EXHIBIT 4.8
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CARRIAGE SERVICES, INC.
TO
WILMINGTON TRUST COMPANY
TRUSTEE
------------
INDENTURE
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DATED AS OF JUNE 3, 1999
$96,649,600
CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES DUE 2029
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS....................................................2
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS..........................11
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE........................12
SECTION 1.04 ACTS OF HOLDERS; RECORD DATES.................................12
SECTION 1.05 NOTICES, ETC., TO TRUSTEE AND THE COMPANY.....................14
SECTION 1.06 NOTICE TO HOLDERS; WAIVER.....................................15
SECTION 1.07 CONFLICT WITH TRUST INDENTURE ACT.............................15
SECTION 1.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS......................15
SECTION 1.09 SUCCESSORS AND ASSIGNS........................................15
SECTION 1.10 SEPARABILITY CLAUSE...........................................15
SECTION 1.11 BENEFITS OF INDENTURE.........................................16
SECTION 1.12 GOVERNING LAW.................................................16
SECTION 1.13 LEGAL HOLIDAYS................................................16
ARTICLE II
SECURITY FORMS
SECTION 2.01 FORMS GENERALLY...............................................16
SECTION 2.02 INITIAL ISSUANCE TO PROPERTY TRUSTEE..........................17
SECTION 2.03 ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.............18
SECTION 2.04 ISSUANCE OF GLOBAL SECURITIES TO HOLDERS......................19
ARTICLE III
THE SECURITIES
SECTION 3.01 TITLE AND TERMS...............................................19
SECTION 3.02 DENOMINATIONS.................................................20
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING................20
SECTION 3.04 TEMPORARY SECURITIES..........................................21
SECTION 3.05 GLOBAL SECURITIES.............................................21
SECTION 3.06 REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES.......................................23
SECTION 3.07 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES..............25
SECTION 3.08 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED................26
SECTION 3.09 PERSONS DEEMED OWNERS.........................................28
SECTION 3.10 CANCELLATION..................................................28
SECTION 3.11 RIGHT OF SET OFF..............................................28
SECTION 3.12 CUSIP NUMBERS.................................................28
SECTION 3.13 EXTENSION OF INTEREST PAYMENT PERIOD; NOTICE OF EXTENSION.....29
SECTION 3.14 PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.........30
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.......................30
SECTION 4.02 APPLICATION OF TRUST MONEY....................................31
ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.............................................31
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT............33
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.......................................................34
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM..............................34
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES...35
SECTION 5.06 APPLICATION OF MONEY COLLECTED................................35
SECTION 5.07 LIMITATION ON SUITS...........................................36
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST AND TO CONVERT.......................................36
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES............................37
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE................................37
SECTION 5.11 DELAY OR OMISSION NOT WAIVER..................................37
SECTION 5.12 CONTROL BY HOLDERS............................................37
SECTION 5.13 WAIVER OF PAST DEFAULTS.......................................37
SECTION 5.14 UNDERTAKING FOR COSTS.........................................38
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS..............................38
SECTION 5.16 ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES................38
ARTICLE VI
THE TRUSTEE
SECTION 6.01 CERTAIN DUTIES AND RESPONSIBILITIES...........................39
SECTION 6.02 NOTICE OF DEFAULTS............................................39
SECTION 6.03 CERTAIN RIGHTS OF TRUSTEE.....................................40
ii
SECTION 6.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........41
SECTION 6.05 MAY HOLD SECURITIES...........................................41
SECTION 6.06 MONEY HELD IN TRUST...........................................41
SECTION 6.07 COMPENSATION AND REIMBURSEMENT................................41
SECTION 6.08 DISQUALIFICATION; CONFLICTING INTERESTS.......................42
SECTION 6.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.......................42
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.............42
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................43
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...44
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.............44
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.....44
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS........45
SECTION 7.03 REPORTS BY TRUSTEE............................................45
SECTION 7.04 REPORTS BY COMPANY............................................45
SECTION 7.05 TAX REPORTING.................................................46
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS...........46
SECTION 8.02 SUCCESSOR SUBSTITUTED.........................................47
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............47
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS...............48
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES..........................49
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.............................49
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT...........................50
SECTION 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES............50
iii
ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 10.01 PAYMENT OF PRINCIPAL AND INTEREST.............................50
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY...............................50
SECTION 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST...............51
SECTION 10.04 STATEMENT BY OFFICERS AS TO DEFAULT...........................52
SECTION 10.05 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES;
COVENANTS AS TO THE TRUST.....................................52
SECTION 10.06 PAYMENT OF EXPENSES OF THE TRUST..............................53
SECTION 10.07 REGISTRATION RIGHTS...........................................53
SECTION 10.08 OFFERING DOCUMENT AMENDMENT OR SUPPLEMENT.....................54
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 OPTIONAL REDEMPTION...........................................54
SECTION 11.02 TAX EVENT REDEMPTION..........................................55
SECTION 11.03 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.............56
SECTION 11.04 NOTICE OF REDEMPTION..........................................56
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE...................................57
SECTION 11.06 SECURITIES PAYABLE ON REDEMPTION DATE.........................57
SECTION 11.07 SECURITIES REDEEMED IN PART...................................58
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.01 AGREEMENT TO SUBORDINATE......................................58
SECTION 12.02 DEFAULT ON SENIOR DEBT........................................59
SECTION 12.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY..........................59
SECTION 12.04 SUBROGATION...................................................60
SECTION 12.05 TRUSTEE TO EFFECTUATE SUBORDINATION...........................61
SECTION 12.06 NOTICE BY THE COMPANY.........................................61
SECTION 12.07 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR DEBT.................62
SECTION 12.08 SUBORDINATION MAY NOT BE IMPAIRED.............................63
iv
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.01 CONVERSION RIGHTS.............................................63
SECTION 13.02 CONVERSION PROCEDURES.........................................64
SECTION 13.03 CONVERSION PRICE ADJUSTMENTS..................................66
SECTION 13.04 RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.....70
SECTION 13.05 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.....................71
SECTION 13.06 PRIOR NOTICE OF CERTAIN EVENTS................................71
SECTION 13.07 ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES....................72
SECTION 13.08 DIVIDEND OR INTEREST REINVESTMENT PLANS.......................75
SECTION 13.09 CERTAIN ADDITIONAL RIGHTS.....................................75
SECTION 13.10 RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.........76
SECTION 13.11 TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS...................................................76
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
SECTION 14.01 NO RECOURSE...................................................76
EXHIBIT A Form of Security
v
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318 OF THE
TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE ACT INDENTURE
SECTION SECTION
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Section 310 (a)(1).............................................. 6.09
(a)(2).............................................. 6.09
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(b)................................................. 6.08, 6.10
Section 311 (a)................................................. 6.13
(b)................................................. 6.13
Section 312 (a)................................................. 7.01
7.02(a)
(b)................................................. 7.02(b)
(c)................................................. 7.02(c)
Section 313 (a)................................................. 7.03(a)
(a)(4).............................................. 7.03(a)
(b)................................................. 7.03(a)
(c)................................................. 7.03(a)
(d)................................................. 7.03(b)
Section 314 (a)................................................. 7.04
(b)................................................. Not Applicable
(c)(1).............................................. 1.02
(c)(2).............................................. 1.02
(c)(3).............................................. Not Applicable
(d)................................................. Not Applicable
(e)................................................. 1.02
Section 315 (a)................................................. 6.01
6.03
(b)................................................. 6.02
(c)................................................. 6.01
(d)................................................. 6.01
(e)................................................. 5.14
Section 316 (a)(1)(A)........................................... 5.02
5.12
(a)(1)(B)........................................... 5.13
(a)(2).............................................. Not Applicable
(b)................................................. 5.08
(c)................................................. 1.04(c)
Section 317 (a)(1).............................................. 5.03
(a)(2).............................................. 5.04
(b)................................................. 1.003
Section 318 (a)................................................. 1.07
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
INDENTURE, dated as of June 3, 1999, between Carriage Services, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), and Wilmington Trust Company, a Delaware banking
corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS Carriage Services Capital Trust, a Delaware business trust (the
"Trust"), formed under the Amended and Restated Declaration of Trust among the
Company, as Sponsor, Wilmington Trust Company, as property trustee (the
"Property Trustee"), and Wilmington Trust Company, as Delaware trustee (the
"Delaware Trustee"), and Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxxxx, as trustees (together with the Property Trustee and the Delaware
Trustee, the "Issuer Trustees"), dated as of June 3, 1999, (the "Declaration"),
pursuant to the Purchase Agreement (the "Purchase Agreement") dated May 27,
1999, among the Company, the Trust and the Initial Purchaser named therein, will
issue and sell up to 1,500,000 of its 7% Convertible Preferred Securities, Term
Income Deferrable Equity Securities (TIDES) ("Preferred Securities") (or up to
1,875,000 of its Preferred Securities to the extent the over-allotment option is
exercised in full) with a liquidation amount of $50 per Preferred Security,
having an aggregate liquidation amount with respect to the assets of the Trust
of up to $75,000,000 (or up to $93,750,000 to the extent the over-allotment
option is exercised in full);
WHEREAS the trustees of the Trust, on behalf of the Trust, will execute
and deliver to the Company Common Securities evidencing an ownership interest in
the Trust, registered in the name of the Company, in an aggregate amount equal
to three percent of the capitalization of the Trust, equivalent to up to 46,392
7% Common Securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") (or up to 57,990 Common Securities to the
extent the over-allotment option is exercised in full), with a liquidation
amount of $50 per Common Security, having an aggregate liquidation amount with
respect to the assets of the Trust of up to $2,319,550 (or up to $2,899,500 to
the extent the over-allotment option is exercised in full);
WHEREAS the Trust will use the proceeds from the sale of the Preferred
Securities and the Common Securities to purchase from the Company the
Convertible Junior Subordinated Debentures Due 2029 (the "Securities") in an
aggregate principal amount of up to $77,319,600 (or up to $96,649,600 to the
extent the over-allotment option is exercised in full);
WHEREAS the Company is guaranteeing the payment of distributions on the
Trust Securities and payment of the Redemption Price (as defined herein) and
payments on liquidation with respect to the Trust Securities, to the extent
provided in the Common Securities Guarantee Agreement, dated June 3, 1999,
between the Company and the Trust, and the Preferred Securities Guarantee
Agreement, dated June 3, 1999, between the Company and Wilmington Trust Company,
as Guarantee Trustee, for the benefit of the holders of the Trust Securities
from time to time (together, the "Guarantee");
WHEREAS the Company has duly authorized the creation of an issue of the
Securities of substantially the tenor and amount hereinafter set forth and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture;
WHEREAS, so long as the Trust is a Holder of Securities and any Preferred
Securities are outstanding, the Declaration provides that the holders of
Preferred Securities may cause the Conversion Agent (as defined herein) to (i)
exchange such Preferred Securities for Securities held by the Trust and (ii)
immediately convert such Securities into Common Stock (as defined herein); and
WHEREAS all things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms, have been
done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined herein) thereof, it is mutually agreed,
for the equal and proportionate benefit of all
Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 1.01 DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or
other subdivision.
2
"ACT", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"ADDITIONAL PAYMENTS" means Compounded Interest and Additional Sums, if
any.
"ADDITIONAL SUMS" has the meaning specified in Section 3.01.
"ADJUSTED REFERENCE MARKET PRICE" has the meaning specified in Section
13.07(a)(i).
"ADJUSTED RELEVANT PRICE" has the meaning specified in Section
13.07(a)(i).
"ADMINISTRATIVE ACTION" has the meaning specified in the definition of Tax
Event in this Section 1.01.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"AGENT MEMBER" means any member of, or participant in, the Depositary.
"APPLICABLE CONVERSION PRICE" has the meaning specified in Section 13.01.
