Exhibit 99.(d)(1)
PENN TREATY AMERICAN CORPORATION
Issuer
AND
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
Trustee
INDENTURE
Dated as of September __, 2002
6-1/4% Convertible Subordinated Notes Due 2008
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CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
310 (a)(1)..................................................................7.10
(a)(2)..................................................................7.10
(a)(3)..................................................................N.A.
(a)(4)..................................................................N.A.
(a)(5)..................................................................7.10
(b)......................................................................7.9
(c).....................................................................N.A.
311 (a).....................................................................7.14
(b).....................................................................7.14
(c).....................................................................N.A.
312 (a)..............................................................2.5(a); 5.1
(b).....................................................................16.5
(c).....................................................................16.5
313 (a)......................................................................7.2
(b)(1)..................................................................N.A.
(b)(2)...................................................................7.2
(c)......................................................................7.2
(d)......................................................................7.2
314 (a)..............................................................4.7(a); 5.2
(b).....................................................................N.A.
(c)(1)..................................................................16.7
(c)(2)..................................................................16.7
(c)(3)..................................................................N.A.
(d).....................................................................N.A.
(e).....................................................................16.7
(f).....................................................................N.A.
315 (a)...................................................................7.1(b)
(b)......................................................................6.8
(c)...................................................................7.1(a)
(d)...................................................................7.1(c)
(e)......................................................................6.9
316 (a) (last sentence)......................................................8.4
(a)(1)(A)................................................................6.7
(a)(1)(B)................................................................6.7
(a)(2)..................................................................N.A.
(b)......................................................................6.4
(c)......................................................................9.2
317 (a)......................................................................6.2
(b)......................................................................4.4
318 (a).............................................................16.10; 16.11
N.A. means "not applicable".
----------------------
* This Cross-Reference Table is not part of the
Indenture.
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS.......................................................................2
Section 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.................................8
Section 1.3 RULES OF CONSTRUCTION.............................................................8
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES............................................8
Section 2.2 FORM OF NOTES.....................................................................9
Section 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST..............................9
Section 2.4 EXECUTION OF NOTES...............................................................11
Section 2.5 EXCHANGE AND TRANSFER OF NOTES; RESTRICTIONS ON TRANSFER; DEPOSITORY.............11
Section 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.......................................14
Section 2.7 TEMPORARY NOTES..................................................................15
Section 2.8 CANCELLATION OF NOTES PAID, ETC..................................................15
Section 2.9 CUSIP NO.........................................................................16
ARTICLE III
REDEMPTION AND REPURCHASE OF NOTES
Section 3.1 REDEMPTION PRICES................................................................16
Section 3.2 NOTICE OF REDEMPTION; SELECTION OF NOTES.........................................16
Section 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION...........................................17
Section 3.4 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION....................................18
Section 3.5 REPURCHASE OF NOTES UPON A CHANGE OF CONTROL.....................................19
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.......................................20
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Section 4.2 MAINTENANCE OF OFFICE OR AGENCY..................................................21
Section 4.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE...............................21
Section 4.4 PROVISIONS AS TO PAYING AGENT....................................................21
Section 4.5 CORPORATE EXISTENCE..............................................................22
Section 4.6 STAY, EXTENSION AND USURY LAWS...................................................23
Section 4.7 COMPLIANCE STATEMENT; NOTICE OF DEFAULTS.........................................23
Section 4.8 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.....23
Section 4.9 TAXES............................................................................23
Section 4.10 INSURANCE........................................................................23
ARTICLE V
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY
Section 5.1 NOTEHOLDERS' LISTS...............................................................24
Section 5.2 REPORTS BY COMPANY...............................................................24
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 EVENTS OF DEFAULT................................................................25
Section 6.2 PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR......................................27
Section 6.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE.......................................28
Section 6.4 PROCEEDINGS BY NOTEHOLDER........................................................29
Section 6.5 PROCEEDINGS BY TRUSTEE...........................................................30
Section 6.6 REMEDIES CUMULATIVE AND CONTINUING...............................................30
Section 6.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF NOTEHOLDERS.......30
Section 6.8 NOTICE OF DEFAULTS...............................................................31
Section 6.9 UNDERTAKING TO PAY COSTS.........................................................31
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE...........................................31
Section 7.2 REPORTS BY TRUSTEE TO HOLDERS....................................................32
Section 7.3 RELIANCE ON DOCUMENTS, OPINIONS, ETC.............................................33
Section 7.4 NO RESPONSIBILITY FOR RECITALS, ETC..............................................34
Section 7.5 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN NOTES.............34
Section 7.6 MONIES TO BE HELD IN TRUST.......................................................34
Section 7.7 COMPENSATION AND EXPENSES OF TRUSTEE.............................................34
Section 7.8 OFFICERS' CERTIFICATE AS EVIDENCE................................................35
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Section 7.9 CONFLICTING INTERESTS OF TRUSTEE.................................................35
Section 7.10 ELIGIBILITY OF TRUSTEE...........................................................35
Section 7.11 RESIGNATION OR REMOVAL OF TRUSTEE................................................35
Section 7.12 ACCEPTANCE BY SUCCESSOR TRUSTEE..................................................36
Section 7.13 SUCCESSOR, BY MERGER, ETC........................................................37
Section 7.14 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR......................................37
ARTICLE VIII
CONCERNING THE NOTEHOLDERS
Section 8.1 ACTION BY NOTEHOLDERS............................................................37
Section 8.2 PROOF OF EXECUTION BY NOTEHOLDERS................................................38
Section 8.3 WHO ARE DEEMED ABSOLUTE OWNERS...................................................38
Section 8.4 COMPANY-OWNED NOTES DISREGARDED..................................................38
Section 8.5 REVOCATION OF CONSENTS, FUTURE HOLDERS BOUND.....................................39
ARTICLE IX
NOTEHOLDERS' MEETINGS
Section 9.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED........................................39
Section 9.2 MANNER OF CALLING MEETINGS; RECORD DATE..........................................40
Section 9.3 CALL OF MEETING BY COMPANY OR NOTEHOLDERS........................................40
Section 9.4 WHO MAY ATTEND AND VOTE AT MEETINGS..............................................40
Section 9.5 MANNER OF VOTING AT MEETINGS AND RECORD TO BE KEPT...............................40
Section 9.6 EXERCISE OF RIGHTS OF TRUSTEE AND NOTEHOLDERS NOT TO BE HINDERED OR DELAYED......41
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS...........................41
Section 10.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS..............................42
Section 10.3 EFFECT OF SUPPLEMENTAL INDENTURES................................................43
Section 10.4 NOTATION ON NOTES................................................................43
Section 10.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TO THE TRUSTEE..43
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ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE, TRANSFER AND LEASE
Section 11.1 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS...................................44
Section 11.2 SUCCESSOR COMPANY TO BE SUBSTITUTED..............................................44
Section 11.3 OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE........................................44
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
Section 12.1 LEGAL DEFEASANCE AND COVENANT DEFEASANCE OF THE NOTES............................44
Section 12.2 TERMINATION OF OBLIGATIONS UPON CANCELLATION OF THE NOTES........................47
Section 12.3 SURVIVAL OF CERTAIN OBLIGATIONS..................................................47
Section 12.4 ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE...........................................47
Section 12.5 APPLICATION OF TRUST ASSETS......................................................47
Section 12.6 REPAYMENT TO THE COMPANY; UNCLAIMED MONEY........................................48
Section 12.7 REINSTATEMENT....................................................................48
ARTICLE XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 13.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS.................................48
ARTICLE XIV
CONVERSION OF NOTES
Section 14.1 RIGHT TO CONVERT.................................................................49
Section 14.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON CONVERSION; NO
ADJUSTMENT FOR INTEREST OR DIVIDENDS.............................................50
Section 14.3 MANDATORY CONVERSION.............................................................52
Section 14.4 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.......................................52
Section 14.5 CONVERSION PRICE.................................................................52
Section 14.6 ADJUSTMENT OF CONVERSION PRICE...................................................53
Section 14.7 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE........................60
Section 14.8 TAXES ON SHARES ISSUED...........................................................61
Section 14.9 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF COMMON STOCK..........61
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Section 14.10 RESPONSIBILITY OF TRUSTEE........................................................61
Section 14.11 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.......................................62
Section 14.12 SUPPLEMENTAL INDENTURE PRIOR TO ISSUANCE OF NOTES IN
DEFINITIVE FORM..................................................................62
ARTICLE XV
SUBORDINATION
Section 15.1 AGREEMENT TO SUBORDINATE.........................................................63
Section 15.2 CERTAIN DEFINITIONS..............................................................63
Section 15.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.............................................64
Section 15.4 DEFAULT ON SENIOR INDEBTEDNESS...................................................64
Section 15.5 WHEN DISTRIBUTION MUST BE PAID OVER..............................................65
Section 15.6 NOTICE BY COMPANY................................................................65
Section 15.7 SUBROGATION......................................................................65
Section 15.8 RELATIVE RIGHTS..................................................................66
Section 15.9 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.....................................66
Section 15.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.........................................66
Section 15.11 RIGHTS OF TRUSTEE AND PAYING AGENT...............................................66
Section 15.12 AUTHORIZATION TO EFFECT SUBORDINATION............................................67
Section 15.13 CONVERSIONS NOT DEEMED PAYMENT...................................................67
Section 15.14 AMENDMENTS.......................................................................67
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 POOLING OF INTERESTS.............................................................68
Section 16.2 PROVISIONS BINDING ON COMPANY'S SUCCESSORS.......................................68
Section 16.3 OFFICIAL ACTS BY SUCCESSOR COMPANY...............................................68
Section 16.4 ADDRESSES FOR NOTICES, ETC.......................................................68
Section 16.5 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.....................................69
Section 16.6 GOVERNING LAW....................................................................69
Section 16.7 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO TRUSTEE........69
Section 16.8 LEGAL HOLIDAYS...................................................................69
Section 16.9 NO SECURITY INTEREST CREATED.....................................................69
Section 16.10 TRUST INDENTURE ACT..............................................................70
Section 16.11 TRUST INDENTURE ACT CONTROLS.....................................................70
Section 16.12 BENEFITS OF INDENTURE............................................................70
Section 16.13 TABLE OF CONTENTS, HEADINGS ETC..................................................70
Section 16.14 AUTHENTICATING AGENT.............................................................70
Section 16.15 EXECUTION IN COUNTERPARTS........................................................71
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INDENTURE, dated as of September __, 2002, by and between
PENN
TREATY AMERICAN CORPORATION, a Pennsylvania corporation (the "Company"), and
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A., a national banking corporation (the
"Trustee").
W I T N E S S E T H :
-------------------
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issuance of its 6-1/4% Convertible Subordinated Notes Due
2008 (the "Notes"), in an aggregate principal amount not to exceed $74,750,000
and to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Notes will be originally issued solely in
global form, and in the event that the Company issues Notes in definitive
form, such issuance will be accompanied by a supplement to this Indenture
including the form of definitive Notes and provisions for conversion of the
Notes under Article XIV hereunder; and
WHEREAS, the Notes, the certificate of authentication to be
borne by the Notes, a form of assignment, a form of option to require repurchase
by the Company upon a Change of Control (as hereinafter defined), and a
certificate of transfer to be borne by the Notes are to be substantially in the
forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issuance hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Notes are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the Notes by
the holders thereof, the Company covenants and agrees with the Trustee for the
equal and proportionate benefit of the respective holders from time to time of
the Notes (except as otherwise provided below) as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The terms defined in this Section 1.1
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. All
other terms used in this Indenture that are defined in the Trust Indenture Act
(as hereinafter defined) or that are by reference defined in the Securities Act
(as hereinafter defined), except as herein otherwise expressly provided for or
unless the context otherwise requires, shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force on the
date of this Indenture. The words "herein," "hereof," "hereunder" and words of
similar import refer to this Indenture as a whole and not to any particular
Article or Section.
ACQUISITION PRICE: The term "Acquisition Price" shall mean the
weighted average price paid by the person or group in acquiring the Voting
Stock.
AFFILIATE: An "Affiliate" of any specified person shall mean
an "affiliate" as defined in Rule 144(a) as promulgated under the Securities
Act.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean
the Board of Directors of the Company or a committee of such Board of Directors
duly authorized to act for it.
BOARD RESOLUTION: The term "Board Resolution" shall mean 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.
BUSINESS DAY: The term "Business Day" shall mean a day, other
than a Saturday, a Sunday or a day on which the banking institutions in the
State and City of
New York are authorized or obligated by law or executive order
to close or a day that is declared a national or
New York state holiday.
CAPITAL STOCK: The term "Capital Stock" of any person shall
mean any and all shares, interests, participations or other equivalents (however
designated) of such person's corporate stock or any and all equivalent ownership
interests in a person (other than a corporation) whether now outstanding or
issued after the date hereof.
CASH EQUIVALENT NOTES: The term "Cash Equivalent Notes" shall
have the meaning specified in Section 14.1(b).
CEDE: The term "Cede" shall mean Cede & Co., a nominee of the
Depository.
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CHANGE OF CONTROL: The term "Change of Control" shall have the
meaning specified in Section 3.5(d).
CHANGE OF CONTROL PURCHASE PRICE: The term "Change of Control
Purchase Price" shall have the meaning specified in Section 3.5(a).
CHANGE OF CONTROL PURCHASE DATE: The term "Change of Control
Purchase Date" shall have the meaning specified in Section 3.5(a).
CHANGE OF CONTROL OFFER: The term "Change of Control Offer"
shall have the meaning specified in Section 3.5(a).
COMMISSION: The term "Commission" shall mean the United States
Securities and Exchange Commission, as 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, the body performing such duties at such time.
COMMON STOCK: The term "Common Stock" shall mean any stock of
any class of the Company that does not have a 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 that is not subject to redemption
by the Company. Subject to the provisions of Section 14.6, however, shares
issuable on conversion of Notes 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 that do not have a 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 that are not subject
to redemption by the Company; provided 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 that the total number of shares of such
class resulting from all such reclassification bears to the total number of
shares of all such classes resulting from all such reclassifications.
COMPANY: The term "Company" shall mean
Penn Treaty American
Corporation, a Pennsylvania corporation, and subject to the provisions of
Article XI, shall include its successors and assigns.
CONVERSION PRICE: The term "Conversion Price" shall have the
meaning specified in Section 14.5.
CORPORATE TRUST OFFICE OF THE TRUSTEE: The term "Corporate
Trust Office of the Trustee," or other similar term, shall mean the office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, from its office which is, located at 6th Street
& Marquette Avenue, MAC N9303-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Trustee
also maintains an office at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at which office it is authorized to receive notices hereunder.
COVENANT DEFEASANCE: The term "covenant defeasance" shall have
the meaning specified in Section 12.1(c).
CUSTODIAN: The term "Custodian" shall mean the Trustee, as
custodian for Cede pursuant to Section 2.5 with respect to the Notes in global
form, or any successor entity thereto.
3
DEFAULT: The term "default" shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of Default.
DEFAULTED INTEREST: The term "Defaulted Interest" shall have
the meaning specified in Section 2.3.
DEFINITIVE NOTES; IN DEFINITIVE FORM: The term "definitive
Notes" shall mean the Notes in definitive form. Any reference to Notes "in
definitive form" shall mean definitive Notes, and any reference to securities
"in definitive form" shall mean definitive Notes or Common Stock as the context
requires.
DEPOSITORY: The term "Depository" shall mean, with respect to
the Notes issuable or issued in whole or in part in global form, the person
specified in Section 2.5(b) as the Depository with respect to the Notes, until a
successor shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depository" shall mean or include
such successor.
DWAC: The term "DWAC" shall mean Deposit and Withdrawal at
Custodian Service.
EVENT OF DEFAULT: The term "Event of Default" shall mean any
event specified in Section 6.1(a) through (g).
EXCHANGE ACT: The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
EXPIRATION TIME: The term "Expiration Time" shall have the
meaning specified in Section 14.6(f).
GLOBAL NOTE: The term "Global Note" shall mean the note in
global form as specified in Exhibit A.
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
INTEREST PAYMENT DATE: The term "Interest Payment Date" shall
mean each October 15 and April 15.
LEGAL DEFEASANCE: The term "legal defeasance" shall have the
meaning specified in Section 12.1(b).
MANDATORY CONVERSION DATE: The term "Mandatory Conversion
Date" shall have the meaning specified in Section 14.3.
MARKET CASH CONVERSION PRICE: The term "Market Cash Conversion
Price" means with respect to any exchange, the average of the closing prices of
the Common Stock (or other securities, as the case may be) for the ten Trading
Day period (appropriately adjusted to take into account the occurrence during
such period of certain events that would
4
result in an adjustment of the Conversion Price with respect to the Common Stock
or other consideration) commencing on the first Trading Day after delivery of
written notice by the Company to the Trustee and holders that the Company has
elected to pay cash in lieu of delivering shares of Common Stock or other
securities. The period between the date of delivery by a holder to an office or
agency maintained by the Company of a notice of conversion as required pursuant
to Section 14.2 hereof, and the date of determination of the Market Cash
Conversion Price may not exceed fifteen Trading Days.
NONPAYMENT DEFAULT: The term "Nonpayment Default" shall have
the meaning specified in Section 15.4(b).
NOTE OR NOTES: The terms "Note" or "Notes" shall mean any one
or more, as the case may be, of the 6-1/4% Convertible Subordinated Notes Due
2008 authenticated and delivered under this Indenture.
NOTEHOLDER; HOLDER: The terms "Noteholder" or "holder" as
applied to any Note, or other similar terms (but excluding the term "beneficial
holder"), shall mean any person in whose name at the time a particular Note is
registered on the Note registrar's books.
