EXHIBIT T3C
ALDERWOODS GROUP, INC., as Issuer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
INDENTURE
Dated as of January 2, 2002
$24,679,000
12 1/4% Convertible Subordinated Notes due 2012
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................................................1
SECTION 1.01 DEFINITIONS.......................................................................1
SECTION 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT................................16
SECTION 1.03 RULES OF CONSTRUCTION............................................................16
ARTICLE 2 THE SUBORDINATED NOTES................................................................................16
SECTION 2.01 ISSUANCE OF SUBORDINATED NOTES...................................................16
SECTION 2.02 RESTRICTIVE LEGEND...............................................................17
SECTION 2.03 EXECUTION AND AUTHENTICATION.....................................................18
SECTION 2.04 REGISTRAR AND PAYING AGENT.......................................................18
SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST..............................................19
SECTION 2.06 HOLDER LISTS.....................................................................19
SECTION 2.07 TRANSFER AND EXCHANGE............................................................19
SECTION 2.08 REPLACEMENT NOTES................................................................20
SECTION 2.09 BOOK-ENTRY PROVISIONS FOR GLOBAL NOTE............................................20
SECTION 2.10 OUTSTANDING SUBORDINATED NOTES...................................................21
SECTION 2.11 TREASURY NOTES...................................................................21
SECTION 2.12 TEMPORARY NOTES..................................................................21
SECTION 2.13 CANCELLATION.....................................................................21
SECTION 2.14 DEFAULTED INTEREST...............................................................21
SECTION 2.15 CUSIP NUMBER.....................................................................22
SECTION 2.16 DEPOSIT OF MONEYS................................................................22
SECTION 2.17 ISSUANCE OF NOTES IN EXCESS OF $24,679,000 PURSUANT TO PLAN OF
REORGANIZATION...................................................................22
ARTICLE 3 REDEMPTION OF SUBORDINATED NOTES......................................................................22
SECTION 3.01 OPTIONAL REDEMPTION..............................................................22
SECTION 3.02 [INTENTIONALLY OMITTED]..........................................................22
SECTION 3.03 SELECTION OF SUBORDINATED NOTES TO BE REDEEMED...................................22
SECTION 3.04 NOTICE OF REDEMPTION.............................................................23
SECTION 3.05 EFFECT OF NOTICE OF REDEMPTION...................................................24
SECTION 3.06 DEPOSIT OF REDEMPTION PRICE......................................................24
SECTION 3.07 SUBORDINATED NOTES REDEEMED OR PURCHASED IN PART.................................24
SECTION 3.08 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION....................................24
ARTICLE 4 COVENANTS.............................................................................................25
SECTION 4.01 PAYMENT OF SUBORDINATED NOTES....................................................25
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY..................................................25
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SECTION 4.03 CORPORATE EXISTENCE..............................................................25
SECTION 4.04 PAYMENT OF TAXES AND OTHER CLAIMS................................................26
SECTION 4.05 MAINTENANCE OF PROPERTIES; INSURANCE; BOOKS AND RECORDS; COMPLIANCE WITH
LAW..............................................................................26
SECTION 4.06 COMPLIANCE CERTIFICATES..........................................................26
SECTION 4.07 LIMITATION ON INDEBTEDNESS.......................................................27
SECTION 4.08 LIMITATION ON RESTRICTED PAYMENTS................................................27
SECTION 4.09 LIMITATION ON ISSUANCES AND SALE OF STOCK BY RESTRICTED SUBSIDIARIES.............29
SECTION 4.10 LIMITATION ON LIENS..............................................................29
SECTION 4.11 CHANGE OF CONTROL................................................................30
SECTION 4.12 DISPOSITION OF PROCEEDS OF ASSET SALES...........................................32
SECTION 4.13 LIMITATION ON TRANSACTIONS WITH INTERESTED PERSONS...............................33
SECTION 4.14 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.....................................................................34
SECTION 4.15 FUTURE GUARANTORS................................................................35
SECTION 4.16 [INTENTIONALLY OMITTED]..........................................................35
SECTION 4.17 COMMISSION REPORTS...............................................................35
SECTION 4.18 RULE 144A INFORMATION REQUIREMENT................................................35
SECTION 4.19 WAIVER OF STAY, EXTENSION OR USURY LAWS..........................................35
ARTICLE 5 SUCCESSOR CORPORATION.................................................................................35
SECTION 5.01 WHEN ALDERWOODS MAY MERGE, ETC...................................................35
SECTION 5.02 SUCCESSOR SUBSTITUTED............................................................37
ARTICLE 6 REMEDIES..............................................................................................37
SECTION 6.01 EVENTS OF DEFAULT................................................................37
SECTION 6.02 ACCELERATION.....................................................................38
SECTION 6.03 OTHER REMEDIES...................................................................39
SECTION 6.04 WAIVER OF PAST DEFAULTS..........................................................39
SECTION 6.05 CONTROL BY MAJORITY..............................................................39
SECTION 6.06 LIMITATION ON SUITS..............................................................39
SECTION 6.07 RIGHT OF HOLDERS TO RECEIVE PAYMENT AND CONVERT SUBORDINATED NOTES...............40
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.......................................................40
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIMS................................................40
SECTION 6.10 PRIORITIES.......................................................................41
SECTION 6.11 UNDERTAKING FOR COSTS............................................................41
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES...............................................41
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ARTICLE 7 TRUSTEE...............................................................................................41
SECTION 7.01 DUTIES...........................................................................41
SECTION 7.02 RIGHTS OF TRUSTEE................................................................42
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.....................................................43
SECTION 7.04 TRUSTEE'S DISCLAIMER.............................................................43
SECTION 7.05 NOTICE OF DEFAULT................................................................43
SECTION 7.06 MONEY HELD IN TRUST..............................................................43
SECTION 7.07 REPORTS BY TRUSTEE TO HOLDERS....................................................43
SECTION 7.08 COMPENSATION AND INDEMNITY.......................................................44
SECTION 7.09 REPLACEMENT OF TRUSTEE...........................................................44
SECTION 7.10 SUCCESSOR TRUSTEE BY MERGER, ETC.................................................45
SECTION 7.11 ELIGIBILITY; DISQUALIFICATION....................................................45
SECTION 7.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ALDERWOODS.............................45
ARTICLE 8 SATISFACTION AND DISCHARGE OF
INDENTURE...............................................................45
SECTION 8.01 TERMINATION OF THE OBLIGATION OF ALDERWOODS......................................45
SECTION 8.02 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................................46
SECTION 8.03 APPLICATION OF TRUST MONEY.......................................................49
SECTION 8.04 REPAYMENT TO ALDERWOODS..........................................................49
SECTION 8.05 REINSTATEMENT....................................................................49
ARTICLE 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS...................................................................49
SECTION 9.01 WITHOUT CONSENT OF HOLDERS.......................................................49
SECTION 9.02 WITH CONSENT OF HOLDERS..........................................................50
SECTION 9.03 COMPLIANCE WITH TRUST
INDENTURE ACT..............................................51
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS................................................51
SECTION 9.05 NOTATION ON OR EXCHANGE OF SUBORDINATED NOTES....................................51
SECTION 9.06 TRUSTEE MAY SIGN AMENDMENTS, ETC.................................................51
SECTION 9.07 EFFECT OF AMENDMENT TO OR WAIVER UNDER SEVEN-YEAR
INDENTURE......................51
ARTICLE 10 [INTENTIONALLY OMITTED]..............................................................................52
ARTICLE 11 MISCELLANEOUS........................................................................................52
SECTION 11.01 TRUST
INDENTURE ACT OF 1939......................................................52
SECTION 11.02 NOTICES..........................................................................52
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS......................................53
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT...............................53
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION....................................53
SECTION 11.06 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR........................................54
SECTION 11.07 GOVERNING LAW....................................................................54
SECTION 11.08 CONSENT TO SERVICE OF PROCESS....................................................54
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SECTION 11.09 NO INTERPRETATION OF OTHER AGREEMENTS............................................54
SECTION 11.10 NO RECOURSE AGAINST OTHERS.......................................................54
SECTION 11.11 SUCCESSORS.......................................................................54
SECTION 11.12 DUPLICATE ORIGINALS..............................................................54
SECTION 11.13 SEPARABILITY.....................................................................55
SECTION 11.14 TABLE OF CONTENTS, HEADINGS, ETC.................................................55
SECTION 11.15 BENEFITS OF
INDENTURE............................................................55
ARTICLE 12 SUBSIDIARY GUARANTEES................................................................................55
SECTION 12.01 GUARANTEES.......................................................................55
SECTION 12.02 LIMITATION ON LIABILITY..........................................................56
SECTION 12.03 SUCCESSORS AND ASSIGNS...........................................................56
SECTION 12.04 NO WAIVER........................................................................56
SECTION 12.05 MODIFICATION.....................................................................57
SECTION 12.06 RELEASE OF SUBSIDIARY GUARANTORS.................................................57
ARTICLE 13 SUBORDINATION OF THE SUBORDINATED NOTES..............................................................57
SECTION 13.01 SUBORDINATED NOTES SUBORDINATE TO SENIOR INDEBTEDNESS............................57
SECTION 13.02 PAYMENT OVER OF PROCEEDS UPON INSOLVENCY, ETC....................................57
SECTION 13.03 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT...................................58
SECTION 13.04 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS..........................58
SECTION 13.05 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS......................................59
SECTION 13.06 TRUSTEE TO EFFECTUATE SUBORDINATION..............................................59
SECTION 13.07 NO WAIVER OF SUBORDINATION PROVISIONS............................................59
SECTION 13.08 NOTICE TO TRUSTEE................................................................60
SECTION 13.09 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT...................61
SECTION 13.10 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.........................61
SECTION 13.11 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.................................................61
SECTION 13.12 ARTICLE APPLICABLE TO PAYING AGENTS..............................................61
SECTION 13.13 AUTHORIZATION TO FILE CLAIMS: REINSTATEMENT OF SUBORDINATION.....................61
SECTION 13.14 NO SUSPENSION OF REMEDIES........................................................62
SECTION 13.15 MISCELLANEOUS....................................................................62
SECTION 13.16 CERTAIN CONVERSIONS NOT DEEMED PAYMENT...........................................63
ARTICLE 14 CONVERSION OF NOTES..................................................................................64
SECTION 14.01 RIGHT TO CONVERT.................................................................64
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SECTION 14.02 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF ALDERWOODS COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS..............................64
SECTION 14.03 CASH PAYMENTS OR ROUNDING UP IN LIEU OF FRACTIONAL SHARES........................65
SECTION 14.04 CONVERSION PRICE.................................................................65
SECTION 14.05 ADJUSTMENT OF CONVERSION PRICE...................................................65
SECTION 14.06 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE........................69
SECTION 14.07 TAXES ON SHARES ISSUED...........................................................70
SECTION 14.08 RESERVATION OF SHARES; LISTING OF ALDERWOODS COMMON STOCK........................70
SECTION 14.09 RESPONSIBILITY OF TRUSTEE........................................................70
SECTION 14.10 NOTICES TO HOLDERS...............................................................71
SCHEDULE 1.01 SUBSIDIARY GUARANTORS
SCHEDULE 4.12 NON-CASH DISPOSABLE ASSETS
EXHIBIT A FORM OF GLOBAL NOTE
EXHIBIT B FORM OF PHYSICAL NOTE
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INDENTURE, dated as of January 2, 2002, among Alderwoods Group, Inc., a
Delaware corporation f/k/a Xxxxxx Group International, Inc. ("ALDERWOODS"), the
Subsidiary Guarantors (as defined herein) who are or may hereafter become
parties to this
Indenture, and Xxxxx Fargo Bank Minnesota, National Association,
a national banking association, as trustee (the "TRUSTEE").
WHEREAS, Alderwoods entered into that certain Settlement Agreement and
Mutual Release (the "SETTLEMENT AGREEMENT"), dated April 12, 2001, by and among
Blackstone Capital Partners II Merchant Banking Fund L.P., a Delaware limited
partnership, Xxxxxxxxxx Xxxx Hills Offshore Capital Partners L.P., a Delaware
limited partnership, Blackstone Family Investment Partnership II, L.P., a
Delaware limited partnership, RHI Management Direct L.P., a Delaware limited
partnership, Roses Delaware, Inc., a Delaware corporation, Alderwoods and The
Xxxxxx Group International Inc., a British Columbia corporation;
WHEREAS, the Plan of Reorganization (as defined below) authorizes
Alderwoods and certain other entities to take any and all actions necessary or
appropriate to consummate the settlement contemplated by the Settlement
Agreement; and
WHEREAS, the Settlement Agreement and Plan of Reorganization provide
that Alderwoods will issue to certain entities named in the Settlement Agreement
its 12 1/4% Convertible Subordinated Notes due 2012 (the "SUBORDINATED NOTES");
NOW, THEREFORE, each party hereto agrees as follows for the benefit of
each other party and, except as otherwise provided herein, for the equal and
ratable benefit of the Holders of Subordinated Notes:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (a) assumed or
created by Alderwoods or any Restricted Subsidiary in connection with an Asset
Acquisition from such Person or (b) existing at the time such Person becomes a
Restricted Subsidiary of any other Person.
"AFFILIATE" means, with respect to any specified Person, any other
Person directly or indirectly Controlling or Controlled by or under direct or
indirect common Control with such specified Person.
"AGENT BANK" means the administrative agent under the Exit Facility and
any successor to the administrative agent in such capacity.
"ALDERWOODS COMMON STOCK" means, for purposes of Article 14, (i) the
class of shares designated as the common stock of Alderwoods as of the date of
this
Indenture, (ii) all shares of any class or classes (however designated) of
Alderwoods, now or hereafter authorized, the holders of which have the right,
without limitation as to amount, either to all or to a part of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which are
ordinarily entitled to vote generally in the election of directors of
Alderwoods, or (iii) any other class of shares resulting from successive changes
or reclassifications of such shares consisting solely of changes in par value,
or from par value to no par value, or from no par value to par value.
"ASSET ACQUISITION" means (a) an Investment by Alderwoods or any
Restricted Subsidiary in any other Person pursuant to which such Person becomes
a Restricted Subsidiary, or is merged with or into Alderwoods or any Restricted
Subsidiary, (b) the acquisition by Alderwoods or any Restricted Subsidiary of
the assets of any Person (other than a Restricted Subsidiary) which constitute
all or substantially all of the assets of such Person, or (c) the acquisition by
Alderwoods or any Restricted Subsidiary of any division or line of business of
any Person (other than a Restricted Subsidiary); PROVIDED, HOWEVER, that no
Restructuring Transaction shall be deemed to constitute an "ASSET ACQUISITION".
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease or other disposition to any Person other than Alderwoods or a
Subsidiary Guarantor, or from one Restricted Subsidiary that is not a Subsidiary
Guarantor to another such Restricted Subsidiary, in one or a series of related
transactions, of (a) any Capital Stock of any Restricted Subsidiary (other than
in respect of directors' qualifying shares or investments by foreign nationals
mandated by applicable law), (b) all or substantially all of the properties and
assets of any division or line of business of Alderwoods or any Restricted
Subsidiary, or (c) any other properties or assets of Alderwoods or any
Restricted Subsidiary other than properties and assets sold in the ordinary
course of business; PROVIDED, HOWEVER, that no Restructuring Transaction shall
be deemed to constitute an "ASSET SALE." Furthermore, for the purposes of this
definition, the term "ASSET SALE" shall not include any sales, transfers or
other dispositions of equipment, tools or other assets (including Capital Stock
of any Restricted Subsidiary), in one transaction or a series of transactions,
by Alderwoods or any of its Restricted Subsidiaries not otherwise excluded from
the definition of "ASSET SALE" in respect of which Alderwoods and its Restricted
Subsidiaries receive cash or property with a Fair Market Value of $100,000 or
less.
"BANKRUPTCY LAW" means Title 11 of the United States Code, as amended,
or any similar United States federal or state law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization or relief of
debtors or any amendment to, succession to or change in any such law.
"BOARD OF DIRECTORS" means, except where otherwise clearly indicated,
the board of directors of Alderwoods or any duly authorized committee of such
board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of Alderwoods to have been duly adopted by
the Board of Directors of Alderwoods and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of
New York,
State of
New York or the city in which the Corporate Trust Office is located,
are authorized or obligated by law, regulation or executive order to close.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person, and any rights, warrants or options exchangeable or exercisable
for or convertible into such capital.
"CAPITALIZED LEASE OBLIGATION" means any obligation under a lease of
(or other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and the amount of any such obligation at
any date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"CASH EQUIVALENTS" means, at any time, (a) any evidence of Indebtedness
with a maturity of 270 days or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States of America is
pledged in support thereof); (b) certificates of deposit or acceptances with a
maturity of 270 days or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000 and rated B or better by Xxxxxxxx'x
Bankwatch (or an equivalent rating by a comparable rating agency); (c)
certificates of deposit with a maturity of 270 days or less of any financial
institution that is not organized under the laws of the United States, any state
thereof or the District of Columbia that are rated at least A-1 by S&P or at
least P-1 by Xxxxx'x or at least an equivalent rating category of another
nationally recognized securities rating agency; and (d) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the government of the United States of
America or issued by any agency thereof and backed by the full faith and credit
of the United States of America, in each case maturing within 270 days from the
date of acquisition; PROVIDED that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985, or any amendment or succession to such
guidelines.
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"CHANGE OF CONTROL" means the occurrence on or after the Measurement
Date of any of the following events: (a) any "PERSON" or "GROUP" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), excluding Permitted
Holders, is or becomes the "BENEFICIAL OWNER" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to have
"BENEFICIAL OWNERSHIP" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time, upon the happening of an event or otherwise), directly or indirectly,
of more than 35% of the total Voting Stock of Alderwoods, under circumstances
where the Permitted Holders (i) "BENEFICIALLY OWN" (as so defined) a lower
percentage of the Voting Stock than such other "PERSON" or "GROUP" and (ii) do
not have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of Alderwoods; (b)
Alderwoods consolidates with, or merges with or into, another Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to another Person, or another Person
consolidates with, or merges with or into, Alderwoods, in any such event
pursuant to a transaction in which the outstanding Voting Stock of Alderwoods is
converted into or exchanged for cash, securities or other property, other than
any such transaction where (i) the outstanding Voting Stock of Alderwoods is
converted into or exchanged for (1) Voting Stock (other than Redeemable Capital
Stock) of the surviving or transferee corporation or (2) cash, securities and
other property in an amount that could then be paid by Alderwoods as a
Restricted Payment under the provisions hereof, and (ii) immediately after such
transaction no "PERSON" or "GROUP" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is the "BENEFICIAL
OWNER" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have "BENEFICIAL OWNERSHIP" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening of an event or
otherwise), directly or indirectly, of more than 50% of the total Voting Stock
of the surviving or transferee corporation; (c) at any time during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of Alderwoods (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders or stockholders of Alderwoods was approved by a
vote of 66-2/3% of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason (including the failure of such
individuals to be elected in a proxy contest involving a solicitation of
proxies) to constitute a majority of the Board of Directors of Alderwoods then
in office; or (d) Alderwoods is liquidated or dissolved or Alderwoods or its
stockholders adopts a plan of liquidation regarding Alderwoods. Notwithstanding
the foregoing, no Change of Control shall be deemed to result from any
Restructuring Transaction.
"CHANGE OF CONTROL OFFER" has the meaning set forth in Section 4.11.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, or if at any time after the execution of this Indenture
such Commission is not existing and performing the applicable duties now
assigned to it, then the body or bodies performing such duties at such time.
"COMMON STOCK" means, with respect to any Person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such Person's common equity, whether
outstanding at the Measurement Date or issued after the Measurement Date, and
includes, without limitation, all series and classes of such common equity.
"CONSOLIDATED EBITDA" means, with respect to any Person for any period,
the sum of Consolidated Net Income, plus the following to the extent deducted or
not included in calculating such Consolidated Net Income:
(a) all income tax expense;
(b) Consolidated Net Interest Expense;
(c) depreciation and amortization expense (excluding
amortization expense attributable to a prepaid operating activity item that was
paid in cash on a prior period); and
(d) all other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenditures in any future period); in each case for such period.
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"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of the aggregate amount of Consolidated EBITDA of such Person
for the most recent four full fiscal quarters preceding the date of the
transaction for which financial statements are available (the "TRANSACTION
DATE") giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio (such four full fiscal quarter period being referred to herein as
the "PRIOR QUARTERS") to the aggregate amount of Consolidated Fixed Net Charges
of such Person for the Prior Quarters. In addition to and without limitation of
the foregoing, for purposes of this definition, "CONSOLIDATED EBITDA" and
"CONSOLIDATED FIXED NET CHARGES" shall be calculated after giving effect on a
pro forma basis for the period of such calculation to, without duplication, (a)
the incurrence of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the net proceeds thereof) during the period
commencing on the first day of the Prior Quarters to and including the
Transaction Date (the "REFERENCE PERIOD"), including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation
(and the application of the net proceeds thereof), as if such incurrence (and
application) occurred on the first day of the Reference Period, and (b) any
Material Asset Sales or Material Asset Acquisitions (including, without
limitation, any Material Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Material Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as if such
Material Asset Sale or Material Asset Acquisition occurred on the first day of
the Reference Period. Furthermore, in calculating "CONSOLIDATED FIXED NET
CHARGES" for purposes of determining the denominator (but not the numerator) of
this "CONSOLIDATED FIXED CHARGE COVERAGE RATIO," (i) interest on outstanding
Indebtedness determined on a fluctuating basis as at the Transaction Date and
that will continue to be so determined thereafter shall be deemed to have
accrued at a fixed or floating rate per annum equal to the rate of interest on
such Indebtedness in effect on the Transaction Date; and (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime, LIBOR, or similar
rate, a eurocurrency interbank offered rate, or other rates, then the interest
rate in effect on the Transaction Date will be deemed to have been in effect
during the Reference Period. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the above clause shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or such Restricted Subsidiary had directly
incurred or otherwise assumed such guaranteed Indebtedness. For purposes of this
calculation, a "MATERIAL ASSET ACQUISITION" is an Asset Acquisition that has a
purchase price of $5,000,000 or more and a "MATERIAL ASSET SALE" is an Asset
Sale that has a sale price of $5,000,000 or more.
"CONSOLIDATED FIXED NET CHARGES" means, with respect to any Person for
any period, the sum of, without duplication, (a) Consolidated Net Interest
Expense for such period, (b) scheduled mandatory principal payments of
Indebtedness other than up to $35,000,000 of scheduled principal repayments of
the Two-Year Notes, (c) the principal component of Capitalized Lease Obligations
paid by such Person during such period, (d) cash dividends on Capital Stock paid
by such Person during such period (excluding dividends paid to Alderwoods or any
Restricted Subsidiary), all as determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED NET INTEREST EXPENSE" means, with respect to any Person
for any period, without duplication, the sum of (a) the interest expense of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without limitation, (i)
any amortization of debt discount, (ii) the net cost under Interest Rate
Protection Obligations, (iii) the interest portion of any deferred payment
obligation, and (iv) all accrued interest and (b) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP less (c) interest
income of such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the consolidated net income (or loss) of such Person and its Restricted
Subsidiaries for such period, including Alderwoods and its Restricted
Subsidiaries, adjusted, to the extent included in calculating such net income,
by excluding, without duplication, (a) all extraordinary gains or losses, (b)
the portion of net income (but not losses) of such Person and its Restricted
Subsidiaries allocable to minority interests in unconsolidated Persons to the
extent that cash dividends or distributions have not actually been received by
such Person or one of its Restricted Subsidiaries, (c) any gain or
4
loss realized upon the termination of any employee pension benefit plan, on an
after-tax basis, (d) gains or losses in respect of any Asset Sales by such
Person or its Restricted Subsidiaries, and (e) the net income of any Restricted
Subsidiary of such Person to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is not at the
time permitted, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders. All amounts and determinations under this definition shall be in
accordance with GAAP.
"CONSOLIDATED NET WORTH" means, with respect to any Person at any date,
the consolidated stockholders' equity (or equivalent) of such Person less the
amount of such stockholders' equity (or equivalent) attributable to Redeemable
Capital Stock of such Person and its Restricted Subsidiaries. All amounts and
determinations under this definition shall be in accordance with GAAP.
"CONSOLIDATION" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its Subsidiaries if and to the extent
the accounts of such Person and each of its Subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"CONSOLIDATED" shall have a meaning correlative to the foregoing.
"CONTROL" means, with respect to any specified Person, the power to
direct the management or policies of such Person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise. The
terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"CONVERSION AGENT" has the meaning set forth in Section 2.04.
"CONVERSION PRICE" has the meaning specified in Section 14.04.
"CORPORATE TRUST OFFICE" means the corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is located at Xxxxx Fargo
Bank Minnesota, N.A., Sixth Street and Marquette Avenue, MAC N9303-120,
Xxxxxxxxxxx, XX 00000, Attention: Corporate Trust - Alderwoods Administrator.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect
Alderwoods or any of its Restricted Subsidiaries against fluctuations in
currency values.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"DEPOSITARY" means The Depositary Trust Company, its nominees and their
respective successors.
"DESIGNATED SENIOR INDEBTEDNESS" means all Indebtedness and Obligations
of Alderwoods and any Subsidiary Guarantor heretofore, now or hereinafter
arising under or in connection with any of the Exit Facility, Two-Year Notes,
the Two-Year Indenture, Five-Year Notes, the Five-Year Indenture, Seven-Year
Notes and the Seven-Year Indenture, and any Refinancing Indebtedness incurred in
respect of any thereof.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
and the regulations promulgated thereunder."
EXCLUDED SUBSIDIARIES" means Alderwoods Life Insurance Group Inc., a
Delaware corporation, Rose Hills Holding Corp., a Delaware corporation, any
Subsidiary of either of the foregoing, any Special Finance
5
Subsidiary, Xxxxxx-Xxxxx Funeral Insurance Company, a Mississippi corporation,
Xxxxxxx Funeral Insurance Company, Inc., a Mississippi corporation, Xxxxxxx
Insurance Company, Inc., a Mississippi corporation, Xxxxxxxx Burial Association,
Inc., a Mississippi corporation, Xxxxxxxx Funeral Benefit Association, Inc., a
Mississippi corporation, Xxxxxxx Funeral Insurance Company, Inc., a Mississippi
corporation, Crown Hill Memorial Park, Inc., a Texas corporation, Xxxxxx X.
Xxxxxx Funeral Home, Inc., Xxxxxx X. Xxxxxx Funeral Home North Chapel, Inc., Xx
X. Xxxxx & Brothers Funeral Directors, Inc., a Texas corporation, Xxxxxx Funeral
Homes, Inc., a Texas corporation, Xxxxxx Funerals, Inc., a Texas corporation,
Xxxxxx Southland Funeral Home, Inc., a Texas corporation, Wensley, L.L.C., a
Michigan limited liability company, and, until they emerge from bankruptcy, the
entities listed on Exhibit I.A.93 to the Plan of Reorganization, Advanced
Planning (Alabama), Inc., an Alabama corporation, Xxxxxxxxx-Xxxxxx Mortuary,
Inc., an Oregon corporation, Hill Funeral Home, Inc., a Virginia corporation,
and Xxxxxxx Funeral Home of Church Hill, Inc., a Tennessee corporation.
"EXIT FACILITY" means the Financing Agreement, dated as of January 2,
2002, among the Exit Facility Agent, the lenders party thereto, Alderwoods and
the Subsidiary Guarantors, and the documents related thereto as such facility
and documents may be amended, restated, supplemented or otherwise modified from
time to time, and any successor or replacement facility or other Refinancing; in
whole or in part thereof.
"EXIT FACILITY AGENT" means the agent under the Exit Facility for the
Exit Facility lenders, acting as such.
"FAIR MARKET VALUE" means, with respect to any asset, the price that
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of which is under pressure
or compulsion to complete the transaction.
"FIVE-YEAR NOTES" means the securities issued under the Five-Year
Indenture, as amended, modified or supplemented from time to time, and any
Refinancing thereof in accordance with clause (i) of the definition of Permitted
Indebtedness.
"FIVE-YEAR INDENTURE" means the indenture, dated as of the date hereof,
between Alderwoods and Xxxxx Fargo Bank Minnesota, National Association
providing for the issuance of 11% senior secured notes due 2007, as such
indenture may be amended, modified, supplemented or restated in accordance with
the terms hereof, and any Refinancing thereof in accordance with clause (i) of
the definition of Permitted Indebtedness.
"GAAP" means accounting principles generally accepted in the United
States consistently applied.
"GLOBAL NOTE" has the meaning set forth in Section 2.01.
"GUARANTEE" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. The term "GUARANTEED" used
as a verb has a corresponding meaning.
"GUARANTEE AGREEMENT" means a supplemental indenture, in form
satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees
Alderwoods' obligations with respect to the Subordinated Notes on the terms
provided for in this indenture.
"HOLDER" means the Person in whose name a Subordinated Note is
registered on the Registrar's books.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (excluding
current accounts payables and other accrued current liabilities incurred in the
ordinary course of business and not past due), (c) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to
6
property acquired by such Person, (e) all Capitalized Lease Obligations of such
Person, (e) all obligations under or in respect of Currency Agreements and
Interest Rate Protection Agreements of such Person, (f) all obligations,
contingent or otherwise, of such Person as an account party under letters of
credit or banker's acceptances, (g) all Guarantees of obligations of others of
the kind referred to in clauses (a) through (f) above, and (h) all obligations
of others of the kind referred to in clauses (a) to (f) above secured by (or for
which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned by such Person, whether
or not the obligations secured thereby have been assumed by such Person.
"INDENTURE" means this Indenture, as amended, modified, supplemented or
restated from time to time, and shall include the form and terms of Subordinated
Notes established as contemplated hereby.
"INDEPENDENT FINANCIAL ADVISOR" means a firm (a) that does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in Alderwoods and (b) that, in the judgment of the
Board of Directors of Alderwoods, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Subordinated Notes, as set forth therein.
"INTEREST RATE PROTECTION AGREEMENT" means any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
a fixed rate of interest on a stated notional amount in exchange for periodic
payments made by such Person calculated by applying a fixed or a floating rate
of interest on the same notional amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and similar agreements.
"INTEREST RATE PROTECTION OBLIGATIONS" means the obligations of any
Person under any Interest Rate Protection Agreement.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit, including any advance, or capital
contribution to, or guarantee of Indebtedness of, (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition by such Person of any
Capital Stock (including securities not consisting of cash or cash equivalents
and received in connection with an asset sale or other disposition of assets
permitted hereunder), bonds, notes, debentures or other securities or evidences
of Indebtedness issued by, any other Person. "INVESTMENTS" shall exclude
extensions of trade credit by Alderwoods and its Restricted Subsidiaries in the
ordinary course of business in accordance with normal trade practices of
Alderwoods or such Restricted Subsidiary, as the case may be.
