PRIME SUCCESSION HOLDINGS, INC.,
AS ISSUER
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
AS TRUSTEE
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INDENTURE
DATED AS OF _______ __, 2000
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$20,000,000
14.25% MANDATORILY CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2004 OR, UPON
CONVERSION, 2009
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
----------- -----------------
ss.310 (a)(1).............................................................7.10
(a)(2).............................................................7.10
(a)(3).............................................................N.A.
(a)(4).............................................................N.A.
(b)...........................................................7.8; 7.10
(c)................................................................N.A.
ss.311 (a)................................................................7.11
(b)................................................................7.11
(c)................................................................N.A.
ss.312 (a)................................................................7.13
(b)................................................................12.3
(c)................................................................12.3
ss.313 (a).................................................................7.6
(b)(1).............................................................N.A.
(b)(2)..............................................................7.6
(c)...........................................................7.6; 12.2
(d).................................................................7.6
ss.314 (a)............................................................4.7; 4.8
(b)................................................................N.A.
(c)(1).............................................................12.4
(c)(2).............................................................12.4
(c)(3).............................................................N.A.
(d)................................................................N.A.
(e)................................................................12.5
(f)................................................................N.A.
ss.315 (a).................................................................7.1
(b)...........................................................7.5; 12.2
(c).................................................................7.1
(d).................................................................7.1
(e)................................................................6.11
ss.316 (a)(last sentence).................................................12.6
(a)(1)(A)...........................................................6.5
(a)(1)(B)...........................................................6.4
(a)(2).............................................................N.A.
(b).................................................................6.7
(c)...........................................................1.1; 2.11
ss.317 (a)(1)..............................................................6.8
(a)(2)..............................................................6.9
(b).................................................................2.4
ss.318 (a)................................................................12.1
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture. N.A. means Not Applicable.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.............................................1
Section 1.1 Incorporation by Reference of Trust Indenture Act............................12
Section 1.2 Rules of Construction........................................................13
ARTICLE II THE NOTES.............................................................................13
Section 2.1 Form and Dating..............................................................13
Section 2.2 Execution and Authentication.................................................14
Section 2.3 Registrar and Paying Agent...................................................15
Section 2.4 Paying Agent To Hold Money in Trust..........................................16
Section 2.5 Global Notes.................................................................17
Section 2.6 Transfer and Exchange........................................................18
Section 2.7 Replacement Notes............................................................19
Section 2.8 Outstanding Notes............................................................19
Section 2.9 Temporary Notes..............................................................20
Section 2.10 Cancellation.................................................................20
Section 2.11 Payment of Interest; Interest Rights Preserved...............................20
Section 2.12 CUSIP Numbers................................................................23
Section 2.13 Transfers, etc...............................................................23
ARTICLE III REDEMPTION............................................................................24
Section 3.1 Redemption of Notes; Notices to Trustee......................................24
Section 3.2 Selection of Notes To Be Redeemed............................................24
Section 3.3 Notice of Redemption.........................................................25
Section 3.4 Effect of Notice of Redemption...............................................26
Section 3.5 Deposit of Redemption Price..................................................26
Section 3.6 Notes Redeemed in Part.......................................................26
ARTICLE IV COVENANTS.............................................................................27
Section 4.1 Payment of Notes.............................................................27
Section 4.2 Maintenance of Office or Agency..............................................27
Section 4.3 Money for the Note Payments to be Held in Trust..............................28
Section 4.4 Corporate Existence..........................................................28
Section 4.5 Maintenance of Property......................................................29
Section 4.6 Payment of Taxes and Other Claims............................................29
Section 4.7 SEC Reports..................................................................29
Section 4.8 Compliance Certificate.......................................................30
Section 4.9 Waiver of Stay, Extension or Usury Laws......................................30
Section 4.10 Investment Company Act.......................................................30
Section 4.11 Further Instruments and Acts.................................................31
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ARTICLE V SUCCESSOR COMPANY.....................................................................31
Section 5.1 Merger, Consolidation and Sale of Assets.....................................31
ARTICLE VI DEFAULTS AND REMEDIES.................................................................32
Section 6.1 Events of Default............................................................32
Section 6.2 Acceleration.................................................................34
Section 6.3 Other Remedies...............................................................34
Section 6.4 Waiver of Past Defaults......................................................35
Section 6.5 Control by Majority..........................................................35
Section 6.6 Limitation on Suits..........................................................35
Section 6.7 Rights of Holders to Receive Payment.........................................36
Section 6.8 Collection Suit by Trustee...................................................36
Section 6.9 Trustee May File Proofs of Claim.............................................36
Section 6.10 Priorities...................................................................37
Section 6.11 Undertaking for Costs........................................................37
ARTICLE VII TRUSTEE....................................................................................37
Section 7.1 Duties of Trustee............................................................37
Section 7.2 Rights of Trustee............................................................39
Section 7.3 Individual Rights of Trustee.................................................39
Section 7.4 Trustee's Disclaimer.........................................................40
Section 7.5 Notice of Defaults...........................................................40
Section 7.6 Reports by Trustee to Holders................................................40
Section 7.7 Compensation and Indemnity...................................................40
Section 7.8 Replacement of Trustee.......................................................41
Section 7.9 Successor Trustee by Merger..................................................42
Section 7.10 Eligibility; Disqualification................................................42
Section 7.11 Preferential Collection of Claims Against Company............................43
Section 7.12 Trustee's Application for Instructions from the Company......................43
Section 7.13 Company to Furnish Trustee Names and
Addresses of Holders.........................................................43
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE........................................................44
Section 8.1 Discharge of Liability on Notes; Defeasance..................................44
Section 8.2 Conditions to Defeasance.....................................................45
Section 8.3 Application of Trust Money...................................................46
Section 8.4 Repayment to Company.........................................................47
Section 8.5 Indemnity for Government Obligations.........................................47
Section 8.6 Reinstatement................................................................47
ARTICLE IX AMENDMENTS............................................................................47
Section 9.1 Without Consent of Holders...................................................47
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Section 9.2 With Consent of Holders......................................................48
Section 9.3 Compliance with Trust Indenture Act..........................................49
Section 9.4 Revocation and Effect of Consents and Waivers................................49
Section 9.5 Notation on or Exchange of Notes.............................................50
Section 9.6 Trustee To Sign Amendments...................................................50
Section 9.7 Payment for Consent..........................................................50
ARTICLE X SUBORDINATION OF THE NOTES............................................................51
Section 10.1 Agreement to Subordinate.....................................................51
Section 10.2 Liquidation, Dissolution, Bankruptcy.........................................51
Section 10.3 Default on Senior Indebtedness of the Company................................51
Section 10.4 Acceleration of Payment of Notes.............................................52
Section 10.5 When Distribution Must Be Paid Over..........................................53
Section 10.6 Subrogation..................................................................53
Section 10.7 Relative Rights..............................................................53
Section 10.8 Subordination May Not Be Impaired by Company.................................53
Section 10.9 Rights of Trustee and Paying Agent...........................................53
Section 10.10 Distribution or Notice to Representative.....................................54
Section 10.11 Article 10 Not to Prevent Events of Default or
Limit Right to Accelerate....................................................54
Section 10.12 Trust Moneys Not Subordinated................................................54
Section 10.13 Trustee Entitled to Rely upon Any Payment
or Distribution..............................................................55
Section 10.14 Trustee To Effectuate Subordination..........................................55
Section 10.15 Trustee not Fiduciary for Holders of Senior Indebtedness.....................55
Section 10.16 Reliance by Holders of Senior Indebtedness
on Subordination Provisions..................................................55
ARTICLE XI CONVERSION OF SECURITIES..............................................................56
Section 11.1 Mandatory Conversion and Conversion Price....................................56
Section 11.2 Exercise of Conversion Feature .............................................57
Section 11.3 Selection of Notes to be Converted; Fractions of Shares .....................58
Section 11.4 Adjustment of Conversion Price...............................................58
Section 11.5 No Adjustment ..............................................................62
Section 11.6 Other Adjustments ..........................................................62
Section 11.7 Adjustments for Tax Purposes ...............................................63
Section 11.8 Notice of Adjustments of Conversion Price ...................................63
Section 11.9 Notice of Certain Corporate Action. ........................................63
Section 11.10 Company to Reserve Common Stock..............................................63
Section 11.11 Taxes on Conversions.........................................................64
Section 11.12 Covenant as to Common Stock..................................................64
Section 11.13 Cancellation of Converted Securities.........................................64
Section 11.14 Provisions in Case of Reclassification,
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Consolidation, Merger or Sale of Assets ....................................64
Section 11.15 Successive Adjustments.......................................................65
ARTICLE XII MISCELLANEOUS..............................................................................65
Section 12.1 Trust Indenture Act Controls.................................................65
Section 12.2 Notices......................................................................65
Section 12.3 Communication by Holders with Other Holders..................................66
Section 12.4 Certificate and Opinion as to Conditions Precedent...........................66
Section 12.5 Statements Required in Certificate or Opinion................................66
Section 12.6 When Notes Disregarded.......................................................67
Section 12.7 Rules by Trustee, Paying Agent and Registrar.................................67
Section 12.8 Legal Holidays...............................................................67
Section 12.9 Governing Law................................................................67
Section 12.10 No Recourse Against Others...................................................68
Section 12.11 Successors...................................................................68
Section 12.12 Multiple Originals...........................................................68
Section 12.13 Table of Contents; Headings..................................................68
Section 12.14 Severability.................................................................68
Section 12.15 Further Instruments and Acts.................................................69
EXHIBIT A - Form of Global Note
EXHIBIT B - Form of Certificate Note
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This INDENTURE dated as of December __ 2000, is made by and
between PRIME SUCCESSION HOLDINGS, INC., a Delaware corporation (the "Company"),
and UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation (the
"Trustee").
RECITALS
Pursuant to the Plan (as hereinafter defined), the Company has
duly authorized the creation and issuance of its 14.25% Mandatorily Convertible
Senior Subordinated Notes Due 2004 or, upon conversion, 2009, and the Company
has duly authorized the execution and delivery of this Indenture.
All things necessary have been done (i) to make the Notes,
when executed by the Company and authenticated and delivered by the Trustee
hereunder and duly issued by the Company, the valid obligations of the Company
and (ii) to make this Indenture a valid instrument of the Company, in each case,
in accordance with their respective terms.
In consideration of the foregoing and the acceptance of the
Notes (or a beneficial interest in a Global Note) by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders, as follows.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
"ACTUAL NET CASH FLOW FROM OPERATING ACTIVITIES" means for any
fiscal year of Prime, the amount shown on Prime's consolidated statement of cash
flows prepared in accordance with GAAP as "Net cash flow from operating
activities."
"AFFILIATE" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" (including with correlative meaning, the terms "controlling,"
"controlled by" and "under common control with") when used with respect to any
Person, means (i) the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise or (ii) the beneficial ownership of 20% or
more of the total voting power of the Voting Stock (on a fully diluted basis) of
such Person.
"AGENT MEMBERS" has the meaning assigned to it in Section
2.5(a).
"BANKRUPTCY LAW" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any
other applicable federal, state, or foreign bankruptcy, insolvency or similar
law as now or hereafter constituted.
"BLOCKAGE NOTICE" has the meaning assigned to it in Section
10.3.
"BOARD OF DIRECTORS" means, as the context requires, the Board
of Directors of the Company or the applicable Subsidiary, as the case may be, or
any committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means a duly adopted resolution of the
Board of Directors in full force and effect at the time of determination and
certified as such by the Secretary or Assistant Secretary of the Company or a
Subsidiary, as the case may be.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such State are authorized or
required by law or other governmental action to close.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the
obligations of such Person under a lease that are required to be capitalized and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) the equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"CASH EQUIVALENTS" means (i) marketable direct obligations
issued or unconditionally Guaranteed by the United States government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Rating Group ("S&P") or ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having the highest
rating obtainable from either S&P or Moody's; and (iv) certificates of deposit
or bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; (v) shares of any money market mutual fund that
(a) has its assets invested continuously in the types of investments referred to
in clauses (i) and (ii) above, (b) has net assets of not less
2
than $500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's; and (vi) repurchase agreements with respect to, and which are fully
secured by a perfected security interest in, obligations of a type described in
clause (i) or clause (ii) above and are with any commercial bank described in
clause (iv) above.
"CERTIFICATED NOTES" has the meaning assigned to it in Section
2.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock, par value $.01 per
share, of the Company (or any Surviving Entity).
"COMPANY" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"COMPANY ORDER" means a written order signed in the name of
the Company by (i) the Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer or any Vice
President of the Company and (ii) the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"CONVERSION DATE" has the meaning set forth in Section 11.1
hereof.
"CONVERSION EVENT" means any of the following events: (i) May
31, 2003, if the Obligations in respect of the Senior Credit Facilities have not
been repaid in full by such date, (ii) non-compliance by Prime, as borrower, of
the financial covenants contained in the Senior Credit Facilities for two
consecutive fiscal quarterly periods, (iii) a payment event of default under the
Senior Credit Facilities which is not cured within 30 days thereof (whether or
not such payment event of default has been waived by the lenders party thereto),
(iv) the commencement of an Insolvency or Liquidation Proceeding in respect of
the
3
Company or Prime which, if commenced involuntarily (other than by the Holders),
shall remain undismissed and unstayed for 30 days thereafter or (v) the
acceleration of the Notes under Section 9.2 hereof.
"CONVERSION OPTION" means the right of the requisite composite
of lenders under, and in accordance with the terms of, the Senior Credit
Facilities, upon the occurrence and continuance of a Conversion Event, to elect
to cause the then outstanding principal amount of the Notes, plus accrued but
unpaid interest thereon, LESS $7,500,000 to be converted into Common Stock on
the terms set forth in Article XI hereof.
"CONVERSION PRICE" has the meaning set forth in Section 11.1
hereof.
"CORPORATE TRUST OFFICE" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office is, at the date of execution of this
Indenture, located in New York City.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"DAILY MARKET PRICE" means the price of a share of Common
Stock on the relevant date, determined (a) on the basis of the last reported
sale price regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices regular way, in either case as
reported on the New York Stock Exchange, Inc. (the "NYSE") or, if the Common
Stock is not then traded on the NYSE, on the principal national securities
exchange on which the Common Stock is listed or admitted for trading or (b) if
the Common Stock is not listed or admitted for trading on any national
securities exchange, on the basis of the last reported sale price or, in case no
such sale takes place on such day, the average of the highest reported bid and
the lowest reported asked quotation for the Common Stock, in either case as
reported on the automatic quotation system of the Nasdaq Stock Market or a
similar service if Nasdaq is no longer reporting such information or (c) if the
Common Stock is not so listed or traded as contemplated by clause (a) and
quotations for the Common Stock are not available as contemplated by clause (b),
on such basis as the Board of Directors shall establish in good faith.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning set forth in Section 2.11
hereof.
"DEPOSITARY" means The Depository Trust Company, its nominees,
and their respective successors.
4
"DESIGNATED SENIOR INDEBTEDNESS" means, in respect of the
Company or any of its Subsidiaries,
(i) the Obligations in respect of the Senior
Credit Facilities; and
(ii) any other Senior Indebtedness of the Company
or any of its Subsidiaries which, in each case, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders of such Senior Indebtedness are committed to lend up
to, at least $5,000,000 and is specifically designated by the Company or in such
Indebtedness as "Designated Senior Indebtedness."
"DISQUALIFIED STOCK" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part.
"EVENT OF DEFAULT" has the meaning assigned to it in Section
6.1.
"EXCESS PAYMENT" means the portion of the aggregate of any
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value and
described in a Board Resolution) of other consideration payable in respect of
any tender offer or other negotiated transaction by the Company or a Subsidiary
for all or any portion of the Common Stock that is in excess of an amount equal
to the product of (x) the number of shares of Common Stock with respect to which
the aggregate tender offer or negotiated purchase consideration is payable times
(y) the Reference Price.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in the
United States as in effect as of the Issue Date, including those set forth (i)
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) in statements and
pronouncements of the Financial Accounting Standards Board, (iii) in such other
statements by such other entity as approved by a significant segment of the
accounting profession, and (iv) in the published rules and regulations of the
Commission governing the inclusion of financial statements (including PRO FORMA
financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff of
the Commission.
"GLOBAL NOTE" has the meaning assigned to it in Section 2.1.
5
"GUARANTEE" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note
is registered on the Registrar's books.