NOTE REGISTER: The term "Note register" shall have the meaning
specified in Section 2.5(a).
NOTE REGISTRAR: The term "Note registrar" shall have the
meaning specified in Section 2.5(a).
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when
used with respect to the Company, shall mean a certificate signed by two
authorized officers which shall include (a) any of the President, the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial Officer
and (b) any Treasurer or Secretary or any Assistant Secretary of the Company,
that is delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 16.7 if and to the extent required by the
provisions of such Section.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean
an opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company or other counsel acceptable to the Trustee, that is
delivered to the Trustee. Each such opinion shall include the statements
provided for in Section 16.7 if and to the extent required by the provisions of
such Section.
OUTSTANDING: The term "outstanding" with reference to Notes as
of any particular time shall mean, subject to the provisions of Section 8.4, all
Notes authenticated and delivered by the Trustee under this Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Notes, or portions thereof, for which monies in the
necessary amount shall have been deposited in trust with the Trustee for
payment, redemption or repurchase; provided that if such Notes are to be
redeemed prior to the maturity thereof, notice of such redemption
5
shall have been given pursuant to Article III or provision satisfactory to
the Trustee shall have been made for giving such notice;
(c) Notes paid or converted pursuant to Section 2.6 hereof or
Notes in lieu of or in substitution for which other Notes shall have been
authenticated and delivered pursuant to the terms of Section 2.6 unless proof
satisfactory to the Trustee is presented that any such Notes are held by BONA
FIDE holders in due course; and
(d) Notes converted into Common Stock or cash pursuant to
Article XIV and Notes not deemed outstanding pursuant to Section 3.2 and 3.5.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice"
shall have the meaning specified in Section 15.4(b).
PAYMENT DEFAULT: The term "Payment Default" shall have the
meaning specified in Section 6.1(d).
PERSON: The term "person" shall mean a corporation, an
association, a partnership, an individual, a joint venture, a joint stock
company, a trust, an unincorporated organization or a government or an agency or
a political subdivision thereof.
PREDECESSOR NOTE: The term "Predecessor Note" of any
particular Note shall mean every previous Note evidencing all or a portion of
the same debt as that evidenced by such particular Note; and, for the purposes
of this definition, any Note authenticated and delivered under Section 2.6 in
lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the lost, destroyed or stolen Note.
PURCHASED SHARES: The term "Purchased Shares" shall have the
meaning specified in Section 14.6(f).
RECORD DATE: The term "record date" with respect to any
interest payment date shall have the meaning set forth in Section 2.3 hereof.
RESPONSIBLE OFFICER: The term "Responsible Officer" with
respect to the Trustee, shall mean an officer of the Trustee assigned and duly
authorized by the Trustee to administer its corporate trust matters.
SECURITIES: The term "Securities" shall have the meaning
specified in Section 14.6(d).
SECURITIES ACT: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
SUBSIDIARY: The term "Subsidiary" of any specified person
shall mean (i) a corporation, a majority of whose Capital Stock with voting
power under ordinary circumstances to elect directors is at the time directly or
indirectly owned by such person or (ii) any other person (other than a
corporation) in which such person or such person and a Subsidiary or
6
Subsidiaries of such person or a Subsidiary or Subsidiaries of such person
directly or indirectly, at the date of determination thereof, has at least
majority ownership.
SUCCESSOR COMPANY: The term "Successor Company" shall have the
meaning specified in Section 11.1.
TRADING DAY: The term "Trading Day" shall mean (x) if the
applicable security is listed or admitted for trading on the
New York Stock
Exchange or another national security exchange, a day on which the
New York
Stock Exchange or such other national security exchange is open for business or
(y) if the applicable security is quoted on the Nasdaq National Market, a day on
which trades may be made thereon or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of
New York are authorized
or obligated by law or executive order to close.
TRIGGER EVENT: The term "Trigger Event" shall have the meaning
specified in Section 14.6(d).
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean
the Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 10.3 and 14.6;
provided that in the event said Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, said Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., its successors and any corporation resulting from or surviving
any consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.
U.S. GOVERNMENT OBLIGATIONS: The term "U.S. Government
Obligations" shall mean securities that are (i) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged
or (ii) obligations of a person controlled or supervised by, and acting as an
agency or instrumentality of, the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of principal or interest on any such U.S. Government Obligation held by
such custodian for the account of the holder of such depository receipt;
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 depository
receipt from any amount received by such custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
VOTING STOCK: The term "Voting Stock" shall have the meaning
set forth in Section 3.5(e) hereof.
7
Section 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture.
The following Trust Indenture Act terms used in this Indenture
have the following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a holder of Notes;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
"OBLIGOR" on the Notes means the Company and any successor
obligor under the Trust Indenture Act.
All other terms used in this Indenture that are defined by the
Trust Indenture Act, defined by Trust Indenture Act reference to another statute
or defined by Commission rule under the Trust Indenture Act have the meanings so
assigned to them.
Section 1.3 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes
shall be designated as "6-1/4% Convertible Subordinated Notes Due 2008." Notes
not to exceed
8
the aggregate principal amount of $74,750,000 upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Notes upon the written order
of the Company, signed by its (a) Chief Executive Officer, President, Chief
Operating Officer or Chief Financial Officer, and (b) any Treasurer or Secretary
or any Assistant Secretary, without any further action by the Company hereunder.
Section 2.2 FORM OF NOTES.
The Global Note shall represent all of the outstanding
Notes. Payment of principal of and interest and premium, if any, on the Global
Note shall be made in accordance with the provisions of Section 2.3 hereof.
The terms and provisions contained in the form of Global
Note attached as Exhibit A hereto shall constitute, and are hereby expressly
made, a part of this Indenture and to the extent applicable, the Company and
the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
Section 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF
INTEREST. The Notes shall be issuable in registered form only without coupons
in denominations of $1,000 principal amount and integral multiples thereof.
Every Note shall be dated the date of its authentication, shall bear interest
from June 1, 2002 and shall be first payable on October 15, 2002 and then
semiannually on each April 15, and October 15, commencing October 15, 2002,
as specified on the face of the form of Global Note, attached as Exhibit A
hereto.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date (including any Note that is converted after the record
date and on or before the interest payment date) shall be entitled to receive
the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion subsequent
to the record date and prior to such interest payment date. Interest may, at the
option of the Company, be paid by check mailed to the address of such person as
it appears on the Note register; provided that, with respect to any holder of
Notes with an aggregate principal amount equal to or in excess of
9
$5,000,000, at the request (such request to include appropriate wire
instructions) of such holder in writing to the Trustee on or before the record
date preceding any interest payment date, interest on such holder's Notes shall
be paid by wire transfer in immediately available funds. The term "record date"
with respect to any interest payment date shall mean the October 1 or April 1
preceding said October 15, or April 15.
None of the Company, the Trustee or any paying agent shall
have any responsibility or liability for any aspect of the records relating to
or payment made on account of beneficial ownership interests in the Global Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Interest on the Notes shall be computed on the basis of a
360-day year composed of twelve 30-day months.
Any interest on any Note that is payable, but is not
punctually paid or duly provided for, on any said October 15, or April 15,
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Noteholder on the relevant record date by virtue of his having been such
Noteholder; and such Defaulted Interest shall 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 Notes (or their respective
Predecessor Notes) 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 to be paid on each Note and
the date of the payment (which shall be not less than 25 days after the
receipt by the Trustee of such notice, unless the Trustee shall consent
to an earlier date), and at the same time, the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount 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 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 payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class
postage prepaid, to each Noteholder at his address as it appears in the
Note register, not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted
Interest shall be paid to the persons in whose names the Notes (or
their respective Predecessor Notes) were 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 in
any other lawful manner not inconsistent with the requirements of any
securities exchange on
10
which the Notes 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.
Section 2.4 EXECUTION OF NOTES. The Notes shall be signed
in the name and on behalf of the Company by the signature of its Chief
Executive Officer, President, Chief Operating Officer or Chief Financial
Officer and attested by the signature of its Treasurer, Secretary or any of
its Assistant Secretaries (any of which signatures may be printed, engraved
or otherwise reproduced thereon, by facsimile or otherwise). Only such Notes
as shall bear thereon a certificate of authentication substantially in the
form set forth on the form of Note attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee
as provided by Section 16.14), shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee (or such an authenticating agent) upon any Note executed by the
Company shall be conclusive evidence that the Note so authenticated has been
duly authenticated and delivered hereunder and that the holder is entitled to
the benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Notes shall cease to be such officer before the Notes so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Notes nevertheless may be authenticated and delivered or disposed
of as though the person who signed such Notes had not ceased to be such officer
of the Company; and any Note may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Note, shall be the
proper officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.
Section 2.5 EXCHANGE AND TRANSFER OF NOTES; RESTRICTIONS ON
TRANSFER; DEPOSITORY.
Any exchange or transfer of all or a part of the Global
Note for definitive Notes pursuant to this Section 2.5 will be accompanied by
a supplemental indenture that will include the form of such definitive Notes
and provisions for conversion of the Notes under Article XIV.
(a) The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such
office and in any other office or agency of the Company designated pursuant
to Section 4.2 being herein sometimes collectively referred to as the "Note
register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the transfers of Notes. Such Note
register shall be in written form or in any form capable of being converted
into written form within a reasonable period of time. The Trustee is hereby
appointed "Note registrar" for the purpose of transfers of Notes as herein
provided. The Company may appoint one or more co-registrars.
Upon surrender for registration of transfer of any Note to the
Note registrar or any co-registrar and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount may be required by
Sections 2.5(c) and (d).
11
Notes may be exchanged for other Notes of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at any such office or agency. Whenever any Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Notes that the Noteholder
making the exchange is entitled to receive bearing certificate numbers not
contemporaneously outstanding.
All Notes presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee, the
Note registrar or any co-registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company, executed by
the Noteholder thereof or his attorney duly authorized in writing.
No service charge shall be charged to the Noteholder for any
exchange or registration of transfer of Notes, but the Company may require
payment of a sum sufficient to cover any tax, assessments or other governmental
charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Note registrar or any
co-registrar shall be required to exchange or register a transfer of (a) any
Notes for a period of 15 days next preceding the mailing of a notice of
redemption, (b) any Notes called for redemption or, if a portion of any Note is
selected or called for redemption, such portion thereof selected or called for
redemption, (c) any Notes surrendered for conversion or, if a portion of any
Note is surrendered for conversion, such portion thereof surrendered for
conversion or (d) any Notes surrendered for repurchase pursuant to Section 3.5
or, if a portion of any Note is surrendered for repurchase pursuant to Section
3.5, such portion thereof surrendered for repurchase pursuant to Section 3.5.
All Notes issued upon any transfer or exchange of Notes shall
be the valid obligations of the Company, evidencing the same debt and entitled
to the same benefits under this Indenture as the Notes surrendered upon such
registration of transfer or exchange. All Notes, the transfer and/or exchange of
which is effectuated by the Trustee pursuant to this Section 2.5, shall be
accompanied by an Officers' Certificate of the Company certifying that such
transfer, exchange and/or registration is authorized by the Company and
permitted hereunder.
Any transfer of a beneficial interest in the Global Note that
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its nominee) of a definitive Note or Notes
registered in the name of the transferee (or its nominee) on the books
maintained by the Trustee, in accordance with the transfer instructions set
forth herein. With respect to any such transfer, the Trustee or the Custodian,
at the direction of the Trustee, shall cause, in accordance with the standing
instructions and procedures existing between the Depository and the Custodian,
the aggregate principal amount of the Global Note to be reduced by the principal
amount of the beneficial interest in the Note being transferred and, following
such reduction, the Company shall execute and the Trustee shall authenticate and
make available for delivery to the transferee (or such transferee's nominee, as
the case may be), a definitive Note or Notes in the appropriate aggregate
principal amount in the name of such transferee (or its nominee).
12
Any transfer of a definitive Note or Notes must be effected by
the delivery to the transferee (or its nominee) of a definitive Note or Notes
registered in the name of the transferee (or its nominee) on the books
maintained by the Trustee. With respect to any such transfer, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the transferee (or such transferee's nominee, as the case may be), a definitive
Note or Notes in the appropriate aggregate principal amount in the name of such
transferee (or its nominee) and bearing such restrictive legends as may be
required by this Indenture.
(b) Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.5(b)), the Global Note
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
The Depository shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depository with respect to the Global Note. Initially, the Global Note shall
be issued to the Depository, registered in the name of Cede, as the nominee of
the Depository, and deposited with the Trustee as Custodian for Cede.
Neither the Company nor the Trustee (or any registrar, paying
agent or conversion agent under this Indenture) shall have responsibility for
the performance by the Depository or its participants or indirect participants
of its respective obligations under the rules and procedures governing its
operations. The Depository will take any action permitted to be taken by a
holder of Notes (including, without limitation, the presentation of Notes for
exchange as described below) only at the direction of one or more participants
to whose account with the Depository interests in the Global Note are credited,
and only in respect of the principal amount of the Notes represented by the
Global Note as to which such participant or participants has or have given such
direction.
If at any time the Depository for the Global Note notifies the
Company that it is unwilling or unable to continue as Depository for such Notes,
the Company may appoint a successor Depository with respect to such Notes. If a
successor Depository for the Notes is not appointed by the Company within 90
days after the Company receives such notice, the Company shall execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, shall authenticate and make available for delivery, Notes in
definitive form, in an aggregate principal amount equal to the principal amount
of the Global Note in exchange for the Global Note.
Definitive Notes issued in exchange for all or a part of the
Global Note pursuant to this Section 2.5(b) shall be registered in such names
and in such authorized denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall make available for
delivery such definitive Notes to the persons in whose names such definitive
Notes are so registered.
13
At such time as all interest in the Global Note has been
redeemed, converted, repurchased or canceled, the Global Note shall be, upon
receipt thereof, canceled by the Trustee in accordance with standing procedures
and instructions existing between the Depository and the Custodian. At any time
prior to such cancellation, if any interest in the Global Note is exchanged for
definitive Notes, redeemed, repurchased, converted, canceled or transferred to a
transferee who receives definitive Notes therefor or any definitive Note is
exchanged or transferred for part of the Global Note, the principal amount of
the Global Note shall, in accordance with the standing procedures and
instructions existing between the Depository and the Custodian, be reduced or
increased, as the case may be, and an endorsement shall be made on the Global
Note by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.
The Company and the Trustee may for all purposes, including
the making of payments due on the Notes, deal with the Depository as the
authorized representative of the Noteholders for the purposes of exercising the
rights of Noteholders hereunder. The rights of the owner of any beneficial
interest in the Global Note shall be limited to those established by law and
agreements between such owners and depository participants; provided that no
such agreement shall give any rights to any person against the Company or the
Trustee without the written consent of the parties so affected. Multiple
requests directions from and votes of the Depository, as holder of notes in
book-entry form with respect to any particular matter, shall not be deemed
inconsistent to the extent they do not represent an amount of notes in excess of
those held in the name of the Depository or its nominee.
(c) Each holder or former holder of a Note agrees to indemnify
the Company and the Trustee against any liability that may result from the
transfer, exchange or assignment of such holder's or former holder's Note in
violation of any provision of this Indenture and/or applicable U.S. federal or
state securities law.
Section 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In
case any Note shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its request, the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery a new Note bearing a number not contemporaneously
outstanding in exchange and substitution for the mutilated Note or in lieu of
and in substitution for the Note so destroyed, lost or stolen. The Company may
charge such applicant for the expenses of the Company in replacing a Note. In
every case the applicant for a substituted Note shall furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless from any
loss, liability, cost or expense caused by or connected with such substitution,
and in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any
such substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, 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
14
connected therewith. In case any Note that has matured or is about to mature or
has been called for redemption or is about to be repurchased or converted into
Common Stock or cash shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Note, pay or authorize the payment
of or convert or authorize the conversion of the same (without surrender
thereof, except in the case of a mutilated Note), as the case may be, if the
applicant for such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless from any
loss, liability, cost or expense caused by or connected with such substitution,
and in case of destruction, loss or theft, evidence satisfactory to the Company,
the Trustee and, if applicable, any paying agent or conversion agent of the
destruction, loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of
this Section 2.6 in lieu of any Note that is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be enforceable by anyone, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.7 TEMPORARY NOTES. Pending the preparation of
definitive Notes, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon written request of
the Company, authenticate and make available for delivery temporary Notes
(printed or lithographed). Temporary Notes shall be issuable in any
authorized denomination and shall be substantially in the form of the
definitive Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Company.
Every such temporary Note shall be executed by the Company and authenticated
by the Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Notes. Without unreasonable delay the Company shall execute and deliver to
the Trustee or such authenticating agent definitive Notes (other than in the
case of Notes in global form) and thereupon any or all temporary Notes (other
than the Global Note) may be surrendered in exchange therefor, at each office
or agency maintained by the Company pursuant to Section 4.2 and the Trustee
or such authenticating agent shall authenticate and make available for
delivery in exchange for such temporary Notes an equal aggregate principal
amount of definitive Notes. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as definitive Notes
authenticated and delivered hereunder.
Section 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes
surrendered for the purpose of payment, redemption, repurchase, conversion,
exchange or registration of transfer shall, if surrendered to the Company or
any paying agent or any Note
15
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it or, if surrendered to the Trustee, shall be promptly canceled
by it and no Notes shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. If required by the
Company, the Trustee shall return canceled Notes to the Company. If the
Company shall acquire any of the Notes, such acquisition shall not operate as
a redemption or satisfaction of the indebtedness represented by such Notes
unless and until the same are delivered to the Trustee for cancellation.