"APPLICABLE CONVERSION RATIO" has the meaning specified in Section 13.01.
"APPLICABLE RATE" means the rate at which the Securities accrue interest
and the corresponding Trust Securities accrue distributions, which in the
absence of a Registration Default shall mean 7%. In the event of a Registration
Default, the Applicable Rate shall be increased in accordance with the
provisions of Section 10.07 hereof.
"BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means any day other than a Saturday or a Sunday, or a day
on which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law or
3
executive order to remain closed, or a day on which the corporate trust office
of the Property Trustee or the Trustee is closed for business.
"CLASS A COMMON STOCK" has the meaning specified in Section 13.01.
"CLOSING PRICE" has the meaning specified in Section 13.07(b).
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"COMMON SECURITIES" has the meaning specified in the Second Recital to
this instrument.
"COMMON STOCK" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Article XIII, shares issuable on conversion of Securities shall
include only shares of the class designated as Class A Common Stock of the
Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"COMMON STOCK FUNDAMENTAL CHANGE" has the meaning specified in Section
13.07(b).
"COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"COMPANY TRANSACTION" has the meaning specified in Section 13.04.
"COMPOUNDED INTEREST" has the meaning specified in Section 3.13.
4
"CONVERSION AGENT" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 13.02
hereof.
"CONVERSION DATE" has the meaning specified in Section 13.02.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in
Wilmington, Delaware, at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
"DECLARATION" has the meaning specified in the Recitals to this
instrument.
"DEBT" means (i) the principal of and premium and interest, if any, on
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of, such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
"DEFAULTED INTEREST" has the meaning specified in Section 3.08.
"DEFERRAL PERIOD" has the meaning specified in Section 3.13.
"DEFERRAL NOTICE" has the meaning specified in Section 3.13.
"DELAWARE TRUSTEE" has the meaning given it in the first recital of this
instrument.
"DEPOSITARY" means The Depository Trust Company, or any successor thereto.
"DISSOLUTION TAX OPINION" has the meaning specified in the definition of
Tax Event in this Section 1.01.
"ENTITLEMENT DATE" has the meaning specified in Section 13.07(b).
"EVENT OF DEFAULT" has the meaning specified in Section 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"EXPIRATION DATE" has the meaning specified in Section 1.04(d).
5
"EXPIRATION TIME" has the meaning specified in Section 13.03(vi).
"FUNDAMENTAL CHANGE" has the meaning specified in Section 13.07(b).
"GLOBAL SECURITY" means a Security issued in the form prescribed in
Section 2.03, issued to the Depositary or its nominee, and registered in the
name of the Depositary or its nominee.
"GUARANTEE" has the meaning specified in the Fourth Recital to this
instrument.
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"INDENTURE" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"INITIAL CONVERSION PRICE" has the meaning specified in Section 13.01.
"INITIAL CONVERSION RATIO" has the meaning specified in Section 13.01.
"INITIAL PURCHASER", with respect to the Preferred Securities, means
Credit Suisse First Boston Corporation.
"INTEREST PAYMENT DATE" has the meaning specified in Section 3.01.
"ISSUER TRUSTEES" has the meaning specified in the First Recital of this
Indenture.
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"90 DAY PERIOD" has the meaning specified in Section 11.02.
"NNM" means the National Market System of the National Association of
Securities Dealers, Inc., or any successor national automated interdealer
quotation system.
"NON-STOCK FUNDAMENTAL CHANGE" has the meaning specified in Section
13.07(b).
"NO RECOGNITION OPINION" means an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the
Securities will not recognize any income, gain or loss for United States Federal
income tax
6
purposes as a result of the liquidation of the Trust and the distribution of the
Securities to the holders of the Preferred Securities.
"NOTICE OF CONVERSION" means the notice to be given by a Holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.04 shall be the principal
executive, financial or accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"OPTIONAL REDEMPTION" has the meaning specified in Section 11.01.
"OPTIONAL REDEMPTION PRICE" has the meaning specified in Section 11.01.
"OPTIONAL REDEMPTION RATIO" has the meaning specified in Section 13.07(b).
"OUTSTANDING", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except: (i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; (ii) Securities for whose payment or
redemption money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.08, converted into
Common Stock pursuant to Section 13.01, or in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"PAYMENT RESUMPTION DATE" has the meaning set forth in Section 3.13.
7
"PERSON" means any individual, corporation, estate company, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.07 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"PREFERRED SECURITIES" has the meaning specified in the first recital
to this instrument.
"PROPERTY TRUSTEE" has the meaning specified in the Recitals to this
instrument.
"PURCHASE AGREEMENT" has the meaning specified in the Recitals to this
instrument.
"PURCHASED SHARES" has the meaning specified in Section 13.03(vi).
"PURCHASER STOCK PRICE" has the meaning specified in Section 13.07(b).
"REDEMPTION DATE", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"REDEMPTION TAX OPINION" means an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Securities for United States Federal income tax purposes, even
after the Trust was liquidated and the Securities were distributed to the
holders of the Preferred Securities.
"REFERENCE DATE" has the meaning specified in Section 13.03(iv).
"REFERENCE MARKET PRICE" has the meaning specified in Section 13.07(b).
"REGISTRATION DEFAULT" has the meaning specified in Section 10.07.
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in Section
10.07.
"REGULAR RECORD DATE" has the meaning specified in Section 3.01.
"RELEVANT PRICE" has the meaning specified in Section 13.07(b).
8
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means the
chairman or any Vice-chairman of the board of directors, the chairman or any
Vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any Vice president, any assistant vice
president, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"RESTRICTED PREFERRED SECURITIES" means each Preferred Security required
to bear the restricted securities legend required by Section 9.02(j) of the
Declaration.
"RESTRICTED SECURITIES" means each Security required to bear a Restricted
Securities Legend pursuant to Section 2.02 hereof.
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section 2.02.
"SECURITIES" has the meaning specified in the Third Recital to this
instrument.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"SECURITY REGISTER" and "Security Registrar" have the respective meanings
specified in Section 3.06.
"SENIOR DEBT" means (i) the principal of, premium, if any, and interest,
on all obligations of every nature of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, together with all fees, indemnities and expenses payable
under such obligations, (ii) all obligations to make payment pursuant to the
terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, was without recourse to the Company, (b) trade accounts
payable and accrued liabilities arising in the ordinary course of business, (c)
any Debt of the Company to any of its subsidiaries, (d) Debt to any employee of
the Company and (e) Debt which by its terms is
9
subordinated to trade accounts payable or accrued liabilities arising in the
ordinary course of business to the extent that payments made to the holders of
such Debt by the Holders of the Securities as a result of the subordination
provisions of the Indenture would be greater than such payments otherwise would
have been as a result of any obligation of such holders of such Debt to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.
"SHELF REGISTRATION STATEMENT" has the meaning specified in Section 10.07.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.08.
"STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal, together with any
accrued and unpaid interest (including Compounded Interest), of such Security or
such installment of interest is due and payable.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"TAX EVENT" means the receipt by the Property Trustee of an opinion of a
nationally recognized independent tax counsel to the Company experienced in such
matters (a "Dissolution Tax Opinion") to the effect that, as a result of (a) any
amendment to or change (including any announced prospective change (which shall
not include a proposed change), provided that a Tax Event shall not occur more
than 90 days before the effective date of any such prospective change) in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any judicial decision or
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Securities or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (x) if the
Securities are held by the Property Trustee, (i) the Trust is, or will be within
90 days of the date of such opinion, subject to United States Federal income tax
with respect to interest accrued or received on the Securities or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (ii) any portion of interest payable
by the
10
Company to the Trust on the Securities is not, or within 90 days of the date of
such opinion will not be, deductible by the Company in whole or in part for
United States Federal income tax purposes or (y) with respect to Securities
which are no longer held by the Property Trustee, any portion of interest
payable by the Company on the Securities is not, or within 90 days of the date
of such opinion will not be, deductible by the Company in whole or in part for
United States Federal income tax purposes.
"TRADING DAY" has the meaning specified in Section 13.07(b).
"TRUST" has the meaning specified in the first recital to this instrument.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"TRUST SECURITIES" has the meaning specified in the second recital to this
instrument.
"VICE PRESIDENT", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"VOTING STOCK" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or reasonably requested by the Trustee in connection with such
application or request. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
11
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made or caused to be made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person
12
or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments is or are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee or the Company, as the case may be, deems
sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Outstanding Securities entitled to give, make or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders. If
not set by the Company prior to the first solicitation of a Holder made by any
Person in respect of any such action, or, in the case of any such vote, prior to
such vote, the record date for any such action or vote shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 7.01) prior to such first solicitation or vote, as
the case may be. With regard to any record date, only the Holders on such date
(or their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action.
(d) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any notice of default, (ii) any declaration of acceleration
referred to in Section 5.02, (iii) any request to institute proceedings referred
to in Section 5.07(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the date set by the Trustee by
which any such determination shall be made (the "Expiration Date") by Holders of
the requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite
13
principal amount of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Expiration Date to be given to the Company
in writing and to each Holder of Securities in the manner set forth in Section
1.06.
(e) The ownership of Securities shall be proved by the Security
Register.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(g) Without limiting the foregoing, a Holder entitled hereunder to
give or take any such action with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which who may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 1.05 NOTICES, ETC., TO TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to:
Carriage Services, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
14
SECTION 1.06 NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of regular mail service or by reason
of any other cause, it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 1.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.10 SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
15
SECTION 1.11 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt, the holders of Preferred Securities (to
the extent provided herein) and the Holders of Securities, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
SECTION 1.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day (except that, with respect to any
Redemption Date, if such Business Day is in the next succeeding calendar year,
such Redemption Date shall be the immediately preceding Business Day) with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or on such last day for conversion, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE II
SECURITY FORMS
SECTION 2.01 FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). The Company shall
furnish any such legend not contained in Exhibit A to the Trustee in writing.
Each Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Exhibit A are part of the terms of
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
16
The definitive Securities shall be typewritten or printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 2.02 INITIAL ISSUANCE TO PROPERTY TRUSTEE.
The Securities initially issued to the Property Trustee of the Trust shall
be in the form of one or more individual certificates in definitive, fully
registered form without distribution coupons and shall bear the following legend
(the "Restricted Securities Legend") unless the Company determines otherwise in
accordance with applicable law:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND
ANY COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANS FERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
THE COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(i) THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
17
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
SECTION 2.03 ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Section 2.02, bear a legend in substantially the following form:
"THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF
THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX)
TO CARRIAGE SERVICES, INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
18
SECTION 2.04 ISSUANCE OF GLOBAL SECURITIES TO HOLDERS.
The Securities may be represented by one or more Global Securities
registered in the name of the Depositary or its nominee if, and only if, the
Securities are distributed to the Holders of the Trust Securities. Until such
time, the Securities shall be registered in the name of and held by the Property
Trustee. Securities distributed to Holders of book-entry Trust Securities shall
be distributed in the form of one or more Global Securities registered in the
name of the Depositary or its nominee, and deposited with the Security
Registrar, as custodian for such Depositary, or held by such Depositary for
credit by the Depositary to the respective accounts of the beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Securities distributed to Holders of Trust Securities other than book-entry
Trust Securities shall not be issued in the form of a Global Security or any
other form intended to facilitate book-entry trading in beneficial interests in
such Securities.
ARTICLE III
THE SECURITIES
SECTION 3.01 TITLE AND TERMS.
The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is limited to the sum of $96,649,600 except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 3.04, 3.05,
3.06, 3.07, 9.06, 11.07 or 13.02.