"INCUR" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Disqualified
Capital Stock of a Person existing at the time such Person becomes a Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Subsidiary at the time it becomes a Subsidiary, and PROVIDED
FURTHER, HOWEVER, the term "incur" may be modified by Section 1.2 hereof. The
term "Incurrence" when used as a noun shall have a correlative meaning.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, on any date of determination, the principal amount (or if less, the
accreted value) of all indebtedness, obligations and liabilities of such Person
(i) for borrowed money;
(ii) evidenced by bonds, debentures, notes or
other similar instruments;
(iii) Capitalized Lease Obligations;
(iv) notes payable and drafts accepted
representing extensions of credit, whether or not representing obligations for
borrowed money, of such Person, excluding all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, and trade accounts payable arising in the ordinary
course of business;
(v) any indebtedness, obligation or liability of
such Person owed for all or any part of the deferred purchase price of property
or services (excluding any such
6
obligations Incurred under ERISA), which purchase price is (a) due more than six
months (or a longer period of up to one year, if such terms are available from
suppliers in the ordinary course of business) from the date of Incurrence of the
obligation in respect thereof or (b) evidenced by a note or similar written
instrument;
(vi) Guarantees of such Person in respect of
Indebtedness referred to in clauses (i) through (v) above and clauses (vii),
(viii) and (x) below;
(vii) all indebtedness of any other Person of the
type referred to in clauses (i) through (vi) above which is secured by any Lien
on any property or asset of such Person regardless of whether the indebtedness
secured thereby shall have been assumed by such Person or is nonrecourse to the
credit of such Person;
(viii) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property);
(ix) all Disqualified Stock issued by such Person
with the amount of Indebtedness represented by such Disqualified Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any;
(x) all obligations under or in respect of
Interest Rate or Currency Protection Agreements of such Person; and
(xi) any Preferred Stock of any Subsidiary of
such Person valued at the sum of (without duplication) (A) the liquidation
preference thereof, (B) any mandatory redemption payment obligations in respect
thereof and (C) accrued cash dividends thereon.
"INDENTURE" means this Indenture as amended or supplemented
from time to time.
"INSOLVENCY OR LIQUIDATION PROCEEDING" means (i) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relating to the Company or its assets, or (ii) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary or whether or
not involving insolvency or bankruptcy, or (iii) any assignment for the benefit
of creditors or any other marshaling of assets or liabilities of the Company.
"INTEREST PAYMENT DATE" means each annual Interest Payment
Date on March 31 of each year, commencing March 31, 2002, in respect of the
Notes. The "First
7
Interest Payment Date" shall mean March 31, 2002. The "Second Interest Payment
Date" shall mean March 31, 2003 and so on.
"INTEREST RATE OR CURRENCY PROTECTION AGREEMENT" of any Person
means any interest rate protection agreement (including, without limitation,
interest rate swaps, caps, floors, collars, derivative instruments and similar
agreements), and/or other types of interest hedging agreements and any currency
protection agreement (including foreign exchange contracts, currency swap
agreements or other currency hedging arrangements) in support of the Company's
business and not of a speculative nature.
"ISSUE DATE" means the date on which the Notes are originally
issued.
"LEGAL HOLIDAY" has the meaning assigned to it in Section
12.8.
"LIEN" means any mortgage, pledge, assignment, security
interest, encumbrance, lien (statutory or otherwise) or charge of any kind
(including any conditional sale or other title retention agreement) and any
other preferential arrangement having the practical effect of any of the
foregoing.
"NOTE CUSTODIAN" means, with respect to each Global Note, the
custodian with respect to such Global Note, the custodian with respect to such
Global Note (as appointed by the Depositary), or any successor Person thereto,
and shall initially be the Trustee.
"NOTE REGISTER" has the meaning assigned to it in Section 2.3.
"NOTES" means the 14.25% Mandatorily Convertible Senior
Subordinated Notes Due 2004 or, upon conversion, 2009, including any Secondary
Securities issued as interest thereon, in each case, issued under this
Indenture, as the same may be amended or modified from time to time in
accordance with the terms hereof.
"NOTICE OF DEFAULT" has the meaning assigned to it in Section
6.1.
"OBLIGATIONS" means, with respect to any Indebtedness, any
principal, interest (including, without limitation, Post-Petition Interest),
penalties, fees, indemnifications, reimbursements, including damages, and other
liabilities payable under the documentation governing such Indebtedness.
"OFFICER" means the Chairman of the Board, President, Chief
Financial Officer, Controller, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary of the Company or any Subsidiary of the Company, as the case
may be.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers.
8
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company.
"PAYING AGENT" has the meaning assigned to it in Section 2.3.
"PAYMENT BLOCKAGE PERIOD" has the meaning assigned to it in
Section 10.3.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PLAN" means the Amended Joint Plan of Reorganization
confirmed in connection with IN RE Prime Succession, Inc., ET AL., Case No.
00-2969(PJW), pending in the -- -- United States Bankruptcy Court for the
District of Delaware.
"POST-PETITION INTEREST" means all interest accrued or
accruing after the commencement of any Insolvency or Liquidation Proceeding (and
interest that would accrue but for the commencement of any Insolvency or
Liquidation Proceeding) in accordance with and at the contract rate (including,
without limitation, any rate applicable upon default) specified in the agreement
or instrument creating, evidencing or governing any Indebtedness, whether or
not, pursuant to applicable law or otherwise, the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding.
"PREFERRED STOCK" means, as applied to the Capital Stock of
any corporation, Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRIME" means Prime Succession, Inc., a Delaware corporation.
"PROPERTY" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
tangible or intangible.
"RECORD DATE" means, for the interest payable on any Interest
Payment Date, the date specified in Section 2.11 hereof.
"REDEMPTION DATE" means, when used with respect to any Note or
part thereof to be redeemed hereunder, the date fixed for redemption of such
Notes pursuant to the terms of the Notes and this Indenture.
"REDEMPTION PRICE" means, when used with respect to any Note
or part thereof to be redeemed hereunder, the price fixed for redemption of such
Note pursuant to
9
the terms of the Notes and this Indenture, plus accrued and unpaid interest
thereon, if any, to the Redemption Date.
"REFERENCE PRICE" means, with respect to any tender offer or
other negotiated transaction by the Company or a Subsidiary for all or any
portion of the Company's Common Stock, the average of the Daily Market Prices
per share of Common Stock on the five consecutive trading days selected by the
Company out of the 10 consecutive trading days next succeeding the date of
payment of such negotiated transaction consideration or expiration of such
tender offer, as the case may be.
"REGISTRAR" has the meaning assigned to it in Section 2.3.
"REPRESENTATIVE" means any trustee, agent or representative
(if any) for an issue of Senior Indebtedness of the Company or any of its
Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"SECONDARY SECURITIES" has the meaning set forth in Section
2.11.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR CREDIT FACILITIES" means the Credit Agreement dated as
of December __, 2000 among Prime, as borrower, the Company and the Subsidiaries
of the Company identified therein, as guarantors, the lenders party thereto, The
Bank of Nova Scotia, as administrative agent, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners,
L.P., as syndication agent, together with the other Loan Documents (as defined
therein), as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"SENIOR INDEBTEDNESS" means with respect to any Person, (i)
all Obligations in respect of the Senior Credit Facilities and (ii) all
Obligations in respect of other Indebtedness (other than as represented by the
Notes), whether outstanding on the Issue Date or thereafter Incurred; PROVIDED,
HOWEVER, that Senior Indebtedness shall not include (1) any obligation of such
Person to any Subsidiary of such Person, (2) any liability for federal, state,
local or other taxes owed or owing by such Person, (3) any accounts payable or
other similar liability to trade creditors (including Guarantees thereof or
instruments evidencing such liabilities), (4) any Indebtedness of such Person
(and any accrued and unpaid interest in respect thereof) which is subordinate or
junior in any respect to any other Indebtedness or other obligation of such
Person or (5) any Indebtedness that by the terms of
10
the instrument creating or evidencing the same or by which the same is assumed
or affirmed is not expressly designated as Senior Indebtedness.
To the extent any payment of Senior Indebtedness is declared
to be fraudulent or preferential, set aside or required to be paid to a trustee,
receiver or other similar party under any bankruptcy, insolvency, receivership
or similar law, then if such payment is recovered by, or paid over to, such
trustee, receiver of similar party, the Senior Indebtedness or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if payment had not occurred.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"SPECIAL RECORD DATE" means a date fixed by the Trustee
pursuant to Section 2.11 for the payment of Defaulted Interest.
"STATED MATURITY" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"SUBORDINATED REORGANIZATION SECURITIES" has the meaning
assigned to it in Section 10.2.
"SUBSIDIARY" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of outstanding shares of Capital Stock or other interests
(including partnership interests) entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person. For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a
Subsidiary.
"SURVIVING ENTITY" has the meaning assigned to it in Section
5.1.
"TARGETED NET CASH FLOW FROM OPERATING ACTIVITIES" means, for
any period, the amount set forth in the second column of the chart contained in
Section 2.11(a) hereof for such period.
11
"TIA" means the Trust Indenture Act of 1939 (15 USC Section
77aaa- 77bbbb) as in effect on the date of this Indenture.
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor
"TRUST OFFICER" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"UNIFORM COMMERCIAL CODE" means the New York Uniform
Commercial Code as in effect from time to time.
"US" or "UNITED STATES" means the United States of America.
"US GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States (including any agency or instrumentality thereof) for the payment
of which the full faith and credit of the United States is pledged and which are
not callable at the issuer's option.
"VOTING STOCK" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary all the Capital
Stock of which (other than directors' qualifying shares and shares held by other
Persons to the extent such shares are required by applicable law to be held by a
Person other than the Company or a Subsidiary) is owned by the Company or one or
more Wholly-Owned Subsidiaries; PROVIDED, HOWEVER, that so long as the Company,
directly or indirectly, owns at least 80% of the Voting Stock of ▇▇▇▇ ▇. ▇▇▇▇
Company, then ▇▇▇▇ ▇. ▇▇▇▇ Company shall constitute a Wholly-Owned Subsidiary of
the Company for purpose of this Indenture.
SECTION 1.1 INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT
This Indenture is subject to the mandatory provisions of the
TIA which are incorporated by reference in and made a part of this Indenture.
The following TIA terms have the following meanings:
"COMMISSION" means the SEC.
12
"INDENTURE SECURITIES" means the Notes; "indenture security
holder" means a Noteholder; "indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee.
"OBLIGOR" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.2 RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be deemed
to be the Incurrence of Indebtedness; and
(8) all references to the date the Notes were originally
issued shall refer to Issue Date.
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ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING
(a) The Notes and the certificate of
authentication of the Trustee thereon shall be substantially in the form of
Exhibit A or Exhibit B hereto, as applicable, which are hereby incorporated in
and expressly made a part of this Indenture.
(b) The Notes may have such letters, numbers or
other marks of identification and such legends and endorsements, stamped,
printed, lithographed or engraved thereon, (i) as the Company may deem
appropriate and as are not inconsistent with the provisions of this Indenture,
(ii) as may be required to comply with this Indenture, any law or any rule of
any securities exchange on which the Notes may be listed and (iii) as may be
necessary to conform to customary usage. Each Note shall be dated the date of
its authentication by the Trustee. The Notes shall be issued only in fully
registered form, without coupons, in denominations of $1.00 and integral
multiples thereof. Definitive Notes shall be typed, printed, lithographed or
engraved or produced by any combination of such methods or produced in any other
manner permitted by the rules of any securities exchange on which such Notes may
be listed, all as determined by the officers of the Company executing such
Notes, as evidenced by their execution of such Notes.
(c) All or a portion of the Notes shall be
issued initially in the form of a single, permanent global note in definitive,
fully registered form, without coupons, substantially in the form and bearing
the legends set forth in Exhibit A hereto (the "Global Note"). The balance of
the Notes shall be issued in definitive, fully registered form, without coupons,
substantially in the form and bearing the legends set forth in Exhibit B hereto
("Certificated Notes").
Upon issuance, such Global Note shall be registered in the
name of the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided and deposited on behalf of
the purchasers of the Notes represented thereby with the Trustee at its
Corporate Trust Office, as custodian for the Depositary. Owners of beneficial
interests in the Global Note shall be entitled to receive physical delivery of a
Certificated Note only upon the occurrence of the events specified in clauses
(i) through (iii) of Section 2.6(a). Upon issuance, all Certificated Notes shall
be duly executed by the Company and authenticated by the Trustee as hereinafter
provided. Any Certificated Note may be exchanged for a beneficial interest in
the Global Note.
14
SECTION 2.2 EXECUTION AND AUTHENTICATION
The Notes shall be issued in one series, except to the extent
a separate series of Notes may be issued under Section 2.11. Except as provided
in Section 2.7 and 2.11, the aggregate principal amount of Notes outstanding any
time shall not exceed $20,000,000; PROVIDED, HOWEVER, that immediately following
the Conversion Date, the aggregate principal amount of the Notes shall not
exceed $7,500,000. The Notes shall be executed on behalf of the Company by its
Chief Executive Officer, President, Chief Operating Officer, Chief Financial
Officer, Treasurer or any Vice President, and shall be attested by the Company's
Secretary or one of its Assistant Secretaries, in each case by manual or
facsimile signature.
The Notes shall be authenticated by manual signature of an
authorized signatory of the Trustee and shall not be valid for any purpose
unless so authenticated.
In case any officer of the Company whose signature shall have
been placed upon any of the Notes shall cease to be such officer of the Company
before authentication of such Notes by the Trustee and the issuance and delivery
thereof, such Notes may, nevertheless, be authenticated by the Trustee and
issued and delivered with the same force and effect as though such Person had
not ceased to be such an officer of the Company.
The Trustee shall, upon receipt of a Company Order requesting
such action, authenticate Notes for original issue up to the aggregate principal
amount not to exceed $20,000,000 outstanding at any given time, except for any
Secondary Securities that may be issued pursuant to Section 2.11 and except as
provided in Section 2.7. Such Company Order shall specify the amount of Notes to
be authenticated and the date on which the Notes are to be authenticated and
shall further provide instructions concerning registration, amounts for each
Holder and delivery. Upon the occurrence of any event specified in Section
2.6(a) hereof, the Company shall execute and the Trustee shall authenticate and
make available for delivery to each beneficial owner identified by the
Depositary, in exchange for such beneficial owner's interest in the Global Note,
Certificated Notes representing Notes theretofore represented by the Global
Note.
A Note shall not be valid or entitled to any benefits under
this Indenture or obligatory for any purpose unless executed by the Company and
authenticated by the manual signature of one of the authorized signatories of
the Trustee as provided herein. Such signature upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered under this Indenture and is entitled to the benefits of this
Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Notes. Unless limited by the terms
of such appointment, an authenticating agent may authenticate the Notes whenever
the Trustee may do so. Each
15
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Any authenticating agent of the Trustee shall have
the same rights hereunder as any Registrar or Paying Agent.
Notwithstanding the foregoing, if any Note shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Note to the Trustee for cancellation as
provided in Section 2.10 together with an Officer's Certificate (which need not
be accompanied by an Opinion of Counsel) stating that such Note has never been
issued and sold by the Company, for all purposes of this Indenture such Note
shall be deemed never to have been authenticated and delivered hereunder and
shall not be entitled to the benefits of this Indenture.
SECTION 2.3 REGISTRAR AND PAYING AGENT
The Company shall maintain, pursuant to Section 4.2 hereof, an
office or agency where the Notes may be presented for registration of transfer
or for exchange (the "Registrar"), an office or agency where Notes may be
presented for payment (the "Paying Agent") and an office or agency where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served.
The Company shall cause to be kept at such office a register
(the "Note Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes entitled to be registered or transferred as provided herein.
The Trustee, at its Corporate Trust Office, is initially
appointed Registrar for the purpose of registering Notes and transfers of Notes
as herein provided. The Company may, upon written notice to the Trustee, change
the designation of the Trustee as Registrar and appoint another Person to act as
Registrar for purposes of this Indenture. If any Person other than the Trustee
acts as Registrar, the Trustee shall have the right at any time, upon reasonable
notice, to inspect or examine the Note Register and to make such inquiries of
the Registrar as the Trustee shall in its discretion deem necessary or desirable
in performing its duties hereunder.
The Company shall enter into an appropriate agency agreement
with any Person designated by the Company as Registrar or Paying Agent that is
not a party to this Indenture, which agreement shall incorporate the provisions
of the TIA and shall implement the provisions of this Indenture that relate to
such Registrar or Paying Agent. Prior to the designation of any such Person, the
Company shall, by written notice (which notice shall include the name and
address of such Person), inform the Trustee of such designation. The Trustee, at
its Corporate Trust Office, is initially appointed Paying Agent under this
Indenture. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such. Subject to Section 2.6(a) hereof, upon surrender for
registration of transfer of
16
any Note at an office or agency of the Company designated for such purpose, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Notes of any authorized denomination or denominations, of like tenor and
aggregate principal amount, all as requested by the transferor.
Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee or
the Registrar) be duly endorsed, or be accompanied by a duly executed instrument
of transfer in form satisfactory to the Company, the Trustee and the Registrar,
by the Holder thereof or such Holder's attorney duly authorized in writing.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST
On or prior to 10 a.m. (New York time) each due date of the
principal, premium, if any, or any payment of interest with respect to any Note,
the Company shall deposit with the Paying Agent a sum or, in compliance with
Section 2.11, Secondary Securities, sufficient to pay such principal, premium,
if any, or interest when so becoming due.
The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that such Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money or Secondary Securities, held by
such Paying Agent for the payment of principal, premium, if any, or interest
with respect to the Notes, shall notify the Trustee of any default by the
Company in making any such payment and at any time during the continuance of any
such default, upon the written request of the Trustee, shall forthwith pay to
the Trustee all sums held in trust by such Paying Agent.