Section 2.9 CUSIP NUMBERS. The Company in issuing the Notes
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use CUSIP numbers in notices of redemption as a convenience to 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 Notes or as
contained in any notice of a redemption and that reliance may be placed only
on the other identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such
numbers. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE III
REDEMPTION AND REPURCHASE OF NOTES
Section 3.1 REDEMPTION PRICES. The Notes are not redeemable
at the option of the Company prior to October 15, 2004. At any time on or
after that date, the Notes may be redeemed at the Company's option, upon
notice as set forth in Section 3.2, in whole at any time or in part from time
to time, at the redemption price of 100% of principal amount of Notes plus
accrued and unpaid interest.
Section 3.2 NOTICE OF REDEMPTION; SELECTION OF NOTES. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Notes pursuant to Section 3.1, it shall fix a
date for redemption and, in the case of any redemption pursuant to Section
3.1, it or, at its written request accompanied by the proposed form of notice
of redemption (which must be received by the Trustee at least 45 days prior
to the date fixed for redemption, unless a shorter period is agreed to by the
Trustee), the Trustee in the name of and at the expense of the Company, shall
mail or cause to be mailed a notice of such redemption at least 30 and not
more than 60 days prior to the date fixed for redemption to the holders of
Notes so to be redeemed as a whole or in part at their last addresses as the
same appear on the Note register, provided that subject to the approval of
the form of notice by the Trustee if the Company shall give such notice, it
shall also give such notice, and notice of the Notes to be redeemed, to the
Trustee. Such mailing shall be by first class mail. The notice, if mailed in
the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of any
Note designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.
Each such notice of redemption shall identify the Notes to be
redeemed (including CUSIP numbers), specify the aggregate principal amount of
Notes to be redeemed, the date fixed
16
for redemption, the redemption price at which Notes are to be redeemed, the
place or places of payment, that payment shall be made upon presentation and
surrender of such Notes, that interest accrued to the date fixed for redemption
shall be paid as specified in said notice and that on and after said date,
interest thereon or on the portion thereof to be redeemed shall cease to accrue.
Such notice shall also state the current Conversion Price and the date on which
the right to convert such Notes or portions thereof into Common Stock shall
expire. If fewer than all the Notes are to be redeemed, the notice of redemption
shall identify the Notes to be redeemed. In case any Note is to be redeemed in
part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed
for redemption, upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion thereof shall be issued.
On or prior to the Business Day prior to the redemption date
specified in the notice of redemption given as provided in this Section 3.2, the
Company shall deposit by 11:00 A.M. Eastern Time with the Trustee or with one
or more paying agents (or, if the Company is acting as its own paying agent,
set aside, segregate and hold in trust as provided in Section 4.4) an amount
of money sufficient to redeem on the redemption date all the Notes so called
for redemption (other than those theretofore surrendered for conversion into
Common Stock or cash) at the appropriate redemption price, together with
accrued interest to the date fixed for redemption. If any Note called for
redemption is converted pursuant hereto, any money deposited with the Trustee
or any paying agent or so segregated and held in trust for the redemption of
such Note shall be paid to the Company upon its written request or, if then
held by the Company, shall be discharged from such trust. If fewer than all
the Notes are to be redeemed, the Company shall give the Trustee written
notice in the form of an Officers' Certificate not fewer than 45 days (or such
shorter period of time as may be acceptable to the Trustee) prior to the
redemption date as to the aggregate principal amount of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee
shall select the Notes or portions thereof to be redeemed (in principal amounts
of $1,000 or integral multiples thereof), by lot or, in its discretion, on a PRO
RATA basis. If any Note selected for partial redemption is converted in part
after such selection, the converted portion of such Note shall be deemed (so far
as may be) to be the portion to be selected for redemption. The Notes (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Note is converted as a whole
or in part before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and
the Trustee may treat as outstanding any Notes surrendered for conversion during
the period of 15 days next preceding the mailing of a notice of redemption and
need not treat as outstanding any Note authenticated and delivered during such
period in exchange for the unconverted portion of any Note converted in part
during such period.
Section 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice
of redemption has been given as above provided, the Notes or portion of Notes
with respect to which such notice has been given shall, unless converted into
Common Stock pursuant to the terms hereof, become due and payable on the date
and at the place or places stated in such notice at the applicable redemption
price, together with interest thereon accrued to the date fixed for
17
redemption, and on and after said date (unless the Company shall default in the
payment of such Notes at the redemption price, together with interest thereon
accrued to said date), interest on the Notes or portion of Notes so called for
redemption shall cease to accrue, and such Notes shall cease after the close of
business on the Business Day next preceding the date fixed for redemption to be
convertible into Common Stock or cash and, except as provided in Sections 7.6
and 12.4, to be entitled to any benefit or security under this Indenture, and
the holders thereof shall have no right in respect of such Notes except the
right to receive the redemption price thereof and unpaid interest thereon to the
date fixed for redemption. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that any semi-annual payment of interest becoming due on
the date fixed for redemption shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the terms and
provisions of Section 2.3 hereof.
Upon presentation of any Note redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Note or
Notes, of authorized denominations, in principal amount equal to the unredeemed
portion of the Notes so presented.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note and such Note shall remain convertible
into Common Stock until the principal and premium, if any, shall have been paid
or duly provided for.
Section 3.4 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Notes, with notice to the Trustee, the Company
may arrange for the purchase and conversion of any Notes by an agreement with
one or more investment bankers or other purchasers to purchase such Notes by
paying to the Trustee in trust for the Noteholders, on or prior to the close of
business one Business Day prior to the date fixed for redemption, an amount not
less than the applicable redemption price, together with interest accrued to the
date fixed for redemption, of such Notes. Notwithstanding anything to the
contrary contained in this Article III, the obligation of the Company to pay the
redemption price of such Notes, together with interest accrued to the date fixed
for redemption, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers. If such an agreement is entered into,
a copy of which shall be filed with the Trustee prior to the date fixed for
redemption, any Notes not duly surrendered for conversion by the holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article XIV) surrendered by such purchasers for
conversion, prior to the close of business on the date fixed for redemption (and
the right to convert any such Notes shall be deemed to have been extended
through such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of
18
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture, and the Company agrees to indemnify the Trustee from, and
hold it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Notes between the Company and such purchasers including the costs and expenses
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
Section 3.5 REPURCHASE OF NOTES UPON A CHANGE OF CONTROL.
(a) If a Change of Control shall occur at any time, then each
holder of Notes shall have the right to require that the Company repurchase such
holder's Notes in whole or in part in integral multiples of $1,000 at a purchase
price (the "Change of Control Purchase Price") in cash in an amount equal to
101% of the principal amount of such Notes, plus accrued and unpaid interest
thereon, if any, to the purchase date (the "Change of Control Purchase Date")
pursuant to the offer described below (the "Change of Control Offer") and in
accordance with the other procedures set forth in this Indenture.
(b) Within 30 days following any Change of Control, the
Company shall publish a notice in the Wall Street Journal, notify the Trustee
thereof and give written notice of such Change of Control to each holder of
Notes, by first-class mail, postage prepaid, at the Noteholder's address
appearing in the Note register, stating, among other things, (i) that a Change
of Control has occurred, (ii) the Change of Control Purchase Price, (iii) the
Change of Control Purchase Date (which shall be a Business Day no earlier than
30 days nor later than 60 days from the date such notice is mailed, or such
later date as is necessary to comply with requirements under the Exchange Act),
(iv) that any Note not tendered shall continue to accrue interest and to have
all of the benefits of this Indenture, (v) that, unless the Company defaults in
the payment of the Change of Control Purchase Price, any Notes accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date, (vi) that Noteholders electing to
have any Notes purchased pursuant to a Change of Control Offer shall be required
to surrender the Notes, with the form entitled "Option of Noteholder to Elect
Purchase" on the reverse of the Notes completed, to the Company at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Purchase Date, (vii) that Noteholders shall be
entitled to withdraw their election if the Company receives, not later than the
close of business on the second Business Day preceding the Change of Control
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Noteholder, the principal amount of Notes delivered for
purchase, and a statement that such Noteholder is withdrawing his election to
have such Notes purchased, and (viii) that Noteholders whose Notes are being
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered, which unpurchased portion must
be equal to $1,000 in principal amount or an integral multiple thereof. The
Company shall comply with the requirements of Rule 13e-4 and 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes in connection with a Change of Control.
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(c) On the Change of Control Purchase Date, the Company shall,
to the extent lawful, (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Trustee in
immediately available funds by 11:00 A.M. Eastern Time an amount equal to the
Change of Control Purchase Price in respect of all Notes or portions thereof
so tendered and (iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the Notes
or portions thereof tendered to the Company. The Trustee shall promptly
mail to each Noteholder of Notes so accepted payment in an amount equal to the
purchase price of such Notes, and the Trustee shall promptly authenticate and
mail to each Noteholder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each such new Note shall
be in a principal amount of $1,000 or an integral multiple thereof. The Company
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
(d) The term "Change in Control" shall mean an event or series
of events in which (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) acquires "beneficial ownership"
(as determined in accordance with Rule 13d-3 under the Exchange Act), directly
or indirectly, of more than 50% of the total Voting Stock of the Company at an
Acquisition Price less than the conversion price then in effect with respect to
the Notes and (ii) the holders of the Common Stock receive consideration which
is not all or substantially all common stock that is (or upon consummation of or
immediately following such event or events will be) listed on a United States
national securities exchange or approved for quotation on the Nasdaq Stock
Market or any similar United States system of automated dissemination of
quotations of securities' prices; provided, however, that any such person or
group shall not be deemed to be the beneficial owner of, or to beneficially own,
any Voting Stock tendered in a tender offer until such tendered Voting Stock is
accepted for purchase under the tender offer.
(e) "Voting Stock" means stock of the class or classes
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of a corporation (irrespective whether or not at the time
stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The
Company covenants and agrees that it shall duly and punctually pay or cause to
be paid the principal of and premium, if any, and interest on each of the Notes
at the places, at the respective times and in the manner provided herein and in
the Notes. Any amounts of cash to be given to the Trustee or paying agent
shall be deposited with the Trustee or paying agent in immediately available
funds by 11:00 A.M. Eastern Time. Each installment of interest on the Notes due
on any semi-annual interest payment date may be paid by mailing checks for the
interest payable to or upon the written order of the holders of Notes entitled
thereto as they shall appear on the Note register; provided that, with respect
to any holder of Notes with an aggregate principal amount equal to or in excess
of $5,000,000, at the request (such request to include appropriate wire
instructions) of such holder in writing to the Trustee, interest on such
holder's Notes shall be paid by wire transfer in immediately available
funds. An installment of
20
principal or interest shall be considered paid on the date due if the Trustee or
paying agent (other than the Company, a Subsidiary of the Company or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment of principal or interest and is not prohibited from
paying such money to the holders of the Notes pursuant to the terms of this
Indenture.
Section 4.2 MAINTENANCE OF OFFICE OR AGENCY. The Company shall
maintain in the Borough of Manhattan, The City of
New York, an office or agency
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion, redemption or repurchase and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company shall 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 office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of
New York, for such purposes. The Company shall 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.
The Company hereby initially designates the Trustee as paying
agent, Note registrar and conversion agent and the Corporate Trust Office of
the Trustee, as offices or agencies of the Company for the purposes set forth
in the first paragraph of this Section 4.2.
So long as the Trustee is the Note registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in Section 7.11(a).
Section 4.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S
OFFICE. The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, shall appoint, in the manner provided in Section 7.11, a Trustee, so
that there shall at all times be a Trustee hereunder.
Section 4.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, the Company or the
Trustee, as the case may be, shall cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 4.4:
(1) that it shall hold all sums held by it as such agent for
the payment of the principal of, premium, if any, or interest on the
Notes (whether such sums have been paid
21
to it by the Company or by any other obligor on the Notes) in trust
for the benefit of the holders of the Notes;
(2) that it shall give the Trustee written notice of any
failure by the Company (or by any other obligor on the Notes) to make
any payment of the principal of, premium, if any, or interest on the
Notes when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it shall forthwith pay to the
Trustee all sums so held in trust.
The Company shall, before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company shall promptly notify the Trustee of
any failure to take such action.
(b) If the Company shall act as its own paying agent, it
shall, on or before each due date of the principal of, premium, if any, or
interest on the Notes, set aside, segregate and hold in trust for the benefit of
the holders of the Notes a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and shall notify the Trustee of any failure to
take such action and of any failure by the Company (or any other obligor under
the Notes) to make any payment of the principal of, premium, if any, or interest
on the Notes when the same shall become due and payable.
(c) Anything in this Section 4.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 4.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
(d) Anything in this Section 4.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
4.4 is subject to Sections 12.3 and 12.4.
Section 4.5 CORPORATE EXISTENCE. Subject to Article XI, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of any Subsidiary of the Company, in accordance
with the respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary and (ii) the rights (charter
and statutory), licenses and franchises of the Company and its Subsidiaries;
provided that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Subsidiaries if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not materially
adverse to the holders of the Notes.
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Section 4.6 STAY, EXTENSION AND USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it shall 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 or other law that would prohibit
or forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or that may affect the covenants or the performance of
this Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.7 COMPLIANCE STATEMENT; NOTICE OF DEFAULTS
(a) The Company shall deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers' Certificate
stating whether or not to the best knowledge of the signers thereof the Company
is in compliance (without regard to periods of grace or notice requirements)
with all conditions and covenants under this Indenture, and if the Company shall
not be in compliance, specifying such non-compliance and the nature and status
thereof of which such signer may have knowledge.
(b) The Company shall file with the Trustee written
notice of the occurrence of any default or Event of Default within ten days of
its becoming aware of any such default or Event of Default.
Section 4.8 LIMITATION ON DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. The Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary to (i) pay dividends or make any other
distribution on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, or pay any indebtedness owed to,
the Company or a Subsidiary of the Company, (ii) make loans or advances to the
Company or any Subsidiary of the Company, or (iii) transfer any of its
properties or assets to the Company.
Section 4.9 TAXES. The Company shall pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or its Subsidiaries or upon the income, profits or property of the Company or
any such Subsidiary and (ii) all lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such Subsidiary; provided that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which disputed amounts adequate reserves have
been made.
Section 4.10 INSURANCE. The Company shall provide, or cause to
be provided, for itself and its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and
23
owning like properties, including, but not limited to, products liability
insurance and public liability insurance, with reputable insurers or with the
government of the United States of America or an agency or instrumentality
thereof, in such amounts with such deductibles and by such methods as shall be
determined in good faith by the Board of Directors to be appropriate.
ARTICLE V
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY
Section 5.1 NOTEHOLDERS' LISTS. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of holders of Notes, the Company and the Trustee,
and shall otherwise comply with Trust Indenture Act Section 312(a). If the
Trustee is not the Notes registrar, the Company shall furnish to the Trustee on
or before at least seven Business Days preceding each interest payment date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee reasonably may require of the names and
addresses of holders of Notes, and the Company shall otherwise comply with Trust
Indenture Act Section 312(a).
Section 5.2 REPORTS BY COMPANY. The Company shall deliver to
the Trustee within 15 days after it files the same with the Commission, copies
of all reports and information (or copies of such portions of any of the
foregoing as the Commission may by its rules and regulations prescribe), if any,
which the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act or pursuant to the immediately following sentence.
So long as at least $5,000,000 aggregate principal amount of Notes remain
outstanding, the Company shall file with the Commission such reports as may be
required pursuant to Section 13 of the Exchange Act in respect of a security
registered pursuant to Section 12 of the Exchange Act, regardless of whether the
Company is otherwise required to file such reports. If the Company is not
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act
(or otherwise required to file reports pursuant to the immediately preceding
sentence), the Company shall deliver to the Trustee, within 15 days after it
would have been required to file such information with the Commission were it
required to do so, annual and quarterly financial statements, including any
notes thereto (and, in the case of a fiscal year end, an auditors' report by an
independent certified public accounting firm of established national
reputation), and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations," in each case substantially equivalent to that which
it would have been required to include in such quarterly or annual reports,
information, documents or other reports if it had been subject to the
requirements of Section 13 or 15(d) of the Exchange Act. The Company shall
provide copies of the foregoing materials to the Noteholders to the extent
required by the Trust Indenture Act once this Indenture has been qualified. The
Company shall also comply with the other provisions of the Trust Indenture Act
Section 314(a).
If the Company is not required to file the reports and
information described above with the Commission, and the Company's Common Stock
is still publicly held, the Company shall deliver an annual financial report for
the Common Stock (as required by the Commission) to the Trustee no later than
120 days from the end of its fiscal year and quarterly financial reports for the
Common Stock (as required by the Commission) no later than 30 days after the end
of each quarter; provided, however, that if the Company's Common Stock is no
longer publicly
24
held, the Company shall deliver annual and quarterly reports to the Trustee at
the same times as described in this paragraph, but the Company shall not have to
include management's discussion and analysis of financial conditions and results
of operations or description of the business sections in such reports.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
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 exclusively on Officers' Certificates).