"LENDERS" means the financial institutions acting as leaders under the
Exit Facility and their successors and assigns (including, without limitation,
any Lender issuing one or more letters of credit).
"LIEN" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind. A Person shall be deemed to own subject to a Lien any property that such
Person has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement.
"MATURITY DATE" means, with respect to any Subordinated Note, the date
on which any principal of such Subordinated Note becomes due and payable as
therein or herein provided, whether at the Stated Maturity with respect to such
principal or by declaration of acceleration, call for redemption or purchase or
otherwise.
"MEASUREMENT DATE" means January 2, 2002.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and its successors and
assignees.
7
"NET CASH PROCEEDS" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to Alderwoods or any Restricted Subsidiary) net of (a) reasonable
and customary brokerage commissions and other fees and expenses (including,
without limitation, fees and expenses of legal counsel and investment bankers)
related to such Asset Sale, (b) provisions for all taxes payable as a result of
such Asset Sale, (c) amounts required to be paid to any person (other than
Alderwoods or any Restricted Subsidiary) owning a beneficial interest (including
a Lien) in the assets subject to the Asset Sale, and (d) appropriate amounts to
be provided by Alderwoods or any Restricted Subsidiary, as the case may be, as a
reserve required in accordance with GAAP against any liabilities associated with
such Asset Sale and retained by Alderwoods or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officers' Certificate delivered to the
Trustee; PROVIDED, HOWEVER, that (i) excess amounts set aside for payment of
taxes pursuant to clause (b) remaining after such taxes have been paid in full
or the statute of limitations therefore has expired and (ii) amounts initially
held in reserve pursuant to clause (d) no longer so held shall at that time
become Net Cash Proceeds.
"NON-PAYMENT DEFAULT" means (a) any "Default" or "Event of Default" (as
such terms are defined in the documents evidencing the Designated Senior
Indebtedness), other than a Payment Default; and (b) any other event of default
with respect to any Senior Indebtedness, other than a Payment Default.
"OBLIGATIONS" means all obligations for the reimbursement of amounts
drawn under any letter of credit or for the payment of principal, premium or
interest (including, without limitation, interest accruing after maturing and
interest whether or not allowed after the filing of a petition initiating any
proceeding under Bankruptcy Law at the rate specified in the instrument
governing the relevant Indebtedness), penalties, fees, expenses, indemnities or
other amounts, now or hereafter existing, with respect to any Indebtedness.
"OFFICER" means the Chairman of the Board, the Chief Executive Officer,
the Chief Operating Officer, the President, any Executive Vice President, any
Senior Vice President, any Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or the Controller of Alderwoods or any other executive
officer of Alderwoods whose office does not currently exist but is created after
the Measurement Date.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of Alderwoods
and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to Alderwoods, any Restricted Subsidiary of Alderwoods or the Trustee.
"PARI PASSU INDEBTEDNESS" means Indebtedness of Alderwoods that ranks
pari passu in right of payment with the Subordinated Notes.
"PAYING AGENT" has the meaning set forth in Section 2.04, except that,
for the purposes of Section 4.11 and Articles 3 and 8, the Paying Agent shall
not be Alderwoods or a Subsidiary of Alderwoods or any of their respective
Affiliates.
"PAYMENT BLOCKAGE PERIOD" has the meaning specified in Section 13.03.
"PAYMENT DEFAULT" means any default in the payment of any Senior
Indebtedness when due.
"PAYMENT IN FULL" means, for the purposes of Article 13, payment in
full in cash or other payment satisfactory to the holders of Senior Indebtedness
being paid.
"PERMITTED HOLDERS" means Xxxxxx Xxxxxx & Co., L.P., a Delaware limited
partnership, Cerberus Capital Management, L.P., a Delaware limited partnership,
Franklin Mutual Advisers, LLC, a Delaware limited
8
liability company, GSCP (N.J.), L.P., a New Jersey limited partnership, and
Oaktree Capital Management, LLC, a California limited liability company, each
Affiliate of any of the foregoing, and any investment fund that is managed or
advised by any of the foregoing.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
(a) Indebtedness under the Two-Year Notes, the Seven-Year
Notes, and the Subordinated Notes;
(b) Indebtedness of Alderwoods or any of its Restricted
Subsidiaries outstanding on the Measurement Date (which, with respect to Rose
Hills Holding Corp., a Delaware corporation, and its Subsidiaries, shall be
deemed to include $75,000,000 of Indebtedness under the Credit Agreement, dated
as of November 19, 1996, among Rose Hills Holding Corp., a Delaware corporation,
Rose Hills Company, a Delaware corporation, Xxxxxxx, Xxxxx & Co., The Bank of
Nova Scotia, and the lenders party thereto (including any Refinancing thereof to
which neither Alderwoods nor any Restricted Subsidiary (other than Rose Hills
Holding Corp., a Delaware corporation, or any of its Subsidiaries) is party, the
"Rose Hills Credit Agreement") and $80,000,000 of Indebtedness under senior
subordinated notes issued pursuant to the Indenture, dated as of November 15,
1996, between Rose Hills Company (f/k/a Rose Hills Acquisition Corp.), a
Delaware company, and United States Trust Company of
New York, a
New York
corporation (including any Refinancing thereof, the "Rose Hills INDENTURE"),
regardless of whether the entirety of such Indebtedness is outstanding on the
Measurement Date, which credit agreement and senior subordinated notes are not
in any way guaranteed by Alderwoods or any Restricted Subsidiary other than
Subsidiaries of Rose Hills Holding Corp., a Delaware corporation) other than
Indebtedness under the Exit Facility, the Two-Year Notes, the Five-Year Notes or
the Seven-Year Notes;
(c) Indebtedness of Alderwoods under the Exit Facility and the
Five-Year Notes in an aggregate principal amount at any one time outstanding not
to exceed $350,000,000;
(d) Interest Rate Protection Obligations of Alderwoods
covering Indebtedness of Alderwoods or any of its Restricted Subsidiaries and
Interest Rate Protection Obligations of any Restricted Subsidiary covering
Indebtedness of such Restricted Subsidiary; PROVIDED, HOWEVER, that, in the case
of any such Interest Rate Protection Obligations, (i) any Indebtedness to which
any such Interest Rate Protection Obligations relate bears interest at
fluctuating interest rates and is otherwise permitted to be incurred under
Section 4.07 and (ii) the notional principal amount of any such Interest Rate
Protection Obligations does not exceed the principal amount of the Indebtedness
to which such Interest Rate Protection Obligations relate;
(e) Indebtedness under Currency Agreements; PROVIDED, HOWEVER,
that, in the case of Currency Agreements that relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of Alderwoods and its
Restricted Subsidiaries outstanding other than as a result of fluctuations in
foreign currency exchange rates, or by reason of fees, indemnities and
compensation payable thereunder;
(f) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; PROVIDED, HOWEVER, that such Indebtedness is
extinguished within two Business Days of incurrence;
(g) Indebtedness incurred in respect of surety bonds,
performance bonds, guarantees, letters of credit, or similar obligations in lieu
thereof provided in the ordinary course of business (including any Indebtedness
resulting from compliance with federal or state laws, orders or regulations
pertaining to funeral home, cemetery or crematory industries or operations);
(h) Indebtedness of Alderwoods or any of its Restricted
Subsidiaries represented by letters of credit for the account of Alderwoods or
any of its Restricted Subsidiaries to provide security for workers' compensation
claims, payment obligations in connection with self-insurance or similar
requirements in the ordinary course of business;
9
(i) (i) Indebtedness of Alderwoods the proceeds of which are
used solely to refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of Alderwoods or any of its Restricted Subsidiaries and (ii)
Indebtedness of any Restricted Subsidiary the proceeds of which are used solely
to refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of such Restricted Subsidiary, in each case other than the
Indebtedness refinanced, redeemed or retired on the Measurement Date or
Indebtedness contemplated by clause (d), (e), (f), (g) or (h) of this covenant;
PROVIDED, HOWEVER, that (x) the principal amount of Indebtedness contemplated by
this clause (i) (or, if such Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of such
Indebtedness) shall not exceed the sum of the principal amount of Indebtedness
so refinanced, plus the amount of any premium required to be paid in connection
with such refinancing pursuant to the terms of such Indebtedness or the amount
of any premium reasonably determined by the Board of Directors of Alderwoods as
necessary to accomplish such refinancing, plus the amount of expenses in
connection therewith and (y) in the case of Indebtedness contemplated by this
clause (i) to Refinance Indebtedness subordinated in right of payment to the
Subordinated Notes, such Refinanced Indebtedness constitutes Indebtedness
subordinated in right of payment to the Subordinated Notes to at least the same
extent and has an average maturity not earlier than that of the Refinanced
Indebtedness;
(j) Indebtedness of Alderwoods or any of its Restricted
Subsidiaries represented by Capitalized Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of use, acquisition,
construction or improvement of assets used in the business of Alderwoods or such
Restricted Subsidiary, in an aggregate principal amount at any time outstanding,
including all Refinancing thereof, not to exceed $25,000,000;
(k) intercompany Indebtedness between or among Alderwoods and
any Restricted Subsidiaries;
(l) the guarantee by Alderwoods or any Restricted Subsidiary
of Indebtedness of Alderwoods or a Restricted Subsidiary contemplated by another
clause of this definition on the same basis;
(m) Indebtedness consisting of the Subsidiary Guarantee of a
Subsidiary Guarantor and any Guarantee by Alderwoods or a Subsidiary Guarantor
of Indebtedness permitted under Section 4.07;
(n) Indebtedness of Alderwoods or any of its Restricted
Subsidiaries under Canadian or United Kingdom credit facilities in an aggregate
principal amount at any one time outstanding not to exceed $20,000,000 and any
Refinancing thereof; and
(o) Indebtedness incurred pursuant to the Restructuring
Transactions.
"PERMITTED INVESTMENTS" means any of the following: (a) Investments in
Alderwoods or any Subsidiary Guarantor of Alderwoods (including any Person that
pursuant to such Investment becomes a Subsidiary Guarantor of Alderwoods) and
any Person that is merged or consolidated with or into, or transfers or conveys
all or substantially all of its assets to, Alderwoods or any Subsidiary
Guarantor of Alderwoods at the time such Investment is made; (b) Investments in
Cash Equivalents; (c) Investments in Currency Agreements on commercially
reasonable terms entered into by Alderwoods or any of its Restricted
Subsidiaries in the ordinary course of business in connection with the
operations of the business of Alderwoods or its Restricted Subsidiaries to hedge
against fluctuations in foreign exchange rates constituting Permitted
Indebtedness; (d) loans or advances to officers, employees or consultants of
Alderwoods or any of its Restricted Subsidiaries for travel and moving expenses
in the ordinary course of business for bona fide business purposes of Alderwoods
or any of its Restricted Subsidiaries; (e) other loans or advances to officers,
employees or consultants of Alderwoods or any of its Restricted Subsidiaries in
the ordinary course of business for bona fide business purposes of Alderwoods or
any of its Restricted Subsidiaries not in excess of $5,000,000 in the aggregate
at any one time outstanding; (f) Investments in evidences of Indebtedness,
securities or other property received from another Person by Alderwoods or any
of its Restricted Subsidiaries in connection with any bankruptcy proceeding or
by reason of a composition or readjustment of debt or a reorganization of such
Person or as a result of foreclosure, perfection or enforcement of any Lien in
exchange for evidences of Indebtedness, securities or other property of such
Person held by Alderwoods or any of its Restricted
10
Subsidiaries, or for other liabilities or obligations of such other Person to
Alderwoods or any of its Restricted Subsidiaries that were created, in
accordance with the terms of this Indenture; (g) Investments in Interest Rate
Protection Agreements on commercially reasonable terms entered into by
Alderwoods or any of its Restricted Subsidiaries in the ordinary course of
business in connection with the operations of Alderwoods or any of its
Restricted Subsidiaries to hedge against fluctuations in interest rates
constituting Permitted Indebtedness; (h) Investments of funds received by
Alderwoods or any of its Restricted Subsidiaries in the ordinary course of
business, which funds are required to be held in trust for the benefit of others
by Alderwoods or such Restricted Subsidiary, as the case may be, and which funds
do not constitute assets or liabilities of Alderwoods or such Restricted
Subsidiary; (i) notes held by Alderwoods or any Restricted Subsidiary that were
obtained by Alderwoods or such Restricted Subsidiary in connection with Asset
Sales; (j) Investments not in excess of $50,000,000 in the aggregate in
Subsidiaries other than Subsidiary Guarantors; (k) Investments not in excess of
$20,000,000 in the aggregate in Subsidiaries other than Subsidiary Guarantors
engaged in insurance businesses conducted by Alderwoods or any of its
Subsidiaries on the Measurement Date or insurance businesses reasonably related
thereto; and (l) guarantees of any of the foregoing Investments; (m) Investments
in Subsidiaries existing on the Measurement Date; (n) Investments in Restricted
Subsidiaries other than Subsidiary Guarantors consisting of short-term
Indebtedness owed to any such Subsidiary arising from ordinary course cash
management transactions; (o) other Investments not in excess of $500,000 in the
aggregate; (p) investments in Restricted Subsidiaries other than Subsidiary
Guarantors by other such Restricted Subsidiaries that are not Subsidiary
Guarantors; and (q) investments in Restricted Subsidiaries other than Subsidiary
Guarantors resulting from liquidations, mergers, consolidations (including the
transfer of Capital Stock of Neweol Finance B.V. from Xxxxxx Investments Two
(Gibraltar) to Xxxxxx Luxembourg (No. 4) and capital contributions in the form
of forgiveness of Indebtedness) and the like of such Restricted Subsidiaries
that are not Subsidiary Guarantors occurring within two weeks of the Measurement
Date.
"PERMITTED LIENS" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or
claims either (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which Alderwoods or any of its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant to
GAAP and as to which foreclosure is stayed during the pending of such
proceeding;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
in respect thereof;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, governmental
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(d) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall not
have been finally terminated or the period within which such proceedings may be
initiated shall not have expired and as to which foreclosure is stayed during
the pending of such proceeding;
(e) easements, rights-of-way, zoning restrictions, cemetery
dedications and restrictions and other similar charges or encumbrances in
respect of real property not interfering in any material respect with the
ordinary conduct of the business of Alderwoods or any of its Restricted
Subsidiaries;
(f) any interest or title of a lessor under any Capitalized
Lease Obligation or operating lease;
(g) any Lien existing on any asset of any Person at the time
such Person becomes a Restricted Subsidiary and not created in contemplation of
such event and provided such Lien is not spread to any other assets of
Alderwoods and its Restricted Subsidiaries;
11
(h) any Lien on any asset securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of acquiring or
constructing such asset; PROVIDED, that such Lien attaches to such asset
concurrently with or within 18 months after the acquisition or completion
thereof;
(i) any Lien on any asset of any Person existing at the time
such Person is merged or consolidated with or into Alderwoods or a Restricted
Subsidiary and not created in contemplation of such event and provided such Lien
is not spread to any other assets of Alderwoods and its Restricted Subsidiaries;
(j) any Lien existing on any asset prior to the acquisition
thereof by Alderwoods or a Restricted Subsidiary and not created in
contemplation of such acquisition;
(k) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
(l) any extension, renewal or replacement of any Lien
contemplated by the preceding clauses (g), (h), (i) or (j) hereof in respect of
the same property or assets theretofore subject to such Lien in connection with
the extension, renewal or refunding of the Indebtedness secured thereby;
PROVIDED that (i) such Lien shall attach solely to the same property or assets
and (ii) such extension, renewal or refunding of such Indebtedness shall be
without increase in the principal remaining unpaid as at the date of such
extension, renewal or refunding;
(m) Liens securing obligations incurred under the Exit
Facility or the Five-Year Notes;
(n) Liens required under or created pursuant to the Plan of
Reorganization, including the Liens provided for or deemed to attach in sections
III.C.18, III.C.19 and III.E of the Plan of Reorganization;
(o) Interment rights of third parties regarding real property
used for burial purposes; and
(p) Liens against Rose Hills Holding Corp., a Delaware
corporation, or any of its Subsidiaries or assets of any thereof securing the
Rose Hills Credit Agreement.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof, or any similar entity.
"PHYSICAL NOTE" has the meaning set forth in Section 2.01.
"PLAN OF REORGANIZATION" means the Fourth Amended Joint Plan of
Reorganization of Xxxxxx Group International Inc., Its Parent Corporation and
Certain of Their Debtor Subsidiaries, dated September 10, 2001, as filed with
the United States Bankruptcy Court for the District of Delaware in Jointly
Administered Case No. 99-1244 (PJW), as the same has been and may be, from time
to time, amended, supplemented or otherwise modified.
"PREDECESSOR NOTES" means, with respect to any particular Subordinated
Note, every previous Subordinated Note evidencing all or a portion of the same
debt as that evidenced by such particular Subordinated Note; and, for the
purposes of this definition, any Subordinated Notes authenticated and delivered
under Section 2.08 hereof in exchange for mutilated Notes or in lieu of lost,
destroyed or stolen Subordinated Notes, shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Subordinated Notes.
"PREFERRED STOCK" means, with respect to any Person, any Capital Stock
of such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
"REDEEMABLE CAPITAL STOCK" means any shares of any class or series of
Capital Stock that, either by the terms thereof, by the terms of any security
into which it is convertible, exchangeable or exercisable or by
12
contract or otherwise, is or upon the happening of an event or passage of time
would be, required to be redeemed prior to the one year anniversary of Stated
Maturity with respect to the principal of any Subordinated Note or is redeemable
at the option of the holder thereof at any time prior to the one year
anniversary of any such Stated Maturity, or is convertible into or exchangeable
for debt securities at any time prior to the one year anniversary of any such
Stated Maturity.
"REDEMPTION DATE" means, with respect to any Subordinated Note to be
redeemed, the date fixed by Alderwoods for such redemption pursuant to this
Indenture and the terms of the Subordinated Notes.
"REDEMPTION PRICE" means, with respect to any Subordinated Note to be
redeemed, the price fixed for such redemption pursuant to the terms of this
Indenture and the Subordinated Notes.
"REFINANCE" means, in respect of any Indebtedness, to finance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such indebtedness, in whole or in
part (including by way of a securitization transaction). "REFINANCED" and
"REFINANCING" have correlative meanings.
"REGISTRAR" has the meaning set forth in Section 2.04.
"RESTRICTED PAYMENTS" has the meaning set forth in Section 4.08.
"RESTRICTED SUBSIDIARY" means any Subsidiary of Alderwoods other than
an Unrestricted Subsidiary.
"RESTRUCTURING TRANSACTION" means any of the "Restructuring
Transactions," as such term is defined in the Plan of Reorganization.
"ROSE HILLS CREDIT AGREEMENT" has the meaning set forth in clause (b)
of the definition of Permitted Indebtedness.
"ROSE HILLS INDENTURE" has the meaning set forth in clause (b) of the
definition of Permitted Indebtedness.
"RULE 144A" means Rule 144A under the Securities Act.
"SALE-LEASEBACK TRANSACTION" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person that has
been or is being sold or transferred by such Person after the acquisition
thereof or the completion of construction or commencement of operation thereof
to such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or asset.
The stated maturity of such arrangement shall be the date of the last payment of
rent or any other amount due under such arrangement prior to the first date on
which such arrangement may be terminated by the lessee without payment of a
penalty.
"S&P" means Standard & Poor's Credit Market Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"SECURITIES ACT" means the Securities Act of 1933, as amended and the
regulations promulgated thereunder.
"SENIOR INDEBTEDNESS" means (i) all Designated Senior Indebtedness, and
(ii) any other Indebtedness (and related Obligations) incurred by Alderwoods or
any Subsidiary Guarantor, unless the instrument under which such Indebtedness is
incurred expressly provides that it is not senior in right of payment to, or is
on a parity with or subordinated in right of payment to the Subordinated Notes.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
described in clause (ii) above will not include (1) any liability for federal,
13
state, local or other taxes owed or owing by Alderwoods or any Subsidiary
Guarantor; (2) any obligation of Alderwoods or any Subsidiary Guarantor to
Alderwoods or any of its Subsidiaries (except to the extent that such
obligations have been assigned to, or for the benefit of, the holders of any of
the Designated Senior Indebtedness to secure any of the Designated Senior
Indebtedness); (3) any accounts payable or trade liabilities arising in the
ordinary course of business (including instruments evidencing such liabilities);
(4) Indebtedness that, when incurred and without respect to any election under
Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without recourse to
Alderwoods; (5) Indebtedness evidenced by the Subordinated Notes and (6) capital
stock of Alderwoods or any Subsidiary Guarantor.
"SENIOR TRUSTEE" means the trustee under any of the Two-Year Indenture,
the Five-Year Indenture, or the Seven-Year Indenture, or any trustee or
equivalent thereof with respect to any Refinancing Indebtedness with respect to
any thereof.
"SETTLEMENT AGREEMENT" has the meaning given such term in the preamble.
"SEVEN-YEAR NOTES" means the securities issued under the Seven-Year
Indenture, as amended, modified or supplemented from time to time, and any
Refinancing thereof in accordance with clause (i) of the definition of Permitted
Indebtedness.
"SEVEN-YEAR INDENTURE" means the indenture, dated as of the date
hereof, between Alderwoods and Xxxxx Fargo Bank Minnesota, National Association
providing for the issuance of 12 1/4% senior unsecured notes due 2009, as such
indenture may be amended, modified, supplemented or restated in accordance with
the terms hereof, and any Refinancing thereof in accordance with clause (i) of
the definition of Permitted Indebtedness.
"SIGNIFICANT SUBSIDIARY" means a Restricted Subsidiary that is a
"SIGNIFICANT SUBSIDIARY" as defined in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"SPECIAL FINANCE SUBSIDIARY" means a special purpose bankruptcy-remote
subsidiary established for purposes of facilitating one or more securitization
transactions.
"STATED MATURITY" means, when used with respect to any Subordinated
Note or any installment of interest thereon, the date specified in such
Subordinated Note as the fixed date on which the principal of such Subordinated
Note or such installment of interest is due and payable, and when used with
respect to any other Indebtedness, means the date specified in the instrument
governing such Indebtedness as the fixed date on which the principal of such
Indebtedness, or any installment of interest thereon, is due and payable.
"SUBORDINATED INDEBTEDNESS" means all Indebtedness heretofore, now or
hereinafter existing under the Subordinated Notes and this Indenture (whether
created directly or acquired by assignment or otherwise), and all interest and
premiums, if any, thereon and all other amounts payable in respect thereof
(including, without limitation, sinking fund payments (if any), defeasance
payments (if any), and any and all amounts payable to acquire any Subordinated
Notes or on account of any redemption, repurchase, retirement or other purchase
of Subordinated Notes, including Indebtedness of the Subsidiary Guarantors with
respect to the foregoing.
"SUBORDINATED NOTES" has the meaning given such term in the preamble.
"SUBSIDIARY" means, with respect to any Person, (a) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof and (b) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has at least majority ownership interest entitled to vote in the
election of directors, managers or trustees thereof (or other Person performing
similar functions). For purposes of this definition, any directors' qualifying
shares or investments by foreign nationals mandated by applicable law shall be
disregarded in determining the ownership of a Subsidiary.
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"SUBSIDIARY GUARANTOR" means each Subsidiary of Alderwoods that
executes this Indenture as a guarantor and each other Subsidiary of Alderwoods
that thereafter enters into a Subsidiary Guarantee pursuant to the terms of this
Indenture.
"SUBSIDIARY GUARANTEE" means a Guarantee by a Subsidiary Guarantor of
Alderwoods' obligations with respect to the Subordinated Notes.
"SURVIVING ENTITY" has the meaning set forth in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the Measurement Date.
"TRUST OFFICER" means any officer in the Corporate Trust Administration
of the Trustee 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 such officer's knowledge of
and familiarity with the particular subject.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces such party (or any previous successor) in accordance with the
provisions of this Indenture, and thereafter means such successor.
"TWO-YEAR NOTES" means the securities issued under the Two-Year
Unsecured Notes Indenture, as amended or supplemented from time to time, and any
Refinancing thereof in accordance with clause (i) of the definition of Permitted
Indebtedness.
"TWO-YEAR INDENTURE" means the indenture, dated as of the date hereof,
between Alderwoods and Xxxxx Fargo Bank Minnesota, National Association
providing for the issuance of 12 1/4% senior unsecured notes due 2004, as such
indenture may be amended, modified, supplemented or restated in accordance with
the terms hereof, and any Refinancing thereof in accordance with clause (i) of
the definition of Permitted Indebtedness.
"U.S. GOVERNMENT OBLIGATIONS" has the meaning set forth in Section
8.02.
"UNRESTRICTED SUBSIDIARY" means each of (a) Xxxxxx Life Insurance
Group, Inc., a Delaware corporation, any Subsidiary thereof, and any successors
to any of the foregoing and (b) any Subsidiary of Alderwoods declared by the
Board of Directors of Alderwoods to be an Unrestricted Subsidiary; PROVIDED,
that no such Subsidiary shall be declared to be an Unrestricted Subsidiary
unless (i) none of its properties or assets were owned by Alderwoods or any of
its Restricted Subsidiaries immediately prior to the Measurement Date, other
than any such assets as are transferred to such Unrestricted Subsidiary in
accordance with Section 4.08, (ii) its properties and assets, to the extent that
they secure Indebtedness, secure only Non-Recourse Indebtedness and (iii) it has
no Indebtedness other than Non-Recourse Indebtedness. As used above,
"NON-RECOURSE INDEBTEDNESS" means Indebtedness as to which (a) neither
Alderwoods nor any of its Subsidiaries (other than the relevant Unrestricted
Subsidiary or another Unrestricted Subsidiary) (i) provides credit support
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (ii) guarantees or is otherwise directly or indirectly liable, or
(iii) constitutes the lender (in each case, other than in compliance with
Section 4.08) and (b) no default with respect to such Indebtedness (including
any rights that the holders thereof may have to take enforcement action against
the relevant Unrestricted Subsidiary or its assets) would permit (upon notice,
lapse of time or both) any holder of any other Indebtedness of Alderwoods or its
Subsidiaries (other than Unrestricted Subsidiaries) to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether at the time, Capital Stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
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"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which 100% of the
outstanding Capital Stock is owned by Alderwoods or one or more Wholly Owned
Subsidiaries of Alderwoods or by Alderwoods and one or more Wholly Owned
Subsidiaries of Alderwoods. For purposes of this definition, any directors'
qualifying shares or investments by foreign nationals mandated by applicable law
shall be disregarded in determining the ownership of a Subsidiary.
SECTION 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Subordinated Notes;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means Alderwoods or any other
obligor on the Subordinated Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03 RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) words in the singular include the plural, and words in the
plural include the singular;
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) 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; and
(e) all references to "$" or "dollars" shall refer to the
lawful currency of the United States of America.
ARTICLE 2
THE SUBORDINATED NOTES
SECTION 2.01 ISSUANCE OF SUBORDINATED NOTES.
The aggregate principal amount of Subordinated Notes which may be
outstanding at any time under this Indenture may not exceed $24,679,000 at any
time, except to the extent permitted by Sections 2.08 and 2.17. Upon the
execution and delivery of this Indenture, Subordinated Notes in an aggregate
principal amount of $24,679,000, and such additional amount as provided for in
Section 2.17, may be executed by Alderwoods and delivered to the Trustee for
authentication.
16
The Subordinated Notes under this Indenture are being issued in
accordance with the Settlement Agreement and pursuant to the Plan of
Reorganization which provides, among other things, that the Subordinated Notes
and certain other securities are being issued in exchange for and in
satisfaction of certain claims against Alderwoods, The Xxxxxx Group Inc. (the
former parent company of Alderwoods) or certain Debtor Subsidiaries (as defined
in the Plan of Reorganization) of Alderwoods or The Xxxxxx Group Inc. No
Subordinated Note will be deemed outstanding for purposes of exercising voting
or similar rights of a Holder pursuant to this Indenture unless and until it or
a Predecessor Note has been issued to the Holder in compliance with such
conditions of issuance as may be set forth in the Settlement Agreement or in the
Plan of Reorganization or the confirmation order relating thereto. Receipt by
the Trustee of an authentication order from Alderwoods or the Disbursing Agent
(as defined in the Plan of Reorganization) will be sufficient evidence of
compliance with such conditions.
The Subordinated Notes and the Trustee's certificate of authentication
thereon shall be in substantially the form of Exhibit A or B hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with any applicable law or with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Subordinated Notes, as evidenced by their execution
thereof. The Subordinated Notes shall be issuable only in registered form
without coupons and only in denominations of $100 and integral multiples
thereof.
The definitive Subordinated Notes shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Subordinated Notes may be listed, all as determined by the
Officers executing such Subordinated Notes, as evidenced by their execution of
such Subordinated Notes. Each Subordinated Note shall be dated the date of its
authentication.
Subordinated Notes may be issued in the form of one or more permanent
global Subordinated Notes substantially in the form set forth in Exhibit A
hereto (the "GLOBAL NOTE") deposited with, or on behalf of, the Depositary or
with the Trustee, as custodian for the Depositary, duly executed by Alderwoods
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Note may from time to time be increased or
decreased by adjustments made on the records of the Depositary or its nominee,
or of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Notwithstanding the foregoing, each holder of an Allowed Claim (as
defined in the Plan of Reorganization) entitled to receive Subordinated Notes in
accordance with the Settlement Agreement and pursuant to the Plan of
Reorganization who has complied with the terms of the Settlement Agreement and
the Plan of Reorganization but is not eligible to hold a Global Note shall be
issued Subordinated Notes in the form of permanent certificated Subordinated
Notes in registered form in substantially the form set forth in Exhibit B hereto
(the "PHYSICAL NOTES"). Subordinated Notes issued pursuant to Section 2.09 in
exchange for interests in the Global Note shall be in the form of Physical
Notes.
The terms and provisions contained in the form of the Subordinated
Notes, annexed hereto as Exhibits A and B, shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable,
Alderwoods and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.02 RESTRICTIVE LEGEND.
Each Global Note shall bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO ALDERWOODS OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO
17
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE.
SECTION 2.03 EXECUTION AND AUTHENTICATION.
Two Officers shall execute the Subordinated Notes on behalf of
Alderwoods by either manual or facsimile signature. If an Officer whose
signature is on a Subordinated Note no longer holds that office at the time the
Trustee authenticates the Subordinated Note or at any time thereafter, the
Subordinated Note shall be valid nevertheless.
A Subordinated Note shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Subordinated
Note. Such signature shall be conclusive evidence that the Subordinated Note has
been authenticated under this Indenture.
The Trustee shall authenticate Subordinated Notes for original issue
upon receipt of an Officers' Certificate signed by two Officers of Alderwoods
directing the Trustee to authenticate the Subordinated Notes and certifying that
all conditions precedent to the issuance of the Subordinated Notes contained
herein have been complied with.