The Company at any time may require a Paying Agent to pay all
money or Secondary Securities held by it to the Trustee and to account for any
funds or Secondary Securities disbursed by such Paying Agent. Upon complying
with this Section 2.4, the Paying Agent shall have no further liability for the
money or Secondary Securities delivered to the Trustee.
SECTION 2.5 GLOBAL NOTES
(a) The Global Note shall initially be
registered in the name of the Depositary or its nominee and be delivered to the
Note Custodian. So long as a Global Note is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under this Indenture with respect to the
Global Note held on their behalf by the Depositary or the Trustee as its
custodian, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global Note
for all purposes. Notwithstanding the
17
foregoing, nothing herein shall (i) prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or (ii)
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder.
(b) The Holder of a Global Note may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests in such Global Note through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Notes.
(c) Whenever, as a result of an optional
redemption of Notes by the Company, a conversion of the Notes pursuant to the
provision of Article XI or an exchange for Certificated Notes pursuant to the
provisions of Section 2.6(a) hereof, a Global Note is redeemed, repurchased,
converted or exchanged in part, such Global Note shall be surrendered by the
Holder thereof to the Trustee who shall cause an adjustment to be made to
Schedule A thereof so that the principal amount of such Global Note will be
equal to the portion of such Global Note not redeemed, repurchased, converted or
exchanged and shall thereafter return such Global Note to such Holder, provided
that each such Global Note shall be in a principal amount of $1.00 or an
integral multiple thereof.
SECTION 2.6 TRANSFER AND EXCHANGE
(a) The Global Note shall be exchanged by the
Company for one or more Certificated Notes if (i) the Depositary has notified
the Company that it is unwilling or unable to continue as, or ceases to be, a
clearing agency registered under Section 17A of the Exchange Act and a successor
to the Depositary registered as a clearing agency under Section 17A of the
Exchange Act is not able to be appointed by the Company within 90 calendar days,
or (ii) the Depositary is at any time unwilling or unable to continue as
Depositary and a successor to the Depositary is not able to be appointed by the
Company within 90 calendar days, or (iii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of Notes in the form
of Certificated Notes. If an Event of Default occurs and is continuing, the
Company shall, at the request of the Holder thereof, exchange all or part of the
Global Note for one or more Certificated Notes; provided that the principal
amount of each of such Certificated Note and such Global Note, after such
exchange, shall be $1.00 or an integral multiple thereof. Whenever a Global Note
is exchanged as a whole for one or more Certificated Notes it shall be
surrendered by the Holder thereof to the Trustee for cancellation. Whenever a
Global Note is exchanged in part for one or more Certificated Notes it shall be
surrendered by the Holder thereof to the Trustee and the Trustee shall make the
appropriate notations thereon pursuant to Section 2.5(c) hereof. All
Certificated Notes issued in exchange for a Global Note or any portion thereof
shall be registered in such names, and delivered, as the Depositary shall
instruct the Trustee.
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(b) Subject to the limitations contained in
Section 2.13(a) hereof, a Holder may transfer a Note only upon the surrender of
such Note for registration of transfer. Subject to the limitations contained in
Section 2.13(a) hereof, no such transfer shall be effected until, and the
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer in the Note Register by the Registrar. When
Notes are presented to the Registrar with a request to register the transfer of,
or to exchange, such Notes, the Registrar shall register the transfer or make
such exchange as requested if its requirements for such transactions and any
applicable requirements hereunder are satisfied. To permit registrations of
transfers and exchanges of Certificated Notes issued in accordance with Section
2.6(a), the Company shall execute and the Trustee shall authenticate and deliver
Certificated Notes at the Registrar's request.
(c) The Company shall not be required to make
and the Registrar need not register the transfer or exchange of Certificated
Notes or portions thereof selected for redemption (except, in the case of a
Certificated Note to be redeemed in part, the portion of such Note not to be
redeemed) for a period of 15 calendar days before a selection of Notes to be
redeemed.
(d) No service charge shall be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer of Notes.
(e) All Notes issued upon any registration of
transfer or exchange pursuant to the terms of this Indenture will evidence the
same debt and will be entitled to the same benefits under this Indenture as the
Notes surrendered for such registration of transfer or exchange.
(f) Any Holder of a Global Note shall, by
acceptance of such Global Note, agree that, subject to the limitations contained
in Section 2.13(a) hereof, transfers of beneficial interests in such Global Note
may be effected only through a book- entry system maintained by such Holder (or
its agent), and that ownership of a beneficial interest in the Notes represented
thereby shall be required to be reflected in book-entry form. Transfers of a
Global Note shall be limited to transfers in whole and not in part, to the
Depositary, its successors, and their respective nominees. Interests of
beneficial owners in a Global Note shall be transferred in compliance with the
rules and procedures of the Depositary (or its successors).
SECTION 2.7 REPLACEMENT NOTES
If a mutilated Note is surrendered to the Registrar or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken, the Company shall issue
19
and the Trustee shall authenticate a replacement Note if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Note is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company.
SECTION 2.8 OUTSTANDING NOTES
Notes outstanding at any time are all Notes, including
Secondary Securities, authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation or for conversion under Article XI
and those described in this Section as not outstanding. A Note does not cease to
be outstanding because the Company or an Affiliate of the Company holds the
Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a Redemption Date or maturity date money
sufficient to pay all principal, premium, if any, and interest payable on that
date with respect to the Notes (or portions thereof) to be redeemed or maturing,
as the case may be, and the Paying Agent is not prohibited from paying such
money to the Noteholders on that date pursuant to the terms of this Indenture,
then on and after that date such Notes (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.9 TEMPORARY NOTES
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate and deliver temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes and deliver them in exchange for temporary Notes.
SECTION 2.10 CANCELLATION
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to
20
them for registration of transfer, exchange or payment. The Trustee and no one
else shall cancel and destroy (subject to the record retention requirements of
the Exchange Act) any Notes surrendered for registration of transfer, exchange,
payment, conversion or cancellation and deliver a certificate of such
destruction to the Company. The Company may not issue new Notes to replace Notes
it has redeemed, paid, converted or delivered to the Trustee for cancellation.
SECTION 2.11 PAYMENT OF INTEREST; INTEREST RIGHTS
PRESERVED
(a) The Notes shall bear interest at a rate of
14.25 % per annum from the Issue Date or from the most recent Interest Payment
Date to which interest has been paid or provided for and, except as otherwise
provided in this Section 2.11(a) below, such interest shall be payable in the
form of additional Notes ("Secondary Securities") rounded upward or downward to
the nearest $1.00 in lieu of the payment of interest in cash on the Notes;
PROVIDED, HOWEVER, that the Company may at its option pay cash in lieu of
rounding upward such Secondary Securities to the nearest $1.00. Any such
Secondary Securities shall be governed by this Indenture and shall be subject to
the same terms (including Stated Maturity and rates of interest from time to
time payable thereon (but not including the issuance date)) as on all other
Notes. Notwithstanding anything herein to the contrary, interest on the Notes
will be payable in cash on any Interest Payment Date that falls due on or after
the date the Obligations in respect of Senior Credit Facilities shall have been
paid in full.
Notwithstanding the foregoing, if the Company's Actual Net
Cash Flow from Operating Activities for a period specified below is more than
the Targeted Net Cash Flow from Operating Activities specified for such period,
then the Company may, at its option and in its sole discretion, on the Interest
Payment Date set opposite such period in the table below, pay accrued, but
unpaid, interest on the Notes in cash in an amount not to exceed the lesser of
(x) 50% of the difference between the Actual Net Cash Flow from Operating
Activities less and the Targeted Net Cash Flow from Operating Activities for the
relevant period set forth below and (y) all interest that accrued on the Notes
from the Issue Date or the preceding Interest Payment Date through the then
current Interest Payment Date.
TARGETED CASH
PERIOD FLOW AMOUNT INTEREST PAYMENT DATE
------ ----------- ---------------------
January 1, 2001 to $13,300,000
December 31, 2001 First Interest Payment Date
January 1, 2002 to $14,700,000 Second Interest Payment Date
December 31, 2002
Each payment of interest in respect of an Interest Payment
Date, whether in cash or Secondary Securities, will include interest accrued
through the day before such
21
Interest Payment Date. If an Interest Payment Date falls on a day that is not a
Business Day, the interest payment to be made on such Interest Payment Date will
be made on the next succeeding Business Day with the same force and effect as if
made on such Interest Payment Date, and no additional interest will accrue as a
result of such delayed payment.
(b) The Company shall give written notice to the
Trustee of the amount of interest to be paid in Secondary Securities not less
than five Business Days prior to the applicable Interest Payment Date, and the
Trustee or an authenticating agent (upon receipt of a Company Order given not
less than five nor more than 45 days prior to such Interest Payment Date) shall
authenticate for original issue (pro rata to each Holder of any Notes on the
applicable Record Date) Secondary Securities rounded upward or downward to the
nearest $1.00 in an aggregate principal amount equal to the amount of interest
not paid in cash on such Interest Payment Date; PROVIDED, HOWEVER, that the
Company may at its option pay cash in lieu of rounding upward such Secondary
Securities to the nearest $1.00. Each issuance of Secondary Securities in lieu
of the payment of interest in cash on the Notes shall be made pro rata with
respect to the outstanding Notes, and the Company shall have the right to
aggregate amounts of interest payable in the form of Secondary Securities to a
Holder of outstanding Notes and issue to such holder a single Secondary Security
in payment thereof. Secondary Securities may be issued in the form of a Global
Note or may be denominated in a separate series if the Company deems it
necessary to do so in order to comply with any law or other applicable
regulation or requirement, with appropriate distinguishing designations.
(c) Interest on any Note which is payable, and
is paid, whether in cash or Secondary Securities, or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name such Note is
registered at the close of business on the Record Date for such interest
payment, which shall be the March 15 (whether or not a Business Day) immediately
preceding such Interest Payment Date.
(d) Any interest on any Note which is payable,
but is not paid, either in Secondary Securities or cash, or duly provided for,
on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the registered Holder on the relevant Record
Date, and, except as hereinafter provided, such Defaulted Interest, and any
interest payable on such Defaulted Interest, shall be paid by the Company, at
its election, as provided in clause (e)(i) or (e)(ii) below:
(e) (i) The Company may elect to make payment of
any Defaulted Interest, and any interest payable on such Defaulted Interest, to
the Persons in whose names the Notes are registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on the Notes and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for
22
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as provided in this Section 2.11(e)(i). Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 calendar days and not less than 10 calendar days prior
to the date of the proposed payment and not less than 10 calendar days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be sent, first-class
mail, postage prepaid, to each Holder at such Holder's address as it appears in
the Note Register, not less than 10 calendar days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Notes are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (ii); or
(ii) The Company may make payment of any
Defaulted Interest, and any interest payable on such Defaulted Interest, on the
Notes in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause (ii), such manner of
payment shall be deemed practicable by the Trustee.
(f) Subject to the foregoing provisions of this
Section 2.11, each Note delivered under this Indenture upon registration of
transfer of, or in exchange for, or in lieu of, any other Note, shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Note.
(g) In the event any Note (or a portion thereof)
is converted into Common Stock in accordance with Article XI hereof prior to an
Interest Payment Date, then all accrued but unpaid interest for the period
beginning on the Issue Date or the last Interest Payment Date for which interest
was paid or provided for through the Conversion Date on such Note (or the
portion thereof to be converted) shall not be payable (although such accrued and
unpaid interest will be deemed paid by the appropriate portion of the Common
Stock received by the Holder upon such conversion).
SECTION 2.12 CUSIP NUMBERS
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED, HOWEVER, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the
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other identification numbers printed on the Notes, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 2.13 TRANSFERS, ETC.
(a) Until the Senior Credit Facilities have been
paid in full, each Holder of a Note (or a beneficial interest in a Global Note)
agrees not to transfer or cause to be transferred its interest in any Note (or
beneficial interest in a Global Note) unless it also transfers to the transferee
a proportionate share of the Common Stock issued under the Plan (together with a
proportionate share of any Common Stock issued to the Holders in accordance with
Article XI hereof), and any transfer which fails to comply with the
aforementioned provisions of this Section 2.13(a) shall be void AB INITIO. Until
the Senior Credit Facilities have been paid in full, each Holder hereby further
agrees that it will not transfer any Common Stock issued under the Plan or to
the Holders upon the conversion of the Notes in accordance with Article XI
hereof unless a proportionate share of the then outstanding Notes are also so
transferred to the transferee. Each Holder who requests a registration of
transfer of a Note (or beneficial interest in a Global Note) or Common Stock
shall be deemed to have represented and warranted to the Company and the
Registrar that such transfer complies with the foregoing provisions of this
Section 2.13(a); PROVIDED, HOWEVER, that the Registrar may, at its discretion,
condition the registration of transfer of any such Note (or a beneficial
interest in a Global Note) or Common Stock upon receipt of documentation
sufficient to establish that such conditions have, in fact, been complied with.
(b) Each Holder of a Note (or a beneficial
interest in a Global Note) agrees to indemnify the Company and the Trustee
against any liability that may result from the transfer, exchange or assignment
by such Holder of such Holder's Note or Common Stock in violation of any
provision of this Indenture and/or applicable US federal or state securities
law.
ARTICLE III
REDEMPTION
SECTION 3.1 REDEMPTION OF NOTES; NOTICES TO TRUSTEE
(a) The Notes may be redeemed at the option of
the Company, in whole or in part, at any time upon at least 30 calendar days'
but not more than 60 calendar days' prior notice, at a purchase price equal to
the then outstanding principal balance of the Notes to be redeemed, plus accrued
and unpaid interest thereon, if any, to the applicable Redemption Date (subject
to the right of each Holder of record on the relevant Record Date to receive
interest due on the relevant Interest Payment Date).
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(b) If the Company elects to redeem Notes
pursuant to clause (a) of this Section 3.1, the Company shall notify the Trustee
in writing of the Redemption Date and the principal amount of Notes to be
redeemed.
(c) The Company shall give each notice to the
Trustee provided for in Section 3.1(b) not less than 35 days nor more than 60
days before the Redemption Date unless the Trustee consents to a shorter period.
Such notice shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will comply with the
conditions herein.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED
If fewer than all the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and which complies with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Notes not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Notes that have denominations larger than $1.00. Notes and portions
of them the Trustee selects shall be in amounts of $1.00 or a whole multiple of
$1.00. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption. The Trustee shall notify
the Company promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.3 NOTICE OF REDEMPTION
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Notes to be redeemed.
The notice shall identify the Notes to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying
Agent;
(4) that Notes called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price;
(5) if any Global Note is being redeemed
in part, the portion of the principal amount of such Note to be redeemed and
that, after the Redemption
25
Date, the Global Note, with a notation on Schedule A thereof adjusting the
principal amount thereof to be equal to the unredeemed portion, will be returned
to the Holder thereof;
(6) if any Certificated Note is being
redeemed in part, the portion of the principal amount of such Note to be
redeemed and that, after the Redemption Date, a new Certificated Note or
Certificated Notes in principal amount equal to the unredeemed portion will be
issued;
(7) if fewer than all the outstanding
Notes are to be redeemed, the identification and principal amounts of the
particular Notes to be redeemed;
(8) that, unless the Company defaults in
making such redemption payment or the Paying Agent is prohibited from making
such payment pursuant to the terms of this Indenture, interest on Notes (or
portion thereof) called for redemption ceases to accrue on and after the
Redemption Date; and
(9) that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.3.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption
Price stated in the notice. Upon surrender to the Paying Agent, such Notes shall
be paid at the Redemption Price stated in the notice, plus accrued interest to
the Redemption Date. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE
On or prior to the Redemption Date, the Company shall deposit
with the Paying Agent (or, if the Company or a domestically incorporated
Wholly-Owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
money in immediately available funds, sufficient to pay the Redemption Price of
and accrued interest on all Notes to be redeemed on that date other than Notes
or portions of Notes called for redemption which have been delivered by the
Company to the Trustee for cancellation.
So long as the Company complies with the preceding paragraph
and the other provisions of this Article III, interest on the Notes or portions
thereof to be redeemed on the applicable Redemption Date shall cease to accrue
from and after such date and such Notes
26
or portions thereof shall be deemed not to be entitled to any benefit under this
Indenture except to receive payment of the Redemption Price on the Redemption
Date (subject to the right of each Holder of record on the relevant Record Date
to receive interest due on the relevant Interest Payment Date). If any Note
called for redemption shall not be so paid upon surrender for redemption, then,
from the Redemption Date until such Redemption Price is paid, interest shall be
paid on the unpaid principal and premium and, to the extent permitted by law, on
any accrued but unpaid interest thereon, in each case at the rate prescribed
therefor by such Notes.