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 EVENTS OF DEFAULT. In case one or more of the
following Events of Default (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) shall have occurred and
be continuing:
(a) default in the payment of the principal of or
premium, if any, on the Notes when due at maturity, upon redemption or
otherwise, including failure by the Company to purchase the Notes when required
under Section 3.5 (whether or not such payment shall be prohibited by Article XV
of this Indenture); or
(b) default in the payment of any installment of interest
on the Notes as and when the same shall become due and payable (whether or not
such payment shall be prohibited by Article XV of this Indenture), and
continuance of such default for a period of 30 days; or
(c) a failure on the part of the Company to duly observe
or perform any other covenants or agreements on the part of the Company in this
Indenture (other than a default in the performance or breach of a covenant or
agreement that is specifically dealt with elsewhere in this Section 6.1) that
continues for a period of 90 days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been given to the
Company by the Trustee, or to the Company and a Responsible Officer of the
Trustee, by the holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 8.4; or
(d) an event of default occurs under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries), whether such indebtedness or guarantee now exists or shall
be created after the date hereof, which default (i) is caused by a failure to
pay principal or interest on such indebtedness prior to the expiration of the
grace period provided in such indebtedness (a "Payment Default") or (ii) results
in the acceleration of such indebtedness prior to its expressed maturity and, in
each case, the principal amount of such
25
indebtedness, together with the principal amount of any other such
indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10,000,000 or more;
(e) final judgments or decrees shall be entered by a
court of competent jurisdiction against the Company or any Subsidiary involving
liabilities of $25,000,000 or more (singly or in the aggregate) (after deducting
the portion of such liabilities accepted by a reputable insurance company) and
such final judgments or decrees shall not have been vacated, discharged,
satisfied or stayed pending appeal within 60 days from the entry thereof;
(f) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect, or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall fail generally to pay its debts as they become
due; or
(g) an involuntary case or other proceeding shall be
commenced against the Company seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 6.1(f) or (g)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding hereunder
determined in accordance with Section 8.4, by notice in writing to the Company
(and to the Trustee if given by Noteholders), may declare the principal of,
premium, if any, on the Notes and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 6.1(f) or (g) occurs and is continuing, the principal of all the Notes
and the interest accrued thereon shall be immediately due and payable. The
foregoing provision is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all Notes and the principal of and premium, if any, on any and all
Notes that shall have become due otherwise than by acceleration (with interest
on overdue installments of interest (to the extent that payment of such interest
is enforceable under applicable law) and on such principal and premium, if any,
at the rate borne by the Notes, to the date of such payment or deposit) and
amounts due to the Trustee pursuant to Section 7.7, and if any and all
defaults under this Indenture, other than the nonpayment of principal of,
premium, if any, and accrued interest on Notes that shall have become due by
acceleration, shall have been cured or waived pursuant to
26
Section 6.7, then and in every such case the holders of a majority in
aggregate principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereto. The Company shall notify a Responsible Officer of the Trustee,
promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such waiver or rescission and annulment or for any other
reason or shall have been determined adversely to the Trustee, then and in every
such case the Company, the holders of Notes and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes and the Trustee shall
continue as though no such proceeding had been taken.
Section 6.2 PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The
Company covenants that (a) in case a default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of 30 days,
or (b) in case default shall be made in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall have become due
and payable, whether at maturity of the Notes or in connection with any
redemption or repurchase, by declaration or otherwise, then, upon demand of the
Trustee, the Company shall pay to the Trustee, for the benefit of the holders of
the Notes, the whole amount that then shall have become due and payable on all
such Notes for principal of, premium, if any, or interest, or both, as the case
may be, with interest upon the overdue principal, premium, if any, and (to the
extent that payment of such interest is enforceable under applicable law) upon
the overdue installments of interest at the rate borne by the Notes; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee,
its agents, attorneys and counsel, and any expenses or liabilities incurred by
the Trustee hereunder other than through its negligence or bad faith. Until such
demand by the Trustee, the Company may pay the principal of and premium, if any,
and interest on the Notes to the registered holders, whether or not the Notes
are overdue.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Notes and collect in the manner provided by law out of the
property of the Company or any other obligor on the Notes wherever situated the
monies adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Notes under
Title 11 of the United States Code or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company
or such
27
other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section
6.2, shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Notes and, in case of any judicial proceedings, to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Noteholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Notes, its or their creditors, or its or their property and to collect and
receive any monies or other property payable or deliverable on any such
claims and to distribute the same after the deduction of any amounts due the
Trustee under Section 7.7; and any receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, custodian or similar official is
hereby authorized by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances
and disbursements out of the estate in any such proceedings shall be denied
for any reason, payment of the same shall be secured by a lien on, and shall
be paid out of, any and all distributions, dividends, monies, securities and
other property that the holders of the Notes may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization
or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or adopt on behalf of any Noteholder any plan
of reorganization or arrangement affecting the Notes or the rights of any
Noteholder, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Trustee without the
possession of any of the Notes or the production thereof on any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, 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 Notes.
In any proceedings brought by the Trustee pursuant to this
Indenture or any supplement hereto (and in any proceedings involving the
interpretation of any provision of this Indenture to which the Trustee shall be
a party), the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 6.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any
monies collected by the Trustee pursuant to this Article VI shall be applied in
the order following, at the date or dates fixed by the Trustee for the
distribution of such monies, upon
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presentation of the several Notes and stamping thereon 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 7.7;
Second: Subject to the provisions of Article XV, in case the
principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on the Notes in default in the order
of the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the rate borne by the Notes,
such payments to be made ratably to the persons entitled thereto; and
Third: Subject to the provisions of Article XV, in case the
principal of the outstanding Notes shall have become due, by
declaration or otherwise, and be unpaid, to the payment of the whole
amount then holding and unpaid upon the Notes for principal, premium,
if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the
rate borne by the Notes; and in case such monies shall be insufficient
to pay in full the whole amounts so due and unpaid upon the Notes, then
to the payment of such principal, premium, if any, and interest without
preference or priority of principal and premium, if any, over interest,
or of interest over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of
any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest.
Section 6.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note
shall have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Notes then outstanding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 6.7; it being understood and intended, and being expressly covenanted by
the taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes 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 holder of Notes, to obtain
or seek to obtain priority over or preference to any other such holder or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Notes (except as
otherwise provided herein). For the protection and enforcement of this Section
6.4, each and every Noteholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
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Notwithstanding any other provision of this Indenture and any
provision of any Note, the right of any holder of any Note to receive payment of
the principal of, premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder
except as otherwise set forth herein.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
Section 6.5 PROCEEDINGS BY TRUSTEE. In case of an Event of
Default and subject to the provisions of Section 7.7 hereof, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 6.6 REMEDIES CUMULATIVE AND CONTINUING. Except as
provided in Section 2.7, all powers and remedies given by this Article VI to the
Trustee or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of such powers and remedies or of any other powers
and remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 6.4, every power and remedy given by this Article VI or by
law to the Trustee or to the Noteholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the Noteholders.
Section 6.7 DIRECTION OF PROCEEDINGS AND ▇▇▇▇▇▇ OF DEFAULTS BY
MAJORITY OF NOTEHOLDERS. The holders of a majority in aggregate principal amount
of the Notes at the time outstanding (determined in accordance with Section 8.4)
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that (a) such direction shall not be in
conflict with any rule of law or with this Indenture and (b) the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent with
such direction. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding (determined in accordance with Section 8.4) may on
behalf of the holders of all of the Notes waive any past default or Event of
Default hereunder and its consequences except (i) a default in the payment of
interest or premium, if any, on, or the principal of, the Notes, (ii) a failure
by the Company to convert any Notes into Common Stock or cash, as the case may
be, or (iii) a default in respect of a covenant or provisions hereof that
30
under Article X cannot be modified or amended without the consent of the holders
of all Notes then outstanding. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 6.7, said default
or Event of Default shall for all purposes of the Notes and this Indenture be
deemed to have been cured and to be not continuing and the Company, the Trustee
and the holders of the Notes shall as reasonably possible be restored to their
former positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 6.8 NOTICE OF DEFAULTS. The Trustee shall, within 90
days after the occurrence of a default, mail to all Noteholders, as the names
and addresses of such holders appear upon the Note register, notice of all
defaults of which a Responsible Officer has actual knowledge, unless such
defaults shall have been cured or waived before the giving of such notice;
provided that, except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Noteholders.
Section 6.9 UNDERTAKING TO PAY COSTS. All parties to this
Indenture agree, and each holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 6.9 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Noteholder or group of Noteholders holding in the aggregate
more than 10% in principal amount of the Notes at the time outstanding
determined in accordance with Section 8.4 or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal of, premium, if
any, or interest on any Note on or after the due date expressed in such Note or
to any suit for the enforcement of the right to convert any Note in accordance
with the provisions of Article XIV.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
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(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others;
and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
provided that in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i)this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Trustee unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts reasonably available to the
Trustee; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.7.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this
Section 7.1.
(e) The Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its own funds or otherwise incur
any financial liability unless it receives indemnity satisfactory to it against
any loss, liability or expense.
Section 7.2 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days
after each April 1 commencing with the April 1 following the date of this
Indenture, the Trustee shall, if required by the Trust Indenture Act, mail to
each Noteholder a brief report dated as of such April 1 that complies with Trust
Indenture Act Section 313(a). The Trustee also shall comply with Trust Indenture
Act Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if
the Notes become listed or delisted on any stock exchange or automatic quotation
system.
A copy of each report at the time of its mailing to
Noteholders shall be mailed to the Company and, to the extent required by
Section 5.2 hereof and of the Trust Indenture Act
32
Section 313(d), filed with the Commission and each stock exchange, if any, on
which the Notes are listed.
Section 7.3 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as
otherwise provided in Section 7.1:
(a) The Trustee may rely and shall be protected in acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed or
required by the Trust Indenture Act); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) The Trustee may consult with counsel of its selection and
any advice or opinion of counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or opinion of counsel;
(d) 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 by it with due care
hereunder; no Depository, Custodian or paying agent who is not the Trustee shall
be deemed an agent of the Trustee, and the Trustee (in its capacity as Trustee)
shall not be responsible for any act or omission by any such Depository,
Custodian or paying agent;
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by the Indenture at the request or
direction of any of the holders pursuant to this Indenture unless such holders
have offered the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that would be incurred by it in compliance with such
request or direction.
(f) Subject to the provisions of Section 7.1(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within its rights or powers;
(g) In connection with any request to transfer or exchange any
Note, the Trustee may request a direction (in the form of an Officers'
Certificate) from the Company and an Opinion of Counsel with respect to
compliance with any restrictions on transfer or exchange imposed by this
Indenture, the Securities Act, other applicable law or the rules and regulations
of any exchange on which the Notes or the Common Stock may be traded, and the
Trustee may rely and shall be protected in acting upon such direction and in
accordance with such Officers' Certificate and Opinion of Counsel;
33
(h) The Trustee may rely and shall be fully protected in
acting upon the determination and notice by the Company of the Conversion Price;
and
(i) The Trustee shall not be deemed to have knowledge of
any Event of Default or other fact or event upon the occurrence of which it may
be required to take action hereunder unless one of its Responsible Officers has
actual knowledge thereof obtained by a written statement.
Section 7.4 NO RESPONSIBILITY FOR RECITALS, ETC. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 7.5 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR
REGISTRAR MAY OWN NOTES. The Trustee, any paying agent, any conversion agent or
any Note registrar, in its individual or any other capacity, may become the
owner or pledgee of Notes with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Note registrar.
Section 7.6 MONIES TO BE HELD IN TRUST. Subject to the
provisions of Section 12.4, all monies received by the Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which they
were received. 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 may be agreed to in writing from time to time by the Company and the
Trustee.
Section 7.7 COMPENSATION AND EXPENSES OF TRUSTEE. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as the Company and the Trustee shall
from time to time agree in writing, for all services rendered by it hereunder in
any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company shall pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee in any capacity under this
Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee or such agent or
authenticating agent, as the case may be, and arising out of or in connection
with the acceptance or administration of this trust or in any other capacity
hereunder, including the costs and expenses of defending themselves against any
claim of liability in the premises. The obligations of the Company under this
Section 7.7 to compensate or indemnify the Trustee and to
34
pay or reimburse the Trustee for expenses, disbursements and advances shall be
secured by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Notes. The obligation of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.
Section 7.8 OFFICERS' CERTIFICATE AS EVIDENCE. Except as
otherwise provided in Section 7.1, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such Officers' Certificate,
in the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
Section 7.9 CONFLICTING INTERESTS OF TRUSTEE. In the event
that the Trust Indenture Act is applicable hereto, and if the Trustee has or
shall acquire a conflicting interest within the meaning of Trust Indenture Act
Section 310(b) and there exists an Event of Default hereunder (exclusive of any
period of grace or requirement of notice), 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.
Section 7.10 ELIGIBILITY OF TRUSTEE. There shall at all times
be a Trustee hereunder that shall be a person that satisfies the requirements of
Trust Indenture Act Section 310(a)(1) and Section 310(a)(5) and that has a
combined capital and surplus of at least $50,000,000. If such person publishes
reports of condition at least annually, pursuant to law or to the requirements
of any supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such person 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 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 VII.
Section 7.11 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company; and the Company shall mail, or cause
to be mailed, notice thereof to the holders of Notes at their addresses as they
shall appear on the Note register. Upon receiving such notice of resignation,
the Company shall promptly appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 7.9
after written request therefor by the Company or by any
Noteholder who has been a BONA FIDE holder of a Note or Notes
for at least six months; or
35
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.10 and shall fail
to resign after written request therefor by the Company or by
any such Noteholder; or
(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or any Noteholder who
has been a BONA FIDE holder of a Note or Notes 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 and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal
amount of the Notes at the time outstanding may at any time remove the Trustee
and nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within ten days after notice to the Company of such nomination
the Company objects thereto, in which case the Trustee so removed or any
Noteholder, upon the terms and conditions and otherwise as provided in the next
paragraph, may petition any court of competent jurisdiction for an appointment
of a successor trustee.
If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after removal or the mailing of such notice
of resignation to the Noteholders, the Trustee resigning or being removed may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or, in the case of either resignation or removal, any Noteholder who
has been a BONA FIDE holder of a Note or Notes for at least six months may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 7.11 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.12.
Section 7.12 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor
trustee appointed as provided in Section 7.11 shall execute, acknowledge and
deliver to the Company and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon, the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but on the written request of the Company
or of the successor trustee, the Trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the
36
provisions of Section 7.7, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the Trustee so ceasing to
act. Upon request of any such successor trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers. Any Trustee
ceasing to act shall, nevertheless, retain a lien upon all property and funds
held or collected by such trustee as such, except for funds held in trust for
the benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 7.7.
No successor trustee shall accept appointment as provided in
this Section 7.12 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 7.9 and eligible under the
provisions of Section 7.10.
Upon acceptance of appointment by a successor trustee as
provided in this Section 7.12, the Company shall mail or cause to be mailed
notice of the succession of such Trustee hereunder to the holders of Notes at
their addresses as they shall appear on the Note register. If the Company fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
Section 7.13 SUCCESSOR, BY MERGER, ETC. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor to the Trustee hereunder, provided such
corporation shall be qualified under the provisions of Section 7.9 and eligible
under the provisions of Section 7.10 without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
Section 7.14 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR. If
and when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Notes) and the Trust Indenture Act is applicable hereto, the
Trustee shall be subject to the provisions of Trust Indenture Act Section 311(a)
or, if applicable, Trust Indenture Act Section 311(b) regarding the collection
of the claims against the Company (or any such other obligor).
ARTICLE VIII
CONCERNING THE NOTEHOLDERS
Section 8.1 ACTION BY NOTEHOLDERS. Whenever in this Indenture
it is provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of
37
Article IX or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Noteholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Notes, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than 15 days prior to the date of commencement of
solicitation of such action.
Section 8.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the
provisions of Sections 7.1, 7.2 and 9.5, proof of the execution of any
instrument by a Noteholder or by agent or proxy shall be sufficient if made in
accordance with Section 7.3 hereof. The holding of Notes shall be proved by the
Note register or by a certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the
manner provided in Section 9.5.
Section 8.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the
Trustee, any paying agent, any conversion agent and any Note registrar may deem
the person in whose name such Note shall be registered upon the books of the
Company to be, and may treat such person as, the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of, premium, if any, and interest on such Note, for
conversion of such Note and for all other purposes; and neither the Company nor
the Trustee nor any paying agent nor any conversion agent nor any Note registrar
shall be affected by any notice to the contrary. All such payments so made to
any holder for the time being, or upon order of such holder, shall be valid and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
The Depository shall be deemed to be the owner of the Global
Note for all purposes, including receipt of notices to Noteholders and payment
of principal of, premium, if any, and interest on the Notes. None of the
Company, the Trustee (in its capacity as Trustee), any paying agent or the Note
registrar (or co-registrar) shall have any responsibility for any aspect of the
records relating to or payments made on account of beneficial interests of the
Global Note or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 8.4 COMPANY-OWNED NOTES DISREGARDED. In determining
whether the holders of the requisite aggregate principal amount of Notes have
concurred in any direction, consent, waiver or other action under this
Indenture, Notes that are owned by the Company or any other obligor on the Notes
or by any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any other obligor on the
Notes shall be disregarded and deemed not to be outstanding for the purpose of
any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Notes that a Responsible Officer of the Trustee actually
knows are so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 8.4 if the pledgee shall establish
to the satisfaction of the Trustee the ▇▇▇▇▇▇▇'▇ right to vote such Notes and
that the pledgee is not the Company, any other obligor on
38
the Notes or a person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any such other
obligor.
In the case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee. Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Notes, if any, known by the Company to
be owned or held by or for the account of any of the above described persons;
and subject to Section 7.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes not listed therein are outstanding for the purpose of
any such determination.
Section 8.5 REVOCATION OF CONSENTS, FUTURE HOLDERS BOUND. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.1, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Notes specified in this Indenture in
connection with such action, any holder of a Note that is shown by the evidence
to be included in the Notes the holders of which have consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 8.2, revoke such action so far as
concerns such Note. Except as aforesaid, any such action taken by the holder of
any Note shall be conclusive and binding upon such holder and upon all future
holders and owners of such Note and of any Notes issued in exchange or
substitution therefor, irrespective of whether any notation in regard thereto is
made upon such Note or any Note issued in exchange or substitution therefor.
