**Exhibit 4.2**

 

 

PENN TREATY AMERICAN CORPORATION

 

Issuer

 

 

AND

 

 

WELLS FARGO BANK MINNESOTA, N.A.

 

Trustee

 

 

INDENTURE

 

Dated as of February 12, 2003

 

 

6-1/4% Convertible Subordinated Notes Due 2008

 

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CROSS-REFERENCE TABLE*

 

| **Trust Indenture Act Section** |   | **Indenture  Section** |
|---------------------------------|--------|------------------------|
|                            |   |                   |
| 310                             |   | (a)(1)                 |   | 7.10 |
|                            |   | (a)(2)                 |   | 7.10 |
|                            |   | (a)(3)                 |   | N.A. |
|                            |   | (a)(4)                 |   | N.A. |
|                            |   | (a)(5)                 |   | 7.10 |
|                            |   | (b)                    |   | 7.9 |
|                            |   | (c)                    |   | N.A. |
| 311                             |   | (a)                    |   | 7.14 |
|                            |   | (b)                    |   | 7.14 |
|                            |   | (c)                    |   | N.A. |
| 312                             |   | (a)                    |   | 2.5(a); 5.1 |
|                            |   | (b)                    |   | 16.5 |
|                            |   | (c)                    |   | 16.5 |
| 313                             |   | (a)                    |   | 7.2 |
|                            |   | (b)(1)                 |   | N.A. |
|                            |   | (b)(2)                 |   | 7.2 |
|                            |   | (c)                    |   | 7.2 |
|                            |   | (d)                    |   | 7.2 |
| 314                             |   | (a)                    |   | 4.7(a); 5.2 |
|                            |   | (b)                    |   | N.A. |
|                            |   | (c)(1)                 |   | 16.7 |
|                            |   | (c)(2)                 |   | 16.7 |
|                            |   | (c)(3)                 |   | N.A. |
|                            |   | (d)                    |   | N.A. |
|                            |   | (e)                    |   | 16.7 |
|                            |   | (f)                    |   | N.A. |
| 315                             |   | (a)                    |   | 7.1(b) |
|                            |   | (b)                    |   | 6.8 |
|                            |   | (c)                    |   | 7.1(a) |
|                            |   | (d)                    |   | 7.1(c) |
|                            |   | (e)                    |   | 6.9 |
| 316                             |   | (a) (last sentence)    |   | 8.4 |
|                            |   | (a)(1)(A)              |   | 6.7 |
|                            |   | (a)(1)(B)              |   | 6.7 |
|                            |   | (a)(2)                 |   | N.A. |
|                            |   | (b)                    |   | 6.4 |
|                            |   | (c)                    |   | 9.2 |
| 317                             |   | (a)                    |   | 6.2 |
|                            |   | (b)                    |   | 4.4 |
| 318                             |   | (a)                    |   | 16.10; 16.11 |

 

N.A. means “not applicable.”

 

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*                                         ThisCross-Reference Table is not part of the Indenture.

 

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**Table of Contents**

 
| ARTICLE I                                                         |
|-------------------------------------------------------------------|
|                                                              |
| DEFINITIONS                                                       |
|                                                              |   |
| Section 1.1                                                       | DEFINITIONS |
| Section 1.2                                                       | INCORPORATION BY REFERENCE OF TRUST  INDENTURE ACT |
| Section 1.3                                                       | RULES OF CONSTRUCTION |
|                                                              |
| ARTICLE II                                                        |
|                                                              |
| ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES |
|                                                              |
| Section 2.1                                                       | DESIGNATION, AMOUNT AND ISSUE OF NOTES |
| Section 2.2                                                       | FORM OF NOTES |
| Section 2.3                                                       | DATE AND DENOMINATION OF NOTES; PAYMENTS OF  INTEREST |
| Section 2.4                                                       | EXECUTION OF NOTES |
| Section 2.5                                                       | EXCHANGE AND TRANSFER OF NOTES; RESTRICTIONS  ON TRANSFER; DEPOSITORY |
| Section 2.6                                                       | MUTILATED, DESTROYED, LOST OR STOLEN NOTES |
| Section 2.7                                                       | TEMPORARY NOTES |
| Section 2.8                                                       | CANCELLATION OF NOTES PAID, ETC |
| Section 2.9                                                       | CUSIP NUMBERS |
|                                                              |
| ARTICLE III                                                       |
|                                                              |
| REDEMPTION AND REPURCHASE OF NOTES                                |
|                                                              |
| Section 3.1                                                       | REDEMPTION PRICES |
| Section 3.2                                                       | NOTICE OF REDEMPTION; SELECTION OF NOTES |
| Section 3.3                                                       | PAYMENT OF NOTES CALLED FOR REDEMPTION |
| Section 3.4                                                       | CONVERSION ARRANGEMENT ON CALL FOR  REDEMPTION |
| Section 3.5                                                       | REPURCHASE OF NOTES UPON A CHANGE OF  CONTROL |
|                                                              |
| ARTICLE IV                                                        |
|                                                              |
| PARTICULAR COVENANTS OF THE COMPANY                               |
|                                                              |
| Section 4.1                                                       | PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST |

 

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| Section 4.2                                         | MAINTENANCE OF OFFICE OR AGENCY                                               |
|-----------------------------------------------------|-------------------------------------------------------------------------------|
| Section 4.3                                         | APPOINTMENTS TO FILL VACANCIES IN TRUSTEE’S  OFFICE                      |
| Section 4.4                                         | PROVISIONS AS TO PAYING AGENT                                                 |
| Section 4.5                                         | CORPORATE EXISTENCE                                                           |
| Section 4.6                                         | STAY, EXTENSION AND USURY LAWS                                                |
| Section 4.7                                         | COMPLIANCE STATEMENT; NOTICE OF DEFAULTS                                      |
| Section 4.8                                         | LIMITATION ON DIVIDEND AND OTHER PAYMENT  RESTRICTIONS AFFECTING SUBSIDIARIES |
| Section 4.9                                         | TAXES                                                                         |
| Section 4.10                                        | INSURANCE                                                                     |
|                                                |
| ARTICLE V                                           |
|                                                |
| NOTEHOLDERS’ LISTS AND REPORTS BY THE  COMPANY |
|                                                |
| Section 5.1                                         | NOTEHOLDERS’ LISTS                                                       |
| Section 5.2                                         | REPORTS BY COMPANY                                                            |
|                                                |
| ARTICLE VI                                          |
|                                                |
| DEFAULTS AND REMEDIES                               |
|                                                |
| Section 6.1                                         | EVENTS OF DEFAULT                                                             |
| Section 6.2                                         | PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR                                   |
| Section 6.3                                         | APPLICATION OF MONIES COLLECTED BY TRUSTEE                                    |
| Section 6.4                                         | PROCEEDINGS BY NOTEHOLDER                                                     |
| Section 6.5                                         | PROCEEDINGS BY TRUSTEE                                                        |
| Section 6.6                                         | REMEDIES CUMULATIVE AND CONTINUING                                            |
| Section 6.7                                         | DIRECTION OF PROCEEDINGS AND WAIVER OF  DEFAULTS BY MAJORITY OF NOTEHOLDERS   |
| Section 6.8                                         | NOTICE OF DEFAULTS                                                            |
| Section 6.9                                         | UNDERTAKING TO PAY COSTS                                                      |
|                                                |
| ARTICLE VII                                         |
|                                                |
| CONCERNING THE TRUSTEE                              |
|                                                |
| Section 7.1                                         | DUTIES AND RESPONSIBILITIES OF TRUSTEE                                        |
| Section 7.2                                         | REPORTS BY TRUSTEE TO HOLDERS                                                 |
| Section 7.3                                         | RELIANCE ON DOCUMENTS, OPINIONS, ETC                                          |
| Section 7.4                                         | NO RESPONSIBILITY FOR RECITALS, ETC                                           |
| Section 7.5                                         | TRUSTEE, PAYING AGENTS, CONVERSION AGENTS  OR REGISTRAR MAY OWN NOTES         |
| Section 7.6                                         | MONIES TO BE HELD IN TRUST                                                    |
| Section 7.7                                         | COMPENSATION AND EXPENSES OF TRUSTEE                                          |
| Section 7.8                                         | OFFICERS’ CERTIFICATE AS EVIDENCE                                        |

 

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| Section 7.9                | CONFLICTING INTERESTS OF TRUSTEE                                                 |
|----------------------------|----------------------------------------------------------------------------------|
| Section 7.10               | ELIGIBILITY OF TRUSTEE                                                           |
| Section 7.11               | RESIGNATION OR REMOVAL OF TRUSTEE                                                |
| Section 7.12               | ACCEPTANCE BY SUCCESSOR TRUSTEE                                                  |
| Section 7.13               | SUCCESSOR, BY MERGER, ETC                                                        |
| Section 7.14               | LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR                                      |
|                       |
| ARTICLE VIII               |
|                       |
| CONCERNING THE NOTEHOLDERS |
|                       |
| Section 8.1                | ACTION BY NOTEHOLDERS                                                            |
| Section 8.2                | PROOF OF EXECUTION BY NOTEHOLDERS                                                |
| Section 8.3                | WHO ARE DEEMED ABSOLUTE OWNERS                                                   |
| Section 8.4                | COMPANY-OWNED NOTES DISREGARDED                                                  |
| Section 8.5                | REVOCATION OF CONSENTS, FUTURE HOLDERS  BOUND                                    |
|                       |
| ARTICLE IX                 |
|                       |
| NOTEHOLDERS’ MEETINGS |
|                       |
| Section 9.1                | PURPOSES FOR WHICH MEETINGS MAY BE CALLED                                        |
| Section 9.2                | MANNER OF CALLING MEETINGS; RECORD DATE                                          |
| Section 9.3                | CALL OF MEETING BY COMPANY OR NOTEHOLDERS                                        |
| Section 9.4                | WHO MAY ATTEND AND VOTE AT MEETINGS                                              |
| Section 9.5                | MANNER OF VOTING AT MEETINGS AND RECORD TO  BE KEPT                              |
| Section 9.6                | EXERCISE OF RIGHTS OF TRUSTEE AND  NOTEHOLDERS NOT TO BE HINDERED OR DELAYED     |
|                       |
| ARTICLE X                  |
|                       |
| SUPPLEMENTAL INDENTURES    |
|                       |
| Section 10.1               | SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF  NOTEHOLDERS                          |
| Section 10.2               | SUPPLEMENTAL INDENTURES WITH CONSENT OF  NOTEHOLDERS                             |
| Section 10.3               | EFFECT OF SUPPLEMENTAL INDENTURES                                                |
| Section 10.4               | NOTATION ON NOTES                                                                |
| Section 10.5               | EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL  INDENTURE TO BE FURNISHED TO THE TRUSTEE |

 

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| ARTICLE XI                                                      |
|-----------------------------------------------------------------|
|                                                            |
| CONSOLIDATION, MERGER, SALE, CONVEYANCE,  TRANSFER AND LEASE    |
|                                                            |
| Section 11.1                                                    | COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN  TERMS |
| Section 11.2                                                    | SUCCESSOR COMPANY TO BE SUBSTITUTED |
| Section 11.3                                                    | OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE |
|                                                            |
| ARTICLE XII                                                     |
|                                                            |
| SATISFACTION AND DISCHARGE OF INDENTURE;  UNCLAIMED MONEYS      |
|                                                            |
| Section 12.1                                                    | LEGAL DEFEASANCE AND COVENANT DEFEASANCE OF  THE NOTES |
| Section 12.2                                                    | TERMINATION OF OBLIGATIONS UPON  CANCELLATION OF THE NOTES |
| Section 12.3                                                    | SURVIVAL OF CERTAIN OBLIGATIONS |
| Section 12.4                                                    | ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE |
| Section 12.5                                                    | APPLICATION OF TRUST ASSETS |
| Section 12.6                                                    | REPAYMENT TO THE COMPANY; UNCLAIMED MONEY |
| Section 12.7                                                    | REINSTATEMENT |
|                                                            |
| ARTICLE XIII                                                    |
|                                                            |
| IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS |
|                                                            |
| Section 13.1                                                    | INDENTURE AND NOTES SOLELY CORPORATE  OBLIGATIONS |
|                                                            |
| ARTICLE XIV                                                     |
|                                                            |
| CONVERSION OF NOTES                                             |
|                                                            |
| Section 14.1                                                    | RIGHT TO CONVERT |
| Section 14.2                                                    | EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE  OF COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS |
| Section 14.3                                                    | MANDATORY CONVERSION |
| Section 14.4                                                    | CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES |
| Section 14.5                                                    | CONVERSION PRICE |
| Section 14.6                                                    | ADJUSTMENT OF CONVERSION PRICE |
| Section 14.7                                                    | EFFECT OF RECLASSIFICATION, CONSOLIDATION,  MERGER OR SALE |
| Section 14.8                                                    | TAXES ON SHARES ISSUED |
| Section 14.9                                                    | RESERVATION OF SHARES; SHARES TO BE FULLY  PAID; LISTING OF COMMON STOCK |

 

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| Section 14.10            | RESPONSIBILITY OF TRUSTEE                                                  |
|--------------------------|----------------------------------------------------------------------------|
| Section 14.11            | NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS                                 |
| Section 14.12            | SUPPLEMENTAL INDENTURE PRIOR TO ISSUANCE OF  NOTES IN DEFINITIVE FORM      |
|                     |
| ARTICLE XV               |
|                     |
| SUBORDINATION            |
|                     |
| Section 15.1             | AGREEMENT TO SUBORDINATE                                                   |
| Section 15.2             | CERTAIN DEFINITIONS                                                        |
| Section 15.3             | LIQUIDATION; DISSOLUTION; BANKRUPTCY                                       |
| Section 15.4             | DEFAULT ON SENIOR INDEBTEDNESS                                             |
| Section 15.5             | WHEN DISTRIBUTION MUST BE PAID OVER                                        |
| Section 15.6             | NOTICE BY COMPANY                                                          |
| Section 15.7             | SUBROGATION                                                                |
| Section 15.8             | RELATIVE RIGHTS                                                            |
| Section 15.9             | SUBORDINATION MAY NOT BE IMPAIRED BY  COMPANY                              |
| Section 15.10            | DISTRIBUTION OR NOTICE TO REPRESENTATIVE                                   |
| Section 15.11            | RIGHTS OF TRUSTEE AND PAYING AGENT                                         |
| Section 15.12            | AUTHORIZATION TO EFFECT SUBORDINATION                                      |
| Section 15.13            | CONVERSIONS NOT DEEMED PAYMENT                                             |
| Section 15.14            | AMENDMENTS                                                                 |
|                     |
| ARTICLE XVI              |
|                     |
| MISCELLANEOUS PROVISIONS |
|                     |
| Section 16.1             | POOLING OF INTERESTS                                                       |
| Section 16.2             | PROVISIONS BINDING ON COMPANY’S SUCCESSORS                            |
| Section 16.3             | OFFICIAL ACTS BY SUCCESSOR COMPANY                                         |
| Section 16.4             | ADDRESSES FOR NOTICES, ETC                                                 |
| Section 16.5             | COMMUNICATIONS BY HOLDERS WITH OTHER  HOLDERS                              |
| Section 16.6             | GOVERNING LAW                                                              |
| Section 16.7             | EVIDENCE OF COMPLIANCE WITH CONDITIONS  PRECEDENT; CERTIFICATES TO TRUSTEE |
| Section 16.8             | LEGAL HOLIDAYS                                                             |
| Section 16.9             | NO SECURITY INTEREST CREATED                                               |
| Section 16.10            | TRUST INDENTURE ACT                                                        |
| Section 16.11            | TRUST INDENTURE ACT CONTROLS                                               |
| Section 16.12            | BENEFITS OF INDENTURE                                                      |
| Section 16.13            | TABLE OF CONTENTS, HEADINGS ETC                                            |
| Section 16.14            | AUTHENTICATING AGENT                                                       |
| Section 16.15            | EXECUTION IN COUNTERPARTS                                                  |

 

vi

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INDENTURE,dated as of February 12, 2003, 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, forits lawful corporate purposes, the Company has duly authorized the issuance ofits 6-1/4% Convertible Subordinated Notes Due 2008 (the “Notes”), in anaggregate principal amount not to exceed $45,000,000 and to provide the termsand conditions upon which the Notes are to be authenticated, issued anddelivered, the Company has duly authorized the execution and delivery of thisIndenture; and

 

WHEREAS, theNotes will be originally issued solely in global form, and in the event thatthe Company issues Notes in definitive form, such issuance will be accompaniedby a supplement to this Indenture including the form of definitive Notes andprovisions for conversion of the Notes under Article XIV hereunder; and

 

WHEREAS, theNotes, the certificate of authentication to be borne by the Notes, a form ofassignment, a form of option to require repurchase by the Company upon a Changeof Control (as hereinafter defined), and a certificate of transfer to be borneby the Notes are to be substantially in the forms hereinafter provided for; and

 

WHEREAS, allacts and things necessary to make the Notes, when executed by the Company andauthenticated and delivered by the Trustee or a duly authorized authenticatingagent, as in this Indenture provided, the valid, binding and legal obligationsof the Company, and to constitute these presents a valid agreement according toits terms, have been done and performed, and the execution of this Indentureand the issuance hereunder of the Notes have in all respects been dulyauthorized.

 

NOW,THEREFORE, THIS INDENTURE WITNESSETH:

 

That in orderto declare the terms and conditions upon which the Notes are, and are to be,authenticated, issued and delivered, and in consideration of the premises andof the purchase and acceptance of the Notes by the holders thereof, the Companycovenants and agrees with the Trustee for the equal and proportionate benefitof the respective holders from time to time of the Notes (except as otherwiseprovided below) as follows:

 

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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 otherwiserequires) for all purposes of this Indenture and of any indenture supplementalhereto shall have the respective meanings specified in this Section 1.1.  All other terms used in this Indenture thatare defined in the Trust Indenture Act (as hereinafter defined) or that are byreference defined in the Securities Act (as hereinafter defined), except asherein otherwise expressly provided for or unless the context otherwiserequires, shall have the meanings assigned to such terms in said TrustIndenture Act and in said Securities Act as in force on the date of thisIndenture.  The words “herein,”“hereof,” “hereunder” and words of similar import refer to this Indenture as awhole and not to any particular Article or Section.

 

ACQUISITION PRICE: The term “AcquisitionPrice” shall mean the weighted average price paid by the person or group inacquiring the Voting Stock.

 

AFFILIATE: An “Affiliate” of any specifiedperson shall mean an “affiliate” as defined in Rule 144(a) as promulgated underthe Securities Act.

 

BOARD OF DIRECTORS: The term “Board ofDirectors” shall mean the Board of Directors of the Company or a committee ofsuch 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 AssistantSecretary of the Company to have been duly adopted by the Board of Directorsand to be in full force and effect on the date of such certification.

 

BUSINESS DAY: The term “Business Day” shallmean a day, other than a Saturday, a Sunday or a day on which the bankinginstitutions in the State and City of New York are authorized or obligated bylaw or executive order to close or a day that is declared a national or NewYork state holiday.

 

CAPITAL STOCK: The term “Capital Stock” ofany person shall mean any and all shares, interests, participations or otherequivalents (however designated) of such person’s corporate stock or any andall equivalent ownership interests in a person (other than a corporation)whether now outstanding or issued after the date hereof.

 

CASH EQUIVALENT NOTES: The term “CashEquivalent Notes” shall have the meaning specified in Section 14.1(b).

 

CEDE: The term “Cede” shall mean Cede &Co., a nominee of the Depository.

 

CHANGE OF CONTROL: The term “Change ofControl” shall have the meaning specified in Section 3.5(d).

 

2

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CHANGE OF CONTROL PURCHASE PRICE: The term“Change of Control Purchase Price” shall have the meaning specified in Section3.5(a).

 

CHANGE OF CONTROL PURCHASE DATE: The term“Change of Control Purchase Date” shall have the meaning specified in Section3.5(a).

 

CHANGE OF CONTROL OFFER: The term “Change ofControl Offer” shall have the meaning specified in Section 3.5(a).

 

COMMISSION: The term “Commission” shall meanthe United States Securities and Exchange Commission, as from time to timeconstituted, created under the Exchange Act or, if at any time after theexecution of this instrument such Commission is not existing and performing theduties now assigned to it under the Trust Indenture Act, the body performingsuch duties at such time.

 

COMMON STOCK: The term “Common Stock” shallmean any stock of any class of the Company that does not have a preference inrespect of dividends or of amounts payable in the event of any voluntary orinvoluntary liquidation, dissolution or winding up of the Company and that isnot subject to redemption by the Company. Subject to the provisions of Section 14.6, however, shares issuable onconversion of Notes shall include only shares of the class designated as commonstock of the Company at the date of this Indenture or shares of any class orclasses resulting from any reclassification or reclassifications thereof and thatdo not have a preference in respect of dividends or of amounts payable in theevent of any voluntary or involuntary liquidation, dissolution or winding up ofthe Company and that are not subject to redemption by the Company; providedthat if at any time there shall be more than one such resulting class, theshares of each such class then so issuable shall be substantially in theproportion that the total number of shares of such class resulting from allsuch reclassification bears to the total number of shares of all such classesresulting from all such reclassifications.

 

COMPANY: The term “Company” shall mean PennTreaty American Corporation, a Pennsylvania corporation, and subject to theprovisions 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: Theterm “Corporate Trust Office of the Trustee,” or other similar term, shall meanthe office of the Trustee at which at any particular time its corporate trustbusiness shall be principally administered, from its office which is, locatedat 6th Street & Marquette Avenue, MAC N9303-110, Minneapolis,Minnesota 55479.  The Trustee alsomaintains an office at 45 Broadway, 12th Floor, MAC N2666-120, NewYork, New York 10006, at which office it is authorized to receive noticeshereunder.

 

COVENANT DEFEASANCE: The term “covenantdefeasance” shall have the meaning specified in Section 12.1(c).

 

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CUSTODIAN: The term “Custodian” shall meanthe Trustee, as custodian for Cede pursuant to Section 2.5 with respect to theNotes in global form, or any successor entity thereto.

 

DEFAULT: The term “default” shall mean anyevent that is, or after notice or passage of time, or both, would be, an Eventof Default.

 

DEFAULTED INTEREST: The term “DefaultedInterest” shall have the meaning specified in Section 2.3.

 

DEFINITIVE NOTES; IN DEFINITIVE FORM: Theterm “definitive Notes” shall mean the Notes in definitive form.  Any reference to Notes “in definitive form”shall mean definitive Notes, and any reference to securities “in definitiveform” 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 globalform, the person specified in Section 2.5(b) as the Depository with respect tothe Notes, until a successor shall have been appointed and become such pursuantto the applicable provisions of this Indenture, and thereafter, “Depository”shall mean or include such successor.

 

DWAC: The term “DWAC” shall mean Deposit andWithdrawal 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” shallmean the Securities Exchange Act of 1934, as amended, and the rules andregulations promulgated thereunder.

 

EXPIRATION TIME: The term “Expiration Time”shall have the meaning specified in Section 14.6(f).

 

GLOBAL NOTE: The term “Global Note” shallmean the note in global form as specified in Exhibit A.

 

INDENTURE: The term “Indenture” shall meanthis instrument as originally executed or, if amended or supplemented as hereinprovided, as so amended or supplemented.

 

INTEREST PAYMENT DATE: The term “InterestPayment 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 DATE: The term“Mandatory Conversion Date” shall have the meaning specified in Section 14.3.

 

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MARKET CASH CONVERSION PRICE: The term“Market Cash Conversion Price” means with respect to any exchange, the averageof the closing prices of the Common Stock (or other securities, as the case maybe) for the ten Trading Day period (appropriately adjusted to take into accountthe occurrence during such period of certain events that would result in an adjustmentof the Conversion Price with respect to the Common Stock or otherconsideration) commencing on the first Trading Day after delivery of writtennotice by the Company to the Trustee and holders that the Company has electedto pay cash in lieu of delivering shares of Common Stock or othersecurities.  The period between the dateof delivery by a holder to an office or agency maintained by the Company of anotice of conversion as required pursuant to Section 14.2 hereof, and the dateof determination of the Market Cash Conversion Price may not exceed fifteenTrading Days.

 

NONPAYMENT DEFAULT: The term “NonpaymentDefault” 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% ConvertibleSubordinated 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 aparticular Note is registered on the Note registrar’s books.

 

NOTE REGISTER: The term “Note register” shallhave the meaning specified in Section 2.5(a).

 

NOTE REGISTRAR: The term “Note registrar” shallhave the meaning specified in Section 2.5(a).

 

OFFICERS’ CERTIFICATE: The term “Officers’Certificate,” when used with respect to the Company, shall mean a certificatesigned by two authorized officers which shall include (a) any of thePresident, the Chief Executive Officer, the Chief Operating Officer or theChief Financial Officer and (b) any Treasurer or Secretary or anyAssistant Secretary of the Company, that is delivered to the Trustee.  Each such certificate shall include thestatements provided for in Section 16.7 if and to the extent required by theprovisions of such Section.

 

OPINION OF COUNSEL: The term “Opinion ofCounsel” shall mean an opinion in writing signed by legal counsel, who may bean employee of or counsel to the Company or other counsel acceptable to theTrustee, that is delivered to the Trustee. Each such opinion shall include the statements provided for in Section16.7 if and to the extent required by the provisions of such Section.

 

OUTSTANDING: The term “outstanding” with referenceto Notes as of any particular time shall mean, subject to the provisions ofSection 8.4, all Notes authenticated and delivered by the Trustee under thisIndenture, except

 

### (a)                                  Notes theretoforecanceled by the Trustee or delivered to the Trustee for cancellation;

 

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### (b)                                 Notes, or portionsthereof, for which monies in the necessary amount shall have been deposited intrust with the Trustee for payment, redemption or repurchase; provided that ifsuch Notes are to be redeemed prior to the maturity thereof, notice of suchredemption shall have been given pursuant to Article III or provisionsatisfactory to the Trustee shall have been made for giving such notice;

###  

### (c)                                  Notes paid orconverted pursuant to Section 2.6 hereof or Notes in lieu of or in substitutionfor which other Notes shall have been authenticated and delivered pursuant tothe terms of Section 2.6 unless proof satisfactory to the Trustee is presentedthat any such Notes are held by BONA FIDE holders in due course; and

###  

### (d)                                 Notes converted intoCommon Stock or cash pursuant to Article XIV and Notes not deemed outstandingpursuant to Section 3.2 and 3.5.

###  

PAYMENT BLOCKAGE NOTICE: The term “PaymentBlockage 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 acorporation, an association, a partnership, an individual, a joint venture, ajoint stock company, a trust, an unincorporated organization or a government oran agency or a political subdivision thereof.

 

PREDECESSOR NOTE: The term “Predecessor Note”of any particular Note shall mean every previous Note evidencing all or aportion of the same debt as that evidenced by such particular Note; and, forthe purposes of this definition, any Note authenticated and delivered underSection 2.6 in lieu of a lost, destroyed or stolen Note shall be deemed toevidence 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” withrespect to any interest payment date shall have the meaning set forth inSection 2.3 hereof.

 

RESPONSIBLE OFFICER: The term “ResponsibleOfficer” with respect to the Trustee, shall mean an officer of the Trusteeassigned and duly authorized by the Trustee to administer its corporate trustmatters.

 

SECURITIES: The term “Securities” shall havethe 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 andregulations promulgated thereunder.

 

SUBSIDIARY: The term “Subsidiary” of anyspecified person shall mean (i) a corporation, a majority of whose CapitalStock with voting power under ordinary circumstances

 

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to elect directors is at thetime 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 Subsidiaryor Subsidiaries of such person or a Subsidiary or Subsidiaries of such persondirectly or indirectly, at the date of determination thereof, has at leastmajority ownership.

 

SUCCESSOR COMPANY: The term “SuccessorCompany” shall have the meaning specified in Section 11.1.

 

TRADING DAY: The term “Trading Day” shallmean (x) if the applicable security is listed or admitted for trading on theNew York Stock Exchange or another national security exchange, a day on whichthe New York Stock Exchange or such other national security exchange is openfor business or (y) if the applicable security is quoted on the Nasdaq NationalMarket, a day on which trades may be made thereon or (z) if the applicable securityis not so listed, admitted for trading or quoted, any day other than a Saturdayor Sunday or a day on which banking institutions in the State of New York areauthorized or obligated by law or executive order to close.

 

TRIGGER EVENT: The term “Trigger Event” shallhave the meaning specified in Section 14.6(d).

 

TRUST INDENTURE ACT: The term “TrustIndenture Act” shall mean the Trust Indenture Act of 1939, as amended, as itwas in force at the date of execution of this Indenture, except as provided in Sections10.3 and 14.6; provided that in the event said Trust Indenture Act of 1939 isamended after the date hereof, the term “Trust Indenture Act” shall mean, tothe extent required by such amendment, said Trust Indenture Act of 1939 as soamended.

 

TRUSTEE: The term “Trustee” shall mean WellsFargo Bank Minnesota, N.A., its successors and any corporation resulting fromor surviving any consolidation or merger to which it or its successors may be aparty and any successor trustee at the time serving as successor trusteehereunder.