SECTION 3.6 NOTES REDEEMED IN PART
Upon surrender of a Note that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder of the Note
being surrendered (at the Company's expense) a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 PAYMENT OF NOTES
The Company shall promptly pay the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes and in this Indenture. Principal, premium, if any, and interest shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Indenture money or, to the extent permitted by
Section 2.11, Secondary Securities, sufficient to pay all principal, premium, if
any, and interest then due and the Trustee or the Paying Agent, as the case may
be, is not prohibited from paying such money or Secondary Securities, as the
case may be, to the Holders thereof on that date pursuant to the terms of this
Indenture.
To the extent lawful, the Company shall pay interest on
overdue principal, overdue premium and Defaulted Interest at the interest rate
borne on the Notes. The Company's obligation pursuant to the previous sentence
shall apply whether such overdue amount is due at its maturity, as a result of
the Company's obligations pursuant to Section 3.5 or otherwise.
All payments not made in Secondary Securities with respect to
a Global Note or a Certificated Note (including principal, premium, if any, and
interest) the Holders of which have given wire transfer instructions to the
Company, will be required to be made by wire transfer of immediately available
funds to the account or accounts specified by the Holders thereof or, if no such
account is specified, by sending via first-class mail, postage prepaid, a check
to each such Holders' registered address.
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SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served, which office shall be
initially the Corporate Trust Office. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee its agent to receive all presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Notes may be presented or surrendered for any or all of such purposes, and may
from time to time rescind such designations; PROVIDED, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
and any change in the location of any such other office or agency. The Company
hereby designates the Corporate Trust Office of the Trustee as one such office
or agency of the Company in accordance with Section 2.3 hereof.
SECTION 4.3 MONEY FOR THE NOTE PAYMENTS TO BE HELD IN
TRUST
If the Company, any Subsidiary of the Company or any of their
respective Affiliates shall at any time act as Paying Agent with respect to the
Notes, such Paying Agent shall, on or before each due date of the principal of,
premium, if any, or interest on any of the Notes, segregate and hold in trust
for the benefit of the Persons entitled thereto money, or if such interest
payment is to be made in Secondary Securities in accordance with the terms
hereof, Secondary Securities sufficient to pay interest so becoming due until
such money shall be paid (or in the case of Secondary Securities, issued) to
such Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Notes, it shall, prior to 10:00 am New York City time on each due
date of the principal of, premium, if any, or interest on any of the Notes,
deposit with a Paying Agent a sum or if such interest payment is to be made in
Secondary Securities in accordance with the terms hereof, Secondary Securities
sufficient to pay the principal, premium, if any, or interest so becoming due,
such sum or Secondary Securities to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest and (unless such Paying
Agent is the
28
Trustee) the Paying Agent shall promptly notify the Trustee of the Company's
action or failure so to act.
SECTION 4.4 CORPORATE EXISTENCE
Subject to the provisions of Article V, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence, rights (charter and statutory) and franchises of
the Company and each of its Subsidiaries; PROVIDED, that the Company and any
such Subsidiary shall not be required to preserve the corporate existence of any
such Subsidiary or any such right or franchise if the Board shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 4.5 MAINTENANCE OF PROPERTY
The Company shall cause all Property used or useful in the
conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as, in the
judgment of the Company, may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, that nothing in this Section 4.5 shall prevent the Company from
discontinuing the operation or maintenance of any of such Property if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any of its Subsidiaries and not disadvantageous
in any material respect to the Holders.
SECTION 4.6 PAYMENT OF TAXES AND OTHER CLAIMS
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or Property of the Company or any of
its Subsidiaries and (b) all material lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon the Property of the
Company or any of its Subsidiaries; PROVIDED that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP or other appropriate provision has been made.
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SECTION 4.7 SEC REPORTS
Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall:
(1) file with the Commission and provide the
Trustee and Noteholders with such annual reports and such information, documents
and other reports as are specified in Sections 13 and 15(d) of the Exchange Act
and applicable to a US corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections;
(2) file with the Commission and provide the
Trustee, in accordance with rules and regulations prescribed from time to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(3) transmit by mail to the Holders of the
Notes, within 30 days after the filing thereof with the Trustee, in the manner
and to the extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to be filed by the Company pursuant
to paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission; and
PROVIDED, delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 4.8 COMPLIANCE CERTIFICATE
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company an Officers' Certificate stating that
in the course of the performance by the signers of their duties as Officers of
the Company they would normally have knowledge of any Default and whether or not
the signers know of any Default that occurred during such period. If they do,
the certificate shall describe the Default, its status and what action the
Company is taking or proposes to take with respect thereto. The Company also
shall comply with TIA Section 314(a)(4).
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SECTION 4.9 WAIVER OF STAY, EXTENSION OR USURY LAWS
The Company will not at any time, to the extent that it may
lawfully not do so, insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or premium, if any, or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
that may affect the covenants or the performance of this Indenture; and, to the
extent that they may lawfully do so, the Company hereby expressly waives all
benefit or advantage of any such law and expressly agrees that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 4.10 INVESTMENT COMPANY ACT
None of the Company or its Subsidiaries shall become an
investment company subject to registration under the Investment Company Act of
1940, as amended.
SECTION 4.11 FURTHER INSTRUMENTS AND ACTS
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS
(a) The Company will not, in a single
transaction or series of related transactions, consolidate or merge with or into
any Person (whether or not the Company is the surviving Person), or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary to sell, assign, transfer, lease, convey or otherwise dispose of) all
or substantially all of the Company's and its Subsidiaries' properties and
assets (determined on a consolidated basis for the Company and its Subsidiaries)
to any Person unless:
(i) either (1) the Company shall be the
surviving or continuing entity or (2) the Person (if other than the
Company) formed by such consolidation or into which the Company is
merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the
Company and of the Company's Subsidiaries substantially as an entirety
31
(the "Surviving Entity") (x) shall be a corporation organized and
validly existing under the laws of the United States or any State
thereof and (y) shall expressly assume, by supplemental indenture (in
form and substance satisfactory to the Trustee), executed and delivered
to the Trustee, the due and punctual payment of the principal of, and
premium, if any, and interest on all of the Notes and the performance
and observance of every covenant of the Notes and this Indenture on the
part of the Company to be performed or observed;
(ii) immediately before and immediately
after giving effect to such transaction and the assumption contemplated
by clause (i)(2)(y) above, no Default or Event of Default shall have
occurred or be continuing; and
(iii) the Company or the Surviving Entity
shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with the applicable provisions of
this Indenture and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
Upon any consolidation, combination or merger or any transfer
of all or substantially all of the properties and assets of the Company and its
Subsidiaries in accordance with the foregoing, in which the Company is not the
continuing corporation, the successor Person formed by such consolidation or
into which the Company is merged or to which such conveyance, lease or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company hereunder and under the Notes with the same effect as
if such surviving entity had been named as such.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT
The term "Event of Default," wherever used herein with respect
to the Notes, means any one of the following events (whatever the reason for
such event, and whether it
32
shall be voluntary or involuntary, or be effected by operation of law, pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) the Company defaults in any payment of
interest with respect to any Note when the same becomes due and payable, whether
or not such payment shall be prohibited by Article X, and such default continues
for a period of 30 days;
(2) the Company (i) defaults in the payment of
the principal of, or premium, if any, on any Note when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration or otherwise,
whether or not such payment shall be prohibited by Article X or (ii) fails to
redeem or purchase Notes when required pursuant to this Indenture or the Notes,
whether or not such redemption or purchase shall be prohibited by Article X;
(3) the Company fails to observe or perform any
covenant, condition or agreement on the part of the Company to be observed or
performed pursuant to Section 5.1;
(4) the Company fails to comply with any of its
other agreements or covenants in or provisions of the Notes or this Indenture
and such failure continues for 30 days after the notice specified below;
(5) Indebtedness of the Company or any
Subsidiary is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness accelerated exceeds $1,000,000 or its foreign
currency equivalent at the time;
(6) any proceeding shall be instituted by or
against the Company or any Significant Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
custodian, receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceedings
instituted against the Company or any Significant Subsidiary (but not instituted
by it), either such proceedings shall remain undismissed and unstayed for a
period of 60 days or any of the actions sought in such proceedings shall occur;
(7) (i) the commencement by the Company or any
Significant Subsidiary of the Company of a voluntary case or proceeding under
any Bankruptcy Law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent; or (ii) the consent by the Company or any Significant
Subsidiary of the Company to the entry of a decree or order for relief in
respect of the Company or any Significant Subsidiary of the Company in
33
an involuntary case or proceeding under any Bankruptcy Law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or any Significant Subsidiary of the Company; or (iii) the filing by the
Company or any Significant Subsidiary of the Company of a petition or answer or
consent seeking reorganization or relief under any Bankruptcy Law; or (iv) the
consent by the Company or any Significant Subsidiary of the Company to the
filing of such petition or to the appointment of or taking possession by a
Custodian of the Company or any Significant Subsidiary of the Company or of any
substantial part of the Property of the Company or any Significant Subsidiary of
the Company, or (v) the making by the Company or any Significant Subsidiary of
the Company of an assignment for the benefit of creditors; or (vi) the admission
by the Company or any Significant Subsidiary of the Company in writing of its
inability to pay its debts generally as they become due; or
(8) any judgment or decree for the payment of
money in excess of $1,000,000 above any applicable insurance coverage or its
foreign currency equivalent at the time is entered against the Company or any
Subsidiary, remains outstanding and unstayed for a period of 60 days following
the entry of such judgment or decree.
A Default under clause (4) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the Notes
notify the Company of the Default and the Company does not cure such Default
within the time specified after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (3) or (5) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (6) or (8), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.2 ACCELERATION
If an Event of Default (other than an Event of Default
specified in Section 6.1(6) or (7) with respect to the Company) occurs and is
continuing, the Trustee by written notice to the Company, or the Holders of at
least 25% in principal amount of the Notes by written notice to the Company and
the Trustee, may declare the principal of, premium, if any, and accrued but
unpaid interest on all the Notes to be due and payable. Upon such a declaration,
such principal, premium, if any, and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.1(6) or (7) with
respect to the Company occurs, the principal of, premium, if any, and interest
on all the Notes shall automatically become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Noteholders. The Holders of a majority in principal amount of the Notes by
notice to the Trustee and the Company may rescind an acceleration
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and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal, premium, if any, or interest that has become due solely
because of such acceleration. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
SECTION 6.3 OTHER REMEDIES
The Company covenants that if an Event of Default specified in
Section 6.1(1) or Section 6.1(2) occurs the Company shall, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders, the whole amount
then due and payable on the Notes for principal, premium, if any, and interest
and, to the extent that payment of such interest shall be legally enforceable,
interest upon the overdue principal (and premium, if any) and upon Defaulted
Interest at the rate or rates prescribed therefor in the Notes, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee pursuant to Section 7.7 hereof.
Subject to the limitation contained in Article X hereof, if an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal of, premium, if any, or interest on
the Notes or to enforce the performance of any provision of the Notes or this
Indenture. The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4 WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in principal amount of
the Notes by notice to the Trustee may, on behalf of the Holders of all the
Notes, waive an existing Default or Event of Default and its consequences except
a continuing Default or Event of Default (i) in the payment of the principal of,
premium, if any or interest on a Note (except a payment default resulting from
an acceleration that has been rescinded) or (ii) in respect of a provision that
under Section 9.2 cannot be amended without the consent of each Holder affected.
SECTION 6.5 CONTROL BY MAJORITY
The Holders of not less than a majority in principal amount of
the Notes may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the
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Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.1, that the Trustee determines is unduly
prejudicial to the rights of other Noteholders or would involve the Trustee in
personal liability; PROVIDED, HOWEVER, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6 LIMITATION ON SUITS
A Noteholder may not pursue any remedy with respect to this
Indenture or the Notes unless:
(1) the Holder has previously given to the
Trustee written notice stating that an Event of Default is continuing;
(2) the Holders of at least 25% in principal
amount of the Notes have made a written request to the Trustee to pursue the
remedy in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the
Trustee reasonable security or indemnity against any loss, liability or expense
to be Incurred in compliance with such request;
(4) the Trustee has not complied with the
request within 60 days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal
amount of the Notes have not given the Trustee a direction inconsistent with the
request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of, premium, if any, and
interest on the Notes held by such Holder, on or after the respective due dates
expressed in the Notes, or the Redemption Dates or purchase dates provided for
therein or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
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SECTION 6.8 COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.1(1) or (2)
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount then due
and owing on the Notes for principal, premium, if any, and interest and, to the
extent that payment of such interest shall be legally enforceable, interest upon
the overdue principal (and premium, if any) and upon Defaulted Interest and the
amounts provided for in Section 7.7.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders of the Notes allowed in any judicial proceedings
relative to the Company, its creditors or its property and, unless prohibited by
law or applicable regulations, may vote on behalf of the Holders in any election
of a trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee. In the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10 PRIORITIES
Subject to the provisions of Article X, if the Trustee
collects any money or property pursuant to this Article VI, it shall pay out the
money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: if the Holders proceed against the Company directly
without the Trustee in accordance with this Indenture, to the Holders
for their collection costs;
THIRD: to the Noteholders for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal and interest, respectively; and
FOURTH: to the Company
The Trustee may fix a Record Date and payment date for any
payment to the Holders pursuant to this Section. At least 15 days before such
Record Date, the Company
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shall mail to each Holder and the Trustee a notice that states the record date,
the payment date and amount to be paid.
SECTION 6.11 UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in
principal amount of the Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein).
(c) The Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own wilful misconduct, except that:
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(1) this paragraph does not limit the
effect of paragraph (b) of this Section 7.1;
(2) the Trustee shall not be liable for
any error of judgment made in good faith by a Trust Officer unless it
is proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.5.
(d) the Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in writing with the
Company.
(e) money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.
(f) no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise Incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(g) every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section 7.1 and to the
provisions of the TIA.
SECTION 7.2 RIGHTS OF TRUSTEE
(a) The Trustee may rely on any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers;
39
PROVIDED, HOWEVER, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel of its
selection, and the advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Notes shall have full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) Any request or direction of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be Incurred by it in
compliance with such request or direction.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co- paying agent may do the same with like
rights. However, the Trustee must comply with Section 7.10 and Section 7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes,
and it shall not be responsible for any statement of the Company in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Trustee's certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS
If a Default occurs and is continuing and if it is actually
known to the Trustee, the Trustee shall mail to each Holder notice of the
Default within 30 days after it is known to a Trust Officer or written notice of
it is received by the Trustee, but in no event later than 90 days after the
occurrence thereof. Except in the case of a Default in the payment of principal
of, premium, if any, or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note, if any), the Trustee may withhold
the notice
40
if and so long as a committee of its Trust Officers in good faith determines
that withholding the notice is in the interests of Holders.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS
The Trustee shall comply with TIA Section 313. The Company
agrees to notify promptly the Trustee whenever the Notes become listed on any
stock exchange and of any delisting thereof.
SECTION 7.7 COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time
compensation for its services as the Company and the Trustee shall from time to
time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out- of-pocket expenses
Incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder.
The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder.
The Company shall defend the claim and the Trustee shall
cooperate in the defense of the claim; PROVIDED that the Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel if the actual or potential defendants in, or the targets of, any
such claim include both the Trustee and the Company and the Trustee shall have
reasonably concluded that there may be legal defenses available to it which are
different from or additional to those available to the Company.
The Trustee will not, without the prior written consent of the
Company, settle or compromise or consent to the entry of any judgment with
respect to any claim in respect of which indemnification may be sought
hereunder. The Company need not reimburse any expense or indemnify against any
loss, liability or expense Incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section
7.7, the Trustee shall have a Lien prior to the Notes on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of, premium, if any, and interest on particular Notes.
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The Company's payment obligations pursuant to this Section 7.7
shall survive the discharge of this Indenture. When the Trustee Incurs expenses
after the occurrence of a Default specified in Section 6.1(6) or (7) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.8 REPLACEMENT OF TRUSTEE
The Trustee may resign at any time by so notifying the
Company. The Holders of not less than a majority in principal amount of the
Notes may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section
7.10;
(2) the Trustee is adjudged bankrupt or
insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of
acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the Lien
provided for in Section 7.7.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of not less than 10% in principal amount of the Notes may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to
this Section 7.8, the Company's obligations under Section 7.7 shall continue for
the benefit of the retiring Trustee
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee, and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of authentication of the Trustee shall have.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b); PROVIDED, HOWEVER,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
SECTION 7.12 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM
THE COMPANY
Any application by the Trustee for written instructions from
the Company may, at the option of the Trustee, be set forth in writing and shall
state any action proposed to be taken or omitted by the Trustee under this
Indenture and the date on and/or after which such action shall be taken or such
omission shall be effective. The Trustee shall not be liable
43
for any action taken by, or omission of, the Trustee in accordance with a
proposal included in such application on or after the date specified in such
application (which date shall not be less than three Business Days after the
date any Officer of the Company actually receives such application, unless any
such Officer shall have consented in writing to any earlier date) unless prior
to taking any such action (or the effective date in the case of an omission),
the Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.