With the prior written approval of Alderwoods, the Trustee may appoint
an authenticating agent acceptable to Alderwoods to authenticate Subordinated
Notes. Unless limited by the terms of such appointment, an authenticating agent
may authenticate Subordinated Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
rights as the Trustee in any dealings hereunder with Alderwoods or with any of
Alderwoods' Affiliates.
SECTION 2.04 REGISTRAR AND PAYING AGENT.
Alderwoods shall maintain an office or agency (which shall be located
in the Borough of Manhattan, the City of
New York, State of
New York) where
Subordinated Notes may be presented for registration of transfer or for exchange
(the "REGISTRAR"), an office or agency (which shall be located in the Borough of
Manhattan, the City of
New York, State of
New York) where Subordinated Notes may
be presented for payment of principal, premium, if any, and interest (the
"PAYING AGENT"), an office or agency (which shall be located in the Borough of
Manhattan, the City of
New York, State of New York) where Subordinated Notes may
be presented for conversion into Alderwoods Common Stock pursuant to the terms
hereof (the "CONVERSION AGENT") and an office or agency where notices and
demands to or upon Alderwoods in respect of the Subordinated Notes and this
Indenture may be served. The Registrar shall keep a register of the Subordinated
Notes and of their transfer and exchange. Alderwoods may have one or more
co-Registrars and one or more additional paying agents. The term "PAYING AGENT"
includes any additional paying agent. Alderwoods may change any Paying Agent,
Registrar or co-Registrar or Conversion Agent upon 30 days' notice to the
Trustee. Except as otherwise expressly provided in this Indenture, Alderwoods or
any Affiliate thereof may act as Paying Agent, Registrar or co-Registrar or
Conversion Agent. Alderwoods shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Registrar or Paying Agent.
Alderwoods shall notify the Trustee of the name and address of any such
Registrar, Paying Agent or Conversion Agent. If Alderwoods fails to maintain a
Registrar, Paying Agent, Conversion Agent or agent for service of notices and
demands, or fails to give the foregoing notice, the Trustee shall act as such
and shall be entitled to appropriate compensation in accordance with Section
7.08. Alderwoods initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands in connection with
the Subordinated Notes.
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SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of,
premium, if any, or interest on the Subordinated Notes (whether such money has
been distributed to it by Alderwoods or any other obligor on the Subordinated
Notes), and Alderwoods (or any other obligor on the Subordinated Notes) and the
Paying Agent shall notify the Trustee of any default by Alderwoods (or any other
obligor on the Subordinated Notes) in making any such payment. If Alderwoods or
an Affiliate of Alderwoods acts as Paying Agent, it shall segregate the money
and hold it as a separate trust fund. Alderwoods at any time may require a
Paying Agent to distribute all money held by it to the Trustee and account for
any funds disbursed and the Trustee may at any time during the continuance of
Event of Default under Section 6.01 (a) or (b) with respect to the Subordinated
Notes, upon written request to a Paying Agent, require such Paying Agent to pay
all money held by it to the Trustee and to account for any funds distributed.
Upon doing so, the Paying Agent (other than an obligor on the Subordinated
Notes) shall have no further liability for the money so paid over to the
Trustee.
SECTION 2.06 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, Alderwoods shall furnish to the Trustee at least ten Business
Days before each Interest Payment Date and at such other times as the Trustee
may request in writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.07 TRANSFER AND EXCHANGE.
When Subordinated Notes are presented to the Registrar or a
co-Registrar with a request to register the transfer of such Subordinated Notes,
to exchange such Subordinated Notes for an equal principal amount of
Subordinated Notes of other authorized denominations or to convert such
Subordinated Notes, the Registrar or co-Registrar shall register the transfer or
make the exchange or conversion as requested if its requirements for such
transaction are met; PROVIDED, HOWEVER, that the Subordinated Notes surrendered
for transfer or exchange or conversion shall be duly endorsed or accompanied by
a written instrument of transfer in form satisfactory to the Registrar or
co-Registrar, or in the case of a conversion, notice of conversion substantially
in the form attached to the Subordinated Note or such other notice that is
acceptable to Alderwoods, duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing. To permit registrations of transfers and
exchanges, Alderwoods shall execute and the Trustee shall authenticate
Subordinated Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any transfer, exchange or redemption, but Alderwoods
may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchanges or
transfers pursuant to Sections 3.07 or 9.05). The Registrar or co-Registrar
shall not be required to register the transfer of or exchange of any
Subordinated Note (i) during a period beginning at the opening of business 15
days before the mailing of a notice of redemption of Subordinated Notes and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article 3, except the unredeemed
portion of any Subordinated Note being redeemed in part, and (iii) surrendered
for conversion pursuant to Article 14.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Note may be effected
only through a book-entry system maintained by the Holder of such Global Note
(or its agent), and that ownership of a beneficial interest in the Subordinated
Note shall be required to be reflected in a book entry.
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SECTION 2.08 REPLACEMENT NOTES.
If a mutilated Subordinated Note is surrendered to the Trustee or if
the Holder of a Subordinated Note claims that the Subordinated Note has been
lost, destroyed or wrongfully taken, Alderwoods shall issue and the Trustee
shall authenticate a replacement Subordinated Note if the Trustee's requirements
are satisfied. If required by the Trustee or Alderwoods, such Holder must
provide an indemnity bond or other indemnity, sufficient in the judgment of both
Alderwoods and the Trustee, to protect Alderwoods, the Trustee or any Paying
Agent, Registrar or Conversion Agent from any loss that any of them may suffer
if a Subordinated Note is replaced. Alderwoods may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Subordinated Note, including
reasonable fees and expenses of counsel. Every replacement Subordinated Note is
an additional obligation of Alderwoods.
SECTION 2.09 BOOK-ENTRY PROVISIONS FOR GLOBAL NOTE.
(a) The Global Note initially shall (i) be registered in the
name of the Depositary for such Global Note or the nominee of such Depositary,
(ii) be deposited with, or on behalf of, the Depositary or with the Trustee, as
custodian for such Depositary, and (iii) bear a legend as set forth in Section
2.02. Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by Alderwoods, the Trustee and
any agent of Alderwoods or the Trustee as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent Alderwoods, the Trustee or any agent of Alderwoods or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or shall impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of any Subordinated Note.
(b) Transfers of the Global Note shall be limited to transfers
of such Global Note in whole, but not in part, to the Depositary, its successors
or their respective nominees. Interests of beneficial owners in the Global Note
may be transferred in accordance with the rules and procedures of the
Depositary. In addition, Physical Notes shall be issued to all beneficial owners
in exchange for their beneficial interests in the Global Note if (i) the
Depositary notifies Alderwoods that it is unwilling or unable to continue as
Depositary for the Global Note and a successor depositary is not appointed by
Alderwoods within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request for such
exchange from the Depositary.
(c) In connection with any transfer of a portion of the
beneficial interest in the Global Note pursuant to Section 2.09(b) to beneficial
owners who are required to hold Physical Notes, the Registrar shall reflect on
its books and records the date and a decrease in the principal amount of the
Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and Alderwoods shall execute, and
the Trustee shall authenticate and deliver, one or more Physical Notes of like
tenor and amount.
(d) In connection with the transfer of the entire Global Note
to beneficial owners pursuant to Section 2.09(b), the Global Note shall be
deemed to be surrendered to the Trustee for cancellation, and Alderwoods shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
the Global Note an equal aggregate principal amount of Physical Notes of
authorized denominations.
(e) The Holder of the Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action that a Holder is
entitled to take under this Indenture or the Subordinated Notes.
(f) Any beneficial owner of interests in a Global Note may
request, and upon request shall be issued, Physical Notes in accordance with the
procedures of the Depositary. In connection with the execution, authentication
and delivery of such Physical Notes, the Registrar shall reflect on its books
and records a decrease in the principal amount of the relevant Global Note equal
to the principal amount of such Physical Notes and Alderwoods shall execute and
the Trustee shall authenticate and deliver one or more Physical Notes having an
equal aggregate principal amount.
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SECTION 2.10 OUTSTANDING SUBORDINATED NOTES.
Subordinated Notes outstanding at any time are all the Subordinated
Notes that have been authenticated by the Trustee except those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Subordinated Note shall cease to be outstanding if Alderwoods
or any of its Subsidiaries holds the Subordinated Note.
If a Subordinated Note is replaced pursuant to Section 2.07 (other than
a mutilated Subordinated Note surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Subordinated Note is held by a bona fide purchaser. A mutilated
Subordinated Note ceases to be outstanding upon surrender of such Subordinated
Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or a Maturity Date the Paying Agent (other than
Alderwoods or an Affiliate of Alderwoods) holds cash sufficient to pay all of
the principal and interest due on the Subordinated Notes payable on that date,
and is not prohibited from paying such cash to the Holders of such Subordinated
Notes pursuant to the terms of this Indenture, or if on any date Subordinated
Notes are converted into Alderwoods Common Stock pursuant to Article 14, then on
and after that date such Subordinated Notes cease to be outstanding and interest
on them shall cease to accrue.
SECTION 2.11 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Subordinated Notes have concurred in any direction, waiver or consent,
Subordinated Notes owned by Alderwoods or any of its Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Subordinated Notes that the Trustee knows or has reason to know are so owned
shall be disregarded.
SECTION 2.12 TEMPORARY NOTES.
Until definitive Subordinated Notes are prepared and ready for
delivery, Alderwoods may prepare and the Trustee shall authenticate temporary
Subordinated Notes. Temporary Subordinated Notes shall be substantially in the
form of definitive Subordinated Notes but may have variations that Alderwoods
considers appropriate for temporary Subordinated Notes. Without unreasonable
delay, Alderwoods shall prepare and the Trustee shall authenticate definitive
Subordinated Notes in exchange for temporary Subordinated Notes. Until such
exchange, temporary Subordinated Notes shall be entitled to the same rights,
benefits and privileges as definitive Subordinated Notes. Holders of temporary
Subordinated Notes shall be entitled to all benefits of this Indenture.
SECTION 2.13 CANCELLATION.
Alderwoods at any time may deliver Subordinated Notes to the Trustee
for cancellation. The Registrar, the Paying Agent and Conversion Agent shall
forward to the Trustee any Subordinated Notes surrendered to them for transfer,
exchange, payment or conversion. The Trustee, or at the direction of the
Trustee, the Registrar, the Paying Agent (other than Alderwoods or an Affiliate
of Alderwoods) or Conversion Agent, and no one else, shall promptly cancel and
dispose of all Subordinated Notes surrendered for transfer, exchange, payment,
conversion or cancellation, subject to the record retention requirements of the
Exchange Act. Subject to Section 2.08, Alderwoods may not issue new Subordinated
Notes to replace Subordinated Notes that it has paid or delivered to the Trustee
for cancellation. If Alderwoods shall acquire any of the Subordinated Notes,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Subordinated Notes unless and until the same
are surrendered to the Trustee for cancellation pursuant to this Section 2.13.
SECTION 2.14 DEFAULTED INTEREST.
If Alderwoods defaults on a payment of interest on the Subordinated
Notes, it shall pay the defaulted interest, plus (to the extent permitted by
law) any interest payable on the defaulted interest, in accordance with the
terms hereof, to the Persons who are Holders on a subsequent special record
date, which date shall be at least five
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Business Days prior to the payment date. Alderwoods shall fix such special
record date and payment date in a manner satisfactory to the Trustee. At least
15 days before such special record date, Alderwoods shall mail to each Holder a
notice that states the special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.
SECTION 2.15 CUSIP NUMBER.
Alderwoods in issuing the Subordinated Notes may use a "CUSIP" number
with respect to the Subordinated Notes (if then generally in use), and if so,
the Trustee may use the CUSIP numbers in notices of redemption or exchange as a
convenience to Holders; PROVIDED, HOWEVER, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Subordinated Notes, and that reliance may be
placed only on the other identification numbers printed on the Subordinated
Notes. Alderwoods will promptly notify the Trustee of any change in the CUSIP
number.
SECTION 2.16 DEPOSIT OF MONEYS.
On or before each Interest Payment Date and Maturity Date, Alderwoods
shall deposit with the Trustee or Paying Agent in immediately available funds
money sufficient to make cash payments, if any, due on such Interest Payment
Date or Maturity Date, as the case may be, in a timely manner that permits the
Paying Agent to remit payment to the Holders on such Interest Payment Date or
Maturity Date, as the case may be.
SECTION 2.17 ISSUANCE OF NOTES IN EXCESS OF $24,679,000 PURSUANT TO
PLAN OF REORGANIZATION.
Alderwoods may issue and have outstanding at any time under this
Indenture any aggregate principal amount of Subordinated Notes exceeding
$24,679,000 to the extent required as a result of the application of the
rounding provisions set forth in Section VI.H.3.b of the Plan of Reorganization.
ARTICLE 3
REDEMPTION OF SUBORDINATED NOTES
SECTION 3.01 OPTIONAL REDEMPTION.
The Subordinated Notes are redeemable in whole or in part at the option
of Alderwoods at 100% of the stated principal amount plus accrued and unpaid
interest to (but not including) the Redemption Date; PROVIDED, HOWEVER, that
prior to the second anniversary of the Measurement Date Alderwoods may not
optionally redeem the Subordinated Notes unless the Current Market Price of
Alderwoods Common Stock is at least 15% greater than the then applicable
Conversion Price. If Alderwoods elects to redeem any Subordinated Notes, in
whole or in part, it shall notify the Trustee of the Redemption Date and
principal amount of Subordinated Notes to be redeemed.
Alderwoods shall notify the Trustee by an Officers' Certificate,
stating that such redemption will comply with the provisions hereof and of such
Subordinated Notes, of any optional redemption at least 45 days before the
Redemption Date (unless a shorter period is satisfactory to the Trustee).
SECTION 3.02 [INTENTIONALLY OMITTED]
SECTION 3.03 SELECTION OF SUBORDINATED NOTES TO BE REDEEMED.
If less than all the Subordinated Notes are to be redeemed, the
particular Subordinated Notes or portions thereof to be redeemed shall be
selected from the outstanding Subordinated Notes not previously called for
redemption either (a) by such method as the Trustee considers to be fair and
appropriate or (b) in such manner as complies with the requirements of the
principal national securities exchange, if any, on which the Subordinated Notes
being redeemed are listed. The amounts to be redeemed shall be equal to $100 or
any integral multiple thereof.
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The amount of Subordinated Notes shall be calculated as the aggregate
principal amount of Subordinated Notes originally issued hereunder less the
aggregate principal amount of any Subordinated Notes previously redeemed. The
Trustee shall make the selection not more than 60 days and not less than 30 days
before the Redemption Date from outstanding Subordinated Notes not previously
called for redemption.
The Trustee shall promptly notify Alderwoods and the Registrar in
writing of the Subordinated Notes selected for redemption and, in the case of
any Subordinated Notes selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Subordinated Notes
shall relate, in the case of any Subordinated Note redeemed or to be redeemed
only in part, to the portion of the principal amount of such Subordinated Note
that has been or is to be redeemed.
SECTION 3.04 NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Subordinated Notes to be redeemed, at the address of
such Holder appearing in the Subordinated Note register maintained by the
Registrar.
All notices of redemption shall identify the Subordinated Notes to be
redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(c) that, unless Alderwoods defaults in making the redemption
payment, interest on Subordinated Notes called for redemption ceases to accrue
on and after the Redemption Date, and the only remaining right of the Holders of
such Subordinated Notes is to receive payment of the Redemption Price and
accrued interest, if any, upon surrender to the Paying Agent of the Subordinated
Notes redeemed;
(d) if any Subordinated Note is to be redeemed in part, the
portion of the principal amount (equal to $100 or any integral multiple thereof)
of such Subordinated Note to be redeemed and that on and after the Redemption
Date, upon surrender for cancellation of such original Subordinated Note to the
Paying Agent, a new Subordinated Note or Subordinated Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued without
charge to the Holder;
(e) that Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price and accrued
interest, if any, and the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such Subordinated
Notes, but no representation is made as to the correctness or accuracy of any
such CUSIP numbers;
(g) the paragraph of the Subordinated Notes or Section of this
Indenture pursuant to which the Subordinated Notes are being redeemed;
(h) the Holder's right to convert pursuant to Article 14 and
the last available date for conversion prior to the Redemption Date;
(i) the current Conversion Price; and
(j) the name and address of the Conversion Agent.
Notice of redemption of Subordinated Notes to be redeemed at the
election of Alderwoods shall be given by Alderwoods or by the Trustee in the
name of Alderwoods.
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SECTION 3.05 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Subordinated Notes called for
redemption (unless surrendered for conversion into Alderwoods Common Stock
pursuant to the terms hereof) become due and payable on the Redemption Date and
at the Redemption Price. Upon surrender to the Paying Agent, such Subordinated
Notes called for redemption shall be paid at the Redemption Price plus accrued
and unpaid interest to the Redemption Date.
SECTION 3.06 DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, Alderwoods shall deposit with the
Paying Agent an amount of money in same day funds sufficient to pay the
Redemption Price of, and accrued interest on, all the Subordinated Notes or
portions thereof that are to be redeemed on that date (other than those
surrendered for conversion into Alderwoods Common Stock), other than
Subordinated Notes or portions thereof called for redemption on that date that
have been delivered by Alderwoods to the Trustee for cancellation. The Paying
Agent shall promptly return to Alderwoods any money deposited with the Paying
Agent by Alderwoods in excess of the amounts necessary to pay the Redemption
Price of, and accrued and unpaid interest on, all Subordinated Notes to be
redeemed (including any amounts deposited for the redemption of Subordinated
Notes that are instead converted into Alderwoods Common Stock).
If Alderwoods complies with the preceding paragraph, then, unless
Alderwoods defaults in the payment of such Redemption Price, interest on the
Subordinated Notes to be redeemed will cease to accrue on and after the
applicable Redemption Date, whether or not such Subordinated Notes are presented
for payment, and such Subordinated Notes will no longer be convertible into
Alderwoods Common Stock. If any Subordinated Note called for redemption shall
not be so paid upon surrender thereof for redemption, the principal, premium, if
any, and, to the extent lawful, accrued and unpaid interest thereon shall, until
paid, bear interest from the Redemption Date at the rate provided in the
Subordinated Notes and shall remain convertible into Alderwoods Common Stock
until the principal, premium, if any, and accrued interest thereon has been paid
or duly provided for.
SECTION 3.07 SUBORDINATED NOTES REDEEMED OR PURCHASED IN PART.
Upon surrender to the Paying Agent of a Subordinated Note that is to be
redeemed in part, Alderwoods shall execute and the Trustee shall authenticate
and deliver to the Holder of such Subordinated Note without service charge, a
new Subordinated Note or Subordinated Notes 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 Subordinated Note so
surrendered that is not redeemed.
SECTION 3.08 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Subordinated Notes, Alderwoods may
arrange for the purchase and conversion of any Subordinated Notes by an
agreement with one or more investment bankers or other purchasers to purchase
such Subordinated Notes by paying to the Trustee in trust for the Holders of the
Subordinated Notes, on or before the date fixed for redemption, an amount in
cash not less than the applicable redemption price, together with interest
accrued to (but excluding) the date fixed for redemption, of such Subordinated
Notes. Notwithstanding anything to the contrary contained in this Article 3, the
obligation of Alderwoods to pay the redemption price of such Subordinated Notes,
together with interest accrued to (but excluding) the date fixed for redemption
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, a copy of which
will be filed with the Trustee prior to the date fixed for redemption, any
Subordinated Notes not duly surrendered for conversion by the Holders thereof
may, at the option of Alderwoods, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such Holders and (notwithstanding anything
to the contrary contained in Article 14) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Subordinated Notes by
such purchasers shall be extended through such time), subject to payment of the
above amount as aforesaid (and if such payment is not duly made, the Holders'
conversion right extends to the date of such payment). At the direction of
Alderwoods, the Trustee shall hold and dispose of any such amount paid to it in
the same manner as it would monies deposited with it by Alderwoods for the
redemption of Subordinated Notes in accordance with this Article 3.
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ARTICLE 4
COVENANTS
Alderwoods hereby covenants as follows, from and after the Closing Date
and continuing so long as any amount remains unpaid on any Subordinated Note:
SECTION 4.01 PAYMENT OF SUBORDINATED NOTES.
Alderwoods will pay, or cause to be paid, the principal of and interest
on the Subordinated Notes on the dates and in the manner provided in the
Subordinated Notes and this Indenture. An installment of principal or interest
shall be considered paid on the date due if the Trustee or Paying Agent (other
than Alderwoods or any Affiliate thereof) holds on that date money designated
and set aside for and sufficient to pay the installment in a timely manner and
is not prohibited from paying such money to the Holders of the Subordinated
Notes pursuant to the terms of this Indenture.
Alderwoods will pay interest on overdue principal at the rate and in
the manner provided in the Subordinated Notes; it shall pay interest on overdue
installments of interest at the same rate and in the same manner, to the extent
lawful.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.
Alderwoods will maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee, Registrar or
co-Registrar, or Conversion Agent) where Subordinated Notes may be surrendered
for registration of transfer or exchange or for presentation for payment or
conversion and where notices and demands to or upon Alderwoods in respect of the
Subordinated Notes and this Indenture may be served. Alderwoods 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 Alderwoods 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 address of the Trustee as set forth in Section 11.02.
Alderwoods may also from time to time designate one or more other
offices or agencies where the Subordinated Notes 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 Alderwoods of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes. Alderwoods
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Alderwoods hereby initially designates the office of an agent of the Trustee
located at x/x Xxxxxxxxxx Xxxxx Xxxxxxx, 0xx Xxxxx, XXXX Department, 00 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, as such office of Alderwoods in accordance with this
Section 4.02 and Section 2.04.
SECTION 4.03 CORPORATE EXISTENCE.
Subject to Article 5, Alderwoods shall do or cause to be done all
things necessary to, and will cause each Restricted Subsidiary to, preserve and
keep in full force and effect its and its Restricted Subsidiaries' corporate,
company or partnership existence and rights (charter and statutory), material
licenses and/or material franchises; PROVIDED, HOWEVER, that Alderwoods and the
Restricted Subsidiaries shall not be required to preserve any such existence,
rights, licenses or franchises if Alderwoods or, in the case of any Restricted
Subsidiary, such Restricted Subsidiary, shall reasonably determine that (a) the
preservation thereof is no longer desirable in the conduct of the business of
Alderwoods and its Restricted Subsidiaries taken as a whole and (b) the loss
thereof is not materially adverse to either (i) Alderwoods and its Restricted
Subsidiaries taken as a whole or (ii) the ability of Alderwoods to otherwise
satisfy its obligations hereunder; and PROVIDED FURTHER that Alderwoods and each
Subsidiary may engage in the Restructuring Transactions. Alderwoods shall cause,
on the date hereof, it and its Restricted Subsidiaries to account for at least
90% of the consolidated assets and fiscal year 2001 revenues of Alderwoods other
than assets of and revenues from the operations of Security Plan Life Insurance
Company, a Louisiana corporation f/k/a Security Industrial Insurance Company.
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SECTION 4.04 PAYMENT OF TAXES AND OTHER CLAIMS.
Alderwoods will pay or discharge or cause to be paid or discharged,
before the same become delinquent, (a) all taxes, assessments and governmental
charges levied or imposed upon Alderwoods or any of its Restricted Subsidiaries
or upon the income, profits or property of Alderwoods or any of its Restricted
Subsidiaries, and (b) all lawful claims for labor, materials and supplies that,
in each case, if unpaid, might by law become a Lien upon the property of
Alderwoods or any Restricted Subsidiary; PROVIDED, HOWEVER, that Alderwoods
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim the amount, applicability or validity of
which is being contested in good faith by appropriate proceedings and for which
adequate provision has been made or where the failure to effect such payment or
discharge is not materially adverse to either (i) Alderwoods and its Restricted
Subsidiaries taken as a whole or (ii) the ability of Alderwoods to otherwise
satisfy its obligations hereunder.
SECTION 4.05 MAINTENANCE OF PROPERTIES; INSURANCE; BOOKS AND RECORDS;
COMPLIANCE WITH LAW.
(a) Alderwoods shall, and shall cause each of its Restricted
Subsidiaries to, cause all properties and assets to be maintained and kept in
good condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment, and cause to be made all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of its
business; PROVIDED, HOWEVER, that nothing in this Section 4.05(a) shall prevent
Alderwoods or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties or assets if such
discontinuance is, in the judgment of Alderwoods or such Restricted Subsidiary,
desirable in the conduct of its business and if such discontinuance is not
materially adverse to either Alderwoods and its Restricted Subsidiaries taken as
a whole or the ability of Alderwoods to otherwise satisfy its obligations
hereunder.
(b) Alderwoods shall, and shall cause each of its Restricted
Subsidiaries to, maintain with financially sound and reputable insurers such
insurance as may be required by law (other than with respect to any
environmental impairment liability insurance not commercially available) and
such other insurance to such extent and against such hazards and liabilities, as
is customarily maintained by companies similarly situated (which may include
self-insurance in the same form as is customarily maintained by companies
similarly situated).
(c) Alderwoods shall, and shall cause each of its Restricted
Subsidiaries to, keep proper books of record and account, in which full and
correct entries shall be made of all business and financial transactions of
Alderwoods and each of its Restricted Subsidiaries and reflect on its financial
statements adequate accruals and appropriations to reserves, all in accordance
with GAAP consistently applied to Alderwoods and its Restricted Subsidiaries
taken as a whole.
(d) Alderwoods shall, and shall cause each of its Restricted
Subsidiaries to, comply with all statutes, laws, ordinances, or government rules
and regulations to which it is subject, non-compliance with which would be
materially adverse to either (i) Alderwoods and its Subsidiaries taken as a
whole or (ii) to the ability of Alderwoods to otherwise satisfy its obligations
hereunder.
SECTION 4.06 COMPLIANCE CERTIFICATES.
(a) Alderwoods will deliver to the Trustee within 45 days
after the end of each of Alderwoods' first three fiscal quarters and within 90
days after the end of Alderwoods' fiscal year an Officers' Certificate stating
whether or not the signers know of any Default or Event of Default under this
Indenture by Alderwoods or an event that, with notice or lapse of time or both,
would constitute a default by Alderwoods under any Pari Passu Indebtedness that
occurred during such fiscal period. If they do know of such a Default, Event of
Default or default, the certificate shall describe any such Default, Event of
Default or default and its status. The first certificate to be delivered
pursuant to this Section 4.06(a) shall be for the first fiscal quarter of
Alderwoods beginning after the Measurement Date. Alderwoods shall also deliver a
certificate to the Trustee at least annually from its principal executive,
financial or accounting officer as to his or her knowledge of Alderwoods'
compliance with all conditions and covenants under this Indenture, such
compliance to be determined without regard to any period of grace or requirement
of notice provided herein.
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(b) Alderwoods shall deliver to the Trustee within 90 days
after the end of each fiscal year a written statement by Alderwoods' independent
public accountants stating (i) that their audit examination has included a
review of the terms of this Indenture and the Subordinated Notes as they relate
to accounting matters, and (ii) whether, in connection with their audit
examination, any Default or Event of Default under this Indenture or an event
that, with notice or lapse of time or both, would constitute a default under any
Pari Passu Indebtedness has come to their attention and, if such a Default,
Event of Default or a default under any Pari Passu Indebtedness has come to
their attention, specifying the nature and period of existence thereof;
PROVIDED, HOWEVER, that, without any restriction as to the scope of the audit
examination, such independent certified public accountants shall not be liable
by reason of any failure to obtain knowledge of any such Default, Event of
Default or a default under any Pari Passu Indebtedness that would not be
disclosed in the course of an audit examination conducted in accordance with
GAAP.
(c) Alderwoods will deliver to the Trustee as soon as
possible, and in any event within 10 Business Days after Alderwoods becomes
aware or should reasonably have become aware of the occurrence of any Default,
Event of Default or an event that, with notice or lapse of time or both, would
constitute a default by Alderwoods under any Indebtedness, an Officers'
Certificate specifying such Default, Event of Default or default and what action
Alderwoods is taking or proposes to take with respect thereto.
SECTION 4.07 LIMITATION ON INDEBTEDNESS.
Alderwoods will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or
otherwise, for the payment of (collectively, to "INCUR") any Indebtedness
(including, without limitation, any Acquired Indebtedness) other than Permitted
Indebtedness. Notwithstanding the foregoing limitations, Alderwoods and its
Restricted Subsidiaries will be permitted to Incur Indebtedness (including,
without limitation, Acquired Indebtedness) if at the time of such incurrence,
and after giving pro forma effect thereto, the Consolidated Fixed Charge
Coverage Ratio of Alderwoods is at least equal to, during any fiscal year in
which Alderwoods has any scheduled principal payment due with respect to the
Five-Year Notes, 1:1, and during any other year, 1.25:1.
SECTION 4.08 LIMITATION ON RESTRICTED PAYMENTS.