 

U.S. GOVERNMENT OBLIGATIONS: The term “U.S.Government Obligations” shall mean securities that are (i) direct obligationsof the United States of America for the payment of which its full faith andcredit 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 thetimely payment of which is unconditionally guaranteed as a full faith andcredit obligation by the United States of America, which, in either case, arenot callable or redeemable at the option of the issuer thereof, and shall alsoinclude a depository receipt issued by a bank (as defined in Section 3(a)(2) ofthe Securities Act) as custodian with respect to any such U.S. GovernmentObligation 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 ofsuch depository receipt; provided that (except as required by law) suchcustodian is not authorized to make any deduction from the amount payable tothe holder of such depository receipt from any amount received by suchcustodian in respect of the U.S. Government Obligation or the specific paymentof principal of or interest on the U.S. Government Obligation evidenced by suchdepository receipt.

 

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VOTING STOCK: The term “Voting Stock” shallhave the meaning set forth in Section 3.5(e) hereof.

 

## Section 1.2                                      INCORPORATIONBY REFERENCE OF TRUST INDENTURE ACT.

##  

Whenever this Indenture refers to a provisionof the Trust Indenture Act, the provision is incorporated by reference in andmade a part of this Indenture.

 

The following Trust Indenture Act terms usedin this Indenture have the following meanings:

 

“INDENTURE SECURITIES” means the Notes;

 

“INDENTURE SECURITY HOLDER” means a holder ofNotes;

 

“INDENTURE TO BE QUALIFIED” means thisIndenture;

 

“INDENTURE TRUSTEE” or “INSTITUTIONALTRUSTEE” means the Trustee;

 

“OBLIGOR” on the Notes means the Company andany successor obligor under the Trust Indenture Act.

 

All other terms used in this Indenture thatare defined by the Trust Indenture Act, defined by Trust Indenture Actreference to another statute or defined by Commission rule under the TrustIndenture Act have the meanings so assigned to them.

 

## Section 1.3                                      RULESOF CONSTRUCTION.

##  

Unless the context otherwise requires:

 

#### (1)                                  aterm has the meaning assigned to it;

####  

#### (2)                                  anaccounting term not otherwise defined has the meaning assigned to it inaccordance with generally accepted accounting principles;

####  

#### (3)                                  “or”is not exclusive;

####  

#### (4)                                  wordsin the singular include the plural, and in the plural include the singular; and

####  

#### (5)                                  provisionsapply to successive events and transactions.

 

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ARTICLE II

 

ISSUE,DESCRIPTION, EXECUTION, REGISTRATIONAND EXCHANGE OF NOTES

 

Section 2.1                                      DESIGNATION,AMOUNT AND ISSUE OF NOTES.  The Notesshall be designated as “6-1/4% Convertible Subordinated Notes Due 2008.”  Notes not to exceed the aggregate principalamount of $45,000,000 upon the execution of this Indenture, or from time totime thereafter, may be executed by the Company and delivered to the Trusteefor authentication, and the Trustee shall thereupon authenticate and makeavailable for delivery said Notes upon the written order of the Company, signedby its (a) Chief Executive Officer, President, Chief Operating Officer orChief Financial Officer, and (b) any Treasurer or Secretary or anyAssistant Secretary, without any further action by the Company hereunder.

 

Section 2.2                                      FORMOF NOTES.

 

The Global Note shall represent all of theoutstanding Notes.  Payment of principalof and interest and premium, if any, on the Global Note shall be made inaccordance with the provisions of Section 2.3 hereof.

 

The terms and provisions contained in theform of Global Note attached as Exhibit A hereto shall constitute, and arehereby 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                                      DATEAND DENOMINATION OF NOTES; PAYMENTS OF INTEREST.  The Notes shall be issuable in registered form only withoutcoupons in denominations of $1,000 principal amount and integral multiplesthereof.  Every Note shall be dated thedate of its authentication, shall bear interest from January 30, 2003 and shallbe payable semiannually on each April 15 and October 15, commencingApril 15, 2003, as specified on the face of the form of Global Note,attached as Exhibit A hereto.

 

The person in whose name any Note (or itsPredecessor Note) is registered at the close of business on any record datewith respect to any interest payment date (including any Note that is convertedafter the record date and on or before the interest payment date) shall beentitled to receive the interest payable on such interest payment datenotwithstanding the cancellation of such Note upon any transfer, exchange orconversion subsequent to the record date and prior to such interest paymentdate.  Interest may, at the option ofthe Company, be paid by check mailed to the address of such person as itappears on the Note register; provided that, with respect to any holder of Noteswith an aggregate principal amount equal to or in excess of $5,000,000, at therequest (such request to include appropriate wire instructions) of such holderin writing to the Trustee on or before the record date preceding any interestpayment date, interest on such holder’s Notes shall be paid by wire transfer inimmediately available funds.  The term“record date” with respect to any interest payment date shall mean theApril 1 or October 1 preceding said April 15, or October 15.

 

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None of the Company, the Trustee or anypaying agent shall have any responsibility or liability for any aspect of therecords relating to or payment made on account of beneficial ownershipinterests in the Global Note or for maintaining, supervising or reviewing anyrecords relating to such beneficial ownership interests.

 

Interest on the Notes shall be computed onthe basis of a 360-day year composed of twelve 30-day months.

 

Any interest on any Note that is payable, butis not punctually paid or duly provided for, on any said April 15, orOctober 15, (herein called “Defaulted Interest”) shall forthwith cease tobe payable to the Noteholder on the relevant record date by virtue of hishaving been such Noteholder; and such Defaulted Interest shall be paid by theCompany, at its election in each case, as provided in clause (1) or (2) below:

 

#### (1)                                  TheCompany may elect to make payment of any Defaulted Interest to the persons inwhose names the Notes (or their respective Predecessor Notes) are registered atthe close of business on a special record date for the payment of suchDefaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee inwriting of the amount of Defaulted Interest to be paid on each Note and thedate of the payment (which shall be not less than 25 days after the receipt bythe Trustee of such notice, unless the Trustee shall consent to an earlierdate), and at the same time, the Company shall deposit with the Trustee an amountof money equal to the aggregate amount to be paid in respect of such DefaultedInterest or shall make arrangements satisfactory to the Trustee for suchdeposit prior to the date of the proposed payment, such money when deposited tobe held in trust for the benefit of the persons entitled to such DefaultedInterest as in this clause provided. Thereupon, the Trustee shall fix a special record date for the paymentof such Defaulted Interest, which shall be not more than 15 days and not lessthan 10 days prior to the date of the payment and not less than 10 days afterthe receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify theCompany of such special record date and, in the name and at the expense of theCompany, shall cause notice of the payment of such Defaulted Interest and thespecial record date therefor to be mailed, first-class postage prepaid, to eachNoteholder at his address as it appears in the Note register, not less than 10days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and thespecial record date therefor having been so mailed, such Defaulted Interestshall be paid to the persons in whose names the Notes (or their respectivePredecessor Notes) were registered at the close of business on such specialrecord date and shall no longer be payable pursuant to the following clause(2).

####  

#### (2)                                  TheCompany may make payment of any Defaulted Interest in any other lawful mannernot inconsistent with the requirements of any securities exchange on which theNotes 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 paymentpursuant to this clause, such manner of payment shall be deemed practicable bythe Trustee.

 

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Section 2.4                                      EXECUTIONOF NOTES.  The Notes shall be signed inthe name and on behalf of the Company by the signature of its Chief ExecutiveOfficer, President, Chief Operating Officer or Chief Financial Officer andattested by the signature of its Treasurer, Secretary or any of its AssistantSecretaries (any of which signatures may be printed, engraved or otherwisereproduced thereon, by facsimile or otherwise).  Only such Notes as shall bear thereon a certificate ofauthentication substantially in the form set forth on the form of Note attachedas Exhibit A hereto, manually executed by the Trustee (or an authenticatingagent appointed by the Trustee as provided by Section 16.14), shall be entitledto the benefits of this Indenture or be valid or obligatory for anypurpose.  Such certificate by theTrustee (or such an authenticating agent) upon any Note executed by the Companyshall be conclusive evidence that the Note so authenticated has been dulyauthenticated and delivered hereunder and that the holder is entitled to thebenefits of this Indenture.

 

In case any officer of the Company who shallhave signed any of the Notes shall cease to be such officer before the Notes sosigned shall have been authenticated and delivered by the Trustee, or disposedof by the Company, such Notes nevertheless may be authenticated and deliveredor disposed of as though the person who signed such Notes had not ceased to besuch officer of the Company; and any Note may be signed on behalf of theCompany 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 theexecution of this Indenture any such person was not such an officer.

 

## Section 2.5                                      EXCHANGEAND TRANSFER OF NOTES; RESTRICTIONS ON TRANSFER; DEPOSITORY.

##  

Any exchange or transfer of all or a part ofthe Global Note for definitive Notes pursuant to this Section 2.5 will beaccompanied by a supplemental indenture that will include the form of suchdefinitive Notes and provisions for conversion of the Notes under Article XIV.

 

### (a)                                  The Company shallcause to be kept at the Corporate Trust Office of the Trustee a register (theregister maintained in such office and in any other office or agency of theCompany designated pursuant to Section 4.2 being herein sometimes collectivelyreferred to as the “Note register”) in which, subject to such reasonableregulations as it may prescribe, the Company shall provide for the transfers ofNotes.  Such Note register shall be inwritten form or in any form capable of being converted into written form withina reasonable period of time.  The Trusteeis hereby appointed “Note registrar” for the purpose of transfers of Notes asherein provided.  The Company mayappoint one or more co-registrars.

###  

Upon surrender for registration of transferof any Note to the Note registrar or any co-registrar and satisfaction of therequirements for such transfer set forth in this Section 2.5, the Company shallexecute, and the Trustee shall authenticate and make available for delivery, inthe name of the designated transferee or transferees, one or more new Notes ofany authorized denominations and of a like aggregate principal amount may be requiredby Section 2.5(b).

 

Notes may be exchanged for other Notes of anyauthorized denominations and of a like aggregate principal amount, uponsurrender of the Notes to be exchanged at any such office or agency.  Whenever any Notes are so surrendered forexchange, the Company shall

 

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execute, and the Trustee shallauthenticate and make available for delivery, the Notes that the Noteholdermaking the exchange is entitled to receive bearing certificate numbers notcontemporaneously outstanding.

 

All Notes presented or surrendered forregistration 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 beaccompanied by a written instrument of transfer in form satisfactory to theCompany, executed by the Noteholder thereof or his attorney duly authorized inwriting.

 

No service charge shall be charged to theNoteholder for any exchange or registration of transfer of Notes, but theCompany may require payment of a sum sufficient to cover any tax, assessmentsor other governmental charges that may be imposed in connection therewith.

 

None of the Company, the Trustee, the Noteregistrar or any co-registrar shall be required to exchange or register atransfer of (a) any Notes for a period of 15 days next preceding themailing 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 portionthereof selected or called for redemption, (c) any Notes surrendered forconversion or, if a portion of any Note is surrendered for conversion, suchportion thereof surrendered for conversion or (d) any Notes surrenderedfor repurchase pursuant to Section 3.5 or, if a portion of any Note issurrendered for repurchase pursuant to Section 3.5, such portion thereofsurrendered for repurchase pursuant to Section 3.5.

 

All Notes issued upon any transfer orexchange of Notes shall be the valid obligations of the Company, evidencing thesame debt and entitled to the same benefits under this Indenture as the Notessurrendered upon such registration of transfer or exchange.  All Notes, the transfer and/or exchange ofwhich is effectuated by the Trustee pursuant to this Section 2.5, shall beaccompanied by an Officers’ Certificate of the Company, certifying that suchtransfer, exchange and/or registration is authorized by the Company andpermitted hereunder.

 

Any transfer of a beneficial interest in theGlobal Note that cannot be effected through book-entry settlement must beeffected by the delivery to the transferee (or its nominee) of a definitiveNote or Notes registered in the name of the transferee (or its nominee) on thebooks maintained by the Trustee, in accordance with the transfer instructionsset forth herein.  With respect to anysuch transfer, the Trustee or the Custodian, at the direction of the Trustee,shall cause, in accordance with the standing instructions and procedures existingbetween the Depository and the Custodian, the aggregate principal amount of theGlobal Note to be reduced by the principal amount of the beneficial interest inthe Note being transferred and, following such reduction, the Company shallexecute and the Trustee shall authenticate and make available for delivery tothe transferee (or such transferee’s nominee, as the case may be), a definitiveNote or Notes in the appropriate aggregate principal amount in the name of suchtransferee (or its nominee).

 

Any transfer of a definitive Note or Notes mustbe effected by the delivery to the transferee (or its nominee) of a definitiveNote or Notes registered in the name of the transferee (or its nominee) on thebooks maintained by the Trustee.  Withrespect to any such transfer, the

 

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Company shall execute and theTrustee shall authenticate and make available for delivery to the transferee(or such transferee’s nominee, as the case may be), a definitive Note or Notesin the appropriate aggregate principal amount in the name of such transferee(or its nominee) and bearing such restrictive legends as may be required bythis Indenture.

 

### (b)                                 Notwithstanding anyother provisions of this Indenture (other than the provisions set forth in thisSection 2.5(b)), the Global Note may not be transferred as a whole except bythe Depository to a nominee of the Depository or by a nominee of the Depositoryto the Depository or another nominee of the Depository or by the Depository orany such nominee to a successor Depository or a nominee of such successorDepository.

###  

The Depository shall be a clearing agencyregistered under the Exchange Act.  TheCompany initially appoints The Depository Trust Company to act as Depositorywith respect to the Global Note. Initially, the Global Note shall be issued to the Depository, registeredin the name of Cede, as the nominee of the Depository, and deposited with theTrustee as Custodian for Cede.

 

Neither the Company nor the Trustee (or anyregistrar, paying agent or conversion agent under this Indenture) shall haveresponsibility for the performance by the Depository or its participants orindirect participants of its respective obligations under the rules andprocedures governing its operations. The Depository will take any action permitted to be taken by a holder ofNotes (including, without limitation, the presentation of Notes for exchange asdescribed below) only at the direction of one or more participants to whoseaccount with the Depository interests in the Global Note are credited, and onlyin respect of the principal amount of the Notes represented by the Global Noteas to which such participant or participants has or have given such direction.

 

If at any time the Depository for the GlobalNote notifies the Company that it is unwilling or unable to continue asDepository for such Notes, the Company may appoint a successor Depository withrespect to such Notes.  If a successorDepository for the Notes is not appointed by the Company within 90 days afterthe Company receives such notice, the Company shall execute, and the Trustee,upon receipt of an Officers’ Certificate for the authentication and delivery ofNotes, shall authenticate and make available for delivery, Notes in definitiveform, in an aggregate principal amount equal to the principal amount of theGlobal Note in exchange for the Global Note.

 

Definitive Notes issued in exchange for allor a part of the Global Note pursuant to this Section 2.5(b) shall beregistered in such names and in such authorized denominations as theDepository, pursuant to instructions from its direct or indirect participantsor otherwise, shall instruct the Trustee. Upon execution and authentication, the Trustee shall make available fordelivery such definitive Notes to the persons in whose names such definitiveNotes are so registered.

 

At such time as all interest in the GlobalNote has been redeemed, converted, repurchased or canceled, the Global Noteshall be, upon receipt thereof, canceled by the Trustee in accordance withstanding procedures and instructions existing between the Depository and theCustodian.  At any time prior to suchcancellation, if any interest in the Global Note is

 

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exchanged for definitive Notes,redeemed, repurchased, converted, canceled or transferred to a transferee whoreceives definitive Notes therefor or any definitive Note is exchanged ortransferred for part of the Global Note, the principal amount of the GlobalNote shall, in accordance with the standing procedures and instructionsexisting between the Depository and the Custodian, be reduced or increased, asthe case may be, and an endorsement shall be made on the Global Note by theTrustee or the Custodian, at the direction of the Trustee, to reflect such reductionor increase.

 

The Company and the Trustee may for allpurposes, including the making of payments due on the Notes, deal with theDepository as the authorized representative of the Noteholders for the purposesof exercising the rights of Noteholders hereunder.  The rights of the owner of any beneficial interest in the GlobalNote shall be limited to those established by law and agreements between suchowners and depository participants; provided that no such agreement shall giveany rights to any person against the Company or the Trustee without the writtenconsent of the parties so affected. Multiple requests, and directions from and votes of the Depository, asholder of notes in book-entry form with respect to any particular matter, shallnot be deemed inconsistent to the extent they do not represent an amount ofnotes in excess of those held in the name of the Depository or its nominee.

 

### (c)                                  Each holder or formerholder of a Note agrees to indemnify the Company and the Trustee against anyliability that may result from the transfer, exchange or assignment of suchholder’s or former holder’s Note in violation of any provision of thisIndenture and/or applicable U.S. federal or state securities law.

###  

Section 2.6                                      MUTILATED,DESTROYED, LOST OR STOLEN NOTES.  Incase any Note shall become mutilated or be destroyed, lost or stolen, theCompany in its discretion may execute, and upon its request, the Trustee or anauthenticating agent appointed by the Trustee shall authenticate and makeavailable for delivery a new Note bearing a number not contemporaneouslyoutstanding in exchange and substitution for the mutilated Note or in lieu ofand in substitution for the Note so destroyed, lost or stolen.  The Company may charge such applicant forthe expenses of the Company in replacing a Note.  In every case the applicant for a substituted Note shall furnishto the Company, to the Trustee and, if applicable, to such authenticating agentsuch security or indemnity as may be required by them to save each of themharmless from any loss, liability, cost or expense caused by or connected withsuch substitution, and in every case of destruction, loss or theft, theapplicant 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 mayauthenticate any such substituted Note and deliver the same upon the receipt ofsuch security or indemnity as the Trustee, the Company and, if applicable, suchauthenticating agent may require.  Uponthe issuance of any substituted Note, the Company may require the payment of asum sufficient to cover any tax or other governmental charge that may beimposed in relation thereto and any other expenses connected therewith.  In case any Note that has matured or isabout to mature or has been called for redemption or is about to be repurchasedor 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 orauthorize the payment of or convert or authorize the conversion of the

 

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same (without surrenderthereof, except in the case of a mutilated Note), as the case may be, if theapplicant for such payment or conversion shall furnish to the Company, to theTrustee and, if applicable, to such authenticating agent such security orindemnity as may be required by them to save each of them harmless from anyloss, liability, cost or expense caused by or connected with such substitution,and in case of destruction, loss or theft, evidence satisfactory to theCompany, the Trustee and, if applicable, any paying agent or conversion agentof the destruction, loss or theft of such Note and of the ownership thereof.

 

Every substitute Note issued pursuant to theprovisions of this Section 2.6 in lieu of any Note that is destroyed, lost orstolen shall constitute an additional contractual obligation of the Company,whether or not the destroyed, lost or stolen Note shall be enforceable byanyone, and shall be entitled to all the benefits of (but shall be subject toall the limitations set forth in) this Indenture equally and proportionately withany and all other Notes duly issued hereunder. To the extent permitted by law, all Notes shall be held and owned uponthe express condition that the foregoing provisions are exclusive with respectto the replacement or payment or conversion of mutilated, destroyed, lost orstolen Notes and shall preclude any and all other rights or remediesnotwithstanding any law or statute existing or hereafter enacted to thecontrary with respect to the replacement or payment or conversion of negotiableinstruments or other securities without their surrender.

 

Section 2.7                                      TEMPORARYNOTES.  Pending the preparation ofdefinitive Notes, the Company may execute and the Trustee or an authenticatingagent appointed by the Trustee shall, upon written request of the Company, authenticateand make available for delivery temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in anyauthorized denomination and shall be substantially in the form of thedefinitive Notes but with such omissions, insertions and variations as may beappropriate for temporary Notes, all as may be determined by the Company.  Every such temporary Note shall be executedby the Company and authenticated by the Trustee or such authenticating agentupon the same conditions and in substantially the same manner, and with thesame effect, as the definitive Notes. Without unreasonable delay the Company shall execute and deliver to theTrustee or such authenticating agent definitive Notes (other than in the caseof Notes in global form) and thereupon any or all temporary Notes (other thanthe Global Note) may be surrendered in exchange therefor, at each office oragency maintained by the Company pursuant to Section 4.2 and the Trustee orsuch authenticating agent shall authenticate and make available for delivery inexchange for such temporary Notes an equal aggregate principal amount ofdefinitive Notes.  Such exchange shallbe made by the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Notes shallin all respects be entitled to the same benefits and subject to the samelimitations under this Indenture as definitive Notes authenticated anddelivered hereunder.

 

Section 2.8                                      CANCELLATIONOF NOTES PAID, ETC.  All Notessurrendered for the purpose of payment, redemption, repurchase, conversion,exchange or registration of transfer shall, if surrendered to the Company orany paying agent or any Note registrar or any conversion agent, be surrenderedto 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 thereofexcept as expressly permitted by any of the provisions of this Indenture.  If required by the Company, the Trusteeshall return canceled Notes to the Company. If the Company shall

 

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acquire any of the Notes, suchacquisition shall not operate as a redemption or satisfaction of theindebtedness represented by such Notes unless and until the same are deliveredto the Trustee for cancellation.

 

Section 2.9                                      CUSIPNUMBERS.  The Company in issuing theNotes may use “CUSIP” numbers (if then generally in use), and, if so, theTrustee shall use CUSIP numbers in notices of redemption as a convenience toholders; provided that any such notice may state that no representation is madeas to the correctness of such numbers either as printed on the Notes or ascontained in any notice of a redemption and that reliance may be placed only onthe other identification numbers printed on the Notes, and any such redemptionshall not be affected by any defect in or omission of such numbers.  The Company shall promptly notify theTrustee of any change in the CUSIP numbers.

 

# ARTICLE III

#  

# REDEMPTION AND REPURCHASE OF NOTES

#  

Section 3.1                                      REDEMPTIONPRICES.  The Notes are not redeemable atthe option of the Company prior to October 15, 2005.  At any time on or after that date, the Notesmay be redeemed at the Company’s option, upon notice as set forth in Section3.2, in whole at any time or in part from time to time, at the redemption priceof 100% of principal amount of Notes plus accrued and unpaid interest.

 

Section 3.2                                      NOTICEOF REDEMPTION; SELECTION OF NOTES.  Incase the Company shall desire to exercise the right to redeem all or, as thecase may be, any part of the Notes pursuant to Section 3.1, it shall fix a datefor redemption and, in the case of any redemption pursuant to Section 3.1, itor, at its written request accompanied by the proposed form of notice ofredemption (which must be received by the Trustee at least 45 days prior to thedate 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 orcause to be mailed a notice of such redemption at least 30 and not more than 60days prior to the date fixed for redemption to the holders of Notes so to beredeemed as a whole or in part at their last addresses as the same appear onthe Note register, provided that subject to the approval of the form of noticeby the Trustee if the Company shall give such notice, it shall also give suchnotice, 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 hereinprovided, shall be conclusively presumed to have been duly given, whether ornot the holder receives such notice.  Inany case, failure to give such notice by mail or any defect in the notice tothe holder of any Note designated for redemption as a whole or in part shallnot affect the validity of the proceedings for the redemption of any otherNote.

 

Each such notice of redemption shall identifythe Notes to be redeemed (including CUSIP numbers), specify the aggregateprincipal amount of Notes to be redeemed, the date fixed for redemption, theredemption price at which Notes are to be redeemed, the place or places ofpayment, that payment shall be made upon presentation and surrender of suchNotes, that interest accrued to the date fixed for redemption shall be paid asspecified in said notice and that on and after said date, interest thereon oron the portion thereof to be redeemed shall cease to accrue.  Such notice shall also state the currentConversion Price and the date on which the right to

 

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convert such Notes or portionsthereof into Common Stock shall expire. If fewer than all the Notes are to be redeemed, the notice of redemptionshall identify the Notes to be redeemed. In case any Note is to be redeemed in part only, the notice ofredemption shall state the portion of the principal amount thereof to beredeemed and shall state that on and after the date fixed for redemption, uponsurrender of such Note, a new Note or Notes in principal amount equal to theunredeemed portion thereof shall be issued.

 

On or prior to the Business Day prior to theredemption date specified in the notice of redemption given as provided in thisSection 3.2, the Company shall deposit by 11:00 a.m. Eastern Time with theTrustee or with one or more paying agents (or, if the Company is acting as itsown paying agent, set aside, segregate and hold in trust as provided in Section4.4) an amount of money sufficient to redeem on the redemption date all theNotes so called for redemption (other than those theretofore surrendered forconversion 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 isconverted pursuant hereto, any money deposited with the Trustee or any payingagent or so segregated and held in trust for the redemption of such Note shallbe paid to the Company upon its written request or, if then held by theCompany, shall be discharged from such trust. If fewer than all the Notes are to be redeemed, the Company shall givethe Trustee written notice in the form of an Officers’ Certificate not fewerthan 45 days (or such shorter period of time as may be acceptable to theTrustee) prior to the redemption date as to the aggregate principal amount ofNotes to be redeemed.

 

If fewer than all the Notes are to beredeemed, 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, inits discretion, on a PRO RATA basis.  Ifany Note selected for partial redemption is converted in part after suchselection, the converted portion of such Note shall be deemed (so far as maybe) to be the portion to be selected for redemption.  The Notes (or portions thereof) so selected shall be deemed dulyselected for redemption for all purposes hereof, notwithstanding that any suchNote is converted as a whole or in part before the mailing of the notice ofredemption.

 

Upon any redemption of less than all Notes,the Company and the Trustee may treat as outstanding any Notes surrendered forconversion during the period of 15 days next preceding the mailing of a noticeof redemption and need not treat as outstanding any Note authenticated anddelivered during such period in exchange for the unconverted portion of anyNote converted in part during such period.

 

Section 3.3                                      PAYMENTOF NOTES CALLED FOR REDEMPTION.  Ifnotice of redemption has been given as above provided, the Notes or portion ofNotes with respect to which such notice has been given shall, unless convertedinto Common Stock pursuant to the terms hereof, become due and payable on thedate and at the place or places stated in such notice at the applicableredemption price, together with interest thereon accrued to the date fixed forredemption, and on and after said date (unless the Company shall default in thepayment of such Notes at the redemption price, together with interest thereonaccrued to said date), interest on the Notes or portion of Notes so called forredemption shall cease to accrue, and such Notes shall cease after the close ofbusiness on the Business Day next preceding the date fixed for

 

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redemption to be convertibleinto Common Stock or cash and, except as provided in Sections 7.6 and 12.4, tobe entitled to any benefit or security under this Indenture, and the holdersthereof shall have no right in respect of such Notes except the right toreceive the redemption price thereof and unpaid interest thereon to the datefixed for redemption.  On presentationand surrender of such Notes at a place of payment in said notice specified, thesaid Notes or the specified portions thereof shall be paid and redeemed by theCompany at the applicable redemption price, together with interest accruedthereon to the date fixed for redemption; provided that any semi-annual paymentof interest becoming due on the date fixed for redemption shall be payable tothe holders of such Notes registered as such on the relevant record datesubject to the terms and provisions of Section 2.3 hereof.

 

Upon presentation of any Note redeemed inpart only, the Company shall execute and the Trustee shall authenticate andmake available for delivery to the holder thereof, at the expense of theCompany, a new Note or Notes, of authorized denominations, in principal amountequal to the unredeemed portion of the Notes so presented.

 

If any Note called for redemption shall notbe so paid upon surrender thereof for redemption, the principal and premium, ifany, shall, until paid or duly provided for, bear interest from the date fixedfor redemption at the rate borne by the Note and such Note shall remainconvertible into Common Stock until the principal and premium, if any, shall havebeen paid or duly provided for.

 

Section 3.4                                      CONVERSIONARRANGEMENT ON CALL FOR REDEMPTION.  Inconnection with any redemption of Notes, with notice to the Trustee, theCompany may arrange for the purchase and conversion of any Notes by anagreement with one or more investment bankers or other purchasers to purchasesuch Notes by paying to the Trustee in trust for the Noteholders, on or priorto the close of business one Business Day prior to the date fixed forredemption, an amount not less than the applicable redemption price, togetherwith interest accrued to the date fixed for redemption, of such Notes.  Notwithstanding anything to the contrarycontained in this Article III, the obligation of the Company to pay theredemption price of such Notes, together with interest accrued to the datefixed for redemption, shall be deemed to be satisfied and discharged to theextent such amount is so paid by such purchasers.  If such an agreement is entered into, a copy of which shall befiled with the Trustee prior to the date fixed for redemption, any Notes notduly surrendered for conversion by the holders thereof may, at the option ofthe Company, be deemed, to the fullest extent permitted by law, acquired bysuch purchasers from such holders and (notwithstanding anything to the contrarycontained in Article XIV) surrendered by such purchasers for conversion, priorto the close of business on the date fixed for redemption (and the right toconvert any such Notes shall be deemed to have been extended through suchtime), subject to payment of the above amount as aforesaid.  At the direction of the Company, the Trusteeshall hold and dispose of any such amount paid to it in the same manner as itwould 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 andconversion of any Notes shall increase or otherwise affect any of the powers,duties, responsibilities or obligations of the Trustee as set forth in thisIndenture, and the Company agrees to indemnify the Trustee from, and hold itharmless against, any loss, liability or expense arising out of or inconnection with any such arrangement for the purchase and conversion of anyNotes between the Company and such purchasers including the costs and

 

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expenses incurred by theTrustee in the defense of any claim or liability arising out of or inconnection with the exercise or performance of any of its powers, duties,responsibilities or obligations under this Indenture.

