting interest if:
(1) The Trustee or, any of its directors or executive
officers, is an obligor upon the Debentures issued under this Indenture
or an underwriter for the Company;
(2) The Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with the Company or an underwriter for the Company;
(3) The Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee, or representative
of the Company, or of an underwriter (other than the Trustee itself)
for the Company who is currently engaged in the business of
underwriting, except that:
(A) One individual may be a director and/or an
executive officer of the Trustee and a director and/or an
executive officer of the Company, but may not be at the same
time an executive officer of both the Trustee and the Company;
(B) If and so long as the number of directors of the
Trustee in office is more than nine (9), one (1) additional
individual may be a director and/or an executive officer of
the Trustee and a director of the Company; and
(C) The Trustee may be designated by the Company or
by an underwriter for the Company to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent, or depository, or in any other similar
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capacity, or, subject to this Section 607(c)(1), to act as
trustee whether under an indenture or otherwise;
(4) Ten percent (10%) or more of the voting securities of the
Trustee is beneficially owned either by the Company or by any director,
partner, or executive officer thereof, or twenty percent (20%) or more
of such voting securities is beneficially owned, collectively, by any
two or more of such persons; or ten percent (10%) or more is owned
either by an underwriter for the Company or any director, partner, or
executive officer thereof, or is beneficially owned, collectively, by
any two or more persons;
(d) For the purposes of this Section 607:
(1) The term "underwriter" when used with reference to the
Company shall mean every person, who, within three (3) years prior to
the time as of which the determination is made, has purchased from the
Company with a view to, or has offered or sold for the Company in
connection with, the distribution of any security of the Company
Outstanding at such time, or has participated or has had a direct or
indirect participation in any such undertaking, or has participated or
has had a participation in the direct or indirect underwriting of any
such undertaking, but such term shall not include a person whose
interest was limited to a commission from an underwriter or dealer not
in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" shall mean any director of a
corporation or any individual performing similar functions with respect
to any organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation,
a limited liability company, a partnership, an association, a
joint-stock company, a trust, an unincorporated organization, or a
government or political subdivision thereof. As used in this paragraph,
the term "trust" shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are evidenced by a
security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement, or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the direction
or management of the affairs of a person.
(5) The term "executive officer" shall mean the president,
every vice president, every trust officer, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated
or unincorporated, but shall not include the chairman of the board of
directors.
The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the
following provisions:
(A) A specified percentage of the voting securities
of the Trustee, the Company or any other person referred to in
this Section 607 (each of whom is referred to as a "person" in
this paragraph), means such amount of the Outstanding voting
securities of such person as entitle the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the
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outstanding voting securities of such person are entitled to
cast in the direction or management of the affairs of such
person.
(B) A specified percentage of a class of securities
of a person means such percentage of the aggregate amount of
securities of the class outstanding.
(C) The term "amount," when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating to
capital shares, and the number of units if relating to any
other kind of security.
(D) The term "outstanding" means issued and not held
by or for the account of the issuer. The following securities
shall not be deemed outstanding within the meaning of this
definition:
(i) Securities of an issuer held in a
sinking fund relating to securities of the issuer of
the same class.
(ii) Securities of an issuer held in a
sinking fund relating to another class of securities
of the issuer, if the obligation evidenced by such
other class of securities is not in default as to
principal or interest or otherwise.
(iii) Securities pledged by the issuer
thereof as security for an obligation of the issuer
not in default as to principal or interest or
otherwise.
(iv) Securities held in escrow if placed in
escrow by the issuer thereof.
Provided, however, that any voting securities of an
issuer shall be deemed outstanding if any person other than
the issuer is entitled to exercise the voting rights thereof.
(E) A security shall be deemed to be of the same
class as another security if both securities confer upon the
holder or holders thereof substantially the same rights and
privileges; provided, however, that, in the case of secured
evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series as different classes and
provided, further, that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity
dates thereof shall not be deemed sufficient to constitute
them securities of different classes, whether or not they are
issued under a single indenture.
Section 608. Persons Eligible for Appointment as Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States or any state authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least Three Million Five Hundred Thousand Dollars ($3,500,000), subject to
supervision or examination by federal or state authority and having a place of
business at the City of Iowa City or Cedar Rapids, Iowa, if there be such a
corporation having a place of business in such cities willing and able to act as
Trustee on reasonable and customary terms. If such corporation publishes reports
of condition at least
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annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, 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. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 609.
Section 609. Resignation and Removal of Trustee; Appointment of
Successor.
(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 to the Holders of Debentures at their addresses as
they shall appear on the registration books of the Company. Upon receiving such
notice of resignation the Company shall promptly appoint a successor trustee by
written instrument executed by order of the Board of Directors of the Company.
If no successor trustee shall have been so appointed and have accepted
appointment within thirty (30) days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Debenture Holder
who has been a bona fide Holder of a Debenture or Debentures for at least six
(6) months may, subject to the provisions of Section 508, on behalf of such
Holder 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 Section 607(a) after
written request therefor by the Company or by any Debenture Holder who
has been a bona fide Holder of a Debenture or Debentures for at least
six (6) months; or
(2) The Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by the Company
or by any such Debenture Holder; 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 of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or
subject to Section 508, any Debenture Holder who has been a bona fide Holder of
a Debenture or Debentures for at least six (6) months may, on behalf of such
Holder 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 a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee and
appoint a successor trustee.
