Document:

exv4w3

 

Exhibit 4.3

SERVICE CORPORATION INTERNATIONAL

as Issuer

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.

as Trustee

$250,000,000

SERIES A AND SERIES B

75/8% SENIOR NOTES DUE 2018

FOURTH

SUPPLEMENTAL

INDENTURE

 

Dated as of October 3, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I ESTABLISHMENT OF NEW SERIES
	 	 	1	 
	Section 1.01 Establishment of New Series
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE III THE NOTES
	 	 	6	 
	Section 3.01 Form
	 	 	6	 
	Section 3.02 Limitation on Ability of the Issuer to Release Funds from Escrow
	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV REDEMPTION
	 	 	7	 
	Section 4.01 Optional Redemption
	 	 	7	 
	Section 4.02 Mandatory Redemption
	 	 	7	 
	Section 4.03 Change of Control
	 	 	7	 
	Section 4.04 Special Redemption
	 	 	9	 
	Section 4.05 Deposit of Redemption Price in the Event of Special Redemption
	 	 	9	 
	 
	 	 	 	 
	ARTICLE V AMENDMENT OF ORIGINAL INDENTURE
	 	 	9	 
	Section 5.01 Amendment of Article One of Original Indenture
	 	 	9	 
	Section 5.02 Amendment of Article Three of Original Indenture
	 	 	10	 
	Section 5.03 Amendment of Article Four of Original Indenture
	 	 	11	 
	Section 5.04 Amendments of Article Five of Original Indenture
	 	 	11	 
	Section 5.05 Amendment of Article Eleven of Original Indenture
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VI ADDITIONAL EVENT OF DEFAULT
	 	 	13	 
	Section 6.01 Event of Default
	 	 	13	 
	Section 6.02 Notice of Default
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VII MISCELLANEOUS
	 	 	13	 
	Section 7.01 Integral Part
	 	 	13	 
	Section 7.02 Additional Interest
	 	 	13	 
	Section 7.03 Adoption, Ratification and Confirmation
	 	 	13	 
	Section 7.04 Counterparts
	 	 	13	 
	Section 7.05 Governing Law
	 	 	14	 
	Section 7.06 Trustee Makes No Representation
	 	 	14	 

	 	 	 
	APPENDIX:

	 	Provisions Relating to Series A and Series B Notes
	EXHIBIT 1 TO APPENDIX:

	 	Form of Series A Note
	EXHIBIT 2 TO APPENDIX:

	 	Form of Transferee Letter of Representation
	EXHIBIT A:

	 	Form of Series B Note
	EXHIBIT B:

	 	Form of Escrow Agreement

 

 

     FOURTH SUPPLEMENTAL INDENTURE dated as of October 3, 2006 (this “Supplemental Indenture”)
between Service Corporation International, a Texas corporation (the “Issuer”), and The Bank of New
York Trust Company, N.A., a national banking corporation, as successor to The Bank of New York, as
trustee (the “Trustee”).

W I T N E S S E T H:

     WHEREAS, the Issuer has heretofore entered into a Senior Indenture, dated as of February 1,
1993 (the “Original Indenture”), with the Trustee, a First Supplemental Indenture, dated as of
April 14, 2004, with the Trustee (the “First Supplemental Indenture”), a Second Supplemental
Indenture, dated as of June 15, 2005, with the Trustee (the “Second Supplemental Indenture”) and a
Third Supplemental Indenture, dated as of October 3, 2006, with the Trustee (the “Third
Supplemental Indenture”);

     WHEREAS, the Original Indenture, as supplemented by this Supplemental Indenture, is herein
called the “Indenture”;

     WHEREAS, under the Original Indenture, the form and terms of a new series of Securities may at
any time be established by a supplemental indenture executed by the Issuer and the Trustee;

     WHEREAS, the Issuer proposes to create under the Indenture a new series of Securities;

     WHEREAS, additional Securities of this series and other series hereafter established, except
as may be limited in the Original Indenture as at the time supplemented and modified, may be issued
from time to time pursuant to the Original Indenture as at the time supplemented and modified; and

     WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental
Indenture and to make it a valid and binding obligation of the Issuer have been done or performed;

     NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows:

ARTICLE I

ESTABLISHMENT OF NEW SERIES

     Section 1.01 Establishment of New Series.

     (a) There is hereby established a new series of Securities to be issued under the
Indenture, to be designated as the Issuer’s 75/8% Senior Notes due
2018 (the “Notes”). The Notes shall be issued as either Series A Notes or Series B Notes,
and any Notes issued under this Supplemental Indenture shall be designated as either Series
A Notes or Series B Notes.

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     (b) On the Issue Date, the Trustee shall authenticate and deliver $250,000,000 of the
Series A Notes and, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver Additional Notes for original issue in accordance with Sections 2.3
and 2.4 of the Original Indenture in an aggregate principal amount specified in the
applicable Issuer Order. Further, from time to time after the original issue date, Notes
shall be authenticated and delivered upon registration of transfer of, or in exchange for,
or in lieu of other Notes as set forth in the Original Indenture or in the Appendix hereto.

     (c) The Notes shall be issued initially in the form of one or more Global Securities in
substantially the form set out in the Appendix or Exhibit A hereto. The Depositary with
respect to the Notes shall be The Depository Trust Company.

     (d) Each Note shall be dated the date of authentication thereof and shall bear interest
as provided in the form of Note in the Appendix or Exhibit A hereto. The date on which
principal is payable on the Notes shall be as provided in the form of Note in the Appendix
or Exhibit A hereto.

     (e) The record dates for the Notes and the manner of payment of principal and interest
on the Notes shall be as provided in the form of Note in the Appendix or Exhibit A hereto.
The Place of Payment shall be as designated in Section 3.2 of the Original Indenture.

     (f) The terms of Section 10.1(C) of the Original Indenture shall be applicable to the
Notes. If and to the extent that the provisions of the Original Indenture are duplicative
of, or in contradiction with, the provisions of this Supplemental Indenture, the provisions
of this Supplemental Indenture shall govern, but solely with respect to the Notes.

ARTICLE II

DEFINITIONS

     For purposes of this Supplemental Indenture and the Notes, the following terms have the
meanings indicated below. All capitalized terms used herein and not otherwise defined below shall
have the meanings ascribed thereto in the Original Indenture.

     “Additional Interest” means all additional interest owing on the Notes pursuant to a
registration default under a Registration Rights Agreement.

     “Additional Notes” means Notes issued in compliance with the terms of this Supplemental
Indenture subsequent to the Issue Date and in compliance with Sections 2.3 and 2.4 of the Original
Indenture, it being understood that any notes issued in exchange for or replacement of any Series A
Notes issued on the Issue Date shall not be Additional Notes, including any such Notes issued
pursuant to a Registration Rights Agreement.

     “Acquisition” means, collectively, the acquisition by the Issuer of Alderwoods pursuant to a
merger agreement dated April 2, 2006, and the related financing transactions described in the
Offering Memorandum dated September 27, 2006, including the issuance of additional debt securities
in a private placement, borrowings under a new senior credit facility, the repurchase of

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certain outstanding notes of Alderwoods and the Issuer pursuant to tender offers and the repayment of certain
other existing debt of Alderwoods.

     “Adjusted Consolidated Net Tangible Assets” means, at the time of determination, the aggregate
amount of total assets included in the Issuer’s most recent quarterly or annual consolidated
balance sheet prepared in accordance with generally accepted accounting principles, net of
applicable reserves reflected in such balance sheet, after deducting the following amounts
reflected in such balance sheet: (a) goodwill; (b) deferred charges and other assets; (c) preneed
funeral receivables and trust investments; (d) preneed cemetery receivables and trust investments;
(e) cemetery perpetual care trust investments; (f) current assets of discontinued operations; (g)
non-current assets of discontinued operations; (h) other like intangibles; and (i) current
liabilities (excluding, however, current maturities of long-term debt).

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     “Alderwoods” means Alderwoods Group, Inc., a Delaware corporation.

     “Attributable Indebtedness,” when used with respect to any sale and leaseback transaction (as
contemplated by Section 3.7 of the Original Indenture), means, at the time of determination, the
present value (discounted at the rate set forth or implicit in the terms of the lease included in
such transaction) of the total obligations of the lessee for rental payments (other than amounts
required to be paid on account of property taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items that do not constitute payments for property
rights) during the remaining term of the lease included in such transaction (including any period
for which such lease has been extended). In the case of any lease that is terminable by the lessee
upon the payment of a penalty or other termination payment, such amount shall be the lesser of the
amount determined assuming termination upon the first date such lease may be terminated (in which
case the amount shall also include the amount of the penalty or termination payment, but no rent
shall be considered as required to be paid under such lease subsequent to the first date upon which
it may be so terminated) or the amount determined assuming no such termination.

     “Capital Stock” of any Person means any and all shares, interests (including partnership
interests), rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred stock, but
excluding any debt securities convertible into such equity.

     “Change of Control” has the meaning attributed thereto in Section 4.03 of this Supplemental
Indenture.

     “Change of Control Offer” has the meaning attributed thereto in Section 4.03 of this
Supplemental Indenture.

     “Credit Facilities” means one or more debt facilities with banks or other institutional
lenders providing for revolving credit or term loans or letters of credit.

     “Escrow Agent” means The Bank of New York Trust Company, N.A.

     “Escrow Agreement” means the escrow agreement relating to the Notes dated as of the date
hereof among the Issuer, the Escrow Agent and the Trustee.

     “Holder” means, in the case of any Note, the Person in whose name such Note is registered in
the security register kept by the Issuer for that purpose in accordance with the terms of the
Indenture.

     “Initial Purchasers” means J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc of America Securities LLC, Lehman Brothers Inc., Raymond James & Associates,
Inc., and Morgan Keegan & Company, Inc.

     “Issue Date” means October 3, 2006.

     “Notes” has the meaning assigned to it in Section 1.01(a) hereof, and includes both the Series
A Notes and the Series B Notes.

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     “Optional Redemption Premium” has the meaning attributed thereto in Exhibit 1 to the Appendix
and in Exhibit A hereto.

     “Perpetual Care Trust” means a trust established to provide perpetual care or maintenance for
any cemetery, mausoleum or columbarium.

     “Pre-Need Trust” means a trust established to hold funds related to the purchase of funeral or
cemetery goods or services on a pre-need basis.

     “Registered Exchange Offer” means the offer by the Issuer, pursuant to a Registration Rights
Agreement, to certain Holders of Series A Notes, to issue and deliver to such Holders, in exchange
for the Series A Notes, a like aggregate principal amount of Series B Notes registered under the
Securities Act.