 

## Section 3.5                                      REPURCHASEOF NOTES UPON A CHANGE OF CONTROL.

##  

### (a)                                  If a Change ofControl shall occur at any time, then each holder of Notes shall have the rightto require that the Company repurchase such holder’s Notes in whole or in partin integral multiples of $1,000 at a purchase price (the “Change of ControlPurchase Price”) in cash in an amount equal to 101% of the principal amount ofsuch Notes, plus accrued and unpaid interest thereon, if any, to the purchasedate (the “Change of Control Purchase Date”) pursuant to the offer describedbelow (the “Change of Control Offer”) and in accordance with the otherprocedures set forth in this Indenture.

###  

### (b)                                 Within 30 days followingany Change of Control, the Company shall publish a notice in the Wall StreetJournal, notify the Trustee thereof and give written notice of such Change ofControl to each holder of Notes, by first-class mail, postage prepaid, at theNoteholder’s address appearing in the Note register, stating, among otherthings, (i) that a Change of Control has occurred, (ii) the Change of ControlPurchase Price, (iii) the Change of Control Purchase Date (which shall be aBusiness Day no earlier than 30 days nor later than 60 days from the date suchnotice is mailed, or such later date as is necessary to comply withrequirements under the Exchange Act), (iv) that any Note not tendered shallcontinue 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 ControlPurchase Price, any Notes accepted for payment pursuant to the Change ofControl Offer shall cease to accrue interest after the Change of ControlPurchase Date, (vi) that Noteholders electing to have any Notes purchasedpursuant 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 reverseof the Notes completed, to the Company at the address specified in the noticeprior to the close of business on the third Business Day preceding the Changeof Control Purchase Date, (vii) that Noteholders shall be entitled to withdrawtheir election if the Company receives, not later than the close of business onthe second Business Day preceding the Change of Control Purchase Date, atelegram, telex, facsimile transmission or letter setting forth the name of theNoteholder, the principal amount of Notes delivered for purchase, and astatement that such Noteholder is withdrawing his election to have such Notespurchased, and (viii) that Noteholders whose Notes are being purchased only inpart shall be issued new Notes equal in principal amount to the unpurchasedportion 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 therequirements of Rule 13e-4 and 14e-1 under the Exchange Act and any othersecurities laws and regulations thereunder to the extent such laws andregulations are applicable in connection with the repurchase of the Notes inconnection with a Change of Control.

###  

### (c)                                  On the Change ofControl Purchase Date, the Company shall, to the extent lawful, (i) accept for paymentNotes or portions thereof tendered pursuant to the Change of Control Offer,(ii) depositwith the Trustee in immediately available funds by 11:00 a.m. Eastern Time anamount equal to the Change of Control Purchase Price in respect of all Notes orportions thereof so tendered and (iii) deliveror cause to be delivered to the Trustee the Notes so accepted

 

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together with an Officers’Certificate stating the Notes or portions thereof tendered to the Company.  The Trustee shall promptly mail to eachNoteholder of Notes so accepted payment in an amount equal to the purchaseprice of such Notes, and the Trustee shall promptly authenticate and mail toeach Noteholder a new Note equal in principal amount to any unpurchased portionof the Notes surrendered, if any; provided that each such new Note shall be ina principal amount of $1,000 or an integral multiple thereof.  The Company shall publicly announce theresults of the Change of Control Offer on or as soon as practicable after theChange of Control Payment Date.

###  

### (d)                                 The term “Change inControl” 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 ExchangeAct) acquires “beneficial ownership” (as determined in accordance with Rule13d-3 under the Exchange Act), directly or indirectly, of more than 50% of thetotal Voting Stock of the Company at an Acquisition Price less than theconversion price then in effect with respect to the Notes and (ii) the holdersof the Common Stock receive consideration which is not all or substantially allcommon stock that is (or upon consummation of or immediately following suchevent or events will be) listed on a United States national securities exchangeor approved for quotation on the Nasdaq Stock Market or any similar UnitedStates system of automated dissemination of quotations of securities’ prices;provided, however, that any such person or group shall not be deemed to be thebeneficial owner of, or to beneficially own, any Voting Stock tendered in atender offer until such tendered Voting Stock is accepted for purchase underthe tender offer.

###  

### (e)                                  “Voting Stock” meansstock of the class or classes pursuant to which the holders thereof have thegeneral voting power under ordinary circumstances to elect at least a majorityof the board of directors, managers or trustees of a corporation (irrespectivewhether or not at the time stock of any other class or classes shall have ormight have voting power by reason of the happening of any contingency).

###  

# ARTICLE IV

#  

# PARTICULAR COVENANTS OF THE COMPANY

#  

Section 4.1                                      PAYMENTOF PRINCIPAL, PREMIUM AND INTEREST.  TheCompany covenants and agrees that it shall duly and punctually pay or cause tobe paid the principal of and premium, if any, and interest on each of the Notesat the places, at the respective times and in the manner provided herein and inthe Notes.  Any amounts of cash to begiven to the Trustee or paying agent shall be deposited with the Trustee orpaying agent in immediately available funds by 11:00 a.m. Eastern Time on orbefore the date such payment is to be made. Each installment of interest on the Notes due on any semi-annualinterest payment date may be paid by mailing checks for the interest payable toor upon the written order of the holders of Notes entitled thereto as theyshall appear on the Note register; provided that, with respect to any holder ofNotes 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 suchholder in writing to the Trustee, interest on such holder’s Notes shall be paidby wire transfer in immediately available funds.  An installment of principal or interest shall be considered paidon the date due if the Trustee or paying agent (other than the Company, aSubsidiary of the Company or any Affiliate of any of them) holds on that datemoney designated for and sufficient to pay the installment of

 

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principal or interest and isnot prohibited from paying such money to the holders of the Notes pursuant tothe terms of this Indenture.

 

Section 4.2                                      MAINTENANCEOF OFFICE OR AGENCY.  The Company shallmaintain in the Borough of Manhattan, The City of New York, an office or agencywhere the Notes may be surrendered for registration of transfer or exchange orfor presentation for payment or for conversion, redemption or repurchase andwhere notices and demands to or upon the Company in respect of the Notes and thisIndenture may be served.  The Companyshall give prompt written notice to the Trustee of the location, and any changein the location, of such office or agency. If at any time the Company shall fail to maintain any such office oragency or shall fail to furnish the Trustee with the address thereof, suchpresentations, surrenders, notices and demands may be made or served at theCorporate Trust Office of the Trustee.

 

The Company may also from time to timedesignate one or more other offices or agencies where the Notes may bepresented or surrendered for any or all such purposes and may from time to timerescind such designations; provided that no such designation or rescissionshall in any manner relieve the Company of its obligation to maintain an officeor agency in the Borough of Manhattan, The City of New York, for suchpurposes.  The Company shall give promptwritten notice to the Trustee of any such designation or rescission and of anychange in the location of any such other office or agency.

 

The Company hereby initially designates theTrustee as paying agent, Note registrar and conversion agent and the CorporateTrust Office of the Trustee, as offices or agencies of the Company for thepurposes 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 inSection 7.11(a).

 

Section 4.3                                      APPOINTMENTSTO FILL VACANCIES IN TRUSTEE’S OFFICE. The Company, whenever necessary to avoid or fill a vacancy in the officeof 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                                      PROVISIONSAS TO PAYING AGENT.

##  

### (a)                                  If the Company shallappoint a paying agent other than the Trustee, or if the Trustee shall appointsuch a paying agent, the Company or the Trustee, as the case may be, shallcause such paying agent to execute and deliver to the Trustee an instrument inwhich such agent shall agree with the Trustee, subject to the provisions ofthis Section 4.4:

###  

#### (1)                                  thatit shall hold all sums held by it as such agent for the payment of theprincipal of, premium, if any, or interest on the Notes (whether such sums havebeen paid to it by the Company or by any other obligor on the Notes) in trustfor the benefit of the holders of the Notes;

####  

#### (2)                                  thatit shall give the Trustee written notice of any failure by the Company (or byany 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 andpayable; and

 

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#### (3)                                  thatat any time during the continuance of an Event of Default, upon request of theTrustee, it shall forthwith pay to the Trustee all sums so held in trust.

####  

The Company shall, before each due date ofthe principal of, premium, if any, or interest on the Notes, deposit with thepaying agent a sum sufficient to pay such principal, premium, if any, orinterest, and (unless such paying agent is the Trustee) the Company shallpromptly notify the Trustee of any failure to take such action.

 

### (b)                                 If the Company shallact as its own paying agent, it shall, on or before each due date of theprincipal of, premium, if any, or interest on the Notes, set aside, segregateand hold in trust for the benefit of the holders of the Notes a sum sufficientto pay such principal, premium, if any, or interest so becoming due and shallnotify the Trustee of any failure to take such action and of any failure by theCompany (or any other obligor under the Notes) to make any payment of theprincipal of, premium, if any, or interest on the Notes when the same shallbecome due and payable.

###  

### (c)                                  Anything in thisSection 4.4 to the contrary notwithstanding, the Company may, at any time, forthe purpose of obtaining a satisfaction and discharge of this Indenture, or forany other reason, pay or cause to be paid to the Trustee all sums held in trustby 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 uponsuch payment by the Company or any paying agent to the Trustee, the Company orsuch paying agent shall be released from all further liability with respect tosuch sums.

###  

### (d)                                 Anything in thisSection 4.4 to the contrary notwithstanding, the agreement to hold sums intrust as provided in this Section 4.4 is subject to Sections 12.3 and 12.4.

###  

Section 4.5                                      CORPORATEEXISTENCE.  Subject to Article XI, theCompany shall do or cause to be done all things necessary to preserve and keepin full force and effect (i) its corporate existence, and the corporate,partnership or other existence of any Subsidiary of the Company, in accordancewith the respective organizational documents (as the same may be amended fromtime to time) of the Company or any such Subsidiary and (ii) the rights(charter and statutory), licenses and franchises of the Company and itsSubsidiaries; provided that the Company shall not be required to preserve anysuch right, license or franchise, or the corporate, partnership or otherexistence of any of its Subsidiaries if the Board of Directors shall determinethat the preservation thereof is no longer desirable in the conduct of thebusiness of the Company and its Subsidiaries, taken as a whole, and that theloss thereof is not materially adverse to the holders of the Notes.

 

Section 4.6                                      STAY,EXTENSION AND USURY LAWS.  The Companycovenants (to the extent that it may lawfully do so) that it shall not at anytime insist upon, plead or in any manner whatsoever claim or take the benefitor advantage of, any stay, extension or usury law or other law that wouldprohibit or forgive the Company from paying all or any portion of the principalof or interest on the Notes as contemplated herein, wherever enacted, now or atany time hereafter in force, or that may affect the covenants or theperformance of this Indenture; and the Company (to the extent it may lawfullydo so) hereby expressly waives all

 

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benefit or advantage of anysuch 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, butshall suffer and permit the execution of every such power as though no such lawhas been enacted.

 

## Section 4.7                                      COMPLIANCESTATEMENT; NOTICE OF DEFAULTS

##  

### (a)                                  The Company shalldeliver to the Trustee within 120 days after the end of each fiscal year of theCompany an Officers’ Certificate stating whether or not to the best knowledgeof the signers thereof the Company is in compliance (without regard to periodsof grace or notice requirements) with all conditions and covenants under thisIndenture, and if the Company shall not be in compliance, specifying suchnon-compliance and the nature and status thereof of which such signer may haveknowledge.

###  

### (b)                                 The Company shall filewith the Trustee written notice of the occurrence of any default or Event ofDefault within ten days of its becoming aware of any such default or Event ofDefault.

###  

Section 4.8                                      LIMITATIONON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.  The Company shall not, and shall not permitany of its Subsidiaries to, directly or indirectly, create or otherwise causeor suffer to exist or become effective any consensual encumbrance orrestriction on the ability of any Subsidiary to (i) pay dividends or makeany other distribution on its Capital Stock or with respect to any otherinterest or participation in, or measured by, its profits, or pay anyindebtedness owed to, the Company or a Subsidiary of the Company,(ii) make loans or advances to the Company or any Subsidiary of theCompany, or (iii) transfer any of its properties or assets to the Company.

 

Section 4.9                                      TAXES.  The Company shall pay or discharge or causeto be paid or discharged, before the same shall become delinquent, (i) alltaxes, assessments and governmental charges (including withholding taxes andany penalties, interest and additions to taxes) levied or imposed upon theCompany or its Subsidiaries or upon the income, profits or property of theCompany or any such Subsidiary and (ii) all lawful claims for labor, materialsand supplies that, if unpaid, might by law become a lien upon the property ofthe Company or any such Subsidiary; provided that the Company shall not berequired to pay or discharge or cause to be paid or discharged any such tax,assessment, charge or claim whose amount, applicability or validity is beingcontested in good faith by appropriate proceedings and for which disputedamounts adequate reserves have been made.

 

Section 4.10                                INSURANCE.  The Company shall provide, or cause to beprovided, for itself and its Subsidiaries, insurance (including appropriateself-insurance) against loss or damage of the kinds customarily insured againstby corporations similarly situated and owning like properties, including, butnot limited to, products liability insurance and public liability insurance,with reputable insurers or with the government of the United States of Americaor an agency or instrumentality thereof, in such amounts with such deductiblesand by such methods as shall be determined in good faith by the Board ofDirectors to be appropriate.

 

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# ARTICLE V

#  

# NOTEHOLDERS’ LISTS AND REPORTS BY THE COMPANY

#  

Section 5.1                                      NOTEHOLDERS’LISTS.  The Trustee shall preserve in ascurrent a form as is reasonably practicable the most recent list available toit 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 Dayspreceding each interest payment date and at such other times as the Trustee mayrequest in writing a list in such form and as of such date as the Trusteereasonably may require of the names and addresses of holders of Notes, and theCompany shall otherwise comply with Trust Indenture Act Section 312(a).

 

Section 5.2                                      REPORTSBY COMPANY.  The Company shall deliverto 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 theforegoing as the Commission may by its rules and regulations prescribe), ifany, which the Company is required to file with the Commission pursuant toSection 13 or 15(d) of the Exchange Act or pursuant to the immediatelyfollowing sentence.  So long as at least$5,000,000 aggregate principal amount of Notes remain outstanding, the Companyshall file with the Commission such reports as may be required pursuant toSection 13 of the Exchange Act in respect of a security registered pursuant toSection 12 of the Exchange Act, regardless of whether the Company is otherwiserequired to file such reports.  If theCompany is not subject to the reporting requirements of Section 13 or 15(d) ofthe Exchange Act (or otherwise required to file reports pursuant to theimmediately preceding sentence), the Company shall deliver to the Trustee,within 15 days after it would have been required to file such information withthe Commission were it required to do so, annual and quarterly financialstatements, including any notes thereto (and, in the case of a fiscal year end,an auditors’ report by an independent certified public accounting firm ofestablished national reputation), and a “Management’s Discussion and Analysisof Financial Condition and Results of Operations,” in each case substantiallyequivalent to that which it would have been required to include in suchquarterly or annual reports, information, documents or other reports if it hadbeen subject to the requirements of Section 13 or 15(d) of the ExchangeAct.  The Company shall provide copies ofthe foregoing materials to the Noteholders to the extent required by the TrustIndenture Act once this Indenture has been qualified.  The Company shall also comply with the other provisions of theTrust Indenture Act Section 314(a).

 

If the Company is not required to file thereports and information described above with the Commission, and the Company’sCommon Stock is still publicly held, the Company shall deliver an annualfinancial report for the Common Stock (as required by the Commission) to the Trusteeno later than 120 days from the end of its fiscal year and quarterly financialreports for the Common Stock (as required by the Commission) no later than 30days after the end of each quarter; provided, however, that if the Company’sCommon Stock is no longer publicly held, the Company shall deliver annual andquarterly reports to the Trustee at the same times as described in thisparagraph, but the Company shall not have to include management’s discussionand analysis of financial conditions and results of operations or descriptionof the business sections in such reports.

 

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Delivery of such reports, information anddocuments to the Trustee is for informational purposes only and the Trustee’sreceipt of such shall not constitute constructive notice of any informationcontained therein or determinable from information contained therein, includingthe Company’s compliance with any of its covenants hereunder (as to which theTrustee is entitled to rely exclusively on Officers’ Certificates).

 

# ARTICLE VI

#  

# DEFAULTS AND REMEDIES

#  

Section 6.1                                      EVENTSOF DEFAULT.  In case one or more of thefollowing Events of Default (whatever the reason for such Event of Default andwhether it shall be voluntary or involuntary or be effected by operation of lawor pursuant to any judgment, decree or order of any court or any order, rule orregulation of any administrative or governmental body) shall have occurred andbe continuing:

 

### (a)                                  default in thepayment of the principal of or premium, if any, on the Notes when due atmaturity, upon redemption or otherwise, including failure by the Company topurchase the Notes when required under Section 3.5 (whether or not such paymentshall be prohibited by Article XV of this Indenture); or

###  

### (b)                                 default in the paymentof any installment of interest on the Notes as and when the same shall becomedue and payable (whether or not such payment shall be prohibited by Article XVof this Indenture), and continuance of such default for a period of 30 days; or

###  

### (c)                                  a failure on the partof the Company to duly observe or perform any other covenants or agreements onthe part of the Company in this Indenture (other than a default in theperformance or breach of a covenant or agreement that is specifically dealtwith elsewhere in this Section 6.1) that continues for a period of 90 daysafter the date on which written notice of such failure, requiring the Companyto remedy the same, shall have been given to the Company by the Trustee, or tothe Company and a Responsible Officer of the Trustee, by the holders of atleast 25% in aggregate principal amount of the Notes at the time outstandingdetermined in accordance with Section 8.4; or

###  

### (d)                                 an event of defaultoccurs under any mortgage, indenture or instrument under which there may beissued or by which there may be secured or evidenced any indebtedness for moneyborrowed by the Company or any of its Subsidiaries (or the payment of which isguaranteed by the Company or any of its Subsidiaries), whether such indebtednessor guarantee now exists or shall be created after the date hereof, whichdefault (i) iscaused by a failure to pay principal or interest on such indebtedness prior tothe expiration of the grace period provided in such indebtedness (a “PaymentDefault”) or (ii) resultsin the acceleration of such indebtedness prior to its expressed maturity and,in each case, the principal amount of such indebtedness, together with theprincipal amount of any other such indebtedness under which there has been aPayment Default or the maturity of which has been so accelerated, aggregates$10,000,000 or more;

 

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### (e)                                  final judgments ordecrees shall be entered by a court of competent jurisdiction against theCompany or any Subsidiary involving liabilities of****$25,000,000or more (singly or in the aggregate) (after deducting the portion of suchliabilities accepted by a reputable insurance company) and such final judgmentsor decrees shall not have been vacated, discharged, satisfied or stayed pendingappeal within 60 days from the entry thereof;

###  

### (f)                                    the Company shallcommence a voluntary case or other proceeding seeking liquidation,reorganization or other relief with respect to itself or its debts under anybankruptcy, insolvency or other similar law now or hereafter in effect, orseeking the appointment of a trustee, receiver, liquidator, custodian or othersimilar official of it or any substantial part of its property, or shallconsent to any such relief or to the appointment of or taking possession by anysuch official in an involuntary case or other proceeding commenced against itor shall make a general assignment for the benefit of creditors or shall failgenerally to pay its debts as they become due; or

###  

### (g)                                 an involuntary case orother proceeding shall be commenced against the Company seeking liquidation,reorganization or other relief with respect to it or its debts under anybankruptcy, insolvency or other similar law now or hereafter in effect orseeking the appointment of a trustee, receiver, liquidator, custodian or othersimilar official of it or any substantial part of its property, and suchinvoluntary case or other proceeding shall remain undismissed and unstayed fora period of 60 consecutive days;

 

then, and in each and every such case (other than an Event of Defaultspecified in Section 6.1(f) or (g)), unless the principal of all of the Notesshall have already become due and payable, either the Trustee or the holders ofnot less than 25% in aggregate principal amount of the Notes then outstandinghereunder determined in accordance with Section 8.4, by notice in writing tothe Company (and to the Trustee if given by Noteholders), may declare theprincipal of, premium, if any, on the Notes and the interest accrued thereon tobe due and payable immediately, and upon any such declaration the same shallbecome and shall be immediately due and payable, anything in this Indenture orin the Notes contained to the contrary notwithstanding.  If an Event of Default specified in Section6.1(f) or (g) occurs and is continuing, the principal of all the Notes and theinterest accrued thereon shall be immediately due and payable.  The foregoing provision is subject to theconditions that if, at any time after the principal of the Notes shall havebeen so declared due and payable, and before any judgment or decree for thepayment of the monies due shall have been obtained or entered as hereinafterprovided, the Company shall pay or shall deposit with the Trustee a sum sufficientto pay all matured installments of interest upon all Notes and the principal ofand premium, if any, on any and all Notes that shall have become due otherwisethan by acceleration (with interest on overdue installments of interest (to theextent that payment of such interest is enforceable under applicable law) andon such principal and premium, if any, at the rate borne by the Notes, to thedate of such payment or deposit) and amounts due to the Trustee pursuant toSection 7.7, and if any and all defaults under this Indenture, other than thenonpayment of principal of, premium, if any, and accrued interest on Notes thatshall have become due by acceleration, shall have been cured or waived pursuantto Section 6.7, then and in every such case the holders of a majority inaggregate principal amount of the Notes then outstanding, by written notice tothe Company and to the Trustee, may waive all defaults or Events of Default andrescind and annul such declaration and its consequences; but no such waiver orrescission and annulment shall extend to or shall affect any subsequent

 

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default or Event of Default, or shall impair any right consequentthereto.  The Company shall notify aResponsible Officer of the Trustee, promptly upon becoming aware thereof, ofany Event of Default.

 

In case the Trustee shall have proceeded toenforce any right under this Indenture and such proceedings shall have beendiscontinued or abandoned because of such waiver or rescission and annulment orfor 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 Trusteeshall be restored respectively to their several positions and rights hereunder,and all rights, remedies and powers of the Company, the holders of Notes andthe Trustee shall continue as though no such proceeding had been taken.

 

Section 6.2                                      PAYMENTSOF NOTES ON DEFAULT; SUIT THEREFOR.  TheCompany covenants that (a) in case a default shall be made in the payment ofany installment of interest upon any of the Notes as and when the same shallbecome due and payable, and such default shall have continued for a period of30 days, or (b) in case default shall be made in the payment of the principalof or premium, if any, on any of the Notes as and when the same shall havebecome due and payable, whether at maturity of the Notes or in connection withany redemption or repurchase, by declaration or otherwise, then, upon demand ofthe Trustee, the Company shall pay to the Trustee, for the benefit of theholders of the Notes, the whole amount that then shall have become due andpayable on all such Notes for principal of, premium, if any, or interest, orboth, as the case may be, with interest upon the overdue principal, premium, ifany, and (to the extent that payment of such interest is enforceable underapplicable law) upon the overdue installments of interest at the rate borne bythe Notes; and, in addition thereto, such further amount as shall be sufficientto cover the costs and expenses of collection, including reasonablecompensation to the Trustee, its agents, attorneys and counsel, and anyexpenses or liabilities incurred by the Trustee hereunder other than throughits negligence or bad faith.  Until suchdemand by the Trustee, the Company may pay the principal of and premium, ifany, and interest on the Notes to the registered holders, whether or not theNotes are overdue.

 

In case the Company shall fail forthwith topay such amounts upon such demand, the Trustee, in its own name and as trusteeof an express trust, shall be entitled and empowered to institute any actionsor proceedings at law or in equity for the collection of the sums so due andunpaid and may prosecute any such action or proceeding to judgment or finaldecree, and may enforce any such judgment or final decree against the Companyor any other obligor on the Notes and collect in the manner provided by law outof the property of the Company or any other obligor on the Notes whereversituated the monies adjudged or decreed to be payable.

 

In case there shall be pending proceedingsfor the bankruptcy or for the reorganization of the Company or any otherobligor on the Notes under Title 11 of the United States Code or any otherapplicable law, or in case a receiver, assignee or trustee in bankruptcy orreorganization, liquidator, sequestrator or similar official shall have beenappointed for or taken possession of the Company or such other obligor, theproperty of the Company or such other obligor, or in the case of any otherjudicial proceedings relative to the Company or such other obligor upon theNotes, 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 bedue and payable as therein expressed or by declaration or otherwise andirrespective of whether the

 

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Trustee shall have made anydemand pursuant to the provisions of this Section 6.2, shall be entitled andempowered, by intervention in such proceedings or otherwise, to file and provea claim or claims for the whole amount of principal, premium, if any, andinterest owing and unpaid in respect of the Notes and, in case of any judicialproceedings, to file such proofs of claim and other papers or documents as maybe necessary or advisable in order to have the claims of the Trustee and of theNoteholders allowed in such judicial proceedings relative to the Company or anyother obligor on the Notes, its or their creditors, or its or their propertyand to collect and receive any monies or other property payable or deliverableon any such claims and to distribute the same after the deduction of anyamounts due the Trustee under Section 7.7; and any receiver, assignee ortrustee in bankruptcy or reorganization, liquidator, custodian or similarofficial is hereby authorized by each of the Noteholders to make such paymentsto the Trustee and, in the event that the Trustee shall consent to the makingof such payments directly to the Noteholders, to pay to the Trustee any amountdue 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 ofreasonable compensation, expenses, advances and disbursements out of the estatein any such proceedings shall be denied for any reason, payment of the sameshall be secured by a lien on, and shall be paid out of, any and alldistributions, dividends, monies, securities and other property that theholders of the Notes may be entitled to receive in such proceedings, whether inliquidation or under any plan of reorganization or arrangement or otherwise.

 

Nothing herein contained shall be deemed toauthorize the Trustee to authorize or consent to or adopt on behalf of anyNoteholder any plan of reorganization or arrangement affecting the Notes or therights of any Noteholder, or to authorize the Trustee to vote in respect of theclaim of any Noteholder in any such proceeding.

 

All rights of action and of asserting claimsunder this Indenture, or under any of the Notes, may be enforced by the Trusteewithout the possession of any of the Notes or the production thereof on anytrial or other proceeding relative thereto, and any such suit or proceedinginstituted by the Trustee shall be brought in its own name as trustee of anexpress trust, and any recovery of judgment shall, after provision for thepayment of the reasonable compensation, expenses, disbursements and advances ofthe Trustee, its agents and counsel, be for the ratable benefit of the holdersof the Notes.

 

In any proceedings brought by the Trusteepursuant to this Indenture or any supplement hereto (and in any proceedingsinvolving the interpretation of any provision of this Indenture to which theTrustee shall be a party), the Trustee shall be held to represent all theholders of the Notes, and it shall not be necessary to make any holders of theNotes parties to any such proceedings.

 

Section 6.3                                      APPLICATIONOF MONIES COLLECTED BY TRUSTEE.  Anymonies collected by the Trustee pursuant to this Article VI shall be applied inthe order following, at the date or dates fixed by the Trustee for thedistribution of such monies, upon presentation of the several Notes andstamping thereon the payment, if only partially paid, and upon surrenderthereof, if fully paid:

 

First: To the payment of all amounts due the Trustee underSection 7.7;

 

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Second: Subject to the provisions of Article XV, in case the principalof the outstanding Notes shall not have become due and be unpaid, to thepayment of interest on the Notes in default in the order of the maturity of theinstallments of such interest, with interest (to the extent that such interesthas been collected by the Trustee) upon the overdue installments of interest atthe rate borne by the Notes, such payments to be made ratably to the personsentitled thereto; and

 

Third: Subject to the provisions of Article XV, in case the principalof 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 uponthe Notes for principal, premium, if any, and interest, with interest on theoverdue principal and premium, if any, and (to the extent that such interesthas been collected by the Trustee) upon overdue installments of interest at therate borne by the Notes; and in case such monies shall be insufficient to payin full the whole amounts so due and unpaid upon the Notes, then to the paymentof such principal, premium, if any, and interest without preference or priorityof principal and premium, if any, over interest, or of interest over principaland premium, if any, or of any installment of interest over any otherinstallment of interest, or of any Note over any other Note, ratably to theaggregate of such principal and premium, if any, and accrued and unpaidinterest.

