Document:

ex4-2.htm

 

Exhibit-4.2

Type:  Exhibit- 4.2

Description: Citizens Capital Corp. Series Bond Indenture Form.

CITIZENS CAPITAL CORP.

INDENTURE

UW Trust Company,

A Texas Trust Company

AS TRUSTEE

DATED AS OF _______________ 2010

 DEBT SECURITIES

	
TABLE OF CONTENTS

	
                                                                                                                                                                   Page

	
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	  
	
SECTION 1.1

	
DEFINITIONS

	
5

	
SECTION 1.2

	
COMPLIANCE CERTIFICATES AND OPINIONS

	
12

	
SECTION 1.3

	
FORM OF DOCUMENTS DELIVERED TO TRUSTEE

	
12

	
SECTION 1.4

	
ACTS OF HOLDERS; RECORD DATES

	
13

	
SECTION 1.5

	
NOTICES, ETC., TO TRUSTEE AND COMPANY

	
14

	
SECTION 1.6

	
NOTICE TO HOLDERS; WAIVER

	
15

	
SECTION 1.7

	
CONFLICT WITH TRUST INDENTURE ACT

	
15

	
SECTION 1.8

	
EFFECT OF HEADINGS AND TABLE OF CONTENTS

	
15

	
SECTION 1.9

	
SUCCESSORS AND ASSIGNS

	
15

	
SECTION 1.10

	
SEPARABILITY CLAUSE

	
16

	
SECTION 1.11

	
BENEFITS OF INDENTURE

	
16

	
SECTION 1.12

	
GOVERNING LAW

	
16

	
SECTION 1.13

	
LEGAL HOLIDAYS

	
16

	
SECTION 1.14

	
INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS

	
16

	
SECTION 1.15

	
INDENTURE MAY BE EXECUTED IN COUTERPARTS

	
16

	  	  	  
	
ARTICLE II SECURITY FORMS

	  
	
SECTION 2.1

	
FORMS GENERALLY

	
17

	
SECTION 2.2

	
FORM OF LEGEND FOR GLOBAL SECURITIES

	
17

	
SECTION 2.3

	
FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	
17

	
SECTION 2.4

	
FORM OF CONVERSION NOTICE

	
18

 

  

Page 1 of 67

  

 

	
ARTICLE III THE SECURITIES

	  
	
SECTION 3.1

	
AMOUNT UNLIMITED; ISSUABLE IN SERIES

	
19

	
SECTION 3.2

	
DENOMINATIONS

	
21

	
SECTION 3.3

	
EXECUTION, AUTHENTICATION, DELIVERY AND DATING

	
21

	
SECTION 3.4

	
TEMPORARY SECURITIES

	
22

	
SECTION 3.5

	
REGISTRAR; REGISTRATION OF TRANSFER AND EXCHANGE

	
23

	
SECTION 3.6

	
MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES

	
24

	
SECTION 3.7

	
PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

	
25

	
SECTION 3.8

	
PERSON DEEMED OWNERS

	
26

	
SECTION 3.9

	
CANCELLATION

	
26

	
SECTION 3.10

	
COMPUTATION OF INTEREST

	
26

	
SECTION 3.11

	
CUSIP NUMBERS

	
26

	  	  	  
	
ARTICLE IV SATISFACTION AND DISCHARGE

	  
	
SECTION 4.1

	
SATISFACTION AND DISCHARGE OF INDENTURE

	
27

	
SECTION 4.2

	
APPLICATION OF TRUST ACCOUNTS MONEY

	
28

	  	  	  
	
ARTICLE V REMEDIES

	  
	
SECTION 5.1

	
EVENTS OF DEFAULT

	
28

	
SECTION 5.2

	
ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

	
29

	
SECTION 5.3

	
COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

	
30

	
SECTION 5.4

	
TRUSTEE MAY FILE PROOFS OF CLAIM

	
30

	
SECTION 5.5

	
TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES

	
30

	
SECTION 5.6

	
APPLICATION OF MONEY COLLECTED

	
31

	
SECTION 5.7

	
LIMITATION OF SUITS

	
31

	
SECTION 5.8

	
RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM, INTEREST & CONVERT

	
31

	
SECTION 5.9

	
RESTORATION OF RIGHTS AND REMEDIES

	
32

	
SECTION 5.10

	
RIGHTS AND REMEDIES CUMULATIVE

	
32

	
SECTION 5.11

	
DELAY OR OMISSION NOT WAIVER

	
32

	
SECTION 5.12

	
CONTROL BY HOLDERS

	
32

	
SECTION 5.13

	
WAIVER OF PAST DEFAULTS

	
32

	
SECTION 5.14

	
UNDERTAKING FOR COST

	
33

	
SECTION 5.15

	
WAIVER OF USURY, STAY OR EXTENSION LAWS

	
33

 

  

Page 2 of 67

  

 

	
ARTICLE VI THE TRUSTEE

	  
	
SECTION 6.1

	
CERTAIN DUTIES AND RESPONSIBILITIES

	
33

	
SECTION 6.2

	
NOTICE OF DEFAULT

	
34

	
SECTION 6.3

	
CERTAIN RIGHTS OF TRUSTEE

	
34

	
SECTION 6.4

	
NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

	
35

	
SECTION 6.5

	
MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES

	
35

	
SECTION 6.6

	
MONEY HELD IN TRUST

	
35

	
SECTION 6.7

	
COMPENSATION AND REIMBURSEMENT

	
35

	
SECTION 6.8

	
CONFLICITING INTERESTS

	
36

	
SECTION 6.9

	
CORPORATE TRUSTEE REQUIRED; ELIGIBILITY

	
36

	
SECTION 6.10

	
RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

	
37

	
SECTION 6.11

	
ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

	
38

	
SECTION 6.12

	
MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS

	
39

	
SECTION 6.13

	
PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

	
39

	
SECTION 6.14

	
INVESTMENT OF CERTAIN PAYMENTS HELD BY THE TRUSTEE

	
39

	
SECTION 6.15

	
APPOINTMENT OF AUTHENTICATING AGENT

	
39

	  	  	  
	
ARTICLE VII HOLDER’S LISTS AND REPORTS BY TRUSTEE AND COMPANY

	  
	
SECTION 7.1

	
COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

	
40

	
SECTION 7.2

	
PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS

	
 

41

	
SECTION 7.3

	
REPORTS BY TRUSTEE

	
41

	
SECTION 7.4

	
REPORTS BY COMPANY

	
41

	  	  	  
	
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

	  
	
SECTION 8.1

	
COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS

	
42

	
SECTION 8.2

	
SUCCESSOR SUBSTITUTED

	
42

	  	  	  
	
ARTICLE IX SUPPLEMENTAL INDENTURES

	  
	
SECTION 9.1

	
SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

	
43

	
SECTION 9.2

	
SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS

	
44

	
SECTION 9.3

	
EXECUTION OF SUPPLEMENTAL INDENTURES

	
45

	
SECTION 9.4

	
EFFECT OF SUPPLEMENTAL INDENTURES

	
45

	
SECTION 9.5

	
CONFORMITY WITH TRUSTEE INDENTURE ACT

	
45

	
SECTION 9.6

	
REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES

	
45

 

  

Page 3 of 67

  

 

	
ARTICLE X COVENANTS

	  
	
SECTION 10.1

	
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST

	
45

	
SECTION 10.2

	
MAINTENANCE OF OFFICE OR AGENCY

	
45

	
SECTION 10.3

	
MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST

	
46

	
SECTION 10.4

	
STATEMENT BY OFFICERS AS TO DEFAULT

	
46

	
SECTION 10.5

	
EXISTENCE

	
47

	
SECTION 10.6

	
WAIVER OF CERTAIN COVENANTS

	
47

	
SECTION 10.7

	
COMMISSION REPORTS

	
47

	
SECTION 10.8

	
COMPLIANCE CERTIFICATE

	
47

	
SECTION 10.9

	
STAY, EXTENSION AND USURY LAW

	
48

	  	  	  
	
ARTICLE XI REDEMPTION OF SECURITIES

	  
	
SECTION 11.1

	
APPLICABILITY OF ARTICLE

	
48

	
SECTION 11.2

	
ELECTION TO REDEEM; NOTICE TO TRUSTEE

	
48

	
SECTION 11.3

	
SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED

	
48

	
SECTION 11.4

	
NOTICE OF REDEMPTION

	
49

	
SECTION 11.5

	
DEPOSIT OF REDEMPTION PRICE

	
50

	
SECTION 11.6

	
SECURITIES PAYABLE ON REDEMPTION DATE

	
50

	
SECTION 11.7

	
SECURITIES REDEEMED IN PART

	
50

	  	  	  
	
ARTICLE XII SINKING FUNDS

	  
	
SECTION 12.1

	
APPLICABILITY OF ARTICLE

	
51

	
SECTION 12.2

	
SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES

	
51

	
SECTION 12.3

	
REDEMPTION OF SECURITIES FOR SINKING FUND

	
51

 

  

Page 4 of 67

  

 

	
ARTICLE XIII DEFEASANCE AND COVENANT DEFEASANCE

	  
	
SECTION 13.1

	
COMPANY’S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE

	
52

	
SECTION 13.2

	
DEFEASANCE AND DISCHARGE

	
52

	
SECTION 13.3

	
COVENANT DEFEASANCE

	
52

	
SECTION 13.4

	
CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE

	
53

	
SECTION 13.5

	
DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS

	
54

	
SECTION 13.6

	
REINSTATEMENT

	
55

	
SECTION 13.7

	
QUALIFYING TRUSTEE

	
55

	
ARTICLE XIV CONVERSION OF SECURITES

	  
	
SECTION 14.1

	
APPLICABILITY OF ARTICLE

	
55

	
SECTION 14.2

	
EXERCISE OF CONVERSION OF PRIVILEGE

	
55

	
SECTION 14.3

	
NO FRACTIONAL SHARES

	
56

	
SECTION 14.4

	
ADJUSTMENT OF CONVERSION PRICE

	
56

	
SECTION 14.5

	
NOTICE OF CERTAIN CORPORATE ACTIONS

	
56

	
SECTION 14.6

	
RESERVATION OF SHARES OF COMMON STOCK

	
57

	
SECTION 14.7

	
PAYMENT OF CERTAIN TAXES UPON CONVERSION

	
57

	
SECTION 14.8

	
NONASSESSABILITY

	
57

	
SECTION 14.9

	
PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS

	
58

	
SECTION 14.10

	
DUTIES OF TRUSTEE REGARDING CONVERSION

	
59

	
SECTION 14.11

	
REPAYMENT OF CERTAIN FUNDS UPON CONVERSION

	
59

	  	  	  
	
ARTICLE XV INITIAL BOND ISSUANCE

	  
	
SECTION 15.1

	
INITIAL ISSUANCE AND BOOK-ENTRY OF BONDS

	
59

	  	  	  
	  
	
ARTICLE XVI DEPOSIT OF BOND PROCEEDS; ESTABLISHMENT OF FUNDS AND ACCOUNTS

	  	  	  
	
SECTION 16.1

	
CREATION OF FUNDS AND ACCOUNTS

	
61

	
SECTION 16.2

	
DEPOSIT OF BOND PROCEEDS

	
61

	
SECTION 16.3

	
COST OF ISSUANCE FUNDS

	
62

	
SECTION 16.4

	
SOURCE OF PAYMENT OF BONDS

	
63

	
SECTION 16.5

	
APPLICATION OF PLEDGED REVENUES

	
63

	
SECTION 16.6

	
THE BOND FUND

	
63

	
SECTION 16.7

	
BONDS NOT PRESENTED FOR PAYMENT

	
63

	
SECTION 16.8

	
BRIDGE LOAN FUND

	
64

	
SECTION 16.9

	
PAYMENT TO THE ISSUER

	
64

 

  

Page 5 of 67

  

 

	  
	
ARTICLE XVII BOND LIQUIDATION FUND

	  
	
SECTION 17.1

	
BOND LIQUIDATION

	
65

	  	  	  
	
ARTICLE XVIII BOND ISSUER FUND

	  
	
SECTION 18.1

	
BOND ISSUER FUND

	
65

 

  

Page 6 of 67

  

     This INDENTURE (the “Indenture”), dated as of the ________day of ________________ 2010, between CITIZENS CAPITAL CORP., a Texas corporation (herein called the “Company” and/or the “Bond Issuer”), having its principal executive office at 3537 Ridgebriar, Dallas, Texas 75234 with official company mailing address for receipt of Notice of: P. O. Box 670406, Dallas, Texas 75367 and UW Trust, a Texas trust company, as Bond Registrar, Escrow, Paying and Collateral Agent (herein called the “Trustee”), having its principal executive office at 510 N. Valley Mills Drive, Suite 505, Waco, Texas 76710.

WITNESSETH:

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

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

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

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

I.1 DEFINITIONS.

