Exhibit 4.7
PENN TREATY AMERICAN CORPORATION
Issuer
AND
WELLS FARGO BANK MINNESOTA, N.A.
Trustee
INDENTURE
Dated as of February 19, 2004
6-1/4% Convertible Subordinated Notes Due
2008
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.
Table of Contents
Page
Article I
DEFINITIONS
Section 1.1
DEFINITIONS............................................................................1
Section 1.2
INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT......................................7
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 REGISTRATION OF TRANSFER OF NOTES; RESTRICTIONS ON
TRANSFER; DEPOSITORY..11
Section 2.6
MUTILATED, DESTROYED, LOST OR STOLEN
NOTES............................................17
Section 2.7
TEMPORARY
NOTES.......................................................................18
Section 2.8
CANCELLATION OF NOTES PAID,
ETC.......................................................18
Section 2.9
CUSIP
NUMBERS.........................................................................18
Article III
REDEMPTION AND REPURCHASE OF NOTES
Section 3.1
REDEMPTION
PRICES.....................................................................19
Section 3.2
NOTICE OF REDEMPTION; SELECTION OF
NOTES..............................................19
Section 3.3
PAYMENT OF NOTES CALLED FOR
REDEMPTION................................................20
Section 3.4
CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION.........................................21
Section 3.5
REPURCHASE OF NOTES UPON A CHANGE OF
CONTROL..........................................21
Article IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1
PAYMENT OF PRINCIPAL, PREMIUM AND
INTEREST............................................23
Section 4.2
MAINTENANCE OF OFFICE OR
AGENCY.......................................................23
Section 4.3
APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S
OFFICE....................................24
Section 4.4
PROVISIONS AS TO PAYING
AGENT.........................................................24
Section 4.5
CORPORATE
EXISTENCE...................................................................25
Section 4.6
STAY, EXTENSION AND USURY
LAWS........................................................25
Section 4.7
COMPLIANCE STATEMENT; NOTICE OF
DEFAULTS..............................................25
Section 4.8
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES..........26
Section 4.9
TAXES.................................................................................26
Section 4.10
INSURANCE.............................................................................26
Article V
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY
Section 5.1
NOTEHOLDERS'
LISTS....................................................................26
Section 5.2
REPORTS BY
COMPANY....................................................................26
Article VI
DEFAULTS AND REMEDIES
Section 6.1
EVENTS OF
DEFAULT.....................................................................27
Section 6.2
PAYMENTS OF NOTES ON DEFAULT; SUIT
THEREFOR...........................................29
Section 6.3
APPLICATION OF MONIES COLLECTED BY
TRUSTEE............................................31
Section 6.4
PROCEEDINGS BY
NOTEHOLDER.............................................................32
Section 6.5
PROCEEDINGS BY
TRUSTEE................................................................32
Section 6.6
REMEDIES CUMULATIVE AND
CONTINUING....................................................33
Section 6.7
DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
NOTEHOLDERS............33
Section 6.8
NOTICE OF
DEFAULTS....................................................................33
Section 6.9
UNDERTAKING TO PAY
COSTS..............................................................33
Article VII
CONCERNING THE TRUSTEE
Section 7.1
DUTIES AND RESPONSIBILITIES OF
TRUSTEE................................................34
Section 7.2
REPORTS BY TRUSTEE TO
HOLDERS.........................................................35
Section 7.3
RELIANCE ON DOCUMENTS, OPINIONS,
ETC..................................................35
Section 7.4
NO RESPONSIBILITY FOR RECITALS,
ETC...................................................36
Section 7.5
TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN
NOTES..................36
Section 7.6
MONIES TO BE HELD IN
TRUST............................................................36
Section 7.7
COMPENSATION AND EXPENSES OF
TRUSTEE..................................................37
Section 7.8
OFFICERS' CERTIFICATE AS
EVIDENCE.....................................................37
Section 7.9
CONFLICTING INTERESTS OF
TRUSTEE......................................................37
Section 7.10
ELIGIBILITY OF
TRUSTEE................................................................37
Section 7.11
RESIGNATION OR REMOVAL OF
TRUSTEE.....................................................38
Section 7.12
ACCEPTANCE BY SUCCESSOR
TRUSTEE.......................................................39
Section 7.13
SUCCESSOR, BY MERGER,
ETC.............................................................39
Section 7.14
LIMITATION ON RIGHTS OF TRUSTEE AS
CREDITOR...........................................40
Article VIII
CONCERNING THE NOTEHOLDERS
Section 8.1
ACTION BY
NOTEHOLDERS.................................................................40
Section 8.2
PROOF OF EXECUTION BY
NOTEHOLDERS.....................................................40
Section 8.3
WHO ARE DEEMED ABSOLUTE
OWNERS........................................................40
Section 8.4
COMPANY-OWNED NOTES
DISREGARDED.......................................................41
Section 8.5
REVOCATION OF CONSENTS, FUTURE HOLDERS
BOUND..........................................41
Article IX
NOTEHOLDERS' MEETINGS
Section 9.1
PURPOSES FOR WHICH MEETINGS MAY BE