 

Section 6.4                                      PROCEEDINGSBY NOTEHOLDER.  No holder of any Noteshall have any right by virtue of or by availing of any provision of thisIndenture to institute any suit, action or proceeding in equity or at law uponor under or with respect to this Indenture, or for the appointment of areceiver, trustee, liquidator, custodian or other similar official, or for anyother remedy hereunder, unless such holder previously shall have given to theTrustee 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% inaggregate principal amount of the Notes then outstanding shall have madewritten request upon the Trustee to institute such action, suit or proceedingin its own name as Trustee hereunder and shall have offered to the Trustee suchreasonable indemnity as it may require against the costs, expenses andliabilities to be incurred therein or thereby, and the Trustee for 60 daysafter its receipt of such notice, request and offer of indemnity, shall haveneglected or refused to institute any such action, suit or proceeding, and nodirection inconsistent with such written request shall have been given to theTrustee pursuant to Section 6.7; it being understood and intended, and beingexpressly covenanted by the taker and holder of every Note with every othertaker and holder and the Trustee, that no one or more holders of Notes shallhave any right in any manner whatever by virtue of or by availing of anyprovision of this Indenture to affect, disturb or prejudice the rights of anyother holder of Notes, to obtain or seek to obtain priority over or preferenceto any other such holder or to enforce any right under this Indenture, exceptin the manner herein provided and for the equal, ratable and common benefit ofall holders of Notes (except as otherwise provided herein).  For the protection and enforcement of thisSection 6.4, each and every Noteholder and the Trustee shall be entitled tosuch relief as can be given either at law or in equity.

 

Notwithstanding any other provision of thisIndenture and any provision of any Note, the right of any holder of any Note toreceive payment of the principal of, premium, if any, and interest on suchNote, on or after the respective due dates expressed in such Note, or toinstitute suit for the enforcement of any such payment on or after suchrespective dates against

 

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the Company shall not beimpaired or affected without the consent of such holder except as otherwise setforth herein.

 

Anything in this Indenture or the Notes tothe contrary notwithstanding, the holder of any Note, without the consent ofeither the Trustee or the holder of any other Note, in his own behalf and forhis own benefit, may enforce, and may institute and maintain any proceedingsuitable to enforce, his rights of conversion as provided herein.

 

Section 6.5                                      PROCEEDINGSBY TRUSTEE.  In case of an Event ofDefault and subject to the provisions of Section 7.7 hereof, the Trustee may inits discretion proceed to protect and enforce the rights vested in it by thisIndenture by such appropriate judicial proceedings as the Trustee shall deemmost effectual to protect and enforce any of such rights, either by suit inequity or by action at law or by proceeding in bankruptcy or otherwise, whetherfor the specific enforcement of any covenant or agreement contained in thisIndenture or in aid of the exercise of any power granted in this Indenture orto enforce any other legal or equitable right vested in the Trustee by thisIndenture or by law.

 

Section 6.6                                      REMEDIESCUMULATIVE AND CONTINUING.  Except asprovided in Section 2.7, all powers and remedies given by this Article VI tothe Trustee or to the Noteholders shall, to the extent permitted by law, bedeemed cumulative and not exclusive of such powers and remedies or of any otherpowers and remedies available to the Trustee or the holders of the Notes, byjudicial proceedings or otherwise, to enforce the performance or observance ofthe covenants and agreements contained in this Indenture, and no delay oromission of the Trustee or of any holder of any of the Notes to exercise anyright or power accruing upon any default or Event of Default occurring andcontinuing as aforesaid shall impair any such right or power or shall be construedto be a waiver of any such default or any acquiescence therein; and, subject tothe provisions of Section 6.4, every power and remedy given by this Article VIor by law to the Trustee or to the Noteholders may be exercised from time totime, and as often as shall be deemed expedient, by the Trustee or by theNoteholders.

 

Section 6.7                                      DIRECTIONOF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF NOTEHOLDERS.  The holders of a majority in aggregateprincipal amount of the Notes at the time outstanding (determined in accordancewith Section 8.4) shall have the right to direct the time, method and place ofconducting any proceeding for any remedy available to the Trustee or exercisingany trust or power conferred on the Trustee; provided that (a) such directionshall 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 notinconsistent with such direction.  Theholders of a majority in aggregate principal amount of the Notes at the timeoutstanding (determined in accordance with Section 8.4) may on behalf of theholders of all of the Notes waive any past default or Event of Defaulthereunder and its consequences except (i) a default in the payment ofinterest or premium, if any, on, or the principal of, the Notes, (ii) afailure by the Company to convert any Notes into Common Stock or cash, as thecase may be, or (iii) a default in respect of a covenant or provisionshereof that under Article X cannot be modified or amended without the consentof the holders of all Notes then outstanding. Whenever any default or Event of Default hereunder shall have beenwaived as permitted by this Section 6.7, said default or Event of Default shallfor all purposes of the Notes and this Indenture be deemed to have been curedand to be not continuing and the

 

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Company, the Trustee and theholders of the Notes shall as reasonably possible be restored to their formerpositions and rights hereunder; but no such waiver shall extend to anysubsequent or other default or Event of Default or impair any right consequentthereon.

 

Section 6.8                                      NOTICEOF DEFAULTS.  The Trustee shall, within90 days after the occurrence of a default, mail to all Noteholders, as thenames and addresses of such holders appear upon the Note register, notice ofall defaults of which a Responsible Officer has actual knowledge, unless suchdefaults 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 principalof, premium, if any, or interest on any of the Notes, the Trustee shall beprotected in withholding such notice if and so long as a Responsible Officer ofthe Trustee in good faith determine that the withholding of such notice is inthe interests of the Noteholders.

 

Section 6.9                                      UNDERTAKINGTO PAY COSTS.  All parties to thisIndenture agree, and each holder of any Note by his acceptance thereof shall bedeemed to have agreed, that any court may, in its discretion, require, in anysuit for the enforcement of any right or remedy under this Indenture, or in anysuit against the Trustee for any action taken or omitted by it as Trustee, thefiling by any party litigant in such suit of an undertaking to pay the costs ofsuch suit and that such court may in its discretion assess reasonable costs,including reasonable attorneys’ fees and expenses, against any party litigantin such suit, having due regard to the merits and good faith of the claims or defensesmade by such party litigant; provided that the provisions of this Section 6.9shall not apply to any suit instituted by the Trustee, to any suit institutedby any Noteholder or group of Noteholders holding in the aggregate more than10% in principal amount of the Notes at the time outstanding determined inaccordance with Section 8.4 or to any suit instituted by any Noteholder for theenforcement of the payment of the principal of, premium, if any, or interest onany Note on or after the due date expressed in such Note or to any suit for theenforcement of the right to convert any Note in accordance with the provisionsof Article XIV.

 

# ARTICLE VII

#  

# CONCERNING THE TRUSTEE

#  

## Section 7.1                                      DUTIESAND RESPONSIBILITIES OF TRUSTEE.

##  

### (a)                                  Ifan Event of Default has occurred and is continuing, the Trustee shall exercisethe rights and powers vested in it by this Indenture and use the same degree ofcare and skill in its exercise as a prudent person would exercise or use underthe circumstances in the conduct of such person’s own affairs.

###  

### (b)                                 Exceptduring the continuance of an Event of Default:

###  

##### (i)                                     theTrustee need perform only those duties that are specifically set forth in thisIndenture and no others; and

#####  

##### (ii)                                  inthe absence of bad faith on its part, the Trustee may conclusively rely, as tothe truth of the statements and the correctness of the

 

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##### opinionsexpressed therein, upon certificates or opinions furnished to the Trustee andconforming to the requirements of this Indenture; provided that in the case ofany such certificates or opinions that by any provision hereof are specificallyrequired to be furnished to the Trustee, the Trustee shall be under a duty toexamine the same to determine whether or not they conform to the requirementsof this Indenture (but need not confirm or investigate the accuracy ofmathematical calculations or other facts stated therein).

#####  

### (c)                                  The Trustee may notbe relieved from liability for its own negligent action, its own negligentfailure to act or its own willful misconduct, except that:

###  

##### (i)                                     thisparagraph (c) does not limit the effect of paragraph (b) of this Section 7.1;

#####  

##### (ii)                                  theTrustee shall not be liable for any error of judgment made in good faith by aResponsible Officer of the Trustee unless it is proved that the Trustee wasnegligent in ascertaining the pertinent facts reasonably available to theTrustee; and

#####  

##### (iii)                               theTrustee shall not be liable with respect to any action it takes or omits totake in good faith in accordance with a direction received by it pursuant toSection 6.7.

#####  

### (d)                                 Every provision ofthis Indenture that in any way relates to the Trustee is subject to paragraphs(a), (b), (c) and (e) of this Section 7.1.

###  

### (e)                                  The Trustee mayrefuse to perform any duty or exercise any right or power or extend or risk itsown funds or otherwise incur any financial liability unless it receivesindemnity satisfactory to it against any loss, liability or expense.

###  

Section 7.2                                      REPORTSBY TRUSTEE TO HOLDERS.  Within 60 daysafter each April 1 commencing with the April 1 following the date of thisIndenture, the Trustee shall, if required by the Trust Indenture Act, mail toeach Noteholder a brief report dated as of such April 1 that complies withTrust Indenture Act Section 313(a).  TheTrustee also shall comply with Trust Indenture Act Sections 313(b) and 313(c).

 

The Company shall promptly notify the Trusteein writing if the Notes become listed or delisted on any stock exchange orautomatic quotation system.

 

A copy of each report at the time of itsmailing to Noteholders shall be mailed to the Company and, to the extentrequired 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 Notesare listed.

 

Section 7.3                                      RELIANCEON DOCUMENTS, OPINIONS, ETC.  Except asotherwise provided in Section 7.1:

 

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### (a)                                  The Trustee may relyand 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 genuineand 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 besufficiently evidenced by an Officers’ Certificate (unless other evidence inrespect thereof be herein specifically prescribed or required by the TrustIndenture Act); and any resolution of the Board of Directors may be evidencedto the Trustee by a copy thereof certified by the Secretary or an AssistantSecretary of the Company;

###  

### (c)                                  The Trustee mayconsult with counsel of its selection and any advice or opinion of counselshall be full and complete authorization and protection in respect of anyaction taken or omitted by it hereunder in good faith and in accordance withsuch advice or opinion of counsel;

###  

### (d)                                 The Trustee mayexecute any of the trusts or powers hereunder or perform any duties hereundereither directly or by or through agents or attorneys, and the Trustee shall notbe responsible for any misconduct or negligence on the part of any agent orattorney appointed by it with due care hereunder; no Depository, Custodian orpaying 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 anyact or omission by any such Depository, Custodian or paying agent;

###  

### (e)                                  The Trustee shall beunder no obligation to exercise any of the rights or powers vested in it by theIndenture at the request or direction of any of the holders pursuant to thisIndenture unless such holders have offered the Trustee reasonable security orindemnity against the costs, expenses and liabilities that would be incurred byit in compliance with such request or direction.

###  

### (f)                                    Subject to theprovisions of Section 7.1(c), the Trustee shall not be liable for any action ittakes or omits to take in good faith that it believes to be authorized orwithin its rights or powers;

###  

### (g)                                 In connection with anyrequest to transfer or exchange any Note, the Trustee may request a direction(in the form of an Officers’ Certificate) from the Company and an Opinion ofCounsel with respect to compliance with any restrictions on transfer orexchange imposed by this Indenture, the Securities Act, other applicable law orthe rules and regulations of any exchange on which the Notes or the CommonStock may be traded, and the Trustee may rely and shall be protected in actingupon such direction and in accordance with such Officers’ Certificate andOpinion of Counsel;

###  

### (h)                                 The Trustee may relyand shall be fully protected in acting upon the determination and notice by theCompany of the Conversion Price; and

###  

### (i)                                     The Trustee shallnot be deemed to have knowledge of any Event of Default or other fact or eventupon the occurrence of which it may be required to take action

 

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hereunder unless one of itsResponsible Officers has actual knowledge thereof obtained by a writtenstatement.

###  

Section 7.4                                      NORESPONSIBILITY FOR RECITALS, ETC.  Therecitals contained herein and in the Notes (except in the Trustee’s certificateof authentication) shall be taken as the statements of the Company, and theTrustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as tothe validity or sufficiency of this Indenture or of the Notes.  The Trustee shall not be accountable for theuse or application by the Company of any Notes or the proceeds of any Notesauthenticated and delivered by the Trustee in conformity with the provisions ofthis Indenture.

 

Section 7.5                                      TRUSTEE,PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN NOTES.  The Trustee, any paying agent, anyconversion agent or any Note registrar, in its individual or any othercapacity, may become the owner or pledgee of Notes with the same rights itwould have if it were not Trustee, paying agent, conversion agent or Noteregistrar.

 

Section 7.6                                      MONIESTO BE HELD IN TRUST.  Subject to theprovisions of Section 12.4, all monies received by the Trustee shall, untilused or applied as herein provided, be held in trust for the purposes for whichthey were received.  Money held by theTrustee in trust hereunder need not be segregated from other funds except tothe extent required by law.  The Trusteeshall be under no liability for interest on any money received by it hereunderexcept as may be agreed to in writing from time to time by the Company and theTrustee.

 

Section 7.7                                      COMPENSATIONAND EXPENSES OF TRUSTEE.  The Companycovenants and agrees to pay to the Trustee from time to time, and the Trusteeshall be entitled to, such compensation as the Company and the Trustee shallfrom time to time agree in writing, for all services rendered by it hereunderin any capacity (which shall not be limited by any provision of law in regardto the compensation of a trustee of an express trust), and the Company shallpay or reimburse the Trustee upon its request for all reasonable expenses,disbursements and advances incurred or made by the Trustee in accordance withany of the provisions of this Indenture (including the reasonable compensationand the expenses and disbursements of its counsel and of all persons notregularly in its employ) except any such expense, disbursement or advance asmay arise from its negligence or bad faith. The Company also covenants to indemnify each of the Trustee or anypredecessor Trustee in any capacity under this Indenture and its agents and anyauthenticating agent for, and to hold them harmless against, any and all loss,liability, damage, claim or expense, including taxes (other than taxes based onthe income of the Trustee) incurred without negligence or bad faith on the partof the Trustee or such agent or authenticating agent, as the case may be, andarising out of or in connection with the acceptance or administration of thistrust or in any other capacity hereunder, including the costs and expenses ofdefending themselves against any claim of liability in the premises.  The obligations of the Company under thisSection 7.7 to compensate or indemnify the Trustee and to pay or reimburse theTrustee for expenses, disbursements and advances shall be secured by a lienprior to that of the Notes upon all property and funds held or collected by theTrustee as such, except funds held in trust for the benefit of the holders ofparticular Notes.  The obligation of theCompany under this Section shall survive the satisfaction and discharge of thisIndenture.

 

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Section 7.8                                      OFFICERS’CERTIFICATE AS EVIDENCE.  Except asotherwise provided in Section 7.1, whenever in the administration of theprovisions of this Indenture the Trustee shall deem it necessary or desirablethat a matter be proved or established prior to taking or omitting any actionhereunder, such matter (unless other evidence in respect thereof be hereinspecifically prescribed) may, in the absence of negligence or bad faith on thepart of the Trustee, be deemed to be conclusively proved and established by anOfficers’ Certificate delivered to the Trustee, and such Officers’ Certificate,in the absence of negligence or bad faith on the part of the Trustee, shall be fullwarrant to the Trustee for any action taken or omitted by it under theprovisions of this Indenture upon the faith thereof.

 

Section 7.9                                      CONFLICTINGINTERESTS OF TRUSTEE.  In the event thatthe Trust Indenture Act is applicable hereto, and if the Trustee has or shallacquire a conflicting interest within the meaning of Trust Indenture ActSection 310(b) and there exists an Event of Default hereunder (exclusive of anyperiod of grace or requirement of notice), the Trustee shall either eliminatesuch interest or resign, to the extent and in the manner provided by, andsubject to the provisions of, the Trust Indenture Act and this Indenture.

 

Section 7.10                                ELIGIBILITYOF TRUSTEE.  There shall at all times bea Trustee hereunder that shall be a person that satisfies the requirements ofTrust Indenture Act Section 310(a)(1) and Section 310(a)(5) and that has acombined capital and surplus of at least $50,000,000.  If such person publishes reports of condition at least annually,pursuant to law or to the requirements of any supervising or examiningauthority, then for the purposes of this Section, the combined capital andsurplus of such person shall be deemed to be its combined capital and surplusas set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to beeligible in accordance with the provisions of this Section, it shall resignimmediately in the manner and with the effect hereinafter specified in thisArticle VII.

 

## Section 7.11                                RESIGNATIONOR REMOVAL OF TRUSTEE.

##  

### (a)                                  The Trustee may atany time resign by giving written notice of such resignation to the Company;and the Company shall mail, or cause to be mailed, notice thereof to theholders of Notes at their addresses as they shall appear on the Note register.  Upon receiving such notice of resignation,the Company shall promptly appoint a successor trustee by written instrument,in duplicate, executed by order of the Board of Directors, one copy of whichinstrument shall be delivered to the resigning Trustee and one copy to thesuccessor trustee.

###  

### (b)                                 In case at any timeany of the following shall occur:

###  

##### (i)                                     theTrustee shall fail to comply with Section 7.9 after written request therefor bythe Company or by any Noteholder who has been a BONA FIDE holder of a Note orNotes for at least six months; or

#####  

##### (ii)                                  theTrustee shall cease to be eligible in accordance with the provisions of Section7.10 and shall fail to resign after written request therefor by the Company orby any such Noteholder; or

#####  

##### (iii)                               theTrustee shall become incapable of acting, or shall be adjudged a bankrupt orinsolvent, or a receiver of the Trustee or of its property shall be

 

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##### appointed, orany public officer shall take charge or control of the Trustee or of itsproperty or affairs for the purpose of rehabilitation, conservation orliquidation,

#####  

then, in any such case, the Company may remove the Trustee and appointa successor trustee by written instrument, in duplicate, executed by order ofthe Board of Directors, one copy of which instrument shall be delivered to theTrustee so removed and one copy to the successor trustee, or any Noteholder whohas been a BONA FIDE holder of a Note or Notes for at least six months may, onbehalf of himself and all others similarly situated, petition any court ofcompetent jurisdiction for the removal of the Trustee and the appointment of asuccessor trustee.  Such court maythereupon, after such notice, if any, as it may deem proper and prescribe,remove the Trustee and appoint a successor trustee.

 

### (c)                                  The holders of amajority in aggregate principal amount of the Notes at the time outstanding mayat any time remove the Trustee and nominate a successor trustee, which shall bedeemed appointed as successor trustee unless within ten days after notice tothe Company of such nomination the Company objects thereto, in which case theTrustee so removed or any Noteholder, upon the terms and conditions andotherwise as provided in the next paragraph, may petition any court ofcompetent jurisdiction for an appointment of a successor trustee.

###  

If no successor trustee shall have been soappointed and have accepted appointment within 60 days after removal or themailing of such notice of resignation to the Noteholders, the Trustee resigningor being removed may petition any court of competent jurisdiction for theappointment of a successor trustee, or, in the case of either resignation orremoval, any Noteholder who has been a BONA FIDE holder of a Note or Notes forat least six months may, on behalf of himself and all others similarlysituated, petition any such court for the appointment of a successortrustee.  Such court may thereupon,after such notice, if any, as it may deem proper and prescribe, appoint asuccessor trustee.

 

### (d)                                 Any resignation orremoval of the Trustee and appointment of a successor trustee pursuant to anyof the provisions of this Section 7.11 shall become effective upon acceptanceof appointment by the successor trustee as provided in Section 7.12.

###  

Section 7.12                                ACCEPTANCEBY SUCCESSOR TRUSTEE.  Any successortrustee appointed as provided in Section 7.11 shall execute, acknowledge anddeliver to the Company and to its predecessor trustee an instrument acceptingsuch appointment hereunder, and thereupon, the resignation or removal of thepredecessor trustee shall become effective and such successor trustee, withoutany further act, deed or conveyance, shall become vested with all the rights,powers, duties and obligations of its predecessor hereunder, with like effectas if originally named as trustee herein; but on the written request of theCompany or of the successor trustee, the Trustee ceasing to act shall, uponpayment of any amounts then due it pursuant to the provisions of Section 7.7,execute and deliver an instrument transferring to such successor trustee allthe rights and powers of the Trustee so ceasing to act.  Upon request of any such successor trustee,the Company shall execute any and all instruments in writing for more fully andcertainly vesting in and confirming to such successor trustee all such rightsand powers.  Any Trustee ceasing to actshall, nevertheless, retain a lien upon all property and funds held or

 

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collected by such trustee assuch, except for funds held in trust for the benefit of holders of particularNotes, to secure any amounts then due it pursuant to the provisions of Section7.7.

 

No successortrustee shall accept appointment as provided in this Section 7.12 unless at thetime of such acceptance such successor trustee shall be qualified under theprovisions of Section 7.9 and eligible under the provisions of Section 7.10.

 

Uponacceptance of appointment by a successor trustee as provided in this Section7.12, the Company shall mail or cause to be mailed notice of the succession ofsuch Trustee hereunder to the holders of Notes at their addresses as they shallappear on the Note register.  If theCompany fails to mail such notice within ten days after acceptance ofappointment by the successor trustee, the successor trustee shall cause suchnotice to be mailed at the expense of the Company.

 

Section 7.13                                SUCCESSOR,BY MERGER, ETC.  Any corporation intowhich the Trustee may be merged or converted or with which it may beconsolidated, or any corporation resulting from any merger, conversion orconsolidation to which the Trustee shall be a party, or any corporationsucceeding to all or substantially all of the corporate trust business of theTrustee, shall be the successor to the Trustee hereunder, provided suchcorporation shall be qualified under the provisions of Section 7.9 and eligibleunder the provisions of Section 7.10 without the execution or filing of anypaper or any further act on the part of any of the parties hereto.

 

Section 7.14                                LIMITATIONON RIGHTS OF TRUSTEE AS CREDITOR.  Ifand when the Trustee shall be or become a creditor of the Company (or any otherobligor upon the Notes) and the Trust Indenture Act is applicable hereto, theTrustee shall be subject to the provisions of Trust Indenture Act Section311(a) or, if applicable, Trust Indenture Act Section 311(b) regarding thecollection of the claims against the Company (or any such other obligor).

 

# ARTICLE VIII

 

# CONCERNING THE NOTEHOLDERS

 

Section 8.1                                      ACTIONBY NOTEHOLDERS.  Whenever in thisIndenture it is provided that the holders of a specified percentage inaggregate principal amount of the Notes may take any action (including themaking of any demand or request, the giving of any notice, consent or waiver orthe taking of any other action), the fact that at the time of taking any suchaction, the holders of such specified percentage have joined therein may beevidenced (a) by any instrument or any number of instruments of similar tenorexecuted by Noteholders in person or by agent or proxy appointed in writing,(b) by the record of the holders of Notes voting in favor thereof at anymeeting of Noteholders duly called and held in accordance with the provisionsof Article IX or (c) by a combination of such instrument or instruments and anysuch record of such a meeting of Noteholders. Whenever the Company or the Trustee solicits the taking of any action bythe holders of the Notes, the Company or the Trustee may fix in advance of suchsolicitation, a date as the record date for determining holders entitled totake such action.  The

 

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record date shall be not morethan 15 days prior to the date of commencement of solicitation of such action.

 

Section 8.2                                      PROOFOF EXECUTION BY NOTEHOLDERS.  Subject tothe provisions of Sections 7.1, 7.2 and 9.5, proof of the execution of anyinstrument by a Noteholder or by agent or proxy shall be sufficient if made inaccordance with Section 7.3 hereof.  Theholding of Notes shall be proved by the Note register or by a certificate ofthe Note registrar.

 

The record of any Noteholders’ meeting shallbe proved in the manner provided in Section 9.5.

 

Section 8.3                                      WHOARE DEEMED ABSOLUTE OWNERS.  TheCompany, the Trustee, any paying agent, any conversion agent and any Noteregistrar may deem the person in whose name such Note shall be registered uponthe books of the Company to be, and may treat such person as, the absoluteowner of such Note (whether or not such Note shall be overdue andnotwithstanding any notation of ownership or other writing thereon) for thepurpose of receiving payment of or on account of the principal of, premium, ifany, and interest on such Note, for conversion of such Note and for all otherpurposes; and neither the Company nor the Trustee nor any paying agent nor anyconversion agent nor any Note registrar shall be affected by any notice to thecontrary.  All such payments so made toany holder for the time being, or upon order of such holder, shall be validand, to the extent of the sum or sums so paid, effectual to satisfy anddischarge the liability for monies payable upon any such Note.

 

The Depository shall be deemed to be theowner of the Global Note for all purposes, including receipt of notices toNoteholders and payment of principal of, premium, if any, and interest on theNotes.  None of the Company, the Trustee(in its capacity as Trustee), any paying agent or the Note registrar (orco-registrar) shall have any responsibility for any aspect of the recordsrelating to or payments made on account of beneficial interests of the GlobalNote or for maintaining, supervising or reviewing any records relating to suchbeneficial ownership interests.

 

Section 8.4                                      COMPANY-OWNEDNOTES DISREGARDED.  In determiningwhether the holders of the requisite aggregate principal amount of Notes haveconcurred in any direction, consent, waiver or other action under thisIndenture, Notes that are owned by the Company or any other obligor on theNotes or by any person directly or indirectly controlling or controlled by orunder direct or indirect common control with the Company or any other obligoron the Notes shall be disregarded and deemed not to be outstanding for thepurpose of any such determination; provided that for the purposes ofdetermining whether the Trustee shall be protected in relying on any suchdirection, consent, waiver or other action, only Notes that a ResponsibleOfficer of the Trustee actually knows are so owned shall be so disregarded.

 

Notes so owned that have been pledged in good faith may be regarded asoutstanding for the purposes of this Section 8.4 if the pledgee shall establishto the satisfaction of the Trustee the pledger’s right to vote such Notes andthat the pledgee is not the Company, any other obligor on the Notes or a persondirectly or indirectly controlling or controlled by or under direct or indirectcommon control with the Company or any such other obligor.

 

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In the case of a dispute as to such right, any decision by the Trusteetaken upon the advice of counsel shall be full protection to the Trustee.  Upon request of the Trustee, the Companyshall furnish to the Trustee promptly an Officers’ Certificate listing andidentifying all Notes, if any, known by the Company to be owned or held by orfor the account of any of the above described persons; and subject to Section7.1, the Trustee shall be entitled to accept such Officers’ Certificate asconclusive evidence of the facts therein set forth and of the fact that allNotes not listed therein are outstanding for the purpose of any suchdetermination.

 

Section 8.5                                      REVOCATIONOF CONSENTS, FUTURE HOLDERS BOUND.  Atany time prior to (but not after) the evidencing to the Trustee, as provided inSection 8.1, of the taking of any action by the holders of the percentage inaggregate principal amount of the Notes specified in this Indenture inconnection with such action, any holder of a Note that is shown by the evidenceto be included in the Notes the holders of which have consented to such actionmay, by filing written notice with the Trustee at its Corporate Trust Officeand upon proof of holding as provided in Section 8.2, revoke such action so faras concerns such Note.  Except asaforesaid, any such action taken by the holder of any Note shall be conclusiveand binding upon such holder and upon all future holders and owners of suchNote and of any Notes issued in exchange or substitution therefor, irrespectiveof whether any notation in regard thereto is made upon such Note or any Noteissued in exchange or substitution therefor.

 

# ARTICLE IX

#  

# NOTEHOLDERS’ MEETINGS

#  

Section 9.1                                      PURPOSESFOR WHICH MEETINGS MAY BE CALLED.  Ameeting of Noteholders may be called at any time and from time to time pursuantto the provisions of this Article IX for any of the following purposes:

 

##### (i)                                     togive any notice to the Company or to the Trustee, or to give any directions tothe Trustee, or to consent to the waiving of any default hereunder and itsconsequences, or to take any other action authorized to be taken by Noteholderspursuant to any of the provisions of Article VI;

#####  

##### (ii)                                  toremove the Trustee and appoint a successor trustee pursuant to the provisionsof Article VII;

#####  

##### (iii)                               toconsent to the execution of an indenture or indentures supplemental heretopursuant to the provisions of Section 10.2; or

#####  

##### (iv)                              totake any other action authorized to be taken by or on behalf of the holders ofany specified aggregate principal amount of the Notes under any other provisionsof this Indenture or under applicable law.

#####  

Section 9.2                                      MANNEROF CALLING MEETINGS; RECORD DATE.  TheTrustee may at any time call a meeting of Noteholders to take any actionspecified in Section 9.1, to be held at such time and at such place inMinneapolis, Minnesota as the Trustee shall determine.  Notice of every meeting of the Noteholders,setting forth the time and the place of

 

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such meeting and in generalterms the action proposed to be taken at such meeting, shall be mailed not lessthan 30 nor more than 60 days prior to the date fixed for the meeting to suchNoteholders at their addresses as such addresses appear in the Noteregister.  For the purpose ofdetermining Noteholders entitled to notice of any meeting of Noteholders, theCompany, upon written notice to the Trustee, shall fix in advance a date as therecord date for such determination, such date to be a business day not morethan ten days prior to the date of the mailing of such notice as hereinaboveprovided.  Only persons in whose nameany Note shall be registered in the Note register at the close of business on arecord date fixed by the Trustee as aforesaid, or by the Company or the Noteholdersas provided in Section 9.3, shall be entitled to notice of the meeting ofNoteholders with respect to which such record date was so fixed.