     “Registration Rights Agreement” means (1) with respect to the Series A Notes issued on the
Issue Date, the Registration Rights Agreement dated October 3, 2006, among the Issuer and the
Initial Purchasers and (2) with respect to each issuance of Additional Notes issued in a
transaction exempt from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Issuer and the Persons purchasing such Additional Notes under
the related Purchase Agreement.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Series A Notes” means (1) $250,000,000 aggregate principal amount of
75/8% Senior Notes Due 2018 issued on the Issue Date and (2) Additional
Notes, if any, issued in a transaction exempt from the registration requirements of the Securities
Act.

     “Series B Notes” means (1) the 75/8% Senior Notes Due 2018 issued
pursuant to the Supplemental Indenture in connection with a Registered Exchange Offer pursuant to a
Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration
statement filed with the SEC under the Securities Act.

     “Special Redemption” means (i) the mandatory redemption, in whole, but not in part, of the
Notes pursuant to the Escrow Agreement and paragraph 6 of the Notes required to take place in the
event the Acquisition is not consummated on or prior to December 31, 2006, or (ii) the optional
redemption, in whole, but not in part, at any time prior to December 31, 2006, if, in the Issuer’s
sole judgment, the Acquisition will not be consummated by that date.

     “Subsidiary” means with respect to any Person: (a) any corporation, association, limited
liability company or other business entity (other than a partnership) of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and (b) any partnership, (i) the sole
general partner or the managing general partner of which is such Person or a Subsidiary of such
Person, or (ii) the only general partners of which are such Person or of one or more Subsidiaries
of such Person (or any

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combination thereof); provided, however, that no Pre-Need Trust or Perpetual Care Trust shall
be deemed to be a Subsidiary for purposes of this Supplemental Indenture

     “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding
and normally entitled (without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof.

ARTICLE III

THE NOTES

     Section 3.01 Form. Provisions relating to the Series A Notes and the Series B Notes
are set forth in the Appendix and Exhibit A hereto, which are hereby incorporated in and expressly
made a part of this Supplemental Indenture. The provisions of the Appendix hereto shall supercede
the applicable provisions of Section 2.8 of the Original Indenture to the extent applicable. The
Series A Notes and the Trustee’s certificate of authentication thereto, shall be substantially in
the form of Exhibit 1 to the Appendix, which is hereby incorporated in and expressly made a part of
this Supplemental Indenture. The Series B Notes and the Trustee’s certificate of authentication
thereto shall be substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Supplemental Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the Issuer is subject, if
any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to
the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable
only in registered form without interest coupons and only in denominations of $2,000 and integral
multiples of $1,000. The terms of the Notes set forth in the Appendix and Exhibit A are part of
the terms of this Supplemental Indenture.

     Section 3.02 Limitation on Ability of the Issuer to Release Funds from Escrow. At the
date of this Supplemental Indenture, the Trustee, the Issuer and the Escrow Agent shall enter into
an Escrow Agreement substantially in the form attached as Exhibit B hereto. The net proceeds from
the offering of the Notes will be paid into an Escrow Account by the Initial Purchasers of the
Notes and held in the name of the Trustee on behalf of the Holders under the terms of the Escrow
Agreement. In accordance with the terms of the Escrow Agreement, the Escrow Property (as defined
in the Escrow Agreement) will be released to the Issuer upon delivery to the Escrow Agent and the
Trustee of a certificate signed by an officer of the Issuer (the “Escrow Release Certificate”), in
the form attached to the Escrow Agreement. The Issuer agrees for the benefit of the Holders to
comply with the terms and conditions of the Escrow Agreement and shall use its reasonable best
efforts to satisfy the conditions precedent to release of the Escrow Property, deliver the Escrow
Release Certificate and receive the net proceeds from the offering and sale of the Notes as
provided in the Escrow Agreement, as soon as practicable following the date hereof. The Issuer
agrees that (i) the terms of the Escrow Agreement shall exclusively control the conditions under
which and procedures pursuant to which Escrow Property (as defined in the Escrow Agreement) can be
released and (ii) it will not attempt to have any Escrow Property (as defined in the Escrow
Agreement) released from escrow except in accordance with the Escrow Agreement.

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ARTICLE IV

REDEMPTION

     Section 4.01 Optional Redemption.

     (a) At its option, the Issuer may choose to redeem all or any portion of the Notes, at
once or from time to time.

     (b) To redeem the Notes, the Issuer must pay a redemption price in an amount determined
in accordance with the provisions of the form of Note in Exhibit 1 to the Appendix or in
Exhibit A hereto.

     (c) Any redemption pursuant to this Section 4.01 shall be made pursuant to the
provisions of Sections 12.1 through 12.3 of the Original Indenture.

     Section 4.02 Mandatory Redemption. Except as set forth in Section 4.04 below, the
Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to
the Notes. However, the Issuer may be required to offer to purchase Notes as described in Section
4.03 below. The Issuer may at any time and from time to time purchase Notes in the open market or
otherwise.

     Section 4.03 Change of Control. Upon the occurrence of any of the following events
(each a “Change of Control”), each Holder shall have the right to require that the Issuer
repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant interest payment date):

	(1)	 	any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such
person shall be deemed to have “beneficial ownership” of all shares that any such person has
the right to acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 35% of the total voting power of the Voting
Stock of the Issuer;
	 
	(2)	 	individuals who on the Issue Date constituted the board of directors (together with any new
directors whose election by such board of directors or whose nomination for election by the
shareholders of the Issuer was approved by a vote of at least a majority of the directors of
the Issuer then still in office who were either directors on the Issue Date or whose election
or nomination for election was previously so approved) cease for any reason to constitute a
majority of the board of directors then in office;
	 
	(3)	 	the Issuer is liquidated or dissolved or adopts a plan of liquidation or dissolution; or
	 
	(4)	 	the merger or consolidation of the Issuer with or into another Person or the merger of
another Person with or into the Issuer, or the sale of all or substantially all the assets of
the Issuer 

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	 	 	(determined on a consolidated basis) to another Person, other than a transaction
following which (i) in the case of a merger or consolidation transaction, holders of
securities that represented 100% of the Voting Stock of the Issuer immediately prior to such
transaction (or other securities into which such securities are converted as part of such
merger or consolidation transaction) own directly or indirectly at least a majority of the
voting power of the Voting Stock of the surviving Person in such merger or consolidation
transaction immediately after such transaction and (ii) in the case of a sale of assets
transaction, each transferee becomes an obligor in respect of the Notes and a subsidiary of
the transferor of such assets.

Within 30 days following any Change of Control, the Issuer will mail a notice to each Holder with a
copy to the Trustee (the “Change of Control Offer”) stating:

	(1)	 	that a Change of Control has occurred and that such Holder has the right to require the
Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the
principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to
the date of purchase (subject to the right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);
	 
	(2)	 	the circumstances and relevant facts regarding such Change of Control (including information
with respect to pro forma historical income, cash flow and capitalization, in each case after
giving effect to such Change of Control);
	 
	(3)	 	the purchase date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed); and
	 
	(4)	 	the instructions, as determined by us, consistent with the covenant described hereunder, that
a Holder must follow in order to have its Notes purchased.

The Issuer will not be required to make a Change of Control Offer with respect to a series of Notes
following a Change of Control if (1) a third party makes the Change of Control Offer in the manner,
at the times and otherwise in compliance with the requirements set forth hereunder applicable to a
Change of Control Offer made by the Issuer and purchases all Notes of such series validly tendered
and not withdrawn under such Change of Control Offer or (2) notice of redemption of all of such
series of Notes has been given pursuant hereto unless and until there has been a default in payment
of the applicable redemption price. A Change of Control Offer may be made in advance of a Change
of Control, conditional upon the Change of Control, if a definitive agreement is in place for the
Change of Control at the time of making of the Change of Control Offer.

The Issuer shall 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
Notes pursuant to this Section 4.03. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.03, the Issuer shall comply with the
applicable securities
laws and regulations and shall not be deemed to have breached its obligations under this Section
4.03 by virtue thereof.

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Holders electing to have a Note purchased will be required to surrender the Note, with an
appropriate form duly completed, to the Issuer at the address specified in the notice at least
three Business Days prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Issuer receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Note purchased.

On the purchase date, all Notes purchased by the Issuer under this Section 4.03 shall be delivered
by the Issuer to the Trustee for cancellation, and the Issuer shall pay the purchase price plus
accrued and unpaid interest, if any, to the Holders entitled thereto.

In the event that at the time of any Change of Control the terms of any Credit Facility restrict or
prohibit the purchase of Notes following such Change of Control, then prior to the mailing of the
notice to Holders but in any event within 30 days following any Change of Control, the Issuer shall
undertake to (1) repay in full all such indebtedness under any applicable Credit Facility or (2)
obtain the requisite consents under the agreements governing such indebtedness under any applicable
Credit Facility to permit the repurchase of the Notes.

     Section 4.04 Special Redemption. Any Special Redemption shall be made in whole, and
not in part, pursuant to the provisions of Sections 12.1 through 12.3 of the Original Indenture;
provided, however, that notice of redemption shall be given one Business Day before the redemption
date; provided, further, that if the Acquisition has not been consummated on or prior to December
31, 2006, the Issuer does not need to provide notice of Special Redemption.

     Section 4.05 Deposit of Redemption Price in the Event of Special Redemption. In the
event of a Special Redemption, the Issuer shall cause the Escrow Agent to deposit with the Trustee
or the Paying Agent an amount of money sufficient to redeem on the redemption date all the Notes so
called for redemption at the appropriate redemption price, together with accrued interest, if any,
to the date fixed for redemption.

ARTICLE V

AMENDMENT OF ORIGINAL INDENTURE

     Section 5.01 Amendment of Article One of Original Indenture. The second paragraph of
Section 1.1 of the Original Indenture is hereby amended and restated, but only with respect to the
Notes, to read in its entirety as follows:

“All accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting principles,
and the term “generally accepted accounting principles” means such accounting
principles as are generally accepted in the United States at the date of the
supplemental indenture authorizing the issuance of the related Securities of such
series.”