(d) Any resignation or removal of the Trustee and any 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 610.
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Section 610. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed under Section 609 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
predecessor 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 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 605 execute and deliver an instrument transferring to such successor
trustee all the rights and powers of the trustee so ceasing to act. 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.
No successor trustee shall accept appointment as provided in this
Section 610, unless at the time of such acceptance such successor trustee shall
be eligible under Section 608.
Upon acceptance of appointment as provided in this Section 610, 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
registration books of the Company. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 611. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder without
execution or filing any paper or any further act on the part of any of the
parties hereto.
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 the original Trustee or any successor to the
Trustee hereunder and deliver such Debentures so authenticated; and in the 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 certificate shall have the same full force and effect as that
provided in the Debentures or in this Indenture with respect to a certificate of
the original Trustee hereunder; provided, however, that the right to
authenticate Debentures in the name of the Trustee herein shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 612. Preferential Collection of Claims Against Company.
(a) Subject to Section 612(b), if the Trustee shall be or shall become
a creditor, directly or indirectly, secured or unsecured, of the Company within
four (4) months prior to a default (as defined for purposes of this Section 612
in Section 612(c)) or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Debentures, and the holders of other indenture securities (as defined for
purposes of this Section 612 in Section 612(c)):
(1) An amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such four (4) month period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in Section 612(a)(2),
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or from the exercise of any right of set-off which the Trustee could
have exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(2) All property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four (4)
month period, or an amount equal to the proceeds of such property, if
disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing contained herein, however, shall affect the right of the
Trustee:
(A) To retain for its own account (i) payments made on account of
any such claim by any person (other than the Company) who is liable
thereon; and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person; and (iii) distributions made in cash,
securities, or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the federal bankruptcy laws or applicable
state law;
(B) To realize for its own account, upon any property held by it as
security for any such claim, if such property was held prior to the
beginning of such four (4) month period;
(C) To realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of
such four (4) month period and such property was received as security
therefor simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such property was
so received the Trustee had no reasonable cause to believe that a
default, as defined in paragraph (c) of this Section 612, would occur
within four (4) months;
(D) To receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such
claim as provided in such paragraph (B) or (C), as the case may be, to
the extent of the fair value of such property.
For the purposes of paragraphs (B), (C), and (D), property
substituted after the beginning of such four (4) month period for
property held as security at the time of such substitution shall, to
the extent of the fair value of the property released, have the same
status as the property released, and, to the extent that any claim
referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any
preexisting claim of the Trustee as such creditor, such claim shall
have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Debenture Holders, and the holders
of other indenture securities in such manner that the Trustee, the
Debenture Holders, and the holders of other indenture securities
realize, as a result of payments from such special account and payments
of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
federal bankruptcy laws or applicable state law, the same percentage of
their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Company of
the funds and property in such special account and before crediting to
the respective claims of the Trustee, the Debenture Holders, and the
holders of other indenture securities dividends on claims filed against
the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the federal bankruptcy laws or applicable
state law, but after
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crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or in proceedings for applicable state
law, whether such distribution is made in cash, securities, or other
property, but shall not include any such distribution with respect to
the secured portion, if any, of such claim. The court in which such
bankruptcy, receivership, or proceeding for reorganization is pending
shall have jurisdiction (i) to apportion between the Trustee, the
Debenture Holders, and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and
property held in such special accounts and the proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee, the Debenture
Holders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property
held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured
and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such four (4) month period shall be subject to paragraph
(a) of this Section 612, as though such resignation or removal had not
occurred. If any Trustee has resigned or been removed prior to the
beginning of such four (4) month period, it shall be subject to Section
612(a) if and only if the following conditions exist:
(i) The receipt of property or reduction of claim
which would have given rise to the obligation to account, if
such Trustee had continued as Trustee, occurred after the
beginning of such four (4) month period; and
(ii) Such receipt of property or reduction of claim
occurred within four (4) months after such resignation or
removal.
(b) There shall be excluded from the operation of paragraph (a) of this
Section 612, a creditor relationship arising from:
(1) The ownership or acquisition of securities issued under
any indenture, or any security or the securities having a maturity of
one year or more at the time of acquisition by the Trustee;
(2) Advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the Debenture
Holders at the time and in the manner provided in this Indenture;
(3) Disbursements made in the ordinary course of business in
the capacity of trustee, under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depository, or other similar
capacity;
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(4) An indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction (as defined in paragraph (c) of
this Section 612);
(5) The ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) The acquisition, ownership, acceptance, or negotiation of
any drafts, bills of exchange, acceptances, or obligations which fall
within the classification of self-liquidating paper (as defined in
paragraph (c) of this Section 612).
(c) As used in this Section 612:
(1) The term "default" shall mean any failure to make payment
in full of the principal of or interest upon any of the Debentures or
upon other indenture securities when and as such principal or interest
becomes due and payable.
(2) The term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined in the
Trust Indenture Act of 1939, as amended (the "TIA")) outstanding under
any other indenture (A) under which the Trustee is also trustee, (B)
which contains provisions substantially similar to the provisions of
paragraph (a) of this Section 612, and (C) under which a default exists
at the time of the apportionment of the funds and property held in said
special account.