The Securities shall be known and designated as the "7% Convertible Junior
Subordinated Debentures Due 2029" of the Company. Their Stated Maturity shall be
June 1, 2029, and they shall bear interest at the Applicable Rate, from June 3,
1999, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth herein), in arrears, on March 1,
June 1, September 1 and December 1 (each an "Interest Payment Date") of each
year, commencing September 1, 1999, until the principal thereof is paid or made
available for payment, and they shall be paid to the Person in whose name the
Security is registered at the close of business on the regular record date for
such interest installment, which shall be the close of business on the fifteenth
day of the month next preceding the applicable Interest Payment Date (the
"Regular Record Date"). Interest will compound quarterly and will accrue at the
Applicable Rate on any interest installment in arrears for more than one quarter
or during an extension of an interest payment period as set forth in Section
3.13 hereof.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day month. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then payment of
19
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), with the same force and effect
as if made on such date.
If at any time (including upon the occurrence of a Tax Event) while the
Property Trustee is the Holder of all the Securities, the Trust or the Property
Trustee is required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any case, the Company will pay
as additional amounts ("Additional Sums") on the Securities held by the Property
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying such
taxes, duties, assessments or other governmental charges will be equal to the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
The principal of and interest on the Securities shall be payable at the
office or agency of the Company in New York, New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at any time that the Property Trustee is not the sole holder of
the Securities, payment of interest may, at the option of the Company, be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or by wire transfer.
The Securities shall be redeemable as provided in Article XI hereof.
The Securities shall be subordinated in right of payment to Senior Debt as
provided in Article XII hereof.
The Securities shall be convertible as provided in Article XIII hereof.
SECTION 3.02 DENOMINATIONS.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples thereof.
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or
20
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall manually authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 3.04 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
make available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.05 GLOBAL SECURITIES.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in
21
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (i) such
Depositary advises the Trustee in writing that such Depositary is no longer
willing or able to continue as a Depositary with respect to such Global
Security, and no successor depositary shall have been appointed, or if at any
time the Depositary ceases to be a "clearing agency" registered under the
Exchange Act, at a time when the Depositary is required to be so registered to
act as such depositary, (ii) the Company in its sole discretion determines that
such Global Security shall be so exchangeable or (iii) there shall have occurred
and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Security Registrar for exchange or cancellation as
provided in this Article III. If any Global Security is to be exchanged for
other Securities or canceled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, then
either (i) such Global Security shall be so surrendered for exchange or
cancellation as provided in this Article III or (ii) the principal amount
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or canceled, or equal to the principal amount of such other
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Trustee shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions and, to the extent required by Section 3.06, a
Restricted Securities Certificate, the Trustee shall, subject to Section 3.05(b)
and as otherwise provided in this Article III, authenticate and make available
for delivery any Securities issuable in exchange for such Global Security (or
any portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Security Registrar shall have any
liability in respect of any transfers effected by the Depositary.
(e) The rights of the beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
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SECTION 3.06 REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN TRANSFERS
AND EXCHANGES.
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 10.02 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an office
or agency of the Company designated pursuant to Section 10.02 for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, 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 or exchange of Securities, other than
exchanges pursuant to Section 3.04, 3.05, 9.06, 11.09 or 13.01 not involving any
transfer.
Neither the Company nor the Trustee shall be required (i) in the case of a
partial redemption of the Securities, to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.04 and ending at the close of business
on the day of such mailing or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
23
(b) TRANSFER AND EXCHANGE PROCEDURES AND RESTRICTIONS. The
Securities may not be transferred except in compliance with the Restricted
Securities Legend unless otherwise determined by the Company in accordance with
applicable law. Upon any distribution of the Securities to the holders of the
Trust Securities in accordance with the Declaration, the Company and the Trustee
shall enter into a supplemental indenture pursuant to Section 9.01(6) to provide
for transfer procedures and restrictions with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at the time of such distribution.
Notwithstanding any other provision of the Indenture, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.06(b) shall be made only in accordance with this Section
3.06(b).
(1) NON-GLOBAL SECURITY TO GLOBAL SECURITY. If the Holder of a
Security (other than a Global Security) wishes at any time to transfer all
or any portion of such Security to a Person who wishes to take delivery
thereof in the form of a beneficial interest in a Global Security, such
transfer may be effected only in accordance with the provisions of this
clause (b)(1) and subject to the rules and procedures of the Depositary.
Upon receipt by the Security Registrar of (A) such Security as provided in
Section 3.06(a) and instructions satisfactory to the Security Registrar
directing that a beneficial interest in the Global Security in a specified
principal amount not greater than the principal amount of such Security be
credited to a specified Agent Member's account and (B) a Securities
Certificate duly executed by such Holder or such Holder's attorney duly
authorized in writing, then the Security Registrar shall cancel such
Security (and issue a new Security in respect of the untransferred portion
thereof) as provided in Section 3.06(a) and increase the aggregate
principal amount of the Global Security by the specified principal amount
as provided in Section 3.05(c).
(2) NON-GLOBAL SECURITY TO NON-GLOBAL SECURITY. A Security
that is not a Global Security may be transferred, in whole or in part, to
a Person who takes delivery in the form of another Security that is not a
Global Security as provided in Section 3.06(a); provided, that if such
Security to be transferred in whole or in part is a Restricted Security,
the Security Registrar shall have received the assignment form attached to
the Security duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.
(3) EXCHANGES BETWEEN GLOBAL SECURITY AND NON-GLOBAL SECURITY.
A beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 3.05.
(c) RESTRICTED SECURITIES LEGEND.
(1) Except as set forth below, all Securities shall bear
the Restricted Securities Legend set forth in Section 2.02.
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(2) Subject to Section 3.06(d) and to the following clauses of
this Section 3.06(c), a Security (other than a Global Security) that does
not bear a Restricted Securities Legend may be issued in exchange for or
in lieu of a Restricted Security or any portion thereof that bears such
legend if, in the Company's judgment, placing such a legend upon such new
Security is not necessary to ensure compliance with the registration
requirements of the Securities Act, and the Trustee, at the written
direction of the Company in the form of an Officers' Certificate, shall
countersign and deliver such a new Security.
(3) Notwithstanding the foregoing provisions of this Section
3.06(c), a successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless the
Company has reasonable cause to believe that such successor Security is a
"restricted security" within the meaning of Rule 144 under the Securities
Act, in which case the Trustee, at the written direction of the Company in
the form of an Officers' Certificate, shall countersign and deliver a new
Security bearing a Restricted Securities Legend in exchange for such
successor Security.
(4) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security)
pursuant to an effective registration statement under the Securities Act
or pursuant to Rule 144 under the Securities Act after such registration
ceases to be effective: (A) in the case of any Restricted Security that is
a definitive Security, the Security Registrar shall permit the Holder
thereof to exchange such Restricted Security for a definitive Security
that does not bear the Restricted Securities Legend and shall rescind any
restriction on the transfer of such Restricted Security; and (B) in the
case of any Restricted Security that is represented by a Global Security,
the Security Registrar shall permit the Holder of such Global Security to
exchange such Global Security for another Global Security that does not
bear the Restricted Securities Legend.
(5) If Restricted Securities are being presented or
surrendered for transfer or exchange then there shall be (if so required
by the Trustee), (A) if such Restricted Securities are being delivered to
the Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that effect;
or (B) if such Restricted Securities are being transferred, a
certification from the transferor as to the compliance with the
restrictions set forth in the Restricted Securities Legend.
SECTION 3.07 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and make available for delivery in
exchange therefor a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice
25
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.08 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security 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
26
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a special
record date (the "Special Record Date") for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange (or by the
Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee provided
that any such payment will be made in coin or currency of the United
States of America which at the time of payment is a legal tender for
payment of public and private debt.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue interest (including in each such case Compounded
Interest), which were carried by such other Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted prior to any Regular Record Date, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments) on the Securities being converted, which shall
be deemed to be paid in full.
27
SECTION 3.09 PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.08) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary. No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company or the Trustee from giving effect to
any written certification, proxy, or other authorization furnished by a
Depositary or impair, as between the Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Security.
SECTION 3.10 CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order; provided, however, that the Trustee shall not be required to destroy the
certificates representing such canceled Securities.
SECTION 3.11 RIGHT OF SET OFF.
Notwithstanding anything to the contrary in this Indenture, the Company
shall have the right to set off any payment it is otherwise required to make
hereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
SECTION 3.12 CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and
28
that reliance may be placed only on the other identification numbers printed on
the Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers.
SECTION 3.13 EXTENSION OF INTEREST PAYMENT PERIOD; NOTICE OF EXTENSION.
(a) So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time during the term of this Security,
from time to time to defer payments of interest by extending for successive
periods not exceeding 20 consecutive quarters for each such period (a "Deferral
Period"); provided that no Deferral Period may extend beyond June 1, 2029. To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 3.13, will bear interest thereon at the Applicable Rate compounded
quarterly for each quarter of the Deferral Period ("Compounded Interest"). On
the applicable Payment Resumption Date, the Company shall pay all interest then
accrued and unpaid on the Securities, including any Compounded Interest that
shall be payable to the Holders of the Securities in whose names the Securities
are registered in the Security Register on the Regular Record Date fixed for
such Payment Resumption Date. A Deferral Period shall terminate upon the payment
by the Company of all interest then accrued and unpaid on the Securities
(together with interest thereon accrued at an annual rate equal to the
Applicable Rate, compounded quarterly, to the extent permitted by applicable
law). Before the termination of any Deferral Period, the Company may further
extend such period as provided in paragraph (b) of this Section 3.13, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Securities. Upon the termination of any Deferral Period, and subject to the
foregoing requirements, the Company may elect to begin a new Deferral Period. No
interest shall be due and payable during a Deferral Period except on the Payment
Resumption Date as determined pursuant to paragraph (b) of this Section 3.13.
There is no limitation on the number of times that the Company may elect to
begin a Deferral Period.
(b) The Company shall give the Holder of the Security and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions that
would have been payable on the Trust Securities except for the decision to begin
or extend a Deferral Period. On or prior to the Regular Record Date immediately
preceding the Interest Payment Date on which the Company elects to pay all
interest then accrued and unpaid on the Securities, including Compound Interest
(the "Payment Resumption Date"), the Company shall give the Holder of the
Security and the Trustee written notice that the Deferral Period will end on
such Payment Resumption Date. Notwithstanding the provision of such notice, the
Company may elect to further extend the Deferral Period, subject to the
limitations set forth in Section 3.13(a), by providing the Holder of the
Security and the Trustee with a new Deferral Notice not less than three Business
Days prior to the Regular Record Date immediately preceding the previously
scheduled Payment Resumption Date. The Company may elect to pay all interest
then accrued and unpaid on the Securities, including Compound Interest, on an
Interest Payment Date prior to its most recently established Payment Resumption
Date provided that the Company gives the Holder of the Security and the Trustee
a new Deferral Notice setting forth the revised Payment
29
Resumption Date at least three Business Days prior to the Regular Record Date
for such revised Payment Resumption Date.
(c) The quarter in which any Deferral Notice is given pursuant to
paragraph (b) hereof shall be counted as one of the 20 quarters permitted in the
maximum Deferral Period permitted under paragraph (a) hereof.
SECTION 3.14 PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.
The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of its
Affiliates may act in any
such capacity.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in
Section 3.06 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.03) have been delivered
to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
1) have become due and payable, or
2) will become due and payable at their Stated
Maturity within one year, or
30
3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal and interest
(including Compounded Interest) to the date of such deposit (in the
case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 4.01 (and held by it or any
Paying Agent) for the payment of Securities subsequently converted shall be
returned to the Company upon Company Request.
ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be
31
occasioned by the provisions of Article XI or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security,
including any Additional Payments, when it becomes due and payable, and
continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of a Deferral Period); or
(2) default in the payment of the principal of any Security
when due, whether at its Maturity, upon redemption, by declaration of
acceleration or otherwise; or
(3) default in the observation or performance, in any material
respect, of any covenant of the Company in this Indenture (other than a
covenant a default in the performance of which or the breach of which is
elsewhere in this Section specifically dealt with), and continuance of
such default for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
outstanding principal amount of the Securities a written notice specifying
such default and requiring it to be remedied; or
(4) failure by the Company to issue and deliver Common Stock
upon an election to convert the Securities into Common Stock; or
(5) the entry or a decree or order by a court having
jurisdiction in the premises adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(6) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due and its
willingness to be adjudicated a bankrupt, or the taking of corporate
action by the Company in furtherance of any such action; or
32
(7) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution
of Securities to holders of Preferred Securities in liquidation or
redemption of their interests in the Trust, (ii) the redemption of all of
the outstanding Preferred Securities of the Trust or (iii) certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Outstanding
Securities and any other amounts payable hereunder (including any Additional
Payments) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders); provided that, if the Property
Trustee is the sole Holder of the Securities and if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities fail to declare the principal of all the Securities to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal and all accrued interest shall become immediately due
and payable. Upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Payments) on all
the Securities shall then become immediately due and payable; provided that the
payment of principal and interest on such Securities (including Additional
Payments) shall remain subordinated to the extent provided in Article XII.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article hereinafter, the Holders of a majority
in aggregate principal amount of the Outstanding Securities or of a majority in
liquidation amount of Preferred Securities, as the case may be, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest (including any Compounded
Interest) on all Securities,
(B) the principal of any Securities which have become
due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
33
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 5.13.
The Company is required to file annually with the Trustee a certificate as
to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under this Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest (including
any Compounded Interest) on any Security when such interest becomes due
and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
any Security at the Stated Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional Sums),
at the rate borne by the Securities, and, in addition thereto, all amounts owing
to the Trustee under Section 6.07.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or
34
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it and any predecessor Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing to the Trustee and any predecessor
Trustee under Section 6.07, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 5.06 APPLICATION OF MONEY COLLECTED.
Subject to Article XII, any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal or interest (including any Additional Payments), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Payments) on the
Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such
Securities for principal and interest (including any Compounded
Interest), respectively; and
THIRD: The balance, if any, to the Company.
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SECTION 5.07 LIMITATION ON SUITS.
Subject to Section 5.08, no Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default,
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject to Section 3.08) interest (including
any Additional Payments) on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to convert such Security in accordance with Article XIII and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder. If the
Property Trustee is the sole Holder of the Securities, any holder of the
Preferred Securities shall have the right to institute suit on behalf of the
Trust for the enforcement of any such payment and right to convert.
36
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
3.07, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 5.12 CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
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Subject to Section 9.02 hereof, the Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf of the Holders of
all the Securities waive any past default hereunder and its consequences, except
a default
(1) in the payment of the principal of, premium, if any, or
interest (including any Additional Payments) on any Security (unless such
default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration
has been deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right
consequent thereon.
SECTION 5.14 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest (including any Additional Payments) on any Security or to convert any
Security in accordance with Article XIII.
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.16 ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES.
Notwithstanding anything to the contrary contained herein, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest
38
or principal on the Securities on the date such interest or principal is
otherwise payable, the Company acknowledges that, in such event, a holder of
Preferred Securities may institute a legal proceeding directly for enforcement
of payment to such Holder of the principal of or interest on the Debentures
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Securities. The Company may not amend this
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of all the holders of Preferred Securities.
Notwithstanding any payment made to such holder of Preferred Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of and interest on the Securities (including Additional
Payments, if any) held by the Trust or the Property Trustee and the Company
shall be subrogated to the rights of the holder of such Preferred Securities
with respect to payments on the Preferred Securities to the extent of any
payments made by the Company to such holder in any Direct Action. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the Holders of the Securities.
ARTICLE VI
THE TRUSTEE
SECTION 6.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default, 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.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of 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
his own affairs.
(c) Notwithstanding the foregoing, (i) the duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act
and (ii) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02 NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder as and
to the extent provided by the Trust Indenture Act; provided, however, that in
the case of any default of the
39
character specified in Section 5.01(3), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 6.03 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) 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;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
reasonable examination of the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be
40
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith, without negligence or willful
misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.05 MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar, or such other agent.
SECTION 6.06 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 6.07 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses, fees,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
41
(3) to indemnify the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
SECTION 6.08 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has its Corporate Trust
Office in Wilmington, Delaware. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months; or
42
(2) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company or
by any such Holder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give written notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided, that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
43
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder; provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other
obligor).
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than January 15 and July 15 in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of a date not more than 15 days prior to the
delivery thereof; 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
44
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.03 REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year, commencing May 15,
2000, the Trustee shall transmit by first-class mail to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 7.04 REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
45
SECTION 7.05 TAX REPORTING.
The Company shall provide to the Trustee on a timely basis such
information as the Trustee requires to enable the Trustee to prepare and file
any form required to be submitted by the Company with the Internal Revenue
Service and the Holders relating to original issue discount, including, without
limitation, Form 1099-0ID or any successor form.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge with or
into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge with
or into another Person or convey, transfer or lease all or substantially
all of its properties and assets on a consolidated basis to any Person,
the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer or lease, all
or substantially all of the properties and assets of the Company on a
consolidated basis shall be a corporation, limited liability company,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, the due and punctual payment of the principal of and interest
(including any Additional Payments) on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed and shall have provided for
conversion rights in accordance with Article XIII;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if at the time any Preferred Securities are outstanding,
such consolidation or merger or conveyance, transfer or lease of assets of
the Company is permitted under, and does not give rise to any breach or
violation of, the Declaration or the Guarantee; and
46
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 8.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of all or substantially
all the properties and assets of the Company on a consolidated basis in
accordance with Section 8.01, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture; provided, that such action pursuant
to this clause (4) shall not adversely affect the interests of the Holders
of the Securities or, so long
47
as any of the Preferred Securities shall remain outstanding, the holders
of the Preferred Securities;
(5) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(6) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any,
to be placed on Securities, and all other matters required pursuant to
Section 3.06(b) or otherwise necessary, desirable or appropriate in
connection with the issuance of Securities to holders of Preferred
Securities in the event of a distribution of Securities by the Trust if a
Tax Event or Investment Company Event occurs and is continuing.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of EACH
Outstanding Security affected thereby,
(1) extend the Stated Maturity of the principal of, or any
installment of interest (including any Additional Payments) on, such
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon, or reduce any premium
payable upon the redemption thereof, or change the place of payment where,
or the coin or currency in which, such Security or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or adversely affect the
right to convert such Security as provided in Article XIII (except as
permitted by Section 9.01(3)), or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse to
the Holders,
(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture, or
(3) modify any of the provisions of this Section or Section
5.13, except to increase any such percentage or to provide that certain
other provisions of this Indenture
48
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
Notwithstanding anything to the contrary in this Indenture or the
Declaration, if the Property Trustee is the sole holder of the Securities, so
long as any of the Preferred Securities remains outstanding, no amendment shall
be made that adversely affects the holders of such Preferred Securities, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of the percentage of the aggregate liquidation
amount of such Preferred Securities then outstanding which is at least equal to
the percentage of aggregate stated principal amount of the Outstanding
Securities as shall be required under this Indenture to effect any such
amendment, termination or waiver.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. No such supplemental indenture shall directly or
49
indirectly modify the provisions of Article XII in any manner which might
terminate or impair the rights of the Senior Debt pursuant to such subordination
provisions.
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture, may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 10.01 PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and interest on
the Securities in accordance with the terms of the Securities and this
Indenture.
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the United States an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange or conversion, and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies (in the United States) where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the United States for such purposes. The Company will give prompt written
50
notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit with
a Paying Agent a sum sufficient to pay the principal or interest so becoming
due, such sum to be held as provided by the Trust Indenture Act, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable, shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of any such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease.
51
SECTION 10.04 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 10.05 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES; COVENANTS
AS TO THE TRUST.
(a) If at such time (x) there shall have occurred an Event of
Default, (y) the Company shall be in default with respect to its payment of any
obligations under the Guarantee or (z) the Company shall have given notice of
its election to begin a Deferral Period as provided herein and shall not have
rescinded such notice, or such Deferral Period shall be continuing, the Company
covenants that the Company shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) other than stock dividends which consist of stock of the same
class as that on which the dividends are being paid, (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Securities or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the Securities
(in each case, other than (A) dividends or distributions in Common Stock, (B)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of the
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock or (F) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).
(b) The Company also covenants and agrees (i) for so long as the
Preferred Securities remain outstanding, (a) to maintain directly or indirectly
100% ownership of the Common Securities, provided that certain successor Persons
in transactions which are permitted by Article VIII may succeed to the Company's
ownership of the Common Securities, (b) not to voluntarily terminate, wind-up or
liquidate the Trust, except in connection with (I) a distribution of the
Securities to the holders of the Trust Securities in liquidation of the Trust,
(II) the redemption of all Trust Securities or (iii) certain mergers,
consolidations or amalgamations permitted by the
52
Declaration, and (c) not to convert Securities except pursuant to a notice of
conversion delivered to the Conversion Agent by a Holder or by a holder of
Common Securities, (ii) to use its reasonable efforts, consistent with the terms
and provisions of the Declaration, to cause the Trust to remain classified as a
grantor trust and not taxable as a corporation for United States federal income
tax purposes, (iii) to maintain the reservation for issuance of the number of
shares of Class A Common Stock that would be required from time to time upon the
conversation of al the Securities then outstanding, (iv) to deliver shares of
Class A Common Stock upon an election by a Holder to convert such Preferred
Securities into or for Class A Common Stock, and (v) to honor all obligations
relating to the conversion or exchange of Preferred Securities into or for Class
A Common Stock or Securities.
SECTION 10.06 PAYMENT OF EXPENSES OF THE TRUST.
In connection with the offering, sale and issuance of the Securities to
the Property Trustee in connection with the sale of the Trust Securities by the
Trust, the Company shall:
(a) pay for all costs, fees and expenses relating to the offering,
sale and issuance of the Securities, including commissions to the Initial
Purchaser payable pursuant to the Purchase Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section 6.07 of
the Indenture;
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the offering, sale and issuance of
the Trust Securities (including commissions to the Initial Purchaser in
connection therewith), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 10.07 REGISTRATION RIGHTS.
The holders of the Preferred Securities, the Securities, the Guarantee and
the shares of Common Stock of the Company issuable upon conversion of the
Securities (collectively, the "Registrable Securities") are entitled to the
benefits of a Registration Rights Agreement, dated as of June 3, 1999, among the
Company, the Trust and the Initial Purchaser (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement the Company and the
Trust have agreed for the benefit of the holders of the Registrable Securities
that (i) they will, at the Company's sole
53
expense, prior to August 3, 1999, file a shelf registration statement (the
"Shelf Registration Statement") with the Commission with respect to resales of
the Registrable Securities, (ii) they will use their best efforts to cause such
Shelf Registration Statement to be declared effective under the Securities Act
prior to November 1, 1999 and (iii) they will use their best efforts to maintain
such Shelf Registration Statement continuously effective under the Securities
Act (subject to certain exceptions under the Registration Rights Agreement)
until the second anniversary of the effectiveness of the Shelf Registration
Statement or such other period as shall be required under Rule 144(k) thereunder
or any successor rule or regulation thereto or such earlier date as is provided
in the Registration Rights Agreement. If the Company fails to comply with either
of clauses (ii) or (iii) above, subject to certain exceptions provided in the
Registration Rights Agreement, (a "Registration Default") then, at such time,
the Applicable Rate will increase by 50 basis points (.50%). Such increase will
remain in effect from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration Defaults
have been cured, on which date the interest rate on the Securities will revert
to the interest rate originally borne by the Securities.
SECTION 10.08 OFFERING DOCUMENT AMENDMENT OR SUPPLEMENT.