 

Section 9.3                                      CALLOF MEETING BY COMPANY OR NOTEHOLDERS. In case at any time the Company, pursuant to a resolution of its Boardof Directors or the holders of at least 10% in aggregate principal amount ofthe Notes then outstanding shall have requested the Trustee to call a meetingof Noteholders to take any action authorized in Section 9.1 by written requestsetting forth in reasonable detail the action proposed to be taken at themeeting, and the Trustee shall not have mailed notice of such meeting within 20days after receipt of such request, then the Company or the holders of Notes inthe amount above specified, as the case may be, may fix the record date withrespect to, and determine the time and the place for, such meeting and may callsuch meeting to take any action authorized in Section 9.1, by mailing noticethereof as provided in Section 9.2.  Therecord date fixed as provided in the preceding sentence shall be set forth in awritten notice to the Trustee and shall be a business day not less than 15 normore than 20 days after the date on which the original request is sent to theTrustee.

 

Section 9.4                                      WHOMAY ATTEND AND VOTE AT MEETINGS.  Only personsentitled to receive notice of a meeting of Noteholders and their respectiveproxies duly appointed by an instrument in writing shall be entitled to vote atsuch meeting.  The only persons whoshall be entitled to be present or to speak at any meeting of Noteholders shallbe the persons entitled to vote at such meeting and their counsel and anyrepresentatives of the Trustee and its counsel and any representatives of theCompany and its counsel.  When a determinationof Noteholders entitled to vote at any meeting of Noteholders has been made asprovided in this Section, such determination shall apply to any adjournmentsthereof.

 

Section 9.5                                      MANNEROF VOTING AT MEETINGS AND RECORD TO BE KEPT. The vote upon any resolution submitted to any meeting of Noteholdersshall be by written ballots on each of which shall be subscribed the signatureof the Noteholder or proxy casting such ballot and the identifying number ornumbers of the Notes held or represented in respect of which such ballot iscast.  The chairman of the meeting shallappoint two inspectors of votes who shall count all votes cast at the meetingfor or against any resolution and who shall make and file with the secretary ofthe meeting their verified written reports in duplicate of all votes cast atthe meeting.  A record in duplicate ofthe proceedings of each meeting of Noteholders shall be prepared by thesecretary of the meeting and there shall be attached to said record theoriginal reports of the inspectors of votes on any vote by ballot taken thereatand affidavits by one or more persons having knowledge of the facts settingforth a copy of the notice of the meeting and showing that said notice wasmailed as provided in Section 9.2.  Therecord shall show the identifying numbers of the Notes voting in favor of oragainst any resolution.  Eachcounterpart of such record shall be signed and verified by the affidavits ofthe chairman and

 

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secretary of the meeting andone of the counterparts shall be delivered to the Company and the other to theTrustee to be preserved by the Trustee.

 

Any counterpart record so signed and verifiedshall be conclusive evidence of the matters therein stated and shall be therecord referred to in clause (b) of Section 8.1.

 

Section 9.6                                      EXERCISEOF RIGHTS OF TRUSTEE AND NOTEHOLDERS NOT TO BE HINDERED OR DELAYED.  Nothing in this Article IX contained shallbe deemed or construed to authorize or permit, by reason of any call of ameeting of Noteholders or any rights expressly or impliedly conferred hereunderto make such call, any hindrance or delay in the exercise of any right orrights conferred upon or reserved to the Trustee or to the Noteholders underany of the provisions of this Indenture or of the Notes.

 

# ARTICLE X

#  

# SUPPLEMENTAL INDENTURES

#  

Section 10.1                                SUPPLEMENTALINDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The Company, when authorized by a Board Resolution, and the Trustee mayfrom time to time and at any time enter into an indenture or indenturessupplemental hereto for one or more of the following purposes:

 

### (a)                                  to make provisionwith respect to the conversion rights of the holders of Notes pursuant to therequirements of Article XIV;

###  

### (b)                                 subject to Article XV,to convey, transfer, assign, mortgage or pledge to the Trustee as security forthe Notes, any property or assets;

###  

### (c)                                  to evidence thesuccession of another person to the Company, or successive successions, and theassumption by the Successor Company of the covenants, agreements andobligations of the Company pursuant to Article XI;

###  

### (d)                                 to add to thecovenants of the Company such further covenants, restrictions or conditions asthe Board of Directors and the Trustee shall consider to be for the benefit ofthe holders of Notes and to make the occurrence, or the occurrence andcontinuance, of a default in any such additional covenants, restrictions orconditions a default or an Event of Default permitting the enforcement of allor any of the several remedies provided in this Indenture as herein set forth;provided that in respect of any such additional covenant, restriction orcondition, such supplemental indenture may provide for a particular period ofgrace after default (which period may be shorter or longer than that allowed inthe case of other defaults) or may provide for an immediate enforcement uponsuch default or may limit the remedies available to the Trustee upon suchdefault;

###  

### (e)                                  to provide for theissuance under this Indenture of Notes in coupon form (including Notesregistrable as to principal only) and to provide for exchangeability of suchNotes with the Notes issued hereunder in fully registered form and to make allappropriate changes for such purpose;

 

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### (f)                                    to cure anyambiguity or to correct or supplement any provision contained herein or in anysupplemental indenture that may be defective or inconsistent with any otherprovision contained herein or in any supplemental indenture, or to make suchother provisions in regard to matters or questions arising under this Indenturethat shall not adversely affect the interests of the holders of the Notes;

###  

### (g)                                 to evidence andprovide for the acceptance of appointment hereunder by a successor Trustee withrespect to the Notes; or

###  

### (h)                                 to modify, eliminateor add to the provisions of this Indenture to such extent necessary to effectthe qualification of this Indenture under the Trust Indenture Act (ifapplicable), or under any similar federal statute hereafter enacted (ifapplicable).

###  

The Trustee is hereby authorized to join withthe Company in the execution of any such supplemental indenture, to make anyfurther appropriate agreements and stipulations that may be therein containedand to accept the conveyance, transfer and assignment of any propertythereunder, but the Trustee shall not be obligated to, but may in itsdiscretion, enter into any supplemental indenture that affects the Trustee’sown rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by theprovisions of this Section 10.1 may be executed by the Company and the Trusteewithout the consent of the holders of any of the Notes at the time outstanding,notwithstanding any of the provisions of Section 10.2.

 

Section 10.2                                SUPPLEMENTALINDENTURES WITH CONSENT OF NOTEHOLDERS. With the consent (evidenced as provided in Article VIII) of the holdersof not less than a majority in aggregate principal amount of the Notes at thetime outstanding, the Company, when authorized by a Board Resolution and theTrustee, may from time to time and at any time enter into an indenture orindentures supplemental hereto for the purpose of adding any provisions to orchanging in any manner or eliminating any of the provisions of this Indentureor any supplemental indenture or of modifying in any manner the rights of theholders of the Notes; provided that no such supplemental indenture shall (i)without the consent of the holders of each Note so affected, extend the fixedmaturity of any Note, or reduce the rate or extend the time of payment ofinterest thereon, or reduce the principal amount thereof or premium, if any,thereon or reduce any amount payable on redemption or repurchase thereof, alterthe obligation of the Company to repurchase the Notes at the option of theholder upon the occurrence of a Change of Control or impair or affect the rightof any Noteholder to institute suit for the payment thereof or make theprincipal thereof or interest or premium, if any, thereon payable in any coinor currency other than that provided in the Notes, modify the subordinationprovisions in a manner adverse to the holders of the Notes, or impair the rightto convert the Notes into Common Stock or cash subject to the terms set forthherein or (ii) without the consent of the holders of all the Notes thenoutstanding, reduce the aforesaid percentage of Notes, the holders of which arerequired to consent to any such supplemental indenture.

 

Upon the request of the Company, accompaniedby a copy of a Board Resolution certified by its Secretary or AssistantSecretary authorizing the execution of any such supplemental indenture, andupon the filing with the Trustee of evidence of the consent of

 

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Noteholders as aforesaid, theTrustee shall join with the Company in the execution of such supplementalindenture unless such supplemental indenture affects the Trustee’s own rights,duties or immunities under this Indenture or otherwise, in which case theTrustee may in its discretion, but shall not be obligated to, enter into suchsupplemental indenture.

 

It shall not be necessary for the consent ofthe Noteholders under this Section 10.2 to approve the particular form of anyproposed supplemental indenture, but it shall be sufficient if such consentshall approve the substance thereof.

 

Section 10.3                                EFFECTOF SUPPLEMENTAL INDENTURES.  Anysupplemental indenture executed pursuant to the provisions of this Article Xshall comply with the Trust Indenture Act, as then in effect, if such supplementalindenture is then required to so comply. Upon the execution of any supplemental indenture pursuant to theprovisions of this Article X, this Indenture shall be and be deemed to bemodified and amended in accordance therewith and the respective rights,limitation of rights, obligations, duties and immunities under this Indentureof the Trustee, the Company and the holders of Notes shall thereafter bedetermined, exercised and enforced hereunder subject in all respects to suchmodifications and amendments and all the terms and conditions of any suchsupplemental indenture shall be and be deemed to be part of the terms andconditions of this Indenture for any and all purposes.

 

Section 10.4                                NOTATIONON NOTES.  Notes authenticated anddelivered after the execution of any supplemental indenture pursuant to theprovisions of this Article X may bear a notation in form approved by theCompany as to any matter provided for in such supplemental indenture, but theyneed not do so.  After notice to theTrustee, if the Company shall determine to add such a notation, new Notes somodified as to conform, in the opinion of the Board of Directors, to anymodification of this Indenture contained in any such supplemental indenturemay, at the Company’s expense, be prepared and executed by the Company,authenticated by the Trustee (or an authenticating agent duly appointed by theTrustee pursuant to Section 16.14) and delivered in exchange for the Notes thenoutstanding, upon surrender of such Notes then outstanding.

 

Section 10.5                                EVIDENCEOF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TO THE TRUSTEE.  The Trustee shall be furnished with and,subject to the provisions of Sections 7.1 and 7.2, may rely conclusively uponan Officers’ Certificate and an Opinion of Counsel as conclusive evidence thatany supplemental indenture executed pursuant hereto complies with therequirements of this Article X.

 

# ARTICLE XI

#  

# CONSOLIDATION, MERGER, SALE, CONVEYANCE,TRANSFER AND LEASE

#  

Section 11.1                                COMPANYMAY CONSOLIDATE, ETC. ON CERTAIN TERMS. The Company shall not consolidate with or merge with or into, or convey,transfer or lease all or substantially all of its assets (determined on aconsolidated basis) to any person unless: (i) either the Company is theresulting, surviving or transferee person (the “Successor Company”) or theSuccessor Company is a person organized and existing under the laws of theUnited States or any State thereof or the District of Columbia, and theSuccessor Company (if

 

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not the Company) expresslyassumes by a supplemental indenture, executed and delivered to the Trustee, inform satisfactory to the Trustee, all the obligations of the Company under thisIndenture and the Notes, including the rights pursuant to Article XIV hereof,(ii) immediately after giving effect to such transaction, no Event ofDefault has happened and is continuing and (iii) the Company delivers tothe Trustee an Officers’ Certificate and an Opinion of Counsel, each statingthat such consolidation, merger or transfer and such supplemental indenture (ifany) comply with this Indenture.

 

Section 11.2                                SUCCESSORCOMPANY TO BE SUBSTITUTED.  In case ofany such consolidation, merger, sale, conveyance, transfer or lease and uponthe assumption by the Successor Company, by supplemental indenture, executedand delivered to the Trustee and satisfactory in form to the Trustee, of thedue and punctual payment of the principal of, premium, if any, and interest onall of the Notes and the due and punctual performance of all of the covenantsand conditions of this Indenture to be performed by the Company, such SuccessorCompany shall succeed to and be substituted for the Company, with the sameeffect as if it had been named herein as the party hereto.  When a Successor Company duly assumes allthe obligations of the Company pursuant to this Indenture and the Notes, thepredecessor shall be released from all such obligations.

 

Section 11.3                                OPINIONOF COUNSEL TO BE GIVEN TO TRUSTEE.  TheTrustee, subject to Sections 7.1 and 7.2, shall receive an Officers’Certificate and an Opinion of Counsel as conclusive evidence that any suchconsolidation, merger, sale, conveyance, transfer or lease and any suchassumption complies with the provisions of this Article XI.

 

# ARTICLE XII

#  

# SATISFACTION AND DISCHARGE OF INDENTURE;UNCLAIMED MONEYS

#  

## Section 12.1                                LEGALDEFEASANCE AND COVENANT DEFEASANCE OF THE NOTES.

##  

### (a)                                  The Company may, atits option by Board Resolution, at any time, with respect to the Notes, electto have either paragraph (b) or paragraph (c) below be applied to theoutstanding Notes upon compliance with the conditions set forth in paragraph(d).

###  

### (b)                                 Upon the Company’sexercise under paragraph (a) of the option applicable to this paragraph (b),the Company shall be deemed to have been released and discharged from itsobligations with respect to the outstanding Notes on the date the conditionsset forth in paragraph (d) below are satisfied (hereinafter, “legaldefeasance”).  For this purpose, suchlegal defeasance means that the Company shall be deemed to have paid anddischarged the entire indebtedness represented by the outstanding Notes, whichshall thereafter be deemed to be “outstanding” only for the purposes of theSections of and matters under this Indenture referred to in clauses (i) and(ii) below and to have satisfied all its other obligations under such Notes andthis Indenture insofar as such Notes are concerned, except for the following,which shall survive until otherwise terminated or discharged hereunder: (i) the rights ofholders of outstanding Notes to receive solely from the trust fund described inparagraph (d) below and as more fully set forth

 

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in such paragraph, payments inrespect of the principal of, premium, if any, and interest on such Notes whensuch payments are due and (ii) obligations listed in Section 12.3.

###  

### (c)                                  Upon the Company’sexercise under paragraph (a) of the option applicable to this paragraph (c),the Company shall be released and discharged from its obligations under anycovenant contained in Article XI and Section 3.5 with respect to theoutstanding Notes on and after the date the conditions set forth in paragraph(d) are satisfied (hereinafter, “covenant defeasance”), and the Notes shallthereafter be deemed to be not “outstanding” for the purpose of any direction,waiver, consent or declaration or act of holders (and the consequences of anythereof) in connection with such covenants, but shall continue to be deemed“outstanding” for all other purposes hereunder.  For this purpose, such covenant defeasance means that, withrespect to the outstanding Notes, the Company may omit to comply with and shallhave no liability in respect of any term, condition or limitation set forth inany such covenant, whether directly or indirectly, by reason of any referenceelsewhere herein to any such covenant or by reason of any reference in any suchcovenant to any other provision herein or in any other document, and suchomission to comply shall not constitute a Default or an Event of Default underSection 6.1, but, except as specified above, the remainder of this Indentureand such Notes shall be unaffected thereby.

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### (d)                                 The following shall bethe conditions to application of either paragraph (b) or paragraph (c) above tothe outstanding Notes:

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##### (i)                                     TheCompany shall have irrevocably deposited in trust with the Trustee, pursuant toan irrevocable trust and security agreement in form and substance satisfactoryto the Trustee, cash or non-callable U.S. Government Obligations maturing as toprincipal and interest at such times, or a combination thereof, in such amountsas are sufficient, without consideration of the reinvestment of such interestand after payment of all federal, state and local taxes or other charges orassessments in respect thereof payable by the Trustee, in the opinion of anationally recognized firm of independent public accountants expressed in awritten certification thereof (in form and substance reasonably satisfactory tothe Trustee) delivered to the Trustee, to pay the principal of, premium, ifany, and interest on the outstanding Notes on the dates on which any suchpayments are due and payable in accordance with the terms of this Indenture andof the Notes as well as all other sums payable hereunder by the Company;

#####  

##### (ii)                                  (A)No Event of Default shall have occurred or be continuing on the date of suchdeposit, and (B) no Default or Event of Default under Section 6.1(f) or6.1(g) shall occur on or before the 123rd day after the date of suchdeposit;

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##### (iii)                               Suchdeposit shall not result in a Default under this Indenture or a breach orviolation of, or constitute a default under, any other instrument or agreementto which the Company is a party or by which it or its property is bound;

 

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##### (iv)                              Inthe case of a legal defeasance under paragraph (b) above, the Company shallhave delivered to the Trustee an Opinion of Counsel in form and substancereasonably satisfactory to the Trustee stating that (A) the Company hasreceived from, or there has been published by, the Internal Revenue Service aruling applicable to such a defeasance or (B) since the date of this Indenture,there has been a change in the applicable federal income tax law, in eithercase to the effect that, and based thereon such opinion shall confirm that, theholders of the Notes shall not recognize income, gain or loss for federalincome tax purposes as a result of such deposit, defeasance and discharge andshall be subject to federal income tax on the same amounts and in the samemanner and at the same times as would have been the case if such deposit,defeasance and discharge had not occurred; and, in the case of a covenantdefeasance under paragraph (c) above, the Company shall have delivered to theTrustee an Officers’ Certificate and an Opinion of Counsel, in form andsubstance reasonably satisfactory to the Trustee, to the effect that holders ofthe Notes shall not recognize income, gain or loss for federal income taxpurposes as a result of such deposit and defeasance and shall be subject tofederal income tax on the same amounts and in the same manner and at the sametimes as would have been the case if such deposit and defeasance had notoccurred;

#####  

##### (v)                                 Theholders shall have a perfected security interest under applicable law in thecash or U.S. Government Obligations deposited pursuant to Section 12.1(d)(i)above;

#####  

##### (vi)                              TheCompany shall have delivered to the Trustee an Opinion of Counsel, in form and substancereasonably satisfactory to the Trustee, to the effect that, after the passageof 123 days following the deposit, the trust funds shall not be subject to anyapplicable bankruptcy, insolvency, reorganization or similar law affectingcreditors’ rights generally;

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##### (vii)                           Suchdefeasance shall not cause the Trustee to have a conflicting interest withrespect to any securities of the Company; and

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##### (viii)                        TheCompany shall have delivered to the Trustee an Officers’ Certificate and anOpinion of Counsel in form and substance reasonably satisfactory to theTrustee, each stating that all conditions precedent specified herein relatingto the defeasance contemplated by this Section 12.1 have been complied with;

#####  

provided, that no deposit under clause (i) shall be effective toterminate the obligations of the Company under the Notes or this Indentureprior to the passage of 123 days following such deposit.

 

Section 12.2                                TERMINATIONOF OBLIGATIONS UPON CANCELLATION OF THE NOTES. In addition to the Company’s rights under Section 12.1, the Company mayterminate all of its obligations under this Indenture (subject to Section 12.3)when:

 

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### (a)                                  (i)                                     all Notestheretofore authenticated and delivered (other than Notes that have beendestroyed, lost or stolen and that have been replaced, converted or paid asprovided in Section 2.6) have been delivered to the Trustee for cancellation;and

###  

##### (ii)                                  theCompany has paid or caused to be paid all other sums payable hereunder andunder the Notes by the Company; or

#####  

### (b)                                 (i) the Notes notpreviously delivered to the Trustee for cancellation shall have become due andpayable or are by their terms to become due and payable within one year or areto be called for redemption under arrangements satisfactory to the Trustee upondelivery of notice, (ii) theCompany shall have irrevocably deposited with the Trustee, as trust funds,cash, in an amount sufficient to pay principal of premium, if any, and intereston the outstanding Notes, to maturity or redemption, as the case may be, (iii) such deposit shallnot result in a breach or violation of, or constitute a default under, anyagreement or instrument pursuant to which the Company is a party or by which itor its property is bound and (iv) theCompany has delivered to the Trustee an Officers’ Certificate and an Opinion ofCounsel in form and substance reasonably satisfactory to the Trustee, eachstating that all conditions related to such defeasance have been complied with.

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Section 12.3                                SURVIVALOF CERTAIN OBLIGATIONS.  Notwithstandingthe satisfaction and discharge of this Indenture and of the Notes referred toin Section 12.1 or 12.2, the respective obligations of the Company and theTrustee under Sections 2.3, 2.4, 2.5, 2.6, 3.1, 4.2, 5.1, 6.4, 6.9, 7.6, 7.11,12.5, 12.6, 12.7, Articles XIV and XV shall survive until the Notes are nolonger outstanding, and thereafter, the obligations of the Company and theTrustee under Sections 6.9, 7.6, 12.5, 12.6 and 12.7 shall survive.  Nothing contained in this Article XII shallabrogate any of the rights, obligations or duties of the Trustee under thisIndenture.

 

Section 12.4                                ACKNOWLEDGMENTOF DISCHARGE BY TRUSTEE.  Subject toSection 12.7, after (i) the conditions of Section 12.1 or 12.2 have been satisfied,(ii) the Company has paid or caused to be paid all other sums payable hereunderby the Company and (iii) the Company has delivered to the Trustee an Officers’Certificate and an Opinion of Counsel, each stating that all conditionsprecedent referred to in clause (i) above relating to the satisfaction anddischarge of this Indenture have been complied with, the Trustee upon writtenrequest shall acknowledge in writing the discharge of the Company’s obligationsunder this Indenture except for those surviving obligations specified inSection 12.3.

 

Section 12.5                                APPLICATIONOF TRUST ASSETS.  The Trustee shall holdany cash or U.S. Government Obligations deposited with it in the irrevocabletrust established pursuant to Section 12.1 or 12.2, as the case may be.  The Trustee shall apply the deposited cashor the U.S. Government Obligations, together with earnings thereon inaccordance with this Indenture and the terms of the irrevocable trust agreementestablished pursuant to Section 12.1 or 12.2, as the case may be, to thepayment of principal of, premium, if any, and interest on the Notes.  The cash or U.S. Government Obligations soheld in trust and deposited with the Trustee in compliance with Section 12.1 or12.2, as the case may be, shall not be part of the trust estate under thisIndenture, but shall constitute a separate trust fund for the benefit of allholders entitled thereto.  Except asspecifically provided herein, the Trustee shall not be requested to

 

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invest any amounts held by itfor the benefit of the holders or pay interest on uninvested amounts to anyholder.

 

The Company shall pay and indemnify theTrustee against any tax, fee or other charge imposed on or assessed against theU.S. Government Obligations deposited pursuant to Section 12.1 hereof orSection 12.2 hereof or the principal and interest received in respect thereofother than any such tax, fee or other charge which by law is for the account ofthe holders of outstanding Notes.

 

Section 12.6                                REPAYMENTTO THE COMPANY; UNCLAIMED MONEY. Subject to applicable laws governing escheat of such property, and upontermination of the trust established pursuant to Section 12.1 hereof or 12.2hereof, as the case may be, the Trustee shall promptly pay to the Company uponwritten request any excess cash or U.S. Government Obligations held bythem.  Additionally, if amounts for thepayment of principal, premium, if any, or interest remains unclaimed for twoyears, the Trustee shall, upon written request, pay such amounts back to theCompany forthwith.  Thereafter, allliability of the Trustee with respect to such amounts shall cease.  After payment to the Company, holdersentitled to such payment must look to the Company for such payment as generalcreditors unless an applicable abandoned property law designates anotherperson.

 

Section 12.7                                REINSTATEMENT.  If the Trustee is unable to apply any cashor U.S. Government Obligations in accordance with Section 12.1 or 12.2 byreason of any legal proceeding or by reason of any order or judgment of anycourt or governmental authority enjoining, restraining or otherwise prohibitingsuch application, the Company’s obligations under this Indenture and the Notesshall be revived and reinstated as though no deposit had occurred pursuant toSection 12.1 or 12.2 until such time as the Trustee is permitted to apply allsuch cash or U.S. Government Obligations in accordance with Section 12.1 or12.2, as the case may be; provided that if the Company makes any payment ofprincipal of, premium, if any, or interest on any Notes following thereinstatement of its obligations, the Company shall be subrogated to the rightsof the holders of such Notes to receive such payment from the amounts held bythe Trustee.

 

# ARTICLE XIII

#  

# IMMUNITY OF INCORPORATORS, SHAREHOLDERS,OFFICERS AND DIRECTORS

#  

Section 13.1                                INDENTUREAND NOTES SOLELY CORPORATE OBLIGATIONS. No recourse for the payment of the principal of, or premium, if any, orinterest on any Note, or for any claim based thereon or otherwise in respectthereof, and no recourse under or upon any obligation, covenant or agreement ofthe Company in this Indenture or in any supplemental indenture or in any Note,or because of the creation of any indebtedness represented thereby, shall behad against any incorporator, shareholder, officer or director, as such, past,present or future, of the Company or of any successor entity, either directlyor through the Company or any successor entity, whether by virtue of anyconstitution, statute or rule of law, or by the enforcement of any assessmentor penalty or otherwise; it being expressly understood that all such liabilityis hereby expressly waived and released as a condition of, and as aconsideration for, the execution of this Indenture and the issuance of theNotes.

 

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# ARTICLE XIV

#  

# CONVERSION OF NOTES

#  

## Section 14.1                                RIGHTTO CONVERT.

##  

### (a)                                  Subject to and uponcompliance with the provisions of this Indenture, the holder of any Note shallhave the right to convert the principal hereof or any portion of such principalthat is $1,000 or an integral multiple thereof, into the Company’s Common Stockat any time following the earlier of (i) May 27, 2003 and (ii) theapproval by the Company’s shareholders of an amendment to the Company’sArticles of Incorporation to increase the number of authorized shares of CommonStock to an amount sufficient to cover the conversion of the Notes, theconversion of the Company’s existing notes due in 2003 and 2008, the conversionof the Company’s convertible preferred stock issuable upon execution of thewarrants granted to Centre Solutions (Bermuda) Limited and the exercise ofoutstanding options granted pursuant to the Company’s stock option plan, andprior to the close of business on October 14, 2008 (except that, with respectto any Note or portion of a Note that shall be called for redemption ordelivered for repurchase, such right shall terminate at the close of businessone Business Day immediately preceding the date fixed for redemption orrepurchase of such Note or portion of a Note unless the Company shall defaultin payment due upon redemption or repurchase thereof).  The principal amount of any such Note, orany portion of such principal amount that is $1,000 or an integral multiplethereof, is convertible into that number of fully paid and nonassessable sharesof Common Stock (as such shares shall then be constituted) obtained by dividingthe aggregate principal amount of the Notes or portion thereof surrendered forconversion by the Conversion Price in effect at such time rounded to thenearest 1/100,000th of a share (with 0.000005 being rolled upward)as such amount shall be certified by the Company as provided in an Officers’Certificate, by following the procedures specified in Section 14.2.  A Note (or portion thereof) in respect ofwhich a holder is exercising its option to require repurchase upon a change ofcontrol pursuant to Section 3.5 of this Indenture, may only be converted ifsuch holder withdraws its election to exercise said redemption option inaccordance with the terms of this Indenture. A holder of Notes is not entitled to any rights of a holder of CommonStock until such holder has converted such holder’s Notes to Common Stock andonly to the extent such Notes are deemed to have been converted to Common Stockunder this Article XIV.

###  

### (b)                                 In the event that theCompany does not amend its Articles of Incorporation on or before May 27, 2003to increase the number of authorized shares of Common Stock to an amountsufficient to cover the conversion of the Notes and the existing notes due in2008, the Company will, at the request of any Noteholder providing notice tothe Company in a manner consistent with Section 16.4, purchase such Noteholder’sNotes in cash at a price equal to 125% of the principal amount of suchNoteholder Notes plus accrued, but unpaid interest.  The right of a Noteholder to request that the Company purchasesuch Noteholder’s Notes pursuant to this Section 14.1(b) shall terminate uponthe amendment of the Company’s Articles of Incorporation to increase the numberof authorized shares of Common Stock to an amount sufficient to cover theconversion of the Notes and the existing notes due in 2008.

 

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### (c)                                  In the event aNoteholder desires to convert all, or any portion, of its Notes into shares ofCommon Stock (or other securities into which the Notes are then convertible)and the Company does not have authorized a sufficient number of shares ofCommon Stock (or other securities into which the Notes are then convertible)for such conversion, then in lieu of delivering shares of Common Stock (orother securities into which the Notes are then convertible) upon conversionpursuant to 14.1(a) of that portion of such holder’s Notes for which there isan insufficient number of shares of Common Stock (or other securities intowhich the Notes are then convertible) (the “Cash Equivalent Notes”), theCompany shall pay to the holder converting the Cash Equivalent Notes whoproperly exercises the conversion privilege, as set forth in Section 14.2, anamount, as calculated by the Company and certified to the Trustee in anOfficers’ Certificate of the Company, in cash equal to the Market Cash ConversionPrice of the shares of Common Stock into which such Cash Equivalent Notes arethen convertible.

###  

### (d)                                 In the event that theCompany directs the Trustee to pay cash upon any conversion in lieu ofdelivering shares of Common Stock or any other securities, as the case may be,the Company shall deliver to the Trustee written notice of such direction notlater than the close of business on the first Trading Day after the date ofreceipt by the Trustee of the notice of conversion delivered by such holder pursuantto Section 14.2, and the Trustee shall notify by facsimile the contact personspecified in the holder’s conversion notice of such election by the Company tosuch holder.  In such event,notwithstanding any other provisions in this Article XIV, in lieu of deliveringCommon Stock upon conversion of such Notes surrendered in accordance withSection 14.2, the Company shall pay or direct the Trustee to pay the holdersurrendering such securities an amount in cash equal to the Market CashConversion Price of the shares of Common Stock, plus any cash and otherproperty theretofore apportioned to such shares of Common Stock in accordancewith Section 14.2.  Prior to orconcurrently with such cash payment, the Company will provide the Trustee withan Officers’ Certificate setting forth the Market Cash Conversion Price andwill deposit with the paying agent the cash so payable.  The Trustee shall have no obligation orliability with respect to the calculation of the Market Cash Conversion Price.