SECTION 7.13 COMPANY TO FURNISH TRUSTEE NAMES AND
ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the
Trustee:
(a) semi-annually, including not later than 15
days after any Record Date for interest for the Notes, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
the Notes as of such Record Date, and
(b) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished, PROVIDED, HOWEVER, that, so long as
the Trustee is the Registrar, no such list shall be required to be furnished.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE
(a) When (i) the Company delivers to the Trustee
all outstanding Notes (other than Notes replaced pursuant to Section 2.7) for
cancellation and/or conversion or (ii) all outstanding Notes have become due and
payable, whether at Stated Maturity or as a result of the mailing of a notice of
redemption pursuant to Article III hereof and the Company irrevocably deposits
with the Trustee funds sufficient to pay at Stated Maturity or upon redemption
all outstanding Notes, including interest accrued and unpaid thereon to Stated
Maturity or such Redemption Date (other than Notes replaced pursuant to Section
2.7), and if in either case the Company pays all other sums payable hereunder by
the Company, then this Indenture shall, subject to Section 8.1(c), cease to be
of further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company.
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(b) Subject to Section 8.1 (c) and Section 8.2,
the Company at any time may terminate:
(i) all its obligations under the Notes
and this Indenture ("legal defeasance option") subject to the following
which shall survive until otherwise terminated or discharged hereunder:
(A) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of,
premium, if any, and interest on such Notes when payments are due from
the trust referred to below;
(B) the Company's obligations
with respect to such Notes under Section 2.3, Section 2.4, Section 2.6,
Section 2.7, Section 2.9, Section 4.2, Section 4.3 and Section 4.4
hereof;
(C) the rights, powers, trusts,
duties and immunities of the Trustee under this Indenture and the
Company's obligations in connection therewith,
(D) Article III hereof, and
(E) this Article VIII; or
(ii) its obligations under Section 4.5
through Section 4.7 and the operation of Section 6.1(5), Section
6.1(6), Section 6.1(7) and Section 6.1(8) (but, in the case of Section
6.1(6) and (7), with respect only to Significant Subsidiaries) or
contained in Section 5.1(a)(ii) ("covenant defeasance option").
The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Notes may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Notes may not
be accelerated because of an Event of Default specified in Section 6.1(4) or
because of the failure of the Company to comply with Section 5.1(a)(ii).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above,
the Company's obligations in Section 8.4, Section 8.5 and Section 8.6 shall
survive.
45
SECTION 8.2 CONDITIONS TO DEFEASANCE
The Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(1) the Company irrevocably deposits in trust
with the Trustee money or US Government Obligations for the payment of principal
of and interest on any outstanding Notes to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a
certificate from a nationally recognized firm of independent accountants
expressing its opinion that the payments of principal and interest when due and
without reinvestment on the deposited US Government Obligations plus any
deposited money without investment will provide cash at such times and in such
amounts as will be sufficient to pay principal of, premium, if any, and interest
when due on all outstanding Notes to Stated Maturity or redemption, as the case
may be;
(3) 91 days pass after the deposit is made and
during the 91-day period no Default specified in Section 6.1(6) or (7) with
respect to the Company occurs which is continuing at the end of the period;
(4) the deposit does not result in a breach or
violation of, or constitute a default under any other agreement or instrument
binding on the Company or any of its Subsidiaries and is not prohibited by
Article X;
(5) the Company delivers to the Trustee an
Opinion of Counsel to the effect that the trust resulting from the deposit does
not constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(6) in the case of the legal defeasance option,
the Company shall have delivered to the Trustee an Opinion of Counsel stating
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this Indenture
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance
option, the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such covenant defeasance and will be subject
to federal income tax on the same amounts, in the
46
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred;
(8) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Notes as
contemplated by this Article VIII have been complied with;
(9) the Company shall have delivered to the
Trustee an Officer's Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other creditors of
the Company or with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others; and
(10) such legal defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting interest within the meaning of
the TIA (assuming for the purpose of this clause (10) that all Notes are in
default within the meaning of such Act).
Before or after a deposit, the Company may make arrangements satisfactory to the
Trustee for the redemption of Notes at a future date in accordance with Article
III.
SECTION 8.3 APPLICATION OF TRUST MONEY
The Trustee shall hold in trust money or US Government
Obligations deposited with it pursuant to this Article VIII. It shall apply the
deposited money and the money from US Government Obligations through the Paying
Agent and in accordance with this Indenture to the payment of principal of,
premium, if any, and interest on the Notes. Money and securities so held in
trust are not subject to Article X.
SECTION 8.4 REPAYMENT TO COMPANY
The Trustee and the Paying Agent shall promptly turn over to
the Company upon request any excess money or securities held by them at any
time. Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of, premium, if any, or interest that remains unclaimed
for two years, and, thereafter, Holders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.5 INDEMNITY FOR GOVERNMENT OBLIGATIONS
The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against deposited US
Government Obligations or the principal and interest received on such US
Government Obligations.
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SECTION 8.6 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any money or
US Government Obligations in accordance with this Article VIII by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
Article VIII until such time as the Trustee or Paying Agent is permitted to
apply all such money or US Government Obligations in accordance with this
Article VIII; PROVIDED, HOWEVER, that, if the Company has made any payment of
interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or US Government Obligations
held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS
The Company and the Trustee may amend this Indenture or the
Notes without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article V;
(3) to provide for uncertificated Notes in
addition to or in place of Certificated Notes; PROVIDED, HOWEVER, that the
uncertificated Notes are issued in registered form for purposes of Section
163(f) of the Code or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article X that would
limit or terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under Article X;
(5) to add Guarantees with respect to the Notes
or to secure the Notes;
(6) to add to the covenants of the Company for
the benefit of the Holders or to surrender any right or power herein conferred
upon the Company;
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(7) to comply with any requirements of the SEC
in connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
(8) to make any change that does not adversely
affect the rights of any Holder.
An amendment under this Section 9.1 may not make any change
that adversely affects the rights under Article X of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section 9.1 becomes effective,
the Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.1.
SECTION 9.2 WITH CONSENT OF HOLDERS
The Company and the Trustee may amend this Indenture or the
Notes without notice to any Holder but with the written consent of the Holders
of at least a majority in principal amount of the Notes then outstanding and any
past Default or compliance with any provisions may also be waived with the
consent of the Holders of not less than a majority of the principal amount of
Notes then outstanding. However, without the consent of each Holder affected, an
amendment may not:
(1) reduce the amount of Notes whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any Note;
(3) reduce the principal of or extend the Stated
Maturity of any Note;
(4) reduce the premium payable upon the
redemption of any Note or change the time at which any Note must be redeemed in
accordance with Article III;
(5) make any Note payable in money other than
that stated in the Note;
(6) make any change in Article X or Article XI
that adversely affects the rights of any Holder under such Article X or Article
XI; or
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(7) make any change in Section 6.4 or Section
6.7 or the second sentence of this Section 9.2.
It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.2 may not make any change
that adversely affects the rights under Article X of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change. After an amendment under this Section 9.2 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Notes shall comply
with the TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS AND
WAIVERS
A consent to an amendment or a waiver by a Holder of a Note
shall bind the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent or waiver is not made on the Note. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or waiver
becomes effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a Record
Date for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a Record Date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such Record Date. No such consent shall be valid or effective for more than 120
days after such Record Date.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES
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If an amendment changes the terms of a Note, the Trustee may
require the Holder of the Note to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Note regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Note shall issue and the Trustee shall
authenticate and deliver a new Note that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Note shall not affect the
validity of such amendment.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS
The Trustee shall sign any amendment authorized pursuant to
this Article IX if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may but need
not sign it. In signing such amendment the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to Section
7.1) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture and that such amendment constitutes the legal, valid and binding
obligation of the Company subject to customary exceptions.
SECTION 9.7 PAYMENT FOR CONSENT
Neither the Company nor any Affiliate of the Company shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid to all Holders that
so consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
SUBORDINATION OF THE NOTES
SECTION 10.1 AGREEMENT TO SUBORDINATE
The Company agrees, and each Holder by accepting a Note (or a
beneficial interest in the Global Note) agrees, that the Obligations in respect
of the Notes and the Indenture are subordinated in right of payment, to the
extent and in the manner provided in this Article X, to the prior payment in
full in cash or Cash Equivalents of all Senior Indebtedness of the Company and
that the subordination provided for in this Article X is for the benefit of and
enforceable by the holders of such Senior Indebtedness. Only Obligations in
respect of Senior Indebtedness will rank senior to the Obligations in respect of
the Notes and the Indenture in accordance with the provisions set forth herein.
The Notes shall in all
51
respects rank PARI PASSU with, or be senior to, all other Indebtedness of the
Company. All provisions of this Article X shall be subject to Section 10.2.
SECTION 10.2 LIQUIDATION, DISSOLUTION, BANKRUPTCY
Upon any Insolvency or Liquidation Proceeding:
(1) holders of Senior Indebtedness of the
Company shall be entitled to receive payment in full of such Senior Indebtedness
in cash or Cash Equivalents before Holders shall be entitled to receive any
payment in respect of the Obligations in respect of the Notes and the Indenture;
and
(2) until such Senior Indebtedness is paid in
full in cash or Cash Equivalents, any distribution to which Holders would be
entitled but for this Article X shall be made to holders of such Senior
Indebtedness as their interests may appear, except that Holders may receive (a)
securities of a Person that are subordinated to such Senior Indebtedness to at
least the same extent as the Notes are subordinated to (A) Senior Indebtedness
of the Company and (B) any securities issued in exchange for Senior Indebtedness
("Subordinated Reorganization Securities") and (b) payments and other
distributions made from any defeasance trust created pursuant to Section 8.1
hereof.
SECTION 10.3 DEFAULT ON SENIOR INDEBTEDNESS OF THE
COMPANY
The Company may not pay any amount in respect of the
Obligations in respect of the Notes and the Indenture or make any deposit
pursuant to Section 8.1 and may not repurchase, redeem or defease any Notes
(collectively, "pay the Notes") (other than in accordance with the conversion
provision of Article XI hereof or with Subordinated Reorganization Securities
and payments and other distributions made from any defeasance trust created
pursuant to Section 8.1 hereof) if (i) any Designated Senior Indebtedness of the
Company is not paid when due or (ii) any other default on such Designated Senior
Indebtedness occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or (y)
such Designated Senior Indebtedness has been paid in full in cash or Cash
Equivalents; PROVIDED, HOWEVER, that the Company may pay the Notes without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of such Designated Senior
Indebtedness. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness of the Company pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, the Company may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice of such default (a "Blockage Notice") from the
Representative of
52
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) by
repayment in full in cash or Cash Equivalents of such Designated Senior
Indebtedness or (iii) because the Representative of the holders of such
Designated Senior Indebtedness shall have notified the Trustee that the default
giving rise to such Blockage Notice is no longer continuing). Notwithstanding
the provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this Section 10.3), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Notes after such Payment
Blockage Period. During any 360-day period, the aggregate of all Payment
Blockage Periods under this Article X shall not exceed 179 days and there shall
be a period of at least 181 consecutive days in each consecutive 360-day period
when no Payment Blockage Period is in effect. For purposes of this Section 10.3,
no default or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.4 ACCELERATION OF PAYMENT OF NOTES
If payment of the Notes is accelerated because of an Event of
Default, the Company or the Trustee at the request of the Company shall promptly
notify the holders of the Designated Senior Indebtedness of the Company (or
their Representative) of the acceleration.
SECTION 10.5 WHEN DISTRIBUTION MUST BE PAID OVER
If, in contravention of the provisions of this Article X, the
Trustee or any Holder shall have received any payment or distribution before all
Senior Indebtedness is paid in full in cash or Cash Equivalents, then such
distribution shall be held in trust for the benefit of, and shall be forthwith
paid over and delivered, to the holders of Senior Indebtedness as their
interests may appear, or their Representative under the agreement pursuant to
which Senior Indebtedness may have been issued, as their respective interests
may appear, for application to the payment of Senior Indebtedness to the extent
necessary to pay all Senior Indebtedness in full.
SECTION 10.6 SUBROGATION
53
After all Senior Indebtedness of the Company is paid in full
in cash or Cash Equivalents and until the Notes are paid in full, the Holders
shall be subrogated to the rights of holders of such Senior Indebtedness to
receive distributions applicable to such Senior Indebtedness. A distribution
made under this Article X to holders of such Senior Indebtedness which otherwise
would have been made to Holders is not, as between the Company and Holders, a
payment by the Company on such Senior Indebtedness.
SECTION 10.7 RELATIVE RIGHTS
This Article X defines the relative rights of Holders and
holders of Senior Indebtedness of the Company. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders,
the obligation of the Company, which is absolute and unconditional, to pay
principal of, premium, if any, and interest on the Notes in accordance with
their terms; or
(2) prevent the Trustee or any Holder from
exercising its available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness of the Company to receive distributions otherwise
payable to Holders.
SECTION 10.8 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY
No right of any holder of Senior Indebtedness of the Company
to enforce the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or by its failure to comply
with this Indenture.
SECTION 10.9 RIGHTS OF TRUSTEE AND PAYING AGENT
Notwithstanding Section 10.3, the Trustee or Paying Agent may
continue to make payments on the Notes and shall not be charged with knowledge
of the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that payments
may not be made under this Article X. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice; PROVIDED, HOWEVER, that, if the holders of an
issue of Senior Indebtedness of the Company have a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness of the Company with the same rights it would have if it were
not the Trustee. The Registrar and co-registrar and the Paying Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set forth
in this Article X with respect to any Senior Indebtedness of the Company which
may at any time be held by it, to the same extent as any
54
other holder of such Senior Indebtedness, and nothing in Article VII shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
X shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.7.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness of the Company, the distribution may be made and
the notice given to their Representative (if any).
SECTION 10.11 ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT
OR LIMIT RIGHT TO ACCELERATE
The failure to make a payment pursuant to the Notes by reason
of any provision in this Article X shall not be construed as preventing the
occurrence of a Default. Nothing in this Article X shall have any effect on the
right of the Holders or the Trustee to accelerate the maturity of the Notes.
SECTION 10.12 TRUST MONEYS NOT SUBORDINATED
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of US Government Obligations held in trust
under Article VIII by the Trustee for the payment of principal of, premium, if
any, and interest on the Notes shall not be subordinated to the prior payment of
any Senior Indebtedness or subject to the restrictions set forth in this Article
X, and none of the Holders shall be obligated to pay over any such amount to the
Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
SECTION 10.13 TRUSTEE ENTITLED TO RELY UPON ANY PAYMENT OR
DISTRIBUTION
Pursuant to this Article X, the Trustee and the Holders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Holders or (iii) upon the Representative for the holders of Senior Indebtedness
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article X, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by
55
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article X, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Section 7.1 and
Section 7.2 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article X.
SECTION 10.14 TRUSTEE TO EFFECTUATE SUBORDINATION
Each Holder by accepting a Note (or a beneficial interest in a
Global Note) authorizes and directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Company as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness of the Company and shall not be liable to any
such holders, absent gross negligence or wilful misconduct, if it shall
mistakenly pay over or distribute to Holders or the Company or any other Person,
money or assets to which any holders of Senior Indebtedness of the Company shall
be entitled by virtue of this Article X or otherwise.
SECTION 10.16 RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS
ON SUBORDINATION PROVISIONS
Each Holder by accepting a Note (or a beneficial interest in a
Global Note) acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness of the Company, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Notes, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
ARTICLE XI
CONVERSION OF SECURITIES
SECTION 11.1 MANDATORY CONVERSION AND CONVERSION PRICE
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(a) Subject to the terms and provisions of this
Article XI, if, within 30 days following the occurrence and continuance of a
Conversion Event, the Company receives a notice (the "Conversion Notice") from
the Representative of the Senior Credit Facilities that the requisite composite
of lenders party to Senior Credit Facilities have agreed in accordance with the
terms thereof to exercise the Conversion Option, then the Holders shall be
required to tender their Notes for conversion into Common Stock on the date (the
"Conversion Date") set forth in such notice, which Conversion Date shall be a
Business Day and shall be at least 15 days and no later than 45 days after the
Company's receipt of such Conversion Notice. Upon such Conversion Date, the
Notes shall be reduced pro rata in a manner so as to cause the remaining
aggregate outstanding principal amount of the Notes, together with all accrued
but unpaid interest thereon, to equal $7,500,000 immediately following such
Conversion Date. The number of shares of Common Stock issuable upon conversion
of a Note is determined by dividing the principal amount of the Note, plus any
accrued but unpaid interest thereon, being so converted by the Conversion Price
in effect as of the Conversion Date. The initial "Conversion Price" is stated in
paragraph 11 of the Notes and is subject to adjustment as provided in this
Article XI (the "Conversion Price"). The Notes may be converted into Common
Stock in accordance with this Article XI only once and the amount to be so
converted shall equal the sum of the then aggregate outstanding principal amount
of the Notes, plus any accrued but unpaid interest thereon, LESS $7,500,000,
with the remaining balance of the Notes being then due and payable on August 29,
2009.
(b) At least 5 days, but not more than 30 days,
before the Conversion Date, the Company shall mail a notice of conversion by
first-class mail, postage prepaid, to each Holder of Notes to be converted.