The Trust and the Company will advise the Initial Purchaser promptly of
any proposal to amend or supplement the final confidential offering circular
dated May 27, 1999 (the "Offering Document"), and will not effect such amendment
or supplementation without the Initial Purchaser's consent. If, at any time, any
event occurs as a result of which the Offering Document as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any such time to amend or supplement the Offering Document to
comply with any applicable law, the Trust and the Company promptly will notify
the Initial Purchaser of such event and promptly will prepare, at their own
expense, an amendment or supplement which will correct such statement or
omission or effect such compliance. Neither the Initial Purchaser's consent to
nor the Initial Purchaser's delivery to offerees or investors of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6 of the Purchase Agreement.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 OPTIONAL REDEMPTION.
The Company shall have the right to redeem the Securities (an "Optional
Redemption") in whole or in part, at any time or from time to time on or after
June 5, 2002, at a Redemption Price (the "Optional Redemption Price") equal to
$51.75 per $50 principal amount of the Securities to be redeemed plus any
accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed on or before June 1, 2003, and at the prices per
$50 principal amount
54
of Securities set forth in the following table, plus accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed during the 12-month period ending on June 1:
PRICE PER $50
YEAR PRINCIPAL AMOUNT
------------------ -----------------
2004.............. $ 51.17
2005.............. $ 50.58
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.
SECTION 11.02 TAX EVENT REDEMPTION.
If a Tax Event has occurred and is continuing and:
(1) the Company has received a Redemption Tax Opinion; or
(2) the Issuer Trustees shall have been informed by nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters that a No Recognition Opinion cannot
be delivered,
then the Company shall have the right upon not less than 20 days, nor more than
60 days, notice to the Holders of the Securities to redeem the Securities in
whole, but not in part, for cash at $50 per $50 principal amount of the
Securities plus accrued and unpaid interest, including Additional Payments, if
any, to the Redemption Date, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"); provided, however, that if, at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, including, but
not limited to, filing a form or making an election, or pursuing some other
similar reasonable measure which, in the sole judgment of the Company, will have
no adverse effect on the Company, the Trust or the Holders of the Preferred
Securities and will involve no material cost, then the Company or the Trust
shall pursue such ministerial action or other measure in lieu of redemption; and
provided further that the Company shall have no right to redeem the Securities
while the Trust is pursuing any ministerial action or other similar measure
pursuant to its obligations under the Declaration.
If the Company opts not to redeem the Securities pursuant to this Section
11.02, the Company shall be required to pay Additional Sums in respect of the
Securities pursuant to Section 3.01 for so long as (i) a Tax Event has occurred
and is continuing and (ii) the Property Trustee is the sole Holder of the
Securities.
55
SECTION 11.03 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee by
such method as the Trustee shall deem fair and appropriate, from the Outstanding
Securities not previously called for redemption. Such selection method may
provide for the selection for redemption of portions (equal to $50 or any
integral multiple thereof) of the principal amount of the Securities.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 11.04 NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 (or, in the case of a redemption pursuant to Section
11.02 hereof, 20) nor more than 60 days prior to the Redemption Date, to each
Holder of Securities to be redeemed, at such Holder's address appearing in the
Security Register.
All notices of redemption given pursuant to this Article XI shall identify
the Securities to be redeemed (including, if relevant, CUSIP number) and shall
state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
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(4) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(5) the date on which the right to convert the Securities to
be redeemed will terminate and the places where such Securities may be
surrendered for conversion.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE.
Prior to 12:00 noon on any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.08) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
SECTION 11.06 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to the terms and the provisions of Section 3.08.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.
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SECTION 11.07 SECURITIES REDEEMED IN PART.
(a) In the event of any redemption in part, the Company shall not be
required (i) to issue, register the transfer of or exchange any Security during
a period beginning at the opening of business 15 days before the date of the
mailing of a notice of redemption of Securities selected for redemption and
ending at the close of business on the day of such mailing and (ii) to register
the transfer of or exchange any Securities so selected for redemption, in whole
or in part, except for the unredeemed portion of any Securities being redeemed
in part.
(b) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
listed, the Company shall not be permitted to effect such partial redemption and
may only redeem the Securities in whole.
(c) Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is surrendered, such new
Security will (subject to Section 3.06) also be a new Global Security.
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.01 AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each Holder of Securities by such
Holder's acceptance thereof likewise covenants and agrees, that all Securities
shall be issued subject to the provisions of this Article XII; and each Holder
of a Security, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions. The payment by the
Company of the principal of, premium, if any, and interest (including Additional
Payments) on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Debt, whether outstanding at the date of
this Indenture or thereafter incurred; provided, however, that no provision of
this Article XII shall prevent the occurrence of any default or Event of Default
hereunder.
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SECTION 12.02 DEFAULT ON SENIOR DEBT.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Debt continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Debt, unless and until such default shall have
been cured or waived or shall have ceased to exist, and in the event that the
maturity of any Senior Debt has been accelerated because of a default, then no
payment shall be made by the Company with respect to the principal of (including
redemption payments), premium, if any, or interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 12.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior Debt
or their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, but only to the extent that the holders
of the Senior Debt (or their representative or representatives or a trustee)
notify the Trustee in writing within 90 days of such payment of the amounts then
due and owing on the Senior Debt and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Debt.
SECTION 12.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts (including principal, premium, if
any, and interest) due or to become due upon all Senior Debt (including any
interest accruing subsequent to the filing of a petition for bankruptcy
regardless of whether such interest is an allowed claim in the bankruptcy
proceeding) shall first be paid in full in cash, or payment thereof provided for
in money in accordance with and to the extent permitted by the terms of such
Senior Debt, before any payment is made on account of the principal (and
premium, if any) or interest on the Securities; and upon any such dissolution or
winding up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Securities or the Trustee
would be entitled, except for the provisions of this Article XII, shall be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay such Senior Debt in full, in cash or in money's
worth in accordance with and to the extent permitted by the terms of such Senior
Debt, after giving effect to any concurrent payment or distribution to or
59
for the holders of such Senior Debt, before any payment or distribution is made
to the Holders of Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or the Holders of the Securities before all Senior Debt is paid in full
in cash, or provision is made for such payment in money in accordance and to the
extent permitted by the terms of such Senior Debt, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of Senior Debt or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Debt may have been issued, and their respective interests
may appear, as calculated by the Company, for application to the payment of all
Senior Debt remaining unpaid to the extent necessary to pay such Senior Debt in
full in cash or in money's worth in accordance with and to the extent permitted
by the terms of such Senior Debt, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Debt.
For purposes of this Article XII, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XII with respect
to the Securities to the payment of all Senior Debt which may at the time be
outstanding; provided that (i) such Senior Debt is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Debt are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of all or substantially all its properties and
assets on a consolidated basis to another Person upon the terms and conditions
provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 12.02 or in this Section 12.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.07 hereof.
SECTION 12.04 SUBROGATION.
Subject to the prior payment in full of all Senior Debt in cash or in
money's worth in accordance with and to the extent permitted by the terms of
such Senior Debt, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of such Senior Debt to receive payments
or distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Debt until the principal of (and premium, if any)
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article
60
XII, and no payment pursuant to the provisions of this Article XII, to or for
the benefit of the holders of such Senior Debt by Holders of the Securities or
the Trustee, shall, as between the Company, its creditors other than holders of
Senior Debt, and the Holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Debt. It is understood that the
provisions of this Article XII are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of such Senior Debt on the other hand.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Senior Debt, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of such Senior Debt in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article XII, the Trustee, subject to the provisions of Section 6.03, and
the Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities, for the purposes of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Company, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII.
SECTION 12.05 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Securities by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII and appoints the Trustee as such Holder's attorney-in-fact for any
and all such purposes.
SECTION 12.06 NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article XII. Notwithstanding the provisions of this
Article XII or any other provision of this Indenture, the Trustee shall not be
61
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XII unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Debt or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.03
hereof, shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 12.06 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which it was
received, and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 6.03, shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Debt (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of such Senior Debt or a
trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the right of such Person under this Article XII, 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.
SECTION 12.07 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR DEBT.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII in respect of any Senior Debt at any time held by
it, to the same extent as any other holder of Senior Debt, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are set forth in this Article XII, and no implied covenants or obligations
with respect to the holders of such Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Debt and, subject to the provisions
of Section 6.03, the Trustee shall not be liable to any holder of such Senior
Debt if it shall pay over or deliver to Holders of Securities, the Company or
any other Person money or assets to which any holder of such Senior Debt shall
be entitled by virtue of this Article XII or otherwise.
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SECTION 12.08 SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the holders of the Securities and without impairing
or releasing the subordination provided in this Article XII or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, such Senior Debt, or
otherwise amend or supplement in any manner such Senior Debt or any instrument
evidencing the same or any agreement under which such Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any
Person liable in any manner for the collection of such Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.01 CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article, the
Securities are convertible, at the option of the Holder, at any time prior to
5:00 p.m. New York City time on June 1, 2029 into fully paid and nonassessable
shares of Class A Common Stock of the Company, par value $.01 per share ("Class
A Common Stock"), at an initial conversion rate of 2.4465 shares of Class A
Common Stock for each $50 in aggregate principal amount of Securities (the
"Initial Conversion Ratio") (equal to a conversion price of $20.4375 principal
amount of Securities per share of Class A Common Stock (the "Initial Conversion
Price")). The conversion ratio and the equivalent conversion price in effect at
any given time are known as the "Applicable Conversion Ratio" and the
"Applicable Conversion Price", respectively, and are subject to adjustment as
described in this Article XIII. A Holder of Securities may convert any portion
of the principal amount of the Securities into that number of fully paid and
nonassessable shares of Class A Common Stock (calculated as to each conversion
to the nearest 1/100th of a share) obtained by dividing the principal amount of
the Securities to be converted by the Applicable Conversion Ratio. In case a
Security or portion thereof is called for redemption, such conversion right in
respect of the Security or portion so called shall expire at the close of the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
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SECTION 13.02 CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Securities, the
Holder thereof shall deliver to the Conversion Agent an irrevocable Notice of
Conversion setting forth the principal amount of Securities to be converted,
together with the name or names, if other than the Holder, in which the shares
of Class A Common Stock should be issued upon conversion and, if such Securities
are definitive Securities, surrender to the Conversion Agent the Securities to
be converted, duly endorsed or assigned to the Company or in blank. In addition,
a holder of Preferred Securities may exercise its right under the Declaration to
convert such Preferred Securities into Class A Common Stock by delivering to the
Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and directing the Conversion
Agent (i) to exchange such Preferred Security for a portion of the Securities
held by the Trust (at an exchange rate of $50 principal amount of Securities for
each Preferred Security) and (ii) to immediately convert such Securities, on
behalf of such holder, into Class A Common Stock of the Company pursuant to this
Article XIII and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Securities except pursuant to a Notice of Conversion duly
executed and delivered to the Conversion Agent by a holder of Preferred
Securities.
If a Notice of Conversion is delivered on or after the Regular Record Date
and prior to the subsequent Interest Payment Date, the Holder will be entitled
to receive the interest payable on the subsequent Interest Payment Date on the
portion of Securities to be converted notwithstanding the conversion thereof
prior to such Interest Payment Date. Except as otherwise provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable, and the Company shall not make nor be required to make any
other payment, adjustment or allowance with respect to accrued but unpaid
interest on the Securities being converted, which shall be deemed to be paid in
full. Each conversion shall be deemed to have been effected immediately prior to
the close of business on the day on which the Notice of Conversion was received
(the "Conversion Date") by the Conversion Agent from the Holder or from a holder
of the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Class A Common Stock as of the Conversion Date. As promptly as practicable
on or after the Conversion Date, the Company shall issue and deliver at the
office of the Conversion Agent, unless otherwise directed by the Holder in the
Notice of Conversion, a certificate or certificates for the number of full
shares of Class A Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) Subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 3.08 and the second paragraph of clause (a) of Section 13.02, the
Company's delivery upon conversion of the whole number of shares
64
of Class A Common Stock into which the Securities are convertible (together with
the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Securities so converted and any unpaid interest (including Compounded
Interest and Additional Sums) accrued on such Securities at the time of such
conversion.