Alderwoods will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other distribution
or payment on or in respect of Capital Stock of Alderwoods or any of its
Restricted Subsidiaries (other than Rose Hills Holding Corp., a Delaware
corporation, or any of its Subsidiaries) or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of Alderwoods or
any of its Restricted Subsidiaries (other than Rose Hills Holding Corp., a
Delaware corporation, or any of its Subsidiaries) (other than (i) dividends or
distributions payable solely in Capital Stock of Alderwoods (other than
Redeemable Capital Stock) or in options, warrants or other rights to purchase
Capital Stock of Alderwoods (other than Redeemable Capital Stock) and (ii)
dividends or other distributions to the extent declared or paid to Alderwoods or
any Restricted Subsidiary of Alderwoods);
(b) purchase, redeem, defease or otherwise acquire or retire
for value any Capital Stock of Alderwoods or any of its Restricted Subsidiaries
(other than any such Capital Stock of a Restricted Subsidiary of Alderwoods);
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to any
scheduled maturity, scheduled repayment, scheduled sinking fund payment or other
Stated Maturity, any Indebtedness that is (i) subordinate or junior in right of
payment to the Subordinated Notes or (ii) Pari Passu Indebtedness (other than in
respect of the Exit Facility, any such subordinated or Pari Passu Indebtedness
owned by Alderwoods or a Restricted Subsidiary of Alderwoods, Two-Year Notes,
Five-Year Notes or Seven-Year Notes); or
(d) make any Investment (other than any Permitted Investment)
in any Person
27
(such payments or Investments described in the preceding clauses (a), (b), (c)
and (d) are collectively referred to as "RESTRICTED PAYMENTS"); unless, at the
time of and after giving effect to the proposed Restricted Payment (the amount
of any such Restricted Payment, if other than cash, shall be the Fair Market
Value on the date of such Restricted Payment of the asset(s) proposed to be
transferred by Alderwoods or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment), (A) no Default or Event of Default shall
have occurred and be continuing, (B) immediately prior to and after giving
effect to such Restricted Payment, Alderwoods would be able to incur $1.00 of
additional Indebtedness pursuant to Section 4.07 (other than Permitted
Indebtedness), and (C) the aggregate amount of all Restricted Payments declared
or made from and after the Measurement Date would not exceed the sum of (1) 50%
of the aggregate Consolidated Net Income of Alderwoods accrued on a cumulative
basis during the period beginning on the Measurement Date and ending on the last
day of the fiscal quarter of Alderwoods immediately preceding the date of such
proposed Restricted Payment, which period shall be treated as a single
accounting period (or, if such aggregate cumulative Consolidated Net Income of
Alderwoods for such period shall be a deficit, minus 100% of such deficit) PLUS
(2) the aggregate Net Cash Proceeds received by Alderwoods either from the
issuance or sale of Capital Stock (excluding Redeemable Capital Stock, but
including Capital Stock issued upon the conversion of convertible Indebtedness
or from the exercise of options, warrants or rights to purchase Capital Stock
(other than Redeemable Capital Stock)) of Alderwoods to any Person (other than
to Alderwoods or a Restricted Subsidiary) after the Measurement Date PLUS (3) in
the case of the disposition or repayment of any Investment constituting a
Restricted Payment made after the Measurement Date (excluding any Investment
described in clause (v) of the following paragraph), an amount equal to the
lesser of the return of capital with respect to such Investment and the cost of
such Investment less, in either case, the cost of the disposition of such
Investment PLUS (4) $10,000,000. For purposes of the preceding clause (C)(2),
the value of the aggregate net proceeds received by Alderwoods upon the issuance
of Capital Stock upon the conversion of convertible Indebtedness or upon the
exercise of options, warrants or rights will be the net cash proceeds received
upon the issuance of such Indebtedness, options, warrants or rights plus the
incremental cash amount received by Alderwoods upon the conversion or exercise
thereof.
None of the foregoing provisions will prohibit:
(i) the payment of any dividend within 60 days after
the date of its declaration, if at the date of declaration such payment would be
permitted by the foregoing paragraph;
(ii) so long as no Default or Event of Default shall
have occurred and be continuing, the redemption, repurchase or other acquisition
or retirement of any shares of any class of Capital Stock of Alderwoods or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to Alderwoods from any Person
(other than a Restricted Subsidiary) or (y) issue and sale of other shares of
Capital Stock (other than Redeemable Capital Stock) of Alderwoods to any Person
(other than to a Restricted Subsidiary) provided such Capital Stock shall be
excluded from the calculation under clause (C)(2) above;
(iii) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or other acquisition
or retirement of Indebtedness that is subordinate or junior in right of payment
to the Subordinated Notes by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to Alderwoods from any Person
(other than a Restricted Subsidiary) or (y) issue and sale of (1) Capital Stock
(other than Redeemable Capital Stock) of Alderwoods to any Person (other than a
Restricted Subsidiary), PROVIDED, HOWEVER, that the amount of any such net
proceeds that are utilized for any such redemption, repurchase or other
acquisition or retirement shall be excluded from clause (C)(2) of the preceding
paragraph, or (2) Indebtedness of Alderwoods issued to any Person (other than a
Restricted Subsidiary), so long as such Indebtedness is Indebtedness that is
subordinate or junior in right of payment to the Subordinated Notes in the same
manner and at least to the same extent as the Indebtedness so purchased,
exchanged, redeemed, acquired or retired;
(iv) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or other acquisition
or retirement of Pari Passu Indebtedness by exchange for, or out of the net cash
proceeds of, a substantially concurrent (x) capital contribution to Alderwoods
from any Person (other than a Restricted Subsidiary) or (y) issue and sale of
(1) Capital Stock (other than Redeemable Capital Stock) of Alderwoods to any
Person (other than a Restricted Subsidiary); PROVIDED, HOWEVER, that the amount
of any
28
such net proceeds that are utilized for any such redemption, repurchase or other
acquisition or retirement shall be excluded from clause (C)(2) of the preceding
paragraph; or (2) Indebtedness of Alderwoods issued to any Person (other than a
Restricted Subsidiary), so long as such Indebtedness is Pari Passu Indebtedness
or Indebtedness that is subordinate or junior in right of payment to the
Subordinated Notes in the same manner and at least to the same extent as the
Indebtedness so purchased, exchanged, redeemed, acquired or retired; PROVIDED,
FURTHER, nothing contained in this Indenture shall limit or restrict the right
of Alderwoods and/or its Subsidiaries to make any principal payment on, or
purchase, defease, redeem, Refinance or otherwise retire for value, prior to any
scheduled maturity, scheduled payment or other Stated Maturity, any Indebtedness
in respect of the Exit Facility;
(v) Investments constituting Restricted Payments made
as a result of the receipt of consideration that consists of cash or Cash
Equivalents from any Asset Sale;
(vi) Investments constituting Restricted Payments
that are permitted by subparagraphs (v) and (vi) of the proviso to Section 4.13;
or
(vii) the Restructuring Transactions.
In computing the amount of Restricted Payments previously made for
purposes of clause (C) of the first full paragraph of this Section 4.08,
Restricted Payments made under the preceding clauses (v) and (vi) shall be
included and those under clauses (i), (ii), (iii), (iv) and (vii) shall not be
so included.
SECTION 4.09 LIMITATION ON ISSUANCES AND SALE OF STOCK BY RESTRICTED
SUBSIDIARIES.
(a) Alderwoods (i) will not permit any of its Restricted
Subsidiaries to issue any Preferred Stock (other than Preferred Stock issued to
Alderwoods or a Restricted Subsidiary of Alderwoods), and (ii) will not permit
any Person to own any Preferred Stock of any Restricted Subsidiary (other than
(i) Preferred Stock owned by Alderwoods or a Subsidiary Guarantor of Alderwoods
or (ii) Preferred Stock of any Person issued prior to such Person becoming a
Restricted Subsidiary not issued in contemplation of such event); PROVIDED,
HOWEVER, that this covenant shall not prohibit the issuance and sale of (x) all,
but not less than all, of the issued and outstanding Capital Stock of any
Restricted Subsidiary owned by Alderwoods or any of its Restricted Subsidiaries
in compliance with the other provisions of this Indenture or (y) directors'
qualifying shares or investments by foreign nationals mandated by applicable
law.
(b) Alderwoods will not, or permit any Restricted Subsidiary
to, transfer, convey, sell or dispose of any Capital Stock of any Restricted
Subsidiary (other than (i) sales, for valid business reasons, of non-voting
equity comprising up to 40% of the Capital Stock of any Restricted Subsidiary to
operators of funeral homes and/or cemeteries and (ii) with respect to DSP
General Partner, Inc., a Texas corporation, Directors Succession Planning, Inc.,
a California corporation, Rose Hills Holding Corp., a Delaware corporation, any
Subsidiary of any such Person, and any successors to any of the foregoing, or
(iii) to Alderwoods or a Subsidiary Guarantor or, with respect to Capital Stock
owned by a Restricted Subsidiary that is not a Subsidiary Guarantor, to another
such Restricted Subsidiary) unless such transaction complies with Section 4.12
hereof.
(c) Alderwoods will not permit any Restricted Subsidiary
(other than DSP General Partner, Inc., a Texas corporation, Directors Succession
Planning, Inc., a California corporation, Rose Hills Holding Corp., a Delaware
corporation, any Subsidiary of any such Person, and any successors to any of the
foregoing) to issue any of its Equity Interests (other than (i) to Alderwoods or
one of its Restricted Subsidiaries or (ii) issuances, for valid business
reasons, of non-voting equity comprising up to 40% of the Capital Stock of any
Restricted Subsidiary to operators of funeral homes and/or cemeteries) unless
such transaction complies with Section 4.12 hereof.
SECTION 4.10 LIMITATION ON LIENS.
Alderwoods will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than
(a) Liens existing as of the Measurement Date, (b) Liens securing the Exit
Facility or the Five-Year Notes or pursuant to Sections 7.08 or 8.02 of each of
the Two-Year Indenture, the
29
Five-Year Indenture, the Seven-Year Indenture or this Indenture, (c) Liens in
favor of Alderwoods or any Restricted Subsidiary, (d) Liens securing
Indebtedness that is incurred to refinance Indebtedness that has been secured by
a Lien permitted under the provisions of this Indenture and that has been
incurred in accordance with the provisions of the Indenture; PROVIDED, HOWEVER,
that such Liens do not extend to or cover any property or assets of Alderwoods
or any of its Restricted Subsidiaries not securing the Indebtedness so
refinanced, and (e) Permitted Liens) of any kind against or upon any of its
property or assets, or any proceeds therefrom where the aggregate amount of
Indebtedness secured by any such Liens exceeds $50,000,000.
SECTION 4.11 CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, Alderwoods will make an
offer to purchase (a "CHANGE OF CONTROL OFFER"), and shall purchase, on a
Business Day (the "CHANGE OF CONTROL PURCHASE DATE") not more than 60 nor less
than 30 days following the occurrence of the Change of Control, all of the then
outstanding Subordinated Notes properly tendered and not withdrawn at a purchase
price (the "CHANGE OF CONTROL PURCHASE PRICE") equal to 100% of their principal
amount plus accrued and unpaid interest. The Change of Control Offer is required
to remain open for at least 20 Business Days and until the close of business on
the Change of Control Purchase Date.
Notice of a Change of Control Offer shall be mailed by Alderwoods not
later than the 30th day after the date of occurrence of the Change of Control to
the Holders of Subordinated Notes at their last registered addresses with a copy
to the Trustee and the Paying Agent. The Change of Control Offer shall remain
open from the time of mailing for at least 20 Business Days and until 5:00 p.m.,
New York City time, three Business Days prior to the Change of Control Purchase
Date. The notice, which shall govern the terms of the Change of Control Offer,
shall include such disclosures as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to
this Section 4.11 and that all Subordinated Notes validly tendered into the
Change of Control Offer and not withdrawn will be accepted for payment;
(b) the purchase price (including the amount of accrued
interest, if any) for each Subordinated Note, the Change of Control Purchase
Date and the date on which the Change of Control Offer expires;
(c) that any Subordinated Note not tendered for payment will
continue to accrue interest in accordance with the terms thereof;
(d) that, unless Alderwoods defaults in the payment of the
purchase price, any Subordinated Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(e) that Holders electing to have Subordinated Notes purchased
pursuant to a Change of Control Offer must surrender their Subordinated Notes to
the Paying Agent at the address specified in the notice prior to 5:00 p.m., New
York City time, three Business Days prior to the Change of Control Purchase Date
and must complete any form of letter of transmittal proposed by Alderwoods and
reasonably acceptable to the Trustee and the Paying Agent;
(f) that Holders of Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00 p.m.,
New York City time, one Business Day prior to the Change of Control Purchase
Date, a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Subordinated Notes the Holder delivered for purchase,
the Subordinated Note certificate number (if any) and a statement that such
Holder is withdrawing its election to have such Subordinated Notes purchased;
(g) that Holders whose Subordinated Notes are purchased only
in part will be issued Subordinated Notes equal in principal amount to the
unpurchased portion of the Subordinated Notes surrendered;
30
(h) the instructions that Holders must follow in order to
tender their Subordinated Notes; and
(i) such other information concerning Alderwoods and the
Change of Control offer as Alderwoods reasonably determines is appropriate.
Alderwoods shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Subordinated Notes as a result of a Change of Control.
On the Change of Control Purchase Date, Alderwoods shall (i) accept for
payment Subordinated Notes or portions thereof validly tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent money, in
immediately available funds, sufficient to pay the purchase price of all
Subordinated Notes or portions thereof so tendered and accepted, and (iii)
deliver to the Trustee the Subordinated Notes so accepted together with an
Officers' Certificate setting forth the Subordinated Notes or portions thereof
tendered to and accepted for payment by Alderwoods. The Paying Agent shall
promptly mail or deliver to the Holders of Subordinated Notes so accepted
payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Subordinated Note equal
in principal amount to any unpurchased portion of the Subordinated Note
surrendered. Any Subordinated Notes not so accepted shall be promptly mailed or
delivered by Alderwoods to the Holder thereof.
Alderwoods will publicly announce the results of the Change of Control
Offer not later than the first Business Day following the Change of Control
Purchase Date.
If a Change of Control occurs and Alderwoods fails to pay the Change of
Control Purchase Price for all Subordinated Notes properly tendered and not
withdrawn, Alderwoods will be obliged to purchase all such Subordinated Notes at
the Change of Control Purchase Price on the Change of Control Purchase Date in
compliance with the requirements applicable to a Change of Control Offer made by
Alderwoods. Alderwoods shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in a
manner, at the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by Alderwoods and purchases all
Subordinated Notes validly tendered and not withdrawn under such Change of
Control Offer. Alderwoods will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act, and any other securities laws
or regulations in connection with the repurchase of Subordinated Notes pursuant
to a Change of Control Offer.
31
SECTION 4.12 DISPOSITION OF PROCEEDS OF ASSET SALES. (a) Alderwoods
will not, and will not permit any of its Restricted Subsidiaries (other than
Rose Hills Holding Corp., a Delaware corporation, or any Subsidiary thereof) to,
make any Asset Sale unless (i) Alderwoods or such Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or otherwise
disposed of and (ii) except with respect to assets listed on Schedule 4.12
hereto, at least 75% of such consideration consists of cash or Cash Equivalents.
To the extent the Net Cash Proceeds of any Asset Sale are not required to be
applied to repay, and permanently reduce the commitments under, the Exit
Facility (as required by the terms thereof) or are applied to payment of
Two-Year Notes, Five-Year Notes, Seven-Year Notes or Subordinated Notes (or with
respect to assets of Rose Hills Holding Corp., a Delaware corporation, or any of
its Subsidiaries, to repay Indebtedness under the Rose Hills Credit Agreement or
the Rose Hills Indenture), Alderwoods or such Restricted Subsidiary, as the case
may be, may, within 270 days of such Asset Sale, apply such Net Cash Proceeds to
an investment in properties and assets that replace the properties and assets
that were the subject of such Asset Sale or in properties and assets that will
be used in the business of Alderwoods and its Restricted Subsidiaries as
existing on the Measurement Date or in businesses reasonably related thereto
("REPLACEMENT ASSETS"). Any Net Cash Proceeds from any Asset Sale that are
neither used to repay, and permanently reduce the commitments under, the Exit
Facility or Two-Year Notes, Five-Year Notes, Seven-Year Notes or Subordinated
Notes (or with respect to assets of Rose Hills Holding Corp., a Delaware
corporation, or any of its Subsidiaries, to repay Indebtedness under the Rose
Hills Credit Agreement or the Rose Hills Indenture) nor invested in Replacement
Assets within the 270-day period described above exceeding, in the aggregate,
$10,000,000 in any fiscal year of Alderwoods constitute "EXCESS PROCEEDS"
subject to disposition as provided below.
(b) When the aggregate amount of Excess Proceeds equals or
exceeds $10,000,000, Alderwoods shall make an offer to purchase (an "ASSET SALE
OFFER"), from all holders of Subordinated Notes, not more than 40 Business Days
thereafter, an aggregate principal amount of Subordinated Notes equal to such
Excess Proceeds, at a price in cash equal to 100% of the outstanding principal
amount thereof plus accrued and unpaid interest, if any, to the purchase date
(the "ASSET SALE OFFER PRICE").
(c) Notice of an Asset Sale Offer shall be mailed by
Alderwoods to all Holders of Subordinated Notes not less than 20 Business Days
nor more than 40 Business Days before the date on which Alderwoods intends to
consummate the Asset Sale Offer ("ASSET SALE PURCHASE DATE") at their last
registered address with a copy to the Trustee and the Paying Agent. The Asset
Sale Offer shall remain open from the time of mailing for at least 20 Business
Days and until at least 5:00 p.m., New York City time, three Business Days prior
to the Asset Sale Purchase Date. The notice, which shall govern the terms of the
Asset Sale Offer, shall include such disclosures as are required by law and
shall state:
(i) that the Asset Sale Offer is being made pursuant
to this Section 4.12;
(ii) the Asset Sale Offer Price (including the amount
of accrued interest, if any) for each Subordinated Note, the Asset Sale Purchase
Date and the date on which the Asset Sale Offer expires;
(iii) that any Subordinated Note not tendered or
accepted for payment will continue to accrue interest in accordance with the
terms thereof;
(iv) that, unless Alderwoods defaults in the payment
of the Asset Sale Offer Price, any Subordinated Note accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset
Sale Purchase Date;
(v) that Holders electing to have Subordinated Notes
purchased pursuant to an Asset Sale Offer must surrender their Subordinated
Notes to the Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, three Business Days prior to the Asset Sale Purchase
Date and must complete any form of letter of transmittal proposed by Alderwoods
and reasonably acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York City
time, one Business Day prior to the Asset Sale Purchase Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Subordinated Notes the
32
Holder delivered for purchase, the Subordinated Note certificate number (if any)
and a statement that such Holder is withdrawing its election to have such
Subordinated Notes purchased;
(vii) that if Subordinated Notes in a principal
amount in excess of the Holder's pro rata share of the amount of Excess Proceeds
are tendered pursuant to the Asset Sale Offer, Alderwoods shall purchase
Subordinated Notes on a pro rata basis among the Subordinated Notes tendered
(with such adjustments as may be deemed appropriate by Alderwoods so that only
Subordinated Notes in denominations of $100 or integral multiples of $100 shall
be acquired);
(viii) that Holders whose Subordinated Notes are
purchased only in part will be issued new Subordinated Notes equal in principal
amount to the unpurchased portion of the Subordinated Notes surrendered;
(ix) the instructions that Holders must follow in
order to tender their Subordinated Notes; and
(x) such other information concerning Alderwoods and
the Asset Sale Offer as Alderwoods reasonably determines is appropriate.
Alderwoods shall comply with the requirements under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with any Asset Sales and Asset Sale
Offers.
(d) On the Asset Sale Purchase Date, Alderwoods shall (i)
accept for payment, on a pro rata basis, Subordinated Notes or portions thereof
tendered pursuant to the Asset Sale Offer, (ii) deposit with the Paying Agent
money, in immediately available funds, in an amount sufficient to pay the Asset
Sale Offer Price of all Subordinated Notes or portions thereof so tendered and
accepted and (iii) deliver to the Trustee the Subordinated Notes so accepted
together with an Officers' Certificate setting forth the Subordinated Notes or
portions thereof tendered to and accepted for payment by Alderwoods. The Paying
Agent shall promptly mail or deliver to Holders of Subordinated Notes so
accepted payment in an amount equal to the Asset Sale Offer Price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Subordinated Note equal in principal amount to any unpurchased portion of the
Subordinated Note surrendered. Any Subordinated Notes not so accepted shall be
promptly mailed or delivered by Alderwoods to the Holder thereof.
(e) Alderwoods will publicly announce the results of the Asset
Sale Offer not later than the second Business Day following the Asset Sale
Purchase Date. To the extent that the aggregate principal amount of Subordinated
Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds,
Alderwoods may use such deficiency for general corporate purposes. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero. For purposes of this Section 4.12, the Trustee shall act as
Paying Agent.
(f) Alderwoods will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Subordinated Notes pursuant
to the Asset Sale Offer.
SECTION 4.13 LIMITATION ON TRANSACTIONS WITH INTERESTED PERSONS.
Alderwoods will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, transfer, disposition, purchase, exchange or lease of assets, property
or services) with, or for the benefit of, any Affiliate of Alderwoods or any
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
of 5% or more of the Common Stock of Alderwoods at any time outstanding
("INTERESTED PERSONS"), unless (a) such transaction or series of related
transactions are on terms that are no less favorable to Alderwoods or such
Restricted Subsidiary, as the case may be, than those that could have been
obtained in a comparable transaction at such time from Persons who are not
Affiliates of Alderwoods or Interested Persons, and (b) with respect to a
transaction or series of transactions involving aggregate payments or value
equal to or greater than $25,000,000, Alderwoods has
33
obtained a written opinion from an Independent Financial Advisor stating that
the terms of such transaction or series of transactions are fair to Alderwoods
or its Restricted Subsidiary, as the case may be, from a financial point of
view; PROVIDED, HOWEVER, that this covenant will not restrict Alderwoods or any
Restricted Subsidiary from (i) paying dividends in respect of its Capital Stock
permitted under Section 4.08, (ii) paying reasonable and customary fees to
directors of Alderwoods or any Restricted Subsidiary who are not otherwise
employees of Alderwoods or any Restricted Subsidiary, (iii) entering into
transactions with its Restricted Subsidiaries or permitting its Restricted
Subsidiaries from entering into transactions with Alderwoods or other Restricted
Subsidiaries of Alderwoods, (iv) creating employee stock ownership plans or
similar benefit plans, (v) making loans or advances to officers, employees or
consultants of Alderwoods or any of its Restricted Subsidiaries for travel and
moving expenses in the ordinary course of business for bona fide business
purposes of Alderwoods or any of its Restricted Subsidiaries, (vi) making other
loans or advances to officers, employees or consultants of Alderwoods or any of
its Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes of Alderwoods or any of its Restricted Subsidiaries not in
excess of $5,000,000 in the aggregate at any one time outstanding, (vii) making
payments to officers or employees of Alderwoods or any of its Restricted
Subsidiaries pursuant to obligations undertaken, at a time when such Persons
were not officers or employees of Alderwoods or any of its Restricted
Subsidiaries, in connection with arms' length Asset Acquisitions, (viii)
purchase or redemption of Two-Year Notes, Five-Year Notes or Seven-Year Notes at
their Fair Market Value, or (ix) engaging in the Restructuring Transactions.
SECTION 4.14 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
Alderwoods will not, and will not permit any of its Restricted
Subsidiaries (other than Rose Hills Holding Corp., a Delaware corporation, or
any Subsidiary thereof, pursuant to the Rose Hills Credit Agreement or the Rose
Hills Indenture) to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) other than with respect to non-Wholly Owned
Subsidiaries organized under the laws of a province of Canada, pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock or any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness owed to Alderwoods or any other Restricted
Subsidiary, (c) make loans or advances to, or any Investment in, Alderwoods or
any other Restricted Subsidiary, (d) other than with respect to DSP General
Partner, Inc., a Texas corporation, Directors Succession Planning, Inc., a
California corporation, any Subsidiary of either such Person, or any successor
thereto, transfer any of its properties or assets to Alderwoods or any other
Restricted Subsidiary, or (e) guarantee any Indebtedness of Alderwoods or any
other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law or regulations, (ii) customary
non-assignment provisions of any contract or any lease governing a leasehold
interest of Alderwoods or any Restricted Subsidiary, (iii) customary
restrictions on transfers of property subject to a Lien permitted under the
provisions of this Indenture which could not materially adversely affect
Alderwoods' ability to satisfy its obligations under the provisions of this
Indenture and the Subordinated Notes, (iv) any agreement or other instrument of
a Person acquired by Alderwoods or any Restricted Subsidiary (or a Restricted
Subsidiary of such Person) in existence at the time of such acquisition (but not
created in contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the properties or assets of the Person, so acquired, (v)
provisions contained in any agreement or instrument relating to Indebtedness
that prohibit the transfer of all or substantially all of the assets of the
obligor thereunder unless the transferee shall assume the obligations of the
obligor under such agreement or instrument, and (vi) encumbrances and
restrictions under Indebtedness in effect on the Measurement Date (including
under the Exit Facility, the Two-Year Notes, the Five-Year Notes and the
Seven-Year Notes) or encumbrances and restrictions in permitted refinancings or
replacements thereof which are no less favorable to the holders of the
Subordinated Notes than those contained in the Indebtedness so refinanced or
replaced.
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SECTION 4.15 FUTURE GUARANTORS. Alderwoods shall cause each (i)
Restricted Subsidiary of Alderwoods organized under the laws of any state or
commonwealth of the United States (other than Excluded Subsidiaries) that
Guarantees any Indebtedness of Alderwoods or any other Restricted Subsidiary and
(ii) newly formed Restricted Subsidiary of Alderwoods that is a Wholly Owned
Subsidiary organized under the laws of any state or commonwealth of the United
States (other than Excluded Subsidiaries) to at the same time execute and
deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted
Subsidiary will Guarantee payment of the Subordinated Notes on the same terms
and conditions as those set forth in Article 12 of this Indenture.
SECTION 4.16 [INTENTIONALLY OMITTED]
SECTION 4.17 COMMISSION REPORTS.
Alderwoods shall file with the Commission, or if not permitted or
required to so file will deliver to the Trustee, the annual reports, quarterly
reports and the information, documents and other reports required to be filed
with the Commission pursuant to Sections 13 and 15 of the Exchange Act, whether
or not Alderwoods has a class of securities registered under the Exchange Act.
In accordance with the provisions of TIA Section 314(a), Alderwoods shall file
with the Trustee and provide to each Holder, within 15 days after it files them
with the Commission (or if such filing is not permitted under the Exchange Act,
15 days after Alderwoods would have been required to make such filing), copies
of such reports. Alderwoods also shall comply with the other provisions of TIA
Section 314(a). In addition, Alderwoods shall cause its annual reports to
stockholders and any quarterly or other financial reports furnished by it to
stockholders generally to be filed with the Trustee and mailed no later than the
date such materials are mailed or made available to Alderwoods' stockholders, to
the Holders at their addresses as set forth in the register of securities
maintained by the Registrar.
SECTION 4.18 RULE 144A INFORMATION REQUIREMENT.
If at any time Alderwoods is no longer subject to the reporting
requirements of the Exchange Act, it will furnish to the Holders or beneficial
holders of the Subordinated Notes and prospective purchasers of the Subordinated
Notes designated by the holders of the Subordinated Notes, upon their request,
any information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 4.19 WAIVER OF STAY, EXTENSION OR USURY LAWS.
Alderwoods 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 or any usury law or
other law that would prohibit or forgive Alderwoods from paying all or any
portion of the principal of, premium, if any, or interest on the Subordinated
Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or that may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) Alderwoods 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.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 WHEN ALDERWOODS MAY MERGE, ETC.
(a) Other than pursuant to the Restructuring Transactions,
Alderwoods will not, in any transaction or series of transactions, merge or
consolidate with or into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets as an entirety
to, any Person or Persons, and Alderwoods will not permit any of its Restricted
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the properties and assets of Alderwoods
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and its Restricted Subsidiaries, taken as a whole, to any other Person or
Persons, unless at the time of and after giving effect thereto:
(i) either (A) if the transaction or series of
transactions is a merger or consolidation, Alderwoods or the Restricted
Subsidiary, as the case may be, shall be the surviving Person of such merger or
consolidation, or (B) the Person formed by such consolidation or into which
Alderwoods is merged or to which the properties and assets of Alderwoods are
transferred (any such surviving Person or transferee Person being the "SURVIVING
ENTITY") shall be a corporation organized and existing under the laws of the
United States of America, any state thereof, or the District of Columbia and
shall expressly assume by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of, premium, if any, and interest on all the
Subordinated Notes and the performance and observance of every covenant and
obligation of this Indenture and the Subordinated Notes on the part of
Alderwoods, to be performed or observed and, in each case, this Indenture shall
remain in full force and effect;
(ii) immediately before and immediately after giving
effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing and Alderwoods or the Surviving Entity, as the case may be, after
giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), could incur $1.00 of additional Indebtedness other than Permitted
Indebtedness pursuant to Section 4.07 (assuming a market rate of interest with
respect to such additional Indebtedness);
(iii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions),
the Consolidated Net Worth of Alderwoods or the Surviving Entity, as the case
may be, is at least equal to the Consolidated Net Worth of Alderwoods
immediately before such transaction or series of transactions; and
(iv) Alderwoods or the Surviving Entity, as the case
may be, shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each in form and substance reasonably satisfactory to the
Trustee, each stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition and, if a supplemental
indenture is required in connection with such transaction or series of
transactions, such supplemental indenture, complies with this Indenture and that
all conditions precedent herein provided for relating to such transaction or
series of transactions have been complied with; PROVIDED, HOWEVER, that solely
for purposes of computing amounts described in subclause (C) of Section 4.08,
any such successor Person shall only be deemed to have succeeded to and be
substituted for Alderwoods with respect to periods subsequent to the effective
time of such merger, consolidation or transfer of assets.
(b) Alderwoods shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person other than Alderwoods or another Subsidiary Guarantor or pursuant
to the Restructuring Transactions unless:
(i) except in the case of a Subsidiary Guarantor that
has been disposed of in its entirety to another Person (other than to Alderwoods
or an Affiliate of Alderwoods), whether through a merger, consolidation or sale
of Capital Stock or assets, if in connection therewith Alderwoods provides an
Officers' Certificate to the Trustee to the effect that Alderwoods will comply
with its obligations under Section 4.12 in respect of such disposition, the
resulting, surviving or transferee Person (if not such Subsidiary) shall be a
Person organized and existing under the laws of the jurisdiction under which
such Subsidiary was organized or under the laws of the United States of America,
or any state thereof or the District of Columbia, and such Person shall
expressly assume, by a Guarantee Agreement, in a form satisfactory to the
Trustee, all the obligations of such Subsidiary, if any, under its Subsidiary
Guarantee;
(ii) immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Indebtedness
that becomes an obligation of the resulting, surviving or transferee
36
Person as a result of such transaction as having been issued by such Person at
the time of such transaction), no Default shall have occurred and be continuing;
and
(iii) Alderwoods delivers to the Trustee an Officers'
Certificate stating that such consolidation, merger or transfer and such
Guarantee Agreement, if any, complies with this Indenture.
SECTION 5.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of Alderwoods in accordance with Section 5.01 hereof, the successor
Person or Persons formed by such consolidation or into which Alderwoods is
merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or other disposition is made, shall succeed to, and be
substituted for, and may exercise every right and power of, Alderwoods under
this Indenture and the Subordinated Notes with the same effect as if such
successor had been named as Alderwoods herein; PROVIDED, HOWEVER, that solely
for purposes of computing amounts described in subclause (C) of Section 4.08,
any such successor Person shall only be deemed to have succeeded to and be
substituted for Alderwoods with respect to periods subsequent to the effective
time of such merger, consolidation or transfer of assets.