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

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

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

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

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

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

 

        “Act,” when used with respect to any Holder, has the meaning specified in Section 1.4.

 

  

Page 7 of 67

  

 

        “Additional Bonds” means all additional Bonds issued on a parity as to lien and source of collateral and payment with the Series Bonds.

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

        “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series.

        “Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board empowered to act for it with respect to this Indenture.

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

        “Bond Fund” means the trust account fund established by the Trustee for the payment of principal and interest to bondholders of record.

        “Bondholder” “Holder of Bonds,” “Owner of Bonds” or any similar term means the registered owner of any Bond.

        “Bond Issuer Fund” means trust fund account established by the Trustee for the allocation and disbursement of net bond proceeds for the benefit of the bond issuer, Citizens Capital Corp.

        “Bond Liquidation Fund” means trust account established by the Trustee for the secondary placement and liquidation of bonds in the capital market place by the original purchaser, CCC ESOP Trust, and subsequent holding of said bond proceeds pending further allocation and disbursement pursuant to Section XVI.

         “Bonds” means the Series Bonds pursuant to current Supplemental Indenture and any Additional Series Bonds and/or series thereof hereafter issued within the terms, restrictions and conditions contained in this Indenture.

       “Bond Year” means the period of twelve consecutive months beginning the first month of issuance to all bond purchasers, except the Citizens Capital Corp. ESOP Trust, ending on December 1, or the next Business Day if December 1 is not a Business Day, in any year in which Series Bonds are or will be outstanding, provided that the first Bond Year shall commence on the date of delivery of the Series Bonds upon secondary issuance to all purchasers thereof, except the Citizens Capital Corp.

ESOP Trust.

         “Bridge Loan Fund” means trust account established by the Trustee for the allocation and disbursement of proceeds to satisfy, in full from gross bond proceeds, repayment to a lender(s) related to any outstanding bridge loan facilities entered into by the bond issuer from the period of initiation of the bond offering to the close and settlement of the bond liquidation proceedings.

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

 

  

Page 8 of 67

  

        “CCC ESOP Trust” means the Citizens Capital Corp. Employee Stock Ownership Trust which facilitates and acts as a secondary, bond liquidation conduit on behalf of the issuer as it pertains to the liquidation of the issuer’s bonds in the secondary, institutional market place.

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

        “Common Stock” includes any stock of any class of the Company, which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company; provided, however, subject to the provisions of Section 14.9, shares issuable upon conversion of Securities shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, further that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

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

        “Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its principal financial officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

        “Constituent Person” has the meaning specified in Section 14.9.

        “Conversion” means the conversion of one security for that of another security.

        “Conversion Ratio” means the percentage ratio and value that one security shall have right and/or privilege to be converted into that of another security by the holders of the security thereof.

        “Corporation” means a corporation, association, company, joint-stock company or business trust.

        “Costs of Issuance” shall mean those costs of issuing Bonds, including, but not limited to, legal, accounting, fiscal agent fees and expenses, any premiums for municipal bond insurance, rating agency charges and expenses, letter of credit fees and expenses and other fees and expenses and all other costs incidental to the issuance of Bonds.

        “Costs of Issuance Fund” means the trust fund account established by the Trustee to allocate and disburse bond proceeds for the payment of various cost related to the issuance of bonds by the issuer.

        “Covenant Defeasance” has the meaning specified in Section 13.3.

 

  

Page 9 of 67

  

        “Defaulted Interest” has the meaning specified in Section 3.7.

        “Defeasance” has the meaning specified in Section 13.2.

        “Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 3.1.

       “DTC” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, in its capacity as securities depository for the Bonds, or any successor thereto.

       “DTC Eligible” means Bonds meeting the qualifications prescribed by DTC.

        “Event of Default” has the meaning specified in Section 5.1.

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

        “Expiration Date” has the meaning specified in Section 1.4.

        “First Mortgage Bonds” means a promise to pay in the form of a bond secured by a “First "Mortgage. It has first claim on the pledged property of the corporation securing said bonds, as well as, upon its earnings.

       “Global Security” means a Security eligible for book-entry clearing and settlement  with the DTC and that evidences all or part of the Securities of any series and bears the legend set forth in Section 2.2 (or such legend as may be specified as contemplated by Section 3.1 for such Securities).

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

        “Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more Indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental Indenture, the provisions of the TRUST INDENTURE Act that are deemed to be a part of and govern this instrument and any such supplemental Indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.1; provided, however, that if at any time more than one Person is acting as Trustee under this Indenture due to the appointment of one or more separate Trustee for any one or more separate series of Securities, “Indenture” shall mean, with respect to such series of Securities for which any such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more Indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities for which such Person is Trustee  established as contemplated by Section 3.1, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more Indentures supplemental hereto executed and delivered after such Person had become such Trustee, but to which such person, as such Trustee, was not a party; provided, further that in the event that this Indenture is supplemented or amended by one or more Indentures supplemental hereto which are only applicable to certain series of Securities, the term “Indenture” for a particular series of Securities shall only include the supplemental Indentures applicable thereto.

        “Interest,” when used with respect to a Security which by its terms bears annual interest payable to bondholders semi-annually.

 

  

Page 10 of 67

  

       “Interest Account” means the account of that name established within the Bond Fund to allocate and disburse funds related to the payment of interest to bond holders.

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

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

        “Issuance Closing Date” means the date that the Series Bond issuance is sold by the original purchaser and the Series Bond issuance settles and closes.

        “Issuer” means an issuer of securities, in this case, it shall mean Citizens Capital Corp. and/or any successor thereto.

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

        “Notice of Default” means a written notice of the kind specified in Section 5.1(4).

        “Officers’ Certificate” means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the principal financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.  One of the officers signing an Officers’ Certificate given pursuant to Section 10.4 shall be the principal executive, financial or accounting officer of the Company.

        “Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Company, and who shall be reasonably acceptable to the Trustee.

        “Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

        “Original Purchasers” means those investment banking firms or other entities so designated as such in a resolution of the Issuer with respect to the issuance of a series of Bonds shall mean Citizens Capital Corp. Employee Stock Ownership Trust (CCC ESOP Trust).

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

(1) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

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

 

  

Page 11 of 67

  

(3)  Securities as to which Defeasance has been effected pursuant to Section 13.2; and

(4) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 3.1, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.1, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

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

        “Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

        “Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.

        “Pledge Assets” means the assets pledged as collateral, securing the Series Bonds.

        “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

        “Record Date” means any Regular Record Date or Special Record Date.

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

 

  

Page 12 of 67

  

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

        “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.

        “Remarketing Agent” means a registered securities broker/dealer, acting on an agency basis, in the sale, resale and/or trading of the Series Bonds.

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

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

        “Security Register” and “Security Registrar” have the respective meanings specified in Section 3.5.

        “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

        “Source of Payment of Bonds” means the primary source of funds utilized to make semi-annual interest on the bonds.

        “Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

        “Subsidiary” means, with respect to any Person, (i) any corporation or trust of which a majority of the outstanding voting securities is at the time, and (ii) any partnership of which a majority of the equity capital or profit interest is at the time, owned, directly or indirectly, by the Company, by one or more other Subsidiaries or by the Company and one or more Subsidiaries. For the purposes of this definition, “voting securities” means securities which ordinarily have voting power for the election of directors, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.

        “Trustee” means UW Trust Company, a Texas trust company acting on behalf of bond issuer and bond purchasers as referenced in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

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

      “Trustee Office” means the Executive office of: UW Trust Company, the Trustee, located at:  510 N. Valley Mills Drive, Suite 505; Waco, Texas 76710; Attention: Vicky Smith; Facsimile: (254) 741-9869 or such other office, designated by the Trustee by written notice to the Company, at which at any particular time its corporate agency services business shall be administered.      

   

  

Page 13 of 67

  

     “U.S. Government Obligation” has the meaning specified in Section 13.4.

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

I.2 COMPLIANCE CERTIFICATES AND OPINIONS.

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

        Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include,

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

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

(3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

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

I.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

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

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

 

  

Page 14 of 67

  

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

I.4 ACTS OF HOLDERS; RECORD DATES.

        Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the Company copies of all such instrument or instruments delivered to the Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

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

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

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

        The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, vote, notice, consent, waiver or other action provided or permitted by this Bond Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.

Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

 

  

Page 15 of 67

  

        The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.2, (iii) any request to institute proceedings referred to in Section 5.7(2) or (iv) any direction referred to in Section 5.12, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

        With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

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

I.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.

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

(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing, first class postage prepaid, (or by facsimile transmissions, provided that oral confirmation of receipt shall have been received) to or with the Trustee at its Executive Office, Attention: Corporate Trust Administration, or

 

  

Page 16 of 67

  

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

I.6 NOTICE TO HOLDERS, WAIVER.

        Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, or delivered by hand or overnight courier to each Holder affected by such event, at its address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. Neither the failure to mail or deliver by hand or overnight courier any such notice, nor any defect in any such notice so mailed or delivered by hand or overnight courier, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

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

I.7 CONFLICT WITH TRUST INDENTURE ACT.

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

I.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

I.9 SUCCESSORS AND ASSIGNS.

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

I.10 SEPARABILITY CLAUSE.

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

I.11 BENEFITS OF INDENTURE.

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

 

  

Page 17 of 67

  

I.12 GOVERNING LAW.

        THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO SUCH STATE’S CONFLICTS OF LAWS PRINCIPLES.

I.13 LEGAL HOLIDAYS.

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

I.14 INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS

        No recourse for the payment of the principal of or premium, if any, or interest on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental Indenture or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities.

I.15 INDENTURE MAY BE EXECUTED IN COUNTERPARTS.

        This instrument 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 instruments.

ARTICLE II

SECURITY FORMS

II.1 FORMS GENERALLY.

        The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more Indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefore or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities. Any such Board Resolution or record of such action shall have attached thereto a true and correct copy of the form of Security referred to therein and approved by or pursuant to such Board Resolution.

 

  

Page 18 of 67

  

II.2 FORM OF LEGEND FOR GLOBAL SECURITIES.

        Unless otherwise specified as contemplated by Section 3.1 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

SUBSEQUENT TO ORIGINAL ISSUANCE, TO THE ORIGINAL PURCHASER(S), AND AT THE DEPOSIT OF SAID SECURITY CERTIFICATE WITH ANY REGISTERED SECURITIES BROKER/DEALER, THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND SHALL BE REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).  SAID SHARES ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144A UNDER THE ACT.  THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO RULE 144A, AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM THE REQUIREMENTS OF REGISTRATION UNDER THE ACT WHICH MIGHT BE RELIED UPON, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

II.3 FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION.

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

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

UW Trust Company

as Trustee

By:______________________

Authorized Officer

II.4 FORM OF CONVERSION NOTICE.

        Conversion notices shall be in substantially the following form:

To: CITIZENS CAPITAL CORP.:

 

  

Page 19 of 67

  

        The undersigned owner of this Security hereby irrevocably exercises the option to convert this Security, or portion hereof (which is $1,000 or an integral multiple thereof) below designated, into shares of Common Stock of the Company in accordance with the terms of the Indenture referred to in this Security, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares and any Securities representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If this Notice is being delivered on a date after the close of business on a Regular Record Date and prior to the opening of business on the related Interest Payment Date (unless this Security or the portion thereof being converted has been called for redemption on a Redemption Date during the period beginning at the close of business on a Regular Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day), this Notice is accompanied by payment, in funds acceptable to the Company, of an amount equal to the interest payable on such Interest Payment Date of the principal of this Security to be converted. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect hereto. Any amount required to be paid by the undersigned on account of interest accompanies this Security.

        Principal Amount to be Converted (in an integral multiple of $1,000, if less than all)

U.S. $_____________

Dated: ____________

Signature(s) must be guaranteed by an eligible guarantor

institution (banks, stock brokers, savings and loan

associations and credit unions with membership

in an approved signature guarantee medallion program)

pursuant to Securities and Exchange Commission Rule 17Ad-15.

-----------------------------------

Signature Guaranty

Fill in for registration of shares of Common Stock and Security if to be issued otherwise than to the registered Holder.

-------------------                                         ------------------------------------

(Name)                                                     Social Security or Other Taxpayer

                                                                 Identification Number

-------------------

(Address)

-------------------------------------

Please print Name and Address

(including zip code number)

[The above conversion notice is to be modified, as appropriate, for conversion into other securities or property of the Company.]

 

  

Page 20 of 67

  

ARTICLE III

THE SECURITIES

III.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.

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

        The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 3.3, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more Indentures supplemental hereto, prior to the issuance of Securities of any series,

(1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);

(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Securities which, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder);

(3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

(4) the date or dates on which the principal of and premium, if any, Securities of the series is payable or the method of determination thereof.