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     Section 5.02 Amendment of Article Three of Original Indenture. Section 3.6 of the
Original Indenture is hereby amended and restated, but only with respect to the Notes, to read in
its entirety as follows:

“The Issuer will not mortgage, pledge, encumber or subject to any lien or security
interest, and no Subsidiary will mortgage, pledge, encumber or subject to any lien
or security interest, to secure any Indebtedness of the Issuer or any Indebtedness
of any Subsidiary (other than Indebtedness owing to the Issuer or a wholly-owned
Subsidiary) any assets, without providing that the Securities shall thereby be
secured equally and ratably with (or prior to) any other Indebtedness so secured,
unless, after giving effect thereto, the aggregate outstanding amount of all such
secured Indebtedness of the Issuer and its Subsidiaries (excluding secured
Indebtedness existing as of June 30, 2006, and any extensions, renewals or
refundings thereof that do not increase the principal amount of Indebtedness so
extended, renewed or refunded and excluding secured Indebtedness incurred pursuant
to subparagraphs (a), (b), (c), (d) and (e) below), together with all outstanding
Attributable Indebtedness from sale and leaseback transactions described in Section
3.7(1) of this Indenture, would not exceed 10% of Adjusted Consolidated Net Tangible
Assets of the Issuer and its Subsidiaries on the date such Indebtedness is so
secured; provided, however, that nothing in this Section 3.6 shall prevent the
Issuer or any Subsidiary:

(a) from acquiring and retaining property subject to mortgages, pledges,
encumbrances, liens or security interests existing thereon at the date of
acquisition thereof, or from creating within one year of such acquisition mortgages,
pledges, encumbrances or liens upon property acquired by it after June 30, 2006, as
security for purchase money obligations incurred by it in connection with the
acquisition of such property, whether payable to the Person from whom such property
is acquired or otherwise;

(b) from mortgaging, pledging, encumbering or subjecting to any lien or security
interest Current Assets to secure Current Liabilities;

(c) from mortgaging, pledging, encumbering or subjecting to any lien or security
interest property to secure Indebtedness under one or more Credit Facilities in an
aggregate principal amount not to exceed $500 million;

(d) from extending, renewing or refunding any Indebtedness secured by a mortgage,
pledge, encumbrance, lien or security interest on the same property theretofore
subject thereto, provided that the principal amount of such Indebtedness so
extended, renewed or refunded shall not be increased; or

(e) from securing the payment of workmen’s compensation or insurance premiums or
from making good faith pledges or deposits in connection with bids,
tenders, contracts (other than contracts for the payment of money) or leases,
deposits to secure public or statutory obligations, deposits to secure surety or
appeal bonds, pledges or deposits in connection with contracts made with or at the
request of the

10

 

United States Government or any agency thereof, or pledges or
deposits for similar purposes in the ordinary course of business.”

     Section 5.03 Amendment of Article Four of Original Indenture. Section 4.3 of the
Original Indenture is hereby amended and restated, but only with respect to the Notes, to read in
its entirety as follows:

“Section 4.3 Reports by the Issuer. (a) Whether or not required by the Commission,
so long as any Securities of any series are Outstanding, the Issuer will furnish to
the Trustee and to any Holders of Securities of such series who so request, within
15 days of the time periods specified in the Commission’s rules and regulations:

     (i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuer were
required to file such Forms, including a “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and, with respect to the annual
information only, a report on the annual financial statements by the Issuer’s
independent accountants; and

     (ii) all current reports that would be required to be filed with the Commission
on Form 8-K if the Issuer were required to file such reports.

(b) Whether or not required by the Commission, the Issuer will file a copy of all of
the information and reports referred to in Sections 4.3(a)(i) and (ii) with the
Commission for public availability within the time periods specified in the
Commission’s rules and regulations (unless the Commission will not accept such a
filing) and make such information available to securities analysts and prospective
investors upon request.

(c) For so long as any Securities of any series remain Outstanding, the Issuer will
furnish to the Holders of Securities of such series and to prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

(d) The Issuer will comply with the requirements of Section 314 of the Trust
Indenture Act of 1939.

(e) The Issuer will furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his knowledge of the Issuer’s compliance with all
conditions and covenants under this Indenture. For purposes of this subsection (e),
such compliance shall be determined without regard to any period of grace or
requirement of notice
provided under this Indenture.”

Section 5.04  Amendments of Article Five of Original Indenture.

11

 

     (a) Section 5.1(g) of the Original Indenture is hereby amended and restated, but only
with respect to the Notes, to read in its entirety as follows:

“(g) default under any bond, debenture, note or other evidence of
Indebtedness for money borrowed by the Issuer or any Subsidiary or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed
by the Issuer or any Subsidiary (other than Non-Recourse Indebtedness),
whether such Indebtedness exists on the date hereof or shall hereafter be
created, which default shall have resulted in such Indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable, or any default in payment of such Indebtedness
(after the expiration of any applicable grace periods and the presentation
of any debt instruments, if required), if the aggregate amount of all such
Indebtedness which has been so accelerated and with respect to which there
has been such a default in payment shall exceed $10,000,000, without each
such default and acceleration having been rescinded or annulled within a
period of 30 days after there shall have been given to the Issuer by the
Trustee by registered mail, or to the Issuer and the Trustee by the Holders
of at least 25 percent in aggregate principal amount of the Securities of
such series then Outstanding, a written notice specifying each such default
and requiring the Issuer to cause each such default and acceleration to be
rescinded or annulled and stating that such notice is a “Notice of Default”
hereunder; or”

     (b) The first sentence of the first paragraph following Section 5.1(h) of the Original
Indenture is hereby amended and restated, but only with respect to the Notes, to read in its
entirety as follows:

“If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not
less than 25 percent in aggregate principal amount of the Securities of such
series then Outstanding, by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the unpaid principal
amount (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all the Securities of such series then Outstanding
and the Optional Redemption Premium, if any, due thereon, and the interest,
if any, accrued thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable.”

12

 

     Section 5.05 Amendment of Article Eleven of Original Indenture. Article Eleven of the
Original Indenture is hereby amended, but only with respect to the Notes, by the addition of the
following new Section at the end thereof:

“Section 11.11 Usury. It is the intent of the parties in the execution and
performance of the Securities of any series and the Indenture to contract in strict
compliance with applicable usury laws from time to time in effect. The Issuer and
the Trustee on behalf of the Holders stipulate and agree that none of the terms in
the Securities of such series or the Indenture are intended or shall ever be
construed to create a contract to pay interest in an amount in excess of the maximum
nonusurious amount or at a rate in excess of the highest lawful rate. In the event
any payment includes any such excess interest, the Issuer stipulates that such
excess interest shall have been paid as a result of error on the part of the Trustee
and the Issuer.”

ARTICLE VI

ADDITIONAL EVENT OF DEFAULT

     Section 6.01 Event of Default. An additional Event of Default under Section 5.1 of
the Original Indenture occurs if the Issuer fails to comply with, or breaches, any material
provision of the Escrow Agreement.

     Section 6.02 Notice of Default. During the term of the Escrow Agreement, the Trustee
shall provide written notice to the Escrow Agent thereunder (i) upon the occurrence of an Event of
Default or (ii) if the principal amount of and accrued but unpaid interest on the Notes has become
immediately due and payable pursuant to Section 5.1 of the Original Indenture.

ARTICLE VII

MISCELLANEOUS

     Section 7.01 Integral Part. This Supplemental Indenture constitutes an integral part
of the Indenture.

     Section 7.02 Additional Interest. In relation to the Notes, all references to
“interest” in the Original Indenture, this Supplemental Indenture and in the Notes shall be deemed
to include Additional Interest, if any, unless the context otherwise requires.

     Section 7.03 Adoption, Ratification and Confirmation. The Original Indenture, as
supplemented and amended by this Supplemental Indenture, is in all respects hereby adopted,
ratified and confirmed.

     Section 7.04 Counterparts. This Supplemental Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed an original; and all such
counterparts shall together constitute but one and the same instrument.

13

 

     Section 7.05 Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     Section 7.06 Trustee Makes No Representation. The Trustee makes no representation as
to the validity or sufficiency of this Supplemental Indenture. The recitals and statements herein
are deemed to be those of the Issuer and not of the Trustee.

[Signatures on following page]

14

 

\

     IN WITNESS WHEREOF, the parties hereto have executed this Supplemental Indenture on the date
first set forth above.

	 
	ISSUER:

	 

	SERVICE CORPORATION INTERNATIONAL

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Eric D. Tanzberger	 
	 	 	Eric D. Tanzberger 	 
	 	 	Senior Vice President and Chief

Financial Officer 	 
	 

	 
	TRUSTEE:

	 

	THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ John Stohlmann	 
	 	 	Name:  	John C. Stohlmann 	 
	 	 	Title:  	Vice President 	 
	 

15

 

APPENDIX

PROVISIONS RELATING TO SERIES A NOTES AND SERIES B NOTES

     1. Definitions

     1.1 Definitions

     For the purposes of this Appendix the following terms shall have the meanings indicated below:

          “Applicable Procedures” means, with respect to any transfer or transaction involving a
Temporary Regulation S Global Security or beneficial interest therein, the rules and procedures of
the Depositary for such a Temporary Regulation S Global Security, to the extent applicable to such
transaction and as in effect from time to time.

          “Definitive Security” means a certificated Series A Note or Series B Note bearing, if
required, the appropriate restricted securities legend set forth in Section 2.3(e).

          “Depositary” means The Depository Trust Company, its nominees and their respective successors.

          “Distribution Compliance Period”, with respect to any Securities, means the period of 40
consecutive days beginning on and including the later of (i) the day on which such Securities are
first offered to Persons other than distributors (as defined in Regulation S under the Securities
Act) in reliance on Regulation S and (ii) the issue date with respect to such Securities.

          “IAI” means an institutional “accredited investor”, as defined in Rule 501(a)(1), (2), (3) and
(7) of Regulation D under the Securities Act.

          “Initial Purchasers” means J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc of America Securities LLC, Lehman Brothers Inc., Raymond James & Associates,
Inc. and Morgan Keegan & Company, Inc.

          “Purchase Agreement” means (1) with respect to the Series A Notes issued on the Issue Date,
the Purchase Agreement dated September 27, 2006, among the Issuer and the Initial Purchasers, and
(2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting
agreement among the Issuer and the Persons purchasing such Additional Notes.

          “QIB” means a “qualified institutional buyer” as defined in Rule 144A.

          “Registered Exchange Offer” means the offer by the Issuer, pursuant to a Registration Rights
Agreement, to certain Holders of Series A Notes, to issue and deliver to

 

 

 2 

such Holders, in exchange
for the Series A Notes, a like aggregate principal amount of Series B Notes registered under the
Securities Act.

          “Registration Rights Agreement” means (1) with respect to the Series A Notes issued on the
Issue Date, the Registration Rights Agreement dated October 3, 2006, among the Issuer and the
Initial Purchasers and (2) with respect to each issuance of Additional Notes issued in a
transaction exempt from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Issuer and the Persons purchasing such Additional Notes under
the related Purchase Agreement.

          “Rule 144A Securities” means all Securities offered and sold to QIBs in reliance on Rule 144A.

          “Securities” means the Series A Notes and the Series B Notes, treated as a single class.

          “Securities Act” means the Securities Act of 1933.