ARTICLE 6
REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" with respect to the Subordinated Notes means any
of the following events:
(a) default in the payment of the principal of or premium, if
any, on any Subordinated Note when the same becomes due and payable (upon Stated
Maturity, acceleration, redemption, required purchase, scheduled principal
payment or otherwise);
(b) default in the payment of an installment of interest on
any Subordinated Note, when the same becomes due and payable, and any such
Default continues for a period of 30 days;
(c) failure to perform or observe any material term, covenant
or agreement contained in Sections 4.11, 4.12 or 5.01;
(d) failure to perform or observe any other term, covenant or
agreement contained in the Subordinated Notes or pursuant to the provisions of
this Indenture (other than Defaults specified in clause (a), (b), or (c) above)
and such Default continues for a period of 30 days after written notice of such
Default requiring Alderwoods to remedy the same shall have been given (i) to
Alderwoods by the Trustee or (ii) to Alderwoods and the Trustee by Holders of at
least 25% in aggregate principal amount of the Subordinated Notes then
outstanding;
(e) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the payment of
money in excess of $25,000,000, either individually or in the aggregate, shall
be entered against Alderwoods or any Restricted Subsidiary or any of their
respective properties and shall not be discharged or bonded against or stayed
and there shall have been a period of 60 days after the date on which any period
for appeal has expired and during which a stay of enforcement of such judgment,
order or decree, shall not be in effect;
(f) default under any Indebtedness under which Alderwoods or
any Restricted Subsidiary then has outstanding in excess of $25,000,000 that
continues beyond any applicable grace period set forth in the documentation
governing such Indebtedness and either (x) such default arises from Alderwoods'
or a Restricted Subsidiary's failure to pay when due principal of or interest on
any such Indebtedness or (y) such Indebtedness is due and payable in full or
such default has resulted in the acceleration of the maturity of such
Indebtedness;
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(g) Alderwoods or any Significant Subsidiary of Alderwoods
pursuant to or under or within the meaning of any Bankruptcy Law:
(1) commences a voluntary case or
proceeding;
(2) consents to the entry of an order for
relief against it in an involuntary case or proceeding;
(3) consents to the appointment of a
Custodian of it or for all or substantially all of its
property;
(4) makes a general assignment for the
benefit of its creditors; or
(5) shall generally not pay its debts when
such debts become due or shall admit in writing its inability
to pay its debts generally; or
(6) takes any corporate action to authorize
or effect any of the foregoing;
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(1) is for relief against Alderwoods or any
Significant Subsidiary of Alderwoods in an involuntary case or
proceeding,
(2) appoints a Custodian of Alderwoods or
any Significant Subsidiary of Alderwoods for all or
substantially all of its properties, or
(3) orders the liquidation of Alderwoods or
any Significant Subsidiary of Alderwoods, and in each case the
order or decree remains unstayed and in effect for 60 days; or
(i) actual invalidity (or the assertion thereof by Alderwoods
or any Subsidiary) of any Subsidiary Guarantee resulting from acts or omissions
of Alderwoods, other than in accordance with the terms hereof or thereof.
Subject to the provisions of Sections 7.01 and 7.02, the Trustee shall
not be charged with knowledge of any Default or Event of Default unless written
notice thereof shall have been given to a Trust Officer at the Corporate Trust
Office of the Trustee by Alderwoods, the Paying Agent, any Holder, any holder of
Indebtedness of Alderwoods or any of their respective agents.
SECTION 6.02 ACCELERATION.
If an Event of Default (other than as specified in Section 6.01(g) or
6.01(h) with respect to Alderwoods or any Significant Subsidiary) occurs and is
continuing with respect to the Subordinated Notes, the Trustee, by written
notice to Alderwoods, or the Holders of at least 25% in aggregate principal
amount of the Subordinated Notes then outstanding, by written notice to the
Trustee and Alderwoods, may declare the principal of, premium, if any, and
accrued and unpaid interest, if any, on all of the Subordinated Notes to be due
and payable immediately, upon which declaration, all amounts payable in respect
of the Subordinated Notes shall be immediately due and payable. If an Event of
Default specified in Section 6.01(g) or 6.01(h) occurs with respect to
Alderwoods or any Significant Subsidiary and is continuing, then the principal
of, premium, if any, and accrued and unpaid interest, if any, on all of the
Subordinated Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder of
Subordinated Notes.
After a declaration of acceleration hereunder with respect to the
Subordinated Notes, but before a judgment or decree for payment of the money due
has been obtained by the Trustee, the Holders of a majority in aggregate
principal amount of the outstanding Subordinated Notes, by written notice to
Alderwoods and the Trustee, may
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rescind such declaration if: (a) Alderwoods has paid or deposited with the
Trustee a sum sufficient to pay (i) all amounts due the Trustee under Section
7.08 and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, (ii) all overdue interest on all
Subordinated Notes, (iii) the principal of and premium, if any, on any
Subordinated Notes that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Subordinated Notes,
and (iv) to the extent that payment of such interest is lawful, interest upon
overdue interest and overdue principal that has become due otherwise than by
such declaration of acceleration at the rate borne by the Subordinated Notes;
(b) the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (c) all Events of Default, other than the
non-payment of principal of, premium, if any, and interest on the Subordinated
Notes that has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.04.
No such rescission shall affect any subsequent Default or Event of
Default or impair any right subsequent therein.
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Subordinated Notes or to
enforce the performance of any provision of the Subordinated Notes or this
Indenture.
All rights of action and claims under this Indenture or the
Subordinated Notes may be enforced by the Trustee even if it does not possess
any of the Subordinated Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
Subject to the provisions of Section 6.07, 9.02 and 9.07, the Holders
of not less than a majority in aggregate principal amount of the outstanding
Subordinated Notes by notice to the Trustee may, on behalf of the Holders of all
the Subordinated Notes, waive any existing Default or Event of Default and its
consequences, except a Default or Event of Default specified in Section 6.01(a)
or (b) or in respect of any provision hereof that cannot be modified or amended
without the consent of the Holder so affected pursuant to Section 9.02. When a
Default or Event of Default is so waived, it shall be deemed cured and shall
cease to exist.
SECTION 6.05 CONTROL BY MAJORITY.
The Holders of not less than a majority in aggregate principal amount
of the outstanding Subordinated Notes 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,
HOWEVER, that the Trustee may, with the advice of counsel, refuse to follow any
direction (a) that conflicts with any rule of law or this Indenture, (b) that
the Trustee determines in good faith would be unduly prejudicial to the rights
of another Holder, or (c) that would expose the Trustee to personal liability
unless the Trustee has been provided reasonable indemnity against any loss or
expense caused by its following such direction; and PROVIDED, FURTHER, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction.
SECTION 6.06 LIMITATION ON SUITS.
No Holder of any Subordinated Notes shall have any right to institute
any proceeding or pursue any remedy with respect to this Indenture or the
Subordinated Notes unless:
(a) the Holder gives written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the outstanding Subordinated Notes make a written request to the Trustee to
pursue the remedy;
39
(c) such Holder or Holders offer and, if requested, provide to
the Trustee reasonable indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 45
days after receipt of the request and the offer and, if requested, provision of
indemnity; and
(e) during such 45-day period the Holders of a majority in
aggregate principal amount of the outstanding Subordinated Notes do not give the
Trustee a direction which is inconsistent with the request.
The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal of, premium, if any, or
accrued interest on, such Subordinated Note on or after the respective due dates
set forth in such Subordinated Note.
A Holder may not use this Indenture to prejudice the rights of any
other Holders or to obtain priority or preference over such other Holders.
SECTION 6.07 RIGHT OF HOLDERS TO RECEIVE PAYMENT AND CONVERT
SUBORDINATED NOTES.
Notwithstanding any other provision in this Indenture but subject to
the provisions of Article 13, the right of any Holder of a Subordinated Note to
receive payment of the principal of, premium, if any, and interest on such
Subordinated Note, on or after the respective Stated Maturities expressed in
such Subordinated Note, to have such Holder's Subordinated Notes converted into
Alderwoods Common Stock in accordance with the terms hereof, or to bring suit
for the enforcement of any such payment on or after the respective Stated
Maturities or conversion, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in clause (a) or (b) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against Alderwoods or any other obligor on the
Subordinated Notes for the whole amount of principal of, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Subordinated Notes and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIMS.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to Alderwoods (or any other obligor upon the Subordinated
Notes), their creditors or their property and shall be entitled and empowered to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Holder to make such payments to the
Trustee and, if the Trustee consents to the making of such payments directly to
the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.08. Nothing
herein contained 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
Subordinated Notes 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.
40
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.08;
Second: to the Holders for interest accrued on the
Subordinated Notes, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Subordinated
Notes for interest;
Third: to the Holders for principal amounts (including any
premium) owing under the Subordinated Notes, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Subordinated Notes for principal (including any
premium); and
Fourth: the balance, if any, to Alderwoods.
The Trustee, upon prior written notice to Alderwoods, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court may in its discretion require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee, any suit by a
Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in
aggregate principal amount of the outstanding Subordinated Notes.
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Subordinated Note 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 Alderwoods, the Trustee and the Holders shall, subject to any determination
in such proceeding, 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.
ARTICLE 7
TRUSTEE
SECTION 7.01 DUTIES.
(a) If 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
such Person's own affairs.
(b) Except during the continuance of an Event of Default,
(1) the Trustee need perform only such
duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
41
(2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but if any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same
to determine whether they conform to the requirements of this
Indenture.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) this paragraph does not limit the effect
of paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant to
Section 6.05;
(d) 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.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
SECTION 7.02 RIGHTS OF TRUSTEE.
Subject to the TIA:
(a) the Trustee may rely on any document reasonably believed
by it to be genuine and to have been signed or presented by the proper Person,
and the Trustee need not investigate any fact or matter stated in the document;
(b) before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 11.04 and 11.05, and the Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such certificate or opinion;
(c) the Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care;
(d) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture
other than any liabilities arising out of its own negligence;
(e) the Trustee may consult with counsel of its own choosing
and the advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture,
42
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
(g) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
thereby.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee, any Paying Agent, Registrar, Conversion Agent or any other
agent of Alderwoods, in its individual or any other capacity, may become the
owner or pledgee of Subordinated Notes and, subject to Sections 7.11 and 7.12
and TIA Sections 310 and 311, may otherwise deal with Alderwoods and its
Subsidiaries with the same rights it would have if it were not the Trustee,
Paying Agent, Registrar, Conversion Agent or such other agent.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Subordinated Notes, it shall not be accountable for
Alderwoods' use or application of the proceeds from the Subordinated Notes, it
shall not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee and it shall not be responsible for any
statement in the Subordinated Notes other than the Trustee's certificate of
authentication.
SECTION 7.05 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
Default or Event of Default within 30 days after such Default or Event of
Default becomes known to the Trustee; PROVIDED, HOWEVER, that, except in the
case of a Default in the payment of the principal of, premium, if any, or
interest on any Subordinated Note, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee of
the board of directors or a committee of the directors of the Trustee and/or
Trust Officers in good faith determines that the withholding of such notice is
in the interest of the Holders.
SECTION 7.06 MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required herein
or by law. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder, except as the Trustee may agree with
Alderwoods.
SECTION 7.07 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 31st beginning with the May 31st
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) shall have occurred within the
previous twelve months, but not otherwise, mail to each Holder a brief report
dated as of such May 31st that complies with TIA Section 313(a). The Trustee
also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to Alderwoods and filed with the Commission and each securities exchange,
if any, on which the Subordinated Notes are listed.
Alderwoods shall notify the Trustee in writing if the Subordinated
Notes become listed on any securities exchange.
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SECTION 7.08 COMPENSATION AND INDEMNITY.
Alderwoods covenants and agrees to pay the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust.
Alderwoods shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
Alderwoods shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it arising out of or in connection
with the administration of this trust and its rights or duties hereunder,
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. The Trustee shall notify Alderwoods promptly of any claim
asserted against the Trustee for which it may seek indemnity. Alderwoods shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and Alderwoods shall pay the reasonable fees and expenses
of such counsel. Alderwoods need not pay for any settlement made without its
prior written consent. Alderwoods need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.
To secure the payment obligations of Alderwoods in this Section 7.08,
the Trustee shall have a Lien prior to the Subordinated Notes on all assets held
or collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of, premium, if any, or interest on particular
Subordinated Notes.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 6.01(g) or (h), the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligations of Alderwoods under this Section 7.08 and any Lien
arising hereunder shall survive the resignation or removal of any trustee, the
discharge of the obligations of Alderwoods pursuant to Article 8 and/or the
termination of this Indenture.
SECTION 7.09 REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying Alderwoods. The Holders of a
majority in principal amount of the outstanding Subordinated Notes may remove
the Trustee by so notifying Alderwoods and the Trustee and may appoint a
successor trustee with Alderwoods' prior written consent. Alderwoods may remove
the Trustee if:
(a) the Trustee fails to comply with Section 7.11;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, Alderwoods shall notify each Holder of such
event and shall promptly appoint a successor Trustee. The Trustee shall be
entitled to payment of its fees and reimbursement of its expenses while acting
as Trustee as provided in Section 7.08, and to the extent such amounts remain
unpaid, the Trustee that has resigned or has been removed shall retain the Lien
afforded by Section 7.08. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the outstanding
Subordinated Notes may, with Alderwoods' prior written consent, appoint a
successor Trustee to replace the successor Trustee appointed by Alderwoods.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to Alderwoods. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
44
successor Trustee, subject to the Lien provided in Section 7.08, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, Alderwoods or the
Holders of at least 10% in principal amount of the outstanding Subordinated
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.11, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.09, the obligations of Alderwoods under Section 7.08 shall continue for the
benefit of the retiring Trustee.
SECTION 7.10 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation
or national banking association, the resulting, surviving or transferee
corporation or national banking association without any further act shall, if
such resulting, surviving or transferee corporation or national banking
association is otherwise eligible hereunder, be the successor Trustee.
SECTION 7.11 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Sections 310(a)(1) and 310(a)(5) and which shall
have a combined capital and surplus of at least $500,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation 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, the Trustee shall resign
immediately in the manner and with the effect specified in this Article.
SECTION 7.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ALDERWOODS.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). If the present or any future
Trustee shall resign or be removed, it shall be subject to TIA Section 311(a) to
the extent provided therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01 TERMINATION OF THE OBLIGATION OF ALDERWOODS.
Alderwoods may terminate its obligations under the Subordinated Notes
and this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 8.01, if all Subordinated Notes previously
authenticated and delivered (other than destroyed, lost or stolen Subordinated
Notes that have been replaced or paid or Subordinated Notes for whose payment
money has theretofore been deposited with the Trustee or the Paying Agent in
trust or segregated and held in trust by Alderwoods and thereafter repaid to
Alderwoods, as provided in Section 8.04) have been delivered to the Trustee for
cancellation and Alderwoods has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article 3, Alderwoods shall have
given notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Subordinated Notes under arrangements
45
satisfactory to the Trustee for the giving of such notice or (ii) all
Subordinated Notes have otherwise become due and payable hereunder;
(b) Alderwoods shall have irrevocably deposited or caused to
be deposited with the Trustee or a trustee reasonably satisfactory to the
Trustee, under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit of
the Holders for that purpose, money in such amount as is sufficient without
consideration of reinvestment of interest, to pay principal of, premium, if any,
and interest on the outstanding Subordinated Notes to maturity or redemption, as
certified in a certificate of a nationally recognized firm of independent public
accountants; PROVIDED that the Trustee shall have been irrevocably instructed to
apply such money to the payment of said principal, premium, if any, and interest
with respect to the Subordinated Notes;
(c) no Default or Event of Default with respect to this
Indenture or the Subordinated Notes shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default under, any
other instrument to which Alderwoods is a party or by which it is bound;
(d) Alderwoods shall have paid all other sums payable by it
hereunder; and
(e) Alderwoods shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent providing for the termination of Alderwoods' obligation
under the Subordinated Notes and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, Alderwoods' obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02 and 7.08 shall survive until the
Subordinated Notes are no longer outstanding pursuant to Section 2.10. After the
Subordinated Notes are no longer outstanding, Alderwoods' obligations in
Sections 7.08, 8.03, 8.04 and 8.05 shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of Alderwoods' obligations under the
Subordinated Notes except for those surviving obligations specified above.
SECTION 8.02 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) Alderwoods may, at its option by Board Resolution, at any
time, with respect to the Subordinated Notes, elect to have either paragraph (b)
or paragraph (c) below be applied to the outstanding Subordinated Notes upon
compliance with the conditions set forth in paragraph (d).
(b) Upon Alderwoods' exercise under paragraph (a) of the
option applicable to this paragraph (b), Alderwoods shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Subordinated Notes on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, such legal defeasance means
that Alderwoods shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Subordinated Notes, which shall
thereafter be deemed to be "OUTSTANDING" only for the purposes of paragraph (e)
below and the other Sections of and matters under this Indenture referred to in
(i) and (ii) below, and to have satisfied all its other obligations under such
Subordinated Notes and this Indenture insofar as such Subordinated Notes are
concerned (and the Trustee, at the expense of Alderwoods, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Subordinated Notes to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in such paragraph,
payments in respect of the principal of, premium, if any, and interest on such
Subordinated Notes when such payments are due, (ii) Alderwoods' obligations with
respect to such Subordinated Notes under Sections 2.06, 2.07 and 4.02, and, with
respect to the Trustee, under Section 7.08, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, and (iv) this Article 8. Subject
to compliance with this Section 8.02, Alderwoods may exercise its option under
this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) below with respect to the Subordinated Notes.
46
(c) Upon the exercise by Alderwoods under paragraph (a) of the
option applicable to this paragraph (c), Alderwoods shall be released and
discharged from its obligations under any covenant contained in Article 5 and in
Sections 4.05 through 4.17 with respect to the outstanding Subordinated Notes on
and after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Subordinated Notes shall thereafter be deemed to
be not "OUTSTANDING" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "OUTSTANDING"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the outstanding Subordinated Notes, Alderwoods may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01, but, except as specified above, the
remainder of this Indenture and such Subordinated Notes shall be unaffected
thereby.
(d) The following shall be the conditions to application of
either paragraph (b) or paragraph (c) above to the outstanding Subordinated
Notes:
(i) Alderwoods shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.11 who shall agree to comply with the provisions of
this Section 8.02 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Subordinated Notes, (A)
cash, in United States dollars, in an amount sufficient to pay principal of,
premium, if any, and interest on the outstanding Subordinated Notes on the
Maturity Date, (B) direct non-callable obligations of, or non-callable
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligation the full faith and credit of the United States is
pledged ("U.S. GOVERNMENT OBLIGATIONS") maturing as to principal, premium, if
any, and interest in such amounts of cash, in United States dollars, and at such
times as are sufficient without consideration of any reinvestment of interest,
to pay principal of, premium, if any, and interest on the outstanding
Subordinated Notes not later than one day before the due date of any payment, or
(C) a combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge
principal of, premium, if any, and interest on the outstanding Subordinated
Notes (except lost, stolen or destroyed Subordinated Notes which have been
replaced or repaid) on the Maturity Date thereof or otherwise in accordance with
the terms of this Indenture and of such Subordinated Notes; PROVIDED, HOWEVER,
that the Trustee (or other qualifying trustee) shall have received an
irrevocable written order from Alderwoods instructing the Trustee (or other
qualifying trustee) to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to the Subordinated Notes, and to
secure the payment obligations of Alderwoods under this Section 8.02(d), the
Trustee shall have a perfected Lien prior to all other creditors on all such
money and proceeds;
(ii) no Default or Event of Default with respect to
the Subordinated Notes shall have occurred and be continuing on the date of such
deposit or, insofar as Section 6.01(a) is concerned, at any time during the
period commencing on the date of such deposit and ending on the 91st day
thereafter (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(iii) such legal defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting interest with respect to any
securities of Alderwoods;
(iv) such legal defeasance or covenant defeasance
shall not result in a breach or violation of, or constitute a Default or Event
of Default under, this Indenture or any other material agreement or instrument
to which Alderwoods is a party or by which it is bound;
(v) in the case of an election under paragraph (b)
above, Alderwoods shall have delivered to the Trustee an Opinion of Counsel
stating that (A) Alderwoods has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the date of this Indenture,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the outstanding Subordinated Notes will not recognize income, gain or
loss for federal income
47
tax purposes as a result of such legal defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such legal defeasance had not occurred;
(vi) in the case of an election under paragraph (c)
above, Alderwoods shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the outstanding Subordinated Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(vii) in the case of an election under either
paragraph (b) or (c) above, Alderwoods shall have delivered to the Trustee an
Opinion of Counsel to the effect that, (A) the trust funds will not be subject
to any rights of any other holders of Indebtedness of Alderwoods, and (B) after
the 91st day following the deposit, the trust funds will not be subject to the
effect of any applicable Bankruptcy Law; PROVIDED, HOWEVER, that if a court were
to rule under any such law in any case or proceeding that the trust funds
remained property of Alderwoods, no opinion needs to be given as to the effect
of such laws on the trust funds except the following: (x) assuming such trust
funds remained in the Trustee's possession prior to such court ruling to the
extent not paid to Holders of Subordinated Notes, the Trustee will hold, for the
benefit of the Holders of Subordinated Notes, a valid and enforceable security
interest in such trust funds that is not avoidable in bankruptcy or otherwise,
subject only to principles of equitable subordination, (y) the Holders of
Subordinated Notes will be entitled to receive adequate protection of their
interests in such trust funds if such trust funds are used, and (z) no property,
rights in property or other interests granted to the Trustee or the Holders of
Subordinated Notes in exchange for or with respect to any of such funds will be
subject to any prior rights of any other Person, subject only to prior Liens
granted under Section 364 of Title 11 of the U.S. Bankruptcy Code (or any
section of any other Bankruptcy Law having the same effect), but still subject
to the foregoing clause (y); and
(viii) Alderwoods shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that (A) all
conditions precedent provided for relating to either the legal defeasance under
paragraph (b) above or the covenant defeasance under paragraph (c) above, as the
case may be, have been complied with and (B) if any other Indebtedness of
Alderwoods shall then be outstanding or committed, such legal defeasance or
covenant defeasance will not violate the provisions of the agreements or
instruments evidencing such Indebtedness.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee)
pursuant to paragraph (d) above in respect of the outstanding Subordinated Notes
shall be held in trust and applied by the Trustee (or other qualifying trustee),
in accordance with the provisions of such Subordinated Notes and this Indenture,
to the payment, either directly or through any Paying Agent (other than
Alderwoods or any Affiliate of Alderwoods) as the Trustee (or other qualifying
trustee) may determine, to the Holders of such Subordinated Notes of all sums
due and to become due thereon in respect of principal, premium and interest, but
such money need not be segregated from other funds except to the extent required
by law.
Alderwoods shall pay and indemnify the Trustee (or other qualifying
trustee) against any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to paragraph (d) above or the
principal, premium, if any, and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the Holders
of the outstanding Subordinated Notes.
Anything in this Section 8.02 to the contrary notwithstanding, the
Trustee (or other qualifying trustee) shall deliver or pay to Alderwoods from
time to time upon the request, in writing, by Alderwoods any money or U.S.
Government Obligations held by it as provided in paragraph (d) above that, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (or other
qualifying trustee), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent legal defeasance or covenant
defeasance.
48
SECTION 8.03 APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 8.01 and 8.02, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Subordinated Notes.
SECTION 8.04 REPAYMENT TO ALDERWOODS.
Subject to Sections 7.08, 8.01 and 8.02, the Trustee shall promptly pay
to Alderwoods, upon receipt by the Trustee of an Officers' Certificate, any
excess money, determined in accordance with Section 8.02, held by it at any
time. The Trustee and the Paying Agent shall pay to Alderwoods, upon receipt by
the Trustee or the Paying Agent, as the case may be, of an Officers'
Certificate, any money held by it for the payment of principal, premium, if any,
or interest that remains unclaimed for two years after payment to the Holders is
required; PROVIDED, HOWEVER, that the Trustee and the Paying Agent before being
required to make any payment may, but need not, at the expense of Alderwoods
cause to be published once in a newspaper of general circulation in The City of
New York or mail to each Holder entitled to such money notice that such money
remains unclaimed and that after a date specified therein, which shall be at
least 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to Alderwoods. After payment
to Alderwoods, Holders entitled to money must look solely to Alderwoods for
payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or Paying Agent with
respect to such money shall thereupon cease.
SECTION 8.05 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then Alderwoods' obligations under this Indenture and the Subordinated
Notes shall be revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is permitted to apply
all such money or U.S. Government Obligations in accordance with this Indenture;
PROVIDED, HOWEVER, that if Alderwoods has made any payment of principal of,
premium, if any, or interest on any Subordinated Notes because of the
reinstatement of its obligations, Alderwoods shall be subrogated to the rights
of the Holders of such Subordinated Notes to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS.
Alderwoods, when authorized by a Board Resolution, and the Trustee may
amend, waive or supplement this Indenture or the Subordinated Notes without
notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article 5;
(c) to comply with any requirements of the Commission to
effect or maintain the qualification of this Indenture under the TIA; or
(d) to make any change that would provide any additional
benefit or rights to the Holders or that does not adversely affect the rights of
any Holder.
49
SECTION 9.02 WITH CONSENT OF HOLDERS.
Subject to Section 6.04, Alderwoods, when authorized by a Board
Resolution, and the Trustee may amend this Indenture or the Subordinated Notes
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Subordinated Notes then outstanding, and the Holders of
not less than a majority in aggregate principal amount of the Subordinated Notes
then outstanding by written notice to the Trustee may waive future compliance by
Alderwoods with any provision of this Indenture or the Subordinated Notes.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 9.01, may not:
(a) reduce the percentage in outstanding aggregate principal
amount of Subordinated Notes the Holders of which must consent to an amendment,
supplement or waiver of any provision of this Indenture or the Subordinated
Notes;
(b) reduce or change the rate or time for payment of interest
on any Subordinated Note;
(c) change the currency in which any Subordinated Note, or any
premium or interest thereon, is payable;
(d) reduce the principal amount outstanding of or extend the
fixed maturity of any Subordinated Note or alter the redemption provisions with
respect thereto;
(e) make the principal of, premium, if any, or interest on any
Subordinated Note payable in money other than that stated in the Subordinated
Note;
(f) modify this Section 9.02 or Section 6.04 or Section 6.07
or Section 9.07;
(g) amend, alter, change or modify the obligation of
Alderwoods to make and consummate a Change of Control Offer in the event of a
Change of Control or make and consummate the offer with respect to any Asset
Sale or modify any of the provisions or definitions with respect thereto;
(h) modify or change any provision of this Indenture affecting
the ranking or subordination of the Subordinated Notes in a manner adverse to
the Holders;
(i) impair the right to institute suit for the enforcement of
any payment on or with respect to the Subordinated Notes;
(j) release all or substantially all Subsidiary Guarantors and
other guarantors, if any, from guarantees of the Indebtedness evidenced by the
Subordinated Notes; or
(k) impairing the conversion rights of a Holder.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, Alderwoods shall mail to the Holder of each Subordinated Note
affected thereby, with a copy to the Trustee, a notice briefly describing the
amendment, supplement or waiver. Any failure of Alderwoods to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any amendment, supplement or waiver.
50
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment of or supplement to this Indenture or the Subordinated
Notes shall comply with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by such Holder and every subsequent
Holder of that Subordinated Note or portion of that Subordinated Note that
evidences the same debt as the consenting Holder's Subordinated Note, even if
notation of the consent is not made on any Subordinated Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Subordinated Note
or portion of a Subordinated Note prior to such amendment, supplement or waiver
becoming effective. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective. Notwithstanding the above, nothing in this paragraph
shall impair the right of any Holder under Section 316(b) of the TIA.
Alderwoods may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the second
and third sentences of the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. Such consent shall be effective
only for actions taken within 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder; unless it makes a change described in any of clauses (a)
through (j) of Section 9.02; if it makes such a change, the amendment,
supplement or waiver shall bind every consenting Holder and subsequent Holder of
a Subordinated Note or portion of a Subordinated Note that evidences the same
debt as the consenting Holder's Subordinated Note.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SUBORDINATED NOTES.
If an amendment, supplement or waiver changes the terms of a
Subordinated Note, the Trustee shall (in accordance with the specific direction
of Alderwoods) request the Holder of the Subordinated Note to deliver it to the
Trustee. The Trustee shall (in accordance with the specific direction of
Alderwoods) place an appropriate notation on the Subordinated Note about the
changed terms and return it to the Holder. Alternatively, if Alderwoods or the
Trustee so determines, Alderwoods in exchange for the Subordinated Note shall
issue and the Trustee shall authenticate a new Subordinated Note that reflects
the changed terms. Failure to make the appropriate notation or issue a new
Subordinated Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06 TRUSTEE MAY SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article 9 if the amendment, supplement or waiver does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In signing or refusing to
sign such amendment, supplement or waiver, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver is authorized or permitted by this Indenture, that it is
not inconsistent herewith and that it will be valid and binding upon Alderwoods
in accordance with its terms.
SECTION 9.07 EFFECT OF AMENDMENT TO OR WAIVER UNDER SEVEN-YEAR
INDENTURE.
Notwithstanding anything to the contrary contained herein or in any
Subordinated Note, any amendment to or waiver of covenants, defaults or other
aspects of the Seven-Year Indenture and Seven-Year Notes properly approved by or
on behalf of the requisite number of holders of Seven-Year Notes shall also,
without any action by Alderwoods, the Trustee, any Holder or any other Person,
immediately become effective in the same fashion with respect to this Indenture
and the Subordinated Notes; PROVIDED that at the time of such amendment or
waiver
51
there is a greater aggregate principal amount of Seven-Year Notes outstanding
than the then outstanding aggregate principal amount of Subordinated Notes; AND
PROVIDED FURTHER, that any amendment or waiver with respect to (i) the principal
amount outstanding of any Subordinated Note, (ii) the rate or time for payment
of interest on any Subordinated Note, (iii) the fixed maturity of any
Subordinated Note, and (iv) the obligation to pay in full in cash the principal
of, premium, if any, or interest on any Subordinated Note when due, shall
require the applicable consent of each Holder affected thereby as required under
Section 9.02 hereof.
ARTICLE 10
[INTENTIONALLY OMITTED]
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT OF 1939.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.
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 excluded,
as the case may be.
SECTION 11.02 NOTICES.
Any notice or communication shall be sufficiently given if in writing
and delivered in person sent by facsimile (with confirmed answerback) or mailed
by first class mail, postage prepaid, addressed as follows:
If to Alderwoods or any Restricted Subsidiary or Subsidiary Guarantor:
Alderwoods Group, Inc.
11th Floor, Atria III
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Facsimile Number: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Alderwoods Group, Inc.
11th Floor, Atria III
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Facsimile Number: (000) 000-0000
Attention: Treasurer
If to the Trustee to:
Xxxxx Fargo Bank Minnesota, N.A.