(3) The term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven
(7) days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable upon
demand.
(4) The term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated, or incurred by the Company for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares of merchandise, and which is secured by documents evidencing
title to, possession of, or lien upon the goods, wares or merchandise
or the receivables or proceeds arising from the sale of the goods,
wares, or merchandise previously constituting the security, provided
the security is received by the Trustee simultaneously with the
creation of the creditor relationship with the Company arising from the
making, drawing, negotiation, or incurring of the draft, bill of
exchange, acceptance, or obligation.
ARTICLE VII
CONCERNING THE DEBENTURE HOLDERS
Section 701. Evidence of Action Taken by Debenture Holders. 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 Debenture Holders in person or by agent or by proxy appointed in
writing, or (b) by the record of the Holders of Debentures voting in favor
thereof at any meeting of Debenture Holders duly called and held in accordance
with the provisions of Article VIII, or (c) by a
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combination of such instrument or instruments and any such record of such a
meeting of Debenture Holders.
Section 702. Proof of Execution of Instruments and of Holding of
Debentures. Subject to the provisions of Sections 601, 602 and Section 806,
proof of the execution of any instrument by a Debenture Holder or such Holder's
agent or proxy and proof of the holding by any person of any of the Debentures
shall be sufficient if made in accordance with such reasonable rules and
regulation 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
register of such Debentures or by a certificate of the Debenture registrar.
The record of any Debenture Holders' meeting shall be proved in the
manner in Section 806.
Section 703. When Deemed Absolute Owners. Prior to due presentment for
registration of transfer, the Company, the Trustee, any paying agent, and any
Debenture registrar may deem and treat the person in whose name any Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon) for the purpose of receiving payment
of or on account of the principal of and premium, if any, and interest on such
Debenture and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any Debenture registrar shall be affected by any notice
to the contrary. All such payment so made to any such registered Holder for the
time being, or upon such Holder's 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 704. Debentures Owned by Company Deemed 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 by any person directly
or indirectly controlling or controlled by or under common control with the
Company shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction or consent or waiver
only Debentures which the Trustee 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 704 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 a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. In
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 705. Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 701, 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 of a Debenture 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 its principal office and upon proof of
holding as provided in Section 702, revoke any such action so far as concerns
such 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 or of any Debenture issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Debenture. Any action taken by the Holders of the
percentage in aggregate principal amount of the Debentures specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the Holders of all the Debentures.
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ARTICLE VIII
DEBENTURE HOLDERS' MEETINGS
Section 801. Purposes for Which Debenture Holders' Meetings May Be
Called. A meeting of Debenture Holders 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:
(1) 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 or Event of Default hereunder and its consequences, or to take
any other action authorized to be taken by Debenture Holders pursuant
to Article V;
(2) To remove the Trustee and appoint a successor trustee
pursuant to Article VI;
(3) To consent to the execution of an indenture or indentures
supplemental hereto pursuant to Section 902; or
(4) To take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of
the Debentures under any other provision of this Indenture or under
applicable law.
Section 802. Call of Meetings by Trustee. The Trustee may at any time
call for a meeting of Debenture Holders to take any action authorized in Section
801, to be held at such time and at such place in the Cities of Cedar Rapids,
Iowa City or Coralville, Iowa, as the Trustee shall determine. Notice of every
meeting of the Debenture Holders, 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 at their addresses as they shall appear
on the registration books of the Company not less than twenty (20) nor more than
one hundred eighty (180) days prior to the date fixed for the meeting.
Section 803. Company and Debenture Holders May Call Meetings. In case
at any time the Company, pursuant to the resolution of its Board of Directors,
or the Holders of at least twenty-five percent (25%) in aggregate principal
amount of the Debentures then Outstanding, shall have requested the Trustee to
call a meeting of Debenture Holders, 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 twenty (20) days
after receipt of such request, then the Company or the Holders of Debentures in
the amount above specified may determine the time and place in the Cities of
Cedar Rapids, Iowa City or Coralville, Iowa, for such meeting and may call such
meeting to take any action authorized in Section 801, by mailings notice thereof
as provided in Section 802.
Section 804. Persons Entitled to Vote at Meeting. To be entitled to
vote at any meeting of Debenture Holders a person shall be (a) a Holder of one
or more Debentures, or (b) a person appointed by an instrument in writing as
proxy by a Holder of one or more Debentures. The only persons who shall be
entitled to be present or to speak at any meeting of Debenture Holders 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 805. Determination of Voting Rights; Conduct and Adjournment of
Meeting. Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Debenture Holders, 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.
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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 Debenture Holders as provided in Section 803, in which case the
Company or the Debenture Holders 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 vote of the Holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote.
At any meeting, the presence of persons holding or representing
Debentures in an aggregate principal amount sufficient to take action upon the
business for the transaction of which such meeting was called shall be necessary
to constitute a quorum; but, if less than a quorum be present, the persons
holding or representing a majority of the Debentures represented at the meeting
may adjourn such meeting with the same effect, for all intents and purposes, as
though a quorum had been present.