          “Securities Custodian” means the custodian with respect to a Global Security (as appointed by
the Depositary), or any successor Person thereto and shall initially be the Trustee.

          “Series A Notes” means (1) $250,000,000 aggregate principal amount of
75/8% Senior Notes Due 2018 issued on the Issue Date and (2) Additional
Notes, if any, issued in a transaction exempt from the registration requirements of the Securities
Act.

          “Series B Notes” means (1) the 75/8% Senior Notes Due 2018 issued
pursuant to the Supplemental Indenture in connection with a Registered Exchange Offer pursuant to a
Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration
statement filed with the SEC under the Securities Act.

          “Shelf Registration Statement” means the registration statement issued by the Issuer in
connection with the offer and sale of Series A Notes pursuant to a Registration Rights Agreement.

          “Transfer Restricted Securities” means Securities that bear or are required to bear the legend
relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e)
hereto.

          1.2 Other Definitions

 

 

 3 

	 	 	 	 	 
	 	 	DEFINED IN
	TERM	 	SECTION:
	“Agent Members”.

	 	 	2.1	(b)
	“Global Securities”.

	 	 	2.1	(a)
	“IAI Global Security”.

	 	 	2.1	(a)
	“Permanent Regulation S Global Security”

	 	 	2.1	(a)
	“Regulation S”.

	 	 	2.1	(a)
	“Regulation S Global Security”.

	 	 	2.1	(a)
	“Rule 144A”.

	 	 	2.1	(a)
	“Rule 144A Global Security”.

	 	 	2.1	(a)
	“Temporary Regulation S Global Security”

	 	 	2.1	(a)

     2. The Securities

     2.1 (a) Form and Dating. The Series A Notes will be offered and sold by the Issuer
pursuant to a Purchase Agreement. The Series A Notes will be resold initially only to (i) QIBs in
reliance on Rule 144A under the Securities Act (“Rule 144A”) and (ii) Persons other than U.S.
Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act
(“Regulation S”). Series A Notes may thereafter be transferred to, among others, QIBs, IAIs and
purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein.
Series A Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one
or more permanent global Securities in definitive, fully registered form (collectively, the “Rule
144A Global Security”); and Series A Notes initially resold pursuant to Regulation S shall be
issued initially in the form of one or more temporary global securities in fully registered form
(collectively, the “Temporary Regulation S Global Security”), in each case without interest coupons
and with the global securities legend and the applicable restricted securities legend set forth in
Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Series A Notes
represented thereby with the Securities Custodian and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided
in the Indenture. One or more global securities in definitive, fully registered form without
interest coupons and with the global securities legend and the applicable restricted securities
legend set forth in Exhibit 1 hereto (collectively, the “IAI Global Security”) shall also be issued
on the Issue Date, deposited with the Securities Custodian, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the
Trustee as provided in the Indenture to accommodate transfers of beneficial interests in the
Securities to IAIs subsequent to the initial distribution. Except as set forth in this Section
2.1(a), beneficial ownership interests in the Temporary Regulation S Global Security will not be
exchangeable for interests in the Rule 144A Global Security, the IAI Global Security, a permanent
global security (the “Permanent Regulation S Global Security”, and together with the Temporary
Regulation S Global Security, the “Regulation S Global Security”) or any other Security prior to
the expiration of the Distribution Compliance Period and then, after the expiration of the
Distribution Compliance Period, may be

 

 

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exchanged for interests in a Rule 144A Global Security,
an IAI Global Security or the Permanent Regulation S Global Security only upon certification in
form reasonably satisfactory to the Trustee that (i) beneficial ownership interests in such
Temporary Regulation S Global Security are owned either by non-U.S. persons or U.S. persons who
purchased such interests in a transaction that did not require registration under the Securities
Act and (ii) in the case of an exchange for an IAI Global Security, certification that the interest
in the Temporary Regulation S Global Security is being transferred to an institutional “accredited
investor” under the Securities Act that is an institutional accredited investor acquiring the
securities for its own account or for the account of an institutional accredited investor.

          Beneficial interests in Temporary Regulation S Global Securities or IAI Global Securities may
be exchanged for interests in Rule 144A Global Securities if (1) such exchange occurs in connection
with a transfer of Securities in compliance with Rule 144A and (2) the transferor of the beneficial
interest in the Temporary Regulation S Global Security or the IAI Global Security, as applicable,
first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the
effect that the beneficial interest in the Temporary Regulation S Global Security or the IAI Global
Security, as applicable, is being transferred to a Person (a) who the transferor reasonably
believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction
meeting the requirements of Rule 144A, and (c) in accordance with all applicable securities laws of
the States of the United States and other jurisdictions.

          Beneficial interests in Temporary Regulation S Global Securities and Rule 144A Global
Securities may be exchanged for an interest in IAI Global Securities if (1) such exchange occurs in
connection with a transfer of the securities in compliance with an exemption under the Securities
Act and (2) the transferor of the Regulation S Global Security or Rule 144A Global Security, as
applicable, first delivers to the Trustee a written certificate (substantially in the form of
Exhibit 2) to the effect that (A) the Regulation S Global Security or Rule 144A Global Security, as
applicable, is being transferred (a) to an “accredited investor” within the meaning of
501(a)(1),(2),(3) and (7) under the Securities Act that is an institutional investor acquiring the
securities for its own account or for the account of such an institutional accredited investor, in
each case in a minimum principal amount of the securities of $250,000, for investment purposes and
not with a view to or for offer or sale in connection with any distribution in violation of the
Securities Act and (B) in accordance with all applicable securities laws of the States of the
United States and other jurisdictions.

          Beneficial interests in a Rule 144A Global Security or an IAI Global Security may be
transferred to a Person who takes delivery in the form of an interest in a Regulation S Global
Security, whether before or after the expiration of the Distribution Compliance Period, only if the
transferor first delivers to the Trustee a written certificate to the effect that such transfer is
being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).

 

 

 5 

          The Rule 144A Global Security, the IAI Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are collectively referred to herein as
“Global Securities”. The aggregate principal amount of the Global Securities may from time to time
be increased or decreased by adjustments made on the records of the Trustee and the Depositary or
its nominee as hereinafter provided.

          (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security
deposited with or on behalf of the Depositary.

          The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Securities that (a) shall be registered in
the name of the Depositary for such Global Security or Global Securities or the nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary’s instructions or held by the Trustee as custodian for the Depositary.

          Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under
the Indenture with respect to any Global Security held on their behalf by the Depositary or by the
Trustee as the custodian of the Depositary or under such Global Security, and the Issuer, the
Trustee and any agent of the Issuer or the Trustee shall be entitled to treat the Depositary as the
absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from
giving effect to any written certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and its Agent Members, the operation of customary
practices of such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.

          (c) Definitive Securities. Except as provided in this Section 2.1 or Section 2.3 or
2.4, owners of beneficial interests in Global Securities shall not be entitled to receive physical
delivery of Definitive Securities.

     2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the Issue
Date, an aggregate principal amount of $250,000,000 75/8% Senior Notes Due
2018, (2) any Additional Notes for an original issue in an aggregate principal amount specified in
the written order of the Issuer pursuant to Sections 2.3 and 2.4 of the Original Indenture and (3)
Series B Notes for issue in a Registered Exchange Offer pursuant to a Registration Rights
Agreement, for a like principal amount of Series A Notes, in each case upon a written order of the
Issuer pursuant to Sections 2.3 and 2.4 of the Original Indenture. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original issue of Securities
is to be authenticated.

          2.3 Transfer and Exchange.

          (a) Transfer and Exchange of Definitive Securities. When Definitive Securities are
presented to the Registrar with a request:

 

 

 6 

	 	(x)	 	to register the transfer of such Definitive Securities; or
	 
	 	(y)	 	to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the Definitive
Securities surrendered for transfer or exchange:

     (i) shall be duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing; and

     (ii) if such Definitive Securities are required to bear a restricted securities
legend, they are being transferred or exchanged pursuant to an effective registration
statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A),
(B) or (C) below, and are accompanied by the following additional information and
documents, as applicable:

     (A) if such Definitive Securities are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, a certification from such Holder
to that effect; or

     (B) if such Definitive Securities are being transferred to the Issuer, a certification
to that effect; or

     (C) if such Definitive Securities are being transferred (x) pursuant to an exemption
from registration in accordance with Rule 144A, Regulation S or Rule 144 under the
Securities Act; or (y) in reliance upon another exemption from the requirements of the
Securities Act: (i) a certification to that effect (in the form set forth on the reverse of
the Security) and (ii) if the Issuer so requests, an opinion of counsel or other evidence
reasonably satisfactory to it as to the compliance with the restrictions set forth in the
legend set forth in Section 2.3(e)(i).

          (b) Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a
Global Security. A Definitive Security may not be exchanged for a beneficial interest in a
Rule 144A Global Security, an IAI Global Security or a Permanent Regulation S Global Security
except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a
Definitive Security, duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:

     (i) certification, in the form set forth on the reverse of the Security, that such
Definitive Security is either (A) being transferred to a QIB in accordance with Rule
144A, (B) being transferred to an IAI that has furnished to the Trustee a signed letter
in the form of Exhibit 2 hereto or (C) being transferred after expiration of the
Distribution Compliance Period by a Person who initially

 

 

 7 

purchased such Security in reliance on Regulation S to a buyer who elects to hold its interest in
such Security in the form of a beneficial interest in the Permanent Regulation S Global
Security; and

     (ii) written instructions directing the Trustee to make, or to direct the
Securities Custodian to make, an adjustment on its books and records with respect to such
Rule 144A Global Security (in the case of a transfer pursuant to clause (b)(i)(A)), IAI
Global Security (in the case of a transfer pursuant to clause (b)(1)(B)) or Permanent
Regulation S Global Security (in the case of a transfer pursuant to clause (b)(i)(B)) to
reflect an increase in the aggregate principal amount of the Securities represented by
the Rule 144A Global Security, IAI Global Security or Permanent Regulation S Global
Security, as applicable, such instructions to contain information regarding the
Depositary account to be credited with such increase,

then the Trustee shall cancel such Definitive Security and cause, or direct the Securities
Custodian to cause, in accordance with the standing instructions and procedures existing between
the Depositary and the Securities Custodian, the aggregate principal amount of Securities
represented by the Rule 144A Global Security, IAI Global Security or Permanent Regulation S Global
Security, as applicable, to be increased by the aggregate principal amount of the Definitive
Security to be exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global Security, IAI Global
Security or Permanent Regulation S Global Security, as applicable, equal to the principal amount of
the Definitive Security so canceled. If no Rule 144A Global Securities, IAI Global Securities or
Permanent Regulation S Global Securities, as applicable, are then outstanding, the Issuer shall
issue and the Trustee shall authenticate, upon written order of the Issuer in the form of an
Officers’ Certificate of the Issuer, a new Rule 144A Global Security, IAI Global Security or
Permanent Regulation S Global Security, as applicable, in the appropriate principal amount.