Sixth Street and Marquette Avenue
MAC X0000-000
Xxxxxxxxxxx, XX 00000
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Facsimile Number: (000) 000-0000
Attention: Corporate Trust - Alderwoods Administrator
The parties hereto by notice to the other parties may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, postage prepaid, to a Holder,
including any notice delivered in connection with TIA Section 310(b), TIA
Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be mailed by
first class mail to such Holder at the address of such Holder as it appears on
the Subordinated Notes register maintained by the Registrar and shall be
sufficiently given to such Holder if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed to
the Trustee.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, if a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Subordinated
Notes. The obligors, the Trustee, the Registrar and any other Person shall have
the protection of TIA Section 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by Alderwoods to the Trustee to take
any action under this Indenture, Alderwoods shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him or her
to express an opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with; PROVIDED, HOWEVER,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
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SECTION 11.06 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 11.07 GOVERNING LAW.
The laws of the State of New York shall govern this Indenture and the
Subordinated Notes. The Trustee, Alderwoods and the Holders agree to submit to
the jurisdiction of the courts of (or federal courts located in) the State of
New York in any action or proceeding arising out of or relating to this
Indenture or the Subordinated Notes.
SECTION 11.08 CONSENT TO SERVICE OF PROCESS.
Alderwoods irrevocably (a) agrees that any legal suit, action or
proceeding arising out of or based upon this Indenture and the Subordinated
Notes issued hereunder may be instituted in any federal or state court located
in the City of New York, (b) waives, to the fullest extent it may effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any such proceeding, and (c) submits to the nonexclusive jurisdiction of such
courts in any such suit, action or proceeding. Alderwoods has appointed CT
Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx Xxxx, XX 00000, as its
authorized agent (the "AUTHORIZED AGENT") upon whom process may be served in any
suit, action or proceeding arising out of or based on this Indenture which may
be instituted in any federal or state court located in the City of New York,
expressly consents to the jurisdiction of any such court in respect of any suit,
action or proceeding, and waives any other requirements of or objections to
personal jurisdiction with respect thereto. Such appointment shall be
irrevocable. Alderwoods agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to Alderwoods shall be
deemed, in every respect, effective service of process upon Alderwoods.
Notwithstanding the foregoing, designation of an authorized agent does not
constitute submission to jurisdiction or consent to service or process in any
legal action or proceeding predicated on United States federal or state
securities laws.
SECTION 11.09 NO INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of Alderwoods or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10 NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or Affiliate, as such, of
Alderwoods or any Subsidiary Guarantor shall not have any liability for any
obligations of Alderwoods under the Subordinated Notes or this Indenture or any
Subsidiary Guarantee or for any claim based on, in respect of or by reason of,
such obligations or their creation. Each Holder by accepting a Subordinated Note
waives and releases all such liability.
SECTION 11.11 SUCCESSORS.
All agreements of Alderwoods in this Indenture and the Subordinated
Notes shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 11.12 DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all such executed copies together
represent the same agreement.
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SECTION 11.13 SEPARABILITY.
In case any provision in this Indenture or the Subordinated Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, and a Holder shall have no claim therefor against any party hereto.
SECTION 11.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 11.15 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Subordinated Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
ARTICLE 12
SUBSIDIARY GUARANTEES
SECTION 12.01 GUARANTEES.
Each Restricted Subsidiary of Alderwoods that is a Wholly Owned
Subsidiary organized under the laws of any state or commonwealth of the United
States (other than the Excluded Subsidiaries) hereby unconditionally and
irrevocably guarantees (in such capacity, a "SUBSIDIARY GUARANTOR"), jointly and
severally, to each Holder and to the Trustee and its successors and assigns (a)
the full and punctual payment of principal of, premium, if any, and interest on
the Subordinated Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of Alderwoods under
this Indenture and the Subordinated Notes and (b) the full and punctual
performance within applicable grace periods of all other obligations of
Alderwoods under this Indenture and the Subordinated Notes (all the foregoing
being hereinafter collectively called the "OBLIGATIONS"). Each Subsidiary
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Article 12 notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to Alderwoods of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Subordinated Notes or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against Alderwoods or any other Person under this Indenture, the
Subordinated Notes or any other agreement or otherwise; (b) any extension or
renewal of any thereof; (c) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Indenture, the Subordinated Notes or any
other agreement; (d) the release of any security held by any Holder or the
Trustee for the Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) except as set forth in Section 12.06, any change in the
ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Except as set forth in Sections 8.01, 8.02, 12.02 and 12.06, the
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of
55
the Obligations or otherwise. Without limiting the generality of the foregoing,
the obligations of each Subsidiary Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Subordinated Notes or any other agreement, by any waiver or modification of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing that may or might in any manner or to any
extent vary the risk of such Subsidiary Guarantor or would otherwise operate as
a discharge of such Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of, premium, if any, or interest
on any Obligation is rescinded or must otherwise be restored by any Holder or
the Trustee upon the bankruptcy or reorganization of Alderwoods or otherwise.
In furtherance of the foregoing and not in limitation of any other
right that any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of Alderwoods to pay the
principal of, premium, if any, or interest on any Obligation when and as the
same shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Subsidiary
Guarantor hereby promises to and shall, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (a) the unpaid amount of such Obligations,
(b) accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (c) all other monetary Obligations of Alderwoods to the
Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (a) the maturity of the
Obligations Guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations Guaranteed hereby, and (b) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 12.02 LIMITATION ON LIABILITY.
Any term or provision of this Indenture to the contrary
notwithstanding, the maximum aggregate amount of the Obligations Guaranteed
hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that
can be hereby Guaranteed without rendering this Indenture, as it relates to such
Subsidiary Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 12.03 SUCCESSORS AND ASSIGNS.
This Article 12 shall be binding upon each Subsidiary Guarantor and its
successors and assigns and shall enure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Subordinated Notes shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 12.04 NO WAIVER.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article 12 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits that either may have under this Article 12 at law, in equity, by
statute or otherwise.
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SECTION 12.05 MODIFICATION.
No modification, amendment or waiver of any provision of this Article
12, nor the consent to any departure by any Subsidiary Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Trustee, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
any Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
SECTION 12.06 RELEASE OF SUBSIDIARY GUARANTORS.
Upon the sale or other disposition (including by way of consolidation
or merger) of a Subsidiary Guarantor or the sale or disposition of all or
substantially all the assets of such Subsidiary Guarantor (in each case other
than a sale or disposition to Alderwoods or another Subsidiary Guarantor), in a
transaction permitted by this Indenture (including, without limitation, the
Restructuring Transactions), such Subsidiary Guarantor shall be deemed released
from all obligations under this Article 12 without any further action required
on the part of the Trustee or any Holder. At the request and expense of
Alderwoods, and upon receipt of an Officers' Certificate, the Trustee shall
execute and deliver an appropriate instrument evidencing such release.
ARTICLE 13
SUBORDINATION OF THE SUBORDINATED NOTES
SECTION 13.01 SUBORDINATED NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
Alderwoods and each Subsidiary Guarantor covenant and agree, and each
Holder of a Subordinated Note, by acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set forth in this
Article 13, the Subordinated Indebtedness is hereby expressly made subordinate
and subject in right of payment to the prior Payment In Full of all Senior
Indebtedness.
SECTION 13.02 PAYMENT OVER OF PROCEEDS UPON INSOLVENCY, ETC.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to Alderwoods, any Subsidiary
Guarantor or to their creditors, as such, or to any of their assets, or (b) any
liquidation, dissolution or winding up of Alderwoods or any Subsidiary
Guarantor, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (c) any assignment for the benefit of creditors or
any marshaling of assets and liabilities of Alderwoods or any Subsidiary
Guarantor, then and in any such event the holders of Senior Indebtedness shall
be entitled to receive Payment In Full of all amounts due or to become due on or
in respect of all Senior Indebtedness before the Holders of the Subordinated
Notes are entitled to receive any payment on account of principal (including,
without limitation, sinking fund payments, if any) of (or premium, if any) or
interest on the Subordinated Notes and before any other payment of Subordinated
Indebtedness may be made or otherwise provided for, and to that end the holders
of Senior Indebtedness shall be entitled to receive, for application to the
payment of all Senior Indebtedness remaining unpaid (to the extent necessary for
Payment In Full of all Senior Indebtedness, after giving effect to any
concurrent indefeasible payment or distribution in cash or other payment
satisfactory to the holders of Senior Indebtedness to or for the holders of
Senior Indebtedness), any payment or distribution of any kind or character,
whether in cash, property or securities, including any such payment or
distribution that may be payable or deliverable by reason of the payment of any
other Indebtedness of Alderwoods or any Subsidiary Guarantor being subordinated
to the payment of the Subordinated Notes, that may be payable or deliverable in
respect of the Subordinated Notes in any such case, proceeding, dissolution,
liquidation, winding up or other event.
If, contrary to the foregoing provisions of this Section, the Trustee
or any Holder receives any payment or distribution of assets of Alderwoods or
any Subsidiary Guarantor of any kind or character, whether in cash, property or
securities, including any such payment or distribution that may be payable or
deliverable by reason of the payment of any other Indebtedness of Alderwoods or
any Subsidiary Guarantor being subordinated to the payment of the Subordinated
Notes, before all Senior Indebtedness is Paid In Full, then such payment or
distribution shall be
57
held in trust by the Trustee or such Holder for the holders of Senior
Indebtedness, and if such facts shall, at or prior to the time of such payment
or distribution, have been made known to the Trustee, shall be held by the
Trustee in a separate account, and shall be paid over or delivered forthwith to
the holders of Senior Indebtedness pro rata (or, if otherwise required by
applicable law, to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of Alderwoods or Subsidiary Guarantor, as the case may be, for
application to the payment of all Senior Indebtedness) until Payment In Full of
all Senior Indebtedness, after giving effect to any concurrent indefeasible
payment or distribution in cash or other payment satisfactory to the holders of
Senior Indebtedness to or for the holders of Senior Indebtedness.
SECTION 13.03 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
Neither Alderwoods nor any Subsidiary Guarantor may pay any
Subordinated Indebtedness if (i) any Payment Default occurs with respect to any
Senior Indebtedness (and such default is not cured or waived in accordance with
the express terms (if any) of the instruments and agreements (as the case may
be) evidencing such Senior Indebtedness) or would occur upon making such payment
on Subordinated Indebtedness or (ii) any Non-Payment Default occurs with respect
to any Senior Indebtedness and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms (and such acceleration is not rescinded
in accordance with the express terms (if any) of the instruments and agreements
(as the case may be) evidencing such Senior Indebtedness), in either case,
unless such Senior Indebtedness is Paid In Full. In addition (and without
limiting the preceding sentence), following the occurrence of any Non-Payment
Default with respect to any Designated Senior Indebtedness (or if a Non-Payment
Default with respect to any Designated Senior Indebtedness would occur upon
making such payment on Subordinated Indebtedness) which permits the holder or
holders of such Designated Senior Indebtedness to accelerate the maturity
thereof, upon the receipt by the Trustee and Alderwoods of written notice (a
"Payment Blockage Notice") from a Senior Trustee or the Agent Bank, neither the
Trustee nor Alderwoods may pay any Subordinated Indebtedness during the period
(the "PAYMENT BLOCKAGE PERIOD") commencing on the date of such receipt by the
Trustee and Alderwoods of such written notice and ending on the earliest of (i)
the date on which such Non-Payment Default shall have been cured or waived in
accordance with the express terms (if any) of the instruments and agreements (as
the case may be) evidencing such Designated Senior Indebtedness, (ii) the date
on which all such Designated Senior Indebtedness shall have been discharged and
Paid In Full, and (iii) the 180th day after the date of the receipt by the
Trustee and Alderwoods of such written notice. Any number of such Payment
Blockage Notices may be given; PROVIDED that notwithstanding any other provision
of this Indenture, (i) only one Payment Blockage Notice may be given within any
consecutive 360-day period, (ii) a Payment Blockage Notice shall be deemed to
include notice of all other Non-Payment Defaults under such indenture or
instrument that are actually known by the Senior Trustee or the Agent Bank, as
applicable, to be continuing at the time of the event of default specified in
such Payment Blockage Notice (each such specified or other known event of
default, a "Continuing Non-Payment Default"), and (iii) no Continuing
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice may be the basis for a subsequent Payment Blockage
Notice unless such Continuing Non-Payment Default shall have been cured or
waived for a period of not less than 90 days.
If, notwithstanding the foregoing, Alderwoods or a Subsidiary Guarantor
makes any payment to the Trustee or the Holder of any Subordinated Note
prohibited by the foregoing provisions of this Section, then and in such event
such payment shall be held in trust by the Trustee or any such Holder for the
appropriate holders of such Senior Indebtedness, and if such facts shall, at or
prior to the time of such payment, have been made known to the Trustee, shall be
held by the Trustee in a separate account, and shall be paid over and delivered
forthwith to the appropriate holders of such Senior Indebtedness until the
amounts of such Senior Indebtedness then due are paid in full or provision made
therefor.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.02 would be applicable.
SECTION 13.04 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the prior Payment In Full of all Senior Indebtedness, the
Holders shall be subrogated to the extent of the payments or distributions made
to the holders of such Senior Indebtedness pursuant to the provisions of this
Article 13 to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash,
58
property and securities applicable to the Senior Indebtedness until the
Subordinated Indebtedness shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Subordinated Notes or the Trustee would be entitled except for the provisions of
this Article 13, and no payments made pursuant to the provisions of this Article
13 to the holders of Senior Indebtedness by Holders of the Subordinated Notes or
the Trustee, shall, as among Alderwoods, the Subsidiary Guarantors, their
creditors other than holders of Senior Indebtedness and the Holders, be deemed
to be a payment or distribution by Alderwoods or any Subsidiary Guarantor to or
on account of the Senior Indebtedness.
SECTION 13.05 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article 13 are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article 13 or elsewhere in this Indenture or in the Subordinated Notes is
intended to or shall, as between Alderwoods and the Subsidiary Guarantors and
the Holders of Subordinated Notes: (a) impair the obligations of Alderwoods and
the Subsidiary Guarantors, which are absolute and unconditional, to pay to the
Holders the principal of (and premium, if any) and interest on the Subordinated
Notes as and when the same shall become due and payable in accordance with their
terms; (b) affect the relative rights against Alderwoods and the Subsidiary
Guarantors of the Holders or (c) prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article 13 of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
Except as expressly provided in this Article 13, nothing contained in
this Article 13 shall affect the obligation of Alderwoods and the Subsidiary
Guarantors to make, or prevent Alderwoods or the Subsidiary Guarantors from
making, payments of the principal of, premium, if any, and interest on the
Subordinated Notes in accordance with the provisions hereof and thereof, or
shall prevent the Trustee from applying any moneys deposited with it hereunder
to the payment of the principal of, premium, if any, and interest on the
Subordinated Notes.
SECTION 13.06 TRUSTEE TO EFFECTUATE SUBORDINATION.
(a) Each Holder of a Subordinated Note by acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate, as between the Holders and the
holders of Senior Indebtedness, the subordination provided in this Article 13
and appoints the Trustee as attorney-in-fact for any and all such purposes.
(b) The Agent Bank and each Senior Trustee are hereby
irrevocably authorized to demand specific performance of the provisions of this
Article 13, whether or not Alderwoods shall have complied with any of the
provisions hereof applicable to it, any time when the Holders or the Trustee
shall have failed, or threatened to fail, to comply with any of the provisions
of this Article 13 applicable to them. The Holders and the Trustee hereby
irrevocably waive any defense based on the adequacy of a remedy at law that
might be asserted as a bar to such remedy of specific performance. The Holders
and the Trustee hereby acknowledge that the provisions of this Article 13 are
intended to be enforceable at all times, whether before or after the
commencement of a proceeding referred to in Section 13.02.
SECTION 13.07 NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness 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 Alderwoods or
any Subsidiary Guarantor or by any act or failure to act by any such holder, or
by any non-compliance by Alderwoods or any Subsidiary Guarantor with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
59
incurring responsibility to the Trustee or the Holders and without impairing or
releasing the subordination provided in this Article 13 or the obligations
hereunder of the Trustee or the Holders to the holders of Senior Indebtedness,
do any one or more of the following:
(i) supplement, renew, extend, accelerate or
otherwise change the time for payment of, or other terms relating to, the Senior
Indebtedness, or any portion thereof, or otherwise modify, amend or change the
terms of any promissory note or other agreement, document or instrument
(including, without limitation, documents evidencing Designated Senior
Indebtedness) relating to any Senior Indebtedness, including, without
limitation, any increase or decrease of the principal amount thereof, the rate
of interest thereon or the fees payable in connection therewith;
(ii) waive or otherwise consent to noncompliance with
any provision of any agreement, document or instrument (including, without
limitation, documents evidencing Designated Senior Indebtedness) relating to any
Senior Indebtedness;
(iii) accept partial payments on any Senior
Indebtedness;
(iv) receive, take and hold security or collateral
for the payment or performance of any Senior Indebtedness and exchange, enforce,
waive, substitute, liquidate, terminate, abandon, impair, fail to perfect,
subordinate, transfer, alter, release or otherwise deal with any such security
or collateral;
(v) apply any and all such security or collateral and
direct the order or manner of sale thereof;
(vi) settle, release, compromise, collect or
otherwise liquidate any Senior Indebtedness;
(vii) add, release or substitute any one or more
guarantors, makers or endorsers of all or any part of any Senior Indebtedness
and otherwise deal with Alderwoods, or any guarantor, maker or endorser;
(viii) apply any and all payments or recoveries from
Alderwoods or from any guarantor, maker or endorser of all or any part of the
Senior Indebtedness in such order as any holder of Senior Indebtedness (or any
agent therefor) may determine, whether such Senior Indebtedness is secured or
unsecured or guaranteed or not guaranteed by others; and
(ix) exercise or refrain from exercising any rights
against Alderwoods or any other Person.
SECTION 13.08 NOTICE TO TRUSTEE.
Alderwoods shall give prompt written notice to the Trustee of any fact
known to Alderwoods that would prohibit the making of any payment to or by the
Trustee in respect of the Subordinated Notes. Notwithstanding the provisions of
this Article 13 or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment to or by the Trustee in respect of the Subordinated Notes,
unless and until the Trustee shall have received written notice thereof at least
one Business Day prior to any such payment date from Alderwoods, any Holder, the
Agent Bank, a holder of any class of Senior Indebtedness or any one or more
agents acting on behalf of any one or more holders of any class of Senior
Indebtedness who (other than the Agent Bank or a Senior Trustee) shall have been
certified by Alderwoods or otherwise established to the reasonable satisfaction
of the Trustee to be such holder, or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 7.01 of the Indenture, shall be entitled in all respects to assume
that no such facts exist.
Subject to the provisions of Section 7.01 of the Indenture, the Trustee
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 Indebtedness (or a trustee or
agent therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee or
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agent therefor). If the Trustee determines in good faith that further evidence
is required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 13, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee, as to the amount of Senior Indebtedness
held by such Person, the extent to which such person is entitled to participate
in such payment or distribution and any other acts pertinent to the rights of
such Person under this Article 13, 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 13.09 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of Alderwoods or any
Subsidiary Guarantor referred to in this Article 13, the Trustee, subject to the
provisions of Section 7.01 of the Indenture, and the Holders shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or other proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Senior Indebtedness and other Indebtedness
of Alderwoods and the Subsidiary Guarantors, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 13.
SECTION 13.10 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders,
absent negligence or willful misconduct, if it shall pay over or distribute to
Holders or to Alderwoods or to any other Person cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 13 or otherwise.
SECTION 13.11 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 13 with respect to any Senior Indebtedness that
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
SECTION 13.12 ARTICLE APPLICABLE TO PAYING AGENTS.
If at any time any Paying Agent other than the Trustee has been
appointed by Alderwoods and is acting hereunder as such, the term "Trustee" as
used in this Article 13 shall in such case (unless the context otherwise
requires) be constructed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 13 in addition to or in place of the Trustee; provided,
however, that this Section 13.12 shall not apply to Alderwoods or any Affiliate
of Alderwoods if it or such Affiliate acts as Paying Agent.
SECTION 13.13 AUTHORIZATION TO FILE CLAIMS: REINSTATEMENT OF
SUBORDINATION.
(a) Each of the Agent Bank and each Senior Trustee is hereby
irrevocably authorized and empowered (in its own name or in the name of the
Holders or the Trustee or otherwise), but shall have no obligation, to file
claims and proofs of claim in respect of the Subordinated Notes in proceedings
referred to in Section 13.02 in the event such claims or proofs of claim have
not been filed prior to 30 days before such filings would be barred.
(b) The provisions of this Article 13 shall continue to be
effective or be immediately reinstated, as the case may be, if at any time any
payment of any Senior Designated Indebtedness is rescinded or must otherwise be
returned by the Agent Bank, any Lender or any other holder of any Senior
Designated Indebtedness in connection with the insolvency, bankruptcy or
reorganization of Alderwoods, any Subsidiary Guarantor or otherwise, all as
though such payment had not been made.
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SECTION 13.14 NO SUSPENSION OF REMEDIES.
(a) The failure to make a payment of Subordinated Indebtedness
by reason of any provision of this Article 13 shall not be construed as
preventing the occurrence of an Event of Default under Section 6.01. Nothing
contained in this Article 13 shall limit the right of the Trustee or the Holders
to take any action to accelerate the maturity of the Subordinated Notes pursuant
to Article 6 or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article 13 of the holders, from
time to time, of Senior Indebtedness; PROVIDED, HOWEVER, that neither the
Trustee nor the Holders may accelerate amounts owing under the Subordinated
Notes pursuant to the first sentence of Section 6.02 without first providing at
least five Business Days prior written notice to the Agent Bank and Senior
Trustees.
(b) Notwithstanding any provisions to the contrary in the
Indenture, so long as any Payment Blockage Period or Payment Default exists,
neither the Trustee nor any Holder may for 120 days after the first date of such
Payment Blockage Period or until such Payment Default is cured (i) ask, demand
or xxx for any payment, distribution or any other remedy in respect of the
Subordinated Indebtedness or (ii) commence or join with any other creditor
(other than the Lenders, the Agent Bank, the Senior Trustees, and other holders
of Designated Senior Indebtedness) in commencing any proceeding referred to in
Section 13.02; PROVIDED, HOWEVER, this clause (b) shall not restrict the ability
of the Trustee or any Holder to file a proof of claim in respect of Indebtedness
owed under this Indenture or Subordinated Notes.
SECTION 13.15 MISCELLANEOUS.
(a) Each Holder, the Trustee, Alderwoods and each Subsidiary
Guarantor will, at Alderwoods' sole expense and at any time and from time to
time, promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that the Agent
Bank or a Senior Trustee may request, in order to protect any right or interest
granted or purported to be granted by the provisions of this Article 13 or to
enable the Agent Bank or Senior Trustee to exercise and enforce rights and
remedies hereunder.
(b) All rights and interests under this Article 13 of the
Lenders, the Agent Bank and any other holder of Senior Indebtedness, and all
agreements and obligations of the Holders, the Trustee, Alderwoods and the
Subsidiary Guarantors under this Article 13 shall remain in full force and
effect irrespective of:
(i) the invalidity or unenforceability of any
security or collateral for or guaranty of all or any part of the Senior
Indebtedness or of any promissory note or other agreement, document or
instrument (including, without limitation, documents evidencing Designated
Senior Indebtedness) evidencing or in respect of all or any Senior Indebtedness,
or the lack of perfection or continuing perfection or failure of priority of any
security or collateral for all or any part of the Senior Indebtedness or any
guaranty therefor;
(ii) the absence of any attempt to collect the Senior
Indebtedness, or any portion thereof, or other action to enforce the same;
(iii) any failure to acquire, perfect or maintain any
security interest in, or to preserve any rights to, any security or collateral
for all or any part of the Senior Indebtedness or any guaranty therefor;
(iv) any election in any proceeding instituted under
Bankruptcy Law;
(v) any borrowing or grant of a security interest or
other Lien by Alderwoods or any Subsidiary Guarantor as debtor- in-possession,
or extension of credit, under Bankruptcy Law;
(vi) the disallowance, under Bankruptcy Law, of all
or any portion of any claim(s) for repayment of the Senior Indebtedness;
(vii) any use of cash collateral under Bankruptcy
Law;
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(viii) any agreement or stipulation as to the
provision of adequate protection in any bankruptcy proceeding;
(ix) the avoidance of any Lien in favor of any holder
of Senior Indebtedness (or any agent therefor) for any reason;
(x) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution proceeding,
including without limitation, any discharge of, or bar or stay against
collecting or accelerating, all or any of the Senior Indebtedness in or as a
result of any such proceeding;
(xi) any failure to file or enforce a claim against
Alderwoods, any Subsidiary Guarantor or estate thereof in any bankruptcy or
insolvency case or proceeding; or
(xii) any other circumstance that might otherwise
constitute a legal or equitable defense to, or discharge of, Alderwoods, a
Subsidiary Guarantor or a subordinated creditor.
(c) The Holders, the Trustee and Alderwoods and the Subsidiary
Guarantors each hereby waive promptness, diligence, notice of acceptance and any
other notice with respect to any of the Senior Indebtedness and this Article 13
and any requirement that the Agent Bank, any Lender, Senior Trustee or any other
holder of Senior Indebtedness protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against Alderwoods or any other Person or any collateral.
(d) No failure on the part of the Agent Bank, a Senior
Trustee, any Lender, or any other holder of Senior Indebtedness to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof,
and no single or partial exercise of any right hereunder shall preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
(e) The provisions of this Article 13 constitute a continuing
agreement and (i) shall remain in full force and effect until the Senior
Indebtedness shall have been Paid In Full, (ii) shall be binding upon the
Holders and the Trustee, Alderwoods and the Subsidiary Guarantors, and their
successors and assigns, (iii) shall inure to the benefit of and be enforceable
by the Agent Bank, the Lenders, the Senior Trustees, and each other holder of
Senior Indebtedness and their successors, participants, transferees and assigns
and (iv) may not be amended or modified in any way (and neither may the
definitions used therein) that would impair the rights of any holder of
Designated Senior Indebtedness without the written consent of such impaired
holder, and in any event no such amendment or modification shall be effective
against any holder of Designated Senior Indebtedness who has not consented
thereto in writing. Without limiting the generality of the foregoing clause any
Lender may assign or otherwise transfer any promissory note issued under the
Exit Facility held by it, or grant any participation in any of its rights or
obligations under the Exit Facility, and any holder of Two-Year Notes, Five-Year
Notes, or Seven-Year Notes may assign or otherwise transfer any such securities,
to any other Person, and such other Person shall thereupon become vested with
all the rights in respect thereof granted to such Lender or holder, as the case
may be, herein or otherwise. The provisions of this Article 13 are intended to
be for the benefit of, and shall be enforceable directly by, the Lenders, any
one or more agents acting on their respective behalf (including, without
limitation, the Agent Bank), and the Senior Trustees.
SECTION 13.16 CERTAIN CONVERSIONS NOT DEEMED PAYMENT.
For the purposes of this Article 13 only, the issuance and delivery of
Alderwoods Common Stock (and related cash in place of fractional shares
delivered pursuant to Section 14.03, if any) upon conversion of Subordinated
Notes in accordance with Article 14 hereof shall not be deemed to constitute a
payment or distribution on account of the principal of (and premium, if any) or
interest on Subordinated Notes or on account of the purchase or other
acquisition of Subordinated Notes.
Nothing contained in this Article 13 or elsewhere in this Indenture or
in the Subordinated Notes is intended to or shall impair, as among Alderwoods,
its creditors (other than holders of Senior Indebtedness) and the Holders of
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Subordinated Notes, the right, which is absolute and unconditional, of the
Holder of any Subordinated Notes to convert such Subordinated Notes in
accordance with Article 14 hereof.
ARTICLE 14
CONVERSION OF NOTES
SECTION 14.01 RIGHT TO CONVERT.
Any Holder has the right, in accordance with the terms and provisions
of this Indenture, at such Holder's option, at any time after the original
issuance of the Subordinated Notes hereunder through the close of business on
the second Business Day prior to the date of repurchase, redemption or final
maturity of the Subordinated Notes (except as provided in Section 3.08) to
convert the principal amount of any such Subordinated Note, or any portion of
such principal amount that is $100 or an integral multiple thereof, into that
number of duly authorized, validly issued, fully paid and non-assessable shares
of Alderwoods Common Stock (as such shares shall then be constituted) obtained
by dividing the principal amount of the Subordinated Note or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Subordinated Note to be so converted in whole or in part in the
manner provided, together with any required funds, if any, in Section 14.02. A
Holder of Subordinated Notes is not entitled to any rights of a holder of
Alderwoods Common Stock until the Holder has converted its Subordinated Notes to
Alderwoods Common Stock, and only to the extent such Subordinated Notes are
deemed to have been converted to Alderwoods Common Stock under this Article 14;
PROVIDED that in case a Subordinated Note or portion thereof is called for
redemption, the conversion right in respect of the Subordinated Note or the
portion so called shall expire at the close of business two Business Days prior
to the applicable Redemption Date, unless Alderwoods defaults in making the
payment due on redemption, in which case the conversion right shall terminate on
the date such default is cured.
SECTION 14.02 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF ALDERWOODS
COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
To exercise the conversion privilege with respect to any Subordinated
Note in certificated form, the Holder of any such Subordinated Note to be
converted in whole or in part shall surrender such Subordinated Note, duly
endorsed or endorsed in blank, at an office or agency maintained by Alderwoods
pursuant to Section 4.02, accompanied by the funds, if any, required by this
Section 14.02, and shall give written notice of conversion in the form provided
on the Subordinated Notes (or such other notice that is acceptable to
Alderwoods) to the office or agency that the Holder elects to convert such
Subordinated Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Alderwoods Common Stock which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 14.07. Each such Subordinated
Note surrendered for conversion shall, unless the shares issuable on conversion
are to be issued in the same name as the registration of such Subordinated Note,
be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to Alderwoods duly executed by, the Holder or the Holder's duly
authorized attorney.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Holder (as if such transfer were a transfer of the Subordinated Note
or Subordinated Notes (or portion thereof) so converted), Alderwoods shall issue
and shall deliver to such Holder at the office or agency maintained by
Alderwoods for such purpose pursuant to Section 4.02, a certificate or
certificates for the number of full shares of Alderwoods Common Stock issuable
upon the conversion of such Subordinated Note or portion thereof in accordance
with the provisions of this Article and, if applicable, a check or cash in
respect of any fractional interest in respect of a share of Alderwoods Common
Stock arising upon such conversion, as provided in Section 14.03.
Each conversion shall be deemed to have been effected as to any such
Subordinated Note (or portion thereof) on the date on which the requirements set
forth above in this Section 14.02 have been satisfied as to such Subordinated
Note (or portion thereof), and the Person in whose name any certificate or
certificates for shares of Alderwoods Common Stock shall be issuable upon such
conversion shall be deemed to have become on said date the holder of record of
the shares represented thereby; PROVIDED, HOWEVER, that any such surrender on
any
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date when the stock transfer books of Alderwoods shall be closed shall
constitute the Person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date upon which such Subordinated Note shall be
surrendered in accordance with the applicable terms of the Indenture.