Subject to the provisions of Section 704, at any meeting each Debenture
Holder or proxy shall be entitled to one (1) vote for each One Dollar ($1.00) of
principal amount of Debentures held or represented by such Holder, 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 such person or instruments in writing
as aforesaid duly designating such person as the person to vote on behalf of
other Debenture Holders. Any meeting of Debenture Holders duly called pursuant
to Section 802 or 803, may be adjourned from time to time, by vote of the
Holders of a majority in principal amount of the Debentures represented at the
meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
Section 806. Counting Votes and Recording Action of Meeting. The vote
upon any resolution submitted to any meeting of Debenture Holders shall be by
written ballots on which shall be subscribed the signatures of the Holders of
Debentures or of their representatives by proxy and the principal amount 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 duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Debenture Holders 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 802.
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 807. Meeting Does Not Hinder Exercise of Rights. Nothing in
this Article VIII shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Debenture Holders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Debenture Holders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE IX
SUPPLEMENTAL INDENTURES
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Section 901. Supplemental Indentures Without Consent of Debenture
Holders. The Company, when authorized by a resolution of its Board of Directors,
and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) To transfer, assign, mortgage or pledge to the Trustee as security
for the Debentures any property or assets which the Company may desire to
transfer, assign, mortgage or pledge;
(b) To evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements, and obligations of the Company pursuant to Article X
hereof;
(c) To add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Holders of the Debentures
as its Board of Directors and the Trustee shall consider to be for the
protection of the Holders of Debentures, and to make the occurrence, or the
occurrence and continuance, of a Default in any such additional covenants,
restrictions, or conditions a Default or an Event of Default permitting the
enforcement of all or any of the several 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 or may limit the right of the Holders of a
majority in aggregate principal amount of the Debentures to waive such Default;
and
(d) 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 provisions contained herein or in any supplemental
matters or questions arising under this Indenture as shall not adversely affect
the interests of the Holders of the Debentures.
(e) To conform this Indenture with any requirements of the Securities
Act, the Exchange Act, or the TIA, or any similar state statute to which this
Indenture, the Debentures issues pursuant hereto, or the Company shall
hereinafter become subject to and governed by.
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 as may be therein contained and to accept the
conveyance, transfer, assignment, mortgage, or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties, or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
901 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 902.
Section 902. Supplemental Indentures with Consent of Debenture Holders.
With the consent (evidenced as provided in Section 701) of the Holders of not
less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal
amount of the Debentures at the time Outstanding, the Company, when authorized
by a resolution of its Board of Directors, 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 supplemental indenture shall (a) extend the fixed maturity of
any Debentures, or reduce the principal amount thereof or any premium thereon,
without the consent of the Holder of
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each Debenture so affected, or (b) reduce the aforesaid percentage of
Debentures, the Holders of which are required to consent to such supplemental
indenture, without the consent of the Holders of all Debentures then
Outstanding.
Upon the request of the Company, accompanied by a copy of a resolution
of its Board of Directors certified by the Secretary or Assistant Secretary of
the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debenture Holders
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.
It shall not be necessary for the consent of the Debenture Holders
under this Section 902 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 902, the
Company shall mail a notice, setting forth in general terms the substance of,
such supplemental indenture, to the Holders of Debentures, at their addresses as
they shall appear on the registration books of the Company. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
Section 903. 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 904. Notation on Debentures in Respect of Supplemental
Indentures. Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation in form approved by the Trustee as to any matter provided 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 Trustee and the
Board of Directors of the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee, and delivered in exchange for the Debentures then
Outstanding.
ARTICLE X
CONSOLIDATION, MERGER, AND SALE
Section 1001. Company May Consolidate or Merge on Certain Terms.
Provided that the obligations of the Indenture and the Debentures survive,
nothing contained in this Indenture or in any of the Debentures shall prevent
any consolidation or merger of the Company with or into any other corporation or
corporations (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.
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Section 1002. Sale of Assets by the Company. The Company may not make a
sale of all or substantially all of its assets, outside the ordinary course of
business, without the consent of Holders of two-thirds (2/3) of the aggregate
principal amount of the Debentures then Outstanding.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE; UNCLAIMED MONEYS
Section 1101. Satisfaction and Discharge of Indenture. If (a) the
Company shall deliver to the Trustee for cancellation all Outstanding
Debentures, or (b) all Outstanding Debentures not delivered to the Trustee for
cancellation shall have become due and payable or by their terms are to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee as trust funds the
entire amount sufficient to pay at maturity or upon redemption all such
Debentures not 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, as the case may be, and if in either case the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company, then
(1) This Indenture shall cease to be of further effect, and
on and after such maturity date or redemption date, as the case may be,
the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an opinion of counsel and at the cost and expense of
the Company, shall execute proper instruments acknowledging
satisfaction of, and discharging, this Indenture; and
(2) All obligations of the Company in respect of the
Debentures shall cease and be discharged and, subject to the provisions
of Section 1103, the Holders of the Debentures shall thereafter be
restricted exclusively to such funds for any and all claims of
whatsoever nature on their part under this Indenture or with respect to
the Debentures.
Section 1102. Application by Trustee of Funds Deposited for Payment of
Debentures. In the event the Trustee is designated as a paying agent, or in the
event that funds come into the possession of the Trustee (whether by exercise of
any remedy due to Default or otherwise), all moneys deposited with the Trustee
pursuant to Section 1101, shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Company
acting as its own paying agent), to the Holders of the particular Debentures,
for the payment or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest.