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

(6) if other than the Corporate Trust Office of Trustee, the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;

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

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

(9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable;

(10) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;

(11) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 1.1;

 

  

Page 21 of 67

  

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

(13) if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;

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

(15) if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 13.2 or Section 13.3 or both such Sections and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced;

(16) if applicable, the terms of any right to convert Securities of the series into shares of Common Stock of the Company or other securities or property;

(17) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 2.2 and any circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 3.5 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

(18) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 5.2;

(19) any addition to or change in the covenants set forth in Article 10 which applies to Securities of the series; and

(20) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by

Section 9.1(5)).

 

  

Page 22 of 67

  

        All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 3.3) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such Indenture supplemental hereto.

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

III.2 DENOMINATIONS.

        The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 3.1. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

III.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

        The Securities shall be executed on behalf of the Company by any two of the following of its officers: Chairman of the Board, its Chief Executive Officer, its principal financial officer, its President or one of its Vice Presidents, and attested by its Treasurer, Secretary or one of its Assistant Treasurers or Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.

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

        At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, a copy of such Board Resolution, the Officers’ Certificate setting forth the terms of the series and an Opinion of Counsel, with such Opinion of Counsel stating,

(1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1;  that such form has been established in conformity with the provisions of this Indenture;

(2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and

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

 

  

Page 23 of 67

  

        If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which the Trustee determines would expose it to personal liability.

        Notwithstanding the provisions of Section 3.1 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents with appropriate instructions satisfactory to the Trustee to cover such future issuances are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

        Each Security shall be dated the date of its authentication.

        No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.9, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

        Neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Security, check, advice of payment or redemption notice, and any such document may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Company nor the Trustee shall be liable for any inaccuracy in such numbers.

III.4 TEMPORARY SECURITIES.

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

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

 

  

Page 24 of 67

  

III.5 REGISTRAR; REGISTRATION OF TRANSFER AND EXCHANGE.

        The Company shall cause to be kept at the Executive Office of the Trustee, a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

        Upon surrender for registration of transfer of any Security of a series at the Office of the Trustee, the Company shall cause to be executed, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

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

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

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

        The Trustee’s charge for processing any registration of transfer or exchange of Securities is contained on its published fee schedule.  In addition, the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

        If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

        The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:

(1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefore, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

 

  

Page 25 of 67

  

(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security or (C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 3.1.

(3) Subject to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

(4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

III.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

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

        If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

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

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

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

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

III.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

 

  

Page 26 of 67

  

        Except as otherwise provided as contemplated by Section 3.1 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

        Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefore to be given to each Holder of Securities of such series in the manner set forth in Section 1.6, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefore having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

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

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

        Subject to the provisions of Section 14.2, in the case of any Security (or any part thereof) which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Security the principal of (or premium, if any, on) which shall become due and payable, whether at Stated Maturity or by declaration of acceleration prior to such Interest Payment Date), interest whose Stated Maturity is on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion and such interest (whether or not punctually paid or duly provided for) shall be paid to the Person in whose name that Security (or any one or more Predecessor Securities) is registered at the close of business on such Regular Record Date. Except as otherwise expressly provided in the immediately preceding sentence or in Section 14.2, in the case of any Security (or any part thereof) which is converted, interest whose Stated Maturity is after the date of conversion of such Security (or such part thereof) shall not be payable.

 

  

Page 27 of 67

  

III.8 PERSONS DEEMED OWNERS.

        Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 3.7) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

III.9 CANCELLATION.

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

III. 10.  COMPUTATION OF INTEREST.

        Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

III. 11 CUSIP NUMBERS.

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

ARTICLE IV

SATISFACTION AND DISCHARGE

IV.1 SATISFACTION AND DISCHARGE OF INDENTURE.

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

 

  

Page 28 of 67

  

(1) either

(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Trustee or the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or

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

    (i)   have become due and payable, or

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

    (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

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

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

        Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Trustee  to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to sub clause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive.

IV.2 APPLICATION OF TRUST ACCOUNTS MONEY.

        Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee  pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.

ARTICLE V

REMEDIES

V.1 EVENTS OF DEFAULT.

 

  

Page 29 of 67

  

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

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

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

(3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or

(4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, Trustee, sequestrate or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

(6) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, Trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or

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

V.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

        If an Event of Default (other than an Event of Default specified in Section 5.1(5) or 5.1(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. If an Event of Default specified in Section 5.1(5) or 5.1(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

 

  

Page 30 of 67

  

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

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

        all overdue interest on all Securities of that series,

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

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

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

(1) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent default or impair any right consequent thereon.

V.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

      The Company covenants that if

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

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

 

  

Page 31 of 67

  

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

V.4 TRUSTEE MAY FILE PROOFS OF CLAIM.

        In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the TRUST INDENTURE Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any Monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, Trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.7.

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

V.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

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

V.6 APPLICATION OF MONEY COLLECTED.

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

        FIRST: To the payment of all amounts due the Trustee under Section 6.7;

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

 

  

Page 32 of 67

  

        THIRD: The balance, if any, to the Company or any other Person or Persons entitled thereto.

V.7 LIMITATION ON SUITS.

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

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

(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

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

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

(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

V.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST AND TO CONVERT.

        Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 3.7) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date), to convert such Securities in accordance with Article 14 to the extent that such right to convert is applicable to such Security and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

V.9 RESTORATION OF RIGHTS AND REMEDIES.

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

V.10 RIGHTS AND REMEDIES CUMULATIVE.

        Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

  

Page 33 of 67

  

V.11 DELAY OR OMISSION NOT WAIVER.

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

V.12 CONTROL BY HOLDERS.

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

(1) such direction shall not be in conflict with any rule of law or with this Indenture and the Trustee shall not have determined that the action so directed would be unjustly prejudicial to Holders of Securities of that series, or any other series, not taking part in such direction; and

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

V.13 WAIVER OF PAST DEFAULTS.

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

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

(2) to the extent such right is applicable to such Security, a failure by the Company on request to convert any Security into Common Stock; or

(3) in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

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

V.14 UNDERTAKING FOR COSTS.

        In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the TRUST INDENTURE Act; provided that neither this Section nor the TRUST INDENTURE Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or in any suit for the enforcement of the right to convert any Security in accordance with Article 14.

 

  

Page 34 of 67

  

V.15 WAIVER OF USURY, STAY OR EXTENSION LAWS.

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

ARTICLE VI

THE TRUSTEE

VI.1 CERTAIN DUTIES AND RESPONSIBILITIES.

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

VI.2 NOTICE OF DEFAULTS.

        If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the TRUST INDENTURE Act; provided, however, that in the case of any default of the character specified in Section 5.1(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

VI.3 CERTAIN RIGHTS OF TRUSTEE.

        Subject to the provisions of Section 6.1:

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

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

 

  

Page 35 of 67

  

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

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

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

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

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

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

VI.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

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

VI.5 MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES.

        The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other

agent.

        Subject to the limitations imposed by the TRUSTEE INDENTURE Act, nothing in this Indenture shall prohibit the Trustee from becoming and acting as Trustee under other Indentures under which other securities, or certificates of interest of participation in other securities, of the Company are outstanding in the same manner as if it were not Trustee hereunder.

 

  

Page 36 of 67

  

VI.6 MONEY HELD IN TRUST.

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

VI.7 COMPENSATION AND REIMBURSEMENT.

      The Company covenants and agrees:

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

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

(3) to indemnify each of the Trustee,  and any predecessor or successor Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any and all loss, liability, claim damage, or expense (including taxes and/or reasonable attorney fees and expenses) incurred without gross negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim, whether asserted by the Company, any Holder or any other Person, or liability in connection with the exercise or performance of any of its powers or duties hereunder; and

(4) that the payment and reimbursement terms and conditions set forth in the Schedule of Fees executed and delivered by the Company to the Trustee, including the special service charges for administration, are reasonable.

    The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate legal counsel and if the Company does not defend the claim, the Company shall pay the reasonable fees and expenses of such counsel, provided, that, if there may be legal defenses available to the Trustee which are different from or additional to those available to the Company, the Trustee shall have the right to select separate counsel to assert such legal defenses and to participate in the defense of such action on behalf of the Trustee with the cost and expenses of Trustee’s separate counsel to be paid by the Company.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

    The Trustee shall have lien prior to the Securities upon all property and funds held by it hereunder for any amount owing it or any predecessor Trustee pursuant to this Section VI.7, except with respect to funds held in trust to pay principal and interest of particular Securities.

     Without limiting any rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section V.1(5) or Section V.1(6), the expenses (including the reasonable charges and expenses of its agents and counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.

 

  

Page 37 of 67

  

     The provisions of the Section shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.

VI.8 CONFLICTING INTERESTS.

        If the Trustee has or shall acquire a conflicting interest within the meaning of the TRUST INDENTURE Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the TRUST INDENTURE Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a Trustee under this Indenture with respect to Securities of more than one series.

VI.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

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

VI.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

        No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

        The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

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

        If at any time:

(1) the Trustee shall fail to comply with Section 6.8 after written request therefore by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefore by the Company or by any such Holder, or

 

  

Page 38 of 67

  

 

(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, (A) the Company by a Board Resolution may remove the Trustee  with respect to all Securities, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustee.

        If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustee with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company.  If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, the retiring Trustee may petition, or any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

        The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

VI.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

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

 

  

Page 39 of 67

  

        In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an Indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental Indenture shall constitute such Trustee co Trustee of the same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental Indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee  shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

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

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

VI.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

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

VI.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

        If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the TRUST INDENTURE Act regarding the collection of claims against the Company (or any such other obligor).

VI.14 INVESTMENT OF CERTAIN PAYMENTS HELD BY THE TRUSTEE.

Any amounts held by the Trustee hereunder shall be invested by the Trustee in a negotiated order of withdrawal or transaction account maintained by Collateral Agent at United Western Bank on behalf of the Bond Purchaser, Bond Issuer and Pledgor (the “United Western Bank NOW Account”).  All parties to this Agreement understand the United Western Bank NOW Account will pay a rate of interest on the funds deposited therein which is determined by referenced to a published money rate index (the “Index”) as disclosed from time to time on the Collateral Agent’s website.  The initial Index in force shall be the “Interest Checking” rate as published in the “Latest Week” column of the “Other Money Rate’s” portion of the “Market Laboratory/Economic Indicators” section of the last weekly issue of Barron’s magazine published prior to the beginning of such calendar month in question and that such initial Index, and any future Index established, may change from time to time by United Western Bank by simply identifying the new Index on the Trustee’s website. Nothing herein shall require the Trustee to invest funds held by it pursuant to the last paragraph of Section X.3.

 

  

Page 40 of 67

  

VI.15 APPOINTMENT OF AUTHENTICATING AGENT.

        The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having (or if the Authenticating Agent is a member of a bank holding company system, its bank holding company has) a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

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

        An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 1.6 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

  

Page 41 of 67

  

        The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.7.

        If an appointment with respect to one or more series is made pursuant to this Section 6.12, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

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

                                               UW Trust Company

                                               as Trustee

                                               By:_______________________

                                               As Authenticating Agent

                                               By:_______________________

                                               Authorized Officer

ARTICLE VII

HOLDER’S LIST AND REPORTS BY TRUSTEE AND COMPANY

VII. 1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

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

	
  

	
(1)

	
at the time of purchase, the name, street address, date of birth, copy of a government issued photo ID, such as a driver’s license or passport, and other information as may be required by the Trustee for each prospective bondholder.

	
  

	
(2)

	
semi-annually, not later than 15 days after the Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as such Regular Record Date, as the case may be; and

	
  

	
(3)

	
at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided that no such list need be furnished by the Company to the Trustee so long as the Trustee is acting as Security Registrar.

VII.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

        The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.

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

 

  

Page 42 of 67

  

        Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the TRUST INDENTURE Act.

VII.3 REPORTS BY TRUSTEE.

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

        Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 1 in each calendar year, commencing with the first July 1 after the first issuance of Securities pursuant to this Indenture.

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

VII.4 REPORTS BY COMPANY.

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

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

VIII.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

        The Company shall not consolidate with or merge into any other Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

(1) in case the Company shall consolidate with or merge into another Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, limited liability company, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an Indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and the conversion rights shall be provided for in accordance with Article 14, if applicable, or as otherwise specified pursuant to Section 3.1, by supplemental Indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person (if other than the Company) formed by such consolidation or into which the Company shall have been merged or by the Person which shall have acquired the Company’s assets;

 

  

Page 43 of 67

  

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

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

VIII.2 SUCCESSOR SUBSTITUTED.

        Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE IX

SUPPLEMENTAL INDENTURES

IX.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

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

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

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

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

 

  

Page 44 of 67

  

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

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

(6) to secure the Securities; or

(7) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or

(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or

(9) to make provision with respect to the conversion rights of Holders pursuant to the requirements of Article 14, including providing for the conversion of the securities into any security (other than the Common Stock of the Company) or property of the Company; or

(10) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Clause (10) shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or

(11) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Articles Four and Thirteen, provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect.