Any Subordinated Note or portion thereof surrendered for conversion
during the period from the close of business on the record date for any interest
payment date to the close of business on the Business Day next preceding the
following interest payment date must (unless such Subordinated Note or portion
thereof being converted shall have been called for redemption on a redemption
date, or tendered for repurchase on a repurchase date, that occurs during the
period from the close of business on such record date to the close of business
on the Business Day next preceding the following interest payment date) be
accompanied by payment, in same day funds or other funds acceptable to
Alderwoods, of an amount equal to the interest otherwise payable on such
interest payment date on the principal amount being converted; PROVIDED,
HOWEVER, that no such payment need be made to the extent there exists at the
time of conversion a default in the payment of interest due on the Subordinated
Notes surrendered for conversion. Except as expressly provided in this Article
14, no payment or other adjustment shall be made for interest accrued on any
Subordinated Note converted or for dividends on any shares issued upon the
conversion of such Subordinated Note as provided in this Article.
Upon the conversion of an interest in a Subordinated Note, the Trustee
(or other conversion agent appointed by Alderwoods) shall authenticate and
deliver to the Holder of the Subordinated Note so surrendered, without charge to
such holder, a new Subordinated Note or Subordinated Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Subordinated Note. Alderwoods shall notify the Trustee in
writing of any conversions of Subordinated Notes effected through any conversion
agent other than the Trustee.
All Subordinated Notes delivered for conversion shall be delivered to
the Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.13.
SECTION 14.03 CASH PAYMENTS OR ROUNDING UP IN LIEU OF FRACTIONAL
SHARES.
No fractional shares of Alderwoods Common Stock or scrip representing
fractional shares shall be issued upon conversion of Subordinated Notes. If more
than one Subordinated Note shall be surrendered for conversion at one time by
the same Holder, the number of full shares that shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Subordinated Notes (or specified portions thereof to the extent permitted
thereby) so surrendered. If any fractional share of stock would be issuable upon
the conversion of any Subordinated Note or Subordinated Notes, Alderwoods shall,
at its option, make an adjustment and payment therefor in cash at the Closing
Price thereof on the last Business Day immediately preceding the day on which
the Subordinated Notes (or specified portions thereof) are deemed to have been
converted to the Holder of Subordinated Notes or round up the number of shares
to be received to the nearest whole share.
SECTION 14.04 CONVERSION PRICE.
The initial conversion price shall be as specified in the form of
Subordinated Note (herein called, as adjusted from time to time, the "CONVERSION
PRICE") attached as Exhibit A hereto, as the case may be, subject to adjustment
as provided in this Article 14.
SECTION 14.05 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be adjusted from time to time by Alderwoods
as follows:
(a) If Alderwoods hereafter pays a dividend or makes a
distribution to all holders of the outstanding Alderwoods Common Stock in shares
of Alderwoods Common Stock, the Conversion Price in effect immediately after the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction the numerator of which shall be the number of shares of the
Alderwoods Common Stock outstanding at the close of business on the date fixed
for such
65
determination and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction, subject to Alderwoods' rights under Section
14.05(k), to become effective immediately after the date following the date
fixed for such determination. If any dividend or distribution of the type
described in this Section 14.05(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price that would then
be in effect if such dividend or distribution had not been declared.
(b) If outstanding shares of Alderwoods Common Stock are
subdivided into a greater number of shares of Alderwoods Common Stock, the
Conversion Price in effect immediately after the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Alderwoods Common Stock shall be combined into a smaller
number of shares of Alderwoods Common Stock, the Conversion Price in effect
immediately after the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the day upon which such
subdivision or combination becomes effective.
(c) If Alderwoods distributes to all holders of Alderwoods
Common Stock, as such, (i) evidences of indebtedness or assets (excluding
regular cash dividends or cash distributions payable out of surplus or net
profits legally available therefor or those distributions described in Section
14.05(a)) of Alderwoods or any Subsidiary of Alderwoods, (ii) shares of capital
stock of Alderwoods or any Subsidiary of Alderwoods (excluding Alderwoods Common
Stock), (iii) securities convertible into or exchangeable for capital stock of
Alderwoods (including Alderwoods Common Stock or capital stock of any other
class) or any Subsidiary of Alderwoods, or (iv) any rights, options or warrants
to purchase any of the foregoing (excluding those described in Section
14.05(d)), then the Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction (not to be more than one), the numerator of which
will be the Current Market Price (as defined below) per share of Alderwoods
Common Stock on the record date for such distribution less the fair value (as
determined in good faith by the Board of Directors of Alderwoods, whose
determination will be conclusive if based on the financial advice of a
nationally recognized investment banking firm) of the portion of the evidences
of indebtedness, assets, securities or rights, options or warrants so
distributed on account of one share of Alderwoods Common Stock and the
denominator of which will be such Current Market Price per share of Alderwoods
Common Stock. Such adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
distribution. If the record date for any such distribution is fixed but such
distribution is not thereafter made, then the Conversion Price shall again be
adjusted to the Conversion Price that would then be in effect if such
distribution had not been declared. Except as provided in Section 14.05(h), no
further adjustments will be made upon the actual conversion or exchange of such
convertible or exchangeable securities or upon the actual exercise of such
rights, options or warrants. If the fair value (as so determined) of the portion
of the evidences of indebtedness, assets, securities or rights, options or
warrants so distributed on account of one share of Alderwoods Common Stock is
equal to or greater than the Current Market Price per share of Alderwoods Common
Stock on the record date for such distribution, in lieu of the foregoing
adjustment, then provision will be made so that the Holder of a Subordinated
Note will be entitled to receive the sum of (A) the number of shares of
Alderwoods Common Stock that, if such Subordinated Note had been converted
immediately prior to such record date, such Holder would have received upon
conversion and (B) such evidences of indebtedness, assets, securities or rights,
options or warrants that such Holder would have been entitled to receive as a
result of such distribution by virtue of such Holder's ownership of such shares.
(d) If Alderwoods issues rights, options or warrants to all
holders of outstanding shares of Alderwoods Common Stock, as such, entitling the
holders of such rights, options or warrants to subscribe for or purchase shares
of Alderwoods Common Stock at a price per share that is lower on the record date
mentioned below than the Current Market Price per share of Alderwoods Common
Stock on such record date, then the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction (not to be greater than one),
the numerator of which will be the number of shares of Alderwoods Common Stock
outstanding on such record date plus the number of shares of Alderwoods Common
Stock which the aggregate subscription or purchase price of the total number of
shares of Alderwoods Common Stock so offered would purchase at the Current
Market Price per share of Alderwoods Common Stock on such record date, and the
denominator of which will be the number of shares of Alderwoods Common Stock
outstanding on such record date plus the number of additional shares of
Alderwoods Common Stock offered by such rights, options or warrants for
subscription or purchase. Such adjustment will become effective immediately
after the record date for the determination of the stockholders entitled
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to receive such rights, options or warrants. If the record date for any such
issuance is fixed but such issuance is not thereafter made, then the Conversion
Price shall again be adjusted to the Conversion Price that would then be in
effect if such record date had not been fixed. If such subscription or purchase
price may be paid in a consideration part or all of which is in a form other
than cash, the fair value of such consideration will be as determined by the
Board of Directors of Alderwoods, whose determination will be conclusive if
based on the financial advice of a nationally recognized investment banking
firm. Except as provided in Section 14.05(h), no further adjustments of the
Conversion Price will be made upon the actual issue of shares of Alderwoods
Common Stock upon exercise of such rights, options or warrants.
(e) If Alderwoods issues shares of Alderwoods Common Stock or
securities convertible into or exchangeable for shares of Alderwoods Common
Stock or rights, options or warrants, entitling the holders of such rights,
options or warrants to subscribe for or purchase shares of Alderwoods Common
Stock (excluding shares of Alderwoods Common Stock, convertible or exchangeable
securities or rights, options or warrants issued in any of the transactions
described in paragraph (a), (b), (c) or (d) of this Section 14.05) for a
purchase price per share of such Alderwoods Common Stock, for a conversion or
exchange price per share of Alderwoods Common Stock initially deliverable upon
conversion or exchange of such securities or for a subscription or purchase
price per share of Alderwoods Common Stock initially deliverable upon exercise
of such rights, options or warrants, that is less than the Current Market Price
per share of Alderwoods Common Stock on the date the purchase, conversion,
exchange or subscription price of such additional shares of Alderwoods Common
Stock is first fixed, then the Conversion Price will be adjusted by multiplying
the Conversion Price by a fraction (not to be greater than one), the numerator
of which will be the number of shares of Alderwoods Common Stock outstanding on
the date of such issuance plus the number of additional shares of Alderwoods
Common Stock which the aggregate purchase, conversion, exchange or subscription
price received or receivable by Alderwoods for such additional shares of
Alderwoods Common Stock would purchase at the Current Market Price per share of
Alderwoods Common Stock on such date, and the denominator of which will be the
number of shares of Common Stock outstanding on such date plus the number of
shares of Alderwoods Common Stock so issued or issuable upon such conversion,
exchange or exercise. Such adjustment shall become effective immediately after
such shares of Alderwoods Common Stock or convertible or exchangeable securities
are issued. If such purchase, conversion, exchange or subscription price may be
paid in a consideration part or all of which is in a form other than cash, the
fair value of such consideration will be as determined by the Board of Directors
of Alderwoods, whose determination will be conclusive if based on the financial
advice of a nationally recognized investment banking firm. Except as provided in
Section 14.05(h), no further adjustment will be made upon the actual issue of
shares of Alderwoods Common Stock upon conversion or exchange of such securities
convertible into or exchangeable for shares of Alderwoods Common Stock or upon
exercise of rights, options or warrants entitling the holder of such rights,
options or warrants to subscribe for or purchase shares of Alderwoods Common
Stock.
(f) For purposes of this Agreement, the "CURRENT MARKET PRICE"
per share of Alderwoods Common Stock on any date will be the average of the
daily Closing Prices for 20 consecutive Trading Days commencing 30 Trading Days
before the date of such computation; PROVIDED, HOWEVER, that if the Current
Market Price per share of Alderwoods Common Stock is determined during a period
following the announcement of (i) a dividend or distribution on Alderwoods
Common Stock payable in shares of Alderwoods Common Stock or securities
convertible into or exchangeable for shares of Alderwoods Common Stock or (ii)
any subdivision, combination or reclassification of shares of Alderwoods Common
Stock, and prior to the expiration of 30 Trading Days after the ex-dividend date
of such dividend or distribution, or the issuance date for such subdivision,
combination or reclassification, then, and in each such case, the Current Market
Price per share will be appropriately adjusted to take into account ex-dividend
trading or to reflect the Current Market Price per share per Alderwoods Common
Stock equivalent. The closing price for each day (the "CLOSING PRICE") will be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which shares of Alderwoods Common Stock are listed or admitted to trading or, if
shares of Alderwoods Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by The Nasdaq Stock Market, Inc. or such other system then in use, or,
if on any such date shares of Alderwoods Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in shares of Alderwoods Common Stock
selected by the Board of Directors of Alderwoods. If Alderwoods Common Stock is
67
not publicly held or not so listed or traded, or is not the subject of available
bid and asked quotes, "CURRENT MARKET PRICE" per share will mean the fair value
per share as determined in good faith by the Board of Directors of Alderwoods.
"TRADING DAY" means any day on which shares of Alderwoods Common Stock are
traded on the principal national securities exchange on which shares of
Alderwoods Common Stock are listed or admitted to trading or, if shares of
Alderwoods Common Stock are not so listed or admitted to trading, in the
over-the-counter market.
(g) Notwithstanding anything to the contrary in this Section
14.05, no adjustment in the Conversion Price will be made under paragraph (a),
(c), (d) or (e) of this Section 14.05 if Alderwoods issues or distributes to
each Holder the shares, rights, options, warrants, convertible or exchangeable
securities, evidences of indebtedness, assets or other securities referred to in
the applicable paragraph that such Holder would have been entitled to receive
had the Subordinated Notes been converted prior to the happening of such event
or the record date with respect thereto (provided that, in any case in which
such Holder would have been so entitled to receive a fractional interest in any
such securities or assets, Alderwoods may distribute to such Holder in lieu of
such fractional interest cash in an amount equal to the fair value of such
fractional interest as determined in good faith by the Board of Directors of
Alderwoods). Notwithstanding anything to the contrary in this Section 14.05, no
adjustment in the Conversion Price will be made on account of: (1) any issuance
of shares of Alderwoods Common Stock, or of options, rights or warrants to
purchase, or securities convertible into or exchangeable for, shares of
Alderwoods Common Stock, pursuant to the Plan of Reorganization, (2) any
issuance of shares of Alderwoods Common Stock upon the exercise of options,
rights or warrants or upon the conversion or exchange of convertible or
exchangeable securities, in either case issued pursuant to the Plan of
Reorganization or outstanding as of the date hereof, (3) any issuance of shares
of Alderwoods Common Stock, or of options, rights or warrants, or of other
securities, pursuant to a share purchase rights plan or any similar plan adopted
by the Board of Directors of Alderwoods, (4) any issuance of shares of
Alderwoods Common Stock, or of options, rights or warrants to purchase, or
securities convertible into or exchangeable for, shares of Alderwoods Common
Stock, in accordance with any plan for the benefit of the employees or directors
of Alderwoods existing as of the date hereof or contemplated by the Plan of
Reorganization or any other plan adopted by the directors of Alderwoods for the
benefit of the employees or directors of Alderwoods or any of its Subsidiaries,
(5) any issuance of shares of Alderwoods Common Stock in connection with a plan
sponsored by Alderwoods for reinvestment of dividends or interest, (6) any
issuance of shares of Alderwoods Common Stock, securities convertible into or
exchangeable for shares of Alderwoods Common Stock or rights, options or
warrants entitling the holder of such rights, options or warrants to subscribe
for or purchase shares of Alderwoods Common Stock pursuant to an underwritten
public offering for a price per share of Alderwoods Common Stock in the case of
an issuance of shares of Alderwoods Common Stock, for a price per share of
Alderwoods Common Stock initially deliverable upon conversion or exchange of
such securities or for a subscription or purchase price per share of Alderwoods
Common Stock initially deliverable upon exercise of such rights, options or
warrants, that is equal to or greater than 95% of the Closing Price per share of
Alderwoods Common Stock on the date the offering, conversion, exchange,
subscription or purchase price of such additional shares of Alderwoods Common
Stock is first fixed, or (7) any issuance of shares of Alderwoods Common Stock
or other securities to the owners of any entity that is directly or indirectly
acquired by Alderwoods in an arm's-length transaction approved by the Board of
Directors of Alderwoods. Notwithstanding anything to the contrary in this
Section 14.05, no adjustment in the Conversion Price will be made for a change
in the par value of the shares of Alderwoods Common Stock.
(h) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof have not been exercised, the
Conversion Price will, upon such expiration, be readjusted and will thereafter
be such as it would have been had it been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
shares of Alderwoods Common Stock so issued were the shares of Alderwoods Common
Stock, if any, actually issued or sold upon the exercise of such rights,
options, warrants or conversion or exchange privileges and (ii) such shares of
Alderwoods Common Stock, if any, were issued or sold for the consideration
actually received by Alderwoods upon such exercise, conversion or exchange plus
the aggregate consideration, if any, actually received by Alderwoods for the
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange privileges whether or not exercised; PROVIDED, HOWEVER, that no such
readjustment will have the effect of increasing the Conversion Price by an
amount in excess of the amount of the adjustment initially made in respect of
the issuance, sale, or grant of such rights, options, warrants or conversion or
exchange privileges.
68
(i) Notwithstanding anything to the contrary in this Section
14.05, no adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
PROVIDED, HOWEVER, that any adjustments that by reason of this Section 14.05(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 14 shall be made
by Alderwoods and shall be made to the nearest tenth of one cent or to the
nearest one-hundredth (1/100) of a share, as the case may be.
(j) Whenever the Conversion Price is adjusted as herein
provided, Alderwoods shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, Alderwoods shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to the Holder of each Subordinated Note
within 20 days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
(k) In any case in which this Section 14.05 provides that an
adjustment shall become effective immediately after a record date for an event,
Alderwoods may defer until the occurrence of such event (i) issuing to the
Holder of any Subordinated Note converted after such record date and before the
occurrence of such event the additional shares of Alderwoods Common Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the Alderwoods Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash or additional shares in lieu of any fraction pursuant to Section 14.03.
(l) For purposes of this Section 14.05, the number of shares
of Alderwoods Common Stock at any time outstanding shall not include shares held
in the treasury of Alderwoods but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Alderwoods Common
Stock. Alderwoods shall not pay any dividend or make any distribution on shares
of Alderwoods Common Stock held in treasury.
SECTION 14.06 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.
If any of the following events occur, namely (i) any reclassification
or change of the outstanding shares of Alderwoods Common Stock (other than a
subdivision or combination to which Section 14.05(b) applies), (ii) any
consolidation, merger or combination of Alderwoods with another Person as a
result of which all holders of Alderwoods Common Stock shall be entitled to
receive stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Alderwoods Common Stock, or (iii) any
sale or conveyance of all or substantially all of the properties and assets of
Alderwoods to any other Person as a result of which all Holders of Alderwoods
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Alderwoods Common Stock, then Alderwoods or the successor or purchasing Person,
as the case may be, shall execute with the Trustee a supplemental indenture
(which shall comply with the Trust Indenture Act as in force at the date of
execution of each supplemental indenture) providing that the Subordinated Notes
shall be convertible into the kind and amount of shares of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Alderwoods Common Stock issuable upon
conversion of such Subordinated Notes (assuming, for such purposes, a sufficient
number of authorized shares of Alderwoods Common Stock available to convert all
such Subordinated Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Alderwoods Common Stock did not exercise such holder's rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance; provided that, if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Alderwoods Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purposes of this Section 14.06 the kind and amount of securities, cash or other
property receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares. Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
69
Alderwoods shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Subordinated Notes within 20 days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 14.06 applies to any event or occurrence, Section 14.05
shall not apply.
SECTION 14.07 TAXES ON SHARES ISSUED.
The issue of stock certificates on conversions of Subordinated Notes
shall be made without charge to the converting Holder for any tax or duties in
respect of the issue thereof. Alderwoods shall not, however, be required to pay
any tax or duty that may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the Holder of any
Subordinated Note converted, and Alderwoods shall not be required to issue or
deliver any such stock certificate unless and until the Person or Persons
requesting the issue thereof shall have paid to Alderwoods the amount of such
tax or shall have established to the satisfaction of Alderwoods that such tax
has been paid.
SECTION 14.08 RESERVATION OF SHARES; LISTING OF ALDERWOODS COMMON
STOCK.
Alderwoods shall at all times have reserved and available, free from
preemptive rights, out of its authorized but unissued Alderwoods Common Stock,
sufficient shares of Alderwoods Common Stock to provide for the full conversion
of the Subordinated Notes then outstanding. Alderwoods covenants that all shares
of Alderwoods Common Stock to be issued upon conversion of the Subordinated
Notes are duly authorized and, when issued, will be validly issued, duly paid
and non-assessable and, except as provided in Section 14.07, free and clear of
all taxes, liens and other encumbrances. Before taking any action that would
cause an adjustment reducing the Conversion Price below the then par value, if
any, of the Alderwoods Common Stock issuable upon conversion of the Subordinated
Notes, Alderwoods shall take all corporate action that may, in the opinion of
its counsel, be necessary so that Alderwoods may validly and legally issue
shares of Alderwoods Common Stock at such adjusted Conversion Price.
Alderwoods further covenants that, subject to the terms of this
Indenture and compliance by the Holders of the Subordinated Notes with
applicable law, if at any time the Alderwoods Common Stock shall be listed on
The New York Stock Exchange or any other national securities exchange or
automated quotation system, Alderwoods will, if permitted by the rules of such
exchange or automated quotation system, use reasonable efforts to list and keep
listed, so long as the Alderwoods Common Stock shall be so listed on such
exchange or automated quotation system, all Alderwoods Common Stock issuable
upon conversion of the Subordinated Notes; PROVIDED, HOWEVER, that, if the rules
of such exchange or automated quotation system permit Alderwoods to defer the
listing of such Alderwoods Common Stock until the first conversion of the
Subordinated Notes into Alderwoods Common Stock in accordance with the
provisions of this Indenture, Alderwoods covenants to list such Alderwoods
Common Stock issuable upon conversion of the Subordinated Notes in accordance
with the requirements of such exchange or automated quotation system at such
time.
SECTION 14.09 RESPONSIBILITY OF TRUSTEE.
The Trustee and any other conversion agent shall not at any time be
under any duty or responsibility to any Holder of Subordinated Notes to
determine the Conversion Price or whether any facts exist that may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Alderwoods Common Stock, or of any securities or property, which may
at any time be issued or delivered upon the conversion of any Subordinated Note;
and the Trustee and any other conversion agent make no representations with
respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of Alderwoods to issue, transfer or deliver any
shares of
70
Alderwoods Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Subordinated Note for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of Alderwoods
contained in this Article 14. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 14.06 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Holders upon the conversion of their Subordinated Notes after any event
referred to in such Section 14.06 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 7.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which Alderwoods shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
SECTION 14.10 NOTICES TO HOLDERS.
If, at any time (with respect to each Holder, prior to such Holder's
exercise of conversion rights), any of the following events occur:
(a) Alderwoods declares any dividend payable in any securities
upon shares of Alderwoods Common Stock or makes any distribution (other than a
regular cash dividend or cash distributions payable out of surplus or net
profits legally available therefor) to the holders of Alderwoods Common Stock;
(b) Alderwoods offers to the holders of Alderwoods Common
Stock any shares of Capital Stock of Alderwoods or any Subsidiary thereof or
securities convertible into or exchangeable for shares of Capital Stock of
Alderwoods or any Subsidiary thereof or any option, right or warrant to
subscribe for or purchase any thereof;
(c) Alderwoods distributes to the holders of Alderwoods Common
Stock evidences of indebtedness or assets (including any cash dividend that
would result in an adjustment under Section 14.05) of Alderwoods or any
Subsidiary thereof;
(d) Any reclassification of Alderwoods Common Stock, any
consolidation of Alderwoods with or merger of Alderwoods into another Person,
any sale, transfer or lease to another Person of all or substantially all the
property of Alderwoods, or any proposal of Alderwoods to effect any of the
foregoing transactions that has been publicly announced by Alderwoods; or
(e) Any proposal by Alderwoods to effect a dissolution,
liquidation or winding up of Alderwoods that has been publicly announced by
Alderwoods;
then in any one or more of such events Alderwoods will give notice of such event
to the Trustee and the Holders, such giving of notice to be completed at least
ten calendar days prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the stockholders entitled to
such dividend, distribution or subscription rights, or for the determination of
stockholders entitled to vote on such proposed reclassification, consolidation,
merger, sale, transfer or lease, dissolution, liquidation or winding up;
provided, however, that no such notice will be required in respect of any of the
matters referred to in the penultimate sentence of Section 14.05(g). Such notice
will specify such record date or the date of closing the transfer books, as the
case may be, for such event. Failure to mail or receive such notice or any
defect therein or in the mailing thereof will not affect the validity of any
action taken in connection with such event.
71
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ALDERWOODS GROUP, INC.
By:
--------------------------------------
Name:
Title:
EACH SUBSIDIARY GUARANTOR
LISTED ON SCHEDULE 1.01 HERETO
By:
--------------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:
--------------------------------------
Name:
Title:
72
Schedule 1.01
[SUBJECT TO FURTHER REVIEW AND CONFIRMATION]
SUBSIDIARY GUARANTORS
ALASKA
Alderwoods (Alaska), Inc.
ARIZONA
Alderwoods (Arizona), Inc.
Xxxxxxxx Funeral Home, Inc.
Phoenix Memorial Park Association
ARKANSAS
Alderwoods (Arkansas), Inc.
CALIFORNIA
Advance Funeral Insurance Services
Alderwoods Group (California), Inc.
Alderwoods (Texas), Inc.
Xxxxxxxx XX, Inc.
Universal Memorial Centers V, Inc.
Universal Memorial Centers VI, Inc.
Xxxxxxxxxx-Lakewood Memorial Park and Funeral Service
COLORADO
Alderwoods (Colorado), Inc.
CONNECTICUT
Alderwoods (Connecticut), Inc.
DELAWARE
Administration Services, Inc.
Alderwoods (Alabama), Inc.
Alderwoods (Commissioner), Inc.
Alderwoods (Delaware), Inc.
Alderwoods (Mississippi), Inc.
Alderwoods (Texas), L.P.
American Burial and Cremation Centers, Inc.
H.P. Xxxxxx Funeral Home, Inc.
Lienkaemper Chapels, Inc.
Neweol (Delaware), L.L.C.
Osiris Holding Corporation
0
XXXXXXXX XX XXXXXXXX
Xxxxxxxxxx (Xxxxxxxx of Columbia), Inc.
FLORIDA
Coral Ridge Funeral Home & Cemetery, Inc.
Funeral Services Acquisition Group, Inc.
Garden Sanctuary Acquisition, Inc.
Kadek Enterprises of Florida, Inc.
Xxxxxx Xxxxxxxxx Memorial Chapels, Inc.
MHI Group, Inc.
Naples Memorial Gardens, Inc.
Osiris Holding of Florida, Inc.
Security Trust Plans, Inc.
GEORGIA
Alderwoods (Georgia), Inc.
Alderwoods (Georgia) Holdings, Inc.
Green Lawn Cemetery Corporation
Xxxxxx Holdings, Inc.
Southeastern Funeral Homes, Inc.
HAWAII
Alderwoods (Hawaii), Inc.
IDAHO
Alderwoods (Idaho), Inc.
ILLINOIS
Alderwoods (Chicago North), Inc.
Alderwoods (Chicago Central), Inc.
Alderwoods (Chicago South), Inc.
Alderwoods (Illinois), Inc.
Chapel Hill Memorial Gardens & Funeral Home Ltd.
Chicago Cemetery Corporation
Elmwood Acquisition Corporation
Mount Auburn Memorial Park, Inc.
The Oak Xxxxx Cemetery Association
Pineview Memorial Park, Inc.
Ridgewood Cemetery Company, Inc.
Xxxxxx Funeral Home, Inc.
Woodlawn Cemetery of Chicago, Inc.
Woodlawn Memorial Park, Inc.
INDIANA
Advance Planning of America, Inc.
Alderwoods (Indiana), Inc.
Xxxxxx Funeral Home, Inc.
0
XXXX
Xxxxxxxxxx (Xxxx), Inc.
KANSAS
Alderwoods (Kansas), Inc.
KENTUCKY
Alderwoods (Partner), Inc.
LOUISIANA
Alderwoods (Louisiana), Inc.
MARYLAND
Alderwoods (Maryland), Inc.
MASSACHUSETTS
Alderwoods (Massachusetts), Inc.
Xxxx-Xxxx Insurance Agency, Inc.
MICHIGAN
Alderwoods (Michigan), Inc.
MINNESOTA
Alderwoods (Minnesota), Inc.
MISSISSIPPI
Family Care, Inc.
Riemann Enterprises, Inc.
Xxxxxxxx Funeral Fund, Inc.
MISSOURI
Alderwoods (Missouri), Inc.
MONTANA
Alderwoods (Montana), Inc.
NEBRASKA
Alderwoods (Nebraska), Inc.
NEVADA
Alderwoods (Nevada), Inc.
3
NEW HAMPSHIRE
Xxxxxx Xxxxxxx Xxxxxxxx Funeral Home, Inc.
St. Laurent Funeral Home, Inc.
ZS Acquisition, Inc.
NEW MEXICO
Alderwoods (New Mexico), Inc.
Xxxxxx-Xxxxxx Mortuary, Inc.
NEW YORK
Alderwoods (New York), Inc.
Northeast Monument Company, Inc.
NORTH CAROLINA
Alderwoods (North Carolina), Inc.
Xxxxxxxxx Holding Company, Inc.
Xxxxxxxxx Group, Inc.
Xxxxxx, Inc.
Westminster Gardens, Inc.
NORTH DAKOTA
Alderwoods (North Dakota), Inc.
OHIO
Alderwoods (Ohio) Cemetery Management, Inc.
Alderwoods (Ohio) Funeral Home, Inc.
Xxxxxxx-Xxxxxx-Szakovitz Funeral Home, Inc.
OKLAHOMA
Alderwoods (Oklahoma), Inc.
OREGON
Alderwoods (Oregon), Inc.
The Portland Memorial, Inc.
Universal Memorial Centers I, Inc.
Universal Memorial Centers II, Inc.
Universal Memorial Centers III, Inc.
PENNSYLVANIA
Alderwoods (Pennsylvania), Inc.
Bright Undertaking Company
X. Xxxxxx, Inc.
Knee Funeral Home of Wilkinsburg, Inc.
Nineteen Thirty-Five Holdings, Inc.
Oak Xxxxx Management Company
4
RHODE ISLAND
Alderwoods (Rhode Island), Inc.
SOUTH CAROLINA
Alderwoods (South Carolina), Inc.
Graceland Cemetery Development Co.
SOUTH DAKOTA
Alderwoods (South Dakota), Inc.
TENNESSEE
DMA Corporation
Eagle Financial Associates, Inc.
Alderwoods (Tennessee), Inc.
TEXAS
Alderwoods (Texas) Cemetery, Inc.
Dunwood Cemetery Service Company
Xxxxxxxx Cemetery Holdings, Inc.
Xxxxxxxx Holdings, Inc.
Xxxxxx Land Company
Waco Memorial Park
VIRGINIA
Alderwoods (Virginia), Inc.
WASHINGTON
Alderwoods (Washington), Inc.
Evergreen Funeral Home and Cemetery, Inc.
Green Service Corporation
S & H Properties & Enterprises, Inc.
Vancouver Funeral Chapel, Inc.
WEST VIRGINIA
Alderwoods (West Virginia), Inc.
WISCONSIN
Alderwoods (Wisconsin), Inc.
Northern Land Company, Inc.
WYOMING
Alderwoods (Wyoming), Inc.