          (c) Transfer and Exchange of Global Securities.

     (i) The transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with the Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global Security shall
deliver to the Registrar a written order given in accordance with the Depositary’s
procedures containing information regarding the participant account of the Depositary to
be credited with a beneficial interest in the Global Security. The Registrar shall, in
accordance with such instructions instruct the Depositary to credit to the account of the
Person specified in such instructions a beneficial interest in the Global Security and to
debit the account of the Person making the transfer the beneficial interest in the Global
Security being transferred.

     (ii) If the proposed transfer is a transfer of a beneficial interest in one Global
Security to a beneficial interest in another Global Security, the Registrar

 

 

 8 

shall reflect
on its books and records the date and an increase in the principal amount of the Global
Security to which such interest is being transferred in an amount equal to the principal
amount of the interest to be so transferred, and the Registrar shall reflect on its books
and records the date and a corresponding decrease in the principal amount of the Global
Security from which such interest is being transferred.

     (iii) Notwithstanding any other provisions of this Appendix (other than the
provisions set forth in Section 2.4), a Global Security may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.

     (iv) In the event that Global Security is exchanged for Definitive Securities to
Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or
the effectiveness of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Series A Notes intended to ensure that such
transfers comply with Rule 144A, Regulation S or another applicable exemption under the
Securities Act, as the case may be) and such other procedures as may from time to time be
adopted by the Issuer.

          (d) Restrictions on Transfer of Temporary Regulation S Global Securities. During the
Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global
Securities may only be sold, pledged or transferred in accordance with the Applicable Procedures
and only (i) to the Issuer, (ii) in an offshore transaction in accordance with Regulation S (other
than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global
Security) or (iii) pursuant to an effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of any State of the United States.

          (e) Legend.

     (i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each
Security certificate evidencing the Global Securities and the Definitive Securities (and
all Securities issued in exchange therefor or in substitution thereof), in the case of
Securities offered otherwise than in reliance on Regulation S shall bear a legend in
substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY

 

 

 9 

INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR

 

 

 10 

TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

     Each certificate evidencing a Security offered in reliance on Regulation S shall, in
addition to the foregoing, bear a legend in substantially the following form:

     THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.

Each Definitive Security shall also bear the following additional legend:

     IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.

     (ii) Upon any sale or transfer of a Transfer Restricted Security (including any
Transfer Restricted Security represented by a Global Security) pursuant to Rule 144 under
the Securities Act, the Registrar shall permit the transferee thereof to exchange such
Transfer Restricted Security for a certificated Security that does not bear the legend
set forth above and rescind any restriction on the transfer of such Transfer Restricted
Security, if the transferor thereof certifies in writing to the Registrar that such sale
or transfer was made in reliance on Rule 144 (such certification to be in the form set
forth on the reverse of the Security).

     (iii) After a transfer of any Series A Notes pursuant to and during the period of
the effectiveness of a Shelf Registration Statement with respect to such Series A Notes,
all requirements pertaining to legends on such Series A Notes will cease to apply and the
requirements requiring any such Series A Notes issued to certain Holders be issued in
global form will continue to apply.

 

 

 11 

     (iv) Upon the consummation of a Registered Exchange Offer with respect to the
Series A Notes, all requirements pertaining to such Series A Notes that Series A Notes be
issued in global form will continue to apply, and Series B Notes in global form without
the restricted securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Series A Notes in such Registered Exchange Offer.

          (f) Cancellation or Adjustment of Global Security. At such time as all beneficial
interests in a Global Security have either been exchanged for Definitive Securities, redeemed,
purchased or canceled, such Global Security shall be returned to the Depositary for cancellation or
retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for Definitive Securities, redeemed, purchased or
canceled, the principal amount of Securities represented by such Global Security shall be reduced
and an adjustment shall be made on the books and records of the Trustee (if it is then the
Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee
or the Securities Custodian, to reflect such reduction.

          (g) No Obligation of the Trustee.

     (i) The Trustee shall have no responsibility or obligation to any beneficial owner
of a Global Security, a member of, or a participant in the Depositary or other Person
with respect to the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the Securities
or with respect to the delivery to any participant, member, beneficial owner or other
Person (other than the Depositary) of any notice (including any notice of redemption) or
the payment of any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders under
the Securities shall be given or made only to or upon the order of the registered Holders
(which shall be the Depositary or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary. The Trustee
may rely and shall be fully protected in relying upon information furnished by the
Depositary with respect to its members, participants and any beneficial owners.

     (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire
as to compliance with any restrictions on transfer imposed under the Indenture or under
applicable law with respect to any transfer of any interest in any Security (including
any transfers between or among Depositary participants,
members or beneficial owners in any Global Security) other than to require delivery
of such certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of the Indenture, and to
examine the same to determine substantial compliance as to form with the express
requirements hereof.

 

 

 12 

          2.4 Definitive Securities.

          (a) A Global Security deposited with the Depositary or with the Trustee as Securities
Custodian for the Depositary pursuant to Section 2.1 shall be transferred to the beneficial owners
thereof in the form of Definitive Securities in an aggregate principal amount equal to the
principal amount of such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depositary notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Global Security and the Depositary fails to
appoint a successor depositary or if at any time such Depositary ceases to be a “clearing agency”
registered under the Exchange Act, in either case, and a successor depositary is not appointed by
the Issuer within 90 days of such notice, or (ii) an Event of Default has occurred and is
continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it
elects to cause the issuance of Definitive Securities under the Indenture.

          (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to
this Section 2.4 shall be surrendered by the Depositary to the Trustee located at its principal
corporate trust office in the State of Texas, The City of Dallas, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate principal amount of
Definitive Securities of authorized denominations. Any portion of a Global Security transferred
pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations
of $2,000 principal amount and any integral multiple of $1,000 and registered in such names as the
Depositary shall direct. Any Definitive Security delivered in exchange for an interest in the
Transfer Restricted Security shall, except as otherwise provided by Section 2.3(e) hereof, bear the
applicable restricted securities legend and definitive securities legend set forth in Exhibit 1
hereto.

          (c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global
Security shall be entitled to grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under the Indenture or the Securities.

          (d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof,
the Issuer shall promptly make available to the Trustee a reasonable supply of Definitive
Securities in definitive, fully registered form without interest coupons. In the event that such
Definitive Securities are not issued, the Issuer expressly acknowledges, with respect to the right
of any Holder to pursue a remedy pursuant to Section 5.4 of the Original Indenture, the right of
any beneficial owner of Securities to pursue such remedy with
respect to the portion of the Global Security that represents such beneficial owner’s
Securities as if such Definitive Securities had been issued.

 

 

EXHIBIT 1

to

APPENDIX

[FORM OF FACE OF SERIES A NOTES]

[Global Securities Legend]

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT 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 ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

          [[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR
COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS
DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF
SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]

[Restricted Securities Legend for Securities offered otherwise than in Reliance on Regulation S]

          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR

 

2

UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

          THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF
OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY
(A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D),
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.

[Restricted Securities Legend for Securities Offered in Reliance on Regulation S.]

          THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
U.S. PERSON EXCEPT PURSUANT TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS

 

3

USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.

[Temporary Regulation S Global Security Legend]

          EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL
SECURITY OR ANY OTHER SECURITY REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH
DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY
DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE
SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE
THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED
SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING
SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE ISSUER, (II)
OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL
NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN
APPLICABLE.

          AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL
SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN
COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST DELIVERS
TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT
THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO
IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

 

4

          AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN AN IAI GLOBAL SECURITY
ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH
AN EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY
FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR
TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND OTHER JURISDICTIONS.

          BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY OR AN IAI GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL
SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY
IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF
REGULATION S OR RULE 144 (IF AVAILABLE).

[Definitive Securities Legend]

          IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT
SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

5

			
	No.                    
	 	$                    

75/8% Senior Notes Due 2018

          Service Corporation International, a Texas corporation, promises to pay to                     , or registered assigns, the principal sum of          Dollars on October 1, 2018.

          Interest Payment Dates: April 1 and October 1.

          Record Dates: March 15 and September 15.

          Additional provisions of this Security are set forth on the other side of this Security.

Dated:

	 	 	 	 	 	 	 
	 	 	SERVICE CORPORATION	 	 
	 	 	INTERNATIONAL,	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

TRUSTEE’S CERTIFICATE OF

     AUTHENTICATION

	 	 	 	 	 	 	 
	THE BANK OF NEW YORK TRUST	 	 
	 	 	COMPANY, N.A.	 	 
	 
	 	 	 	 	 	 
	 	 	as Trustee, certifies	 	 
	 

	 	 	 	that this is one of	 	 
	 

	 	 	 	the Securities referred	 	 
	 

	 	 	 	to in the Supplemental Indenture.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Signatory
	 	 

 

6

[FORM OF REVERSE SIDE OF SERIES A NOTES]

75/8% Senior Note Due 2018

1. Interest

          Service Corporation International, a Texas corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the “Issuer”),
promises to pay interest on the principal amount of this Security at the rate per annum shown
above; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this Security at a rate
of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up to a maximum
additional interest rate of 1.00%) from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration Defaults have been cured.
The Issuer will pay interest semiannually on April 1 and October 1 of each year, commencing April
1, 2007. Interest on the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from October 3, 2006. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

2. Method of Payment

          The Issuer will pay interest on the Securities (except defaulted interest) to the Persons who
are registered holders of Securities at the close of business on the March 15 or September 15 next
preceding the interest payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the accounts specified by
the Depositary. The Issuer will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on a certificated Security will be made
by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States
if such Holder elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

          Initially, The Bank of New York Trust Company N.A., a New York banking corporation (the
“Trustee”), will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying
Agent, Registrar or co-registrar without notice.

 

7

4. Indenture

          The Issuer issued the Securities under an Indenture dated as of February 1, 1993, as amended
by the Fourth Supplemental Indenture dated as of October 3, 2006 (together, the “Indenture”), each
between the Issuer and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Supplemental Indenture (the “Act”).
Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders are referred to the
Indenture and the Act for a statement of those terms.

          The Securities are general unsecured obligations of the Issuer. The Issuer shall be entitled
to issue Additional Notes pursuant to Section 2.3 of the Original Indenture. The Series A Notes
issued on the Issue Date, any Additional Notes and all Series B Notes issued in exchange therefor
will be treated as a single class for all purposes under the Indenture. The Indenture contains
covenants that limit the ability of the Issuer and its subsidiaries to create liens on assets;
consolidate, merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions. These covenants are subject to important
exceptions and qualifications.