IX.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

        With the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental Indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, may enter into an Indenture or Indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental Indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

(1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

 

  

Page 45 of 67

  

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

(3) modify any of the provisions of this Section, Section 5.13 or Section 10.06, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 10.6, or the deletion of this proviso, in accordance with the requirements of Sections 6.11 and 9.1(8), or

(4) if applicable, make any change that adversely affects the right to convert any security as provided in Article 14 or pursuant to Section 3.1 (except as permitted by Section 9.1(9)) or decrease the conversion rate or increase the conversion price of any such security. A supplemental Indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

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

IX.3 EXECUTION OF SUPPLEMENTAL INDENTURES.

        In executing, or accepting the additional trusts created by, any supplemental Indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental Indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental Indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

IX.4 EFFECT OF SUPPLEMENTAL INDENTURES.

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

IX.5 CONFORMITY WITH TRUST INDENTURE ACT.

        Every supplemental Indenture executed pursuant to this Article shall conform to the requirements of the TRUST INDENTURE Act as then in effect.

IX.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

 

  

Page 46 of 67

  

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

ARTICLE X

COVENANTS

X.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

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

X.2 MAINTENANCE OF OFFICE OR AGENCY.

        The Company will maintain an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, where Securities of that series may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served.  The Trustee is hereby initially appointed Paying Agent, and the Corporate Trust Office of the Trustee is initially designated as the office or agency for the foregoing purposes.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.

If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof or in the case that the Company files for protection under federal bankruptcy laws or reorganization proceedings are initiated against the Company, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

Unless otherwise provided in a supplemental Indenture or pursuant to Section 3.1 hereof, the Place of Payment for any series of Securities shall be at the Corporate Office of the Trustee.

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

X.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

        The Company shall cause to be deposited, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, and the Trustee shall segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons. 

 

  

Page 47 of 67

  

        

        Any money deposited with the Trustee, or received, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for the two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request (unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law), or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall hereafter, as an unsecured general creditor, look only to the Company for payment thereof ( unless the Company has remitted required moneys or other property to the appropriate governmental authority under any applicable escheat or abandoned or unclaimed property laws, or has otherwise been discharged under such laws of similar applicability, in which case such Holder shall look solely to its remedies (if any) under such laws and not to the Company), and all liability of the Trustee with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee, before being required to make any such repayment, shall at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, including the Wall Street Journal, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

X.4 STATEMENT BY OFFICERS AS TO DEFAULT.

        The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. The fiscal year of the Company currently ends on December 31; and the Company will give the Trustee prompt written notice of any change of its fiscal year.

X.5 EXISTENCE.

        Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and affect its existence.

X.6 WAIVER OF CERTAIN COVENANTS.

        Except as otherwise specified as contemplated by Section 3.1 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 3.1(19) or 9.1(2) for the benefit of the Holders of such series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

X.7 COMMISSION REPORTS.

 

  

Page 48 of 67

  

     Whether or not required by the rules and regulations of the Commission, so long as any Securities are outstanding, the Company will file with the Commission and further to the Trustee and to the holders of Securities all periodic, quarterly and annual financial information, and/or current information otherwise, required to be contained in a filing with the Commission for Forms 10-Q; 10-K and 8-K if applicable.  With respect to annual information only, a report thereon by the Company’s certified independent accountants shall be included in such annual information.  The Trustee will provide, at the Company expense, copies of any such documents to any Holders that request such copies.  Delivery of such documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely on Office’s Certificates).

X.8 COMPLIANCE CERTIFICATE.

     The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company, an Officer’s Certificate stating that a review of the activities of the Company and its subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under, and complied with the covenants and conditions contained in, this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of such Officer’s knowledge the Company has kept, observed, performed and fulfilled each and every covenant, and complied with the covenants and conditions contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge) and that to the best of such Officer’s knowledge no event has occurred and remains in existence by reason of which payments on account of the principal or of interest, if any, on the Securities are prohibited.

     One of the Officers signing such Officer’s Certificate shall be either of the Company’s principal executive officer, principal financial officer or principal accounting offer.

     The Company will, so long as any of the Securities are outstanding, deliver to the Truste forthwith upon becoming aware of:

     (a) any Default, Event of Default or default in the performance of any covenant, agreement or condition contained in this Indenture; or

     (b) any event of default under any other mortgage, indenture or instrument as that term is used in Section 5.1(7), an Officer’s Certificate specifying such Default, Event of Default or default.

X. 9 STAY, EXTENTION AND USURY LAW.

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

ARTICLE XI

REDEMPTION OF SECURITIES

 

  

Page 49 of 67

  

XI.1 APPLICABILITY OF ARTICLE.

        Securities of any series which are redeemable in whole or in part before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for such Securities) in accordance with this Article.

XI.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.

        The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities. In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.

XI.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

        If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot,  by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination) for such, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

        If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection.

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

        The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

 

  

Page 50 of 67

  

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

XI.4 NOTICE OF REDEMPTION.

        Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to each Holder of Securities to be redeemed, at its address appearing in the Security Register.

        All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price (including accrued interest, if any),

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

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

(5) the place or places where each such Security is to be surrendered for payment of the Redemption Price,

(6) if applicable, the conversion price, the date on which the right to convert the principal of the Securities or the portions thereof to be redeemed will terminate, and the place or places where such Securities may be surrendered for conversion, and

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

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

XI.5 DEPOSIT OF REDEMPTION PRICE.

        On or prior to 10:00 (Central Time) on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

        If any Security called for redemption is converted, any money deposited with the Trustee or with a Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject to the right of any Holder of such Security to receive interest as provided in the last paragraph of Section 3.7) be paid to the Company on Company Request, or if then held by the Company, shall be discharged from such trust.

 

  

Page 51 of 67

  

XI.6 SECURITIES PAYABLE ON REDEMPTION DATE.

        Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.1, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.7.

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

XI.7 SECURITIES REDEEMED IN PART.

        Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefore (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security subject to its published fees, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE XII

SINKING FUNDS

XII.1 APPLICABILITY OF ARTICLE.

        The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 3.1 for such Securities.

        The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment.” If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

XII.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

 

  

Page 52 of 67

  

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

XII.3 REDEMPTION OF SECURITIES FOR SINKING FUND.

        Not less than 60 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 12.2 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7.

ARTICLE XIII

DEFEASANCE AND COVENANT DEFEASANCE

XIII.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.

        The Company may elect, at its option at any time, to have Section 13.2 or Section 13.3 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 3.1 as being defeasible pursuant to such Section 13.2 or 13.3, in accordance with any applicable requirements provided pursuant to Section 3.1 and upon compliance with the conditions set forth below in this Article. Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities.

XIII.2 DEFEASANCE AND DISCHARGE.

        Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.4 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due;

 

  

Page 53 of 67

  

(2) the Company’s obligations with respect to such Securities under Sections 3.4, 3.5, 3.6, 10.2 and 10.3, and, if applicable, Article 14;

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder; and

(4) this Article VIII.

        Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 13.3 applied to such Securities.

XIII.3 COVENANT DEFEASANCE.

        Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be:

(1) the Company shall be released from its obligations under any covenants provided pursuant to Section 3.1(19) or 9.1(2) or for the benefit of the Holders of such Securities; and

(2) the occurrence of any event specified in any covenants provided pursuant to Section 3.1(19) or 9.1(2) shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (herein after called “Covenant Defeasance”).  For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect to any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.1(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

XIII.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

        The following shall be the conditions to the application of Section 13.2 or Section 13.3 to any Securities or any series of Securities, as the case may be:

(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another Trustee which satisfies the requirements contemplated by Section 6.9 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying Trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in Clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

 

  

Page 54 of 67

  

(2) In the event of an election to have Section 13.2 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

(3) In the event of an election to have Section 13.3 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.

(4) The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.

(5) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 5.1(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).

(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the TRUST INDENTURE Act (assuming all Securities are in default within the meaning of such Act).

(7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound.

(8) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration there under.

 

  

Page 55 of 67

  

(9) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

XIII.5 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS.

        Subject to the provisions of the last paragraph of Section 10.3, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying Trustee  (solely for purposes of this Section and Section 13.6, the Trustee and any such other Trustee are referred to collectively as the “Trustee”) pursuant to Section 13.4 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust 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 U.S. Government Obligations deposited pursuant to Section 13.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

        Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 13.4 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.

XIII.6 REINSTATEMENT.

        If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 13.5 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

XIII. 7 QUALIFYING TRUSTEE.

Any trustee appointed pursuant to Section XII.4 for the purpose of holding trust funds deposited pursuant to that Section shall be appointed under any agreement in form acceptable to the Trustee and shall provide to the Trustee a certificate of such trustee, upon which certificate the Trustee shall be entitled to conclusively rely, that all conditions precedent provided for herein to the related defeasance or covenant defeasance have been complied with.  In no event shall the Trustee be liable for any acts or omissions of said trustee.

  

Page 56 of 67

  

ARTICLE XIV

CONVERSION OF SECURITIES

XIV. 1 APPLICABILITY OF ARTICLE.

        The provisions of this Article shall be applicable to the Securities of any series which are convertible into shares of Common Stock of the Company, and the issuance of such shares of Common Stock upon the conversion of such Securities, except as otherwise specified by Section 3.1 for the Securities of such series.

XIV. 2 EXERCISE OF CONVERSION PRIVILEGE.

        In order to exercise a conversion privilege, the Holder of a Security of a series with such a privilege shall surrender such Security to the Office of the Trustee for that purpose pursuant to Section 10.2, accompanied by a duly executed conversion notice to the Company substantially in the form set forth in Section 2.4 stating that the Holder elects to convert such Security or a specified portion thereof.

Such notice shall state, the name and address of such registered Holder, for which the certificate or certificates for shares of Common Stock shall be issuable upon conversion

As promptly as practicable after the receipt of such notice at the Offices of the Trustee, the Trustee shall deliver for execution, to the Company’s Stock Transfer Agent of record, said duly authorized and executed certificates and/or related conversion documents.  The Company’s Stock Transfer Agent of record is:

Mailing Address:

Stock Transfer Corporation

P.O. Box 701629

Dallas, Texas 75370

Physical Address:

Stock Transfer Corporation

2591 Dallas Parkway; Suite 102

Frisco, Texas 75034

Telephone: (469) 633-0101

Fax: (469) 633-0088

Per written instruction, the Company’s Stock Transfer Agent shall; 1) issue in the name of the registered Holder, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Security; 2) redeliver said stock certificate or certificates to the Offices of the Trustee for delivery by the Trustee, directly to the registered Holder, as listed of record in the Trustee bond register.

XIV.3 NO FRACTIONAL SHARES.

        No fractional share of Common Stock of the Company shall be issued upon conversions of Securities of any series.  The value of said fractional shares, at the conversion price, shall be paid by the Company in cash.

 

  

Page 57 of 67

  

XIV.4 ADJUSTMENT OF CONVERSION PRICE.

        The conversion price of Securities of any series that are convertible into Common Stock of the Company may be adjusted for any reclassifications, combinations or similar transactions in accordance with the terms of the supplemental Indenture or Board Resolutions setting forth the terms of the Securities of such series.

Whenever the conversion price is adjusted, the Company shall compute the adjusted conversion price in accordance with terms of the applicable Board Resolution or supplemental Indenture and shall prepare an Officers’ Certificate setting forth the adjusted conversion price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at Office of the Trustee. Further, the Company shall forthwith cause a notice setting forth the adjusted conversion price to be mailed, first class postage prepaid, to each Holder of Securities of such series at its address appearing on the Security Register and to any conversion agent other than the Trustee.

XIV. 5 NOTICE OF CERTAIN CORPORATE ACTIONS.

      In case:

the Company shall declare a dividend (or any other distribution) on its Common Stock payable otherwise than in cash out of its retained earnings (other than a dividend for which approval of any shareholders of the Company is required) that would require an adjustment pursuant to Section 14.4; or

the Company shall authorize the granting to all or substantially all of the holders of its Common Stock of rights, options or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (other than any such grant for which approval of any shareholders of the Company is required); or

of any reclassification of the Common Stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock, or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any shareholders of the Company is required), or of the sale of all or substantially all of the assets of the Company; or

of the voluntary or involuntary dissolution, liquidation or winding up of the Company;

then the Company shall cause to be filed with the Trustee, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the Security Register, at least 20 days (or 10 days in any case specified in Clause (1) or (2) above) prior to the applicable record date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of Record to be entitled to such dividend, distribution, rights, options or warrants are to be determined, or (ii) the date on which such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up. If at any time the Trustee shall not be the conversion agent, a copy of such notice shall also forthwith be filed by the Company with the Trustee.

XIV.6 RESERVATION OF SHARES OF COMMON STOCK.

 

  

Page 58 of 67

  

        The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of Securities, the full number of shares of Common Stock of the Company then issuable upon the conversion of all outstanding Securities of any series that has conversion rights.