(c) No fractional shares of Class A Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Securities or Preferred Securities, as the case may be, were duly surrendered to
the Conversion Agent for conversion, or, if such day is not a Trading Day, on
the next Trading Day, and the Conversion Agent in turn will make such payment,
if any, to the Holder of the Securities or the holder of the Preferred
Securities so converted.
(d) In the event of the conversion of any Security in part only, a
new Security or Securities for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
Section 3.06.
(e) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Securities) and as agent
of the Holders of Securities (in the conversion of Securities into Class A
Common Stock), as the case may be, directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (x) if the Trust exists,
(i) to exchange Securities held by or on behalf of the Trust from time to time
for Preferred Securities in connection with the conversion of such Preferred
Securities in accordance with this Article XIII and (ii) to convert all or a
portion of the Securities into Class A Common Stock and thereupon to deliver
such shares of Class A Common Stock in accordance with the provisions of this
Article XIII and to deliver to the Trust a new Security or Securities for any
resulting unconverted to exchange Securities held by the Holders in connection
with the conversion of such Securities in accordance with this Article XIII and
(y) if the Trust has been dissolved and the Securities have been distributed to
the holders of the Preferred Securities, to convert all or a portion of the
Securities into Class A Common Stock and thereupon to deliver such shares of
Class A Common Stock in accordance with the provisions of this Article XIII and
to deliver to such Holders a new Security or Securities for any resulting
unconverted principal amount.
(f) All shares of Class A Common Stock delivered upon any conversion
of Restricted Securities shall bear a restrictive legend substantially in the
form of the legend required to be set forth on such Securities and shall be
subject to the restrictions on transfer provided in such legend and in Section
3.06(b) hereof. Neither the Trustee nor the Conversion Agent shall have any
responsibility for the inclusion or content of any such restrictive legend on
such Class A Common Stock; provided, however, that the Trustee or the Conversion
Agent shall have provided to the Company or to the Company's transfer agent for
such Class A Common Stock, prior to or concurrently with a request to the
Company to deliver to such Conversion Agent certificates for such
65
Class A Common Stock, written notice that the Securities delivered for
conversion are Restricted Securities.
SECTION 13.03 CONVERSION PRICE ADJUSTMENTS.
The Applicable Conversion Price shall be subject to adjustment (without
duplication) from time to time as follows:
(i) In case the Company shall pay a dividend or make a
distribution on the Common Stock exclusively in Common Stock, the
Applicable Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced
by multiplying such Applicable Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number
of shares constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (i), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.
In the event that such dividend or distribution is not so paid or made,
the Applicable Conversion Price shall again be adjusted to be the Applicable
Conversion Price which would then be in effect if such dividend or distribution
had not occurred.
(ii) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all holders of its Common Stock, rights or warrants, in
each case entitling the holders thereof to subscribe for or purchase
shares of Common Stock at a price per share less than the current market
price per share (determined as provided in subparagraph (vii)) of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Applicable Conversion
Price in effect at the opening of business on the day following the date
fixed for such determination shall be reduced by multiplying such
Applicable Conversion Price by a fraction of which the NUMERATOR shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate of the offering price of the total number
of shares of Common Stock so offered for subscription or purchase would
purchase at such current market price and the denominator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common
Stock so offered for subscription or purchase, such reduction to become
effective immediately prior to the opening of business on the day
following the date fixed for such determination. To the extent that rights
are not so issued or shares of Common Stock are not so delivered after the
expiration of such rights or
66
warrants, the Applicable Conversion Price shall be readjusted to the
Applicable Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such
rights or warrants had not been fixed. For the purposes of this
subparagraph (ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.
(iii) In case outstanding shares of Class A Common Stock shall
be subdivided into a greater number of shares of Class A Common Stock, the
Applicable Conversion Price in effect at the opening of business on the
day following the day upon which such subdivision becomes effective shall
be proportionately reduced and, conversely, in case outstanding shares of
Class A Common Stock shall each be combined into a smaller number of
shares of Class A Common Stock, the Applicable Conversion Price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
prior to the opening of business on the day following the day upon which
such subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv),
in case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any
class or series of capital stock, cash or assets (including securities,
but excluding any rights or warrants referred to in subparagraph (ii) of
this Section 13.03, any dividend or distribution paid exclusively in cash
and any dividend or distribution referred to in subparagraph (i) of this
Section 13.03), the Applicable Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by this subparagraph
(iv) by a fraction of which the numerator shall be the current market
price per share (determined as provided in subparagraph (vii) of this
Section 13.03) of the Common Stock on the date fixed for the determination
of stockholders entitled to receive such distribution (the "Reference
Date") less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors), on the Reference Date, of the
portion of the evidences of indebtedness, shares of capital stock, cash
and assets so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common
Stock, such reduction to become effective immediately prior to the opening
of business on the day following the Reference Date. In the event that
such dividend or distribution is not so paid or made, the Applicable
Conversion Price shall again be adjusted to be the Applicable Conversion
Price which would then be in effect if such dividend or distribution had
not occurred. For purposes of this subparagraph (iv), any dividend or
distribution that includes shares of Common Stock or rights or warrants to
subscribe for or purchase shares of Common Stock shall be deemed instead
to be (1) a dividend or distribution of the evidences of indebtedness,
shares of capital stock, cash or assets other than such shares of Common
Stock or such rights or warrants (making any Applicable Conversion Price
reduction required
67
by this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants
(making any further Applicable Conversion Price reduction required by
subparagraph (i) or (ii) of this Section 13.03), except any shares of
Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
13.03.
(v) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding (x) cash
dividends to the extent that they do not exceed the per share amount of
the smallest of the immediately four preceding quarterly cash dividends
(as adjusted to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv), (v) and (vi)), and (y) cash
dividends to the extent that the annualized per share amount thereof does
not exceed 12.5% of the current market price per share of the Common Stock
on the Trading Day next preceding the date of declaration of such
dividend, the Applicable Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by this subparagraph
(v) by a fraction of which the numerator shall be the current market price
per share (determined as provided in subparagraph (vii) of this Section
13.03) of the Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed and not excluded as
provided applicable to one share of Common Stock and the denominator shall
be such current market price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the
day following the date fixed for the payment of such distribution;
provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater
than the current market price per share (as defined in subparagraph (vii)
of this Section 13.03) of the Common Stock on the record date mentioned
above, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder of Securities shall have the right to receive
upon conversion the amount of cash such Holder would have received had
such Holder converted each Security immediately prior to the record date
for the distribution of the cash. In the event that such dividend or
distribution is not so paid or made, the Applicable Conversion Price shall
again be adjusted to be the Applicable Conversion Price which would then
be in effect if such record date had not been fixed.
(vi) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or any
portion of the Company's Common Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such Subsidiary
of consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have
been amended) that exceeds 110% of the current market price per share
(determined as provided in subparagraph (vii) of this Section 13.03) of
the
68
Common Stock on the Trading Day next succeeding the Expiration Time, the
Applicable Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Applicable Conversion Price in
effect immediately prior to the effectiveness of the Applicable Conversion
Price reduction contemplated by this subparagraph (vi) by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration
Time multiplied by the current market price per share (determined as
provided in subparagraph (vii) of this Section 13.03) of the Common Stock
on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the current market price per
share (determined as provided in subparagraph (vii) of this Section 13.03)
of the Common Stock on the Trading Day next succeeding the Expiration
Time, such reduction to become effective immediately prior to the opening
of business on the day following the Expiration Time.
(vii) For the purpose of any computation under subparagraphs
(ii), (iv), (v) and (vi) of this Section 13.03, the current market price
per share of Common Stock on any date in question shall be deemed to be
the average of the daily Closing Prices of the Class A Common Stock for
the ten consecutive Trading Days prior to the earlier of the day in
question and, if applicable, the day before the "ex" date with respect to
the issuance or distribution requiring such computation; provided,
however, that if another event occurs that would require an adjustment
pursuant to subparagraphs (i) through (vi) of this Section 13.03,
inclusive, the Board of Directors may make such adjustments to the Closing
Prices during such five Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 13.03, in which
case any such determination by the Board of Directors shall be set forth
in a Board Resolution and shall be conclusive. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Class A Common Stock is
quoted regular way on the New York Stock Exchange Composite Tape or on
such successor securities exchange on which the Class A Common Stock may
be quoted or listed or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or
distribution, and (2) when used with respect to any tender or exchange
offer means the first date on which the Class A Common Stock is quoted
regular way on such securities exchange or in such market after the
Expiration Time of such offer.
(viii)The Company may make such reductions in the Applicable
Conversion Price, in addition to those required by subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of this Section 13.03, as it considers to
be advisable to avoid or diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any
69
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
(ix) There shall also be no adjustment of the Applicable
Conversion Price in case of the issuance of any Common Stock (or
securities convertible into or exchangeable for Common Stock), except as
specifically described above. If any action would require adjustment of
the Applicable Conversion Price, pursuant to more than one of the
anti-dilution provisions set forth in this Article XIII, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to Holders. Furthermore, no
adjustment in the Applicable Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Applicable Conversion Price; provided, however, that any adjustments
which by reason of this sentence are not required to be made shall be
carried forward and taken into account in determining whether any
subsequent adjustment shall be required.
SECTION 13.04 RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.
In the event that the Company shall be a party to any transaction
(including without limitation (a) any 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), (b) 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 of
the Company), (c) any sale or transfer of all or substantially all of the assets
of the Company or (d) any compulsory share exchange) (each of the events in the
preceding clauses (a) through (d) being referred to as a "Company Transaction"),
in each case, as a result of which shares of Common Stock shall be 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 Company Transaction whereby
the Holder of each Security then outstanding shall have the right thereafter to
convert such Security only into (i) in the case of any Company Transaction other
than a Common Stock Fundamental Change, the kind and amount of securities, cash
and other property receivable upon the consummation of the Company Transaction
by a holder of that number of shares of Common Stock into which such Security
was convertible immediately prior to such transaction, after giving effect to
any adjustment in the Applicable Conversion Price required by the provisions of
Section 13.07(a)(i), and (ii) in the case of a Company Transaction involving a
Common Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount
determined pursuant to the provisions of Section 13.07(a)(ii). Holders of the
Securities shall have no voting rights with respect to any Company Transaction
described in this Section 13.04.
The Company or the Person formed by such consolidation or resulting from
such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such
70
right. Such certificate or articles of incorporation or other constituent
document shall provide for adjustments which, for events subsequent to the
effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XIII. The above provisions shall
similarly apply to successive transactions of the foregoing type.
SECTION 13.05 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Applicable Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Applicable Conversion
Price and shall prepare a certificate signed by the Chief Financial Officer or
the Treasurer of the Company setting forth the adjusted Applicable Conversion
Price and showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee, the
Conversion Agent, the Property Trustee and the transfer agent for the Preferred
Securities and the Securities; and
(b) a notice stating the Applicable Conversion Price has been
adjusted and setting forth the adjusted Applicable Conversion Price shall as
soon as practicable be mailed by the Company to all record holders of Preferred
Securities and the Securities at their last addresses as they appear upon the
stock transfer books of the Company and the books and records of the Trust,
respectively.
SECTION 13.06 PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(i) the Company shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 13.03(iv) or (v) or (2)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 13.03(vi);
(ii) the Company shall authorize the granting to all holders
of Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or warrants;
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company shall be
required, or of the sale or transfer of all or substantially all of the
assets of the
71
Company or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the books and records of the Trust, or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 13.07 ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES.