Section 1103. Defeasance and Discharge of Indenture and the Debentures.
The Company may at any time elect to have either Section 1104 or 1105 be applied
to the Outstanding Debentures upon compliance with the conditions set forth in
Section 1106.
Section 1104. Legal Defeasance and Discharge. Upon the Company's
exercise under Section 1103 of the option applicable to this Section 1104, the
Company shall be deemed to have been discharged from its obligations with
respect to the Debentures on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Debentures, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1107 and the other
Sections of this Indenture referred to in clauses (a) and (b) of this Section
1104, and to have satisfied all its other obligations under the Debentures and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except
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for the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Outstanding Debentures to receive solely
from the trust fund described in Section 1106, and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on the Debentures when such payments are due, (b) the Company's
obligations under Sections 106, 107 and 203, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (iv) this Article XI. Subject
to compliance with this Article XI, the Company may exercise its option under
this Section 1104 notwithstanding the prior exercise of its option under Section
1105 with respect to the Debentures.
Section 1105. Covenant Defeasance. Upon the Company's exercise under
Section 1103 of the option applicable to this Section 1105, the Company shall be
released from its obligations under the covenants contained in Sections 202,
204, 206, 302, 303 and 1002 on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Debentures shall
thereafter be deemed not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders of Debentures (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the Outstanding
Debentures, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default with respect to the
Debentures under Section 501(c) or (f) but, except as specified above, the
remainder of this Indenture and the Debentures shall be unaffected thereby. In
addition, upon the Company's exercise under Section 1103 of the option
applicable to this Section 1105, Sections 501(d) and (e) shall not constitute
Events of Default.
Section 1106. Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to application of either Section 1104 or
Section 1105 to the Debentures:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 608 who shall agree to comply with the provisions of this Article XI
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Debentures, (i) cash in U.S. Dollars in an
amount, or (ii) non-callable Government Securities which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment,
cash in U.S. Dollars in an amount, or (iii) a combination thereof, in such
amounts, as will be sufficient to pay and discharge and which shall be applied
by the Trustee to pay and discharge (A) interest payments on the Debentures on
each Interest Payment Date and (B) the principal of the Outstanding Debentures
on September 30, 2002; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such non-callable Government
Securities to said payments with respect to the Debentures.
(b) In the case of an election under Section 1104, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the Outstanding Debentures will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance has not occurred.
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(c) In the case of an election under Section 1105, the Company shall
have delivered to the Trustee an opinion of counsel in the United States to the
effect that the Holders of the Outstanding Debentures will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax in the same amount, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred.
(d) No Default or Event of Default with respect to the Debentures shall
have occurred and be continuing on the date of such deposit or, in so far as
subsection 501(d) or (e) is concerned, at any time in the period ending on the
91st day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(e) Such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which the Company is bound.
(f) The Company shall have delivered to the Trustee an opinion of
counsel to the effect that the deposit with the Trustee of the assets deposited
in connection with such Legal Defeasance or Covenant Defeasance, as the case may
be, and the payment, from the assets so deposited or the proceeds thereof, of
the principal of and interest on the Outstanding Debentures in accordance with
the terms of the Indenture and the Debentures, would not be avoidable under
Section 544, 547 or 548 of Title 11 of the United States Code (the "Bankruptcy
Code") as in effect on the date of such opinion in the event a petition naming
the Company as debtor were filed under the Bankruptcy Code after the 91st day
following such deposit.
Section 1107. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 1108, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with the Trustee pursuant to Section 1106 in respect of the Outstanding
Debentures shall be held in trust and applied by the Trustee, in accordance with
the provisions of the Debentures and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of the Debentures of all
sums due and to become due thereon in respect of principal and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 1106 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Debentures.
Anything in this Article XI to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any money or non-callable Government Securities held by it as provided
in Section 1106 which are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 1108. Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. Dollars or non-callable Government Securities in accordance
with Section 1104 or 1105, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 1104 or 1105 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1104 or 1105, as the case may be; provided, however, that, if the
Company makes any payment of principal of or interest on any Debenture following
the reinstatement of its obligations, the Company
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shall be subrogated to the rights of the Holders of such Debenture to receive
such payment from the money held by the Trustee or Paying Agent.
Section 1109. Return of Unclaimed Moneys. Any moneys deposited with the
Trustee or any Paying Agent not applied but remaining unclaimed by the Holders
of Debentures for one (1) year after the date upon which the principal of and
premium, if any, or interest on such Debentures shall have become due and
payable, shall be repaid to the Company by the Trustee or such agent on demand;
and the Holder of any of the Debentures entitled to receive such payment shall
thereafter look only to the Company for the payment thereof.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 1201. Personal Immunity from Liability of Incorporators,
Stockholders, Officers and Directors. No recourse under or upon any obligation,
covenant, or agreement of this Indenture, or of any Debenture, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, or against any past, present, or future stockholder, officer, or
director, as such, of the Company or of any successor corporation, either
directly or through the Company, whether by virtue of any constitution, statute,
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability and all such claims being hereby expressly waived and
released as a condition of, and as consideration for, the execution of this
Indenture and the issue of the Debentures, it being expressly understood that
this Indenture and the obligations issued hereunder are solely non-recourse
corporate obligations, and that any and all such personal liability is hereby
expressly waived and released by every Holder of Debentures as a condition of,
and as a consideration for, the execution of this Indenture and the issue of
such Debentures.