###  

### (e)                                  In the event that aNoteholder desires to convert all or any portion of its Notes into shares ofCommon Stock prior to October 15, 2005, the Company will pay such Noteholder anamount equal to the interest that would have been otherwise earned on suchNotes between the date of such conversion and October 15, 2005 discounted topresent value utilizing a rate of 6.25% with simple interest over a 360 dayyear.  In the event that a Noteholderelects to convert prior to October 15, 2005 and the Company is required to payinterest pursuant to this Section 14.1(e), the Company may, in its solediscretion, elect to make such interest payment in cash or in shares of CommonStock based on 90% of the average Closing Prices of the Common Stock for thefive Trading Days immediately preceding the conversion date.  Prior to or concurrently with such payment,the Company will provide the Trustee with an Officers’ Certificate settingforth the calculation of the payment required by this Section 14.1(e).  The Trustee shall have no obligation orliability with respect to the calculation of the payments required by thisSection 14.1(e).

###  

Section 14.2                                EXERCISEOF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON CONVERSION; NO ADJUSTMENTFOR INTEREST OR DIVIDENDS.  In order toexercise the conversion privilege with respect to any interest in the

 

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Global Note, the beneficialholder must complete the appropriate instruction form for conversion pursuantto the Depository’s book-entry conversion program and follow the otherprocedures set forth in such program.

 

As promptly as practicable after satisfactionof the requirements for conversion set forth above, subject to Section 14.1(c)and in compliance with any restrictions on transfer if shares issuable onconversion are to be issued in a name other than that of the Noteholder (as ifsuch transfer were a transfer of the Note or Notes (or portion thereof) soconverted), the Company shall issue in book-entry form the number of fullshares issuable upon the conversion of such Note or portion thereof in the nameof such holder in compliance with the Depository’s book-entry conversionprogram and with the provisions of this Article XIV and shall issue a check orcash in respect of any fractional interest in respect of a share of CommonStock arising upon such conversion, as provided in Section 14.4.

 

Each conversion shall be deemed to have beeneffected as to any such Note (or portion thereof) on the date on which therequirements set forth above in this Section 14.2 have been satisfied as tosuch Note (or portion thereof), and, subject to Section 14.1(c), the person inwhose name any shares of Common Stock shall be issuable upon such conversionshall be deemed to have become on said date the holder of record of the sharesrepresented thereby.

 

Any unpaid interest on any Note or portionthereof as of the date such Note or portion thereof is surrendered forconversion shall (unless such Note or portion thereof being converted shallhave been called for redemption on a redemption date during the period from theclose of business on or after any record date for the payment of interest tothe close of business on the business day following the corresponding interestpayment date) be paid in cash to the former holder of such Note or portionthereof on the next succeeding interest payment date.

 

Upon the conversion of an interest in theGlobal Note, the Trustee, or the Custodian at the direction of the Trustee,shall make a notation on the Global Note as to the reduction in the principalamount represented thereby.

 

Section 14.3                                MANDATORYCONVERSION.  The Notes shall beautomatically converted into Common Stock on the first date (the “MandatoryConversion Date”) on or after the 15th Trading Day following October 15, 2005,on which: (i) the average of the Closing Price (as defined in Section 14.6(g))of the Common Stock on 15 consecutive preceding Trading Days is equal to orgreater than 110% of the Conversion Price and (ii) the Company has sufficientshares of Common Stock (or other securities into which the Notes are thenconvertible) authorized to execute the Mandatory Conversion (as definedbelow).  The Notes shall be convertedinto that number of fully paid and nonassessable shares of Common Stock (orother securities into which the Notes are then convertible) obtained bydividing the aggregate principal amount of the Notes by the Conversion Price ineffect at such time rounded to the nearest 1/100,000th of a share(with 0.000005 being rolled upward) (the “Mandatory Conversion”).

 

The Company will monitor the Closing Price ofthe Common Stock.  Upon the occurrenceof Mandatory Conversion, the Company shall complete the appropriate instructionform for conversion pursuant to the Depository’s book-entry conversion programand follow the

 

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procedures set forth in suchprogram.  Any interest on the Notesaccrued as of the Mandatory Conversion Date shall be paid in cash to the formerholders of such Notes on the next succeeding interest payment date.  After the Mandatory Conversion, the Noteswill no longer represent Indebtedness of the Company, will no longer accrueinterest or require the Company to make any payment of principal, and theCompany’s obligations to make any further payments with respect to the Noteswill terminate (except for under this Section 14.3).  The Company will cause to be issued inbook-entry form shares of Common Stock sufficient to effect the MandatoryConversion and shall issue a check or cash in respect of any fractionalinterest in respect of a share of Common Stock arising upon such conversion, asprovided in Section 14.4.  The shares ofCommon Stock issued as a result of the Mandatory Conversion shall be creditedthrough the Depository’s book-entry conversion program to the respectiveaccount of each Noteholder as of the Mandatory Conversion Date.

 

Section 14.4                                CASHPAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock or scrip representing fractionalshares shall be issued upon conversion of Notes.  Subject to Section 14.1(c), (i) if more than one Note shall besurrendered for conversion at one time by the same holder, the number of fullypaid and nonassessable shares of Common Stock issuable upon conversion of a Noteshall be determined by dividing the aggregate principal amount of such Notes orportion thereof surrendered for conversion by the Conversion Price and (ii) theaggregate number of shares of Common Stock issuable upon conversion shall berounded to the nearest 1/100,000th of a share (with .0000005 being rolledupward).  If any fractional share ofstock would be issuable upon the conversion of any Note or Notes, the Companyshall make an adjustment therefor in cash at the current market valuethereof.  The current market value of ashare of Common Stock shall be determined by multiplying the fractional shareby the Closing Price on the Trading Day immediately preceding the MandatoryConversion Date or the date, pursuant to Section 14.2, on which the Notes (orspecified portions thereof) are deemed to have been converted.

 

Section 14.5                                CONVERSIONPRICE.  The conversion price of theNotes (the “Conversion Price”) shall be $1.75 per share of Common Stock,subject to adjustment as provided in this Article XIV.

 

Section 14.6                                ADJUSTMENTOF CONVERSION PRICE.  The ConversionPrice shall be adjusted from time to time by the Company as follows:

 

### (a)                                  In case the Companyshall (i) paya dividend or make a distribution on its outstanding Common Stock in shares ofits Common Stock, (ii) subdivideor split its outstanding Common Stock into a greater number of shares, (iii) combine itsoutstanding Common Stock into a smaller number of shares or (iv) issue any shares ofCapital Stock by reclassification of its Common Stock, the conversion price ineffect immediately prior thereto shall be adjusted so that the holder of anyNotes thereafter surrendered for conversion shall be entitled to receive thenumber of shares of Common Stock of the Company which such holder would have ownedor have been entitled to receive after the occurrence of any of the eventsdescribed above had such Notes been surrendered for conversion immediatelyprior to the occurrence of such event or the record date therefor, whichever isearlier.  An adjustment made pursuant tothis subsection (a) shall become effective immediately after the close ofbusiness on the record date for determination of shareholders entitled toreceive such dividend or distribution in the case of a

 

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dividend or distribution(except as provided in Section 14.6(j)) and shall become effective immediatelyafter the close of business on the effective date in the case of a subdivision,split, combination or reclassification. Any shares of Common Stock issuable in payment of a dividend shall bedeemed to have been issued immediately prior to the close of business on therecord date for such dividend for purposes of calculating the number ofoutstanding shares of Common Stock under Sections 14.6(b) and (c).

###  

### (b)                                 In case the Companyshall issue rights, options or warrants to all holders of its outstandingshares of Common Stock entitling them to subscribe for or purchase shares ofCommon Stock at a price per share less than the Current Market Price (asdefined in Section 14.6(g)) on the Record Date fixed for determination ofshareholders entitled to receive such rights, options or warrants, theConversion Price shall be adjusted so that the same shall equal the pricedetermined by multiplying the Conversion Price in effect at the opening ofbusiness on the date after the Record Date by a fraction the numerator of whichshall be the number of shares of Common Stock outstanding at the close ofbusiness on the Record Date plus the number of shares that the aggregateoffering price of the total number of shares so offered would purchase at suchCurrent Market Price, and the denominator of which shall be the number ofshares of Common Stock outstanding on the close of business on the Record Dateplus the total number of additional shares of Common Stock so offered forsubscription or purchase.  Suchadjustment shall become effective immediately after the opening of business onthe day following the Record Date fixed for determination of shareholders entitledto receive such rights, options or warrants. To the extent that shares of Common Stock are not delivered after theexpiration or termination of such rights, options or warrants, the ConversionPrice shall be readjusted to the Conversion Price that would then be in effecthad the adjustments made upon the issuance of such rights, options or warrantsbeen made on the basis of delivery of only the number of shares of Common Stockactually delivered.  In the event thatsuch rights, options or warrants are not so issued, the Conversion Price shallagain be adjusted to be the Conversion Price that would then be in effect ifsuch date fixed for the determination of shareholders entitled to receive suchrights, options or warrants had not been fixed.  In determining whether any rights, options or warrants entitlethe holders to subscribe for or purchase shares of Common Stock at less thansuch Current Market Price, and in determining the aggregate offering price ofsuch shares of Common Stock, there shall be taken into account anyconsideration received for such rights, options or warrants, the value of suchconsideration, if other than cash, to be determined by the Board of Directors.

###  

### (c)                                  In case outstandingshares of Common Stock shall be subdivided into a greater number of shares ofCommon Stock, the Conversion Price in effect at the opening of business on theday following the day upon which such subdivision becomes effective shall beproportionately reduced, and conversely, in case outstanding shares of CommonStock shall be combined into a smaller number of shares of Common Stock, theConversion Price in effect at the opening of business on the day following theday upon which such combination becomes effective shall be proportionatelyincreased, such reduction or increase, as the case may be, to become effectiveimmediately after the opening of business on the day following the day uponwhich such subdivision or combination becomes effective.

###  

### (d)                                 In case the Companyshall, by dividend or otherwise, distribute to all holders of its Common Stockshares of any class of Capital Stock of the Company (other than

 

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any dividends or distributionsto which Section 14.6(a) applies) or evidences of its indebtedness or assets(including securities, but excluding any rights, options or warrants referredto in Section 14.6(b), and excluding any dividend or distribution (x) inconnection with the liquidation, dissolution or winding-up of the Company,whether voluntary or involuntary, (y) exclusively in cash or (z) referred to inSection 14.6(a) (any of the foregoing hereinafter in this Section 14.6(d)called the “Securities”)), then, in each such case, the Conversion Price shallbe reduced so that the same shall be equal to the price determined bymultiplying the Conversion Price in effect immediately prior to the close ofbusiness on the Record Date (as defined in Section 14.6(g)) with respect tosuch distribution by a fraction of which the numerator shall be the CurrentMarket Price (determined as provided in Section 14.6(g)) on such date less thefair market value (as determined by the Board of Directors, whose determinationshall be conclusive and described in a Board Resolution) on such date of theportion of the Securities so distributed applicable to one share of CommonStock and the denominator shall be such Current Market Price, such reduction tobecome effective immediately prior to the opening of business on the dayfollowing the Record Date; provided that in the event the then fair marketvalue (as so determined) of the portion of the Securities so distributedapplicable to one share of Common Stock is equal to or greater than the CurrentMarket Price on the Record Date, in lieu of the foregoing adjustment, adequateprovision shall be made so that each Noteholder shall have the right to receiveupon conversion the amount of Securities such holder would have received hadsuch holder converted each Note on such date. In the event that such dividend or distribution is not so paid or made,the Conversion Price shall again be adjusted to be the Conversion Price thatwould then be in effect if such dividend or distribution had not beendeclared.  If the Board of Directorsdetermines the fair market value of any distribution for purposes of thisSection 14.6(d) by reference to the actual or when issued trading market forany securities comprising all or part of such distribution, it must in doing soconsider the prices in such market over the same period used in computing theCurrent Market Price pursuant to Section 14.6(g) to the extent possible.

###  

Notwithstanding the foregoing provisions ofthis Section 14.6(d), no adjustment shall be made hereunder for anydistribution of Securities if the Company makes proper provision so that eachNoteholder who converts a Note (or any portion thereof) after the date fixedfor determination of shareholders entitled to receive such distribution shallbe entitled to receive upon such conversion, in addition to the shares ofCommon Stock issuable upon such conversion, the amount and kind of Securitiesthat such holder would have been entitled to receive if such holder had,immediately prior to such determination date, converted such Note into CommonStock; provided that, with respect to any Securities that are convertible,exchangeable or exercisable, the foregoing provision shall only apply to theextent (and so long as) the Securities receivable upon conversion of such Notewould be convertible, exchangeable or exercisable, as applicable, without anyloss of rights or privileges for a period of at least 60 days followingconversion of such Note.

 

Rights, options or warrants distributed bythe Company to all holders of Common Stock entitling the holders thereof topurchase shares of the Company’s Capital Stock (either initially or undercertain circumstances), which rights, options or warrants, until the occurrenceof a specified event or events (the “Trigger Event”) (i) are deemed to betransferred with such shares of Common Stock, (ii) are not exercisable and(iii) are also issued in respect of future issuances of Common Stock, shall notbe deemed distributed for purposes of this Section 14.6(d) (and no adjustmentto the Conversion Price under Section 14.6(d) shall be required) until the

 

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occurrence of the earliestTrigger Event.  In addition, in theevent of any distribution of rights, options or warrants, or any Trigger Eventwith respect thereto, that shall have resulted in an adjustment to theConversion Price under this Section 14.6(d), (1) in the case of any suchrights, options or warrants that shall all have been redeemed or repurchasedwithout exercise by any holders thereof, the Conversion Price shall bereadjusted upon such final redemption or repurchase to give effect to suchdistribution or Trigger Event, as the case may be, as though it were a cashdistribution, equal to the per share redemption or repurchase price received bya holder of Common Stock with respect to such rights, options or warrants(assuming such holder had retained such rights, options or warrants), made toall holders of Common Stock as of the date of such redemption or repurchase,and (2) in the case of such rights, options or warrants all of which shall haveexpired or been terminated without exercise by any holder thereof, theConversion Price shall be readjusted as if such issuance had not occurred.

 

For purposes of this Section 14.6(d) andSections 14.6(a) and (b), any dividend or distribution to which this Section14.6(d) is applicable that also includes shares of Common Stock, or rights,options or warrants to subscribe for or purchase shares of Common Stock (orboth), shall be deemed instead to be (1) a dividend or distribution of theevidences of indebtedness, assets or shares of Capital Stock other than suchshares of Common Stock or rights, options or warrants (and any Conversion Pricereduction required by this Section 14.6(d) with respect to such dividend ordistribution shall then be made) immediately followed by (2) a dividend ordistribution of such shares of Common Stock or such rights, options or warrants(and any further Conversion Price reduction required by Sections 14.6(a) and(b) with respect to such dividend or distribution shall then be made) except(A) the Record Date of such dividend or distribution shall be substituted as“the date fixed for the determination of shareholders entitled to receive suchdividend or other distribution” and “the date fixed for such determination”within the meaning of Sections 14.6(a) and (b) and (B) any shares of CommonStock included in such dividend or distribution shall not be deemed“outstanding at the close of business on the date fixed for such determination”within the meaning of Section 14.6(a).

 

### (e)                                  In case the Companyshall, by dividend or otherwise, distribute to all holders of its Common Stockcash (excluding any cash that is distributed upon a merger or consolidation towhich Section 14.7 applies or as part of a distribution referred to in Section14.6(d) for which an adjustment to the Conversion Price is provided therein) inan aggregate amount that, combined together with (1) the aggregate amount ofany other such distributions to all holders of its Common Stock madeexclusively in cash within the 12 months preceding the date of payment of suchdistribution, and in respect of which no adjustment pursuant to this Section14.6(e) has been made, and (2) the aggregate of any cash plus the fair marketvalue (as determined by the Board of Directors, whose determination shall beconclusive and described in a Board Resolution) of consideration payable inrespect of any tender offer, by the Company or any of its Subsidiaries for allor any portion of the Common Stock concluded within the 12 months preceding thedate of payment of such distribution, and in respect of which no adjustmentpursuant to Section 14.6(f) has been made, exceeds 20.0% of the product of theCurrent Market Price (determined as provided in Section 14.6(g)) on the RecordDate with respect to such distribution times the number of shares of CommonStock outstanding on such date, then, and in each such case, immediately afterthe close of business on such date, unless the Company elects to reserve suchcash for distribution to the holders of the Notes upon the conversion of theNotes so that any such holder converting Notes shall receive upon such

 

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conversion, in addition to theshares of Common Stock to that such holder is entitled, the amount of cashwhich such holder would have received if such holder had, immediately prior tothe Record Date for such distribution of cash, converted its Notes into CommonStock, the Conversion Price shall be reduced so that the same shall equal theprice determined by multiplying the Conversion Price in effect immediatelyprior to the close of business on such date by a fraction (i) the numerator ofwhich shall be equal to the Current Market Price on the Record Date less anamount equal to the quotient of (x) the excess of such combined amount oversuch 20.0% and (y) the number of shares of Common Stock outstanding on theRecord Date and (ii) the denominator of which shall be equal to the CurrentMarket Price on such date; provided that in the event the portion of the cashso distributed applicable to one share of Common Stock is equal to or greaterthan the Current Market Price of the Common Stock on the Record Date, in lieuof the foregoing adjustment, adequate provision shall be made so that eachNoteholder shall have the right to receive upon conversion the amount of cashsuch holder would have received had such holder converted each Note on theRecord Date.  In the event that suchdividend or distribution is not so paid or made, the Conversion Price shall againbe adjusted to be the Conversion Price that would then be in effect if suchdividend or distribution had not been declared.

###  

### (f)                                    In case a tenderoffer made by the Company or any of its Subsidiaries for all or any portion ofthe Common Stock shall expire and such tender offer (as amended upon theexpiration thereof) shall require the payment to shareholders (based on theacceptance (up to any maximum specified in the terms of the tender offer) ofPurchased Shares (as defined below)) of an aggregate consideration having afair market value (as determined by the Board of Directors, whose determinationshall be conclusive and described in a Board Resolution) that combined togetherwith (1) the aggregate of the cash plus the fair market value (as determined bythe Board of Directors, whose determination shall be conclusive and describedin a Board Resolution), as of the expiration of such tender offer, ofconsideration payable in respect of any other tender offer, by the Company orany of its Subsidiaries for all or any portion of the Common Stock expiringwithin the 12 months preceding the expiration of such tender offer, and inrespect of which no adjustment pursuant to Section 14.6(f) has been made, and(2) the aggregate amount of any distributions to all holders of the Company’sCommon Stock made exclusively in cash within 12 months preceding the expirationof such tender offer, and in respect of which no adjustment pursuant to Section14.6(e) has been made, exceeds 20.0% of the product of the Current Market Price(determined as provided in Section 14.6(g)) as of the last time (the“Expiration Time”) tenders could have been made pursuant to such tender offer(as it may be amended) times the number of shares of Common Stock outstanding(including any tendered shares) on the Expiration Time, then, and in each suchcase, immediately prior to the opening of business on the day after the date ofthe Expiration Time, the Conversion Price shall be adjusted so that the sameshall equal the price determined by multiplying the Conversion Price in effectimmediately prior to close of business on the date of the Expiration Time by afraction of which the numerator shall be the number of shares of Common Stockoutstanding (including any tendered shares) on the Expiration Time multipliedby the Current Market Price of the Common Stock on the Trading Day nextsucceeding the Expiration Time and the denominator shall be the sum of (x) thefair market value (determined as aforesaid) of the aggregate considerationpayable to shareholders based on the acceptance (up to any maximum specified inthe terms of the tender offer) of all shares validly tendered and not withdrawnas of the Expiration Time (the shares deemed so accepted, up to any suchmaximum, being referred to as the “Purchased Shares”) and

 

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(y) the product of the numberof shares of Common Stock outstanding (less any Purchased Shares) on theExpiration Time and the Current Market Price of the Common Stock on the TradingDay next succeeding the Expiration Time, such reduction to become effectiveimmediately prior to the opening of business on the day following theExpiration Time.  In the event that theCompany is obligated to purchase shares pursuant to any such tender offer, butthe Company is permanently prevented by applicable law from effecting any suchpurchases or all such purchases are rescinded, the Conversion Price shall againbe adjusted to be the Conversion Price that would then be in effect if suchtender offer had not been made.

###  

### (g)                                 For purposes of thisSection 14.6, the following terms shall have the meaning indicated:

###  

##### (i)                                     “ClosingPrice” with respect to any securities on any day shall mean the closing saleprice regular way on such day or, in case no such sale takes place on such day,the average of the reported closing bid and asked prices, regular way, in eachcase on the New York Stock Exchange, or, if such security is not listed oradmitted to trading on such exchange, on the principal national securityexchange or quotation system on which such security is quoted or listed oradmitted to trading, or, if not quoted or listed or admitted to trading on anynational securities exchange or quotation system, the average of the closingbid and asked prices of such security on the over-the-counter market on the dayin question as reported by the National Quotation Bureau Incorporated, or asimilar generally accepted reporting service, or if not so available, in suchmanner as furnished by any New York Stock Exchange member firm selected fromtime to time by the Board of Directors for that purpose, or a price determinedin good faith by the Board of Directors, whose determination shall beconclusive and described in a Board Resolution.

#####  

##### (ii)                                  “CurrentMarket Price” shall mean the average of the daily Closing Prices per share ofCommon Stock for the ten consecutive Trading Days immediately prior to the datein question; provided that (1) if the “ex” date (as hereinafter defined) forany event (other than the issuance or distribution or Change of Controlrequiring such computation) that requires an adjustment to the Conversion Pricepursuant to Section 14.6(a), (b), (c), (d), (e) or (f) occurs during such tenconsecutive Trading Days, the Closing Price for each Trading Day prior to the“ex” date for such other event shall be adjusted by multiplying such ClosingPrice by the same fraction by which the Conversion Price is so required to beadjusted as a result of such other event, (2) if the “ex” date for any event (otherthan the issuance, distribution or Change of Control requiring suchcomputation) that requires an adjustment to the Conversion Price pursuant toSection 14.6(a), (b), (c), (d), (e) or (f) occurs on or after the “ex” date forthe issuance or distribution requiring such computation and prior to the day inquestion, the Closing Price for each Trading Day on and after the “ex” date forsuch other event shall be adjusted by multiplying such Closing Price by thereciprocal of the fraction by which the Conversion Price is so required to beadjusted as a result of such other event and (3) if the “ex” date for theissuance, distribution or Change of Control requiring such computation is priorto the day in question, after taking

 

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##### into accountany adjustment required pursuant to clause (1) or (2) of this proviso, theClosing Price for each Trading Day on or after such “ex” date shall be adjustedby adding thereto the amount of any cash and the fair market value (asdetermined by the Board of Directors in a manner consistent with anydetermination of such value for purposes of Section 14.6(d) or (f), whosedetermination shall be conclusive and described in a Board Resolution) of theevidences of indebtedness, shares of Capital Stock or assets being distributedapplicable to one share of Common Stock as of the close of business on the daybefore such “ex” date.  For purposes ofany computation under Section 14.6(f), the Current Market Price of the CommonStock on any date shall be deemed to be the average of the daily Closing Pricesper share of Common Stock for such day and the next two succeeding TradingDays; provided that if the “ex” date for any event (other than the tender orexchange offer requiring such computation) that requires an adjustment to theConversion Price pursuant to Section 14.6(a), (b), (c), (d), (e) or (f) occurson or after the Expiration Time for the tender or exchange offer requiring suchcomputation and prior to the day in question, the Closing Price for eachTrading Day on and after the “ex” date for such other event shall be adjustedby multiplying such Closing Price by the reciprocal of the fraction by whichthe Conversion Price is so required to be adjusted as a result of such otherevent.  For purposes of this paragraph,the term “ex” date, (1) when used with respect to any issuance or distribution,means the first date on which the Common Stock trades regular way on therelevant exchange or in the relevant market from which the Closing Price wasobtained without the right to receive such issuance or distribution, (2) whenused with respect to any subdivision or combination of shares of Common Stock,means the first date on which the Common Stock trades regular way on suchexchange or in such market after the time at which such subdivision orcombination becomes effective and (3) when used with respect to any tender orexchange offer means the first date on which the Common Stock trades regularway on such exchange or in such market after the expiration of such offer.  Notwithstanding the foregoing, wheneversuccessive adjustments to the Conversion Price are called for pursuant to thisSection 14.6, such adjustments shall be made to the Current Market Price as maybe necessary or appropriate to effectuate the intent of this Section 14.6 andto avoid unjust or inequitable results as determined in good faith by the Boardof Directors.

#####  

##### (iii)                               “fairmarket value” shall mean the amount that a willing buyer would pay a willingseller in an arm’s-length transaction.

#####  

##### (iv)                              “RecordDate” shall mean, with respect to any dividend, distribution or othertransaction or event in which the holders of Common Stock have the right toreceive any cash, securities or other property or in which the Common Stock (orother applicable security) is exchanged for or converted into any combinationof cash, securities or other property, the date fixed for determination ofshareholders entitled to receive such cash, securities or other property(whether such date is fixed by the Board of Directors or by statute, contractor otherwise).

 

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### (h)                                 The Company may makesuch reductions in the Conversion Price, in addition to those required bySections 14.6(a), (b), (c), (d), (e) and (f), as the Board of Directorsconsiders to be advisable to avoid or diminish any income tax to holders ofCommon Stock or rights to purchase Common Stock resulting from any dividend ordistribution of stock (or rights to acquire stock) or from any event treated assuch for income tax purposes.  To theextent permitted by applicable law, the Company from time to time may reducethe Conversion Price by any amount for any period of time if the period is atleast 20 days, the reduction is irrevocable during the period and the Board ofDirectors shall have made a determination that such reduction would be in thebest interests of the Company, which determination shall be conclusive anddescribed in a Board Resolution.  Wheneverthe Conversion Price is reduced pursuant to the preceding sentence, the Companyshall mail to all holders of record of the Notes a notice of the reduction atleast 15 days prior to the date the reduced Conversion Price takes effect, andsuch notice shall state the reduced Conversion Price and the period it shall bein effect.

###  

### (i)                                     No adjustment inthe Conversion Price shall be required unless such adjustment would require anincrease or decrease of at least 1% in such price; provided that anyadjustments that by reason of this Section 14.6(i) are not required to be madeshall be carried forward and taken into account in any subsequentadjustment.  All calculations under thisArticle XIV shall be made by the Company and shall be made to the nearest 1/100,000(with 0.0000005 being rolled upward).

###  

No adjustment need be made for rights topurchase Common Stock pursuant to a Company plan for reinvestment of dividendsor interest.

 

No adjustment need be made for a change inthe par value, or to or from no par value, of the Common Stock.

 

To the extent the Notes become convertibleinto cash, assets, property or securities (other than Common Stock of theCompany), no adjustment need be made thereafter as to the cash, assets,property or such securities (except as such securities may otherwise by theirterms provide), and interest shall not accrue on such cash.

 

### (j)                                     Whenever theConversion Price is adjusted as herein provided, the Company shall promptlyfile with the Trustee and any conversion agent other than the Trustee anOfficers’ Certificate setting forth the Conversion Price after such adjustmentand setting forth a brief statement of the facts requiring suchadjustment.  Promptly after delivery ofsuch certificate, the Company shall prepare a notice of such adjustment of theConversion Price setting forth the adjusted Conversion Price and the date onwhich each adjustment becomes effective and shall mail such notice of suchadjustment of the Conversion Price to the holder of each Note at his lastaddress appearing on the Note register provided for in Section 2.5, within 20days after execution thereof.  Failureto deliver such notice shall not effect the legality or validity of any suchadjustment.

###  

### (k)                                  In any case in whichthis Section 14.6 provides that an adjustment shall become effective immediatelyafter a Record Date for an event, the Company may defer until the occurrence ofsuch event (i) issuing to the holder of any Note converted after such RecordDate and before the occurrence of such event the additional shares of CommonStock issuable upon

 

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such conversion by reason ofthe adjustment required by such event over and above the Common Stock issuableupon such conversion before giving effect to such adjustment and (ii) paying tosuch holder any amount in cash in lieu of any fraction pursuant to Section14.4.