(a) Notwithstanding any other provision in this Article XIII to the
contrary, in the case of any Company Transaction involving a Fundamental Change,
the Applicable Conversion Price will be adjusted immediately after such
Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the
Applicable Conversion Price of the Securities shall thereupon become the
lower of (A) the Applicable Conversion Price in effect immediately prior
to such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Article XIII, and (B) the
result obtained by multiplying the greater of the Relevant Price or the
then applicable Reference Market Price by the Optional Redemption Ratio
(such product shall hereinafter be referred to as the "Adjusted Relevant
Price" or the "Adjusted Reference Market Price", as the case may be); and
(ii) in the case of a Common Stock Fundamental Change, the
Applicable Conversion Price of the Securities in effect immediately prior
to such Common Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to this Article XIII, shall
thereupon be adjusted by multiplying such Applicable Conversion Price by a
fraction of which the numerator shall be the Purchaser Stock Price and the
denominator shall be the Relevant Price; provided, however, that in the
event of a Common
72
Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Class A Common Stock is common stock
of the successor, acquiror or other third party (and cash, if any, is paid
only with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all of the
Class A Common Stock shall have been exchanged for, converted into or
acquired for common stock (and cash with respect to fractional interests)
of the successor, acquiror or other third party, the Applicable Conversion
Price of the Securities in effect immediately prior to such Common Stock
Fundamental Change shall thereupon be adjusted by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be
one and the denominator shall be the number of shares of common stock of
the successor, acquiror, or other third party received by a stockholder
for one share of Class A Common Stock as a result of such Common Stock
Fundamental Change.
(b) DEFINITIONS. The following definitions shall apply to terms used
in this Article XIII:
(1) "Closing Price" of any security on any day shall mean on
any day the last reported sale price of such security on such day, or in
case no sale takes place on such day, the average of the closing bid and
asked prices in each case on the principal national securities exchange on
which such securities are listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange, on the NNM or,
if such securities are not listed or admitted to trading on any national
securities exchange or quoted on the NNM, the average of the closing bid
and asked prices in the over-the-counter market as furnished by any New
York Stock Exchange member firm selected by the Company for such purpose.
(2) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% of the value (as determined in
good faith by the Board of Directors) of the consideration received by
holders of Class A Common Stock consists of common stock that for each of
the ten consecutive Trading Days immediately prior to the Entitlement Date
has been admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the NNM; provided,
however, that a Fundamental Change shall not be a Common Stock Fundamental
Change unless either (i) the Company continues to exist after the
occurrence of such Fundamental Change and the outstanding Preferred
Securities continue to exist as outstanding Preferred Securities, or (ii)
not later than the occurrence of such Fundamental Change, the outstanding
Securities are converted into or exchanged for debentures of a corporation
succeeding to the business of the Company, which debentures have terms
substantially similar to those of the Securities.
(3) "Entitlement Date" shall mean the record date for
determination of the holders of Common Stock entitled to receive
securities, cash or other property in connection with a Non-Stock
Fundamental Change or a Common Stock Fundamental Change or, if there
73
is no such record date, the date upon which holders of Class A Common
Stock shall have the right to receive such securities, cash or other
property.
(4) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Class A Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to receive
securities, cash or other property (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in
the case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Applicable Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially all
of the Class A Common Stock of the Company shall be exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash or other property, but the adjustment shall be based upon
the highest weighted average per share consideration that a holder of
Class A Common Stock could have received in such transactions or events as
a result of which more than 50% of the Class A Common Stock of the Company
shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash or other property.
(5) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(6) "Optional Redemption Ratio" means a fraction of which the
numerator shall be $50 and the denominator will be the then current
Optional Redemption Price or, prior to June 5, 2002, an amount per
Security determined by the Company in its sole discretion, after
consultation with an investment banking firm, to be the equivalent of the
hypothetical redemption price that would have been applicable if the
Securities had been redeemable during such period.
(7) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the daily Closing Prices
of the common stock received in such Common Stock Fundamental Change for
the ten (10) consecutive Trading Days prior to and including the
Entitlement Date, as adjusted in good faith by the Board of Directors to
appropriately reflect any of the events referred to in subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of Section 13.03.
(8) "Reference Market Price" shall initially mean on the date
of original issuance of the Securities, $11.17 (which is an amount equal
to 66-2/3% of the last reported sale price for the Class A Common Stock on
the New York Stock Exchange Composite Tape on May 27, 1999 and, in the
event of any adjustment to the Applicable Conversion Price, other than as
a result of a Non-Stock Fundamental Change, the Reference Market Price
shall also be adjusted so that the ratio of the Reference Market Price to
the Applicable Conversion
74
Price after giving effect to any such adjustment shall always be the same
as the ratio of $11.17 to the Initial Conversion Price.
(9) "Relevant Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Class A Common
Stock receive only cash, the amount of cash received by a stockholder for
one share of Class A Common Stock and (ii) in the event of any other
Non-Stock Fundamental Change or any Common Stock Fundamental Change, the
average of the daily Closing Prices of the Class A Common Stock for the
ten (10) consecutive Trading Days prior to and including the Entitlement
Date, in each case, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of Section 13.03.
(10) "Trading Day" shall mean a day on which securities are
traded on the national securities exchange or quotation system used to
determine the Closing Price.
SECTION 13.08 DIVIDEND OR INTEREST REINVESTMENT PLANS.
(a) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any such plan, and the issuance of any shares of Common Stock or options or
rights to purchase such shares pursuant to any employee benefit plan or program
of the Company or pursuant to any option issued, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies.
(b) There shall also be no adjustment of the Applicable Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article XIII.
SECTION 13.09 CERTAIN ADDITIONAL RIGHTS.
Notwithstanding any other provision of this Article XIII to the contrary,
rights, warrants, evidences of indebtedness, other securities, cash or other
assets (including, without limitation, any rights distributed pursuant to any
stockholder rights plan) shall be deemed not to have been distributed for
purposes of this Article XIII if the Company makes proper provision so that each
Holder who converts a Security (or any portion thereof) after the date fixed for
determination of stockholders entitled to receive such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the amount and kind of such distributions
that such Holder would have been entitled to receive if such Holder had,
immediately prior to such determination date, converted such Security into
Common Stock.
75
SECTION 13.10 RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.
(a) Shares of Class A Common Stock to be issued upon conversion of a
Security in respect of Restricted Preferred Securities (as defined in the
Declaration) shall bear such restrictive legends as the Company may provide in
accordance with applicable law.
(b) If shares of Class A Common Stock to be issued upon conversion
of a Security in respect of Restricted Preferred Securities are to be registered
in a name other than that of the Holder of such Preferred Security, then the
Person in whose name such shares of Class A Common Stock are to be registered
must deliver to the Conversion Agent a certificate satisfactory to the Company
and signed by such Person, as to compliance with the restrictions on transfer
applicable to such Preferred Security. Neither the Trustee nor any Conversion
Agent or Registrar shall be required to register in a name other than that of
the Holder shares of Class A Common Stock or such Preferred Securities issued
upon conversion of any such Security in respect of such Preferred Securities not
so accompanied by a properly completed certificate.
SECTION 13.11 TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder of any Security to determine whether
any facts exist which may require any adjustment of the Applicable Conversion
Price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or whether any supplemental indenture
needs to be entered into. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any shares of Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article X or this Article XIII.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 14.01 NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of
76
any predecessor or successor corporation, either directly or through the Company
or any such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Securities.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
Dated:June 3, 1999
CARRIAGE SERVICES, INC.
By:/s/ XXXXXX X. XXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
and Chief Financial
Officer
WILMINGTON TRUST COMPANY, as
Trustee
By:/s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President
77
EXHIBIT A
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
[Include if a Global Security: THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR A SECURITY REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO CARRIAGE
SERVICES, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include Restricted Securities Legend if required under Section 2.02:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
78
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND THE
COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iii)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (i) THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE.]
79
CARRIAGE SERVICES, INC.
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE DUE 2029
No. _________ $_______
CUSIP No. 143805 AA 5
CARRIAGE SERVICES, INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein called "the Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum [indicated on Schedule A hereof](1) [of
Dollars](2) ($) on June 1, 2029.
Interest Payment Dates: March 1, June 1, September 1 and December 1,
commencing September 1, 1999.
Regular Record Dates: the close of business on the fifteenth day
immediately preceding each Interest Payment Date, commencing September 15, 1999.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated: ________, 1999
CARRIAGE SERVICES, INC.
By:_______________________________
Name:
Title:
____________
(1)Applicable to Global Securities only.
(2)Applicable to certificated Securities only.
80
[Seal]
Attest:
______________________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
indenture.
Dated:June __, 1999
WILMINGTON TRUST COMPANY
as Trustee
By:________________________________
Authorized Signatory
81
[FORM OF REVERSE OF SECURITY]
CARRIAGE SERVICES, INC.
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE DUE 2029(3)
1. INTEREST. Carriage Services, Inc., a Delaware corporation (the
"Company"), is the issuer of this Convertible Junior Subordinated Debenture Due
2029 (the "Security") limited in aggregate principal amount to $96,649,600,
issued under the Indenture hereinafter referred to. The Company promises to pay
interest on the Securities in cash from June 3, 1999 or from the most recent
interest payment date to which interest has been paid or duly provided for,
quarterly (subject to deferral for up to 20 consecutive quarters as described in
Section 3 hereof) in arrears on March 1, June 1, September 1, and December 1 of
each year (each such date, an "Interest Payment Date"), commencing September 1,
1999, at the Applicable Rate, plus Additional Sums, if any, until the principal
hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the
basis of twelve 30-day months and a 360-day year. To the extent lawful, the
Company shall pay interest on overdue installments of interest (without regard
to any applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Sums as set forth in this Security.
2. ADDITIONAL SUMS. The Company shall pay to Carriage Services Capital
Trust (and its permitted successors or assigns under the Declaration) (the
"Trust") such additional amounts as may be necessary in order that the amount of
dividends or other distributions then due and payable by the Trust on the
Preferred Securities that at any time remain outstanding in accordance with the
terms thereof shall not be reduced as a result of any additional taxes, duties
and other governmental charges of whatever nature (other than withholding taxes)
imposed by the United States or any other taxing authority.
3. EXTENSION OF INTEREST PAYMENT PERIOD. So long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
during the term of this Security, from time to time to defer payments of
interest by extending the interest payment period of such Security for up to 20
consecutive quarters (a "Deferral Period"); provided that no Deferral Period may
extend beyond June 1, 2029. To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to Section 3.13 of the Indenture, will bear interest
thereon at the Applicable Rate compounded quarterly for each quarter of the
Deferral Period ("Compounded Interest"). On the applicable Payment Resumption
Date, the Company shall pay all interest then accrued and unpaid on the
Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose
_________________
(3)All terms used in this Security which are defined in the
Indenture or in the Declaration referred to herein shall have the meanings
assigned to them in the Indenture or the Declaration, as the case may be.
82
names the Securities are registered in the Security Register on the record date
fixed for such Payment Resumption Date. Before the termination of any Deferral
Period, the Company may further extend such period as provided in the Indenture,
provided that such period together with all such further extensions thereof
shall not exceed 20 consecutive quarters or extend beyond the Stated Maturity of
the Security. Upon the termination of any Deferral Period and upon the payment
of all Compounded Interest and Additional Sums (together, "Additional
Payments"), if any, then due, the Company may commence a new Deferral Period,
subject to the foregoing requirements. No interest shall be due and payable
during a Deferral Period except on the applicable Payment Resumption Date.
The Company shall give the Holder of the Security and the Trustee written
notice (a "Deferral Notice") of its selection of a Deferral Period at least ten
days prior to the record date for any distributions that would have been payable
on the Trust Securities except for the decision to begin or extend such Deferral
Period. The Company may elect to pay all interest then accrued and unpaid on the
Securities, including Compound Interest, on an Interest Payment Date prior to
its most recently established Payment Resumption Date, provided that the Company
gives the Holder of the Security and the Trustee a new Deferral Notice setting
forth the revised Payment Resumption Date at least three Business Days prior to
the Regular Record Date for such revised Payment Resumption Date.