5. Optional Redemption

          Except as set forth below and in Section 6, the Issuer shall not be entitled to redeem the
Securities.

          The Notes will be redeemable, in whole or in part, at the Issuer’s option at any time, upon at
least 30 days’ and not more than 60 days’ notice to the Holders, at a redemption price equal to the
greater of (1) 100% of the principal amount of such Notes, and (2) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 50 basis points (the greater
of (1) and (2), the “Optional Redemption Premium”), plus in each case, accrued interest thereon to
(but not including) the date of redemption.

          Notice of optional redemption pursuant to this Section 5 will be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his
registered address. Securities in denominations larger than $1,000 principal amount may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.

 

8

          “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Securities to be
redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such Securities.

          “Comparable Treasury Price” means, with respect to any redemption date, (i) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than three
such Reference Treasury Dealer Quotations, the average of all such Quotations.

          “Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

          “Reference Treasury Dealer” means each of J.P. Morgan Securities Inc. (and its successors),
Merrill Lynch, Pierce, Fenner & Smith Incorporated (and its successors), and any other nationally
recognized investment banking firm that is a primary U.S. government securities dealer specified
from time to time by the Issuer.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Issuer, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer as of 5:00 p.m., New York time,
on the third Business Day preceding the redemption date.

6. Escrow; Special Mandatory Redemption

          Pursuant to the Escrow Agreement, the net proceeds of the Series A Notes issued on the Issue
Date will be deposited into an escrow account. The Series A Notes issued on the Issue Date and the
Series B Notes issued in exchange therefor are subject to special mandatory redemption, in whole,
but not in part, in the event that the Acquisition is not consummated on or prior to December 31,
2006. All of the Series A Notes issued on the Issue Date and the Series B Notes issued in exchange
therefor may also be redeemed, at the Issuer’s option, in whole, but not in part, at any time prior
to December 31, 2006, if, in the Issuer’s sole judgment, the Acquisition will not be consummated by
that date. The redemption price in either case will be 100% of the issue price of the Securities,
plus accrued and unpaid interest to the redemption date.

 

9

7. Put Provisions

          Upon a Change of Control, any Holder of Securities will have the right to cause the Issuer to
repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of
the principal amount of the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of holders of record on the relevant record date to receive
interest due on the related interest payment date) as provided in, and subject to the terms of, the
Indenture.

8. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of $2,000 principal
amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.

9. Persons Deemed Owners

          Except as provided in Section 2 hereto, the registered Holder of this Security may be treated
as the owner of it for all purposes.

10. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Issuer as general creditors and not to the Trustee for payment.

11. Discharge and Defeasance

          Subject to certain conditions, the Issuer at any time shall be entitled to terminate some or
all of its obligations under the Securities and the Indenture (insofar as the Indenture applies to
the Securities) if the Issuer deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or maturity, as the case may
be.

12. Amendment, Waiver

          Subject to certain exceptions set forth in the Indenture, (a) the Indenture (insofar as the
Indenture applies to the Securities) and the Securities may be amended with the written consent of
the Holders of at least a majority in principal amount outstanding of

 

10

the Securities and (b) any
default or noncompliance with any provision may be waived with
respect to the Securities with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Issuer and the Trustee shall be entitled to amend
the Indenture or the Securities to evidence the assumption by a successor corporation of the
Issuer’s obligations under the Indenture, or to add covenants or make the occurrence and
continuance of a default in such additional covenants a new Event of Default for the protection of
the Holders of debt securities, or to cure any ambiguity or correct any inconsistency in the
Indenture or amend the Indenture in any other manner which the Issuer may deem necessary or
desirable and which will not adversely affect the interests of the Holders of senior debt
securities issued thereunder, or to establish the form and terms of any series of senior debt
securities to be issued pursuant to the Indenture, or to evidence the acceptance of appointment by
a successor Trustee, or to secure the senior debt securities with any property or assets.

13. Defaults and Remedies

          Under the Indenture, Events of Default include (a) default for 30 days in payment of interest
on the Securities; (b) default in payment of principal on the Securities at maturity, upon
redemption pursuant to Section 5 hereto, upon acceleration or otherwise, or failure by the Issuer
to redeem or purchase Securities when required; (c) failure by the Issuer to comply with other
agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Issuer if the amount accelerated (or so unpaid) exceeds $10
million; (e) certain events of bankruptcy or insolvency with respect to the Issuer; and (f) with
respect to the Series A Notes issued on the Issue Date and any Series B Notes issued in exchange
therefor, failure by the Issuer to comply with, or any breach of, any material provision of the
Escrow Agreement. If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence of such Events of
Default.

          Securityholders may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives
indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in the interest of
the Holders.

14. Trustee Dealings with the Issuer

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Issuer or its

 

11

Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee.

15. No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not
have any liability for any obligations of the Issuer under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their creation. By accepting
a Security, each Securityholder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.

16. Authentication

          This Security shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Security.

17. Abbreviations

          Customary abbreviations may be used in the name of a Securityholder or an assignee, such as
TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift
to Minors Act).

18. CUSIP Numbers

          Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures the Issuer has caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.

19. Holders’ Compliance with Registration Rights Agreement

          Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of
the Registration Rights Agreement, including the obligations of the Holders with respect to a
registration and the indemnification of the Issuer to the extent provided therein.

20. Governing Law

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.

 

12

          The Issuer will furnish to any Securityholder upon written request and without charge to the
Security holder a copy of the Indenture which has in it the text of this Security in larger type.
Requests may be made to:

1929 Allen Parkway

Houston, Texas 77019

Attention: Secretary

 

13

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

          (Print or type assignee’s name, address and zip code)

          (Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint          agent to transfer this Security on the books of
the Issuer. The agent may substitute another to act for him.

 

	 	 	 	 	 
	DATE:

	 	YOUR SIGNATURE:	 	 
	 

	 	 	 	 
	 
	 	 	 	 

 

Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this certificate occurring
prior to the expiration of the period referred to in Rule 144(k) under the Securities Act after the
later of the date of original issuance of such Securities and the last date, if any, on which such
Securities were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that
such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

	 	o	 	to the Issuer; or
	 
	 	o	 	pursuant to an effective registration statement under the Securities Act of
1933; or
	 
	 	o	 	inside the United States to a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933) that purchases for its own account or for
the account of a qualified institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933; or

 

14

	 	o	 	outside the United States in an offshore transaction within the meaning of
Regulation S under the Securities Act in compliance with Rule 904 under the Securities
Act of 1933; or

	 
	 	o	 	pursuant to the exemption from registration provided by Rule 144 under the
Securities Act of 1933; or

	 
	 	o	 	to an institutional “accredited investor” (as defined in Rule
501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has furnished to the
Trustee a signed letter containing certain representations and agreements.

          Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other than
the registered holder thereof; provided, however, that if box (4)
is checked, the Trustee shall be entitled to require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and other
information as the Issuer has reasonably requested to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.

	 	 	 
	 

	 	 
	 

	 	Signature

Signature Guarantee:

	 	 	 
	 

	 	 
	Signature must be guaranteed

	 	Signature

          Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

15

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

          The undersigned represents and warrants that it is purchasing this Security for its own
account or an account with respect to which it exercises sole investment discretion and that it and
any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing representations in order to
claim the exemption from registration provided by Rule 144A.

	 	 	 
	Dated:
	 	 
	 

	 	 
	 

	 	Notice: To be executed by
	 

	 	                  an executive officer

 

16

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

          The following increases or decreases in this Global Security have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal amount of	 	 	Signature of	 
	 	 	Amount of decrease	 	 	Amount of increase	 	 	this Global	 	 	authorized officer	 
	 	 	in Principal	 	 	in Principal amount	 	 	Security following	 	 	of Trustee or	 
	Date of	 	amount of this	 	 	of this Global	 	 	such decrease or	 	 	Securities	 
	Exchange	 	Global Security	 	 	Security	 	 	increase)	 	 	Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

17

OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Issuer pursuant to Section 4.03 of
the Supplemental Indenture, check the box: o

          If you want to elect to have only part of this Security purchased by the Issuer pursuant to
Section 4.03 of the Supplemental Indenture, state the amount in principal amount: $

	 	 	 	 	 
	Dated:

	 	Your Signature:	 	 
	 

	 	 	 	 
	 

	 	 	 	(Sign exactly as your name appears on the other side of this
Security.)

	 	 	 
	Signature Guarantee:
	 	 
	 

	 	 
	 

	 	(Signature must be guaranteed)

          Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT 2 to APPENDIX

Form of

Transferee Letter of Representation

[Issuer]

In care of

[     ]

[     ]

[     ]

          Ladies and Gentlemen:

          This certificate is delivered to request a transfer of $     principal amount of the
75/8% Senior Notes due 2018 (the “Securities”) of Service Corporation
International (the “Issuer”).

          Upon transfer, the Securities would be registered in the name of the new beneficial owner as
follows:

	 	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 
	Address:

	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 
	Taxpayer ID Number:

	 	 	 	 
	 

	 	 

	 	 

          The undersigned represents and warrants to you that:

          1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own
account or for the account of such an institutional “accredited investor” at least $250,000
principal amount of the Securities, and we are acquiring the Securities not with a view to, or for
offer or sale in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Securities, and we invest in or purchase securities
similar to the Securities in the normal course of our business. We, and any accounts for which we
are acting, are each able to bear the economic risk of our or its investment.

 

2

          2. We understand that the Securities have not been registered under the Securities Act and,
unless so registered, may not be sold except as permitted in the following sentence. We agree on
our own behalf and on behalf of any investor account for which we are purchasing Securities to
offer, sell or otherwise transfer such Securities prior to the date that is two years after the
later of the date of original issue and the last date on which the Issuer or any affiliate of the
Issuer was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction
Termination Date”) only (i) to the Issuer, (ii) in the United States to a person whom the seller
reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of
Rule 144A, (iii) to an institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is an institutional accredited investor purchasing
for its own account or for the account of an institutional accredited investor, in each case in a
minimum principal amount of the Securities of $250,000, (iv) outside the United States in a
transaction complying with the provisions of Rule 904 under the Securities Act, (v) pursuant to an
exemption from registration under the Securities Act provided by Rule 144 (if available) or (vi)
pursuant to an effective registration statement under the Securities Act, in each of cases (i)
through (vi) subject to any requirement of law that the disposition of our property or the property
of such investor account or accounts be at all times within our or their control and in compliance
with any applicable state securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the
Securities is proposed to be made pursuant to clause (iii) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee substantially in the
form of this letter to the Issuer and the Trustee, which shall provide, among other things, that
the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges
that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior
to the Resale Restriction Termination Date of the Securities pursuant to clause (iii), (iv) or (v)
above to require the delivery of an opinion of counsel, certifications or other information
satisfactory to the Issuer and the Trustee.