###  

Section 14.7                                EFFECTOF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.  If any of the following events occur, namely (i) anyreclassification or change of outstanding shares of Common Stock (other than achange in par value, or to or from no par value, as a result of a subdivisionor combination), (ii) any consolidation, merger or combination of the Companywith another corporation as a result of which holders of Common Stock shall beentitled to receive stock, securities or other property or assets (includingcash) with respect to or in exchange for such Common Stock or (iii) any sale orconveyance of the properties and assets of the Company as, or substantially as,an entirety (determined on a consolidated basis) to any other corporation as aresult of which holders of Common Stock shall be entitled to receive stock,securities or other property or assets (including cash) with respect to or inexchange for such Common Stock, then the Company or the successor or purchasingcorporation, as the case may be, shall execute with the Trustee a supplementalindenture (which shall comply with the Trust Indenture Act as in force at thedate of execution of such supplemental indenture if such supplemental indentureis then required to so comply) providing that the Notes shall be convertibleinto the kind and amount of shares of stock and other securities or property orassets (including cash) receivable upon such reclassification, change, consolidation,merger, combination, sale or conveyance by a holder of a number of shares ofCommon Stock issuable upon conversion of such Notes (assuming, for suchpurposes, a sufficient number of authorized shares of Common Stock available toconvert all such Notes) immediately prior to such reclassification, change,consolidation, merger, combination, sale or conveyance, assuming such holder ofCommon Stock did not exercise his rights of election, if any, as to the kind oramount of securities, cash or other property receivable upon suchreclassification, change, consolidation, merger, combination, sale orconveyance (provided that, if the kind or amount of securities, cash or otherproperty receivable upon such reclassification, change, consolidation, merger,combination, sale or conveyance is not the same for each share of Common Stockin respect of which such rights of election shall not have been exercised(“non-electing share”), then for the purposes of this Section 14.7 the kind andamount of securities, cash or other property receivable upon suchreclassification, change, consolidation, merger, combination, sale orconveyance for each non-electing share shall be deemed to be the kind andamount so receivable per share by a plurality of the non-electing shares).  Such supplemental indenture shall providefor adjustments that shall be as nearly equivalent as may be practicable to theadjustments provided for in this Article XIV.

 

The Company shall cause notice of theexecution of such supplemental indenture to be mailed to each holder of Notes,at his address appearing on the Note register provided for in Section 2.5,within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validityof such supplemental indenture.

 

The above provisions of this Section 14.7shall similarly apply to successive reclassifications, changes, consolidations,mergers, combinations, sales and conveyances.

 

Section 14.8                                TAXESON SHARES ISSUED.  The issuance of stockcertificates on conversions of Notes shall be made without charge to theconverting Noteholder for any

 

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transfer or similar tax inrespect of the issue thereof.  TheCompany shall not, however, be required to pay any tax that may be payable inrespect of any transfer involved in the issue and delivery of stock in any nameother than that of the holder of any Note converted, and the Company shall notbe required to issue or deliver any such stock certificate unless and until theperson or persons requesting the issuance thereof shall have paid to theCompany the amount of such tax or shall have established to the satisfaction ofthe Company that such tax has been paid.

 

Section 14.9                                RESERVATIONOF SHARES; SHARES TO BE FULLY PAID; LISTING OF COMMON STOCK.  Subject to Section 14.1(c) the Company shallprovide, free from preemptive rights, out of its authorized but unissued sharesor shares held in treasury, sufficient shares to provide for the conversion ofthe Notes from time to time as such Notes are presented for conversion.

 

Before taking any action that would cause anadjustment reducing the Conversion Price below the then par value, if any, ofthe shares of Common Stock issuable upon conversion of the Notes, the Companyshall take all corporate action that may, in the opinion of its counsel, benecessary in order that the Company may validly and legally issue shares ofsuch Common Stock at such adjusted Conversion Price.

 

The Company covenants that all shares ofCommon Stock that may be issued upon conversion of Notes shall, upon issuance,be fully paid and nonassessable by the Company and free from all taxes, liensand charges with respect to the issuance thereof.

 

Section 14.10                          RESPONSIBILITYOF TRUSTEE.  The Trustee and any other conversionagent shall not at any time be under any duty or responsibility to any holderof Notes to determine whether any facts exist that may require any adjustmentof the Conversion Price or notice thereof, or with respect to the nature,accuracy or extent or calculation of any such adjustment when made, or withrespect to the method employed, or herein or in any supplemental indentureprovided to be employed, in making the same. The Trustee and any other conversion agent shall not be accountable withrespect to the validity or value (or the kind or amount) of any shares ofCommon Stock, or of any securities or property, that may at any time be issuedor delivered upon the conversion of any Note; and the Trustee and any otherconversion agent make no representations with respect thereto or actions oromissions by the Company in connection with this Article XIV.  Subject to the provisions of Section 7.1,neither the Trustee nor any conversion agent shall be responsible for anyfailure of the Company to issue, transfer or deliver any shares of Common Stockor stock certificates or other securities or property or cash upon thesurrender of any Note for the purpose of conversion or to comply with any ofthe duties, responsibilities or covenants of the Company contained in thisArticle XIV.  Without limiting thegenerality of the foregoing, neither the Trustee nor any conversion agent shallbe under any responsibility to determine whether a supplemental indenture underSection 14.7 hereof need to be entered into or the correctness of anyprovisions contained in any supplemental indenture entered into pursuant toSection 14.7 relating either to the kind or amount of shares of stock orsecurities or property (including cash) receivable by Noteholders upon the conversionof their Notes after any event referred to in such Section 14.7 or to anyadjustment to be made with respect thereto, and may accept as conclusiveevidence of the correctness of any such provisions, and shall be protected inrelying upon, the Officers’

 

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Certificate (which the Companyshall be obligated to file with the Trustee prior to the execution of any suchsupplemental indenture) with respect thereto.

 

Section 14.11                          NOTICETO HOLDERS PRIOR TO CERTAIN ACTIONS.  Incase:

 

### (a)                                  the Company makes anydistribution or dividend that would require an adjustment in the ConversionPrice pursuant to Section 14.6; or

###  

### (b)                                 the Company takes anyaction that would require a supplemental indenture pursuant to Section 14.7; or

###  

### (c)                                  of the voluntary orinvoluntary dissolution, liquidation or winding-up of the Company,

###  

the Company shall cause to be filed with the Trustee and to be mailedto each holder of Notes at his address appearing on the Note register, as promptlyas possible but in any event at least 15 days prior to the applicable datehereinafter specified, a notice stating (x) the date on which a record date isto be taken for the purpose of such dividend, distribution, rights, options orwarrants, or, if a record is not to be taken, the date as of which the holdersof Common Stock of record to be entitled to such dividend, distribution,rights, options or warrants are to be determined or (y) the date on which suchreclassification, change, consolidation, merger, sale, conveyance, transfer,dissolution, liquidation or winding-up is expected to become effective or occurand the date as of which it is expected that holders of record of Common Stockshall be entitled to exchange their Common Stock for securities or otherproperty deliverable upon such reclassification, change, consolidation, merger,sale, conveyance, transfer, dissolution, liquidation or winding-up.  Neither the failure to give such notice norany defect therein shall affect the legality or validity of the proceedingsreferenced in clauses (a) through (c) of this Section 14.11.

 

Section 14.12                          SUPPLEMENTALINDENTURE PRIOR TO ISSUANCE OF NOTES IN DEFINITIVE FORM.  If the Company is required by this Indentureor chooses to issue Notes in definitive form, then the Company shall executewith the Trustee a supplemental indenture (which shall comply with the TrustIndenture Act as in force at the date of execution of such supplementalindenture of such supplemental indenture is then required to so comply) statingprocedures under this Article XIV for the mandatory and optional conversion ofdefinitive Notes into Common Stock.

 

# ARTICLE XV

#  

# SUBORDINATION

#  

Section 15.1                                AGREEMENTTO SUBORDINATE.  The Company agrees, andeach Noteholder by accepting a Note agrees, that the indebtedness evidenced bythe Notes is subordinated in right of payment, to the extent and in the mannerprovided in this Article XV, to the prior payment in full of all SeniorIndebtedness and that the subordination is for the benefit of the holders ofSenior Indebtedness.

 

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Section 15.2                                CERTAINDEFINITIONS.  For purposes of thisArticle XV, the following terms shall have the meaning indicated:

 

#### (1)                                  “Representative”shall mean a duly authorized indenture trustee or other trustee, agent orrepresentative for any Senior Indebtedness.

####  

#### (2)                                  “SeniorIndebtedness” with respect to the Notes means the principal of, premium, ifany, and interest on, and any fees, costs, expenses and any other amounts (includingindemnity payments) related to the following, whether outstanding on the datehereof or hereafter incurred or created: (a) indebtedness, matured orunmatured, whether or not contingent, of the Company for money borrowedevidenced by notes or other written obligations, (b) any interest ratecontract, interest rate swap agreement or other similar agreement orarrangement designed to protect the Company or any of its Subsidiaries againstfluctuations in interest rates, (c) indebtedness, matured or unmatured,whether or not contingent, of the Company evidenced by notes, debentures, bondsor similar instruments or letters of credit (or reimbursement agreements inrespect thereof), (d) obligations of the Company as lessee undercapitalized leases and under leases of property made as part of any sale andleaseback transactions, (e) indebtedness of others of any of the kindsdescribed in the preceding clauses (a) through (d) assumed or guaranteed by theCompany and (f) renewals, extensions, modifications, amendments, andrefundings of, and indebtedness and obligations of a successor person issued inexchange for or in replacement of, indebtedness or obligations of the kindsdescribed in the preceding clauses (a) through (f), unless the agreementpursuant to which any such indebtedness described in clauses (a) through (f) iscreated, issued, assumed or guaranteed expressly provides that suchindebtedness is not senior or superior in right of payment to the Notes;provided that the following shall not constitute Senior Indebtedness:(i) any indebtedness or obligation of the Company in respect of the Notes,(ii) any indebtedness of the Company to any of its Subsidiaries or otherAffiliates; (iii) any indebtedness that is subordinated or junior in anyrespect to any other indebtedness of the Company other than SeniorIndebtedness; (iv) any indebtedness incurred for the purchase of goods ormaterials in the ordinary course of business and (v) any indebtedness orobligation of the Company in respect of the 6-1/4% Convertible SubordinatedNotes Due 2003.

####  

For the purposes of this Indenture, SeniorIndebtedness shall not be deemed to have been paid in full until the holders ofthe Senior Indebtedness shall have indefeasibly received payment in full incash of all Senior Indebtedness; provided that if any holder of SeniorIndebtedness agrees to accept payment in full of such Senior Indebtedness forconsideration other than cash, such holder shall be deemed to have indefeasiblyreceived payment in full of such Senior Indebtedness.  The provisions of this Article XV shall continue to be effectiveor be reinstated, as the case may be, if at any time any payment of any of theSenior Indebtedness is rescinded or must otherwise be returned by any holder ofSenior Indebtedness upon the insolvency, bankruptcy or organization of theCompany or otherwise, all as though such payment had not been made.

 

A distribution may consist of cash,securities or other property, by set-off or otherwise.

 

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Section 15.3                                LIQUIDATION;DISSOLUTION; BANKRUPTCY.  Upon anydistribution to creditors of the Company in a liquidation or dissolution of theCompany or in a bankruptcy, reorganization, insolvency, receivership or similarproceeding relating to the Company or its property, in an assignment for thebenefit of creditors or any marshalling of the Company’s assets andliabilities, (a) holders of all Senior Indebtedness shall first be entitled toreceive payment in full of all amounts due or to become due thereon beforeNoteholders shall be entitled to receive any payment with respect to theprincipal of, premium, if any, or interest on the Notes (except thatNoteholders may receive securities that are subordinated to at least the sameextent as the Notes to Senior Indebtedness and any securities issued inexchange for Senior Indebtedness) and (b) until all Senior Indebtedness (asprovided in clause (a) above) is paid in full, any distribution to whichNoteholders would be entitled but for this Article shall be made to holders ofSenior Indebtedness (except that Noteholders may receive securities that aresubordinated to at least the same extent as the Notes to (x) SeniorIndebtedness and (y) any securities issued in exchange for SeniorIndebtedness), as their interests may appear.

 

Section 15.4                                DEFAULTON SENIOR INDEBTEDNESS.  The Company maynot make any payment upon or in respect of the Notes (except in suchsubordinated securities) and may not acquire from the Trustee or any Noteholderany Note for cash or property (other than securities that are subordinated toat least the same extent as the Note to (i) Senior Indebtedness and (ii) anysecurities issued in exchange for Senior Indebtedness) until all SeniorIndebtedness has been paid in full if:

 

### (a)                                  a default in thepayment of the principal of, premium, if any, or interest on SeniorIndebtedness occurs and is continuing beyond any applicable period of grace (a“Payment Default”); or

###  

### (b)                                 a default, other thana Payment Default on Senior Indebtedness occurs and is continuing that permitsholders of the Senior Indebtedness as to which such default relates toaccelerate its maturity (a “Nonpayment Default”) and the Trustee receives anotice of the default (a “Payment Blockage Notice”) from the Representative orRepresentatives of holders of at least a majority in principal amount of SeniorIndebtedness then outstanding.  NoNonpayment Default that existed or was continuing on the date of delivery ofany such Payment Blockage Notice to the Trustee shall be, or be made, the basisfor a subsequent Payment Blockage Notice unless such default shall have beencured or waived for a period of not less than 180 days.  No new period of payment blockage may becommenced within 360 days after the receipt by the Trustee of any prior PaymentBlockage Notice.

###  

The Company, with notice and evidence of theoccurrence of (c) or (d) provided to the Trustee, may and shall resume paymentson and distributions in respect of the Notes and may acquire them upon theearlier of:

 

### (c)                                  in the case of aPayment Default, upon the date on which the default is cured or waived, or

###  

### (d)                                 in the case of adefault other than a NonPayment Default: 179 days after the date on which theapplicable Payment Blockage Notice is received, unless the maturity of

 

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such Senior Indebtedness hasbeen accelerated, if this Article XV otherwise permits the payment,distribution or acquisition at the time of such payment or acquisition.

 

Section 15.5                                WHENDISTRIBUTION MUST BE PAID OVER.  In theevent that the Trustee (or paying agent if other than the Trustee) or anyNoteholder receives any payment of principal or interest with respect to theNotes at a time when such payment is prohibited by Section 15.3 or 15.4 hereof,such payment shall be held by the Trustee (or paying agent if other than theTrustee) or such Noteholder, in trust for the benefit of, and immediately shallbe paid over and delivered, upon written request, to, the holders of SeniorIndebtedness as their interests may appear or their Representative under theindenture or other agreement (if any) pursuant to which Senior Indebtedness mayhave been issued, as their respective interests may appear, for application tothe payment of all Senior Indebtedness remaining unpaid to the extent necessaryto pay all Senior Indebtedness in full in accordance with its terms, aftergiving effect to any concurrent payment or distribution to or for the holdersof Senior Indebtedness.

 

With respect to the holders of SeniorIndebtedness, the Trustee undertakes to perform only such obligations on thepart of the Trustee as are specifically set forth in this Article XV, and noimplied covenants or obligations with respect to the holders of SeniorIndebtedness shall be read into this Indenture against the Trustee.  The Trustee shall not be deemed to owe anyfiduciary duty to the holders of Senior Indebtedness and shall not be liable toany such holders if the Trustee shall pay over or distribute to or on behalf ofNoteholders or the Company or any other person money or assets to which anyholders of Senior Indebtedness shall be entitled by virtue of this Article XV,except if such payment is made as a result of the willful misconduct or grossnegligence of the Trustee.

 

Section 15.6                                NOTICEBY COMPANY.  The Company shall promptlynotify the Trustee and the paying agent in writing of any facts known to theCompany that would cause a payment of any principal or interest with respect tothe Notes to violate this Article XV, but failure to give such notice shall notaffect the subordination of the Notes to the Senior Indebtedness as provided inthis Article XV.

 

Section 15.7                                SUBROGATION.  Until all Senior Indebtedness is paid infull and until the Notes are paid in full, Noteholders shall be subrogated(equally and ratably with all other indebtedness pari passu with the Notes) tothe rights of holders of Senior Indebtedness to receive distributionsapplicable to Senior Indebtedness to the extent that distributions otherwisepayable to the Noteholders have been applied to the payment of SeniorIndebtedness.  A distribution made underthis Article XV to holders of Senior Indebtedness that otherwise would havebeen made to Noteholders is not, as between the Company and Noteholders, a paymentby the Company on the Notes.

 

Section 15.8                                RELATIVERIGHTS.  This Article XV defines therelative rights of Noteholders and holders of Senior Indebtedness.  Nothing in this Indenture shall:

 

### (a)                                  impair, as betweenthe Company and the Noteholders, the obligation of the Company, which isabsolute and unconditional, to pay principal of, premium, if any, and intereston the Notes in accordance with their terms;

 

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### (b)                                 affect the relativerights of Noteholders and creditors of the Company other than their rights inrelation to holders of Senior Indebtedness; or

###  

### (c)                                  prevent the Trusteeor any Noteholder from exercising its available remedies upon a default orEvent of Default, subject to the rights of holders and owners of SeniorIndebtedness to receive distributions and payments otherwise payable toNoteholders.

###  

If the Company fails because of this ArticleXV to pay principal of, premium, if any, or interest on a Note on the due date,the failure is still a default or Event of Default.

 

Section 15.9                                SUBORDINATIONMAY NOT BE IMPAIRED BY COMPANY.  Noright of any holder of Senior Indebtedness to enforce the subordination of theindebtedness evidenced by the Notes shall be impaired by any act or failure toact by the Company or any holder of Notes or by the failure of the Company orany holder of Notes to comply with this Indenture.

 

Section 15.10                          DISTRIBUTIONOR NOTICE TO REPRESENTATIVE.  Whenever adistribution is to be made or a notice given to holders of Senior Indebtedness,the distribution may be made and the notice given to their Representative.

 

Upon any payment or distribution of assets ofthe Company referred to in this Article XV, the Trustee and the Noteholdersshall be entitled to rely upon any order or decree made by any court ofcompetent jurisdiction or upon any certificate of such Representative or of theliquidating trustee or agent or other person making any distribution to theTrustee or to the Noteholders for the purpose of ascertaining the personsentitled to participate in such distribution, the holders of the SeniorIndebtedness and other indebtedness of the Company, the amount thereof orpayable thereon, the amount or amounts paid or distributed thereon and allother facts pertinent thereto or to this Article XV.

 

Section 15.11                          RIGHTSOF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions of this Article XV or any other provisionof this Indenture, the Trustee shall not be charged with knowledge of theexistence of any facts that would prohibit the making of any payment ordistribution by the Trustee, and the Trustee and the paying agent may continueto make payments on the Notes, unless the Trustee shall have received at itsCorporate Trust Office at least three Business Days prior to the date of suchpayment written notice of facts that would cause the payment of any principal,premium, if any, and interest with respect to the Notes to violate this ArticleXV.  Only the Company or a Representativemay give the notice.  Nothing in this ArticleXV shall impair the claims of, or payments to, the Trustee under or pursuant toSection 7.6 hereof.

 

The Trustee shall be entitled to rely on thedelivery to it of a written notice by a person representing such person to be aholder of Senior Indebtedness (or a trustee or agent on behalf of such holder)to establish that such notice has been given by a holder of Senior Indebtedness(or a trustee or agent on behalf of any such holder).  In the event that the Trustee determines in good faith that furtherevidence is required with respect to the right of any person as a holder ofSenior Indebtedness to participate in any payment or distribution pursuant tothis Article XV, the Trustee may request such person to furnish evidence to thereasonable

 

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satisfaction of the Trustee asto the amount of Senior Indebtedness held by such person, the extent to whichsuch person is entitled to participate in such payment or distribution and anyother facts pertinent to the rights of such person under this Article XV, andif such evidence is not furnished, the Trustee may defer any payment which itmay be required to make for the benefit of such person pursuant to the terms ofthis Indenture pending judicial determination as to the rights of such personto receive such payment.

 

The Trustee in its individual or any othercapacity may hold Senior Indebtedness with the same rights it would have if itwere not Trustee.  Any paying agent, anyauthenticating agent, any conversion agent, any Note registrar and theirsuccessors may do the same with like rights.

 

Section 15.12                          AUTHORIZATIONTO EFFECT SUBORDINATION.  Each holder ofa Note by the holder’s acceptance thereof authorizes and directs the Trustee onthe holder’s behalf to take such action as may be necessary or appropriate toeffectuate the subordination as provided in this Article XV and appoints theTrustee to act as the holder’s attorney-in-fact for any and all suchpurposes.  Without limiting theforegoing, each Representative is hereby irrevocably authorized and empowered(in its own name or in the name of the Noteholders or the Trustee orotherwise), but shall have no obligation, to demand, sue for, collect andreceive every payment or distribution referred to in Section 15.3 above andgive acquittance therefor and to file claims and proofs of claim and take suchother action as it may deem necessary or advisable for the exercise orenforcement of any of the rights or interests of the holders or owners of theSenior Indebtedness hereunder; provided that for purposes of this Section 15.12holders or owners of Senior Indebtedness may act only through suchRepresentative.

 

Section 15.13                          CONVERSIONSNOT DEEMED PAYMENT.  For the purposes ofthis Article XV only, the issuance and delivery of Common Stock upon conversionof the Notes in accordance with Article XIV shall not be deemed to constitute apayment or distribution on account of the principal of or interest on the Notesor on account of the purchase or other acquisition of Notes.  Nothing contained in this Article orelsewhere in this Indenture or in the Notes is intended to or shall impair, asamong the Company, its creditors other than holders of Senior Indebtedness andthe holders, the right, which is absolute and unconditional, of the holder ofany Note to convert such Note in accordance with Article XIV.

 

Section 15.14                          AMENDMENTS.  The provisions of this Article XV shall notbe amended or modified without the written consent of the holders of SeniorIndebtedness.

 

# ARTICLE XVI

#  

# MISCELLANEOUS PROVISIONS

#  

Section 16.1                                POOLINGOF INTERESTS.  The Company desires topreserve its ability to account for acquisition and other business combinationtransactions using the pooling-of-interests method where appropriate, and theprovisions of this Indenture shall be interpreted accordingly.

 

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Section 16.2                                PROVISIONSBINDING ON COMPANY’S SUCCESSORS.  Allthe covenants, stipulations, promises and agreements in this Indenture made bythe Company shall bind its successors and assigns whether so expressed or not.

 

Section 16.3                                OFFICIALACTS BY SUCCESSOR COMPANY.  Any act orproceeding by any provision of this Indenture authorized or required to be doneor performed by any board (including the Board of Directors), committee orofficer of the Company shall and may be done and performed with like force andeffect by the like board, committee or officer of any corporation that shall atthe time be the lawful sole successor of the Company.

 

Section 16.4                                ADDRESSESFOR NOTICES, ETC.  Any notice or demandthat by any provision of this Indenture is required or permitted to be given orserved by the Trustee or by the holders of Notes on the Company shall be deemedto have been sufficiently given or made, for all purposes if given or served bybeing sent by prepaid overnight delivery or being deposited postage prepaid byregistered or certified mail in a post office letter box addressed (untilanother address is filed by the Company with the Trustee) to Penn TreatyAmerican Corporation, 5440 Lehigh Street, Allentown, Pennsylvania 18103,Attention: General Counsel with a copy to Justin P. Klein, Ballard SpahrAndrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania19103.  Any notice, direction, requestor demand hereunder to or upon the Trustee shall be deemed to have beensufficiently given or made, for all purposes, if given or served by being sentby prepaid overnight delivery or being deposited postage prepaid by registeredor certified mail in a post office letter box addressed to the Trustee, whichoffice is, at the date as of which this Indenture is dated, located at 6thStreet & Marquette Avenue, MAC N9303-110, Minneapolis, Minnesota55479.  Attention:  Corporate Trust Services.

 

The Trustee, by notice to the Company, maydesignate additional or different addresses for subsequent notices orcommunications.

 

Any notice or communication mailed to aNoteholder shall be mailed to him by first class mail, postage prepaid, at theaddress of such Noteholder as it appears on the Note register and shall besufficiently given to such Noteholder if so mailed within the time prescribed.

 

Failure to mail a notice or communication toa Noteholder or any defect in it shall not affect its sufficiency with respectto other Noteholders.  If a notice orcommunication is mailed in the manner provided above, it is duly given, whetheror not the addressee receives it.

 

Section 16.5                                COMMUNICATIONSBY HOLDERS WITH OTHER HOLDERS. Noteholders may communicate pursuant to Trust Indenture Act Section312(b) with other Noteholders with respect to their rights under this Indentureor the Notes.  The Company, the Trustee,the Note registrar and any other person shall have the protection of TrustIndenture Act Section 312(c).

 

Section 16.6                                GOVERNINGLAW.  This Indenture shall be deemed tobe a contract made under the substantive laws of New York and for all purposesshall be construed in accordance with the substantive laws of New York withoutregard to conflicts of laws principles thereof.

 

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Section 16.7                                EVIDENCEOF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO TRUSTEE.  Upon any application or demand by theCompany to the Trustee to take any action under any of the provisions of thisIndenture, including those actions set forth in Trust Indenture Act Section314(c), the Company shall furnish to the Trustee an Officers’ Certificatestating that all conditions precedent, if any, provided for in this Indenturerelating to the proposed action have been complied with, and an Opinion ofCounsel stating that, in the opinion of such counsel, all such conditionsprecedent have been complied with.

 

Each certificate or opinion provided for inthis Indenture and delivered to the Trustee with respect to compliance with acondition or covenant provided for in this Indenture shall include: (1) astatement that the person making such certificate or opinion has read suchcovenant or condition, (2) a brief statement as to the nature and scope of theexamination or investigation upon which the statement or opinion contained insuch certificate or opinion is based, (3) a statement that, in the opinion ofsuch person, he has made such examination or investigation as is necessary toenable him to express an informed opinion as to whether or not such covenant orcondition has been complied with and (4) a statement as to whether or not, inthe opinion of such person, such condition or covenant has been complied with.

 

Section 16.8                                LEGALHOLIDAYS.  In any case where anyinterest payment date, date fixed for redemption, stated maturity or Change ofControl Purchase Date of any Note or the last date on which a holder has theright to convert his Notes shall not be a Business Day, then (notwithstandingany other provision of this Indenture or of the Notes) payment of interest orprincipal (and premium, if any) or conversion of the Notes need not be made onsuch date, but may be made on the next succeeding Business Day with the sameforce and effect as if made on the Interest Payment Date, date fixed forredemption, Change of Control Purchase Date, or at the stated maturity, or onsuch last day for conversion, provided that no interest shall accrue for theperiod from and after such interest payment date, date fixed for redemption,Change of Control Purchase Date or stated maturity, as the case may be.

 

Section 16.9                                NOSECURITY INTEREST CREATED.  Nothing inthis Indenture or in the Notes, expressed or implied, shall be construed toconstitute a security interest under the Uniform Commercial Code or similarlegislation, as now or hereafter enacted and in effect, in any jurisdictionwhere property of the Company or its Subsidiaries is located.

 

Section 16.10                          TRUSTINDENTURE ACT.  This Indenture is herebymade subject to, and shall be governed by, the provisions of the TrustIndenture Act required to be part of and to govern indentures qualified underthe Trust Indenture Act.

 

Section 16.11                          TRUSTINDENTURE ACT CONTROLS.  If anyprovision of this Indenture limits, qualifies, or conflicts with the dutiesimposed by operation of the Trust Indenture Act, the imposed duties, uponqualification of this Indenture under the Trust Indenture Act, shall control.

 

Section 16.12                          BENEFITSOF INDENTURE.  Nothing in this Indentureor in the Notes, expressed or implied, shall give to any person, other than theparties hereto, any paying agent, any authenticating agent, any conversionagent, any Note registrar and their successors

 

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hereunder and the holders ofNotes, any benefit or any legal or equitable right, remedy or claim under thisIndenture.

 

Section 16.13                          TABLEOF CONTENTS, HEADINGS ETC.  The table ofcontents and the titles and headings of the articles and sections of thisIndenture have been inserted for convenience of reference only, are not to beconsidered a part hereof, and shall in no way modify or restrict any of theterms or provisions hereof.

 

Section 16.14                          AUTHENTICATINGAGENT.  The Trustee may appoint anauthenticating agent that shall be authorized to act on its behalf and subjectto its direction in the authentication and delivery of Notes in connection withthe original issuance thereof and transfers and exchanges of Notes hereunder,including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intentsand purposes as though the authenticating agent had been expressly authorizedby this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, theauthentication and delivery of Notes by the authenticating agent shall bedeemed to be authentication and delivery of such Notes “by the Trustee” and acertificate of authentication executed on behalf of the Trustee by anauthenticating agent shall be deemed to satisfy any requirement hereunder or inthe Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all timesbe a person eligible to serve as Trustee hereunder pursuant to Section 7.10.

 

Any corporation into which any authenticatingagent may be merged or converted or with which it may be consolidated, or anycorporation resulting from any merger, consolidation or conversion to which anyauthenticating agent shall be a party, or any corporation succeeding to the corporatetrust business of any authenticating agent, shall be the successor of theauthenticating agent hereunder, if such successor company is otherwise eligibleunder this Section, without the execution or filing of any paper or any furtheract on the part of the parties hereto or the authenticating agent or suchsuccessor company.