The quarter in which any Deferral Notice is given pursuant to the second
paragraph of this Section 3 shall be counted as one of the 20 quarters permitted
in the maximum Deferral Period permitted under the first paragraph of this
Section 3.
4. METHOD OF PAYMENT. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the regular record date
for such interest installment, which shall be the close of business on the
fifteenth day immediately preceding each Interest Payment Date (the "Regular
Record Date"), commencing September 15, 1999. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than ten days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture, provided that any such payment will be made in such coin or currency
of the United States of America which at the time of payment is a legal tender
for payment of public and private debts.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in New York, New
York, in coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and
83
private debts; provided, however, that at any time that the Property Trustee is
not the sole holder of the Securities, payment of interest may, at the option of
the Company, be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by wire
transfer.
5. PAYING AGENT AND SECURITY REGISTRAR. The Trustee will act as Paying
Agent, Security Registrar and Conversion Agent. The Company may change any
Paying Agent, Security Registrar, co-registrar or Conversion Agent without prior
notice. The Company or any of its Affiliates may act in any such capacity.
6. INDENTURE. The Company issued the Securities under an indenture, dated
as of June 3, 1999 (the "Indenture"), between the Company and Wilmington Trust
Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) ("Trust Indenture Act") as in effect on the date of the Indenture.
The Securities are subject to, and qualified by, all such terms, certain of
which are summarized herein, and holders are referred to the Indenture and the
Trust Indenture Act for a statement of such terms. The Securities are unsecured
general obligations of the Company limited to up to $96,649,600 and subordinated
in right of payment to all existing and future Senior Debt of the Company. No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
7. OPTIONAL REDEMPTION. The Securities are redeemable at the Company's
option (an "Optional Redemption") in whole or in part, at any time or from time
to time, on or after June 5, 2002, at a Redemption Price equal to $51.75 per $50
principal amount of the Securities to be redeemed plus any accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed on or before June 1, 2003, and at the prices per $50 principal amount
of Securities set forth in the table below, plus any accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed during the 12-month period ending on June 1:
PRICE PER $50
YEAR PRINCIPAL AMOUNT
------------------ -----------------
2004.............. $ 51.17
2005.............. $ 50.58
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.
84
8. OPTIONAL REDEMPTION UPON TAX EVENT. Subject to the conditions set forth
in the Indenture, the Securities are subject to redemption in whole, but not in
part, if a Tax Event shall occur and be continuing, at any time within 90 days
following the occurrence of such Tax Event, at a Redemption Price equal to $50
per $50 principal amount thereof, plus accrued but unpaid interest, including
Additional Payments, if any, to the Redemption Date.
In lieu of the foregoing, the Company also shall have the option of
causing the Securities to remain outstanding and pay Additional Sums on the
Securities.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first-class mail, postage prepaid, at least 30 days (or 20 days, in the case of
a redemption upon the occurrence of a Tax Event), but not more than 60 days
before the Redemption Date to each Holder of the Securities to be redeemed at
such Holder's address appearing in the Security Register.
10. NO SINKING FUND. There are no sinking fund payments with respect to
the Securities.
11. PAYMENT TO REGISTERED HOLDERS; CESSATION OF INTEREST ACCRUAL UPON
REDEMPTION. If this Security is redeemed subsequent to a Regular 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 to the person
in whose name this Security is registered at the close of business on such
record date. On or after the Redemption Date, interest will cease to accrue on
the Securities, or portion thereof, called for redemption.
12. SUBORDINATION. The payment of the principal of, interest on or any
other amounts due on the Securities is subordinated in right of payment to all
existing and future Senior Debt (as defined below) of the Company, as described
in the Indenture. Each Holder, by accepting a Security, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
"Senior Debt" means (i) the principal of, and premium and interest, if
any, on all indebtedness of the Company for money borrowed, whether outstanding
on the date of execution of the Indenture or thereafter created, assumed or
incurred, (ii) all obligations to make payment pursuant to the terms of
financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebted ness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the
85
Company which, when incurred and without respect to any election under Section
1111(b) of the United States Bankruptcy Code of 1978, was without recourse to
the Company, (b) trade accounts payable and accrued liabilities arising in the
ordinary course of business, (c) any Debt of the Company to any of its
subsidiaries, (d) Debt to any employee of the Company, and (e) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the Holders of the Securities as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been as a result of any obligation of such holders of such
Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.
13. CONVERSION. The Holder of any Security has the right, exercisable at
any time prior to 5:00 p.m., New York City time, on June 1, 2029, to convert the
principal amount thereof (or any portion thereof that is an integral multiple of
$50) into shares of Common Stock at the initial conversation rate of 2.4465
shares of Class A Common Stock for each $50 in aggregate principal amount of
Securities (equivalent to a conversion price of $20.4375 per share of Class A
Common Stock of the Company). The conversion ratio and equivalent conversion
price in effect at any time are known as the "Applicable Conversion Price" and
the "Applicable Conversion Ratio," respectively, and are subject to adjustment
under certain circumstances. If a Security is called for redemption, the
conversion right will terminate at the close of business on the Business Day
immediately preceding the corresponding Redemption Date, unless the Company
defaults in making the payment due upon redemption.
To convert a Security, a Holder must (1) complete and sign a conversion
notice substantially in the form attached hereto, (2) surrender the Security to
a Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Security Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. Upon conversion, no adjustment or payment
will be made for interest or dividends, but if any Holder surrenders a Security
for conversion after the close of business on the Regular Record Date for the
payment of an installment of interest and prior to the opening of business on
the next Interest Payment Date, then, notwithstanding such conversion, the
interest payable on such Interest Payment Date will be paid to the registered
Holder of such Security on such Regular Record Date. In such event, such
Security, when surrendered for conversion, need not be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the Applicable Conversion Price in effect on the Conversion Date.
No fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Class A Common Stock.
14. REGISTRATION RIGHTS. The holders of the Preferred Securities, the
Securities, the Guarantee Agreement and the shares of Common Stock of the
Company issuable upon conversion of the Securities (collectively, the
"Registrable Securities") are entitled to the benefits of a
86
Registration Rights Agreement, dated as of June 3, 1999, among the Company, the
Trust and the Initial Purchaser (the "Registration Rights Agreement"). Pursuant
to the Registration Rights Agreement the Company and the Trust have agreed for
the benefit of the holders of the Registrable Securities that (i) they will, at
the Company's sole expense, prior to August 3, 1999, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (ii) they will use their best efforts
to cause such Shelf Registration Statement to be declared effective under the
Securities Act prior to November 1, 1999, and (iii) they will use their best
efforts to maintain such Shelf Registration Statement continuously effective
under the Securities Act (subject to certain exceptions under the Registration
Rights Agreement) until the second anniversary of the effectiveness of the Shelf
Registration Statement or such other period as shall be required under Rule
144(k) thereunder or any successor rule or regulation thereto or such earlier
date as is provided in the Registration Rights Agreement. If the Company fails
to comply with either of clauses (ii) or (iii) above, subject to certain
exceptions provided in the Registration Rights Agreement, (a "Registration
Default") then, at such time, the Applicable Rate will increase by 50 basis
points (.50%). Such increase will remain in effect from and including the date
on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured, on which date the interest rate
on the Securities will revert to the interest rate originally borne by the
Securities.
15. REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company in
New York, New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Prior to due presentment of this
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
16. PERSONS DEEMED OWNERS. Except as provided in Section 3 hereof, the
registered Holder of a Security may be treated as its owner for all purposes.
87
17. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
18. EVENTS OF DEFAULT AND REMEDIES. The Securities shall have the Events
of Default as set forth in Section 5.01 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the holders of at least 25% in aggregate
principal amount of the Outstanding Securities by notice to the Company and the
Trustee may declare all amounts payable on the Securities (including any
Additional Payments) to be due and payable immediately; provided that, if the
Property Trustee is the sole Holder of the Security and if upon an Event of
Default, the Trustee or the holder of not less than 25% in aggregate principal
amount of the then outstanding Securities fail to declare the principal of all
the Securities to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee; and upon any
such declaration such principal and all accrued interest shall become
immediately due and payable; and provided further that the payment of principal
and interest on such Securities shall remain subordinated to the extent provided
in the Indenture.
In the case of an Event of Default, the holders of a majority in principal
amount of the Outstanding Securities by written notice to the Trustee may
rescind an 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 or interest that has become
due solely because of the acceleration.
Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. Subject to certain limitations, holders of a majority in
principal amount of the then outstanding Securities issued under the Indenture
may direct the Trustee in its exercise of any trust or power. The Company must
furnish annually compliance certificates to the Trustee. The above description
of Events of Default and remedies is qualified by reference to, and subject in
its entirety by, the more complete description thereof contained in the
Indenture.
19. AMENDMENTS, SUPPLEMENTS AND WAIVERS. The Indenture permits, subject to
the rights of the holders of Preferred Securities set forth therein and in the
Declaration and with certain other exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company, and
the rights of the Holders of the Securities under the Indenture, at any time, by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, subject to the
rights of the holders of the Preferred Securities set forth therein and in the
Declaration, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture
88
and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security. The above
description of amendments, supplements and waivers is qualified by reference to,
and subject in its entirety, by the more complete description thereof contained
in the Indenture.
20. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity may become the owner or pledgee of the Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not a Trustee, subject to certain limitations provided for
in the Indenture and in the Trust Indenture Act. Any Agent may do the same with
like rights.
21. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
22. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
23. AUTHENTICATION. The Securities shall not be valid until authenticated
by the manual signature of an authorized officer of the Trustee or an
authenticating agent.
24. 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 right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
25. The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
Carriage Services, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
89
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date:
Your Signature:_________________________________________________________________
(Sign exactly as your name appears on the face of this Note)
SIGNATURE GUARANTEE(4)
________________________________________________________________________________
_______________
(4)(Signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
90
[Include the following if the Security bears a Restricted Securities
Legend
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) |_| exchanged for the undersigned's own account
without transfer; or
(2) |_| transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(3) |_| transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933; or
(4) |_| transferred pursuant to another available
exemption from the registration requirements of
the Securities Act of 1933.
(5) |_| transferred pursuant to an effective registration
statement under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
___________________________________
Signature
91
SIGNATURE GUARANTEE:(5)
___________________________________
Signature
Signature must be guaranteed Signature
_______________
(5)(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
92
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.]
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:_________________________
_______________________________________
NOTICE: [To be executed by an executive
officer]
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be $_______.
The following increases or decreases in the principal amount of this Global
Security have
been made:
AMOUNT OF
DECREASE IN
PRINCIPAL AMOUNT SIGNATURE OF
OF THIS GLOBAL AMOUNT OF PRINCIPAL AMOUNT AUTHORIZED
SECURITY INCLUDING INCREASE IN OF THIS GLOBAL SIGNATORY OF
INCREASE UPON PRINCIPAL AMOUNT SECURITY FOLLOWING TRUSTEE OR
EXERCISE OF OVER- OF THIS GLOBAL SUCH DECREASE (OR SECURITIES
DATE MADE ALLOTMENT OPTION SECURITY INCREASE) CUSTODIAN
--------- ------------------ ---------------- ------------------- ------------
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ELECTION TO CONVERT
To: Carriage Services, Inc.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Class A
Common Stock of CARRIAGE SERVICES, INC. in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Indenture and the Security, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Class A Common Stock issuable
upon conversion of the
Securities.
Date:
in whole __
Portions of Security to be converted ($50 or integral multiples thereof):
$_______________________
____________________________________ Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number ___________________________________________
________________________________________________________________________________
Signature Guarantee:(6)
_______________________________
___________________
(6)(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
95