TRANSFEREE:                    ‚

     by:                    

 

 

EXHIBIT A

[FORM OF FACE OF SERIES B NOTES]

 

			
	*/	 	[If the Security is to be issued in global form add the Global Securities Legend from
Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL
SECURITIES] — SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.]

 

2

			
	No.                    
	 	$                    

75/8% Senior Notes Due 2018

          Service Corporation International, a Texas corporation, promises to pay to                     , or registered assigns, the principal sum of                     
Dollars on October

1, 2018.

          Interest Payment Dates: April 1 and October 1.

          Record Dates: March 15 and September 15.

          Additional provisions of this Security are set forth on the other side of this Security.

Dated:

	 	 	 	 	 	 	 	 	 
	 	 	SERVICE CORPORATION	 	 
	 	 	INTERNATIONAL,	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

TRUSTEE’S CERTIFICATE OF

          AUTHENTICATION

	 	 	 	 	 	 	 
	THE BANK OF NEW YORK TRUST	 	 
	 

	 	 	 	COMPANY, N.A.	 	 
	 	 	as Trustee, certifies	 	 
	 

	 	 	 	that this is one of	 	 
	 

	 	 	 	the Securities referred	 	 
	 

	 	 	 	to in the Supplemental Indenture.	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Signatory
	 	 

 

3

[FORM OF REVERSE SIDE OF SERIES B NOTES]

75/8% Senior Note Due 2018

1. Interest

          Service Corporation International, a Texas corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the “Issuer”),
promises to pay interest on the principal amount of this Security at the rate per annum shown
above[; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this Security at a rate
of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day
period that occurs after the date on which such Registration default occurs up to a maximum
additional interest rate of 1.00%) from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration Defaults have been
cured.]1 The Issuer will pay interest semiannually on April 1 and October 1 of each
year, commencing April 1, 2007. Interest on the Securities will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from October 3, 2006. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment

          The Issuer will pay interest on the Securities (except defaulted interest) to the Persons who
are registered holders of Securities at the close of business on the March 15 or September 15 next
preceding the interest payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the accounts specified by
the Depositary. The Issuer will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on a certificated Security will be made
by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States
if such Holder elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

			
	1	 	Insert if at the date of issuance of the Series B
Note (as the case may be) any Registration Default has occurred with respect to
the related Series A Notes during the interest period in which such date of
issuance occurs.

 

4

	3.	 	Paying Agent and Registrar

          Initially, The Bank of New York Trust Company, N.A., a New York banking corporation (the
“Trustee”), will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying
Agent, Registrar or co-registrar without notice.

4. Indenture

          The Issuer issued the Securities under an Indenture dated as of February 1, 1993, as amended
by the Fourth Supplemental Indenture dated as of October 3, 2006 (together, the “Indenture”), each
between the Issuer and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Supplemental Indenture (the “Act”).
Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders are referred to the
Indenture and the Act for a statement of those terms.

          The Securities are general unsecured obligations of the Issuer. The Issuer shall be entitled
to issue Additional Notes pursuant to Section 2.3 of the Original Indenture. The Series A Notes
issued on the Issue Date, any Additional Notes and all Series B Notes issued in exchange therefor
will be treated as a single class for all purposes under the Indenture. The Indenture contains
covenants that limit the ability of the Issuer and its subsidiaries to create liens on assets;
consolidate, merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions. These covenants are subject to important
exceptions and qualifications.

5. Optional Redemption

          Except as set forth below and in Section 6, the Issuer shall not be entitled to redeem the
Securities.

          The Notes will be redeemable, in whole or in part, at the Issuer’s option at any time, upon at
least 30 days’ and not more than 60 days’ notice to the Holders, at a redemption price equal to the
greater of (1) 100% of the principal amount of such Notes, and (2) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 50 basis points (the greater
of (1) and (2), the “Optional Redemption Premium”), plus in each case, accrued interest thereon to
(but not including) the date of redemption.

          Notice of optional redemption pursuant to this Section 5 will be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his
registered address. Securities in denominations larger than $1,000 principal

 

5

amount may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for redemption.

          “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Securities to be
redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such Securities.

          “Comparable Treasury Price” means, with respect to any redemption date, (i) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than three
such Reference Treasury Dealer Quotations, the average of all such Quotations.

          “Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

          “Reference Treasury Dealer” means each of J.P. Morgan Securities Inc. (and its successors),
Merrill Lynch, Pierce, Fenner & Smith Incorporated (and its successors), and any other nationally
recognized investment banking firm that is a primary U.S. government securities dealer specified
from time to time by the Issuer.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Issuer, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer as of 5:00 p.m., New York time,
on the third Business Day preceding the redemption date.

6. Escrow; Special Mandatory Redemption

          Pursuant to the Escrow Agreement, the net proceeds of the Series A Notes issued on the Issue
Date will be deposited into escrow. The Series A Notes issued on the Issue Date and the Series B
Notes issued in exchange therefor are subject to special mandatory redemption, in whole, but not in
part, in the event that the Acquisition is not consummated on or prior to December 31, 2006. All
of the Series A Notes issued on the Issue Date and the Series B Notes issued in exchange therefor
may also be redeemed, at the Issuer’s option, in whole, but not in part, at any time prior to
December 31, 2006, if, in the Issuer’s sole

 

6

judgment, the Acquisition will not be consummated by
that date. The redemption price in either case will be 100% of the issue price of the Notes, plus
accrued and unpaid interest to the redemption date.

7. Put Provisions

          Upon a Change of Control, any Holder of Securities will have the right to cause the Issuer to
repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of
the principal amount of the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of holders of record on the relevant record date to receive
interest due on the related interest payment date) as provided in, and subject to the terms of, the
Indenture.

8. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of $2,000 principal
amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.

9. Persons Deemed Owners

          Except as provided in Section 2 hereto, the registered Holder of this Security may be treated
as the owner of it for all purposes.

10. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Issuer as general creditors and not to the Trustee for payment.

11. Discharge and Defeasance

          Subject to certain conditions, the Issuer at any time shall be entitled to terminate some or
all of its obligations under the Securities and the Indenture (insofar as the Indenture applies to
the Securities) if the Issuer deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or maturity, as the case may
be.

12. Amendment; Waiver

 

7

          Subject to certain exceptions set forth in the Indenture, (a) the Indenture (insofar as the
Indenture applies to the Securities) and the Securities may be amended with the written
consent of the Holders of at least a majority in principal amount outstanding of the
Securities and (b) any default or noncompliance with any provision may be waived with respect to
the Securities with the written consent of the Holders of a majority in principal amount
outstanding of the Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Issuer and the Trustee shall be entitled to amend the
Indenture or the Securities to evidence the assumption by a successor corporation of the Issuer’s
obligations under the Indenture, or to add covenants or make the occurrence and continuance of a
default in such additional covenants a new Event of Default for the protection of the Holders of
debt securities, or to cure any ambiguity or correct any inconsistency in the Indenture or amend
the Indenture in any other manner which the Issuer may deem necessary or desirable and which will
not adversely affect the interests of the Holders of senior debt securities issued thereunder, or
to establish the form and terms of any series of senior debt securities to be issued pursuant to
the Indenture, or to evidence the acceptance of appointment by a successor Trustee, or to secure
the senior debt securities with any property or assets.

13. Defaults and Remedies

          Under the Indenture, Events of Default include (a) default for 30 days in payment of interest
on the Securities; (b) default in payment of principal on the Securities at maturity, upon
redemption pursuant to Section 5 hereto, upon acceleration or otherwise, or failure by the Issuer
to redeem or purchase Securities when required; (c) failure by the Issuer to comply with other
agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Issuer if the amount accelerated (or so unpaid) exceeds $10
million; (e) certain events of bankruptcy or insolvency with respect to the Issuer; and (f) with
respect to the Series A Notes issued on the Issue Date and any Series B Notes issued in exchange
therefor, failure by the Issuer to comply with, or any breach of, any material provision of the
Escrow Agreement. If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence of such Events of
Default.

          Securityholders may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives
indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in the interest of
the Holders.

	14.	 	Trustee Dealings with the Issuer

 

8

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

15. No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not
have any liability for any obligations of the Issuer under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their creation. By accepting
a Security, each Securityholder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.

16. Authentication

               This Security shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Security.

17. Abbreviations

               Customary abbreviations may be used in the name of a Securityholder or an assignee, such as
TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift
to Minors Act).

18. CUSIP Numbers

               Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures the Issuer has caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.

19. Holders’ Compliance with Registration Rights Agreement

               Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of
the Registration Rights Agreement, including the obligations of the Holders with respect to a
registration and the indemnification of the Issuer to the extent provided therein.]2

 

			
	2	 	Delete if this Security is not being issued in
exchange for a Series A Note.

 

9

20. Governing Law

               THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.

               The Issuer will furnish to any Securityholder upon written request and without charge to the
Security holder a copy of the Indenture which has in it the text of this Security in larger type.
Requests may be made to:

1929 Allen Parkway

Houston, Texas 77019

Attention: Secretary

 

10

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

          (Print or type assignee’s name, address and zip code)

          (Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint           agent to transfer this Security on the books of the
Issuer. The agent may substitute another to act for him.

 

	 	 	 	 	 
	Date:

	 	Your Signature:	 	 
	 

	 	 	 	 

 

Sign exactly as your name appears on the other side of this Security.

 

 

OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Issuer pursuant to Section 4.03 of
the Supplemental Indenture, check the box: o

          If you want to elect to have only part of this Security purchased by the Issuer pursuant to
Section 4.03 of the Supplemental Indenture, state the amount in principal amount: $

	 	 	 	 	 
	Dated:

	 	Your Signature:	 	 
	 

	 	 	 	 
	 

	 	 	 	(Sign Exactly As Your Name Appears

On The Other Side Of This Security.)

	 	 	 
	Signature Guarantee:
	 	 
	 

	 	 
	 

	 	(Signature Must Be Guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT B

Form of Escrow Agreementexv10w1

 

Exhibit 10.1

2014 NOTES REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT dated October 3, 2006 (the “Agreement”) is entered into by
and among Service Corporation International, a Texas corporation (the “Company”), and J.P. Morgan
Securities Inc. (“JPMorgan”), Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America
Securities LLC, Lehman Brothers Inc., Raymond James & Associates, Inc. and Morgan Keegan & Company,
Inc. (the “Initial Purchasers”).