ARTICLE XIII
MISCELLANEOUS PROVISIONS AND DEFINITIONS
Section 1301. Successors. All the covenants, stipulations, promises,
and agreements in this Indenture by or on behalf of the Company shall bind its
successors and assigns, whether so expressed or not.
Section 1302. Benefit of Indenture Restricted to Parties and Debenture
Holders. Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any person, firm, or corporation, other
than the parties hereto and the Debenture Holders, any legal or equitable right,
remedy, or claim under or in respect of the Indenture, or under any covenant,
condition, or provision herein contained; and subject to the provisions of
Section 1201, all its covenants, conditions, and provisions shall be for the
sole benefit of the parties hereto and of the Debenture Holders.
Section 1303. Payments Due on Sundays and Holidays. In any case where
the date of maturity of interest on or principal of the Debentures or the date
fixed for redemption of any Debentures shall be a Saturday, Sunday or legal
holiday or a day on which banking institutions in the City of Cedar Rapids,
Iowa, are authorized by law to close, then payment of interest or principal and
premium, if any, may be made on the next succeeding business day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after such date.
Section 1304. Notices and Demands on Company and Trustee. Any notice or
demand which by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the Holders of Debentures on the Company
shall be deemed to have been sufficiently given or served, for all
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purposes, if given or served on the Company at 2600 Crosspark Road, Coralville,
Iowa 52241-3212 (until another address is filed by the Company with the
Trustee). Any notice, direction, request, or demand by any Debenture Holder to
or upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the principal office of the Trustee at 1800
First Avenue NE, P.O. Box 2189, Cedar Rapids, IA 52406 (until another address is
filed by the Trustee with the Company).
Section 1305. Laws of Iowa to Govern. This Indenture and each Debenture
shall be deemed to be a contract made under the laws of the State of Iowa, and
for all purposes shall be construed in accordance with the laws of such State.
Section 1306. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. 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 all conditions precedent 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 conditions precedent have been complied
with, except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relative to such particular application or demand, no additional
certificate or opinion need be furnished.
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 (a) a statement that the person
making such certificate or opinion has read such covenant or condition; (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (d) a statement as to whether or not in the opinion of such
person, such condition or covenant has been complied with.
Section 1307. 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 1308. Definitions. The terms defined in this Section 1308
(except as 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 means specified in this Section.
(a) Affiliate. The term "Affiliate" shall mean a person
controlling, controlled by, or under common control with, another
person.
(b) Board of Directors. The term "Board of Directors" shall
mean the Board of Directors of the Company, or the Executive Committee
of such Board.
(c) Debenture; Outstanding. The term "Debenture" or
"Debentures" shall mean any Debentures authenticated and delivered
under this Indenture.
The term "Outstanding," when used with reference to
Debentures, shall, subject to the provisions of Section 704, mean, as
of any particular time, all Debentures authenticated and delivered by
the Trustee under this Indenture, except:
(1) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
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(2) Debentures 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 that if such Debentures are to be
redeemed prior to the maturity thereto, notice of such
redemption shall have been given as in Article IV provided, or
provision satisfactory to the Trustee shall have been made for
giving such notice; and
(3) Debentures in lieu of or in substitution for
which other Debentures shall have been authenticated and
delivered pursuant to Section 107.
(d) Default. The term "Default" means any event that is
or with the passage of time or the giving of notice or both would be an
Event of Default.
(e) Event of Default. The term "Event of Default" shall
mean any event specified in Section 501, continued for the period of
time, if any, and after the giving of the notice, if any, thereof
designated in the Indenture.
(f) Government Securities. The term "Government Securities"
means securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof.
(g) Holder. The terms "Debenture Holder" and "Holder," and
other similar terms, shall mean the person in whose name a particular
Debenture is registered on the books of the Company kept for that
purpose in accordance with the terms of this Indenture.
(h) Officers' Certificate. The term "Officers'
Certificate" shall mean a certificate signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer or any accounting
officer of the Company.
(i) Opinion of Counsel. The term "Opinion of Counsel"
shall mean a written opinion of counsel (who may be an employee of or
of counsel to the Company).
(j) Responsible Officer. The term "responsible officer,"
when used with respect to the Trustee, shall mean the chairman or the
vice chairman of the board of directors or trustees, the chairman or
vice chairman of the executive committee of the board of directors or
trustees, the president, any vice president, the treasurer, the
secretary, any trust officer, any second or assistant vice president,
or any officer or assistant officer of the Trustee other than those
specifically above mentioned customarily performing functions similar
to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with a
particular subject.
(k) Trustee. The term "Trustee" shall mean First Trust &
Savings Bank, a state banking association duly organized and existing
under the laws of the State of Iowa and, subject to the provisions of
Article VII, shall also include its successors and assigns. The term
"principal office" of the Trustee shall mean the principal office of
the Trustee at which the corporate trust business of the Trustee shall,
at any particular time, be administered.
Section 1311. TIA Not Applicable. This Indenture is exempt from
application of the TIA as in effect on the date of execution of this Indenture.
In no event shall the amount of Debentures issued and Outstanding under this
Indenture exceed Ten Million Dollars ($10,000,000).