CALLED.............................................42
Section 9.2
MANNER OF CALLING MEETINGS; RECORD
DATE...............................................42
Section 9.3
CALL OF MEETING BY COMPANY OR
NOTEHOLDERS.............................................42
Section 9.4
WHO MAY ATTEND AND VOTE AT
MEETINGS...................................................43
Section 9.5
MANNER OF VOTING AT MEETINGS AND RECORD TO BE
KEPT....................................43
Section 9.6
EXERCISE OF RIGHTS OF TRUSTEE AND NOTEHOLDERS NOT TO BE HINDERED OR
DELAYED...........43
Article X
SUPPLEMENTAL INDENTURES
Section 10.1
SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS................................43
Section 10.2
SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS...................................45
Section 10.3
EFFECT OF SUPPLEMENTAL
INDENTURES.....................................................45
Section 10.4
NOTATION ON
NOTES.....................................................................46
Section 10.5
EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TO
THE TRUSTEE.......46
Article XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE, TRANSFER AND LEASE
Section 11.1
COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS........................................46
Section 11.2
SUCCESSOR COMPANY TO BE
SUBSTITUTED...................................................46
Section 11.3
OPINION OF COUNSEL TO BE GIVEN TO
TRUSTEE.............................................47
Article XII
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
Section 12.1
LEGAL DEFEASANCE AND COVENANT DEFEASANCE OF THE
NOTES.................................47
Section 12.2
TERMINATION OF OBLIGATIONS UPON CANCELLATION OF THE
NOTES.............................49
Section 12.3
SURVIVAL OF CERTAIN
OBLIGATIONS.......................................................49
Section 12.4
ACKNOWLEDGMENT OF DISCHARGE BY
TRUSTEE................................................50
Section 12.5
APPLICATION OF TRUST
ASSETS...........................................................50
Section 12.6
REPAYMENT TO THE COMPANY; UNCLAIMED
MONEY.............................................50
Section 12.7
REINSTATEMENT.........................................................................50
Article XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 13.1
INDENTURE AND NOTES SOLELY CORPORATE
OBLIGATIONS......................................51
Article XIV
CONVERSION OF NOTES
Section 14.1
RIGHT TO
CONVERT......................................................................51
Section 14.2
EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR
INTEREST OR
DIVIDENDS.................................................................53
Section 14.3
MANDATORY
CONVERSION..................................................................54
Section 14.4
CASH PAYMENTS IN LIEU OF FRACTIONAL
SHARES............................................55
Section 14.5
CONVERSION
PRICE......................................................................55
Section 14.6
ADJUSTMENT OF CONVERSION
PRICE........................................................55
Section 14.7
EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.............................63
Section 14.8
TAXES ON SHARES
ISSUED................................................................63
Section 14.9
RESERVATION OF SHARES; SHARES TO BE FULLY
PAID........................................64
Section 14.10
RESPONSIBILITY OF
TRUSTEE.............................................................64
Section 14.11
NOTICE TO HOLDERS PRIOR TO CERTAIN
ACTIONS............................................65
Article XV
SUBORDINATION
Section 15.1
AGREEMENT TO
SUBORDINATE..............................................................65
Section 15.2
CERTAIN
DEFINITIONS...................................................................65
Section 15.3
LIQUIDATION; DISSOLUTION;
BANKRUPTCY..................................................66
Section 15.4
DEFAULT ON SENIOR
INDEBTEDNESS........................................................67
Section 15.5
WHEN DISTRIBUTION MUST BE PAID
OVER...................................................67
Section 15.6
NOTICE BY
COMPANY.....................................................................68
Section 15.7
SUBROGATION...........................................................................68
Section 15.8
RELATIVE
RIGHTS.......................................................................68
Section 15.9
SUBORDINATION MAY NOT BE IMPAIRED BY
COMPANY..........................................68
Section 15.10
DISTRIBUTION OR NOTICE TO
REPRESENTATIVE..............................................69
Section 15.11
RIGHTS OF TRUSTEE AND PAYING
AGENT....................................................69
Section 15.12
AUTHORIZATION TO EFFECT
SUBORDINATION.................................................70
Section 15.13
CONVERSIONS NOT DEEMED
PAYMENT........................................................70
Section 15.14
AMENDMENTS............................................................................70
Article XVI
MISCELLANEOUS PROVISIONS
Section 16.1
POOLING OF
INTERESTS..................................................................70
Section 16.2
PROVISIONS BINDING ON COMPANY'S
SUCCESSORS............................................70
Section 16.3
OFFICIAL ACTS BY SUCCESSOR
COMPANY....................................................70
Section 16.4
ADDRESSES FOR NOTICES,
ETC............................................................70
Section 16.5
COMMUNICATIONS BY HOLDERS WITH OTHER
HOLDERS..........................................71
Section 16.6
GOVERNING
LAW.........................................................................71
Section 16.7
EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO
TRUSTEE.............71
Section 16.8
LEGAL
HOLIDAYS........................................................................72