 

Any authenticating agent may at any timeresign by giving written notice of resignation to the Trustee and to theCompany.  The Trustee may at any timeterminate the agency of any authenticating agent by giving written notice oftermination to such authenticating agent and to the Company.  Upon receiving such a notice of resignationor upon such a termination, or in case at any time any authenticating agentshall cease to be eligible under this Section, the Trustee shall promptlyappoint a successor authenticating agent (which may be the Trustee), shall givewritten notice of such appointment to the Company and shall mail notice of suchappointment to all holders of Notes as the names and addresses of such holdersappear on the Note register.

 

The Company agrees to pay to theauthenticating agent from time to time reasonable compensation for itsservices.

 

The provisions of Sections 7.3, 7.4, 7.5, 8.3and this Section 16.14 shall be applicable to any authenticating agent.

 

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Section 16.15                          EXECUTIONIN COUNTERPARTS.  This Indenture may beexecuted in any number of counterparts, each of which shall be an original, butsuch counterparts shall together constitute but one and the same instrument.

 

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Wells Fargo Bank Minnesota, N.A. herebyaccepts the trusts in this Indenture declared and provided, upon the terms andconditions hereinabove set forth.

 

IN WITNESS WHEREOF, the parties hereto havecaused this Indenture to be duly signed and attested, all as of the date firstwritten above.

 
|                |   | PENN TREATY AMERICAN CORPORATION             |
|---------------------|--------|----------------------------------------------|
|                |   |                                         |
|                |   |                                         |
|                |   | By:                                          | /s/ Cameron B. Waite |   |
|                |   | Name:                                        | Cameron B. Waite |
|                |   | Title:                                       | EVP and CFO |
|                |   |                                         |
| Attest:             |   |                                         |
|                |   |                                         |
|                |   |                                         |
| /s/ Mark Cloutier   |   |                                         |   |
|                |   | WELLS FARGO BANK MINNESOTA, N.A., as Trustee |
|                |   |                                         |
|                |   |                                         |
|                |   | By:                                          | /s/ Michael G. Slade |   |
|                |   | Name:                                        | Michael G. Slade |
|                |   | Title:                                       | Corporate Trust Officer |
|                |   |                                         |
| Attest:             |   |                                         |
|                |   |                                         |
|                |   |                                         |
| /s/ Julie Pelletier |   |                                         |   |

 

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EXHIBIT A - FORM OF GLOBAL NOTE

 

[FORM OF FACE OF NOTE]

 
| No. A- |   | $                              |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   CUSIP                                                                                                                                                          |

 

PENN TREATY AMERICAN CORPORATION

 

6-1/4% Convertible Subordinated Notes Due 2008

 

PENN TREATY AMERICAN CORPORATION, acorporation duly organized and validly existing under the laws of theCommonwealth of Pennsylvania (the “Company”), which term includes any SuccessorCompany under the Indenture referred to on the reverse hereof, for valuereceived hereby promises to pay to Cede & Co., or registered assigns, theprincipal sum of                                                                      Dollars (subject to adjustment as set forth in the next paragraph hereof) onOctober 15, 2008, at the office or agency of the Company maintained for thatpurpose in the Borough of Manhattan, The City of New York, or, at the option ofthe holder of this Global Note, at the Corporate Trust Office of the Trustee,in such coin or currency of the United States of America as at the time ofpayment shall be legal tender for the payment of public and private debts, andto pay interest, semi-annually on April 15 and October 15 of each year(each an “Interest Payment Date”), commencing                 ,         , on said principal sumat said office or agency, in like coin or currency, at the rate per annumspecified in the title of this Global Note, from                    ,         or the most recent InterestPayment Date, as the case may be, next preceding the date of this Global Noteto which interest has been paid or duly provided for, unless the date hereof isa date to which interest has been paid or duly provided for, in which case fromthe date of this Global Note, or unless no interest has been paid or dulyprovided for on the Notes, in which case from                    ,         , until payment of saidprincipal sum has been made or duly provided for.  Any interest on any Note that is payable, but is not punctuallypaid or duly provided for on said April 15 or October 15 (herein called“Defaulted Interest”) shall forthwith cease to be payable to the Noteholder onthe relevant record date by virtue of his having been such Noteholder; and suchDefaulted Interest shall be paid by the Company, at its election in each case,either (i) by notifying the Trustee of a special record date, the amountof interest to be paid on such special record date and the date of payment (notmore than 25 days after receipt by the Trustee of such interest, unless theTrustee shall consent to an earlier date) and depositing with the Trustee anamount of money equal to the aggregate amount to be paid in respect of suchDefaulted Interest on making arrangements satisfactory to the Trustee for suchdeposit or (ii) in any lawful manner not inconsistent with therequirements of any securities exchange on which the Notes may be listed andupon notice requested by such exchange, if, after notice to the Trustee, theTrustee deems such manner of payment to be practicable.  The interest so payable on any April 15or October 15 will be paid to the person in whose name this Global Note(or one or more Predecessor Notes) is registered at the close of business onthe record date, which shall be the April 1 and October 1 (recorddate) (whether or not a Business Day) next preceding such April 15 andOctober 15, respectively, provided that any such interest not punctuallypaid or duly provided for shall be payable as provided in the Indenture.  Interest shall be paid by check mailed tothe registered holder at the

 

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registered address of suchperson unless other arrangements are made in accordance with the provisions ofthe Indenture.

 

The aggregate principal amount of this GlobalNote represented hereby may from time to time be reduced or increased toreflect exchanges of a part of this Global Note for interests in the GlobalNote or definitive Notes or exchanges of interests in the Global Note ordefinitive Notes for a part of this Global Note or conversions, redemptions orrepurchases of a part of this Global Note or cancellations of a part of thisGlobal Note or transfers of interests in the Global Note or definitive Notes inreturn for a part of this Global Note or transfers of a part of this GlobalNote effected by delivery of interests in the Global Note or definitive Notes,in each case, and in any such case, by means of notations on the Schedule ofExchanges, Conversions, Redemptions, Repurchases, Cancellations and Transferson the last page hereof. Notwithstanding any provision of this Global Note to the contrary, (i)exchanges of a part of this Global Note for interests in the Global Note ordefinitive Notes, (ii) exchanges of interests in the Global Note or definitiveNotes for a part of this Global Note, (iii) conversions, redemptions orrepurchases of a part of this Global Note, (iv) cancellations of a part of thisGlobal Note, (v) transfers of interests in the Global Note or definitive Notesin return for a part of this Global Note and (vi) transfers of a part of thisGlobal Note effected by delivery of interests in the Global Note or definitiveNotes may be effected without the surrendering of this Global Note, providedthat appropriate notations on the Schedule of Exchanges, Conversions,Redemptions, Repurchases, Cancellations and Transfers are made by the Trustee,or the Custodian at the direction of the Trustee, to reflect the appropriatereduction or increase, as the case may be, in the aggregate principal amount ofthis Global Note resulting therefrom or as a consequence thereof.

 

Reference is made to the further provisionsof this Global Note set forth on the reverse hereof, including, withoutlimitation, provisions giving the holder of this Global Note the right toconvert this Global Note into Common Stock of the Company (or, under certaincircumstances specified in the Indenture, into an amount of cash as set forthin the Indenture) on the terms and subject to the limitations referred to onthe reverse hereof and as more fully specified in the Indenture.  Such further provisions shall for allpurposes have the same effect as though fully set forth at this place.

 

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This Global Note shall not be valid or becomeobligatory for any purpose until the certificate of authentication hereon shallhave been manually signed by the Trustee or a duly authorized authenticatingagent under the Indenture.

 

IN WITNESS WHEREOF, the Company has causedthis Global Note to be duly executed under its corporate seal.

 
|      |   | PENN TREATY AMERICAN CORPORATION |
|-----------|--------|----------------------------------|
|      |   |                             |
|      |   |                             |
|      |   | By:                              |   |
|      |   | Name:                            |
|      |   | Title:                           |
|      |   |                             |
| Attest:   |   |                             |
|      |   |                             |
|      |   |                             |
|      |   |                             |   |
| Secretary |   |                             |
|           |        |                                  |  |  |

 

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[FORM OF CERTIFICATE OF AUTHENTICATION]

 

CERTIFICATE OF AUTHENTICATION

 

Dated:

 

This is one of the Notes described in thewithin-named Indenture.

 
|   |   | WELLS FARGO BANK MINNESOTA, N.A., as Trustee |
|--------|--------|----------------------------------------------|
|   |   |                                         |
|   |   |                                         |
|   |   | By:                                          |   |
|   |   |                                         | Authorized Signatory |

 

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[FORM OF REVERSE OF GLOBAL NOTE]

 

PENN TREATY AMERICAN CORPORATION

 

6-1/4% Convertible Subordinated Notes Due 2008

 

This Global Note is one of a duly authorizedissue of Notes of the Company, designated as its 6-1/4% ConvertibleSubordinated Notes Due 2008 (herein called the “Notes”), limited to theaggregate principal amount of$                        all issued or to be issued under and pursuant to an Indenture dated as ofFebruary     , 2003 (the “Indenture”), between theCompany and Wells Fargo Bank Minnesota, N.A., as trustee (the “Trustee”), towhich Indenture and all indentures supplemental thereto reference is herebymade for a complete description of the rights, limitations of rights,obligations, duties and immunities thereunder of the Trustee, the Company andthe holders of the Notes.  Each Note issubject to, and qualified by, all such terms as set forth in the Indenturecertain of which are summarized hereon and each holder of a Note is referred tothe corresponding provisions of the Indenture for a complete statement of suchterms.  To the extent that there is anyinconsistency between the summary provisions set forth in the Notes and theIndenture, the provisions of the Indenture shall govern.  Capitalized terms used but not defined inthis Global Note shall have the meanings ascribed to them in the Indenture.

 

In case an Event of Default, as defined inthe Indenture, shall have occurred and be continuing, the principal of,premium, if any, and accrued interest on all Notes may be declared, and uponsaid declaration shall become, due and payable, in the manner, with the effectand subject to the conditions provided in the Indenture.

 

The payment of principal of, premium, if any,and interest on the Notes will, to the extent set forth in the Indenture, besubordinated in right of payment to the prior payment in full of all SeniorIndebtedness (as defined in the Indenture). Upon any distribution to creditors of the Company in a liquidation ordissolution of the Company or in a bankruptcy, reorganization, insolvency,receivership or similar proceeding related to the Company or its property, inan assignment for the benefit of creditors or any marshalling of the Company’sassets and liabilities, the holders of all Senior Indebtedness will first beentitled to receive payment in full of all amounts due or to become due thereonbefore the holders of the Notes will be entitled to receive any payment inrespect of the principal of, premium, if any, or interest on the Notes (exceptthat holders of Notes may receive securities that are subordinated at least tothe same extent as the Notes to Senior Indebtedness and any securities issuedin exchange for Senior Indebtedness).

 

The Company also may not make any paymentupon or in respect of the Notes (except in such subordinated securities) andmay not acquire from the Trustee or the holder of any Note for cash or property(other than securities subordinated to at least the same extent as the Note to(i) Senior Indebtedness and (ii) any securities issued in exchange for SeniorIndebtedness) until all Senior Indebtedness has been paid in full if (a) adefault in the payment of the principal of, premium, if any, or interest onSenior Indebtedness occurs and is continuing beyond any applicable period ofgrace or (b) any other default occurs and is continuing with respect to SeniorIndebtedness that permits holders of the Senior Indebtedness as to which suchdefault relates to accelerate its maturity and the Trustee receives a notice ofsuch default (a

 

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“Payment Blockage Notice”) fromthe representative or representatives of holders of at least a majority inprincipal amount of Senior Indebtedness then outstanding.  Payments on the Notes may and shall beresumed (i) in the case of a Payment Default, upon the date on which suchdefault is cured or waived, or (ii) in the case of a Nonpayment Default, 179days after the date on which the applicable Payment Blockage Notice isreceived, unless the maturity of any Senior Indebtedness has been accelerated.  No new period of payment blockage may becommenced within 360 days after the receipt by the Trustee of any prior PaymentBlockage Notice.  No default, other thana Nonpayment Default, that existed or was continuing on the date of delivery ofany Payment Blockage Notice to the Trustee shall be, or be made, the basis fora subsequent Payment Blockage Notice unless such default shall have been curedor waived for a period of not less than 180 days.

 

In the event that the Trustee (or payingagent if other than the Trustee) or any holder of the Notes receives anypayment of principal or interest with respect to the Notes at a time when suchpayment is prohibited under the Indenture, such payment shall be held in trustfor the benefit of, and immediately shall be paid over and delivered to, theholders of Senior Indebtedness or their representative as their respectiveinterests may appear.  After all SeniorIndebtedness is paid in full and until the Notes are paid in full, the holdersof the Notes shall be subrogated (equally and ratably with all otherIndebtedness pari passu with the Notes) to the rights of holders of SeniorIndebtedness to receive distributions applicable to Senior Indebtedness to theextent that distributions otherwise payable to the holders of the Notes havebeen applied to the payment of Senior Indebtedness.

 

The Indenture contains provisions permittingthe Company and the Trustee, with the consent of the holders of not less than amajority in aggregate principal amount of the Notes at the time outstanding,evidenced as in the Indenture provided, to execute supplemental indenturesadding any provisions to or changing in any manner or eliminating any of theprovisions of the Indenture or of any supplemental indenture or modifying inany manner the rights of the holders of the Notes; provided that no suchsupplemental indenture shall (i) extend the fixed maturity of any Note, orreduce the rate or extend the time of payment of interest thereon, or reducethe principal amount thereof or premium, if any, thereon, or reduce any amountpayable on redemption thereof, alter the obligation of the Company torepurchase the Notes at the option of the holders upon the occurrence of aChange of Control, or impair or affect the right of any Noteholder to institutesuit for the payment thereof, or make the principal thereof or interest orpremium, if any, thereon payable in any coin or currency other than thatprovided in the Notes, modify the subordination provisions in a manner adverseto the holders of the Notes, or impair the right to convert the Notes intoCommon Stock subject to the terms set forth in the Indenture without theconsent of the holder of each Note so affected or (ii) reduce the aforesaidpercentage of Notes, the holders of which are required to consent to any suchsupplemental indenture, without the consent of the holders of all Notes thenoutstanding.  The Company and theTrustee may amend or supplement the Indenture without notice to or consent ofany holder of Notes in certain events specified in the Indenture.  It is also provided in the Indenture that,prior to any declaration accelerating the maturity of the Notes, the holders ofa majority in aggregate principal amount of the Notes at the time outstandingmay on behalf of the holders of all of the Notes waive any past default orEvent of Default under the Indenture and its consequences except a default inthe payment of interest or any premium on or the principal of any of the Notes,a failure by the Company to convert any Notes into Common Stock of the

 

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Company, unless otherwiseexcused pursuant to the terms of the Indenture, or a default in respect of acovenant or provision of the Indenture that under Article X thereof cannot bemodified or amended without the consent of the holders of all Notes thenoutstanding.  Any such consent or waiverby the holder of this Global Note (unless revoked as provided in the Indenture)shall be conclusive and binding upon such holder and upon all future holdersand owners of this Global Note and any Notes that may be issued in exchange orsubstitution hereof, irrespective of whether or not any notation thereof ismade upon this Global Note or such other Notes.

 

No reference herein to the Indenture and noprovision of this Global Note or of the Indenture shall alter or impair theobligation of the Company, which is absolute and unconditional, to pay theprincipal of and any premium and interest on this Global Note at the place, atthe respective times, at the rate and in the coin or currency hereinprescribed.

 

Interest on the Notes shall be computed onthe basis of a 360-day year composed of twelve 30-day months.

 

The Notes are issuable in registered formwithout coupons in denominations of $1,000 principal amount and integralmultiples thereof.  At the office oragency of the Company referred to on the face hereof, and in the manner andsubject to the limitations provided in the Indenture, without payment of anyservice charge but with payment of a sum sufficient to cover any tax or othergovernmental charge that may be imposed in connection with any registration orexchange of Notes, Notes may be exchanged for a like aggregate principal amountof Notes of other authorized denominations.

 

The Notes are not redeemable at the option ofthe Company prior to October 15, 2005. At any time on or after that date, the Notes may be redeemed at theCompany’s option, upon notice as set forth in the Indenture, in whole at any timeor in part from time to time, at the price of 100% of the principal amount,together with accrued interest to the date fixed for redemption; provided thatif the date fixed for redemption is a date on or after the record date and onor before the next following Interest Payment Date, then the interest payableon such date shall be paid to the holder of record on the next precedingOctober 1 or April 1, respectively.

 

If a Change of Control (as defined in theIndenture) shall occur at any time, then each holder of Notes shall have theright to require that the Company repurchase such holder’s Notes in whole or inpart in integral multiples of $1,000, at a purchase price in cash in an amountequal to 101% of the principal amount of such Notes, plus accrued and unpaidinterest, if any, to the repurchase date pursuant to an offer to be made by theCompany and in accordance with the procedures set forth in the Indenture.

 

Subject to the provisions of the Indenture,the holder hereof has the right to convert the principal hereof or any portionof such principal that is $1,000 or an integral multiple thereof, into theCompany’s Common Stock at any time following the earlier of (i) May 27,2003 and (ii) the approval by our shareholders of an amendment to ourArticles of Incorporation to increase the number of authorized shares of CommonStock to an amount sufficient to cover the conversion of the Notes, theconversion of the Company’s existing notes due in 2003 and 2008, the conversionof the Company’s convertible preferred stock issuable upon execution of thewarrants granted to Centre Solutions (Bermuda) Limited and the exercise ofoutstanding options

 

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granted pursuant to theCompany’s stock option plan, until the close of business on October 14,2008, subject to prior redemption or repurchase, or, as to all or any portionhereof called for redemption, prior to the close of business one business daybefore the date fixed for redemption (unless the Company shall default inpayment due upon redemption thereof). The principal hereof or any portion of such principal that is $1,000 oran integral multiple thereof, is convertible into that number of fully paid andnon-assessable shares of the Company’s Common Stock, as said shares shall beconstituted at the date of conversion, obtained by dividing the principalamount of this Global Note or portion thereof to be converted by the conversionprice of $1.75 per share or such conversion price as adjusted from time to timeas provided in the Indenture, upon surrender of this Global Note to the Companyat the office or agency of the Company maintained for that purpose in theBorough of Manhattan, the City of New York, or at the option of such holder,the Corporate Trust Office of the Trustee, and, unless the shares issuable onconversion are to be issued in the same name as this Global Note, duly endorsedby, or accompanied by instruments of transfer in form satisfactory to theCompany duly executed by, the holder or by his duly authorized attorney.

 

Except as described in the Indenture, noadjustment will be made on conversion of any Notes for interest accrued thereonor for dividends paid on any Common Stock issued.  A Holder of Notes at the close of business on a record date willbe entitled to receive the interest payable on such Notes on the correspondinginterest payment date.  Any unpaidinterest on any Note or portion thereof as of the date such Note or portionthereof is surrendered for conversion shall (unless such Note or portionthereof being converted is called for redemption on a redemption date duringthe period from the close of business on or after any record date to the closeof business on the business day following the corresponding interest paymentdate) be paid in cash to the former holder of such Note or portion thereof onthe next succeeding interest payment date.

 

In the event that the Company does not amendits Articles of Incorporation on or before May 27, 2003 to increase the numberof authorized shares of Common Stock to an amount sufficient to cover theconversion of the Notes and the existing notes due in 2008, the Company will,at the request of any holder, purchase such holder’s Notes at a price equal to125% of the principal amount of such Notes. The right of a holder to request that the Company purchase such holder’sNotes pursuant to this Section 14.1(b) shall terminate upon the amendment ofthe Company’s Articles of Incorporation to increase the number of authorizedShares of Common Stock to an amount sufficient to cover the conversion of theNotes and the existing Notes due in 2008.

 

In the event a holder desires to convert allor any portion of its Notes into shares of Common Stock and the Company doesnot have authorized a sufficient number of shares of Common Stock for suchconversion, in lieu of delivering shares of Common Stock (or other securitiesinto which the Notes are then convertible) upon conversion of that portion ofsuch holder’s Notes for which there is an insufficient number of shares ofCommon Stock (the “Cash Equivalent Notes”) pursuant to the provisions of theIndenture, the Company will pay to the holder converting the Cash EquivalentNotes who properly exercises the conversion privilege, as set forth in theIndenture, an amount in cash equal to the Market Cash Conversion Price (asdefined in the Indenture) of the shares of Common Stock into which such CashEquivalent Notes are then convertible.

 

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On any date on or after the 15th business dayfollowing October 15, 2005, if: (i) the average of the closing price of theCommon Stock on 15 consecutive business days is equal to or greater than 110%of the conversion price (as it may be adjusted in the Indenture) and (ii) theCompany has sufficient shares of Common Stock (or other securities into whichthe Notes are then convertible) authorized to execute the Mandatory Conversion(as defined below), then the Notes shall be converted into that number of fullypaid and nonassessable shares of Common Stock (or other securities into whichthe Notes are then convertible) obtained by dividing the aggregate principalamount of the Notes by the conversion price in effect at such time rounded tothe nearest 1/100,000th of a share (with 0.000005 being rolledupward) (the “Mandatory Conversion”). After the Mandatory Conversion, the Notes will no longer representindebtedness of the Company and will no longer accrue interest or require theCompany to make any payment of principal; and the Company’s obligations to makeany further payments with respect to the Notes will terminate.

 

In the event that a Noteholder desires toconvert all or any portion of its Notes into shares of Common Stock prior toOctober 15, 2005, the Company will pay such Noteholder an amount equal to theinterest that would have been otherwise earned on such Notes between the dateof such conversion and October 15, 2005 discounted to present value utilizing arate of 6.25% with simple interest over a 360 day year.  In the event that a Noteholder elects toconvert prior to October 15, 2005 and the Company is required to pay interestpursuant to this Section 14.1(e), the Company may, in its sole discretion,elect to make such interest payment in cash or in shares of Common Stock basedon 90% of the average Closing Prices of the Common Stock for the five TradingDays immediately preceding the conversion date.

 

The Company is not required to issuefractional shares of Common Stock upon conversion of Notes and, in lieuthereof, will pay a cash adjustment based upon the closing price of the CommonStock on the last business day prior to the date of conversion.

 

Upon due presentment for registration oftransfer of this Global Note at the office or agency of the Company in theBorough of Manhattan, The City of New York, or at the option of the holder ofthis Global Note, at the Corporate Trust Office of the Trustee, a new Note orNotes of authorized denominations for an equal aggregate principal amount willbe issued to the transferee in exchange thereof, subject to the conditions and limitationsprovided in the Indenture, without charge except for any tax or othergovernmental charge imposed in connection therewith.

 

The Company, the Trustee, any authenticatingagent, any paying agent, any conversion agent and any Note registrar may deemand treat the registered holder hereof as the absolute owner of this GlobalNote (whether or not this Global Note shall be overdue and notwithstanding anynotation of ownership or other writing hereon made by anyone other than theCompany or any Note registrar), for the purpose of receiving payment hereof, oron account hereof, for the conversion hereof and for all other purposes, andneither the Company nor the Trustee nor any other authenticating agent nor anypaying agent nor any other conversion agent nor any Note registrar shall beaffected by any notice to the contrary. All payments made to or upon the order of such registered holder shall,to the extent of the sum or sums paid, satisfy and discharge liability formonies payable on this Global Note.

 

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No recourse for the payment of the principalof or any premium or interest on this Global Note, or for any claim basedhereon or otherwise in respect hereof, and no recourse under or upon anyobligation, covenant or agreement of the Company in the Indenture or anyindenture supplemental thereto or in any Note, or because of the creation ofany indebtedness represented thereby, shall be had against any incorporator,shareholder, officer or director, as such, past, present or future, of theCompany or of any Successor Company, either directly or through the Company orany Successor Company, whether by virtue of any constitution, statute or ruleof law or by the enforcement of any assessment or penalty or otherwise, allsuch liability being, by the acceptance hereof and as part of the considerationfor the issue hereof, expressly waived and released.

 

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ABBREVIATIONS

 

The following abbreviations, when used in theinscription of the face of this Global Note, shall be construed as though theywere written out in full according to applicable laws or regulations:

 
| TEN COM | -      | as tenants  in common                                                     | UNIF GIFT  MIN ACT -  Uniform Gifts to Minors Act |
|---------|--------|---------------------------------------------------------------------------|---------------------------------------------------|
|    |   |                                                                      |                                              |   |
|    |   |                                                                      | (State)                                           |
| TEN ENT | -      | as tenants  by the entireties                                             |                                              | Custodian |   |
|    |   |                                                                      | (Cust)                                            |   |   |
| JT TEN  | -      | as joint  tenants with right of survivorship and not as tenants in common |                                              | under |   |
| (Minor) |   |
|    |   |
|         |        |                                                                           |                                                   |  |  |  |

 

Additional abbreviations may also be usedthough not in the above list.

 

A-11

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| Fill in for  registration of shares if to be issued, and  Notes if to be delivered, other than to and in the  name of the registered holder: |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                         |   |   |
|                                                                                                                                         |   |   |   |
| (Name)                                                                                                                                       |   |   |
|                                                                                                                                         |   |   |
|                                                                                                                                         |   |   |   |
| (Street  Address)                                                                                                                            |   |   |
|                                                                                                                                         |   |   |
|                                                                                                                                         |   |   |   |
| (City, State  and Zip Code)                                                                                                                  |   |   |
|                                                                                                                                         |   |   |
| Please print  name and address                                                                                                               |   |   |

 

 
|   | Principal amount to be converted                                                                                                                                                                          |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | (if less than all)                                                                                                                                                                                        |   |
|   | $                                    |   |
|   |                                                                                                                                                                                                      |   |
|   |                                                                                                                                                                                                      |   |
|   |                                                                                                                                                                                                      |   |
|   | Social Security or Other Taxpayer                                                                                                                                                                         |   |
|   | Identification Number                                                                                                                                                                                     |   |

 

A-12

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[FORM OF OPTION TO ELECT REPAYMENT

 

UPON A CHANGE OF CONTROL]

 

To: Penn Treaty American Corporation

 

The undersigned registered owner of thisGlobal Note hereby irrevocably acknowledges receipt of a notice from PennTreaty American Corporation (the “Company”) as to the occurrence of a Change ofControl with respect to the Company and requests and instructs the Company torepay the entire principal amount of this Global Note, or the portion thereof(which is $1,000 principal amount or an integral multiple thereof) belowdesignated, in accordance with the terms of the Indenture referred to in thisGlobal Note, together with accrued interest to such date, to the registeredholder hereof.

 
| Dated: |   |                                                                                                                                                                                                                                                                                                   |   |   |   |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   | Signature(s)                                                                                                                                                                                                                                                                                           |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   | Social Security or Other Taxpayer  Identification Number                                                                                                                                                                                                                                               |   |
|   |   |                                                                                                                                                                                                                                                                                                   |   |
|   |   | Principal amount to be repaid (if less than  all): $                                           |   |

 

A-13

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[FORM OF ASSIGNMENT]

 

For value received                                                                   hereby sell(s), assign(s) and transfer(s) unto                                   (please insert social security or other identifying number of assignee) the withinNote, and hereby irrevocably constitutes and appoints                                                      attorney to transfer the said Note on the books of the Company, with full powerof substitution in the premises.

 
| Dated:       |   |   |   |   |   |
|--------------|--------|--------|--------|--------|--------|
|         |   |   |   |   |
|         |   |   |   |   |
|         |   |   |   |   |
|         |   |   |   |   |
| Signature(s) |   |   |   |   |

 
| Signature(s) must be guaranteed by an eligible Guarantor Institution  (banks, stock brokers, savings and loan associations and credit unions) with  membership in an approved signature guarantee medallion program pursuant to  Securities and Exchange Commission Rule 17Ad-15. |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|

 

 
|                |   |   |   |   |
|---------------------|--------|--------|--------|--------|
| Signature Guarantee |   |   |   |   |

 

NOTICE: Theoption to elect payment upon a Change of Control or the assignment mustcorrespond with the name as written upon the face of the Note in everyparticular without alteration or enlargement or any change whatever.

 

A-14

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SCHEDULE A

 

SCHEDULE OF EXCHANGES, CONVERSIONS,REDEMPTIONS, REPURCHASES, CANCELLATIONS AND TRANSFERS

 

The initial principal amount of this Global Noteis U.S.$                          .  The following additions to principal, redemptions,repurchases, exchanges of a part of this Global Note for an interest in theGlobal Note, definitive Notes and conversions into Common Stock or cash havebeen made:

 
| **Date of  Addi-  tion to Prin-  cipal, Re-  demption,  Repurchase,  Exchange or  Conversion** |   | **Principal  Amount Added  on  Exchange of  Interest in  the Global  Note or  Definitive  Notes** |   | **Principal  Amount  Redeemed,  Repurchased  Exchanged for  Interest in  the Global  Note or  Definitive  Notes or  Converted into  Common Stock  or Cash** |   | **Remaining  Principal  Amount Out-  standing  Following  such Transac-  tion** |   | **Notation  Made by or  on behalf of  the Trustee** |
|------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|-----------------------------------------------------|
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |
|                                                                                           |   |                                                                                              |   |                                                                                                                                                        |   |                                                                            |   |                                                |

 

A-15

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