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SIGNATURE PAGE FOR TRUST INDENTURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
NEURAL APPLICATIONS CORPORATION
--------------------------------------
By /s/ Robert A. Squires
---------------------------------- --------------------------------------
Robert A Squires, President
....FIRST TRUST & SAVINGS BANK,
Cedar Rapids, Iowa
--------------------------------------
By /s/ [illegible]
---------------------------------- --------------------------------------
---------------------------------- --------------------------------------
and Trust Officer
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EXHIBIT "A"
No. $
----- --------
NEURAL APPLICATIONS CORPORATION
8.75% SENIOR SECURED DEBENTURES DUE 2002
THE DEBENTURE EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAS BEEN TAKEN BY
THE HOLDER SOLELY FOR INVESTMENT PURPOSES. SAID DEBENTURE MAY NOT BE SOLD OR
TRANSFERRED UNLESS (A) IT HAS BEEN REGISTERED UNDER SAID ACT AND REGISTERED OR
QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR (B) THE COMPANY IS
PRESENTED WITH EITHER A WRITTEN OPINION OF COUNSEL OR A "NO ACTION" LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION AND ANY APPLICABLE STATE SECURITIES
COMMISSION, IN EITHER CASE IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE
COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
CIRCUMSTANCES OF SUCH SALE OR TRANSFER.
NEURAL APPLICATIONS CORPORATION, a Delaware corporation, hereinafter
referred to as the "Company," for value received, hereby promises to pay, solely
in conformity with the terms of this Debenture and the Indenture (as such terms
are defined below), to the Debenture Holder, or registered assigns, the
principal sum of_________________ Thousand Dollars ($_______) on June 30, 2002
(or upon earlier redemption, as provided in the Indenture) in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debt, and to pay interest on
the principal sum at the rate of 8.75% per annum from the date of issue of this
Debenture until full payment of the principal sum has been made or duly provided
for. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months and shall be payable on March 31 and September 30 of each year beginning
on March 31, 1998 (each such date an "Interest Payment Date") to the person in
whose name any Debenture is registered at the close of business on the March 15
or September 15 immediately preceding such Interest Payment Date. All payments
to be paid hereunder shall be paid by check mailed to the registered Holder
entitled thereto at such Holder's last address as it appears on the records of
the Company.
1. DEBENTURES. This Debenture is one of a duly authorized issue of
Debentures of the Company designated as its "8.75% Senior Secured Debentures due
2002" (hereinafter referred to as the "Debentures") limited to an aggregate
principal amount not to exceed Nine Million Dollars ($9,000,000), issued or to
be issued under and pursuant to an Indenture dated as of August 1, 1997
(hereinafter referred to as the "Indenture") duly executed and delivered by the
Company to First Trust & Savings Bank, Cedar Rapids, Iowa, as trustee
(hereinafter referred to as the "Trustee"), to which Indenture and all
indentures supplemental thereto (whether entered into with or without the
consent of the Holder hereof, as provided in the Indenture) reference is hereby
made for a complete description of the respective rights, limitations of rights,
obligations, duties, and immunities thereunder of the Trustee, the Company, and
the Holders of the Debentures. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Indenture; in the
event of any conflict or inconsistency between the terms of this Debenture and
the terms of the Indenture, the terms of the Indenture shall govern.
2. DEFAULT. In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.
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3. LIMITATION ON SUITS BY DEBENTURE HOLDERS; UNDERTAKING TO PAY COSTS.
The Indenture provides that, if the Trustee and the Company shall have been
given a Notice of Acceleration (as defined in the Indenture) in accordance with
the terms of the Indenture, no Debenture Holder shall have the right by virtue
or by availing of any provision of the Debentures or the Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to the Debentures or the Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder; it being understood and intended,
and being expressly covenanted by the Holder of every Debenture with every other
Holder and the Trustee, that no one or more Holders of Debentures shall have any
right in any manner whatever by virtue or by availing of any provision of the
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 the Indenture, except in
the manner provided in the Indenture and for the equal, ratable, and common
benefit of all Holders of Debentures. Notwithstanding any provision of the
Indenture, however, the right of any Holder of any Debenture to receive payment
on the principal of, and premium, if any, and interest on, such Debenture, on
and after the respective due dates thereof as in such Debenture and the
Indenture provided, or to institute suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
The Indenture further provides that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under the
Indenture, or 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, 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; but this provision shall not
apply to any suit instituted by the Trustee, or any suit instituted by any
Debenture Holder, or group of Debenture Holders, holding in the aggregate more
than twenty-five percent (25%) in principal amount of the Debentures
Outstanding, or to any suit instituted by any Debenture Holder for the
enforcement of the payment of the principal of and premium, if any, or interest,
on any Debenture on or after the due date expressed in such Debenture.
4. REGISTRATION. The Debentures shall be registered as to principal and
interest in the Holders' name in the manner hereinafter provided. Books for the
registry of the Debentures shall be maintained at the office of the Company, and
no transfer hereof shall be valid unless made on the Company's books at the
office of the Company, by the registered Holder hereof, in person, or such
Holder's attorney duly authorized in writing, and similarly noted hereon.
Payment to the registered Holder hereof of the principal hereof or interest
hereon shall be a complete discharge of the Company's liability with respect to
any such payment, but the Company may, at any time, require the presentation
hereof as a condition precedent to such payment.