Section 16.9
NO SECURITY INTEREST
CREATED..........................................................72
Section 16.10
TRUST INDENTURE
ACT...................................................................72
Section 16.11
TRUST INDENTURE ACT
CONTROLS..........................................................72
Section 16.12
BENEFITS OF
INDENTURE.................................................................72
Section 16.13
TABLE OF CONTENTS, HEADINGS
ETC.......................................................72
Section 16.14
AUTHENTICATING
AGENT..................................................................72
Section 16.15
EXECUTION IN
COUNTERPARTS.............................................................73
INDENTURE,
dated as of February 19, 2004, by and between PENN TREATY
AMERICAN CORPORATION, a Pennsylvania corporation (the
“Company”), and WELLS 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 $2,000,000, 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, 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), a
form of conversion notice 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(c).
CEDE:
The term “Cede” shall mean Cede & Co., a nominee of
the Depository.
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, which is located at MAC
N9303-120, Sixth Street & Marquette Avenue, Minneapolis,
Minnesota 55479. The Trustee also maintains an office c/o
Depository Trust Company, 1 st Floor, TADS Department,
55 Water Street, New York, New York 10041, 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.
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 as set forth on Exhibit A
hereto. 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 Notes in
global form as set forth in Exhibit B hereto.
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 April 15 and October 15.
LEGAL
DEFEASANCE: The term “legal defeasance” shall have the
meaning specified in Section 12.1(b).
MANDATORY
CONVERSION: The term “Mandatory Conversion” shall have
the meaning specified in Section 14.3.
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 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 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.
RESTRICTED
SECURITIES: The term “Restricted Securities” shall have
the meaning specified in Section 2.5(c).
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 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.
TRANSFER:
The term “Transfer” shall have the meaning specified in
Section 2.5(c).
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 Wells 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.
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:
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(1)
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a term has the
meaning assigned to it;
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(2)
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an accounting
term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting
principles;
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(3)
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“or” is not exclusive;
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(4)
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words in the
singular include the plural, and in the plural include the
singular; and
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(5)
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provisions
apply to successive events and transactions.
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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
the aggregate principal amount of $2,000,000 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. Notes
will initially be issued in definitive form in substantially the
form of Exhibit A hereto, with the legends in substantially the
form indicated in Exhibit A hereto, and shall be registered in the
name of the holders thereof, duly executed by the Company and
authenticated by the Trustee as the authenticating agent as
provided herein.
An
interest in a global Note may be issued in exchange for any
definitive Note transferred pursuant to an effective registration
statement for the Notes under the Securities Act, in compliance
with Rule 144 promulgated thereunder or after receipt of an opinion
of counsel reasonably satisfactory to the Company that such
registration or compliance is not required. Any global Note shall
represent such of the outstanding Notes as shall be specified
therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby
may from time to time be increased or reduced to reflect transfers
or exchanges permitted hereby. Any endorsement of a global Note to
reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee
or the Custodian, at the direction of the Trustee, in such manner
and upon written instructions given by the holder of such Notes in
accordance with the Indenture. Payment of principal of and interest
and premium, if any, on any global Note shall be made in accordance
with the provisions of Section 2.3 hereof.
The
terms and provisions contained in the forms of Notes attached as
Exhibit A and Exhibit B 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
February 19, 2004 and shall be payable semiannually on each
April 15 and October 15, commencing April 15, 2004, as
specified on the faces of the forms of Notes, attached as Exhibit A
and Exhibit B 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 $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 April 1 or October 1 preceding said April 15 or
October 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
a 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 April 15 or October 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:
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(1)
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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).