ARTICLE IX
NOTEHOLDERS' MEETINGS
Section 9.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A
meeting of Noteholders may be called at any time and from time to time pursuant
to the provisions of this Article IX for any of the following purposes:
(i) to give any notice to the Company or to the
Trustee, or to give any directions to the Trustee, or to
consent to the waiving of any default hereunder and its
consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of
Article VI;
(ii) to remove the Trustee and appoint a successor
trustee pursuant to the provisions of Article VII;
(iii) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of
Section 10.2; or
(iv) to take any other action authorized to be taken
by or on behalf of the holders of any specified aggregate
principal amount of the Notes under any other provisions of
this Indenture or under applicable law.
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Section 9.2 MANNER OF CALLING MEETINGS; RECORD DATE. The
Trustee may at any time call a meeting of Noteholders to take any action
specified in Section 9.1, to be held at such time and at such place in
Minneapolis, Minnesota, as the Trustee shall determine. Notice of every meeting
of the Noteholders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
not less than 30 nor more than 60 days prior to the date fixed for the meeting
to such Noteholders at their addresses as such addresses appear in the Note
register. For the purpose of determining Noteholders entitled to notice of any
meeting of Noteholders, the Company, upon written notice to the Trustee, shall
fix in advance a date as the record date for such determination, such date to
be a business day not more than ten days prior to the date of the mailing of
such notice as hereinabove provided. Only persons in whose name any Note shall
be registered in the Note register at the close of business on a record date
fixed by the Trustee as aforesaid, or by the Company or the Noteholders as
provided in Section 9.3, shall be entitled to notice of the meeting of
Noteholders with respect to which such record date was so fixed.
Section 9.3 CALL OF MEETING BY COMPANY OR NOTEHOLDERS. In case
at any time the Company, pursuant to a resolution of its Board of Directors or
the holders of at least 10% in aggregate principal amount of the Notes then
outstanding shall have requested the Trustee to call a meeting of Noteholders to
take any action authorized in Section 9.1 by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed notice of such meeting within 20 days after
receipt of such request, then the Company or the holders of Notes in the amount
above specified, as the case may be, may fix the record date with respect to,
and determine the time and the place for, such meeting and may call such meeting
to take any action authorized in Section 9.1, by mailing notice thereof as
provided in Section 9.2. The record date fixed as provided in the preceding
sentence shall be set forth in a written notice to the Trustee and shall be a
business day not less than 15 nor more than 20 days after the date on which the
original request is sent to the Trustee.
Section 9.4 WHO MAY ATTEND AND VOTE AT MEETINGS. Only persons
entitled to receive notice of a meeting of Noteholders and their respective
proxies duly appointed by an instrument in writing shall be entitled to vote at
such meeting. The only persons who shall be entitled to be present or to speak
at any meeting of Noteholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel. When a determination of
Noteholders entitled to vote at any meeting of Noteholders has been made as
provided in this Section, such determination shall apply to any adjournments
thereof.
Section 9.5 MANNER OF VOTING AT MEETINGS AND RECORD TO BE
KEPT. The vote upon any resolution submitted to any meeting of Noteholders shall
be by written ballots on each of which shall be subscribed the signature of the
Noteholder or proxy casting such ballot and the identifying number or numbers of
the Notes held or represented in respect of which such ballot is cast. The
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or
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more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was mailed as provided in Section 9.2.
The record shall show the identifying numbers of the Notes voting in favor of or
against any resolution. Each counterpart of such record shall be signed and
verified by the affidavits of the chairman and secretary of the meeting and one
of the counterparts shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee.
Any counterpart record so signed and verified shall be
conclusive evidence of the matters therein stated and shall be the record
referred to in clause (b) of Section 8.1.
Section 9.6 EXERCISE OF RIGHTS OF TRUSTEE AND NOTEHOLDERS NOT
TO BE HINDERED OR DELAYED. Nothing in this Article IX contained shall be deemed
or construed to authorize or permit, by reason of any call of a meeting of
Noteholders or any rights expressly or impliedly conferred hereunder to make
such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Noteholders under any of the
provisions of this Indenture or of the Notes.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS. The Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Article XIV
(b) subject to Article XV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes, any property or
assets;
(c) to evidence the succession of another person to the
Company, or successive successions, and the assumption by the Successor Company
of the covenants, agreements and obligations of the Company pursuant to Article
XI;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Notes and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
41
(e) to provide for the issuance under this Indenture of
Notes in coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder in
fully registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture that shall not adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent necessary to effect the qualification of this Indenture
under the Trust Indenture Act (if applicable), or under any similar federal
statute hereafter enacted (if applicable).
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations that may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 10.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 10.2.
Section 10.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS. With the consent (evidenced as provided in Article VIII) of the
holders of not less than a majority in aggregate principal amount of the Notes
at the time outstanding, the Company, when authorized by a Board Resolution and
the Trustee, may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall (i)
without the consent of the holders of each Note so affected, extend the fixed
maturity of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or premium, if any,
thereon or reduce any amount payable on redemption or repurchase thereof, alter
the obligation of the Company to repurchase the Notes at the option of the
holder upon the occurrence of a Change of Control or impair or affect the right
of any Noteholder to institute suit for the payment thereof or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, modify the subordination
provisions in a manner adverse to the holders of the Notes, or impair the right
to convert the Notes into Common Stock or cash subject to the terms set forth
herein or (ii) without the consent of the holders of all the Notes then
42
outstanding, reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture.
Upon the request of the Company, accompanied by a copy of a
Board Resolution certified by its Secretary or Assistant Secretary authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Noteholders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Noteholders
under this Section 10.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
Section 10.3 EFFECT OF SUPPLEMENTAL INDENTURES. Any
supplemental indenture executed pursuant to the provisions of this Article X
shall comply with the Trust Indenture Act, as then in effect, if such
supplemental indenture is then required to so comply. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article X, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section 10.4 NOTATION ON NOTES. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article X may bear a notation in form approved by the Company
as to any matter provided for in such supplemental indenture, but they need not
do so. After notice to the Trustee, if the Company shall determine to add such a
notation, new Notes so modified as to conform, in the opinion of the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company's expense, be prepared and executed
by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 16.14) and delivered in exchange
for the Notes then outstanding, upon surrender of such Notes then outstanding.
Section 10.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE
TO BE FURNISHED TO THE TRUSTEE. The Trustee shall be furnished with and, subject
to the provisions of Sections 7.1 and 7.2, may rely conclusively upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article X.
43
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE, TRANSFER AND LEASE
Section 11.1 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of its assets (determined on a
consolidated basis) to any person unless: (i) either the Company is the
resulting, surviving or transferee person (the "Successor Company") or the
Successor Company is a person organized and existing under the laws of the
United States or any State thereof or the District of Columbia, and the
Successor Company (if not the Company) expressly assumes by a supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under this Indenture and the Notes,
including the rights pursuant to Article XIV hereof, (ii) immediately after
giving effect to such transaction, no Event of Default has happened and is
continuing and (iii) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture.
Section 11.2 SUCCESSOR COMPANY TO BE SUBSTITUTED. In case of
any such consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the Successor Company, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such Successor
Company shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party hereto. When a Successor
Company duly assumes all the obligations of the Company pursuant to this
Indenture and the Notes, the predecessor shall be released from all such
obligations.
Section 11.3 OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE. The
Trustee, subject to Sections 7.1 and 7.2, shall receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or lease and any such assumption complies
with the provisions of this Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
Section 12.1 LEGAL DEFEASANCE AND COVENANT DEFEASANCE OF THE
NOTES.
(a) The Company may, at its option by Board Resolution, at any
time, with respect to the Notes, elect to have either paragraph (b) or paragraph
(c) below be applied to the outstanding Notes upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (b), the Company shall be deemed to have
been released and discharged from
44
its obligations with respect to the outstanding Notes on the date the conditions
set forth in paragraph (d) below are satisfied (hereinafter, "legal
defeasance"). For this purpose, such legal defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the outstanding Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of the Sections of and matters under this Indenture
referred to in clauses (i) and (ii) below and to have satisfied all its other
obligations under such Notes and this Indenture insofar as such Notes are
concerned, except for the following, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of holders of outstanding
Notes to receive solely from the trust fund described in paragraph (d) below and
as more fully set forth in such paragraph, payments in respect of the principal
of, premium, if any, and interest on such Notes when such payments are due and
(ii) obligations listed in Section 12.3.
(c) Upon the Company's exercise under paragraph (a) of
the option applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Article XI and
Section 3.5 with respect to the outstanding Notes on and after the date the
conditions set forth in paragraph (d) are satisfied (hereinafter, "covenant
defeasance"), and the Notes shall thereafter be deemed to be not "outstanding"
for the purpose of any direction, waiver, consent or declaration or act of
holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder.
For this purpose, such covenant defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document, and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.1,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.
(d) The following shall be the conditions to application
of either paragraph (b) or paragraph (c) above to the outstanding Notes:
(i) The Company shall have irrevocably deposited in
trust with the Trustee, pursuant to an irrevocable trust and
security agreement in form and substance satisfactory to the
Trustee, cash or non-callable U.S. Government Obligations
maturing as to principal and interest at such times, or a
combination thereof, in such amounts as are sufficient,
without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other
charges or assessments in respect thereof payable by the
Trustee, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof (in form and substance reasonably
satisfactory to the Trustee) delivered to the Trustee, to pay
the principal of, premium, if any, and interest on the
outstanding Notes on the dates on which any such payments are
due and payable in accordance with the terms of this Indenture
and of the Notes as well as all other sums payable hereunder
by the Company;
(ii) (A) No Event of Default shall have occurred or
be continuing on the date of such deposit, and (B) no Default
or Event of Default under
45
Section 6.1(f) or 6.1(g) shall occur on or before the 123rd
day after the date of such deposit;
(iii) Such deposit shall not result in a Default
under this Indenture or a breach or violation of, or
constitute a default under, any other instrument or agreement
to which the Company is a party or by which it or its property
is bound;
(iv) In the case of a legal defeasance under
paragraph (b) above, the Company shall have delivered to the
Trustee an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that (A) the Company has
received from, or there has been published by, the Internal
Revenue Service a ruling applicable to such a defeasance or
(B) since the date of this Indenture, there has been a change
in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm
that, the holders of the Notes shall not recognize income,
gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and shall be subject to
federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred; and, in
the case of a covenant defeasance under paragraph (c) above,
the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in form and substance
reasonably satisfactory to the Trustee, to the effect that
holders of the Notes shall not recognize income, gain or loss
for federal income tax purposes as a result of such deposit
and defeasance and shall be subject to federal income tax on
the same amounts and in the same manner and at the same times
as would have been the case if such deposit and defeasance had
not occurred;
(v) The holders shall have a perfected security
interest under applicable law in the cash or U.S. Government
Obligations deposited pursuant to Section 12.1(d)(i) above;
(vi) The Company shall have delivered to the Trustee
an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee, to the effect that, after the
passage of 123 days following the deposit, the trust funds
shall not be subject to any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights
generally;
(vii) Such defeasance shall not cause the Trustee to
have a conflicting interest with respect to any securities of
the Company; and
(viii) The Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel in
form and substance reasonably satisfactory to the Trustee,
each stating that all conditions precedent specified herein
relating to the defeasance contemplated by this Section 12.1
have been complied with;
46
provided, that no deposit under clause (i) shall be effective to terminate the
obligations of the Company under the Notes or this Indenture prior to the
passage of 123 days following such deposit.
Section 12.2 TERMINATION OF OBLIGATIONS UPON CANCELLATION OF
THE NOTES. In addition to the Company's rights under Section 12.1, the Company
may terminate all of its obligations under this Indenture (subject to Section
12.3) when:
(a) (i) all Notes theretofore authenticated and delivered
(other than Notes that have been destroyed, lost or stolen and that have been
replaced, converted or paid as provided in Section 2.6) have been delivered to
the Trustee for cancellation; and
(i) the Company has paid or caused to be paid all
other sums payable hereunder and under the Notes by the
Company; or
(b) (i) the Notes not previously delivered to the Trustee
for cancellation shall have become due and payable or are by their terms to
become due and payable within one year or are to be called for redemption under
arrangements satisfactory to the Trustee upon delivery of notice, (ii) the
Company shall have irrevocably deposited with the Trustee, as trust funds, cash,
in an amount sufficient to pay principal of premium, if any, and interest on the
outstanding Notes, to maturity or redemption, as the case may be, (iii) such
deposit shall not result in a breach or violation of, or constitute a default
under, any agreement or instrument pursuant to which the Company is a party or
by which it or its property is bound and (iv) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee, each stating that all conditions related
to such defeasance have been complied with.
Section 12.3 SURVIVAL OF CERTAIN OBLIGATIONS. Notwithstanding
the satisfaction and discharge of this Indenture and of the Notes referred to in
Section 12.1 or 12.2, the respective obligations of the Company and the Trustee
under Sections 2.3, 2.4, 2.5, 2.6, 3.1, 4.2, 5.1, 6.4, 6.9, 7.6, 7.11, 12.5,
12.6, 12.7, Articles XIV and XV shall survive until the Notes are no longer
outstanding, and thereafter, the obligations of the Company and the Trustee
under Sections 6.9, 7.6, 12.5, 12.6 and 12.7 shall survive. Nothing contained in
this Article XII shall abrogate any of the rights, obligations or duties of the
Trustee under this Indenture.
Section 12.4 ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE. Subject
to Section 12.7, after (i) the conditions of Section 12.1 or 12.2 have been
satisfied, (ii) the Company has paid or caused to be paid all other sums payable
hereunder by the Company and (iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon written request shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified in Section 12.3.
Section 12.5 APPLICATION OF TRUST ASSETS. The Trustee shall
hold any cash or U.S. Government Obligations deposited with it in the
irrevocable trust established pursuant to Section 12.1 or 12.2, as the case may
be. The Trustee shall apply the deposited cash
47
or the U.S. Government Obligations, together with earnings thereon in accordance
with this Indenture and the terms of the irrevocable trust agreement established
pursuant to Section 12.1 or 12.2, as the case may be, to the payment of
principal of, premium, if any, and interest on the Notes. The cash or U.S.
Government Obligations so held in trust and deposited with the Trustee in
compliance with Section 12.1 or 12.2, as the case may be, shall not be part of
the trust estate under this Indenture, but shall constitute a separate trust
fund for the benefit of all holders entitled thereto. Except as specifically
provided herein, the Trustee shall not be requested to invest any amounts held
by it for the benefit of the holders or pay interest on uninvested amounts to
any holder.
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 12.1 hereof or Section 12.2 hereof 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 Notes.
Section 12.6 REPAYMENT TO THE COMPANY; UNCLAIMED MONEY.
Subject to applicable laws governing escheat of such property, and upon
termination of the trust established pursuant to Section 12.1 hereof or 12.2
hereof, as the case may be, the Trustee shall promptly pay to the Company upon
written request any excess cash or U.S. Government Obligations held by them.
Additionally, if amounts for the payment of principal, premium, if any, or
interest remains unclaimed for two years, the Trustee shall, upon written
request, pay such amounts back to the Company forthwith. Thereafter, all
liability of the Trustee with respect to such amounts shall cease. After payment
to the Company, holders entitled to such payment must look to the Company for
such payment as general creditors unless an applicable abandoned property law
designates another person.
Section 12.7 REINSTATEMENT. If the Trustee is unable to apply
any cash or U.S. Government Obligations in accordance with Section 12.1 or 12.2
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.1 or 12.2 until such time as the Trustee is permitted to apply all
such cash or U.S. Government Obligations in accordance with Section 12.1 or
12.2, as the case may be; provided that if the Company makes any payment of
principal of, premium, if any, or interest on any Notes following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the holders of such Notes to receive such payment from the amounts held by
the Trustee.
ARTICLE XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 13.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS.
No recourse for the payment of the principal of, or premium, if any, or interest
on any Note, 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
48
supplemental indenture or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or of any successor entity, either directly or through the Company or
any successor entity, 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 issuance of the Notes.
ARTICLE XIV
CONVERSION OF NOTES
Section 14.1 RIGHT TO CONVERT.
(a) Subject to and upon compliance with the provisions of
this Indenture, the holder of any Note shall have the right, at the option of
such holder, at any time prior to the close of business on October 14, 2008
(except that, with respect to any Note or portion of a Note that shall be
called for redemption or delivered for repurchase, such right shall terminate
at the close of business one Business Day immediately preceding the date
fixed for redemption or repurchase of such Note or portion of a Note unless
the Company shall default in payment due upon redemption or repurchase
thereof) to convert the principal amount of any such Note, or any portion of
such principal amount that is $1,000 or an integral multiple thereof, into
that number of fully paid and nonassessable shares of Common Stock (as such
shares shall then be constituted) obtained by dividing the aggregate
principal amount of the Notes or portion thereof surrendered for conversion
by the Conversion Price in effect at such time rounded to the nearest
1/100,000th of a share (with 0.000005 being rolled upward) as such amount
shall be certified by the Company as provided in an Officers' Certificate, by
following the procedures specified in Section 14.2. A Note (or portion
thereof) in respect of which a holder is exercising its option to require
repurchase upon a change of control pursuant to Section 3.5 of this
Indenture, may only be converted if such holder withdraws its election to
exercise said redemption option in accordance with the terms of this
Indenture. A holder of Notes is not entitled to any rights of a holder of
Common Stock until such holder has converted such holder's Notes to Common
Stock and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XIV.