        The Company may also reserve, keep available and allocate, out of its authorized and issued Common Stock, for the purposes of effecting the conversion of Securities, the full number of shares of Common Stock of the Company then issuable upon the conversion of all outstanding Securities of any series that has conversion rights.

XIV.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION.

        Except as provided in the next sentence, the Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of its Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of its Common Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid.

XIV.8 NONASSESSABILITY.

        The Company covenants that all shares of its Common Stock which may be issued upon conversion of Securities will upon issue in accordance with the terms hereof be duly and validly issued and fully paid and non-assessable.

XIV.9 PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

        In case of any consolidation or merger of the Company with or into any other Person, any merger of another Person with or into the Company (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company) or any conveyance, sale, transfer or lease of all or substantially all of the assets of the Company, the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental Indenture providing that the Holder of each Security of a series then Outstanding that is convertible into Common Stock of the Company shall have the right thereafter (which right shall be the exclusive conversion right thereafter available to said Holder), during the period such Security shall be convertible, to convert such Security only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease by a holder of the number of shares of Common Stock of the Company into which such Security might have been converted immediately prior to such consolidation, merger, conveyance, sale, transfer or lease.

Assuming such holder of Common Stock of the Company (i) is not a Person with which the Company consolidated or merged with or into or which merged into or with the Company or to which such conveyance, sale, transfer or lease was made, as the case may be (a “Constituent Person”), or an Affiliate of a Constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease (provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer, or lease is not the same for each share of Common Stock of the Company held immediately prior to such consolidation, merger, conveyance, sale, transfer or lease by others than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (“Non-electing Share”), then for the purpose of this Section 14.4 the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease by the holders of each Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-electing Shares).  Such supplemental Indenture shall provide for adjustments which, for events subsequent to the effective date of such supplemental Indenture, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article or in accordance with the terms of the supplemental Indenture or Board Resolutions setting forth the terms of such adjustments.

 

  

Page 59 of 67

  

The above provisions of this Section 14.4 shall similarly apply to successive consolidations, mergers, conveyances, sales, transfers or leases. Notice of the execution of such a supplemental Indenture shall be given by the Company to the Holder of each Security of a series that is convertible into Common Stock of the Company as provided in Section 1.6 promptly upon such execution.

Neither the Trustee nor any conversion agent, if any, shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental Indenture relating either to the kind or amount of shares of stock or other securities or property or cash receivable by Holders of Securities of a series convertible into Common Stock of the Company upon the conversion of their Securities after any such consolidation, merger, conveyance, transfer, sale or lease or to any such adjustment, but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Opinion of Counsel with respect thereto, which the Company shall cause to be furnished to the Trustee upon request.

XIV.10 DUTIES OF TRUSTEE REGARDING CONVERSION.

     The Trustee has no duty to determine when an adjustment under this Article Fourteen should be made, how it should be made or what such adjustment should be, but may accept as conclusive evidence of the correctness of any such adjustment, and shall be protected in relying upon the Officer’s Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to this Article Fourteen.  The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities, and the Trustee shall not be responsible for the Company’s failure to comply with any provisions of this Article Fourteen.

     The Trustee shall not be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture executed, but may accept as conclusive evidence of the correctness thereof, and shall be protected in relying upon, the Officer’s Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to this Article Fourteen.

XIV.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.

        Any funds which at any time shall have been deposited by the Company or on its behalf with the Trustee or any other paying agent for the purpose of paying the principal of and any premium and interest on any of the Securities (including, but not limited to, funds deposited for the sinking fund referred to in Article 12 hereof and funds deposited pursuant to Article 13 hereof) and which shall not be required for such purposes because of the conversion of such Securities as provided in this Article XIV shall after such conversion be repaid to the Company by the Trustee upon the Company’s written request.

 

  

Page 60 of 67

  

ARTICLE XV

INITIAL ISSUANCE OF BONDS

XV.1 INITIAL ISSUANCE AND BOOK ENTRY OF BONDS

a) The Series Bonds shall initially be issued and registered in the Bond register in the name of Cede & Co., as nominee of the DTC, with Citizens Capital Corp. ESOP Trust as the initial bond purchaser and beneficial owner, in the form of one (1), authenticated, fully registered Series Bond in the principal amount and at the stated maturity of the Series Bond issue.  No payments of either principal or interest shall be made to the initial bond purchaser, Citizens Capital Corp. ESOP Trust.

 

 

b) Subsequent to the initial Series Bond issuance, except as provided in subsection (c) of this Section, the registered Owner of all the Series Bonds shall be Cede & Co., as nominee of the DTC.  Payment of semiannual interest for any Series Bonds registered as of each Regular Record Date in the name of Cede & Co. shall be made by wire transfer to the account of Cede & Co. on the Interest Payment Date for the Series Bonds at the address indicated on the Regular Record Date for Cede & Co. in the registry book of the Issuer kept by the Trustee.

The Trustee and the Issuer may treat DTC (or its nominee) as the sole and exclusive owner of the Series Bonds registered in its name for the purposes of payment of the principal of or interest on the Series  Bonds, giving any notice permitted or required to be given to Bondholders under this Indenture, registering the transfer of Series Bonds, obtaining any consent or other action to be taken by Bondholders and for all other purposes whatsoever; and neither the Trustee nor the Issuer shall be affected by any notice to the contrary.

Neither the Trustee nor the Issuer shall have any responsibility or obligation to any DTC participant, any person claiming a beneficial ownership interest in the Series Bonds under or through DTC or any DTC participant, or any other person which is not shown on the Bond Registrar’s, Security Registry, as maintained by the Trustee as being a Bondholder with respect to the accuracy of any records maintained by DTC, Cede & Co. or any DTC participant; the payment by DTC or any DTC participant to any beneficial owner of any amount in respect of the principal of or interest on the Series Bonds; the delivery to any DTC participant or any interest on the Series Bonds; the delivery to any DTC participant or any beneficial owner of any notice which is permitted or required to be given to Bondholders under this Indenture; the selection by DTC or any DTC participant of any person to receive payment in the event of a partial payment of the Series Bonds; or any consent given or other action taken by DTC as Bondholder.

The Paying Agent shall pay all principal of, and interest on, the Series Bonds only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State) Cede & Co., as nominee of DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer’s obligations with respect to the principal of and interest on the Series Bonds to the extent of the sum or sums so paid. Upon delivery by DTC to the Trustee of written notice to the effect that DTC had determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to record dates, the word “Cede & Co.” in this Indenture shall refer to such new nominee of DTC.

(c) In the event that (i) DTC determines not to act as securities depository for the Series Bonds; or (ii) the Issuer advises DTC of its determination that DTC is incapable of discharging its duties; or (iii) the Issuer determines that it is in the best interest of the beneficial owners of the Series Bonds that they be able to obtain bond certificates, the Issuer shall, if the event is triggered by either (i) or (ii) above, attempt to locate another qualified securities depository.  If the Issuer fails to locate such a replacement, then it shall notify DTC and the Trustee, requesting DTC to notify its participants, of the availability through DTC of bond certificates. In such event, the Trustee shall issue, transfer and exchange bond certificates as requested by DTC and any other Bondholders in appropriate amounts.

 

  

Page 61 of 67

  

The Issuer and Trustee shall be obligated to deliver bond certificates as described in this Indenture. In the event bond certificates are issued to Bondholders other than DTC, the provisions of this Indenture shall apply to, among other things, the transfer and exchange of such certificates and the method of payment of principal of an interest on such Series Bonds. Whenever DTC requests the Issuer and the Trustee to do so, the Trustee and the Issuer will cooperate with DTC in taking appropriate action after reasonable notice (a) to make available one or more separate certificates evidencing the Series Bonds to any DTC participant having Series Bonds credited to its DTC account or (b) to arrange for another securities depository to maintain custody of certificates evidencing the Series Bonds.

(d) Notwithstanding any other provision of this Indenture to the contrary, so long as any Series Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal of and interest on such Series Bond and all notices with respect to such Series Bond shall be made and given to DTC as provided in the Letter of Representations.

(e) In connection with any notice or other communication to be provided to Bondholders pursuant to this Indenture by the Issuer or the Trustee with respect to any consent or other action to be taken by Bondholders, so long as any Series Bond is registered in the name of Cede & Co., as nominee of DTC, the Issuer or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

(f) As long as a series of Bonds are registered in the name of a securities depository, or its nominee, the Trustee agrees to comply with the terms and provisions of the Letter of Representations, including the provisions of the Letter of Representations with respect to any delivery of such Series Bonds to the Trustee, which provisions shall supersede the provisions of this Indenture with respect thereto.

ARTICLE XVI

DEPOSIT OF BOND PROCEEDS; ESTABLISHMENT OF FUNDS AND ACCOUNTS;

Section XVI.1 Creation of Funds and Accounts. There are hereby created and ordered established, the following trust funds and trust accounts to be held by the Trustee:

(a) The Bond Issuer Fund;

(b) The Costs of Issuance Fund;

(c) The Bond Fund, which shall contain the following accounts:

	
  

	
(i)

	
The Interest Account; and

(ii)        The Principal Account; and

(d) The Bridge Loan Fund.

(e) Bond Liquidation Fund

Section XVI.2 Deposit of Series Bond Proceeds and/or the deposit of proceeds from any Series bond.  The Trustee shall hereby be ordered to establish a Bond Liquidation account in the name of:  Citizens Capital Corp. ESOP Trust (CCC ESOP Trust).

Subsequent to the initial issuance of the Series Bonds, by the Bond Issuer, to the CCC ESOP Trust, the CCC ESOP Trust shall cause all of said Series Bonds and/or any additional bonds series thereof to be progressively liquidated in the secondary, capital market place.  The gross proceeds from the liquidation of the Series Bonds and/or any series bonds thereof, including any accrued interest thereon, shall be deposited immediately upon delivery of said liquidation proceeds to the Trustee, into the CCC ESOP Trust account.

 

  

Page 62 of 67

  

The Trustee is hereby authorized to disburse monies from the CCC ESOP Trust, Series Bond Liquidation account and/or any series bonds thereof upon receipt of a written requisition signed by an Authorized Representative of the Company.  Each such written requisition shall state with respect to each payment to be made:

(i) The requisition number;

(ii) The name and address of the Person to whom payment is due or to whom an advance by the Issuer has been made;

(iii) The amount to be paid; and

(iv) That each obligation mentioned therein has been properly incurred, is currently due and payable, is a proper charge for a portion of the costs and/or expenses, and are unpaid or unreimbursed and has not been the basis of any previous requisition.

In making any payments and/or allocations from the CCC ESOP Trust, Series Bond Liquidation account,  the Trustee shall conclusively rely on any written requisition from an Authorized Representative of the Company delivered to it in accordance with this Section XVI and the Trustee shall be relieved of all liability for making any such payments in accordance with such written without inspection or any other investigation.

Monies from said CCC ESOP Trust, Series Bond Liquidation account and/or any series bonds thereof shall be allocated to the following funds and/or accounts as follows:

(i) A sum in the amount of $__________, representing costs of issuance, shall be deposited in the Costs of Issuance Fund and applied to payment of certain costs and expenses related to the issuance of the Series Bonds and/or any series bonds thereof.

(ii) A sum in the amount of $__________, representing the aggregate principal loan amount of any outstanding bridge loan facility, plus accrued interest, obtained by the Bond Issuer shall be deposited in the Bridge Loan Fund for direct disbursement to the bridge loan lender(s) as repayment in full of said bridge loan facility outstanding, if any.

(iii) The sum of $__________, from the net proceeds of the Bond liquidation account, as disbursed by the CCC ESOP Trust account, shall be deposited in the Bond Issuer Fund for direct disbursement to the Bond Issuer.

(iv) The sum of $_______________ due as annual interest on the Series Bonds and/or any series bonds thereof shall be deposited in the Interest Account in the amount $______________ representing semi-annual interest due on the Series Bonds, and disbursed to registered bondholders of the Series Bond issue, except CCC ESOP Trust, as payment of semi annual interest  due on the Series Bond issue.

(v) The sum of $_____________ due as re-payment of principal on the Series Bonds and/or any series bonds thereof upon maturity, redemption and/or call of the Series Bonds shall be deposited in the Principal Account for disbursement to registered bondholders of the Series Bond issue, except CCC ESOP Trust, at the maturity, redemption and/or call of said Series Bond issue.

 

  

Page 63 of 67

  

Proceeds of any series of Additional Bonds will be applied as provided in the Supplemental Bond Indenture for such series of Bonds.

Section XVI.3 Costs of Issuance Fund.

(a) The proceeds of the Bonds deposited in the Costs of Issuance Fund shall be used and withdrawn by the Trustee only as provided in this Section XVI.3. No amount in any other fund or account created by this Indenture shall be expended for Costs of Issuance.