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(2)
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The Company may
make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange
on 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.
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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 forms of Note attached
as Exhibit A and Exhibit B 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 REGISTRATION OF
TRANSFER OF NOTES; RESTRICTIONS ON TRANSFER; DEPOSITORY.
(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
registration of Notes and of 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
registering Notes and 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 and bearing such restrictive legends as
may be required by Sections 2.5(c) and (d).
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, exchange and/or registration 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.
(b) Once
the Notes are eligible for book-entry settlement with the
Depository, all definitive Notes shall be exchanged for interests
in a global Note registered in the name of the Depository or the
nominee of the Depository. The transfer and exchange of beneficial
interests in any global Note that does not involve the issuance of
a definitive Note or the transfer of interests to another global
Note shall be effected through the Depository (and not the Trustee
or the Custodian) in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of
the Depository therefor. Neither the Trustee nor the Custodian (in
such respective capacities) shall have any responsibility for the
transfer and exchange of beneficial interests in such global Note
that does not involve the issuance of a definitive Note or the
transfer of interests to another global Note.
Any
transfer of a beneficial interest in a 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).
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. As a
condition to such transfer, the Trustee or the Custodian, at the
direction of the transferor, shall be provided with such
representations and agreements relating to the restrictions on
transfer of such Note or Notes from such transferee (or such
transferee’s nominee) substantially in the form as set forth
in Exhibit C hereto.
If
a holder of a definitive Note wishes or is required under the first
paragraph of this Section 2.5(b) at any time to exchange its Note
for a beneficial interest in any global Note (or vice versa), or to
transfer its definitive Note to a person who wishes to take
delivery thereof in the form of a beneficial interest in a global
Note (or vice versa), such Notes and beneficial interest may be
exchanged or transferred for one another only in accordance with
such procedures as are consistent with the provisions of this
Section 2.5(b) (including the certification requirements intended
to ensure that such exchanges or transfers are made pursuant to an
effective registration statement under the Securities Act or in
compliance with Rule 144 promulgated thereunder) and as may be from
time to time adopted by the Company with notice to and the consent
of the Trustee. Such Notes shall bear the legends required by
Sections 2.5(c) and (d) as applicable. As a condition to such
exchange or transfer, the Trustee or the Custodian, shall be
provided with such representations and agreements relating to the
restrictions on transfer of such Note or Notes from such transferor
(or such transferor’s nominee) substantially in the form as
set forth in Exhibit D hereto.
Any
global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Company
with notice thereof to the Custodian or the Depository or to
indicate any special limitations or restrictions to which any
particular Notes are subject.
(c) Every
Note that bears or is required under this Section 2.5(c) to bear
the legend set forth in this Section 2.5(c) (together with any
Common Stock issued upon conversion of the Notes and required to
bear the legend set forth in Section 2.5(d), collectively, the
“Restricted Securities”) shall be subject to the
restrictions on transfer set forth in this Section 2.5(c), unless
such restrictions on transfer shall have been waived by the written
consent of the Company or removed in accordance with the provisions
of Section 2.5(e), and the holder of each such Restricted Security,
by such holder’s acceptance thereof, agrees to be bound by
such restrictions on transfer. As used in this Section 2.5(c), the
term “transfer” encompasses any sale, pledge, transfer
or other disposition of any Restricted Security.
Until
two years after the later of the original issuance date of any Note
and the last date on which the Company or an Affiliate of the
Company was the owner of such Note, any certificate evidencing such
Note (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in
Section 2.5(d), if applicable) shall bear a legend in substantially
the following form, unless otherwise agreed by the Company (with
notice thereof to the Trustee):
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THE NOTE
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS, AND IS A “RESTRICTED SECURITY”
AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE NOTES MAY NOT
BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE NOTES UNDER
THE SECURITIES ACT; (II) IN COMPLIANCE WITH RULE 144 PROMULGATED
UNDER THE SECURITIES ACT; OR (III) AFTER RECEIPT OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO PENN TREATY AMERICAN CORPORATION
THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID
SALE, OFFER OR DISTRIBUTION.
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Any
Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in
accordance with their terms may, upon satisfaction of the
requirements of Section 2.5(d) and surrender of such Note for
exchange to the Note registrar in accordance with the provisions of
this Section 2.5, be exchanged for a new Note or Notes, of like
tenor and aggregate principal amount, which shall not bear the
restrictive legend required by this Section 2.5(c).