5
SCHEDULE 4.12
[SUBJECT TO FURTHER REVIEW AND CONFIRMATION]
NON-CASH DISPOSABLE ASSETS
TYPE LOC'N NAME ADDRESS CITY ST ZIP CODE
---- ----- ---- ------- ---- -- --------
CE 0000 XxXxxx Xxxxxx Xxxxxxx 0000 Xxxxxx Xxxx 000 Xxxxxx XX 00000
CE 0000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Inc. 000 Xxxxxx Xxxxxxx Xxx. Xxxxxxx XX 00000
CE 2085 Sunset Memorial Gardens & Mausoleum 0000 Xxxxx Xxx Xxx. Xxxxxxxxx XX 00000
CE 0000 Xxxxxxxxx Xxxxxx Xxxxxxx 0000 Xxxxx Xxxxxxx 00 Xx Xxxxxxx XX 00000
CE 0000 Xxxx Xxxxxxxx Xxxx 0000 Xxxx Xxxxxx Xxxx Xxxx Xxxxxxxx Xxxx XX 00000
CE 2138 Royal Palm Cemetery 000 00xx Xxxxxx Xxxxx Xx. Xxxxxxxxxx XX 00000
CE 2139 Royal Palm Cemetery North 0000 Xxxxx Xxxx. Xx. Xxxxxxxxxx XX 00000
CE 0000 Xxxxxxxx Xxxxxxxx Xxxx 0000 Xxxxxxxxxx Xxxx Xxxxxx XX 00000
CE 0000 Xxxxxx Xxxxxx Xxxxxxxx Xxxx 000 Xxxxx Xxxxx Xxxxxx Xxxxxxx XX 00000
CE 2179 Memorial Lawn 0000 Xxxxx Xxxxx Xxxx Xxxxxxx XX 00000
CE 2179 Memorial Lawn - Xxxxxxxxx Xxxxxxxx Xxxxxxx 00 Xxxxxxxxx XX 00000
CE 0000 Xxxxxxxxx Xxxxxxxx Xxxxxxx 0000 Xxxxx Xxxxx Xxxxxx Xxxxxxxxx XX 00000
CE 0000 Xxxxxxxxxx Xxxxxx Xxxxxxx Xxxxxx Xxxxxx Xxxx Xxxxxxxxxxx XX 00000
CE 0000 Xxxxxxxxx Xxxxxxxx Xxxxxxx 0000 Xxxxxxx 00 Xxxxx Xxxxxx XX 00000
CE 5509 Sarasota Memorial Park Cemetery 0000 Xxxxx Xxxxxxx Xxxxx Xxxxxxxx XX 00000
CE 5515 Memory Gardens, Inc. 0000 Xxxxxxxxx Xxxxxx Xxxx Xxxx XX 00000
CE 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000 000xx Xxxxxx Xxxxxxxxxx XX 00000
CE 5519 Sunset Memorial Cemetery 0000 Xxxx Xxxxxx Xxxxxx XX 00000
CE 5520 Hillcrest Memorial Cemetery 0000 Xxxxxxx 00 Xxxx Xxxxxxx XX 00000
CE 0000 Xxxxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxx 00 Xxxxxxxxx XX 00000
CE 5540 Mt. Auburn Cemetery Co. 0000 Xxxx Xxxx Xx. Xxxxxx XX 00000
CE 0000 Xxxxx Xxxx Xxxxxxxx Xxxx 0000 Xxxxx Xxxxxx Xxxx Xxxxxx XX 00000
CE 0000 Xxxxxx Xxxx Xxxxxxxx Xxxx 0000 Xxxxx Xxxxxx Xxxxxx Xxxxx XX 00000
CE 5668 Xxxxxx Chapel Memorial Gardens 0000 Xxxxxx Xxxxxx Xxxxxxxxxx XX 00000
CE 5670 Macedonia Memorial Park 00000 Xxxx Xxxxxxxx Xxxxxx XX 00000
CE 0000 Xxxxx Xxxxxx Xxxxxxxx Xxxxxxx 0000 Xxxxx Xxxxxx Xxxxx Xxxxx XX 00000
CE 5677 Blackhawk County Gardens 0000 Xxxxx Xxxxxx Xxxxxxxx XX 00000
CE 5683 Xxxxxxxxxx Memorial Cemetery 0000 Xxxxxxx Xxxxx Xxxxxxxxxx XX 00000
CE 5719 White Chapel Memory Gardens 00000 Xxxxx Xxxxxx Xxxxxxx 0-XX0 Xxxxxx XX 00000
CE 0000 Xxxxxx Xxxx Xxxxxxxx Xxxxxxx 0000 X.X. Xxxxxxx 000 Xxxx Xxxxxx XX 00000
CE 5723 Kankakee Memorial Gardens 15 South 0000 Xxxx Xxxx Xxxxxxxx XX 00000
CE 0000 Xxxxxxxxx Xxxxxxxx Xxxxxxx 0000 XxXxxx Xxxxxx Xxxx Xxxxxxx XX 00000
CE 0000 Xxx Xxxx Xxxxxxxx Xxxxxxx 0000 X.X. Xxxxxxx 000 Xxxxx Xxxxxxxxx XX 00000
CE 0000 Xxxxxxxxx Xxxxxx Xxxxxxx 0000 X.X. Xxxxxxx 00 Xxxxxxx XX 00000
CE 5735 Mt. Hope Cemetery 000 Xxxx Xxxxxxxxxxxx Xxxxxx Xxxxxxxxx XX 00000
CE 5736 Roselawn Cemetery 000 Xxxx Xxxxxxxxxxxx Xxxxxx Xxxxxxxxx XX 00000
CE 5737 Woodlawn Cemetery 0000 Xxxxx Xxxxx Xxxxxx Xxxxxx XX 00000
CE 5738 Lincoln Memorial Gardens 0000 Xxxxx Xxxxx Xxxxxx Xxxxxx XX 00000
CE 0000 Xxxxxxxx Xxxx 0000 Xxxx 0xx Xxxxxx Xxxxxxxxxxx XX 00000
CE 5740 Hillcrest Cemetery 000 Xxxxxxxxx Xxxx Xxxxx XX 00000
CE 0000 Xxxxxxxxxx Xxxxxx Xxxxxxxx Xxxx 0000 Xxxxxxx 00 Xxxxx Xxxxxxxxxx XX 00000
CE 5743 Beverley Memorial 0000 Xxxx 0xx Xxxxxx Xxxxxxxxxxx XX 00000
CE 5758 Sumter Xxxxxx Xxxxxxxx Xxxxxxx X.X. Xxxxxxx 00 Xxxx Xxxx XX 00000
CE 5759 Livingston Memorial Gardens U.S. Xxxxxxx 00 Xxxx Xxxxxxxxxx XX 00000
CE 5764 Broadlawn Memorial Gardens 0000 Xxx Xxxxxxx Xxxx Xxxxxx XX 00000
CE 0000 Xxxx Xxxx Xxxxxxxx Xxxx 00000 Xxxxx Xxxxx Xxxx Xxxxxxxx XX 00000
CE 0000 Xxxxxxxxxxx Xxxxxxxx Xxxxxxx 0000 Xxxxxx Xxxx Xxxxxxx XX 00000
CE 0000 Xxxxxxxxxx Xxxxxx Xxxxxxx 0000 Xxxxxxxx Xxxx Xxxxx XX 00000
CE 5811 Mt. Xxxxxx Memorial Gardens 00000 Xxxxxxxxx Xxxx Xx. Xxxxxx XX 00000
CE 5812 Coshocton County Memory Garden 00000 Xxxxx Xxxxx 000 Xxxxxxxxx XX 00000
CE 5817 Xxxxxx Memorial Gardens 0000 Xxxxx Xxxxxxxxxx Xxxx Xxxxxx Xxxxxxx XX 00000
CE 5821 North Lawn Cemetery 0000 Xxxxx 00xx Xxxxxx Xxxx Xxxxx XX 00000
CE 0000 Xxxxxxxx Xxxxxxxx Xxxxxxx 0000 Xxxxx Xxxxx Xxxx Xxxxxxxxxx XX 00000
CE 0000 Xxxxx Xxxxxxxx Xxxxxxx 0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxx XX 00000
CE 0000 Xxxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxxx Xxxx Xxxxxxxx XX 00000
1/2
TYPE LOC'N NAME ADDRESS CITY ST ZIP CODE
---- ----- ---- ------- ---- -- --------
FH 2758 P/Xxxxxx Funeral Homes 0000 Xxxx 00xx Xxxxxx Xxxxxxx XX 00000
FH 2759 P/Xxxxxx Funeral Homes 0000 Xxxxxxxxxxxx Xxxx. Xxxxxxx XX 00000
FH 2819 Xxxxxx-Xxxxxxx Funeral Home 000 Xxxxx Xxxxxxx Xxxx Xxxxxxxxxx XX 00000
FH 2889 Xxxxxx-Xxxxxx-Xxxxxxxxx Funeral Home 00 Xxxxx Xxxxxx Xxxxxx Xxxxxx XX 00000
FH 2906 Helm Funeral Home, Inc. 0000 Xxxxxxxx Xxxxxx Xxxxx Xxxx Xxxxxxx XX 00000
FH 3109 Xxxxx Xxxxx Funeral Home 000 Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx XX 00000
FH 3115 Xxxxx Funeral Home 000 Xxxx Xxxxxxxx Xxxx Xxxxx XX 00000
FH 3140 Royal Palm Funeral Chapel 0000 Xxxxx Xxxx. Xx. Xxxxxxxxxx XX 00000
FH 3163 Xxxxxx-Druid Funeral 000 Xxxx Xxxxx Xxxx Xxxxxxxxxx XX 00000
FH 3174 XxXxxxx Funeral Service Inc. 000 Xxxx Xxxxx Xxxxxx Xxxxxxxx XX 00000
FH 3174A XxXxxxx Funeral Service 000 Xxxx Xxxx Xxxxxxxxxx XX 00000
FH 3256 Shrine Of Memories 0000 Xxxxx Xxxxx Xxxx Xxxxxxx XX 00000
FH 0000 Xxxxxx X. Xxx Funeral Homes Inc. 000 Xxxx Xxxx Xxxxxxx XX 00000
FH 0000X Xxxxxx X. Xxx Funeral Homes Inc. 000 X. Xxxxxxxxx Xxxxxx Xxxxxxxx XX 00000
FH 0000X Xxxxxx X. Xxx Funeral Homes Inc. Xxxxxxx Xxxxxx xxx Xxxxxxx Xxxxxxxxxxxxx XX 00000
FH 3382 Bradenton Funeral Home 0000 00xx Xxxxxx Xxxx Xxxxxxxxx XX 00000
FH 3432 Xxxxxx Funeral Home 000 X. Xxxxxxxxx Xxxx. Xxxxxx XX 00000
FH 3446 Chapel Hill Funeral Home 0000 Xxxxx Xxxxxx Xxxx. Xxxxx XX 00000
FH 3452 Xxxxxx X. Xxxxxx Funeral Home 000 X. Xxxxxxxxx Xxxx. Xxxxxx XX 00000
FH 3452A Xxxxxx X. Xxxxxx Funeral Home 000 Xxxxx Xxxxxx Xxxxx Xxxx XX 00000
FH 3452B Xxxxxx X. Xxxxxx Funeral Home 000 Xxxxx Xxxxxxx Xxxxxx XX 00000
FH 3453 Xxxxxx Xxxxxx F/H North C 0000 Xxxxx Xxxxxx Xxxx Xxxxxx XX 00000
FH 3454 Xx X. Xxxxx & Bros. Funeral Home 0000 Xxxxxx Xxxx. Xxxxxx XX 00000
FH 3455 Xxxxxx Funerals, Inc. 000 X. Xxxxxxxxx Xxxx. Xxxxxx XX 00000
FH 3456 Xxxxxx Southland Funeral 000 XX 0xx Xxxxxx Xxxxx Xxxxxxx XX 00000
FH 3468 Knee F.Home Of Wilkinsburg 000 Xxxxxx Xxxxxx Xxxxxxxxxxx XX 00000
FH 3472 Wattengel Funeral Home 000 Xxxxxx Xxxxxx Xxxxx Xxxxxxxxx XX 00000
FH 3475 Xxxxxx Chapel Funeral Home 0000 Xxxxxx Xxxx Xxxxxxxxxx XX 00000
FH 3559 Xxxxxxxxx-Xxxxxxx Funeral Chapel 000 Xxxxxx Xxxxxx Xxxxxxx XX 00000
FH 3579 Xxxxxxxxxx-Xxxxxxx Funeral Home 0000 Xxxxx Xxxxx Xxxxxxxxx XX 00000
2/2
EXHIBIT A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ALDERWOODS OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE INDENTURE.
ALDERWOODS GROUP, INC.
12 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2012
No. ______ $__________
CUSIP No.
ALDERWOODS GROUP, INC., a corporation incorporated under the laws of
the State of Delaware (herein called "ALDERWOODS", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to CEDE & Co. or registered assigns, the
principal sum of _______________ Dollars on January 2, 2012, at the office or
agency of Alderwoods referred to below, and to pay interest thereon on March 15
and September 15, in each year, commencing on March 15, 2002, accruing from the
most recent Interest Payment Date to which interest has been paid or duly
provided for or, if no interest has been paid, from the Measurement Date
(subject to deduction as provided for in Section 2.01 of the Indenture), at the
rate of 12 1/4% per annum, until the principal hereof is paid or duly provided
for. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the Person in whose name this Global Note (or one or
more Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest, which shall be March 1 or September 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date (each a "REGULAR RECORD DATE"). Any such interest not so punctually paid,
or duly provided for, and interest on such defaulted interest at the rate borne
by the Global Notes, to the extent lawful, shall forthwith cease to be payable
to the Holder on such Regular Record Date, and may be paid to the Person in
whose name this Global Note (or one or more Predecessor Notes) is registered at
the close of business on a special record date for the payment of such defaulted
interest to be fixed by the Trustee, notice of which shall be given to Holders
of Global Notes not less than 10 days prior to such special record date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Global Notes may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Global Note will be made at the office or agency of Alderwoods maintained for
that purpose in the Borough of Manhattan in the City of New York, or at such
other office or agency of Alderwoods as may be maintained 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
payment of interest may be made at the option of Alderwoods by check mailed to
the address of the Person entitled thereto as such address shall appear on the
security register maintained by the Registrar. Reference is hereby made to the
further provisions of this Global Note set forth on the reverse hereof.
A-1
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, and a seal
has been affixed hereon, this Global Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, Alderwoods has caused this instrument to be duly
executed under its corporate seal.
Dated:
ALDERWOODS GROUP, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Global Notes designated therein referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:
--------------------------------------
Authorized Officer
A-4
(Reverse of Global Note)
1. INDENTURE. This Global Note is one of the duly authorized
Subordinated Notes of Alderwoods designated as its 12.25% Convertible
Subordinated Notes due 2012 (the "SUBORDINATED NOTES"), which may be issued
under an indenture (herein called the "INDENTURE") dated as of January 2, 2002,
among Alderwoods Group, Inc., a Delaware corporation, as issuer ("ALDERWOODS")
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, 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, obligations and immunities thereunder of
Alderwoods, the Trustee and the Holders of the Subordinated Notes, and of the
terms upon which the Subordinated Notes are, and are to be, authenticated and
delivered.
All capitalized terms used in this Subordinated Note that are defined
in the Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
No reference herein to the Indenture and no provisions of this
Subordinated Note or of the Indenture shall alter or impair the obligation of
Alderwoods, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Subordinated Note at the times, place and
rate, and in the coin or currency, herein prescribed, or Alderwoods' conversion
obligations as set forth herein and in the Indenture.
2. REDEMPTION.
(a) OPTIONAL REDEMPTION. The Subordinated Notes are redeemable as a
whole or in part, at the option of Alderwoods, at any time upon not less than 30
nor more than 60 days' prior notice at a Redemption Price equal to 100% of their
principal amount plus accrued interest to the date of redemption; PROVIDED,
HOWEVER, that prior to the second anniversary of the Measurement Date Alderwoods
may not optionally redeem the Subordinated Notes unless the Current Market Price
of Alderwoods Common Stock is at least 15% greater than the then applicable
Conversion Price.
(b) PARTIAL REDEMPTION. In the event of redemption of this Subordinated
Note in part only, a new Subordinated Note or Subordinated Notes for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
3. OFFERS TO PURCHASE. Section 4.11 of the Indenture provides that upon
the occurrence of a Change of Control, and subject to further limitations
contained therein, Alderwoods shall make an offer to purchase certain amounts of
the Subordinated Notes in accordance with the procedures set forth in the
Indenture. Section 4.12 of the Indenture provides that upon the occurrence of
certain Asset Sales, and subject to further limitations contained therein,
Alderwoods shall make an offer to purchase certain amounts of the Subordinated
Notes in accordance with the procedures set forth in the Indenture.
4. DEFAULTS AND REMEDIES. If an Event of Default shall occur and be
continuing, the principal of all of the outstanding Subordinated Notes, plus all
accrued and unpaid interest, if any, to and including the date the Subordinated
Notes are paid, may be declared or may become due and payable in the manner and
with the effect provided in the Indenture.
5. DEFEASANCE. The Indenture contains provisions (which provisions
apply to this Subordinated Note) for defeasance at any time of (a) the entire
indebtedness of Alderwoods under this Subordinated Note and (b) certain
restrictive covenants and related Defaults and Events of Default, in each case
upon compliance by Alderwoods with certain conditions set forth therein.
6. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of Alderwoods and the rights of the Holders under the
Indenture at any time by Alderwoods and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Subordinated Notes at the time outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the
A-5
Subordinated Notes at the time outstanding, on behalf of the Holders of all the
Subordinated Notes, to waive compliance by Alderwoods with certain provisions of
the Indenture and certain past Defaults and Events of Default under the
Indenture and this Subordinated Note and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Subordinated Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Subordinated Note and of any Subordinated Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Subordinated Note.
7. DENOMINATIONS, TRANSFER AND EXCHANGE. The Subordinated Notes are
issuable only in registered form without coupons in denominations of $100 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Subordinated Notes are exchangeable
for a like aggregate principal amount of Subordinated Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Subordinated Note is registrable on the security
register of Alderwoods, upon surrender of this Subordinated Note for
registration of transfer at the office or agency of Alderwoods maintained for
such purpose in the Borough of Manhattan in the City of New York or at such
other office or agency of Alderwoods as may be maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Subordinated Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Subordinated Notes, but Alderwoods may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
8. PERSONS DEEMED OWNERS. Prior to and at the time of due presentment
of this Subordinated Note for registration of transfer, Alderwoods, the Trustee,
the Conversion Agent and any agent of Alderwoods or the Trustee may treat the
Person in whose name this Subordinated Note is registered as the owner hereof
for all purposes, whether or not this Subordinated Note shall be overdue, and
neither Alderwoods, the Trustee, the Conversion Agent nor any agent shall be
affected by notice to the contrary.
9. GOVERNING LAW. This Subordinated Note shall be governed by and
construed in accordance with the laws of the State of New York.
10. CONVERSION. Subject to the provisions of the Indenture, the Holder
hereof has the right, at such Holder's option, at any time after the original
issuance of any Subordinated Notes through the close of business on the second
Business Day prior to the date of repurchase, redemption or final maturity date
of the Subordinated Notes to convert the principal hereof or any portion of such
principal that is $100 or an integral multiple thereof into that number of duly
authorized, validly issued, fully paid and non-assessable shares of Alderwoods
Common Stock, as said shares shall be constituted at the date of conversion,
obtained by dividing the principal amount of this Subordinated Note or portion
thereof to be converted by $17.17 (the initial "CONVERSION PRICE") or such
Conversion Price as adjusted from time to time as provided in the Indenture,
upon surrender of this Subordinated Note in the manner provided in Section 14.02
of the Indenture. No adjustment in respect of interest or dividends will be made
upon any conversion; PROVIDED, HOWEVER, that if this Subordinated Note is
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day preceding the interest payment date, this Subordinated Note (unless it or
the portion being converted have been called for redemption or repurchase during
the period from the close of business on any record date for the payment of
interest to the close of business on the Business Day preceding the interest
payment date) must be accompanied by an amount, in same day funds or other funds
acceptable to Alderwoods, equal to the interest payable on such interest payment
date on the principal amount being converted; PROVIDED, HOWEVER, that no such
payment need be made to the extent there exists at the time of conversion a
default in the payment of interest due on the Subordinated Notes surrendered for
conversion. No fractional shares will be issued upon any conversion, but either
an adjustment in cash will be made, as provided in the Indenture, in respect of
any fraction of
A-6
a share that would otherwise be issuable upon the surrender of any Subordinated
Note or Subordinated Notes for conversion or the number of shares shall be
rounded up to full shares.
A-7
Schedule A
Exchange of (a) portions of this Global Note for
Physical Notes or (b) Physical Notes
for an interest in this Global Note.
Principal Amount of Physical Notes
Issued in Exchange for, or Exchanged Remaining Principal Amount of this Notation Made
Date for an Interest in, the Global Note Global Note By
---- ------------------------------------ ---------------------------------- -------------
---- ------------------------------------ ---------------------------------- -------------
---- ------------------------------------ ---------------------------------- -------------
---- ------------------------------------ ---------------------------------- -------------
---- ------------------------------------ ---------------------------------- -------------
---- ------------------------------------ ---------------------------------- -------------
A-8
EXHIBIT B
ALDERWOODS GROUP, INC.
12.25% CONVERTIBLE SUBORDINATED NOTES DUE 2012
No. ______ $__________
CUSIP No.
ALDERWOODS GROUP, INC., a corporation incorporated under the laws of
the State of Delaware (herein called "ALDERWOODS", 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 of _______________ Dollars on January 2, 2012, at the office or
agency of Alderwoods referred to below, and to pay interest thereon on March 15
and September 15, in each year, commencing on March 15, 2002, accruing from the
most recent Interest Payment Date to which interest has been paid or duly
provided for or, if no interest has been paid, from the Measurement Date
(subject to deduction as provided for in Section 2.01 of the Indenture), at the
rate of 12.25% per annum, until the principal hereof is paid or duly provided
for. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the Person in whose name this Physical Note (or one
or more Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest, which shall be March 1 or September 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date (each a "REGULAR RECORD DATE"). Any such interest not so punctually paid,
or duly provided for, and interest on such defaulted interest at the rate borne
by the Physical Notes, to the extent lawful, shall forthwith cease to be payable
to the Holder on such Regular Record Date, and may be paid to the Person in
whose name this Physical Note (or one or more Predecessor Notes) 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 of which shall be given to
Holders of Physical Notes not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Physical Notes may
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Physical Note will be made at the office or agency of Alderwoods maintained for
that purpose in the Borough of Manhattan in the City of New York, or at such
other office or agency of Alderwoods as may be maintained 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
payment of interest may be made at the option of Alderwoods by check mailed to
the address of the Person entitled thereto as such address shall appear on the
security register maintained by the Registrar or by wire transfer to such
account as the Person entitled thereto may request in form reasonably
satisfactory to Alderwoods and the Trustee. Reference is hereby made to the
further provisions of this Physical Note set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, and a seal
has been affixed hereon, this Physical Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
B-1
IN WITNESS WHEREOF, Alderwoods has caused this instrument to be duly
executed under its corporate seal.
Dated:
ALDERWOODS GROUP, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
B-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Physical Notes designated therein referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:
--------------------------------------
Authorized Officer
B-3
(Reverse of Physical Note)
1. INDENTURE. This Physical Note is one of the duly authorized
Subordinated Notes of Alderwoods designated as its 12.25% Convertible
Subordinated Notes due 2012 (the "SUBORDINATED NOTES"), which may be issued
under an indenture (herein called the "INDENTURE") dated as of January 2, 2002,
among Alderwoods Group, Inc., a Delaware corporation, as issuer ("ALDERWOODS")
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, 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, obligations and immunities thereunder of
Alderwoods, the Trustee and the Holders of the Subordinated Notes, and of the
terms upon which the Subordinated Notes are, and are to be, authenticated and
delivered.
All capitalized terms used in this Subordinated Note that are defined
in the Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
No reference herein to the Indenture and no provisions of this
Subordinated Note or of the Indenture shall alter or impair the obligation of
Alderwoods, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Subordinated Note at the times, place and
rate, and in the coin or currency, herein prescribed, or Alderwoods' conversion
obligations as set forth herein and in the Indenture.
2. REDEMPTION.
(a) OPTIONAL REDEMPTION. The Subordinated Notes are redeemable as a
whole or in part, at the option of Alderwoods, at any time upon not less than 30
nor more than 60 days' prior notice at a Redemption Price equal to 100% of their
principal amount plus accrued interest to the date of redemption; PROVIDED,
HOWEVER, that prior to the second anniversary of the Measurement Date Alderwoods
may not optionally redeem the Subordinated Notes unless the Current Market Price
of Alderwoods Common Stock is at least 15% greater than the then applicable
Conversion Price.
(b) PARTIAL REDEMPTION. In the event of redemption of this Subordinated
Note in part only, a new Subordinated Note or Subordinated Notes for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
3. OFFERS TO PURCHASE. Section 4.11 of the Indenture provides that upon
the occurrence of a Change of Control, and subject to further limitations
contained therein, Alderwoods shall make an offer to purchase certain amounts of
the Subordinated Notes in accordance with the procedures set forth in the
Indenture. Section 4.12 of the Indenture provides that upon the occurrence of
certain Asset Sales, and subject to further limitations contained therein,
Alderwoods shall make an offer to purchase certain amounts of the Subordinated
Notes in accordance with the procedures set forth in the Indenture.
4. DEFAULTS AND REMEDIES. If an Event of Default shall occur and be
continuing, the principal of all of the outstanding Subordinated Notes, plus all
accrued and unpaid interest, if any, to and including the date the Subordinated
Notes are paid, may be declared or may become due and payable in the manner and
with the effect provided in the Indenture.
5. DEFEASANCE. The Indenture contains provisions (which provisions
apply to this Subordinated Note) for defeasance at any time of (a) the entire
indebtedness of Alderwoods under this Subordinated Note and (b) certain
restrictive covenants and related Defaults and Events of Default, in each case
upon compliance by Alderwoods with certain conditions set forth therein.
6. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of Alderwoods and the rights of the Holders under the
Indenture at any time by Alderwoods and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Subordinated Notes at the time outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the
B-4
Subordinated Notes at the time outstanding, on behalf of the Holders of all the
Subordinated Notes, to waive compliance by Alderwoods with certain provisions of
the Indenture and certain past Defaults and Events of Default under the
Indenture and this Subordinated Note and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Subordinated Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Subordinated Note and of any Subordinated Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Subordinated Note.
7. DENOMINATIONS, TRANSFER AND EXCHANGE. The Subordinated Notes are
issuable only in registered form without coupons in denominations of $100 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Subordinated Notes are exchangeable
for a like aggregate principal amount of Subordinated Notes of a different
authorized denomination, as requested by the Holder surrendering the same. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Subordinated Note is registrable on the security register
of Alderwoods, upon surrender of this Subordinated Note for registration of
transfer at the office or agency of Alderwoods maintained for such purpose in
the Borough of Manhattan in the City of New York or at such other office or
agency of Alderwoods as may be maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Subordinated Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. No service charge shall be
made for any registration of transfer or exchange or redemption of Subordinated
Notes, but Alderwoods may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
8. PERSONS DEEMED OWNERS. Prior to and at the time of due presentment
of this Subordinated Note for registration of transfer, Alderwoods, the Trustee,
the Conversion Agent and any agent of Alderwoods or the Trustee may treat the
Person in whose name this Subordinated Note is registered as the owner hereof
for all purposes, whether or not this Subordinated Note shall be overdue, and
neither Alderwoods, the Trustee, the Conversion Agent nor any agent shall be
affected by notice to the contrary.
9. GOVERNING LAW. This Subordinated Note shall be governed by and
construed in accordance with the laws of the State of New York.
10. CONVERSION. Subject to the provisions of the Indenture, the Holder
hereof has the right, at such Holder's option, at any time after the original
issuance of any Subordinated Notes through the close of business on the second
Business Day prior to the date of repurchase, redemption or final maturity date
of the Subordinated Notes to convert the principal hereof or any portion of such
principal that is $100 or an integral multiple thereof into that number of duly
authorized, validly issued, fully paid and non-assessable shares of Alderwoods
Common Stock, as said shares shall be constituted at the date of conversion,
obtained by dividing the principal amount of this Subordinated Note or portion
thereof to be converted by $17.17 (the initial "CONVERSION PRICE") or such
Conversion Price as adjusted from time to time as provided in the Indenture,
upon surrender of this Subordinated Note in the manner provided in Section 14.02
of the Indenture. No adjustment in respect of interest or dividends will be made
upon any conversion; PROVIDED, HOWEVER, that if this Subordinated Note is
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day preceding the interest payment date, this Subordinated Note (unless it or
the portion being converted have been called for redemption or repurchase during
the period from the close of business on any record date for the payment of
interest to the close of business on the Business Day preceding the interest
payment date) must be accompanied by an amount, in same day funds or other funds
acceptable to Alderwoods, equal to the interest payable on such interest payment
date on the principal amount being converted; PROVIDED, HOWEVER, that no such
payment need be made to the extent there exists at the time of conversion a
default in the payment of interest due on the Subordinated Notes surrendered for
conversion. No fractional shares will be issued upon any conversion, but either
an adjustment in cash will be made, as provided in the Indenture, in respect of
any fraction of a share that would otherwise be issuable upon the surrender of
any Subordinated Note or Subordinated Notes for conversion or the number of
shares shall be rounded up to full shares.
B-5
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Subordinated Note purchased by Alderwoods
pursuant to Section 4.11 or 4.12 of the Indenture, check the "Yes" box:
Yes [ ]
If you wish to have a portion of this Subordinated Note purchased by
Alderwoods pursuant to Section 4.11 or 4.12 of the Indenture, state the amount:
$__________
Date: Your Signature:
------------------------ -------------------------------
(Sign exactly as your name
appears on the other side of
this Subordinated Note)
Signature Guarantee:
-----------------------------
B-6
ASSIGNMENT FORM
If you the holder want to assign this Subordinated Note, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Subordinated Note to
------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________ agent to transfer this Subordinated Note
on the books of Alderwoods. The agent may substitute another to act for him.
Date: Your Signature:
------------------------ -------------------------------
(Sign exactly as your name
appears on the other side of
this Subordinated Note)
Signature Guarantee:
-----------------------------
CONVERSION NOTICE
TO: ALDERWOODS GROUP, INC.
The undersigned registered owner of this Subordinated Note hereby
exercises the option to convert this Subordinated Note, or the portion thereof
(which is $100 or an integral multiple thereof) below designated, into shares of
Common Stock of Alderwoods Group, Inc. in accordance with the terms of the
Indenture referred to in this Subordinated Note, and directs that the shares
issuable and deliverable upon such conversion, together with any check in
payment for fractional shares and any Subordinated Notes representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares or any
portion of this Subordinated Note not converted are to be issued in the name of
a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest accompanies this Subordinated Note.
Dated:
-----------------------
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Your Signature:
-------------------------------
(Sign exactly as your name
appears on the other side of
this Subordinated Note)
Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Subordinated Note
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 Subordinated Note
Registrar in addition to, or in substitution
for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
----------------------------------------------
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and
Subordinated Notes if to be delivered, other than to and in the name of the
registered holder:
----------------------------------
(Name)
----------------------------------
(Street Address)
----------------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all): $
-------------
Social Security or Other Taxpayer
Identification Number:
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