The notice shall identify the Notes to be converted and shall
state:
(1) the Conversion Date;
(2) the Conversion Price;
(3) the name and address of the Paying
Agent;
(4) that Notes called for conversion
must be surrendered to the Paying Agent to receive the Common Stock;
(5) if any Global Note is being
converted, the portion of the outstanding amount of such Note to be converted
and that, after the Conversion Date, the Global Note, with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to the
unconverted portion, will be returned to the Holder thereof;
(6) if any Certificated Notes are being
converted, the portion of the principal amount of such Note to be converted and
that, after the Conversion
57
Date, a new Certificated Note or Certificated Notes in principal amount equal to
the unconverted portion will be issued;
(7) [intentionally left blank];
(8) that, unless the Company defaults in
issuing such Common Stock or the Paying Agent is prohibited from issuing such
Common Stock, interest on Notes called for conversion ceases to accrue on and
after the Conversion Date; and
(9) that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
conversion in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 11.1(b).
SECTION 11.2 EXERCISE OF CONVERSION FEATURE
Upon the exercise of the Conversion Option, the Holder of any
Note to be converted shall: (a) surrender, not later than 11:00 a.m. (New York
time) on the Conversion Date or on such other date and at such other time as
such Holder and the Company mutually agree in writing, such Note to the Company
at such office or agency; and (b) if required, furnish appropriate endorsements
and transfer documents.
Whether or not the Notes are physically tendered by the
Holders in accordance with Section 11.1 hereof, the Notes shall be deemed to
have been converted immediately prior to the close of business on the Conversion
Date in accordance with the foregoing provisions, and at such time the rights of
the Holders shall cease with respect to that portion of the Notes being
converted, and the Person or Persons entitled to receive the Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such Common Stock at such time. As promptly as practicable on or
after the Conversion Date, the Company shall issue and shall deliver at such
office or agency of the Registrar as agreed a certificate or certificates for
the number of full shares of Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share as provided in Section 11.3;
PROVIDED, HOWEVER, that the Registrar shall not be required to release such
Common Stock to a Holder who has failed to tender its Note(s). All shares of
Common Stock delivered upon such conversion of Notes shall be subject to the
same restrictions as those placed on the Common Stock issued under the Plan.
Upon such conversion of the Notes, the Company shall execute
and the Trustee shall authenticate and deliver to the Holders thereof new Notes
of authorized denominations in aggregate principal amount equal to $7,500,000
and the Stated Maturity of such new Notes shall be extended to August 29, 2009;
PROVIDED, HOWEVER, that the
58
Registrar shall not be required to release any such new Note(s) to a Holder who
has failed to tender its old Note(s). Any requirements for notice, surrender or
delivery of Notes pursuant to this Article XI shall, with respect to any Global
Note, be subject to any then applicable rules and procedures of the Depository
(or its successor) thereof.
Except as described in 2.11(g), no Holder of a Note will be
entitled upon conversion thereof to any payment or adjustment for accrued and
unpaid interest thereon or for dividends on the shares of Common Stock issued in
connection therewith.
SECTION 11.3 SELECTION OF NOTES TO BE CONVERTED;
FRACTIONS OF SHARES
(a) The Trustee shall select the Notes to be converted
pro rata or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers fair and
appropriate and which complies with methods generally used at the time of
selection by fiduciaries in similar circumstances. The Trustee shall notify the
Company promptly of the portions of Notes to be converted.
(b) No fractional shares of Common Stock shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Notes being converted. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of any Note or Notes, the Company may pay a cash adjustment
(calculated to the nearest cent) in respect of such fraction in an amount equal
to the same fraction of the Daily Market Price per share of the Common Stock at
the close of business on the day of conversion (or, if such day is not a trading
day, on the trading day immediately preceding such day) or, alternatively, the
Company shall round up or down to the nearest whole share.
SECTION 11.4 ADJUSTMENT OF CONVERSION PRICE
The Conversion Price shall be subject to adjustment from time
to time as follows:
(a) In case the Company shall (1) pay a dividend in
shares of Common Stock to holders of Common Stock, (2) make a distribution in
shares of Common Stock to holders of Common Stock, (3) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock or (4)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, the Conversion Price in effect immediately prior to such action
shall be adjusted so that the holder of any Note thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which he or she would have owned immediately following such action had such
Notes been converted immediately prior thereto. Any adjustment made pursuant to
this
59
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision or combination.
(b) In case the Company shall issue rights, warrants or
options to substantially all holders of Common Stock entitling them (for a
period commencing no earlier than the record date for the determination of
holders of Common Stock entitled to receive such rights, warrants or options and
expiring not more than 45 days after such record date) to subscribe for or
purchase shares of Common Stock (or securities convertible into Common Stock) at
a price per share less than the current market price (as determined pursuant to
subsection (f) below) of the Common Stock on such record date, the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to such record date
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares of Common Stock
which the aggregate offering price of the offered shares of Common Stock (or the
aggregate conversion price of the convertible securities so offered) would
purchase at such current market price, and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered (or into which the convertible
securities so offered are convertible). Such adjustments shall become effective
immediately after such record date.
(c) In case the Company shall distribute to all holders
of Common Stock shares of any class of stock other than Common Stock, evidences
of indebtedness or other assets (other than cash dividends out of current or
retained earnings), or shall distribute to substantially all holders of Common
Stock rights, warrants or options to subscribe for securities (other than those
referred to in subsection (b) above), then in each such case the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the current market
price (determined as provided in subsection (f) below) of the Common Stock on
the record date mentioned below less the then fair market value (as determined
by the Board of Directors, whose determination shall be conclusive evidence of
such fair market value and described in a Board Resolution) of the portion of
the assets so distributed or of such subscription rights, warrants or options
applicable to one share of Common Stock, and of which the denominator shall be
such current market price of the Common Stock. Such adjustment shall become
effective immediately after the record date for the determination of the holders
of Common Stock entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the Company shall distribute rights, warrants or
options (other than those referred to in subsection (b) above) ("Rights") PRO
RATA to holders of Common Stock, the Company may, in lieu of making any
adjustment pursuant to this Section 11.4, make proper provision so that each
holder of a Note who is required to convert such Note after the record date for
such distribution and prior to the expiration or redemption of the Rights shall
be entitled to receive
60
upon such conversion, in addition to the shares of Common Stock issuable upon
such conversion (the "Conversion Shares"), a number of Rights to be determined
as follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of Rights to which a holder of
a number of shares of Common Stock equal to the number of Conversion Shares is
entitled at the time of such conversion in accordance with the terms and
provisions of and applicable to the Rights; and (ii) if such conversion occurs
after the Distribution Date, the same number of Rights to which a holder of the
number of shares of Common Stock into which the principal amount of the Note so
converted was convertible immediately prior to the Distribution Date would have
been entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise,
at any time distribute to all holders of its Common Stock cash (including any
distributions of cash out of current or retained earnings of the Company but
excluding any cash that is distributed as part of a distribution requiring a
Conversion Price adjustment pursuant to paragraph (c) of this Section) in an
aggregate amount that, together with the sum of (x) the aggregate amount of any
other distributions to all holders of its Common Stock made in cash plus (y) all
Excess Payments, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section or this paragraph
(d) has been made, exceeds 10% of the product of the current market price per
share (determined as provided in paragraph (f) of this Section) of the Common
Stock on the Distribution Record Date times the number of shares of Common Stock
outstanding on the Distribution Record Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying such Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this paragraph (d) by a fraction of which the numerator shall be
the current market price per share (determined as provided in paragraph (f) of
this Section) of the Common Stock on the Distribution Record Date less the
amount of such cash and other consideration (including any Excess Payments) so
distributed applicable to one share (based on the PRO RATA portion of the
aggregate amount of such cash and other consideration (including any Excess
Payments), divided by the shares of Common Stock outstanding on the Distribution
Record Date) of Common Stock and the denominator shall be such current market
price per share (determined as provided in paragraph (f) of this Section) of the
Common Stock on the Distribution Record Date, such reduction to become effective
immediately prior to the opening of business on the day following the
Distribution Record Date.
(e) In case a tender offer or other negotiated
transaction made by the Company or any Subsidiary for all or any portion of the
Common Stock shall be consummated, if an Excess Payment is made in respect of
such tender offer or other negotiated transaction and the amount of such Excess
Payment, together with the sum of
61
(x) the aggregate amount of all Excess Payments plus (y) the aggregate amount of
all distributions to all holders of the Common Stock made in cash (specifically
including distributions of cash out of retained earnings), in each case made
within the 12 months preceding the date of payment of such current negotiated
transaction consideration or expiration of such current tender offer, as the
case may be (the "Purchase Date"), and as to which no adjustment pursuant to
paragraph (c) or paragraph (d) of this Section or this paragraph (e) has been
made, exceeds 10% of the product of the current market price per share
(determined as provided in paragraph (f) of this Section) of the Common Stock on
the Purchase Date times the number of shares of Common Stock outstanding
(including any tendered shares but excluding any shares held in the treasury of
the Company) on the Purchase Date, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying such Conversion Price
in effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this paragraph (e) by a fraction of which the
numerator shall be the current market price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Purchase Date less the
amount of such Excess Payments and such cash distributions, if any, applicable
to one share (based on the PRO RATA portion of the aggregate amount of such
Excess Payments and such cash distributions, divided by the shares of Common
Stock outstanding on the Purchase Date) of Common Stock and the denominator
shall be such current market price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Purchase Date, such
reduction to become effective immediately prior to the opening of business on
the day following the Purchase Date.
(f) The current market price per share of Common Stock on
any date shall be deemed to be the average of the Daily Market Prices for the
shorter of (i) 30 consecutive Business Days ending on the last full trading day
on the exchange or market referred to in determining such Daily Market Prices
prior to the time of determination or (ii) the period commencing on the date
next succeeding the first public announcement of the issuance of such rights,
warrants or options or such other distribution or such negotiated transaction
through such last full trading day on the exchange or market referred to in
determining such Daily Market Prices prior to the time of determination.
(g) In any case in which this Section 11.4 shall require
that an adjustment be made immediately following a record date, the Company may
elect to defer (but only until five Business Days following the filing by the
Company with the Trustee of the certificate described in Section 11.8 below)
issuing to the holder of any Note converted after such record date the shares of
Common Stock and other Capital Stock of the Company issuable upon such
conversion over and above the shares of Common Stock and other Capital Stock of
the Company issuable upon such conversion only on the basis of the Conversion
Price prior to adjustment; and, in lieu of the shares the issuance of which is
so deferred, the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence of the right to receive such shares.
62
SECTION 11.5 NO ADJUSTMENT
No adjustment in the Conversion Price shall be required until
cumulative adjustments amount to 1% or more of the Conversion Price as last
adjusted; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11.5 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article XI
shall be made to the nearest cent or to the nearest one- hundredth of a share,
as the case may be. No adjustment need be made for rights to purchase Common
Stock pursuant to a Company plan for reinvestment of dividends or interest or in
connection with any management stock option or stock incentive plan approved by
the Board of Directors. No adjustment need be made for a change in the par value
or no par value of the Common Stock.
SECTION 11.6 OTHER ADJUSTMENTS
If, as a result of an adjustment made pursuant to Section 11.4
above, the Holder of any Note thereafter surrendered for conversion shall become
entitled to receive any shares of Capital Stock of the Company other than shares
of its Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any Notes shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in this Article XI.
(a) If, as a result of an adjustment pursuant to
this Article XI, the Holder of a Note thereafter surrendered for conversion
would be entitled to receive shares of two or more classes of the Capital Stock
of the Company, the Board of Directors (whose determination shall be conclusive
if made in good faith and shall be described in a Board Resolution) shall
determine the number of shares of each such class to be issued upon such
conversion.
(b) In the event that shares of Common Stock are
not delivered after the expiration of any of the rights, warrants or options
referred to in Section 11.4(b) and Section 11.4(c) hereof, the Conversion Price
shall be readjusted to the Conversion Price which would otherwise be in effect
had the adjustment made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock actually
delivered.
SECTION 11.7 ADJUSTMENTS FOR TAX PURPOSES
The Company may make such reductions in the Conversion Price,
in addition to those required by Section 11.4 above, as it determines to be
advisable in order that any stock dividend, subdivision of shares, distribution
or rights to purchase stock or Notes or distribution of Notes convertible into
or exchangeable for stock made by the Company to its stockholders will not be
taxable to the recipients thereof.
63
SECTION 11.8 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE
Whenever the Conversion Price is adjusted, the Company shall
promptly mail to the Holders a notice of the adjustment. The Company shall file
with the Trustee such notice. The notice shall, absent manifest error, be
conclusive evidence that the adjustment is correct. Neither the Trustee nor any
Paying Agent shall be under any duty or responsibility with respect to any such
notice except to exhibit the same to any Holder desiring inspection thereof.
SECTION 11.9 NOTICE OF CERTAIN CORPORATE ACTION.
If:
(a) the Company takes any action that would require an
adjustment in the Conversion Price pursuant to Section 11.4;
(b) the Company takes any action that would require a
supplemental indenture pursuant to Section 11.14; or
(c) there is a dissolution, liquidation or winding down
of the Company;
then the Company shall mail or shall deliver to the Trustee and direct the
Trustee to mail to Holders and file with the Trustee and the Conversion Agent a
notice stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
The Company shall file and mail the notice at least 15 days before such date.
Failure to file or mail the notice or any defect in it shall not affect the
validity of any transaction referred to in clause (a), (b) or (c) of this
Section.
SECTION 11.10 COMPANY TO RESERVE COMMON STOCK
The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of Notes, the whole number of
shares of Common Stock then issuable upon the conversion of the Notes.
SECTION 11.11 TAXES ON CONVERSIONS
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Notes pursuant hereto. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Note or Notes to be converted, and no such issue or delivery
64
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
SECTION 11.12 COVENANT AS TO COMMON STOCK
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Notes will upon issue be newly issued (and not
treasury shares) and be duly authorized, validly issued, fully paid and
nonassessable and, except as provided in Section 11.11, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 11.13 CANCELLATION OF CONVERTED SECURITIES
All Notes delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.10.
SECTION 11.14 PROVISIONS IN CASE OF RECLASSIFICATION,
CONSOLIDATION, MERGER OR SALE OF ASSETS
In the event that the Company shall be a party to any
transaction including, without limitation, any (i) recapitalization or
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), (ii) any consolidation of the
Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), (iii) any sale or transfer of all or substantially all of the
assets of the Company or (iv) any other transaction pursuant to which the Common
Stock is converted into the right to receive other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby the Holder of each Note then outstanding shall have the
obligation thereafter to convert such Note only into (subject to funds being
legally available for such purpose under applicable law at the time of such
conversion) the kind and amount of securities, cash and other properly
receivable upon such transaction by a holder of the number of shares of Common
Stock into which such Note might have been converted immediately prior to such
transaction. The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquired the Company's
shares, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture establishing such rights. Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided
65
for in this Article. The above provisions of this Section 11.14 shall similarly
apply to successive transactions of the foregoing type.
SECTION 11.15 SUCCESSIVE ADJUSTMENTS
After an adjustment to the Conversion Price under this Article
XI, any subsequent event requiring an adjustment under this Article XI shall
cause an adjustment to the Conversion Price as so adjusted.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION 12.2 NOTICES
Any notice or communication shall be in writing and delivered
in person or by a recognized overnight courier or mailed by first-class mail
postage prepaid addressed as follows:
if to the Company:
Prime Succession Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications. Any notice or
communication mailed
66
to a Holder shall be mailed to the Holder at the Holder's address as it appears
on the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders. If a notice or communication is mailed or otherwise delivered to
a Holder in the manner provided above, it is duly given, whether or not the
Holder actually receives it.
SECTION 12.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT
Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate in form and
substance reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.5 STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION
Each certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate are based;
(3) a statement that, in the opinion of such
individual, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
67
(4) a statement as to whether or not, in the
opinion of such individual, such covenant or condition has been complied with.
SECTION 12.6 WHEN NOTES DISREGARDED
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Affiliate of the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Notes outstanding at the time
shall be considered in any such determination.
SECTION 12.7 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR
The Trustee may make reasonable rules for action by or a
meeting of the Holders. The Registrar and the Paying Agent may make reasonable
rules for their functions.
SECTION 12.8 LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York. If a
payment date is a Legal Holiday, payment shall be made on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 12.9 GOVERNING LAW
(a) THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
(b) the Company hereby (i) agrees that any suit,
action or proceeding against it arising out of or relating to this Indenture or
the Notes, as the case may be, may be instituted in any Federal or state court
sitting in The City of New York, (ii) waives, to the extent permitted by
applicable law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding, and any claim that any suit,
action or proceeding in such a court has been brought in an inconvenient forum,
(iii) irrevocably submits to the non-exclusive jurisdiction of such courts in
any suit, action or proceeding, (iv) agrees that final judgment in any such
suit, action or proceeding brought in such a court shall be conclusive and
binding upon each and may be enforced in the courts of the jurisdiction of which
each is subject, respectively, by a suit upon judgment, (v) agrees
68
that service of process by mail to the address specified in Section 12.2 hereof
shall constitute personal service of such process on it in any such suit, action
or proceeding.