Notwithstanding
any other provisions of this Indenture (other than the provisions
set forth in this Section 2.5(c)), a 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. 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 and its
nominees, 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 a global Note are credited, and only in
respect of the principal amount of the Notes represented by the
global Notes as to which such participant or participants has or
have given such direction.
If
at any time the Depository for a 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 Notes in
exchange for such global Notes.
Definitive
Notes issued in exchange for all or a part of a global Note
pursuant to this Section 2.5(c) 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.
At
such time as all interests in global Notes have been redeemed,
converted, repurchased or canceled, such global Notes 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 a 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 a
global Note, the principal amount of such 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 such 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 any global Note, deal with the Depository as the
authorized representative of the holders of such Note for the
purposes of exercising the rights of Noteholders hereunder. The
rights of the owner of any beneficial interest in a 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, and 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.
(d) Until
two years after the later of the original issuance date of any Note
and the last date on which the Company or an Affiliate of the
Company was the owner of such Note, any stock certificate
representing Common Stock issued upon or in connection with
conversion of such Note shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with
written notice thereof to the Trustee and any transfer agent for
the Common Stock):
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THE COMMON
STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS, AND IS A
“RESTRICTED SECURITY” AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT. THE COMMON STOCK MAY NOT BE SOLD OR
OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FOR THE COMMON STOCK UNDER THE
SECURITIES ACT; (II) IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER
THE SECURITIES ACT; OR (III) AFTER RECEIPT OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO PENN TREATY AMERICAN CORPORATION THAT
SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE,
OFFER OR DISTRIBUTION.
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Any
such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon satisfaction
of the requirements of Section 2.5(f) and surrender of the
certificates representing such shares of Common Stock for exchange
in accordance with the procedures of the transfer agent for the
Common Stock, be exchanged for a new certificate or certificates
for a like aggregate number of shares of Common Stock, which shall
not bear the restrictive legend required by this Section
2.5(d).
(e) Upon
any sale or transfer of any Restricted Security (i) that is
effected pursuant to an effective registration statement under the
Securities Act, (ii) that is effected pursuant to Rule 144 as
promulgated under the Securities Act as determined by counsel to
the Company or (iii) in connection with which the Trustee (or
transfer agent for the Common Stock, in the case of shares of
Common Stock) receives certificates and other information,
including an opinion from counsel having substantial experience in
practice under the Securities Act and otherwise reasonably
acceptable to the Company, addressed to the Company and the Trustee
or transfer agent, to the effect that such security shall no longer
be subject to the resale restrictions under federal and state
securities laws, then the Note registrar or co-registrar (or
transfer agent, in the case of Common Stock) shall issue a security
that does not bear the legends set forth in Section 2.5(c) or
2.5(d), as applicable. In addition, any Note (or security issued in
exchange or substitution therefor) or shares of Common Stock issued
upon or in connection with conversion of any Note as to which the
restrictions on transfer described in the legends set forth in
Section 2.5(c) and 2.5(d), respectively, have expired by their
terms, upon surrender thereof (in accordance with the terms of this
Indenture in the case of Notes), together with such certifications
and other information, including an opinion from counsel having
substantial experience in practice under the Securities Act and
otherwise reasonably acceptable to the Company, addressed to the
Company and the Trustee or transfer agent, to the effect that such
security shall no longer be subject to the resale restrictions
under federal and state securities laws, may be exchanged for a new
Note or Notes of like tenor and aggregate principal amount (in the
case of Notes), or a new certificate or certificates for a like
aggregate number of shares of Common Stock (in the case of Common
Stock), or a new certificate or other instrument of like tenor and
amount (in the case of securities issued in exchange or
substitution for Notes), which shall not bear the restrictive
legends set forth in Sections 2.5(c) and 2.5(d).
(f) 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 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 any such 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 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, 2005. 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 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 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 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.
(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 on or before
the date such payment is to be made. 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
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.
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(a)
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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:
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(1)
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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 to it by the Company or by any other
obligor on the Notes) in trust for the benefit of the holders of
the Notes;
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(2)
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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
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(3)
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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.
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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.
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 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 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 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 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 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 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;
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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
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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.
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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.
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 WAIVER 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 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.
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(a)
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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)
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Except during
the continuance of an Event of Default:
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(i)
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the Trustee
need perform only those duties that are specifically set forth in
this Indenture and no others; and
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(ii)
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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).
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(c)
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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:
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(i)
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this paragraph
(c) does not limit the effect of paragraph (b) of this Section
7.1;
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(ii)
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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
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(iii)
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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.
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(d)
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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.
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(e)
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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.
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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 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 ac