(b) In the event a Noteholder desires to convert all, or
any portion, of its Notes into shares of Common Stock (or other securities into
which the Notes are then convertible) and the Company does not have authorized a
sufficient number of shares of Common Stock (or other securities into which the
Notes are then convertible) for such conversion, then in lieu of delivering
shares of Common Stock (or other securities into which the Notes are then
convertible) upon conversion pursuant to 14.1(a) of that portion of such
holder's Notes for which there is an insufficient number of shares of Common
Stock (or other securities into which the Notes are then convertible) (the "Cash
Equivalent Notes"), the Company shall pay to the holder converting the Cash
Equivalent Notes who properly exercises the conversion privilege, as set forth
in Section 14.2, an amount, as calculated by the Company and certified to the
Trustee in an
49
Officers' Certificate of the Company, in cash equal to the Market Cash
Conversion Price of the shares of Common Stock into which such Cash Equivalent
Notes are then convertible.
(c) In the event that the Company directs the Trustee to
pay cash upon any conversion in lieu of delivering shares of Common Stock or any
other securities, as the case may be, the Company shall deliver to the Trustee
written notice of such direction not later than the close of business on the
first Trading Day after the date of receipt by the Trustee of the notice of
conversion delivered by such holder pursuant to Section 14.2, and the Trustee
shall notify by facsimile the contact person specified in the holder's
conversion notice of such election by the Company to such holder. In such event,
notwithstanding any other provisions in this Article XIV, in lieu of delivering
Common Stock upon conversion of such Notes surrendered in accordance with
Section 14.2, the Company shall pay or direct the Trustee to pay the holder
surrendering such securities an amount in cash equal to the Market Cash
Conversion Price of the shares of Common Stock, plus any cash and other property
theretofore apportioned to such shares of Common Stock in accordance with
Section 14.2. Prior to or concurrently with such cash payment, the Company will
provide the Trustee with an Officers' Certificate setting forth the Market Cash
Conversion Price and will deposit with the paying agent the cash so payable. The
Trustee shall have no obligation or liability with respect to the calculation of
the Market Cash Conversion Price.
Section 14.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF
COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
In order to exercise the conversion privilege with respect to
any interest in the Global Note, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depository's
book-entry conversion program and follow the other procedures set forth in such
program.
As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to Section 14.1(b) and in
compliance with any restrictions on transfer if shares issuable on conversion
are to be issued in a name other than that of the Noteholder (as if such
transfer were a transfer of the Note or Notes (or portion thereof) so
converted), the
50
Company shall issue in book-entry form the number of full shares issuable
upon the conversion of such Note or portion thereof in the name of such
holder in compliance with the Depository's book-entry conversion program and
with the provisions of this Article XIV and shall issue a check or cash in
respect of any fractional interest in respect of a share of Common Stock
arising upon such conversion, as provided in Section 14.4.
Each conversion shall be deemed to have been effected as to
any such Note (or portion thereof) on the date on which the requirements set
forth above in this Section 14.2 have been satisfied as to such Note (or portion
thereof), and, subject to Section 14.1(b), the person in whose name any shares
of Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby.
Any unpaid interest on any Note or portion thereof as of
the date such Note or portion thereof is surrendered for conversion shall
(unless such Note or portion thereof being converted shall have been called
for redemption on a redemption date during the period from the close of
business on or after any record date for the payment of interest to the close
of business on the business day following the corresponding interest payment
date) be paid in cash to the former holder of such Note or portion thereof
on the next succeeding interest payment date.
51
Upon the conversion of an interest in the Global Note, the
Trustee, or the Custodian at the direction of the Trustee, shall make a notation
on the Global Note as to the reduction in the principal amount represented
thereby.
Section 14.3 MANDATORY CONVERSION. The Notes shall be
automatically converted into Common Stock on the first date (the "Mandatory
Conversion Date") on or after the 15th Trading Day following October 15, 2004,
on which: (i) the average of the Closing Price (as defined in Section 14.6(g))
of the Common Stock on 15 consecutive preceding Trading Days is equal to or
greater than 110% of the Conversion Price and (ii) the Company has sufficient
shares of Common Stock (or other securities into which the Notes are then
convertible) authorized to execute the Mandatory Conversion (as defined below).
The Notes shall be converted into that number of fully paid and nonassessable
shares of Common Stock (or other securities into which the Notes are then
convertible) obtained by dividing the aggregate principal amount of the Notes by
the Conversion Price in effect at such time rounded to the nearest 1/100,000th
of a share (with 0.000005 being rolled upward)(the "Mandatory Conversion").
The Company will monitor the Closing Price of the Common
Stock. Upon the occurrence of Mandatory Conversion, the Company shall
complete the appropriate instruction form for conversion pursuant to the
Depository's book-entry conversion program and follow the other procedures
set forth in such program. Any unpaid interest on the Notes accrued as of
the Mandatory Conversion Date shall be paid in cash to the former holders of
such Notes on the next succeeding interest payment date. After the Mandatory
Conversion, the Notes will no longer represent Indebtedness of the Company,
will no longer accrue interest or require the Company to make any payment of
principal, and the Company's obligations to make any further payments with
respect to the Notes will terminate (except for under this Section 14.3). The
Company will cause to be issued in book-entry form shares of Common Stock
sufficient to effect the Mandatory Conversion. The shares of Common Stock
issued as a result of the Mandatory Conversion shall be credited through the
Depository's book-entry conversion program to the respective account of each
Noteholder as of the Mandatory Conversion Date.
Section 14.4 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Notes. Subject to Section 14.1(b), (i) if more than
one Note shall be surrendered for conversion at one time by the same holder, the
number of fully paid and nonassessable shares of Common Stock issuable upon
conversion of a Note shall be determined by dividing the aggregate principal
amount of such Notes or portion thereof surrendered for conversion by the
Conversion Price and (ii) the aggregate number of shares of Common Stock
issuable upon conversion shall be rounded to the nearest 1/100,000th of a share
(with .0000005 being rolled upward). If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment therefor in cash at the current market value thereof. The current
market value of a share of Common Stock shall be determined by multiplying the
fractional share by the Closing Price on the Trading Day immediately preceding
the Mandatory Conversion Date or the date on which the Notes pursuant to Section
14.2 (or specified portions thereof) are deemed to have been converted.
Section 14.5 CONVERSION PRICE. The conversion price of the
Notes (the "Conversion Price") shall be $5.31 per share of Common Stock, subject
to adjustment as provided in this Article XIV.
52
Section 14.6 ADJUSTMENT OF CONVERSION PRICE. The Conversion
Price shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend or make
a distribution on its outstanding Common Stock in shares of its Common Stock,
(ii) subdivide or split its outstanding Common Stock into a greater number of
shares, (iii) combine its outstanding Common Stock into a smaller number of
shares or (iv) issue any shares of Capital Stock by reclassification of its
Common Stock, the conversion price in effect immediately prior thereto shall be
adjusted so that the holder of any Notes thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock of the Company
which such holder would have owned or have been entitled to receive after the
occurrence of any of the events described above had such Notes been surrendered
for conversion immediately prior to the occurrence of such event or the record
date therefor, whichever is earlier. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the close of business on
the record date for determination of shareholders entitled to receive such
dividend or distribution in the case of a dividend or distribution (except as
provided in Section 14.6(j)) and shall become effective immediately after the
close of business on the effective date in the case of a subdivision, split,
combination or reclassification. Any shares of Common Stock issuable in payment
of a dividend shall be deemed to have been issued immediately prior to the close
of business on the record date for such dividend for purposes of calculating the
number of outstanding shares of Common Stock under Sections 14.6(b) and (c).
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding shares of Common Stock entitling them
to subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price (as defined in Section 14.6(g)) on the Record Date
fixed for determination of shareholders entitled to receive such rights, options
or warrants, the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect at the
opening of business on the date after the Record Date by a fraction the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date plus the number of shares that the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Common Stock outstanding on the close of business on the Record
Date plus the total number of additional shares of Common Stock so offered for
subscription or purchase. Such adjustment shall become effective immediately
after the opening of business on the day following the Record Date fixed for
determination of shareholders entitled to receive such rights, options or
warrants. To the extent that shares of Common Stock are not delivered after the
expiration or termination of such rights, options or warrants, the Conversion
Price shall be readjusted to the Conversion Price that would then be in effect
had the adjustments made upon the issuance of such rights, options or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. In the event that such rights, options or warrants are not
so issued, the Conversion Price shall again be adjusted to be the Conversion
Price that would then be in effect if such date fixed for the determination of
shareholders entitled to receive such rights, options or warrants had not been
fixed. In determining whether any rights, options or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received for such rights,
53
options or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of Capital
Stock of the Company (other than any dividends or distributions to which Section
14.6(a) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights, options or warrants referred to in Section
14.6(b), and excluding any dividend or distribution (x) in connection with the
liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary, (y) exclusively in cash or (z) referred to in Section 14.6(a) (any
of the foregoing hereinafter in this Section 14.6(d) called the "Securities")),
then, in each such case, the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record Date (as defined
in Section 14.6(g)) with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price (determined as provided in Section
14.6(g)) on such date less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) on such date of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator shall be such
Current Market Price, such reduction to become effective immediately prior to
the opening of business on the day following the Record Date; provided that in
the event the then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion the amount of Securities such
holder would have received had such holder converted each Note on such date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such dividend or distribution had not been declared. If the
Board of Directors determines the fair market value of any distribution for
purposes of this Section 14.6(d) by reference to the actual or when issued
trading market for any securities comprising all or part of such distribution,
it must in doing so consider the prices in such market over the same period used
in computing the Current Market Price pursuant to Section 14.6(g) to the extent
possible.
Notwithstanding the foregoing provisions of this Section
14.6(d), no adjustment shall be made hereunder for any distribution of
Securities if the Company makes proper provision so that each Noteholder who
converts a Note (or any portion thereof) after the date fixed for determination
of shareholders entitled to receive such distribution shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock issuable
upon such
54
conversion, the amount and kind of Securities that such holder would have been
entitled to receive if such holder had, immediately prior to such determination
date, converted such Note into Common Stock; provided that, with respect to any
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Securities
receivable upon conversion of such Note would be convertible, exchangeable or
exercisable, as applicable, without any loss of rights or privileges for a
period of at least 60 days following conversion of such Note.
Rights, options or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to purchase shares of the
Company's Capital Stock (either initially or under certain circumstances), which
rights, options or warrants, until the occurrence of a specified event or events
(the "Trigger Event") (i) are deemed to be transferred with such shares of
Common Stock, (ii) are not exercisable and (iii) are also issued in respect of
future issuances of Common Stock, shall not be deemed distributed for purposes
of this Section 14.6(d) (and no adjustment to the Conversion Price under Section
14.6(d) shall be required) until the occurrence of the earliest Trigger Event.
In addition, in the event of any distribution of rights, options or warrants, or
any Trigger Event with respect thereto, that shall have resulted in an
adjustment to the Conversion Price under this Section 14.6(d), (1) in the case
of any such rights, options or warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights, options or warrants
(assuming such holder had retained such rights, options or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights, options or warrants all of which shall have
expired or been terminated without exercise by any holder thereof, the
Conversion Price shall be readjusted as if such issuance had not occurred.
For purposes of this Section 14.6(d) and Sections 14.6(a) and
(b), any dividend or distribution to which this Section 14.6(d) is applicable
that also includes shares of Common Stock, or rights, options or warrants to
subscribe for or purchase shares of Common Stock (or both), shall be deemed
instead to be (1) a dividend or distribution of the evidences of indebtedness,
assets or shares of Capital Stock other than such shares of Common Stock or
rights, options or warrants (and any Conversion Price reduction required by this
Section 14.6(d) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such shares of
Common Stock or such rights, options or warrants (and any further Conversion
Price reduction required by Sections 14.6(a) and (b) with respect to such
dividend or distribution shall then be made) except (A) the Record Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution" and "the date fixed for such determination" within the meaning of
Sections 14.6(a) and (b) and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of Section
14.6(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 14.7 applies or as
part of a distribution referred to in Section
55
14.6(d) for which an adjustment to the Conversion Price is provided therein) in
an aggregate amount that, combined together with (1) the aggregate amount of any
other such distributions to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution,
and in respect of which no adjustment pursuant to this Section 14.6(e) has been
made, and (2) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) of consideration payable in respect of any
tender offer, by the Company or any of its Subsidiaries for all or any portion
of the Common Stock concluded within the 12 months preceding the date of payment
of such distribution, and in respect of which no adjustment pursuant to Section
14.6(f) has been made, exceeds 20.0% of the product of the Current Market Price
(determined as provided in Section 14.6(g)) on the Record Date with respect to
such distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date, unless the Company elects to reserve such cash for distribution to
the holders of the Notes upon the conversion of the Notes so that any such
holder converting Notes shall receive upon such conversion, in addition to the
shares of Common Stock to that such holder is entitled, the amount of cash which
such holder would have received if such holder had, immediately prior to the
Record Date for such distribution of cash, converted its Notes into Common
Stock, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on such date by a fraction (i) the numerator of which
shall be equal to the Current Market Price on the Record Date less an amount
equal to the quotient of (x) the excess of such combined amount over such 20.0%
and (y) the number of shares of Common Stock outstanding on the Record Date and
(ii) the denominator of which shall be equal to the Current Market Price on such
date; provided that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Note on the Record Date. In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price that would then be in effect
if such dividend or distribution had not been declared.
(f) In case a tender offer made by the Company or any of
its Subsidiaries for all or any portion of the Common Stock shall expire and
such tender offer (as amended upon the expiration thereof) shall require the
payment to shareholders (based on the acceptance (up to any maximum specified in
the terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (1) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offer, by the Company or any of its Subsidiaries for all or any portion of the
Common Stock expiring within the 12 months preceding the expiration of such
tender offer, and in respect of which no adjustment pursuant to Section 14.6(f)
has been made, and (2) the aggregate amount of any distributions to all holders
of the Company's Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer, and in respect of which no
56
adjustment pursuant to Section 14.6(e) has been made, exceeds 20.0% of the
product of the Current Market Price (determined as provided in Section 14.6(g))
as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on the date of
the Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time and the denominator shall be
the sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price that would then be in effect if such tender offer had not been made.
(g) For purposes of this Section 14.6, the following terms
shall have the meaning indicated:
(i) "Closing Price" with respect to any securities on
any day shall mean the closing sale price regular way on such
day or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices, regular
way, in each case on the
New York Stock Exchange, or, if such
security is not listed or admitted to trading on such
exchange, on the principal national security exchange or
quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of
such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished
by any
New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution.
(ii) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in
question; provided that (1) if the "ex" date (as hereinafter
defined) for any event (other than the issuance or
distribution or
57
Change of Control requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section
14.6(a), (b), (c), (d), (e) or (f) occurs during such ten
consecutive Trading Days, the Closing Price for each Trading
Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the "ex" date
for any event (other than the issuance, distribution or Change
of Control requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section
14.6(a), (b), (c), (d), (e) or (f) occurs on or after the "ex"
date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of
such other event and (3) if the "ex" date for the issuance,
distribution or Change of Control requiring such computation
is prior to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of this
proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined by the
Board of Directors in a manner consistent with any
determination of such value for purposes of Section 14.6(d) or
(f), whose determination shall be conclusive and described in
a Board Resolution) of the evidences of indebtedness, shares
of Capital Stock or assets being distributed applicable to one
share of Common Stock as of the close of business on the day
before such "ex" date. For purposes of any computation under
Section 14.6(f), the Current Market Price of the Common Stock
on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the
next two succeeding Trading Days; provided that if the "ex"
date for any event (other than the tender or exchange offer
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 14.6(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the
tender or exchange offer requiring such computation and prior
to the day in question, the Closing Price for each Trading Day
on and after the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event. For purposes
of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date
on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance
or distribution, (2) when used with respect to any subdivision
or combination of shares of Common Stock, means the first date
on which the Common Stock trades regular way on such exchange
or in such market after the time at which such subdivision or
combination becomes effective and (3) when used with respect
to any tender or exchange offer means the first date on which
the Common Stock trades regular way on such exchange or in
such market after the expiration of such offer.
Notwithstanding the foregoing, whenever successive adjustments
to the Conversion Price are called for pursuant to this
Section 14.6,
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such adjustments shall be made to the Current Market Price as
may be necessary or appropriate to effectuate the intent of
this Section 14.6 and to avoid unjust or inequitable results
as determined in good faith by the Board of Directors.
(iii) "fair market value" shall mean the amount that
a willing buyer would pay a willing seller in an arm's-length
transaction.
(iv) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other
property, the date fixed for determination of shareholders
entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(h) The Company may make such reductions in the
Conversion Price, in addition to those required by Sections 14.6(a), (b), (c),
(d), (e) and (f), as the Board of Directors considers to be advisable to avoid
or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes. To the
extent permitted by applicable law, the Company from time to time may reduce the
Conversion Price by any amount for any period of time if the period is at least
20 days, the reduction is irrevocable during the period and the Board of
Directors shall have made a determination that such reduction would be in the
best interests of the Company, which determination shall be conclusive and
described in a Board Resolution. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to all holders of
record of the Notes a notice of the reduction at least 15 days prior to the date
the reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period it shall be in effect.
(i) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such price; provided that any adjustments that by reason of this
Section 14.6(i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XIV shall be made by the Company and shall be made to the nearest 1/100,000
(with 0.0000005 being rolled upward).
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value, or
to or from no par value, of the Common Stock.
To the extent the Notes become convertible into cash, assets,
property or securities (other than Common Stock of the Company), no adjustment
need be made thereafter as to the cash, assets, property or such securities
(except as such securities may otherwise by their terms provide), and interest
shall not accrue on such cash.