SECTION 12.10 NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or stockholder of
the Company shall have any liability for any obligations of the Company under
the Notes or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation, solely by reason of its status as
a director, officer, employee, incorporator or stockholder of the Company. By
accepting a Note (or a beneficial interest in the Global Note), each Holder
waives and releases all such liability (but only such liability) as part of the
consideration for issuance of such Note to such Holder.
SECTION 12.11 SUCCESSORS
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 12.12 MULTIPLE ORIGINALS
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement. One signed copy is enough to prove this Indenture.
SECTION 12.13 TABLE OF CONTENTS; HEADINGS
The table of contents, cross-reference table and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
SECTION 12.14 SEVERABILITY
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 12.15 FURTHER INSTRUMENTS AND ACTS
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
69
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
PRIME SUCCESSION HOLDINGS, INC., as Issuer
By: _______________________________________
Name:__________________________________
Title:_________________________________
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By: _______________________________________
Name:__________________________________
Title:_________________________________
70
EXHIBIT A
FORM OF GLOBAL NOTE
FACE OF GLOBAL NOTE
PRIME SUCCESSION HOLDINGS, INC. CUSIP No
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PRIME SUCCESSION HOLDINGS,
INC. OR A SUCCESSOR THEREOF OR THE REGISTRAR FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO
OR SUCH OTHER ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO OR TO SUCH OTHER ENTITY AS HAS
BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO, HAS AN INTEREST HEREIN.
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, AND NOT IN
PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS WHICH COMPLY WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6
OF THE INDENTURE, DATED AS OF DECEMBER __, 2000, AMONG PRIME SUCCESSION
HOLDINGS, INC., AS ISSUER, AND UNITED STATES TRUST COMPANY OF NEW YORK, AS
TRUSTEE, PURSUANT TO WHICH THIS NOTE WAS ISSUED.
1
GLOBAL NOTE
REPRESENTING 14.25% MANDATORILY CONVERTIBLE
SENIOR SUBORDINATED NOTES DUE 2004.
Prime Succession Holdings, Inc., a Delaware corporation, for value received,
hereby promises to pay to Cede & Co, or its registered assigns, the principal
sum indicated on Schedule A hereof, on August 29, 2004; PROVIDED, HOWEVER, that
remaining principal balance of this Note following the Conversion Date shall be
due and payable on August 29, 2009 as provided in the Indenture.
Interest Payment Dates: March 31, commencing March 31, 2002.
Record Dates: March 15.
Reference is hereby made to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purposes.
IN WITNESS WHEREOF, Prime Succession Holdings, Inc. has caused this Note to be
duly executed.
PRIME SUCCESSION HOLDINGS, INC.
By: _______________________________________
Name:__________________________________
Title:_________________________________
Attest: ____________________________
Name:
Title:
Dated:______________________________
▇
▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New York, as Trustee, certifies that this is one
of the Notes referred to in the Indenture.
By:_________________________________
Authorized Signatory
3
REVERSE SIDE OF GLOBAL NOTE
PRIME SUCCESSION HOLDINGS, INC.
GLOBAL NOTE
REPRESENTING 14.25% SENIOR SUBORDINATED NOTES DUE 2004
OR, UPON CONVERSION, 2009
1. Indenture.
This Note is one of a duly authorized issue of debt securities of the
Company (as defined below) designated as its "14.25% Mandatorily Convertible
Senior Subordinated Notes Due 2004" (herein called the "Notes") issued under an
Indenture dated as of December __, 2000 (as amended and in effect from time to
time, the "Indenture") among the Company, as issuer, and United States Trust
Company of New York, as trustee (the "Trustee") in aggregate principal amount
not to exceed $20,000,000, plus any Secondary Securities issued in lieu of cash
interest payments pursuant to Section 2.11 of the Indenture. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 US Code ▇▇.▇▇.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and such Act for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and each Holder and of the terms upon which the Notes are, and are to
be, authenticated and delivered. The summary of the terms of this Note contained
herein does not purport to be complete and is qualified by reference to the
Indenture. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control. All capitalized terms used in this Note
which are not defined herein shall have the meanings assigned to them in the
Indenture.
The Indenture restricts, among other things, the Company's ability to
merge or consolidate with any other person, or sell, assign, transfer, lease,
convey or otherwise dispose of substantially all of the assets of the Company
and its Subsidiaries.
2. Principal and Interest.
Prime Succession Holdings, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay the principal
amount set forth on Schedule A of this Note to the Holder hereof on August 29,
2004; PROVIDED, HOWEVER, that following the Conversion Date, the principal
amount outstanding under this Note, together with any accrued but unpaid
interest thereon, shall be reduced pro rata and converted into Common Stock as
described in paragraph 11 hereof in a manner so as to cause the remaining
aggregate principal amount of all Notes, plus any accrued but unpaid interest
thereon, to equal
4
$7,500,000 as of such Conversion Date, with the remaining balance of this Note
being then due and payable on August 29, 2009.
Until the principal amount hereof is paid, made available for payment
or converted into Common Stock in accordance with Article XI of the Indenture,
the Company shall pay interest on the Notes at a rate of 14.25% per annum from
the Issue Date or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, annually in arrears on March 31 of each
year, commencing on March 31, 2001, to the Holder hereof and, except as
otherwise provided for herein, such interest shall be payable in the form of
additional Notes ("Secondary Securities"); PROVIDED, HOWEVER, that the Company
may at its option pay cash in lieu of issuing Secondary Securities rounded
upward to the nearest $1.00.
Notwithstanding anything herein to the contrary, interest on the Notes
will be payable in cash on any Interest Payment Date on or after the date the
Obligations in respect of the Senior Credit Facilities shall have been paid in
full. Any such Secondary Securities shall be governed by the Indenture and shall
be subject to the same terms (including the maturity date and the rate of
interest from time to time payable thereon) as this Note (except, as the case
may be, with respect to the title, issuance date and aggregate principal
amount). The term "Notes" shall include the Secondary Securities that may be
issued under the Indenture. Interest (whether in cash or Secondary Securities)
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, subject to certain exceptions provided in the Indenture, be paid to
the Person in whose name this Note (or the Note in exchange or substitution for
which this Note was issued) is registered at the close of business on the Record
Date for interest payable on such Interest Payment Date. The Record Date for any
interest payment is the close of business on March 15, whether or not a Business
Day, immediately preceding the Interest Payment Date on which such interest is
payable. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Record Date and shall be
paid as provided in Section 2.11 of the Indenture. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, if the Company's Actual Net Cash Flow
from Operative Activities for a period specified below is more than the Targeted
Net Cash Flow from Operative Activities specified for such period, then the
Company may, at its option and in its sole discretion, on the Interest Payment
Date set opposite such period, pay interest on the Notes in cash in lieu of the
payment in whole or in part of interest in Secondary Securities in an amount not
to exceed the lesser of (x) 50% of the difference between the Actual Net Cash
Flow from Operative Activities and the Targeted Net Cash Flow from Operative
Activities for the relevant period set forth below and (y) all interest that
accrued on the Notes from the Issue Date or the preceding Interest Payment Date
through the current Interest Payment Date.
5
SPECIFIED CASH
PERIOD FLOW AMOUNT INTEREST PAYMENT DATE
================================================================================
January 1, 2001--December 31, 2001 $13,300,000 First Interest Payment Date
--------------------------------------------------------------------------------
January 1, 2002--December 31, 2002 $14,700,000 Second Interest Payment Date
--------------------------------------------------------------------------------
Each payment of interest in respect of an Interest Payment
Date, whether in cash or Secondary Securities, will include interest accrued
through the day before such Interest Payment Date. If an Interest Payment Date
falls on a day that is not a Business Day, the interest payment to be made on
such Interest Payment Date will be made on the next succeeding Business Day with
the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment.
To the extent lawful, the Company shall pay interest on
overdue principal, overdue premium and Defaulted Interest (without regard to any
applicable grace period) at the interest rate borne on this Note. The Company's
obligation pursuant to the previous sentence shall apply whether such overdue
amount is due at its maturity, as a result of the Company's obligations pursuant
to Section 3.5 of the Indenture or otherwise.
3. RESERVED.
4. Method of Payment.
The Company, through the Paying Agent, shall pay interest on this Note
to the registered Holder of this Note, as provided above. The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Company
will pay principal, premium, if any, and interest (not otherwise paid in
Secondary Securities) in money of the United States that at the time of payment
is legal tender for payment of all debts public and private. Principal, premium,
if any, and interest, other than such interest paid in Secondary Securities,
shall be paid by check mailed to the registered Holders at their registered
addresses; PROVIDED that all such cash payments with respect to Notes the
Holders of which have given wire transfer instructions to the Company will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Payments of interest made in
Secondary Securities shall be made by mailing such Secondary Securities to the
Holders at their addresses appearing in the Note Register.
5. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar under the
Indenture. The Company may, upon written notice to the Trustee, appoint and
change any Paying Agent or Registrar. The Company or any of its Affiliates may
act as Paying Agent or Registrar, provided that if the Company or such Affiliate
is acting as Paying Agent, the Company or such Affiliate shall segregate all
funds and Secondary Securities held by it as Paying Agent and hold them in trust
for the benefit of the Holders or the Trustee.
6
6. RESERVED.
7. Subordination.
This Note is subordinated in right of payment, as set forth in the
Indenture, to the prior payment in full of all existing and future Obligations
in respect of any Senior Indebtedness. The Company agrees, and each Holder by
accepting a Note (or a beneficial interest in a Global Note) agrees, to the
subordination provisions set forth in the Indenture, authorizes the Trustee to
give them effect and appoints the Trustee as attorney-in-fact for such purpose.
8. Redemption.
The Notes will be subject to redemption at the option of the Company,
in whole or in part, on at least 30 calendar days' but not more than 60 calendar
days' prior notice, at a redemption price equal to the unpaid principal amount
of the Notes sought to be redeemed, plus accrued and unpaid interest thereon, if
any, to the applicable Redemption Date (subject to the right of each Holder of
record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date).
9. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days before a
Redemption Date, the Company shall deliver to the Trustee and send, by
first-class mail, postage prepaid, to Holders of Notes to be redeemed at the
addresses of such Holders as they appear in the Note Register, a notice of
redemption.
If fewer than all the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Notes not previously
called for redemption; provided that the Trustee may select for redemption
portions (equal to $1.00 or any integral multiple thereof) of the principal of
Notes that have denominations larger than $1.00 (Notes in denominations of $1.00
or less may be redeemed only in whole). If any Note is redeemed subsequent to a
Record Date with respect to any Interest Payment Date specified above and on or
prior to such Interest Payment Date, then any accrued interest will be paid on
such Interest Payment Date to the Holder of the Note on such Record Date. If
money in an amount sufficient to pay the Redemption Price of all Notes (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent on or before the applicable Redemption Date and certain other
conditions are satisfied, interest on the Notes or portions thereof to be
redeemed on the applicable Redemption Date will cease to accrue.
7
10. RESERVED.
11. Conversion Feature
Subject to the terms and provisions of this paragraph 11, if, within 30
days following the occurrence and continuance of a Conversion Event, the Company
receives a notice (the "Conversion Notice") from the Representative of the
Senior Credit Facilities that the requisite composite of lenders party to Senior
Credit Facilities have agreed in accordance with the terms thereof to exercise
the Conversion Option, then the Holders shall be required to tender their notes
for conversion into Common Stock on the date (the "Conversion Date") set forth
in such Conversion Notice which Conversion Date shall be a Business Day and
shall be at least 15 days, but not more than 45 days, after the Company's
receipt of such Conversion Notice. Upon such Conversion Date, the Notes shall be
reduced pro rata in a manner so as to cause the remaining aggregate outstanding
principal amount of the Notes, together with accrued but unpaid interest
thereon, to equal $7,500,000 immediately following such Conversion Date. The
number of shares of Common Stock issuable upon conversion of a Note is
determined by dividing the principal amount of the Notes, plus accrued but
unpaid interest thereon, being so converted by the Conversion Price in effect as
of the Conversion Date. The initial Conversion Price per share of Common Stock
shall be $2.76 per share, but shall be subject to adjustment as provided in
Article XI of the Indenture. The Notes may be converted into Common Stock in
accordance herewith only once and the amount to be so converted shall equal the
sum of the then aggregate outstanding principal amount of the Notes, plus any
accrued but unpaid interest thereon, LESS $7,500,000, with the remaining balance
of the Notes being then due and payable on August 29, 2009.
12. The Global Note.
So long as this Global Note is registered in the name of the Depositary
or its nominee, members of, or participants in, the Depositary ("Agent Members")
shall have no rights under the Indenture with respect to this Global Note held
on their behalf by the Depositary or the Trustee as its custodian, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of this Global Note for all
purposes. Notwithstanding the foregoing, nothing herein shall (i) prevent the
Company, the Trustee or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (ii) impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
Holder.
The Holder of this Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder is entitled to take under the Indenture or the Notes.
8
Whenever, as a result of optional redemption by the Company, a
conversion of the Note described in paragraph 11 or an exchange for Certificated
Notes, this Global Note is redeemed, repurchased, converted or exchanged in
part, this Global Note shall be surrendered by the Holder thereof to the Trustee
who shall cause an adjustment to be made to Schedule A hereof so that the
principal amount of this Global Note will be equal to the portion not redeemed,
repurchased, converted or exchanged and shall thereafter return this Global Note
to such Holder; PROVIDED that this Global Note shall be in a principal amount of
$1.00 or an integral multiple of $1.00.
13. RESERVED.
14. Transfer and Exchange.
(a) Each Holder of a beneficial interest in this Global Note
agrees not to transfer or cause to be transferred its beneficial interest in
this Global Note unless it also transfers to the transferee a proportionate
share of the Common Stock issued under the Plan (together with a proportionate
share of any Common Stock issued to the Holders in accordance with Article XI of
the Indenture), and any transfer which fails to comply with the aforementioned
provisions shall be void AB INITIO.
(b) A Holder of this Global Note may transfer this Global Note as
provided in the Indenture and subject to certain limitations therein set forth.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes, fees and expenses
required by law or permitted by the Indenture.
15. Denominations.
The Notes are issuable only in registered form without coupons in
denominations of $1.00 and integral multiples thereof of principal amount.
16. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may terminate
some or all of the obligations of the Company under the Notes and the Indenture
if the Company irrevocably deposits in trust with the Trustee cash or US
Government Obligations for the payment of principal, premium, if any, interest
on the then outstanding Notes to redemption or maturity, as the case may be.
17. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes (which consent
may, but need not, be given in connection
9
with any tender offer or exchange offer for the Notes) and (ii) any past Default
and its consequences or any compliance with any provisions of the Indenture may
be waived with the written consent of the Holders of at least a majority in
principal amount of the outstanding Notes. Subject to certain exceptions set
forth in the Indenture, without the consent of any Holder, the Company and the
Trustee may amend the Indenture or the Notes (i) to evidence the succession of
another Person to the Company and the assumption by such successor of the
covenants of the Company under the Indenture and contained in the Notes; (ii) to
add to the covenants of the Company, for the benefit of the Holders of all of
the Notes, or to surrender any right or power conferred on the Company under the
Indenture; (iii) to provide for uncertificated Notes in addition to or in place
of Certificated Notes; (iv) to secure the Notes; (v) to cure any ambiguity,
omission, defect or inconsistency in the Indenture, provided that such actions
shall not adversely affect the interests of the Holders of Notes in any material
respect; or (vi) to comply with the requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the TIA.
18. Defaults and Remedies.
Under the Indenture, Events of Default include: (i) a default for 30
days in the payment when due of interest on the Notes (whether or not prohibited
by the subordination provisions of the Indenture); (ii) a default in the payment
when due of the principal of or premium, if any, on the Notes (whether or not
prohibited by the subordination provisions of the Indenture); (iii) failure by
the Company to observe or perform certain covenants, conditions, agreements or
other provisions of the Indenture or this Note (and, in the case of certain
covenants, agreements or other provisions, such failure has continued for 30
calendar days after written notice by the Trustee or the Holders of at least 25%
in principal amount of the Notes); (iv) acceleration of Indebtedness of the
Company or any of its Subsidiaries in an amount in excess of $1 million in the
aggregate; (v) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries; or (vi) certain undischarged
judgments not covered by insurance in excess of $1 million against the Company
or any of its Subsidiaries.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes, subject to certain
limitations, may declare all the Notes to be immediately due and payable.
Certain events of bankruptcy or insolvency shall result in the Notes being
immediately due and payable upon the occurrence of such Events of Default
without any further act of the Trustee or any Holder.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power under the Indenture.
The Holders of a majority in principal amount of the then outstanding Notes, by
written notice to the Trustee and the Company, may rescind any
10
declaration of acceleration and its consequences if the rescission would not
conflict with any judgment or decree, and if all existing Events of Default have
been cured or waived, except nonpayment of principal, interest or premium that
has become due solely because of acceleration. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
19. Individual Rights of Trustee.
Subject to certain limitations imposed by the TIA, the Trustee or any
Paying Agent or Registrar, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Registrar, as the case may be, under the Indenture.
20. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation, solely by reason of its status as
a director, officer, employee, incorporator or stockholder of the Company. By
accepting a Note (or a beneficial interest in a Global Note), each Holder waives
and releases all such liability (but only such liability) as part of the
consideration for issuance of such Note to such Holder.
21. Authentication.
This Note shall not be valid until the Trustee or an authenticating
agent manually signs the certificate of authentication on the other side of this
Note.
22. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of Notes. No representation is
made as to the accuracy of such
11
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
24. Governing Law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SAID STATE.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture. Requests may be made to:
Prime Succession Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
12
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT.
The initial principal amount at maturity of this Note shall be $20,000,000 (less
the principal amount of any Certificated Notes), plus any Secondary Securities
issued in lieu of cash interest payments. The following decreases/increase in
the principal amount in denominations of $1.00 or integral multiples thereof at
maturity of this Note have been made:
Total Amount at Decrease in Increase in Made by or on Date of
Principal Maturity Notation Principal Principal Behalf of Trustee Maturity
13
ASSIGNMENT
(To be executed by the registered Holder if such Holder desires to transfer this
Note).
FOR VALUE RECEIVED ___________________________ hereby sells, assigns
and transfers unto______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE.
______________________________________.
This Note, together with all right, title and interest herein, and does
hereby irrevocably constitute and appoint _______________________ Attorney to
transfer this Note on the Note Register, with full power of substitution.
Dated: _______________
_____________________________ _____________________________
Signature of Holder Signature Guaranteed
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
14
EXHIBIT B
FORM OF CERTIFICATED NOTE.
FACE OF CERTIFICATED NOTE.
PRIME SUCCESSION HOLDINGS, INC. CUSIP NO
14.25% MANDATORILY CONVERTIBLE
SENIOR SUBORDINATED NOTE DUE 2004.
Prime Succession Holdings, Inc., a Delaware corporation, for value received,
hereby promises to pay to __________________________, or its registered assigns,
the principal amount of ____________, on August 29, 2004; PROVIDED, HOWEVER,
that the remaining principal balance of this Note following the Conversion Date
shall be due and payable on August 29, 2009 as provided in the Indenture.
Interest Payment Dates: March 31, commencing March 31, 2002.
Record Dates: March 15.
Reference is hereby made to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purposes.
IN WITNESS WHEREOF, Prime Succession Holdings, Inc. has caused this Note to be
duly executed.
PRIME SUCCESSION HOLDINGS, INC.
By: _______________________________________
Name:__________________________________
Title:_________________________________
Attest: ____________________________
Name:
Title:
Dated:______________________________
▇
▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New York, as Trustee, certifies that this is one
of the Notes referred to in the Indenture.
By:____________________________________
Authorized Signatory.
2
REVERSE SIDE OF INITIAL CERTIFICATED NOTE.
PRIME SUCCESSION HOLDINGS, INC.
14.25% MANDATORILY CONVERTIBLE
SENIOR SUBORDINATED NOTE DUE 2004 OR, UPON CONVERSION, 2009.
1. Indenture.
This Note is one of a duly authorized issue of debt securities of the
Company (as defined below) designated as its "14.25% Mandatorily Convertible
Senior Subordinated Notes Due 2004" (herein called the "Notes") issued under an
indenture dated as of December __, 2000 (as amended and in effect from time to
time, the "Indenture") among the Company, as issuer, and United States Trust
Company of New York, as trustee (the "Trustee"), in an aggregate principal
amount not to exceed $20,000,000, plus any Secondary Securities issued in lieu
of cash interest payments pursuant to Section 2.11 of the Indenture. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 US
Code ▇▇.▇▇. 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
of Notes are referrED to the Indenture and such Act for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and each Holder and of the terms upon which the Notes
are, and are to be, authenticated and delivered. The summary of the terms of
this Note contained herein does not purport to be complete and is qualified by
reference to the Indenture. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control. All capitalized terms used
in this Note which are not defined herein shall have the meanings assigned to
them in the Indenture.
The Indenture restricts, among other things, the Company's ability to
merge or consolidate with any other person, or sell, assign, transfer, lease,
convey or otherwise dispose of substantially all of the assets of the Company
and its Subsidiaries.
2. Principal and Interest.
Prime Succession Holdings, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay the principal
amount set forth on Schedule A of this Note to the Holder hereof on August 29,
2004; PROVIDED, HOWEVER, that immediately following the Conversation Date, the
principal amount outstanding under this Note, together with any accrued but
unpaid interest thereon, shall be reduced pro rata and converted into Common
Stock as described in paragraph 11 in a manner so as to cause the remaining
aggregate principal amount of all Notes, plus any accrued but unpaid interest
thereon, to equal
3
$7,500,000 as of such Conversion Date, with the remaining balance of this Note
being then due and payable on August 29, 2009.
Until the principal amount hereof is paid, made available for payment
or converted into Common Stock in accordance with Article XI of the Indenture,
the Company shall pay interest on the Note at a rate of 14.25% per annum from
the Issue Date or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, annually in arrears on March 31 of each
year, commencing on March 31, 2001, to the Holder hereof and, except as
otherwise provided for herein, such interest shall be payable in the form of
additional Notes ("Secondary Securities"); PROVIDED, HOWEVER, that the Company
may at its option pay cash in lieu of issuing Secondary Securities rounded
upward to the nearest $1.00.
Notwithstanding anything herein to the contrary, interest on the Notes
will be payable in cash on any Interest Payment Date on or after the date the
Obligations in respect of the Senior Credit Facilities shall have been paid in
full. Any such Secondary Securities shall be governed by the Indenture and shall
be subject to the same terms (including the maturity date and the rate of
interest from time to time payable thereon) as this Note (except, as the case
may be, with respect to the title, issuance date and aggregate principal
amount). The term "Notes" shall include the Secondary Securities that may be
issued under the Indenture. Interest (whether in cash or Secondary Securities)
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, subject to certain exceptions provided in the Indenture, be paid to
the Person in whose name this Note (or the Note in exchange or substitution for
which this Note was issued) is registered at the close of business on the Record
Date for interest payable on such Interest Payment Date. The Record Date for any
interest payment is the close of business on March 15, whether or not a Business
Day, immediately preceding the Interest Payment Date on which such interest is
payable. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Record Date and shall be
paid as provided in Section 2.11 of the Indenture. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Notwithstanding the following, if the Company's Actual Net Cash Flow
from Operating Activities for a period specified below is more than the Targeted
Net Cash Flow from Operating Activities specified for such period, then the
Company may, at its option and in its sole discretion, on the Interest Payment
Date set opposite such period, pay interest on the Notes in cash in lieu of the
payment in whole or in part of interest in Secondary Securities in an amount not
to exceed the lesser of (x) 50% of the difference between the Actual Net Cash
Flow from Operating Activities and the Targeted Net Cash Flow from Operating
Activities for the relevant period set forth below and (y) all interest that
accrued on the Notes from the Issue Date or the preceding Interest Payment Date
through the current Interest Payment Date.
4
SPECIFIED CASH
PERIOD FLOW AMOUNT INTEREST PAYMENT DATE
================================================================================
January 1, 2001--December 31, 2001 $13,300,000 First Interest Payment Date
--------------------------------------------------------------------------------
January 1, 2002--December 31, 2002 $14,700,000 Second Interest Payment Date
--------------------------------------------------------------------------------
Each payment of interest in respect of an Interest Payment Date.
whether in cash or Secondary Securities, will include interest accrued through
the day before such Interest Payment Date. If an Interest Payment Date falls on
a day that is not a Business Day, the interest payment to be made on such
Interest Payment Date will be made on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment.
To the extent lawful, the Company shall pay interest on overdue
principal, overdue premium and Defaulted Interest (without regard to any
applicable grace period) at the interest rate borne on this Note. The Company's
obligation pursuant to the previous sentence shall apply whether such overdue
amount is due at its maturity, as a result of the Company's obligations pursuant
to Section 3.5 of the Indenture or otherwise.
3. RESERVED.
4. Method of Payment.
The Company, through the Paying Agent, shall pay interest on this Note
to the registered Holder of this Note, as provided above. The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Company
will pay principal, premium, if any, and interest (not otherwise paid in
Secondary Securities) in money of the United States that at the time of payment
is legal tender for payment of all debts public and private. Principal, premium,
if any, and interest, other than such interest paid in Secondary Securities,
shall be paid by check mailed to the registered Holders at their registered
addresses; PROVIDED that all such cash payments with respect to Notes the
Holders of which have given wire transfer instructions to the Company will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Payments of interest made in
Secondary Securities shall be made by mailing such Secondary Securities to the
Holders at their addresses appearing in the Note Register.
5. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar under the
Indenture. The Company may, upon written notice to the Trustee, appoint and
change any Paying Agent or Registrar. The Company or any of its Affiliates may
act as Paying Agent or Registrar, provided that if the Company or such Affiliate
is acting as Paying Agent, the Company or such Affiliate shall segregate all
funds and Secondary Securities held by it as Paying Agent and hold them in trust
for the benefit of the Holders or the Trustee.
5
6. RESERVED.
7. Subordination.
This Note is subordinated in right of payment, as set forth in the
Indenture, to the prior payment in full of all existing and future Obligations
in respect of any Senior Indebtedness. The Company agrees, and each Holder by
accepting this Note agrees, to the subordination provisions set forth in the
Indenture, authorizes the Trustee to give them effect and appoints the Trustee
as attorney-in-fact for such purpose.
8. Redemption.
The Notes will be subject to redemption at the option of the Company,
in whole or in part, on at least 30 calendar days' but not more than 60 calendar
days' prior notice, at a redemption price equal to the unpaid principal amount
of the Notes sought to be redeemed, plus accrued and unpaid interest thereon, if
any, to the applicable Redemption Date).
9. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days before a
Redemption Date, the Company shall deliver to the Trustee and send, by
first-class mail, postage prepaid, to Holders of Notes to be redeemed at the
addresses of such Holders as they appear in the Note Register, a notice of
redemption.
If fewer than all the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Notes not previously
called for redemption; provided that the Trustee may select for redemption
portions (equal to $1.00 or any integral multiple thereof) of the principal of
Notes that have denominations larger than $1.00 (Notes in denominations of $1.00
or less may be redeemed only in whole). If any Note is redeemed subsequent to a
Record Date with respect to any Interest Payment Date specified above and on or
prior to such Interest Payment Date, then any accrued interest will be paid on
such Interest Payment Date to the Holder of the Note on such Record Date. If
money in an amount sufficient to pay the Redemption Price of all Notes (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent on or before the applicable Redemption Date and certain other
conditions are satisfied, interest on the Notes or portions thereof to be
redeemed on the applicable Redemption Date will cease to accrue.
6
10. RESERVED.
11. Conversion Feature
Subject to the terms and provisions of this paragraph 11, if, within 30
days following the occurrence and continuance of a Conversion Event, the Company
receives a notice (the "Conversion Notice") from the Representative of the
Senior Credit Facilities that the requisite composite of lenders party to Senior
Credit Facilities have agreed in accordance with the terms thereof to exercise
the Conversion Option, then the Holders shall be required to tender their Notes
for conversion into Common Stock on the date (The "Conversion Date") set forth
in such Conversion Notice shall be a Business Day and shall be at least 15 days,
but not more than 45 days, after the Company's receipt of such Conversion
Notice. Upon such Conversion Date, the Notes shall be reduced pro rata in a
manner so as to cause the remaining aggregate outstanding principal amount of
the Notes, together with accrued but unpaid interest thereon, to equal
$7,500,000 immediately following such Conversion Date. The number of shares of
Common Stock issuable upon conversion of a Note is determined by dividing the
principal amount of the Notes, plus accrued but unpaid interest thereon, being
so converted by the Conversion Price in effect as of the Conversion Date. The
initial Conversion Price per share of Common Stock shall be $2.76 per share, but
shall be subject to adjustment as provided in Article XI of the Indenture. The
Notes may be converted into Common Stock in accordance herewith only once and
the amount to be so converted shall equal the sum of the then aggregate
outstanding principal amount of the Notes, plus any accrued but unpaid interest
thereon, LESS $7,500,000, with the remaining balance of the Notes being then due
and payable on August 29, 2009.
12. Reissuance of Notes.
Whenever, as a result of optional redemption by the Company or a
conversion of the Note described in paragraph 11, this Certificated Note is
redeemed, repurchased, converted or exchanged in part, this Certificated Note
shall be surrendered by the Holder thereof to the Trustee who shall reissue this
Certificated Note in a principal amount equal to the portion thereof not so
redeemed or converted.
13. RESERVED.
14. Transfer and Exchange.
(a) Each Holder of this Note agrees not to transfer or cause to be
transferred its interest in this Note unless it also transfers to the transferee
a proportionate share of the Common Stock issued under the Plan (together with a
proportionate share of any Common Stock issued to the Holders in accordance with
Article XI of the Indenture), and any transfer which fails to comply with the
aforementioned provisions shall be void AB INITIO.
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(b) The Registrar may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes,
fees and expenses required by law or permitted by the Indenture. The Registrar
need not register the transfer or exchange of Certificated Notes or portions
thereof selected for redemption (except, in the case of a Certificated Note to
be redeemed in part, the portion of such Certificated Note not to be redeemed)
or any Certificated Notes for a period of 15 calendar days before a selection of
Notes to be redeemed.
15. Denominations.
The Notes are issuable only in registered form without coupons in
denominations of $1.00 and integral multiples thereof of principal amount.
16. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may terminate
some or all of the obligations of the Company under the Notes and the Indenture
if the Company irrevocably deposits in trust with the Trustee cash or US
Government Obligations for the payment of principal, premium, if any, interest
on the then outstanding Notes to redemption or maturity, as the case may be.
17. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes (which consent
may, but need not, be given in connection with any tender offer or exchange
offer for the Notes) and (ii) any past Default and its consequences or any
compliance with any provisions of the Indenture may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend the
Indenture or the Notes (i) to evidence the succession of another Person to the
Company and the assumption by such successor of the covenants of the Company
under the Indenture and contained in the Notes; (ii) to add to the covenants of
the Company, for the benefit of the Holders of all of the Notes, or to surrender
any right or power conferred on the Company under the Indenture; (iii) to
provide for uncertificated Notes in addition to or in place of Certificated
Notes; (iv) to secure the Notes; (v) to cure any ambiguity, omission, defect or
inconsistency in the Indenture, provided that such actions shall not adversely
affect the interests of the Holders of Notes in any material respect; or (vi) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
18. Defaults and Remedies.
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Under the Indenture, Events of Default include: (i) a default for 30
days in the payment when due of interest on the Notes (whether or not prohibited
by the subordination provisions of the Indenture); (ii) a default in the payment
when due of the principal of or premium, if any, on the Notes (whether or not
prohibited by the subordination provisions of the Indenture); (iii) failure by
the Company to observe or perform certain covenants, conditions, agreements or
other provisions of the Indenture or this Note (and, in the case of certain
covenants, agreements or other provisions, such failure has continued for 30
calendar days after written notice by the Trustee or the Holders of at least 25%
in principal amount of the Notes); (iv) a default in the payment of Indebtedness
acceleration of the Company or any of its Subsidiaries in an amount in excess of
$1 million in the aggregate; (v) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries; or (vi) certain
undischarged judgments not covered by insurance in excess of $1 million against
the Company or any of its Subsidiaries.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes, subject to certain
limitations, may declare all the Notes to be immediately due and payable.
Certain events of bankruptcy or insolvency shall result in the Notes being
immediately due and payable upon the occurrence of such Events of Default
without any further act of the Trustee or any Holder.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power under the Indenture.
The Holders of a majority in principal amount of the then outstanding Notes, by
written notice to the Trustee and the Company, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all existing Events of Default have been cured or
waived, except nonpayment of principal, interest or premium that has become due
solely because of acceleration. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
19. Individual Rights of Trustee.
Subject to certain limitations imposed by the TIA, the Trustee or any
Paying Agent or Registrar, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Company, or its
Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Registrar, as the case may be, under the Indenture.
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20. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, or the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation, solely by reason of its status
as a director, officer, employee, incorporator or stockholder of the Company. By
accepting a Note, each Holder waives and releases all such liability (but only
such liability) as part of the consideration for issuance of such Note to such
Holder.
21. Authentication.
This Note shall not be valid until the Trustee or an authenticating
agent manually signs the certificate of authentication on the other side of this
Note.
22. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of Notes. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
24. Governing Law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SAID STATE.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture. Requests may be made to:
Prime Succession Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
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ASSIGNMENT
(To be executed by the registered Holder if such Holder desires to transfer this
Note).
FOR VALUE RECEIVED ___________________________ hereby sells, assigns
and transfers unto______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE.
______________________________________.
This Note, together with all right, title and interest herein, and does
hereby irrevocably constitute and appoint _______________________ Attorney to
transfer this Note on the Note Register, with full power of substitution.
Dated: _______________
_____________________________ _____________________________
Signature of Holder Signature Guaranteed
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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