5. REDEMPTION. The Debentures constituting this series are subject to
redemption by the Company on a date not later than sixty (60) days following the
closing date of a Qualifying Public Offering (as defined in the Indenture), upon
the terms and subject to the conditions described in the Indenture. Such
redemption shall be at a redemption price equal to One Hundred Percent (100%) of
the principal amount hereof plus accrued but unpaid interest hereon to the date
fixed for redemption. Notice of redemption to the Holders of Debentures shall be
in the form of written notice mailed by the Company at least thirty (30) days
prior to the date fixed for redemption to the registered Holders of Debentures
at their last addresses as they shall appear on the registry books of the
Company, said notice to be by first class mail, postage prepaid. Payment of the
redemption price of the Debentures, together with accrued interest to the date
fixed for redemption, will be made at the office or agency to be maintained by
the Company in accordance with the Indenture, upon presentation and surrender of
such Debentures. Unless the Company defaults in making the redemption payment,
from and after the redemption date named in the notice of redemption, interest
will cease to accrue on the Debentures.
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6. REGISTERED HOLDER DEEMED OWNER. The Company and the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this
Debenture (whether or not this Debenture shall be overdue and notwithstanding
any notice of ownership or writing hereon or thereon made by anyone other than
the Company or any Debenture registrar), for the purpose of receiving payment
hereof or thereof or an account hereof or thereof and for all other purposes,
and neither the Company nor the Trustee shall be affected by any notice to the
contrary.
7. LETTER OF CREDIT. The Company has obtained in favor of the Trustee,
for the benefit of the Holders of the Debentures, and shall maintain until the
earlier of November 29, 2002 or such time as the principal amount and all
interest payable pursuant to the Debentures have been paid in full, an
Irrevocable Standby Letter of Credit (the "Letter of Credit"), providing for
payment to the Trustee, for the benefit of the Holders of the Debentures, of the
Outstanding principal amount of the Debentures, plus all interest due and unpaid
pursuant to the Debentures, and all costs of collection recoverable hereunder or
pursuant to the Indenture, upon a Notice of Acceleration as provided for by the
Indenture and call by the Trustee as required by the Letter of Credit. The
amount of the Letter of Credit shall at all times total at least one hundred
seven percent (107%) of the Outstanding principal amount of the Debentures.
The Indenture further provides that, subject to the terms and
conditions contained therein, the Company may, at its option, obtain a
substitute Letter of Credit (a "Substitute Letter of Credit"), the terms of
which shall in all material respects be the same as those of the original Letter
of Credit and the issuer of which shall be a bank, trust company or financial
lender with assets in excess of $1 billion and with long-term obligations rated
by Standard & Poors or a similar rating service of B+ or better.
8. NEGATIVE COVENANT. In the Indenture, and subject to the terms and
provisions thereof, the Company has agreed that it shall not pledge, mortgage,
grant a security interest in, agree to the placement of any lien upon, or, other
than in the ordinary course of its business, sell, any of its assets; provided,
that the Company may grant a security interest in, or agree to the placement of
a lien upon, any asset or assets if such security interest is granted or lien
incurred to secure all or part of the purchase price, or to secure indebtedness
incurred to pay all or part of the purchase price, of such asset or assets; and
provided, further, that (a) any such security interest or lien shall be confined
solely to the asset or assets so acquired and, if required by the terms of the
instrument originally creating such security interest or lien, other assets
which are an improvement to or are acquired for specific use in connection with
such acquired assets or assets, together with any proceeds, including insurance
proceeds, thereof and (b) any such security interest or lien shall be created
within 120 days after the acquisition of such asset or assets.
9. NON-RECOURSE AGAINST INCORPORATORS, STOCKHOLDERS, OFFICERS, OR
DIRECTORS; LIABILITY OF TRUSTEE. No recourse under or upon any obligation,
covenant, or agreement of this Debenture, or of the Indenture, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, or against any past, present, or future stockholder, officer, or
director, as such, of the Company or of any successor corporation, either
directly or through the Company, whether by virtue of any constitution, statute,
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability and all such claims being hereby expressly waived and
released as a condition of, and as consideration for, the execution of the
Indenture and the issue of the Debentures, it being expressly understood that
the Indenture and the Debentures issued thereunder are solely non-recourse
corporate obligations, and that any and all such personal liability is hereby
expressly waived and released by every Holder of Debentures as a condition of,
and as a consideration for, the execution of the Indenture and the issue of such
Debentures. Except as provided for in the Indenture, the Trustee shall not be
liable to the Holders on the Debentures.
10. AUTHORIZATION. The Company represents that all things necessary to
make this Debenture, when executed by the Company as provided in the Indenture,
the valid, binding and legal obligation of the Company as set forth in and
limited by the terms of the Indenture, and to constitute
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these presents a valid Debenture and agreement according to its terms and the
terms of the Indenture and that the execution of the Indenture and the execution
and issue of this Debenture have in all respects been duly authorized.
Witness the original or facsimile signature of the duly authorized
officers of the Company.
Dated:
--------------------
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described above issued pursuant to the
above-mentioned Indenture.
Dated:
-------------
FIRST TRUST & SAVINGS BANK, as Trustee
By
-------------------------------------
Authorized Signatory
Name
-------------------------------
Title
------------------------------
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