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(j) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to the holder of each Note at his last
address appearing on the Note register provided for in Section 2.5, within 20
days after execution thereof. Failure to deliver such notice shall not effect
the legality or validity of any such adjustment.
(k) In any case in which this Section 14.6 provides that
an adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing to
the holder of any Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Stock issuable upon such conversion before giving effect to
such adjustment and (ii) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 14.4.
Section 14.7 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE. If any of the following events occur, namely (i) any reclassification
or change of outstanding shares of Common Stock (other than a change in par
value, or to or from no par value, as a result of a subdivision or combination),
(ii) any consolidation, merger or combination of the Company with another
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock or (iii) any sale or conveyance
of the properties and assets of the Company as, or substantially as, an entirety
(determined on a consolidated basis) to any other corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing corporation,
as the case may be, shall execute with the Trustee a supplemental indenture
(which shall comply with the Trust Indenture Act as in force at the date of
execution of such supplemental indenture if such supplemental indenture is then
required to so comply) providing that the Notes shall be convertible into the
kind and amount of shares of stock and other securities or property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of a number of shares of
Common Stock issuable upon conversion of such Notes (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock available to
convert all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance, assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 14.7 the kind and
amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger,
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combination, sale or conveyance for 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
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XIV.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Notes, at his address
appearing on the Note register provided for in Section 2.5, within 20 days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of such supplemental indenture.
The above provisions of this Section 14.7 shall similarly
apply to successive reclassifications, changes, consolidations, mergers,
combinations, sales and conveyances.
Section 14.8 TAXES ON SHARES ISSUED. The issuance of stock
certificates on conversions of Notes shall be made without charge to the
converting Noteholder for any transfer or similar tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the holder of any Note converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
Section 14.9 RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
LISTING OF COMMON STOCK. Subject to Section 14.1(b) the Company shall provide,
free from preemptive rights, out of its authorized but unissued shares or shares
held in treasury, sufficient shares to provide for the conversion of the Notes
from time to time as such Notes are presented for conversion.
Before taking any action that would cause an adjustment
reducing the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Notes, the Company shall take all
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue shares of such Common Stock at
such adjusted Conversion Price.
The Company covenants that all shares of Common Stock that may
be issued upon conversion of Notes shall, upon issuance, be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issuance thereof.
Section 14.10 RESPONSIBILITY OF TRUSTEE. The Trustee and any
other conversion agent shall not at any time be under any duty or responsibility
to any holder of Notes to determine whether any facts exist that may require any
adjustment of the Conversion Price or notice thereof, or with respect to the
nature, accuracy or extent or calculation of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, that may at any time be issued or delivered upon the conversion of any
Note; and the Trustee and any other
61
conversion agent make no representations with respect thereto or actions or
omissions by the Company in connection with this Article XIV. Subject to the
provisions of Section 7.1, neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article XIV. Without limiting the generality of the foregoing, neither
the Trustee nor any conversion agent shall be under any responsibility to
determine whether a supplemental indenture under Section 14.7 hereof need to be
entered into or the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 14.7 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 14.7 or to any adjustment to be made with respect thereto, and may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 14.11 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In
case:
(a) the Company makes any distribution or dividend that
would require an adjustment in the Conversion Price pursuant to Section 14.6; or
(b) the Company takes any action that would require a
supplemental indenture pursuant to Section 14.7; or
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, as promptly as
possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record date 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 (y) the date on which such
reclassification, change, consolidation, merger, sale, conveyance, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur
and the date as of which it is expected that holders of record of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
sale, conveyance, transfer, dissolution, liquidation or winding-up. Neither the
failure to give such notice nor any defect therein shall affect the legality or
validity of the proceedings referenced in clauses (a) through (c) of this
Section 14.11.
Section 14.12 SUPPLEMENTAL INDENTURE PRIOR TO ISSUANCE OF
NOTES IN DEFINITIVE FORM. If the Company is required by this Indenture or
chooses to issue Notes in definitive form, then the Company shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply)
stating procedures under this Article XIV for the mandatory and optional
conversion of definitive Notes into Common Stock.
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ARTICLE XV
SUBORDINATION
Section 15.1 AGREEMENT TO SUBORDINATE. The Company agrees, and
each Noteholder by accepting a Note agrees, that the indebtedness evidenced by
the Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article XV, to the prior payment in full of all Senior
Indebtedness and that the subordination is for the benefit of the holders of
Senior Indebtedness.
Section 15.2 CERTAIN DEFINITIONS. For purposes of this Article
XV, the following terms shall have the meaning indicated:
(1) "Representative" shall mean a duly authorized indenture
trustee or other trustee, agent or representative for any Senior
Indebtedness.
(2) "Senior Indebtedness" with respect to the Notes means the
principal of, premium, if any, and interest on, and any fees, costs,
expenses and any other amounts (including indemnity payments) related
to the following, whether outstanding on the date hereof or hereafter
incurred or created: (a) indebtedness, matured or unmatured, whether or
not contingent, of the Company for money borrowed evidenced by notes or
other written obligations, (b) any interest rate contract, interest
rate swap agreement or other similar agreement or arrangement designed
to protect the Company or any of its Subsidiaries against fluctuations
in interest rates, (c) indebtedness, matured or unmatured, whether or
not contingent, of the Company evidenced by notes, debentures, bonds or
similar instruments or letters of credit (or reimbursement agreements
in respect thereof), (d) obligations of the Company as lessee under
capitalized leases and under leases of property made as part of any
sale and leaseback transactions, (e) indebtedness of others of any of
the kinds described in the preceding clauses (a) through (d) assumed or
guaranteed by the Company and (f) renewals, extensions, modifications,
amendments, and refundings of, and indebtedness and obligations of a
successor person issued in exchange for or in replacement of,
indebtedness or obligations of the kinds described in the preceding
clauses (a) through (f), unless the agreement pursuant to which any
such indebtedness described in clauses (a) through (f) is created,
issued, assumed or guaranteed expressly provides that such indebtedness
is not senior or superior in right of payment to the Notes; provided
that the following shall not constitute Senior Indebtedness: (i) any
indebtedness or obligation of the Company in respect of the Notes, (ii)
any indebtedness of the Company to any of its Subsidiaries or other
Affiliates; (iii) any indebtedness that is subordinated or junior in
any respect to any other indebtedness of the Company other than Senior
Indebtedness; (iv) any indebtedness incurred for the purchase of goods
or materials in the ordinary course of business and (v) any
indebtedness or obligation of the Company in respect of the 6-1/4%
Convertible Subordinated Notes Due 2003.
For the purposes of this Indenture, Senior Indebtedness shall
not be deemed to have been paid in full until the holders of the Senior
Indebtedness shall have indefeasibly received payment in full in cash of all
Senior Indebtedness; provided that if any holder of Senior
63
Indebtedness agrees to accept payment in full of such Senior Indebtedness for
consideration other than cash, such holder shall be deemed to have
indefeasibly received payment in full of such Senior Indebtedness. The
provisions of this Article XV shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Senior Indebtedness is rescinded or must otherwise be returned by any holder
of Senior Indebtedness upon the insolvency, bankruptcy or organization of the
Company or otherwise, all as though such payment had not been made.
A distribution may consist of cash, securities or other
property, by set-off or otherwise.
Section 15.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshalling of the Company's assets and liabilities,
(a) holders of all Senior Indebtedness shall first be entitled to receive
payment in full of all amounts due or to become due thereon before Noteholders
shall be entitled to receive any payment with respect to the principal of,
premium, if any, or interest on the Notes (except that Noteholders may receive
securities that are subordinated to at least the same extent as the Notes to
Senior Indebtedness and any securities issued in exchange for Senior
Indebtedness) and (b) until all Senior Indebtedness (as provided in clause (a)
above) is paid in full, any distribution to which Noteholders would be entitled
but for this Article shall be made to holders of Senior Indebtedness (except
that Noteholders may receive securities that are subordinated to at least the
same extent as the Notes to (x) Senior Indebtedness and (y) any securities
issued in exchange for Senior Indebtedness), as their interests may appear.
Section 15.4 DEFAULT ON SENIOR INDEBTEDNESS. The Company may
not make any payment upon or in respect of the Notes (except in such
subordinated securities) and may not acquire from the Trustee or any Noteholder
any Note for cash or property (other than securities that are subordinated to at
least the same extent as the Note to (i) Senior Indebtedness and (ii) any
securities issued in exchange for Senior Indebtedness) until all Senior
Indebtedness has been paid in full if:
(a) a default in the payment of the principal of,
premium, if any, or interest on Senior Indebtedness occurs and is continuing
beyond any applicable period of grace (a "Payment Default"); or
(b) a default, other than a Payment Default on Senior
Indebtedness occurs and is continuing that permits holders of the Senior
Indebtedness as to which such default relates to accelerate its maturity (a
"Nonpayment Default") and the Trustee receives a notice of the default (a
"Payment Blockage Notice") from the Representative or Representatives of holders
of at least a majority in principal amount of Senior Indebtedness then
outstanding. No Nonpayment Default that existed or was continuing on the date of
delivery of any such Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 180 days. No new
period of payment blockage may be commenced within 360 days after the receipt by
the Trustee of any prior Payment Blockage Notice.
64
The Company, with notice and evidence of the occurrence of (c)
or (d) provided to the Trustee, may and shall resume payments on and
distributions in respect of the Notes and may acquire them upon the earlier of:
(c) in the case of a Payment Default, upon the date on which
the default is cured or waived, or
(d) in the case of a default other than a NonPayment
Default: 179 days after the date on which the applicable Payment Blockage Notice
is received, unless the maturity of such Senior Indebtedness has been
accelerated, if this Article XV otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition.
Section 15.5 WHEN DISTRIBUTION MUST BE PAID OVER. In the event
that the Trustee (or paying agent if other than the Trustee) or any Noteholder
receives any payment of principal or interest with respect to the Notes at a
time when such payment is prohibited by Section 15.3 or 15.4 hereof, such
payment shall be held by the Trustee (or paying agent if other than the Trustee)
or such Noteholder, in trust for the benefit of, and immediately shall be paid
over and delivered, upon written request, to, the holders of Senior Indebtedness
as their interests may appear or their Representative under the indenture or
other agreement (if any) pursuant to which Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full in accordance with its terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holders if the Trustee shall pay over or distribute to or on behalf
of Noteholders or the Company or any other person money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article XV,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
Section 15.6 NOTICE BY COMPANY. The Company shall promptly
notify the Trustee and the paying agent in writing of any facts known to the
Company that would cause a payment of any principal or interest with respect to
the Notes to violate this Article XV, but failure to give such notice shall not
affect the subordination of the Notes to the Senior Indebtedness as provided in
this Article XV.
Section 15.7 SUBROGATION. Until all Senior Indebtedness is
paid in full and until the Notes are paid in full, Noteholders shall be
subrogated (equally and ratably with all other indebtedness pari passu with the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the Noteholders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article XV to holders of Senior
Indebtedness that otherwise would
65
have been made to Noteholders is not, as between the Company and Noteholders, a
payment by the Company on the Notes.
Section 15.8 RELATIVE RIGHTS. This Article XV defines the
relative rights of Noteholders and holders of Senior Indebtedness. Nothing in
this Indenture shall:
(a) impair, as between the Company and the Noteholders,
the obligation of the Company, which is absolute and unconditional, to pay
principal of, premium, if any, and interest on the Notes in accordance with
their terms;
(b) affect the relative rights of Noteholders and
creditors of the Company other than their rights in relation to holders of
Senior Indebtedness; or
(c) prevent the Trustee or any Noteholder from exercising
its available remedies upon a default or Event of Default, subject to the rights
of holders and owners of Senior Indebtedness to receive distributions and
payments otherwise payable to Noteholders.
If the Company fails because of this Article XV to pay
principal of, premium, if any, or interest on a Note on the due date, the
failure is still a default or Event of Default.
Section 15.9 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No
right of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any holder of Notes or by the failure of the Company or
any holder of Notes to comply with this Indenture.
Section 15.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee and the Noteholders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Noteholders for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XV.
Section 15.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article XV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the paying agent may continue to make payments on
the Notes, unless the Trustee shall have received at its Corporate Trust Office
at least three Business Days prior to the date of such payment written notice of
facts that would cause the payment of any principal, premium, if any, and
interest with respect to the Notes to violate this Article XV. Only the Company
or a Representative may give the notice.
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Nothing in this Article XV shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.6 hereof.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a person representing such person to be a holder of Senior
Indebtedness (or a trustee or agent on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee or
agent on behalf of any such holder). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XV, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article XV, and if such
evidence is not furnished, the Trustee may defer any payment which it may be
required to make for the benefit of such person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such person to
receive such payment.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any paying agent, any authenticating agent, any conversion agent, any Note
registrar and their successors may do the same with like rights.
Section 15.12 AUTHORIZATION TO EFFECT SUBORDINATION. Each
holder of a Note by the holder's acceptance thereof authorizes and directs the
Trustee on the holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article XV and
appoints the Trustee to act as the holder's attorney-in-fact for any and all
such purposes. Without limiting the foregoing, each Representative is hereby
irrevocably authorized and empowered (in its own name or in the name of the
Noteholders or the Trustee or otherwise), but shall have no obligation, to
demand, sue for, collect and receive every payment or distribution referred to
in Section 15.3 above and give acquittance therefor and to file claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of the holders
or owners of the Senior Indebtedness hereunder; provided that for purposes of
this Section 15.12 holders or owners of Senior Indebtedness may act only through
such Representative.
Section 15.13 CONVERSIONS NOT DEEMED PAYMENT. For the purposes
of this Article XV only, the issuance and delivery of Common Stock upon
conversion of the Notes in accordance with Article XIV shall not be deemed to
constitute a payment or distribution on account of the principal of or interest
on the Notes or on account of the purchase or other acquisition of Notes.
Nothing contained in this Article or elsewhere in this Indenture or in the Notes
is intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the holders, the right, which is absolute and
unconditional, of the holder of any Note to convert such Note in accordance with
Article XIV.
Section 15.14 AMENDMENTS. The provisions of this Article XV
shall not be amended or modified without the written consent of the holders of
Senior Indebtedness.
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 POOLING OF INTERESTS. The Company desires to
preserve its ability to account for acquisition and other business combination
transactions using the pooling-of-interests method where appropriate, and the
provisions of this Indenture shall be interpreted accordingly.
Section 16.2 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All
the covenants, stipulations, promises and agreements in this Indenture made by
the Company shall bind its successors and assigns whether so expressed or not.
Section 16.3 OFFICIAL ACTS BY SUCCESSOR COMPANY. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board (including the Board of Directors), committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
Section 16.4 ADDRESSES FOR NOTICES, ETC. Any notice or demand
that by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company shall be deemed
to have been sufficiently given or made, for all purposes if given or served by
being sent by prepaid overnight delivery or being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company with the Trustee) to
Penn Treaty
American Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being sent by prepaid overnight delivery or being deposited postage prepaid by
registered or certified mail in a post office letter box addressed to the
Trustee, which office is, at the date as of which this Indenture is dated,
located at 6th Street & Marquette Avenue, MAC N9303-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Attention: _____________.
The Trustee, by notice to the Company, may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be
mailed to him by first class mail, postage prepaid, at the address of such
Noteholder as it appears on the Note register and shall be sufficiently given to
such Noteholder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
68
Section 16.5 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to Trust Indenture Act Section 312(b) with
other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Note registrar and any other person shall
have the protection of Trust Indenture Act Section 312(c).
Section 16.6 GOVERNING LAW. This Indenture shall be deemed to
be a contract made under the substantive laws of
New York and for all purposes
shall be construed in accordance with the substantive laws of New York without
regard to conflicts of laws principles thereof.
Section 16.7 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture,
including those actions set forth in Trust Indenture Act Section 314(c), the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition, (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based, (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.8 LEGAL HOLIDAYS. In any case where any interest
payment date, date fixed for redemption, stated maturity or Change of Control
Purchase Date of any Note or the last date on which a holder has the right to
convert his Notes shall not be a Business Day, then (notwithstanding any other
provision of this Indenture or of the Notes) payment of interest or principal
(and premium, if any) or conversion of the Notes need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, date fixed for redemption,
Change of Control Purchase Date, or at the stated maturity, or on such last day
for conversion, provided that no interest shall accrue for the period from and
after such interest payment date, date fixed for redemption, Change of Control
Purchase Date or stated maturity, as the case may be.
Section 16.9 NO SECURITY INTEREST CREATED. Nothing in this
Indenture or in the Notes, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction
where property of the Company or its Subsidiaries is located.
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Section 16.10 TRUST INDENTURE ACT. This Indenture is hereby
made subject to, and shall be governed by, the provisions of the Trust Indenture
Act required to be part of and to govern indentures qualified under the Trust
Indenture Act.
Section 16.11 TRUST INDENTURE ACT CONTROLS. If any provision
of this Indenture limits, qualifies, or conflicts with the duties imposed by
operation of the Trust Indenture Act, the imposed duties, upon qualification of
this Indenture under the Trust Indenture Act, shall control.
Section 16.12 BENEFITS OF INDENTURE. Nothing in this Indenture
or in the Notes, expressed or implied, shall give to any person, other than the
parties hereto, any paying agent, any authenticating agent, any conversion
agent, any Note registrar and their successors hereunder and the holders of
Notes, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 16.13 TABLE OF CONTENTS, HEADINGS ETC. The table of
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 16.14 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be a person
eligible to serve as Trustee hereunder pursuant to Section 7.10.
Any corporation into which any authenticating agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
authenticating agent shall be a party, or any corporation succeeding to the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor company is otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the parties hereto or the authenticating agent or
such successor company.