(b) The Trustee is authorized and directed to make disbursements from the Costs of Issuance Fund for Costs of Issuance set forth on the settlement statement or closing memorandum delivered in connection with the issuance of the Series Bonds and, in addition, upon receipt from time to time of an Issuer’s Certificate setting forth the amounts due and payable, together with such other documentation as may be required hereunder, and certifying that such amounts may be properly paid.  The Trustee shall make such disbursements not later than five days after receipt of all the documentation required by this Section XVI.3(b).

(c) Notwithstanding any provision to the contrary, any amounts remaining in the Costs of Issuance Fund 180 days after the Closing Date shall be transferred to the Bond Issuer Fund.

Section XVI.4 Source of Payment of Bonds. The Bonds and all payments by the Issuer hereunder are the sole obligation of the Issuer payable solely from the Trust Estate.  The pledge of the Trust Estate, including Pledged Revenues, if any, and the assets, funds and accounts as security for the performance of all obligations of the Issuer hereunder, shall be valid and binding from the time such pledge is made. The Pledged Revenues, if any, and the assets, funds and accounts immediately shall be subject to the lien of this Indenture without any physical delivery thereof or further act. Upon receipt of any Pledged Revenues, if any, and the assets, funds, accounts or other payments hereunder, the Trustee shall deposit the same in the appropriate fund or funds or account or accounts established hereunder. Except as otherwise provided herein, the Pledged Revenues, if any, and the assets, funds and accounts as security shall be collected, held and applied for the equal and ratable benefit, security and distribution to all bondholders.

Section XVI.5 Application of Pledged Revenues, if any. If no Event of Default has occurred and is continuing (in which case all Pledged Revenues must be deposited with the Trustee upon receipt), the Issuer shall make the following payments from the Pledged Revenues, if any, in the order of priority set forth below:

(a) Fifteen days prior to the interest due date of each year, the Issuer shall deposit in the Interest Account in the Bond Fund an amount equal to the semi-annual Debt Service Charges for interest coming due on the next succeeding Interest Payment Date (less any amount then on deposit in the Interest Account and available for such payment);

When the fifteenth day of the month is not a Business Day, then such payments shall be made on the next succeeding Business Day, and all such payments shall be remitted to the Trustee with appropriate instructions as to the custody, use and application thereof consistent with the provisions of this Indenture.

(b) The Issuer shall also, from the Pledged Revenues, if any, remit to the proper Person on such dates or at such other times, amounts as shall be required to pay all Administrative Expenses.

Section XVI.6 The Bond Fund. There shall be deposited to the credit of the appropriate account of the Bond Fund Monies required to be deposited in the Bond Fund pursuant to Section XV.5.(a) and (b) hereof and any other Monies required hereunder to be transferred thereto or for which no other designation as to a fund or account has been made. Subject to such priorities of application as are established herein, Monies on deposit in the Bond Fund shall be used to pay Debt Service Charges when due at maturity, upon prior redemption, prepayment, call or otherwise.

 

  

Page 64 of 67

  

Section XVI.7 Bonds Not Presented for Payment. In the event any Bonds shall not be presented for payment when the principal thereof becomes due, either at maturity or at the date fixed for redemption or call thereof or the acceleration of maturity, if monies sufficient to pay such Bonds are held by the Trustee, the Trustee shall segregate and hold such monies in trust inclusive of interest, without liability for interest thereon to the registered bondholder thereof, for the benefit of the Holders of such Bonds who shall, except as provided in the following paragraph, thereafter be restricted exclusively to such fund or funds for the satisfaction of any claim of whatever nature on their part under this Bond Indenture or relating to said Bonds.

Any Monies which the Trustee shall segregate and hold in trust for the payment of the Debt Service Charges on any Bond and which remain unclaimed for two years after such Debt Service Charges have become due and payable shall be paid to the Issuer inclusive of any earned interest thereof. After the payment of such unclaimed monies to the Issuer, the Holder of any such Bond shall thereafter look only to the Issuer for the payment thereof, excluding any interest thereof and all liability of the Trustee with respect to such monies shall thereupon cease.

Section XVI.8 Bridge Loan Fund.

(a) The Bridge Loan Fund shall be separate from any other fund established and maintained hereunder or under any laws governing the creation and use of funds by the Issuer.  There shall be deposited in the Bridge Loan Fund such amounts, allocated from the Bond Liquidation Fund, as are required to be deposited therein for the re-payment, in full, of any outstanding bridge loan facility or loan facilities otherwise owing and due by the Issuer. All monies at any time deposited in the Bridge Loan Fund shall be held by the Trustee in trust, to the extent required to satisfy re-payment, in full, of any Bridge Loan facility outstanding.

Neither the Issuer, the Holder of any Bonds nor the Trustee, except a Trustee in its separate capacity as a commercial banking lender who may have originated said Bridge Loan facility shall have any rights in or claim to such monies held in the Bridge Loan Fund. All amounts deposited into or on deposit in the Bridge Loan Fund shall be governed by this Section.

(b) Notwithstanding any other provisions herein, the Trustee shall allocate and deposit amounts to the Bridge Loan Fund from deposits held for the benefit of the CCC ESOP Trust, Bond Liquidation Fund account, which are generated from the progressive liquidation of the Series Bonds.

(c) The Trustee shall have no obligations to pay any amounts required to be disbursed by the Bridge Loan Fund pursuant to this Section, other than from monies held in the Bridge Loan Fund created under this Indenture or from other monies provided separately to it by the Issuer.

 (d) The Trustee shall invest all amounts held in the Bridge Loan Fund in Permitted Investments as directed by the Issuer.

(e) The Trustee shall remit all balances in the Bridge Loan Fund, exclusive of any and all earned interest thereof, if any.  At the direction of the Issuer, any fund balances in the Bridge Loan Fund up to the amount owed by the Issuer, exclusive of any and all earned interest thereof, shall be remitted to the Bridge Loan lender(s).  All earned interest generated and accruing to the Bridge Loan Fund, if any, over and above the amount owed to the Bridge Loan Lender(s) shall be withdrawn and remitted directly to the Bond Issuer within five days after remittance of all outstanding Bridge Loan re-payment amounts, in full, to any and all Bridge Loan lender(s).

 

  

Page 65 of 67

  

Section XVI.9 Payment to the Issuer. After the right, title and interest of the Trustee in and to the Trust Estate and all covenants, agreements and other obligations of the Issuer to the Holders shall have ceased, terminated and become void and shall have been satisfied and discharged in accordance with Article VXI hereof, and all fees, expenses and other amounts payable to the Issuer, the Trustee, the Registrar, any Authenticating Agent, any Paying Agent and Administrative Expenses pursuant to any provision hereof shall have been paid in full, any monies remaining in any fund or account held under this Indenture (other than monies held for the payment of Debt Service Charges) shall be paid to the Issuer, except as otherwise provided in Section XVI.9 hereof.

ARTICLE XVII

BOND LIQUIDATION FUND

Section XVII.1 Bond Liquidation Fund. Subsequent to the initial issuance of the Series Bonds and/or any series bonds thereof, by the Company, said Series Bonds and/or any series bonds thereof shall be issued to and deposited directly by the CCC ESOP Trust, as the Original Purchaser, into its institutional broker/dealer securities account. The CCC ESOP Trust, as the Original Purchaser, shall progressively cause said Series Bonds to be liquidated and/or any series bonds thereof, on an agency basis, directly into the institutional capital market place through its institutional broker/dealer securities account.

 The proceeds generated from any and all liquidations of the Series Bonds and/or any series bonds thereof shall be delivered directly from the Original Purchaser, institutional securities broker/dealer account, to the Trustee, for the benefit of the CCC ESOP Trust and the deposited into of, the CCC ESOP Trust, Series Bond liquidation fund account (the “Bond Liquidation Fund).

Monies from the CCC ESOP Trust, Series Bond liquidation fund account and/or any series bonds thereof shall then be allocated by, the Trustee, to specific funds and/or accounts pursuant to Section XVI.

ARTICLE XVIII

BOND ISSUER FUND

Section XVIII.1 Bond Issuer Fund. Monies generated from the liquidation of the Series Bonds by, the CCC ESOP Trust, as the Original Purchaser, and deposited into the bond liquidation fund account; net of specific amounts allocated to certain accounts and funds as detailed in Section XVI, shall be allocated and deposited by the Trustee, into the Bond Issuer Fund account (the “Bond Issuer Fund”), for the benefit of the bond issuer, Citizens Capital Corp.. Subsequently, said amounts held in the Bond Issuer Fund account shall be remitted to the Company, by the Trustee, within five (5) business days after all amounts have been fully allocated to certain accounts and funds as detailed in Section XVI and said accounts and funds have been settled and closed by the Trustee.

  

Page 66 of 67

  

        IN WITNESS WHEREOF, the parties hereto have caused this Bond Indenture to be duly executed as of the day and year first above written.

 

	 	CITIZENS CAPITAL CORP
	 	Issuer
	 	By: ______________________________
	 	Name: Billy D. Hawkins
	 	Title: President and CEO
	 	
UW Trust Company, a Texas trust company

	 	as Trustee
	 	
By: ______________________________

	 	Name: Paul E. Maxwell
	 	Title:  Chairman and CEO

                                                                                                                                       

                                                    

                                                                                                     Page 67 of 67ex4-3.htm

Exhibit-4.3

Type:  Exhibit-4.3

Description: Citizens Capital Corp.; Series 2010A; First Supplement to the Series Bond Indenture Form.

CITIZENS CAPITAL CORP.

BOND ISSUER

And

UW Trust Company,

a Texas trust company

AS TRUSTEE

FIRST SUPPLEMENTAL INDENTURE

$30,000,000

SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020

CUSIP: 174445AA4

FIRST SUPPLEMENTAL INDENTURE dated as of __________________, 2010 (“Supplemental Indenture”), to the Indenture dated as of____________________, 2010 (as supplemented, the “Indenture”), by and between  CITIZENS CAPITAL CORP., a Texas corporation (herein called the “Company” and/or the “Bond Issuer”), having its principal executive office at 3537 Ridgebriar, Dallas, Texas 75234 with official company mailing address for receipt of Notice of: P. O. Box 670406, Dallas, Texas 75367 and UW Trust Company, a Texas Trust Company, as Bond Registrar, Escrow, Paying and Collateral Agent (herein called the “Trustee”), having its principal executive office at 510 N. Valley Mills Drive, Suite 505, Waco, Texas 76710.

 

        Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the holders of the Bonds (as defined below):

 

        WHEREAS, the Bond Issuer and the Trustee have duly authorized the execution and delivery of the Indenture to provide for the issuance from time to time of debt securities (the “Securities”) to be issued in one or more Series as in the Indenture provided;

 

        WHEREAS, the Bond Issuer desires and has requested the Trustee to join the Bond Issuer in the execution and delivery of this Supplemental Indenture in order to establish and provide for the issuance by the Bond Issuer of a series of Securities designated as its SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020 (the “Series 2010A Bonds”) in the aggregate principal amount of US $30,000,000, if fully subscribed, substantially in the form attached hereto as Exhibit A, on the terms set forth herein;

 

         WHEREAS, said Series 2010A Bonds are convertible at US $5.00 per share into 200 shares of Citizens Capital Corp. (OTC:CAAP) common stock per each $1,000 par value bonds held for an aggregate of 6,000,000 shares of Citizens Capital Corp. common stock.

 

  

Page 1 of 20

  

 

         WHEREAS, said Series 2010A Bonds are callable at any time, by the issuer, at a 7% percent premium or US $1,070.00 per each $1,000.00 par value bonds held by registered and/or beneficial holder thereof for an aggregate value of US $32,100,000, if fully subscribed.

 

         WHEREAS, the Bond Issuer intends to use the net proceeds from sale of the Series 2010A Bonds in the following manner:

 

      1) To facilitate, fund and finance its corporate and/or asset acquisition initiatives which contemplates the pursuit, execution and consummation of multiple asset acquisitions as executed by itself and/or its subsidiary units;

 

      2) To facilitate, fund and finance the $519,897 purchase of certain studio and IPTV broadcast equipment related to its Black Financial News TV Network unit; its DLFA Industries, Inc’s unit, Dream League TV Network; and its Media Force Sports & Entertainment TV (MFS&E TV) unit respectively;

 

      3) To facilitate, fund and finance the launch of its DLFA Industries, Inc’s unit, Dream League Football Association, professional football league;

 

      4) To pay the cost of the Series 2010A Bond issuance and/or re-marketing;

 

      5)  For working capital and general corporate purposes.