Any authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any authenticating agent by giving written
notice of termination to such authenticating agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any authenticating agent shall cease to be eligible under this Section,
the Trustee shall promptly appoint a successor authenticating agent (which may
be the
70
Trustee), shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from
time to time reasonable compensation for its services.
The provisions of Sections 7.3, 7.4, 7.5, 8.3 and this Section
16.14 shall be applicable to any authenticating agent.
Section 16.15 EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
71
▇▇▇▇▇ Fargo Bank Minnesota, N.A. ▇▇▇▇▇▇ accepts the trusts in
this Indenture declared and provided, upon the terms and conditions hereinabove
set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly signed and attested, all as of the date first written
above.
PENN TREATY AMERICAN CORPORATION
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and
Chief Executive Officer
Attest:
----------------------------------
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A., as Trustee
By
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Attest:
----------------------------------
72
EXHIBIT A - FORM OF GLOBAL NOTE
[FORM OF FACE OF NOTE]
No. A- $_________________
CUSIP
PENN TREATY AMERICAN CORPORATION
6-1/4% Convertible Subordinated Notes Due 2008
PENN TREATY AMERICAN CORPORATION, a corporation duly organized
and validly existing under the laws of the Commonwealth of Pennsylvania (the
"Company"), which term includes any Successor Company under the Indenture
referred to on the reverse hereof, for value received hereby promises to pay to
_______________________________, or registered assigns, the principal sum of
_________________________________Dollars (subject to adjustment as set forth in
the next paragraph hereof) on ____________, 2008, at the office or agency of the
Company maintained for that purpose in the ____________________________
_____________________, or, at the option of the holder of this Global Note, at
the ________________ of the Trustee, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semi-annually on
October 15 and April 15 of each year (each an "Interest Payment Date"),
commencing October 15, on said principal sum at said office or agency, in like
coin or currency, at the rate per annum specified in the title of this Global
Note, from June 1, 2002 or the most recent Interest Payment Date, as the
case may be, next preceding the date of this Global Note to which interest has
been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of this
Global Note, or unless no interest has been paid or duly provided for on the
Notes, in which case from June 1, 2002, until payment of said principal sum
has been made or duly provided for. Any interest on any Note that is payable,
but is not punctually paid or duly provided for on said October 15 or April 15
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Noteholder on the relevant record date by virtue of his having been such
Noteholder; and such Defaulted Interest shall be paid by the Company, at its
election in each case, either (i) by notifying the Trustee of a special record
date, the amount of interest to be paid on such special record date and the date
of payment (not more than 25 days after receipt by the Trustee of such interest,
unless the Trustee shall consent to an earlier date) and depositing with the
Trustee an amount of money equal to the aggregate amount to be paid in respect
of such Defaulted Interest on making arrangements satisfactory to the Trustee
for such deposit or (ii) in any lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed and
upon notice requested by such exchange, if, after notice to the Trustee, the
Trustee deems such manner of payment to be practicable. The interest so payable
on any October 15 or April 15 will be paid to the person in whose name this
Global Note (or one or more Predecessor Notes) is registered at the close of
business on the record date, which shall be the October 1 and April 1 (record
date) (whether or not a Business Day) next preceding such October 15 and April
15, respectively; provided that any such interest not punctually paid or duly
provided for shall be payable as provided in the Indenture. Interest shall be
paid by check mailed to the
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registered holder at the registered address of such person unless other
arrangements are made in accordance with the provisions of the Indenture.
The aggregate principal amount of this Global Note represented
hereby may from time to time be reduced or increased to reflect exchanges of a
part of this Global Note for interests in the Global Note or definitive Notes or
exchanges of interests in the Global Note or definitive Notes for a part of this
Global Note or conversions, redemptions or repurchases of a part of this Global
Note or cancellations of a part of this Global Note or transfers of interests in
the Global Note or definitive Notes in return for a part of this Global Note or
transfers of a part of this Global Note effected by delivery of interests in the
Global Note or definitive Notes, in each case, and in any such case, by means of
notations on the Schedule of Exchanges, Conversions, Redemptions, Repurchases,
Cancellations and Transfers on the last page hereof. Notwithstanding any
provision of this Global Note to the contrary, (i) exchanges of a part of this
Global Note for interests in the Global Note or definitive Notes, (ii) exchanges
of interests in the Global Note or definitive Notes for a part of this Global
Note, (iii) conversions, redemptions or repurchases of a part of this Global
Note, (iv) cancellations of a part of this Global Note, (v) transfers of
interests in the Global Note or definitive Notes in return for a part of this
Global Note and (vi) transfers of a part of this Global Note effected by
delivery of interests in the Global Note or definitive Notes may be effected
without the surrendering of this Global Note, provided that appropriate
notations on the Schedule of Exchanges, Conversions, Redemptions, Repurchases,
Cancellations and Transfers are made by the Trustee, or the Custodian at the
direction of the Trustee, to reflect the appropriate reduction or increase, as
the case may be, in the aggregate principal amount of this Global Note resulting
therefrom or as a consequence thereof.
Reference is made to the further provisions of this Global
Note set forth on the reverse hereof, including, without limitation, provisions
giving the holder of this Global Note the right to convert this Global Note into
Common Stock of the Company (or, under certain circumstances specified in the
Indenture, into an amount of cash as set forth in the Indenture) on the terms
and subject to the limitations referred to on the reverse hereof and as more
fully specified in the Indenture. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
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This Global Note shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee or a duly authorized authenticating agent under
the Indenture.
IN WITNESS WHEREOF, the Company has caused this Global Note to
be duly executed under its corporate seal.
PENN TREATY AMERICAN CORPORATION
By:
---------------------------------
Name:
Title:
Attest:
-----------------------------------
Secretary
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes described in the within-named
Indenture.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A., as Trustee
By:
----------------------------------------
Authorized Signatory
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[FORM OF REVERSE OF GLOBAL NOTE]
PENN TREATY AMERICAN CORPORATION
6-1/4% Convertible Subordinated Notes Due 2008
This Global Note is one of a duly authorized issue of Notes of
the Company, designated as its 6-1/4% Convertible Subordinated Notes Due 2008
(herein called the "Notes"), limited to the aggregate principal amount of
$74,750,000 all issued or to be issued under and pursuant to an Indenture dated
as of September __, 2002 (the "Indenture"), between the Company and ▇▇▇▇▇ Fargo
Bank Minnesota, N.A., as trustee (the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a complete
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the Notes.
Each Note is subject to, and qualified by, all such terms as set forth in the
Indenture certain of which are summarized hereon and each holder of a Note is
referred to the corresponding provisions of the Indenture for a complete
statement of such terms. To the extent that there is any inconsistency between
the summary provisions set forth in the Notes and the Indenture, the provisions
of the Indenture shall govern. Capitalized terms used but not defined in this
Global Note shall have the meanings ascribed to them in the Indenture.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of, premium, if any, and
accrued interest on all Notes may be declared, and upon said declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The payment of principal of, premium, if any, and interest on
the Notes will, to the extent set forth in the Indenture, be subordinated in
right of payment to the prior payment in full of all Senior Indebtedness (as
defined in the Indenture). Upon any distribution to creditors of the Company in
a liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payment in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment upon or in respect
of the Notes (except in such subordinated securities) and may not acquire from
the Trustee or the holder of any Note for cash or property (other than
securities subordinated to at least the same extent as the Note to (i) Senior
Indebtedness and (ii) any securities issued in exchange for Senior Indebtedness)
until all Senior Indebtedness has been paid in full if (a) a default in the
payment of the principal of, premium, if any, or interest on Senior Indebtedness
occurs and is continuing beyond any applicable period of grace or (b) any other
default occurs and is continuing with respect to Senior Indebtedness that
permits holders of the Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the representative or representatives of holders
of at least a
A-5
majority in principal amount of Senior Indebtedness then outstanding. Payments
on the Notes may and shall be resumed (i) in the case of a Payment Default, upon
the date on which such default is cured or waived, or (ii) in the case of a
Nonpayment Default, 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of any Senior Indebtedness has
been accelerated. No new period of payment blockage may be commenced within 360
days after the receipt by the Trustee of any prior Payment Blockage Notice. No
default, other than a Nonpayment Default, that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 180 days.
In the event that the Trustee (or paying agent if other than
the Trustee) or any holder of the Notes receives any payment of principal or
interest with respect to the Notes at a time when such payment is prohibited
under the Indenture, such payment shall be held in trust for the benefit of, and
immediately shall be paid over and delivered to, the holders of Senior
Indebtedness or their representative as their respective interests may appear.
After all Senior Indebtedness is paid in full and until the Notes are paid in
full, the holders of the Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the holders of the Notes have
been applied to the payment of Senior Indebtedness.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided that no such supplemental indenture shall
(i) extend the fixed maturity of any Note, or reduce the rate or extend the time
of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption thereof,
alter the obligation of the Company to repurchase the Notes at the option of the
holders upon the occurrence of a Change of Control, or impair or affect the
right of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, modify the subordination
provisions in a manner adverse to the holders of the Notes, or impair the right
to convert the Notes into Common Stock subject to the terms set forth in the
Indenture without the consent of the holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding. The Company and the Trustee may amend or
supplement the Indenture without notice to or consent of any holder of Notes in
certain events specified in the Indenture. It is also provided in the Indenture
that, prior to any declaration accelerating the maturity of the Notes, the
holders of a majority in aggregate principal amount of the Notes at the time
outstanding may on behalf of the holders of all of the Notes waive any past
default or Event of Default under the Indenture and its consequences except a
default in the payment of interest or any premium on or the principal of any of
the Notes, a failure by the Company to convert any Notes into Common Stock of
the Company, unless otherwise excused pursuant to the terms of the Indenture, or
a default in respect
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of a covenant or provision of the Indenture that under Article X thereof cannot
be modified or amended without the consent of the holders of all Notes then
outstanding. Any such consent or waiver by the holder of this Global Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Global Note and
any Notes that may be issued in exchange or substitution hereof, irrespective of
whether or not any notation thereof is made upon this Global Note or such other
Notes.
No reference herein to the Indenture and no provision of this
Global Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Global Note at the place, at the respective times,
at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a
360-day year composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes are not redeemable at the option of the Company
prior to October 15, 2004. At any time on or after that date, the Notes may be
redeemed at the Company's option, upon notice as set forth in the Indenture, in
whole at any time or in part from time to time, at the price of 100% of the
principal amount, together with accrued interest to the date fixed for
redemption; provided that if the date fixed for redemption is a date on or after
the record date and on or before the next following Interest Payment Date, then
the interest payable on such date shall be paid to the holder of record on the
next preceding October 1 or April 1, respectively.
If a Change of Control (as defined in the Indenture) shall
occur at any time, then each holder of Notes shall have the right to require
that the Company repurchase such holder's Notes in whole or in part in integral
multiples of $1,000, at a purchase price in cash in an amount equal to 101% of
the principal amount of such Notes, plus accrued and unpaid interest, if any, to
the repurchase date pursuant to an offer to be made by the Company and in
accordance with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof
has the right, at its option, at any time after 90 days following the latest
date of original issuance of the Notes and prior to the close of business on
September __, 2008, subject to prior redemption or repurchase, or, as to all or
any portion hereof called for redemption, prior to the close of business one
business day before the date fixed for redemption (unless the Company shall
default in payment due upon redemption thereof), to convert the principal hereof
or any portion of such principal that is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of the Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount of this Global Note or portion thereof to
A-7
be converted by the conversion price of $5.31 per share or such conversion price
as adjusted from time to time as provided in the Indenture, upon surrender of
this Global Note to the Company at the office or agency of the Company
maintained for that purpose in the ______________________________________, or
at the option of such holder, the Corporate Trust Office of the Trustee, and,
unless the shares issuable on conversion are to be issued in the same name as
this Global Note, duly endorsed by, or accompanied by instruments of transfer
in form satisfactory to the Company duly executed by, the holder or by his
duly authorized attorney.
Except as described in the Indenture, no adjustment will be
made on conversion of any Notes for interest accrued thereon or for dividends
paid on any Common Stock issued. A Holder of Notes at the close of business
on a record date will be entitled to receive the interest payable on such
Notes on the corresponding interest payment date. Any unpaid interest on any
Note or portion thereof as of the date such Note or portion thereof is
surrendered for conversion shall (unless such Note or portion thereof being
converted is called for redemption on a redemption date during the period
from the close of business on or after any record date to the close of
business on the business day following the corresponding interest payment
date) be paid in cash to the former holder of such Note or portion thereof on
the next succeeding interest payment date.
In the event a holder desires to convert all or any portion of
its Notes into shares of Common Stock and the Company does not have authorized a
sufficient number of shares of Common Stock for such conversion, in lieu of
delivering shares of Common Stock (or other securities into which the Notes are
then convertible) upon conversion of that portion of such holder's Notes for
which there is an insufficient number of shares of Common Stock (the "Cash
Equivalent Notes") pursuant to the provisions of the Indenture, the Company will
pay to the holder converting the Cash Equivalent Notes who properly exercises
the conversion privilege, as set forth in the Indenture, an amount in cash equal
to the Market Cash Conversion Price (as defined in the Indenture) of the shares
of Common Stock into which such Cash Equivalent Notes are then convertible.
On any date on or after the 15th business day following
October 15, 2004, if: (i) the average of the closing price of the Common Stock
on 15 consecutive business days is equal to or greater than 110% of the
conversion price (as it may be adjusted in the Indenture) and (ii) the Company
has sufficient shares of Common Stock (or other securities into which the Notes
are then convertible) authorized to execute the Mandatory Conversion (as defined
below), then the Notes shall be converted into that number of fully paid and
nonassessable shares of Common Stock (or other securities into which the Notes
are then convertible) obtained by dividing the aggregate principal amount of the
Notes by the conversion price in effect at such time rounded to the nearest
1/100,000th of a share (with 0.000005 being rolled upward)(the "Mandatory
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Conversion"). After the Mandatory Conversion, the Notes will no longer represent
indebtedness of the Company and will no longer accrue interest or require the
Company to make any payment of principal; and the Company's obligations to make
any further payments with respect to the Notes will terminate.
The Company is not required to issue fractional shares of
Common Stock upon conversion of Notes and, in lieu thereof, will pay a cash
adjustment based upon the closing price of the Common Stock on the last business
day prior to the date of conversion.
Upon due presentment for registration of transfer of this
Global Note at the office or agency of the Company in the
____________________________________, or at the option of the holder of this
Global Note, at the Corporate Trust Office of the Trustee, a new Note or Notes
of authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange thereof, subject to the conditions and
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying
agent, any conversion agent and any Note registrar may deem and treat the
registered holder hereof as the absolute owner of this Global Note (whether or
not this Global Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon made by anyone other than the Company or any
Note registrar), for the purpose of receiving payment hereof, or on account
hereof, for the conversion hereof and for all other purposes, and neither the
Company nor the Trustee nor any other authenticating agent nor any paying agent
nor any other conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Global Note.
No recourse for the payment of the principal of or any premium
or interest on this Global Note, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or of any Successor
Company, either directly or through the Company or any Successor Company,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
A-9
ABBREVIATIONS
The following abbreviations, when used in the inscription of
the face of this Global Note, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
Uniform Gifts to Minors Act
_______________________________________
(State)
TEN ENT - as tenants by the
entireties ________________ Custodian
(Cust)
JT TEN - as joint tenants with
right of survivorship ________________ under
and not as tenants in (Minor)
common
Additional abbreviations may also be used
though not in the above list.
A-10
Fill in for registration of shares
if to be issued, and Notes if to be
delivered, other than to and in the
name of the registered holder:
-----------------------------------
(Name)
-----------------------------------
(Street Address)
-----------------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all)
$_____________________________
-----------------------------------
Social Security or Other Taxpayer
Identification Number
A-11
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
To:
Penn Treaty American Corporation
The undersigned registered owner of this Global Note hereby
irrevocably acknowledges receipt of a notice from Penn Treaty American
Corporation (the "Company") as to the occurrence of a Change of Control with
respect to the Company and requests and instructs the Company to repay the
entire principal amount of this Global Note, or the portion thereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Global Note,
together with accrued interest to such date, to the registered holder hereof.
Dated:
-----------------------------
------------------------------------
Signature(s)
------------------------------------
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if
less than all): $___________________
A-12
[FORM OF ASSIGNMENT]
For value received _______________________________ hereby
sell(s), assign(s) and transfer(s) unto _________________ (please insert social
security or other identifying number of assignee) the within Note, and hereby
irrevocably constitutes and appoints ____________________________ attorney to
transfer the said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
-----------------------------
-----------------------------------
-----------------------------------
Signature(s)
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 Guarantee
NOTICE: The option to elect payment upon a Change of Control or the
assignment must correspond with the name as written upon the face of
the Note in every particular without alteration or enlargement or any
change whatever.
A-13
SCHEDULE A
SCHEDULE OF EXCHANGES, CONVERSIONS,
REDEMPTIONS, REPURCHASES, CANCELLATIONS AND TRANSFERS
The initial principal amount of this Global Note is U.S.
$_____________. The following additions to principal, redemptions, repurchases,
exchanges of a part of this Global Note for an interest in the Global Note,
definitive Notes and conversions into Common Stock or cash have been made:
----------------------------------------------------------------------------------------------------------------------
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Principal
Amount
Redeemed,
Repurchased
Principal Exchanged for
Amount Added Interest in
Date of Addi- on the Global Remaining
tion to Prin- Exchange of Note or Principal
cipal, Re- Interest in Definitive Amount Out-
demption, the Global Notes or standing Notation
Repurchase, Note or Converted into Following Made by or
Exchange or Definitive Common Stock such Transac- on behalf of
Conversion Notes or Cash tion the Trustee
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