 

         WHEREAS, in conjunction with the closing and settlement of the Series 2010A Bonds, said Series 2010A Bonds shall be collateralized and secured by Indenture and security agreement directly related to: i) the monthly subscriber subscription revenue as generated by the 10 year content licensing and distribution agreement between and amongst the Bond Issuer and Vivicast Media, LLC, as related to the Bond Issuer’s Black Financial News TV Network; ii) the monthly subscriber subscription revenue as generated by the 10 year content licensing and distribution agreement between and amongst the Bond Issuer and Vivicast Media, LLC, as related to the Bond Issuer’s Dream League TV Network; iii) the monthly subscriber subscription revenue as generated by the Bond Issuer’s MFS&E TV unit; iv) the monthly commercial advertising revenue as generated as a result of the 10 year content licensing and distribution agreement between and amongst the Bond Issuer and Vivicast Media, LLC, as related to the Bond Issuer’s Black Financial News TV Network; v) the monthly commercial advertising revenue as generated as a result of the 10 year content licensing and distribution agreement between and amongst the Bond Issuer and Vivicast Media, LLC, as related to the Bond Issuer’s Dream League TV Network; vi) the monthly commercial advertising revenue as generated by the Bond Issuer’s MFS&E TV unit; vii) cash; viii) marketable securities; and/or ix) other assets (See Exhibit B – List of Pledged Assets; Attached Herein).

 

WHEREAS, the List of Pledged Assets generate monthly and annual subscriber subscription and commercial advertising revenue (the “Source of Payment of Bonds”) said annual subscriber subscription and commercial advertising revenue shall be a source of income related to payment of annual interest due on the Series 2010A Bonds of US $2,100,000, if said Bonds are fully subscribed; and payable semi-annually in the amount of US $1,050,000, if said Bonds are fully subscribed.

 

        WHEREAS, Section 3.1 of the Indenture provides that a supplemental indenture may be entered into by the Bond Issuer and the Trustee for such purpose provided certain conditions are met;

 

        WHEREAS, the conditions set forth in the Indenture for the execution and delivery of this Supplemental Indenture have been complied with; and

 

  

Page 2 of 20

  

 

        WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Bond Issuer and the Trustee, in accordance with its terms, and a valid amendment of, and supplement to, the Indenture have been done;

 

         NOW, THEREFORE:

 

        In consideration of the premises and the purchase and acceptance of the Bonds by the holders thereof, the Bond Issuer covenants and agrees with the Trustee, for the equal and ratable benefit of the holders, that the Indenture is supplemented and amended, to the extent expressed herein, as follows:

 

 

ARTICLE I

Scope of Supplemental Indenture; General

 

        This Supplemental Indenture supplements, and to the extent inconsistent therewith, replaces the provisions of the Indenture, to which provisions reference is hereby made.

 

        The changes, modifications and supplements to the Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Bonds, which shall initially be in aggregate principal amount of $30,000,000, which amount may be increased pursuant to an Officers’ Certificate (as defined in the Indenture) in accordance with this Supplemental Indenture and shall not apply to any other Securities that may be issued under the Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements. Pursuant to this Supplemental Indenture, there is hereby created and designated a series of Securities under the Indenture entitled “SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020” (The Bonds shall be in the form of Exhibit A hereto).

 

        In the event that the Bond Issuer shall issue and the Trustee shall authenticate any Bonds issued under this Supplemental Indenture subsequent to the Issue Date (as defined below) (such Bonds, “Additional Securities”), the Bond Issuer shall use its best efforts to obtain the same “CUSIP” number for such Bonds as is printed on the Bonds outstanding at such time; provided, however, that if any series of Bonds issued under this Supplemental Indenture subsequent to the Issue Date is determined, pursuant to an Opinion of Counsel (as defined in the Indenture) of the Bond Issuer in a form reasonably satisfactory to the Trustee, to be a different class of security than the Bonds outstanding at such time for federal income tax purposes, the Bond Issuer may obtain a “CUSIP” number for such Bonds that is different than the “CUSIP” number printed on the Bonds then outstanding. Notwithstanding the foregoing, all Bonds issued under this Supplemental Indenture shall vote and consent together on all matters as one class and no series of Bonds will have the right to vote or consent as a separate class on any matter.

 

ARTICLE II

Certain Definitions

 

        The following terms have the meanings set forth below in this Supplemental Indenture. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Indenture. To the extent terms defined herein differ from the Indenture the terms defined herein shall govern.

 

        “Act,” when used with respect to any Holder, has the meaning specified in Section 1.4.

        “Additional Bonds” means all additional Bonds issued on parity as to lien and source of collateral and payment with the Series Bonds.

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

 

  

Page 3 of 20

  

        “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series.

        “Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board empowered to act for it with respect to this Indenture.

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

        “Bond Fund” means the trust account fund established by the Trustee for the payment of principal and interest to bondholders of record.

        “Bondholder” “Holder of Bonds,” “Owner of Bonds” or any similar term means the registered owner of any Bond.

        “Bond Issuer Fund” means trust fund account established by the Trustee for the allocation and disbursement of net bond proceeds for the benefit of the bond issuer, Citizens Capital Corp.

        “Bond Liquidation Fund” means trust account established by the Trustee for the secondary placement and liquidation of bonds in the capital market place by the original purchaser, CCC ESOP Trust, and subsequent holding of said bond proceeds pending further allocation and disbursement pursuant to Section XVI.

         “Bonds” means the Series Bonds pursuant to current Supplemental Indenture and any Additional Series Bonds and/or series thereof hereafter issued within the terms, restrictions and conditions contained in this Indenture.

       “Bond Year” means the period of twelve consecutive months beginning the first month of issuance to all bond purchasers, except the Citizens Capital Corp. ESOP Trust, ending on December 1, or the next Business Day if December 1 is not a Business Day, in any year in which Series Bonds are or will be outstanding, provided that the first Bond Year shall commence on the date of delivery of the Series Bonds upon secondary issuance to all purchasers thereof, except the Citizens Capital Corp.

ESOP Trust.

         “Bridge Loan Fund” means trust account established by the Trustee for the allocation and disbursement of proceeds to satisfy, in full from gross bond proceeds, repayment to a lender(s) related to any outstanding bridge loan facilities entered into by the bond issuer from the period of initiation of the bond offering to the close and settlement of the bond liquidation proceedings.

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

        “CCC ESOP Trust” means the Citizens Capital Corp. Employee Stock Ownership Trust which facilitates and acts as a secondary, bond liquidation conduit on behalf of the issuer as it pertains to the liquidation of the issuer’s bonds in the secondary, institutional market place.

 

  

Page 4 of 20

  

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

        “Common Stock” includes any stock of any class of the Company, which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company; provided, however, subject to the provisions of Section 14.9 of the Indenture, shares issuable upon conversion of Securities shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture and /or Indenture Supplement or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, further that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

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

        “Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its principal financial officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

        “Constituent Person” has the meaning specified in Section 14.9.

        “Conversion” means the conversion of one security for that of another security.

        “Conversion Ratio” means the percentage ratio and value that one security shall have right and/or privilege to be converted into that of another security by the holders of the security thereof.

        “Corporation” means a corporation, association, company, joint-stock company or business trust.

        “Costs of Issuance” shall mean those costs of issuing Bonds, including, but not limited to, legal, accounting, fiscal agent fees and expenses, any premiums for municipal bond insurance, rating agency charges and expenses, letter of credit fees and expenses and other fees and expenses and all other costs incidental to the issuance of Bonds.

        “Costs of Issuance Fund” means the trust fund account established by the Trustee to allocate and disburse bond proceeds for the payment of various cost related to the issuance of bonds by the issuer.

        “Covenant Defeasance” has the meaning specified in Section 13.3.

        “Defaulted Interest” has the meaning specified in Section 3.7.

        “Defeasance” has the meaning specified in Section 13.2.

 

  

Page 5 of 20

  

        “Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 3.1.

       “DTC” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, in its capacity as securities depository for the Bonds, or any successor thereto.

       “DTC Eligible” means Bonds meeting the qualifications prescribed by DTC.

        “Event of Default” has the meaning specified in Section 5.1.

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

        “Expiration Date” has the meaning specified in Section 1.4.

        “First Mortgage Bonds” means a promise to pay in the form of a bond secured by a “First "Mortgage.  It has first claim on the pledged property of the corporation securing said bonds, as well as, upon its earnings.

       “Global Security” means a Security eligible for book-entry settlement with the DTC and that evidences all or part of the Securities of any series and bears the legend set forth in Section 2.2 (or such legend as may be specified as contemplated by Section 3.1 for such Securities).

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

        “Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more Indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental Indenture, the provisions of the TRUST INDENTURE Act that are deemed to be a part of and govern this instrument and any such supplemental Indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.1; provided, however, that if at any time more than one Person is acting as Trustee under this Indenture due to the appointment of one or more separate Trustee for any one or more separate series of Securities, “Indenture” shall mean, with respect to such series of Securities for which any such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more Indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities for which such Person is Trustee  established as contemplated by Section 3.1, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more Indentures supplemental hereto executed and delivered after such Person had become such Trustee, but to which such person, as such Trustee, was not a party; provided, further that in the event that this Indenture is supplemented or amended by one or more Indentures supplemental hereto which are only applicable to certain series of Securities, the term “Indenture” for a particular series of Securities shall only include the supplemental Indentures applicable thereto.

        “Interest,” when used with respect to a Security which by its terms bears annual interest payable to bondholders semi-annually.

       “Interest Account” means the account of that name established within the Bond Fund to allocate and disburse funds related to the payment of interest to bond holders.

 

  

Page 6 of 20

  

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

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

        “Issuance Closing Date” means the date that the Series Bond issuance is sold by the original purchaser and the Series Bond issuance settles and closes.

        “Issuer” means an issuer of securities, in this case, it shall mean Citizens Capital Corp. and/or any successor thereto.

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

        “Notice of Default” means a written notice of the kind specified in Section 5.1(4).

        “Officers’ Certificate” means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the principal financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.  One of the officers signing an Officers’ Certificate given pursuant to Section 10.4 shall be the principal executive, financial or accounting officer of the Company.

        “Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Company, and who shall be reasonably acceptable to the Trustee.

        “Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

        “Original Purchasers” means those investment banking firms or other entities so designated as such in a resolution of the Issuer with respect to the issuance of a series of Bonds shall mean Citizens Capital Corp. Employee Stock Ownership Trust (CCC ESOP Trust).

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

(1) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

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

(3)  Securities as to which Defeasance has been effected pursuant to Section 13.2; and

(4) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 3.1, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.1, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

  

Page 7 of 20

  

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

        “Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

        “Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.

        “Pledge Assets” means the assets pledged as collateral, securing the Series Bonds.

        “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

        “Record Date” means any Regular Record Date or Special Record Date.

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

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

        “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.

 

  

Page 8 of 20

  

        “Remarketing Agent” means a registered securities broker/dealer, acting on an agency basis, in the sale, resale and/or trading of the Series Bonds.

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

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

        “Security Register” and “Security Registrar” have the respective meanings specified in Section 3.5.

        “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

        “Source of Payment of Bonds” means the primary source of funds utilized to make semi-annual interest on the bonds.

        “Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

        “Subsidiary” means, with respect to any Person, (i) any corporation or trust of which a majority of the outstanding voting securities is at the time, and (ii) any partnership of which a majority of the equity capital or profit interest is at the time, owned, directly or indirectly, by the Company, by one or more other Subsidiaries or by the Company and one or more Subsidiaries. For the purposes of this definition, “voting securities” means securities which ordinarily have voting power for the election of directors, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.

        “Trustee” means UW Trust Company, a Texas trust company acting on behalf of bond issuer and bond purchasers as referenced in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

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

      “Trustee Office” means the Executive office of: UW Trust Company, the Trustee, located at:  510 N. Valley Mills Drive, Suite 505; Waco, Texas 76710; Attention: Vicky Smith; Facsimile: (254) 741-9869 or such other office, designated by the Trustee by written notice to the Company, at which at any particular time its corporate agency services business shall be administered.         

     “U.S. Government Obligation” has the meaning specified in Section 13.4 of the Indenture.

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

 

  

Page 9 of 20

  

ARTICLE III

The Bonds

Section 3.1  Payments of Principal and Interest

 

        The SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020 shall bear interest from the Dated date of the sale/purchase of the Bonds up to but excluding the date of Maturity, at the rate of 7% per annum or $2,100,000.  The Bonds shall mature on December 1, 2020.  The Bond Issuer shall pay interest semi-annually on the Bonds at an amount of $385,000 on June 15 and December 15 of each year, commencing on the closing date of said issuance to the Person in whose name any such Bond or any predecessor Bond is registered in the Security Register at the close of business on  June 1 and December 1 respectively next preceding such Interest Payment Date. The Bond Issuer initially authorizes the Trustee to act as Paying Agent.

 

Section 3.2  Optional Redemption

 

        Subject to the provisions of Article XI of the Indenture, the Bonds shall be callable at the option of the Bond Issuer, in whole at any time or in part from time to time, at a Redemption Premium of 7% or $1,070.00 per $1,000.00 par value bonds held or an aggregate value of $32,100,000.

 

Section 3.3 No Sinking Fund.

 

        The Bonds shall not be entitled to the benefit of any sinking fund.

 

Section 3.4  Book Entry, Delivery and Form.

 

        The Bonds shall initially be issued in certificated form. Subsequently, the bonds shall be a book-entry only, Global Security (the “Global Bond”).  As such, the Global Bond shall be deposited on or about the Dated date of the sale/purchase with, or on behalf of, The Depository company (the “Depositary”) and registered in the name of Cede & Co., as nominee of the Depositary.

 

Section 3.5  Form of Legend for Global Bond

 

        In addition to the legend set forth in Section 2.2 of the Indenture, every Global Bond authenticated and delivered hereunder shall bear a legend substantially in the following form:

 

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

 

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

 

  

Page 10 of 20

  

 

ARTICLE IV

Covenants

Section 4.1  Limitations on Liens

 

        So long as any of the Series 2010A Bonds are Outstanding, neither the Bond Issuer nor any Subsidiary shall pledge, mortgage, hypothecate or grant a security interest in, or permit any mortgage, pledge, security interest or other lien upon the real property which serves as collateral securing the SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020.  However, that this restriction shall not apply to nor prevent the Bond Issuer or any of its direct or indirect subsidiaries from the creation of:

 

                    (1) any mortgage, pledge, security interest, lien or encumbrance upon the capital stock, assets or any real property, other than, the real property which serves as collateral securing the SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020.

 

                    (2)  any judgment, levy, execution, attachment or other similar lien arising in connection with court proceedings, provided that:

 

(a)  the execution or enforcement of each such lien is effectively stayed within 60 days after entry of the corresponding judgment (or the corresponding judgment has been discharged within such 60-day period) and the claims secured thereby are being contested in good faith by appropriate proceedings timely commenced and diligently prosecuted;      

ARTICLE V

Remedies

Section 5.1  Events of Default

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

 

(a)   default in the payment of the principal of or any Make-Whole Amount on any Bond at its Maturity;

 

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

 

(c)  default in the performance, or breach, of any covenant or warranty of the Bond Issuer in this Supplemental Indenture or the Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in the Indenture solely for the benefit of series of Securities other than the Bonds), and the continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Bond Issuer by the Trustee or to the Bond Issuer and the Trustee by the Holders of at least 25% in principal amount of the Bonds Outstanding a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder (without giving effect to any applicable grace period with respect to such covenant or warranty);

 

  

Page 11 of 20

  

 

(d)  the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Bond Issuer in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Bond Issuer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Bond Issuer under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, Trustee, sequestrator or other similar official of the Bond Issuer or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

 

(e)   the commencement by the Bond Issuer of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Bond Issuer in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, Trustee, sequestrator or other similar official of the Bond Issuer or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Bond Issuer in furtherance of any such action.

 

ARTICLE VI

Miscellaneous

Section 6.1  Governing Law.

 

        This Supplemental Indenture and the Bonds shall be governed by and construed in accordance with the laws of the State of Texas, without giving effect to such states’ conflicts of laws principles.

 

Section 6.2  Ratification of Indenture

        Except as expressly modified or amended hereby, the Indenture continues in full force and effect and is in all respects confirmed, ratified and preserved.

Section 6.3 Trustee.

 

        The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. The statements and recitals herein are deemed to be those of the Bond Issuer and not those of the Trustee.

 

Section 6.4  Counterparts

 

        This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same instrument.

 

Section 6.5   Separability

 

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

 

 

        IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

  

Page 12 of 20

  

 

 

	 	CITIZENS CAPITAL CORP.
	 	as the Bond Issuer
	 	By: /s/ Billy D. Hawkins______________________________
	 	Name: Billy D. Hawkins
	 	Title: President and CEO
	 	Date:________________
	 	 
	 	UW Trust Company, a Texas trust company
	 	as Trustee
	 	By: ______________________________
	 	Name: Paul E. Maxwell
	 	Title:  Chairman and CEO
	 	Date:________________

 

Exhibit A

 

 

FORM OF BOND

 

[Face of Security]

 

        SUBSEQUENT TO ORIGINAL ISSUANCE TO THE ORIGINAL PURCHASER(S), AND AT THE DEPOSIT OF SAID SECURITY CERTIFICATE WITH ANY REGISTERED SECURITIES BROKER/ DEALER, THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND SHALL BE REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

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

 

  

Page 13 of 20

  

 

A-1

 

 

No.: ___CUSIP No.

 

CITIZENS CAPITAL CORP.

 

 

$30,000,000

 

 

SERIES 2010A; 7%; $1,000 PAR VALUE;; CONVERTIBLE; CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020

 

        CITIZENS CAPITAL CORP., a Texas corporation (the “Bond Issuer”), for value received, hereby promises to pay to ___________________or the registered assigns the principal sum of US $30,000,000 DOLLARS on December 1, 2020 (the “Stated Maturity”) or earlier at the option of the Bond Issuer as provided herein (the “Redemption Date”) and to pay annual interest of US $2,100,000 payable semi-annually in the amount of US $1,050,000 on June 15 and December 15 in each year (each, an “Interest Payment Date”), commencing on the Issuance Closing Date, at the rate of 7% per annum, until the principal hereof is paid or duly provided for.

 

        All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Indenture by and between the Bond Issuer and UW Trust Company, a Texas Trust Company, as Trustee (the “Trustee”), dated as of ________________2010, as supplemented by the First Supplemental Indenture, dated as of _________________2010, by and between the Bond Issuer and the Trustee (collectively, the “Indenture”).

        The interest payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date at the office or agency of the Bond Issuer maintained for such purpose. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

        The principal of this Security payable on the Stated Maturity or the principal of, or Make-Whole Amount, if any, and, if the Redemption Date is not an Interest Payment Date, interest on this Security payable on the Redemption Date, will be paid against presentation of this Security at the office or agency of the Bond Issuer maintained for that purpose in the Dallas, Texas, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

 

A-2

 

        Interest payable on this Security on any Interest Payment Date and on the Stated Maturity or Redemption Date, as the case may be, will include interest accrued from and including the next preceding Interest Payment Date in respect of which interest has been paid or duly provided for up to but excluding such Interest Payment Date or the Stated Maturity or Redemption Date, as the case may be. If any Interest Payment Date or the Stated Maturity or Redemption Date falls on a day that is not a Business Day, as defined below, principal or Make-Whole Amount, if any, and/or interest payable with respect to such Interest Payment Date or Stated Maturity or Redemption Date, as the case may be, will be paid on the next succeeding Business Day with the same force and effect as if it were paid on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or Stated Maturity or Redemption Date, as the case may be. “Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions in the City of Dallas, Texas are authorized or obligated by law or executive order to close.

 

  

Page 14 of 20

  

 

        [If this Security is a Global Bond, insert: All payments of principal or Make-Whole Amount, if any, and interest in respect of this Security will be made by the Bond Issuer in immediately available funds.]

 

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

 

        Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature of one of its authorized signatories, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

 

A-3

 

        IN WITNESS WHEREOF, the Bond Issuer has caused this instrument to be duly executed under its facsimile corporate seal.

 

	Dated: _____________	CITIZENS CAPITAL CORP
	 	By: ______________________________ 
	 	Name____________________________
	 	Title_____________________________
	 	 
	 	 
	 
Attest:

	 
	 
By:                                                                                   

	 
	  Name	 
	  Title:	 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

 

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

 

	 	UW Trust Company, a Texas trust company
	 	as Trustee
	 	    By: ______________________________
	 	Authorized Officer
	 	 
	 	Date:____________________________

 

A-4

 

[Reverse of Security]

 

CITIZENS CAPITAL CORP.

 

$30,000,000

 

SERIES 2010A; 7%; $1,000 PAR VALUE; CONVERTIBLE; CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020

 

  

Page 15 of 20

  

 

        This Security is one of a duly authorized issue of securities of the Bond Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of ______________ 2010, as supplemented by the First Supplemental Indenture, dated as of ______________2010 (as so supplemented, herein called the “Indenture”), each between the Bond Issuer and UW Trust Company, a Texas Trust Company, as Trustee (herein called the “Trustee”), which term includes any successor Trustee under the Indenture with respect to the series of which this Security is a part), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities there under of the Bond Issuer, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. The aggregate principal amount of the Securities to be issued under such series is initially limited to $30,000,000 (except for Securities authenticated and delivered upon transfer of, or in exchange for, or in lieu of other Securities). All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

        If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

        At the option of bond holders, the SERIES 2010A; 7% PERCENT; $1,000 PAR VALUE; CONVERTIBLE, CALLABLE; SECURED; 144A; FIRST MORTGAGE BONDS DUE 2020 are convertible at $5.00 per share into 200 shares of Citizens Capital Corp. (OTC:CAAP) common stock per each $1,000 par value bonds held for an aggregate of 6,000,000 shares of Citizens Capital Corp. common stock.

 

        At the option of the Bond Issuer, the Securities are subject to redemption, at any time, by the issuer, at a 7% percent premium or $1,070.00 per each $1,000.00 par value bonds held by the registered and/or beneficial holder thereof for an aggregate value of $32,100,000.

 

        Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the Redemption Date, all as provided in the Indenture.

 

        In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.

 

        The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Bond Issuer and the rights of the Holders of the Securities under the Indenture at any time by the Bond Issuer and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of all Securities issued under the Indenture at the time Outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of not less than a majority of the aggregate principal amount of the Outstanding Securities, on behalf of the Holders of all such Securities, to waive compliance by the Bond Issuer with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of not less than a majority of the aggregate principal amount, in certain instances, of the Outstanding Securities of any series to waive, on behalf of all of the Holders of Securities of such series, certain past defaults under the Indenture and their consequences.

 

A-5

 

        No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Bond Issuer, which is absolute and unconditional, to pay the principal of (and Make-Whole Amount, if any) and interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed.

 

  

Page 16 of 20

  

 

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

 

        As provided in the Indenture and subject to certain limitations therein set forth, this Security is exchangeable for a like aggregate principal amount of Securities of different authorized denominations but otherwise having the same terms and conditions, as requested by the Holder hereof surrendering the same.

 

        The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.

 

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

 

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

 

        No recourse shall be had for the payment of the principal of or Make-Whole Amount, if any, or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, employee, agent, officer, or director or subsidiary, as such, past, present or future, of the Bond Issuer or of any successor corporation, either directly or through the Bond Issuer or any successor corporation, 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 being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

 

A-6

 

        The Securities and the Indenture shall be governed by and be construed in accordance with the laws of the State of Texas, without giving effect to such state’s conflicts of laws principles.

 

A-7

 

ASSIGNMENT FORM

 

 

To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to

 

  

Page 17 of 20

  

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint___________________________________________________________ to transfer this Security on the books of the Bond Registrar. The agent may substitute another to act for him.

 

 

 

Date: _________________

 

Your Signature: __________________________

(Sign exactly as your name appears on the face of this Security)

Tax Identification No: _____________________

SIGNATURE GUARANTEE:

 

Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).  SAID SHARES ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144A UNDER THE ACT.  THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO RULE 144A, AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM THE EQUIREMENTS OF REGISTRATION UNDER THE ACT WHICH MIGHT BE RELIED UPON, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE BOND ISSUER.

  

Page 18 of 20

  

 

A-8

 

  

Page 19 of 20

  

EXHIBIT B – List of Pledged Assets

	
 

 

No.

	
 

 

Description of Assets

	
 

Projected Initial Subscribers

	
Project Monthly

Subscription Rate

	
Projected Annual

Subscription

Revenue

	
Projected Annual

Ad Revenue

	
 

 

Term

	
 

Asset

Type (1)

	
 

Asset

Type (2)

	  	  	  	  	  	  	  	  	  
	
1

	
 Black Financial News TV Network/Vivicast Media LLC; content licensing/distribution agreement

	
100,000

	
$0.08

	
$96,000

	
TBD

	
10 years

	
Monthly Subscriber Subscription Revenue

	
Monthly Commercial Advertising Revenue

	  	
 

	  	  	  	  	  	
 

	
 

	
2

	
Dream League TV Network/Vivicast Media LLC; content licensing/distribution agreement

	
TBD

	
TBD

	
TBD

	
TBD

	
10 years

	
Monthly Subscriber Subscription Revenue

	
Monthly Commercial Advertising Revenue

	  	
 

	  	  	  	  	  	
 

	
 

	
3

	
Black Financial News TV Network/MFS&E TV System; content licensing/distribution agreement

	
20,000

	
$3.00

	
$720,000

	
TBD

	
10 years

	
Monthly Subscriber Subscription Revenue

	
Monthly Commercial Advertising Revenue

	  	
 

	  	  	  	  	  	
 

	
 

	
4

	
Dream League TV Network/MFS&E TV System; content licensing/distribution agreement

	
10,000

	
$3.00

	
$360,000

	
TBD

	
10 years

	
Monthly Subscriber Subscription Revenue

	
Monthly Commercial Advertising Revenue

TBD = To Be Determined

 

Page 20 of 20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00194-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00194-of-00352.parquet"}]]