     The Company and the Initial Purchasers are parties to the Purchase Agreement dated September
27, 2006 (the “Purchase Agreement”), which provides for the sale by the Company to the Initial
Purchasers of $250,000,000 aggregate principal amount of the Company’s 7 3/8% Senior Notes due 2014
(the “Securities”) and $250,000,000 aggregate principal amount of the Company’s 7 5/8% Senior Notes
due 2018. As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchasers and their direct and indirect transferees
the registration rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

     “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed.

     “Company” shall have the meaning set forth in the preamble and shall also include the
Company’s successors.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

     “Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

     “Exchange Offer” shall mean the exchange offer by the Company of Exchange Securities for
Registrable Securities pursuant to Section 2(a) hereof.

     “Exchange Offer Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.

     “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on
Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to
such registration statement, in each case including the

 

 

Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document
incorporated by reference therein.

     “Exchange Securities” shall mean senior notes issued by the Company under the Indenture
containing terms identical to the Securities (except that the Exchange Securities will not be
subject to restrictions on transfer or to any increase in annual interest rate for failure to
comply with this Agreement) and to be offered to Holders of Registrable Securities in exchange for
Registrable Securities pursuant to the Exchange Offer.

     “Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the
Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in
connection with the sale of the Securities or the Exchange Securities.

     “Holders” shall mean the Initial Purchasers, for so long as they own any Registrable
Securities, and each of their successors, assigns and direct and indirect transferees who become
owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and
5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

     “Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indenture” shall mean the Indenture relating to the Securities dated as of February 1, 1993
among the Company and The Bank of New York Trust Company, N.A., as successor trustee to The Bank of
New York, as trustee, as supplemented by the Third Supplemental Indenture thereto, to be dated the
date hereof, and as the same may be amended from time to time in accordance with the respective
terms thereof.

     “Initial Purchasers” shall have the meaning set forth in the preamble.

     “Inspector” shall have the meaning set forth in Section 3(a)(xiii) hereof.

     “Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

     “JPMorgan” shall have the meaning set forth in the preamble.

     “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of
the outstanding Registrable Securities; provided that whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder, any Registrable
Securities owned directly or indirectly by the Company or any of its affiliates shall not be
counted in determining whether such consent or approval was given by the Holders of such required
percentage or amount; and provided, further, that if the Company shall issue any additional
Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the

2

 

effectiveness of any Shelf Registration Statement, such additional Securities and the
Registrable Securities to which this Agreement relates shall be treated together as one class for
purposes of determining whether the consent or approval of Holders of a specified percentage of
Registrable Securities has been obtained.

     “Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

     “Person” shall mean an individual, partnership, limited liability company, corporation, trust
or unincorporated organization, or a government or agency or political subdivision thereof.

     “Prospectus” shall mean the prospectus included in, or, pursuant to the rules and regulations
of the Securities Act, deemed a part of, a Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including any document incorporated by reference
therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble.

     “Registrable Securities” shall mean the Securities; provided that the Securities shall cease
to be Registrable Securities (i) when a Registration Statement with respect to such Securities has
become effective under the Securities Act and such Securities have been exchanged or disposed of
pursuant to such Registration Statement, (ii) when such Securities are eligible to be sold pursuant
to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the Securities Act
or (iii) when such Securities cease to be outstanding.

     “Registration Expenses” shall mean any and all expenses incident to performance of or
compliance by the Company with this Agreement, including without limitation: (i) all SEC, stock
exchange or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all
fees and expenses incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel for any Underwriters or Holders in
connection with blue sky qualification of any Exchange Securities or Registrable Securities), (iii)
all expenses of any Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus and any amendments or supplements thereto,
any underwriting agreements, securities sales agreements or other similar agreements and any other
documents relating to the performance of and compliance with this Agreement, (iv) all rating agency
fees, (v) all fees and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii)
the fees and disbursements of counsel for the Company and, in the case of a Shelf Registration
Statement, the fees and disbursements of one counsel for the Holders (which counsel shall be
selected by the Majority Holders and which counsel may

3

 

also be counsel for the Initial Purchasers) and (viii) the fees and disbursements of the
independent public accountants of the Company (and, if necessary, any other certified public
accountant of any subsidiary of the Company, or of any business acquired by the Company for which
financial statements and financial data are or are required to be included in the Registration
Statement), including the expenses of any special audits or “comfort” letters required by or
incident to the performance of and compliance with this Agreement, but excluding fees and expenses
of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the
Holders and underwriting discounts and commissions, brokerage commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Securities by a Holder.

     “Registration Statement” shall mean any registration statement of the Company that covers any
of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement
and all amendments and supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein or deemed a part thereof, all
exhibits thereto and any document incorporated by reference therein.

     “SEC” shall mean the United States Securities and Exchange Commission.

     “Securities” shall have the meaning set forth in the preamble.

     “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

     “Shelf Additional Interest Date” shall have the meaning set forth in Section 2(d) hereof.

     “Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

     “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

     “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company that
covers all or a portion of the Registrable Securities (but no other securities unless approved by a
majority of the Holders whose Registrable Securities are to be covered by such Shelf Registration
Statement) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that
may be adopted by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus contained therein or
deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

     “Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

     “Staff” shall mean the staff of the SEC.

4

 

     “Target Registration Date” shall have the meaning set forth in Section 2(d) hereof.

     “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to
time.

     “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

     “Underwriter” shall have the meaning set forth in Section 3(e) hereof.

     “Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an
Underwriter for reoffering to the public.

     2. Registration Under the Securities Act. (a) To the extent not prohibited by any
applicable law or applicable interpretations of the Staff, the Company shall use its reasonable
best efforts to (i) cause to be filed an Exchange Offer Registration Statement covering an offer to
the Holders to exchange all the Registrable Securities for Exchange Securities and (ii) have such
Registration Statement remain effective until 180 days after the last Exchange Date for use by one
or more Participating Broker-Dealers. The Company shall commence the Exchange Offer promptly after
the Exchange Offer Registration Statement is declared effective by the SEC and use its reasonable
best efforts to complete the Exchange Offer not later than 60 days after such effective date.

     The Company shall commence the Exchange Offer by mailing the related Prospectus, appropriate
letters of transmittal and other accompanying documents to each Holder stating, in addition to such
other disclosures as are required by applicable law, substantially the following:

	(i)	 	that the Exchange Offer is being made pursuant to this Agreement and that all Registrable
Securities validly tendered and not properly withdrawn will be accepted for exchange;
	 
	(ii)	 	the dates of acceptance for exchange (which shall be a period of at least 20 Business Days
from the date such notice is mailed) (the “Exchange Dates”);
	 
	(iii)	 	that any Registrable Security not tendered will remain outstanding and continue to accrue
interest but will not retain any rights under this Agreement, except as otherwise specified
herein;
	 
	(iv)	 	that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange
Offer will be required to (A) surrender such Registrable Security, together with the
appropriate letters of transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) and in the manner specified in the notice, or (B)
effect such exchange otherwise in compliance with the applicable procedures of the depositary
for such Registrable

5

 

	 	 	Security, in each case prior to the close of business on the last Exchange Date; and
	 
	(v)	 	that any Holder will be entitled to withdraw its election, not later than the close of
business on the last Exchange Date, by (A) sending to the institution and at the address
(located in the Borough of Manhattan, The City of New York) specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the
principal amount of Registrable Securities delivered for exchange and a statement that such
Holder is withdrawing its election to have such Securities exchanged or (B) effecting such
withdrawal in compliance with the applicable procedures of the depositary for the Registrable
Securities.

     As a condition to participating in the Exchange Offer, a Holder will be required to represent
to the Company that (i) any Exchange Securities to be received by it will be acquired in the
ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer it has
no arrangement or understanding with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the
Securities Act, (iii) it is not an “affiliate” (within the meaning of Rule 405 under the Securities
Act) of the Company and (iv) if such Holder is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Registrable Securities that were acquired as a
result of market-making or other trading activities, then such Holder will deliver a Prospectus
(or, to the extent permitted by law, make available a Prospectus to purchasers) in connection with
any resale of such Exchange Securities.

     As soon as practicable after the last Exchange Date, the Company shall:

	(i)	 	accept for exchange Registrable Securities or portions thereof validly tendered and not
properly withdrawn pursuant to the Exchange Offer; and
	 
	(ii)	 	deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities
or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee
to promptly authenticate and deliver to each Holder, Exchange Securities equal in principal
amount to the principal amount of the Registrable Securities tendered by such Holder.

     The Company shall use its reasonable best efforts to complete the Exchange Offer as provided
above and shall comply with the applicable requirements of the Securities Act, the Exchange Act and
other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer
shall not be subject to any conditions, other than that the Exchange Offer does not violate any
applicable law or applicable interpretations of the Staff.

     (b) In the event that (i) the Company determines that the Exchange Offer Registration provided
for in Section 2(a) above is not available or may not be completed as soon as practicable after the
last Exchange Date because it would violate any

6

 

applicable law or applicable interpretations of the Staff, (ii) the Exchange Offer is not for
any other reason completed by April 1, 2007 or (iii) upon receipt of a written request (a “Shelf
Request”) from any Initial Purchaser representing that it holds Registrable Securities that are or
were ineligible to be exchanged in the Exchange Offer, the Company shall use its reasonable best
efforts to cause to be filed as soon as practicable after such determination date or Shelf Request,
as the case may be, a Shelf Registration Statement providing for the sale of all the Registrable
Securities by the Holders thereof and to have such Shelf Registration Statement become effective.

     In the event that the Company is required to file a Shelf Registration Statement pursuant to
clause (iii) of the preceding sentence, the Company shall use its reasonable best efforts to file
and have become effective both an Exchange Offer Registration Statement pursuant to Section 2(a)
with respect to all Registrable Securities and a Shelf Registration Statement (which may be a
combined Registration Statement with the Exchange Offer Registration Statement) with respect to
offers and sales of Registrable Securities held by the Initial Purchasers after completion of the
Exchange Offer.

     The Company agrees to use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective until the expiration of the period referred to in Rule 144(k) (or any
similar rule then in force, but not Rule 144A) under the Securities Act with respect to the
Registrable Securities or such shorter period that will terminate when all the Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (the “Shelf Effectiveness Period”). The Company further agrees to
supplement or amend the Shelf Registration Statement and the related Prospectus if required by the
rules, regulations or instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or by any other rules and regulations
thereunder or if reasonably requested by a Holder of Registrable Securities with respect to
information relating to such Holder, and to use its reasonable best efforts to cause any such
amendment to become effective, if required, and such Shelf Registration Statement and Prospectus to
become usable as soon as thereafter practicable. The Company agrees to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after its being used or
filed with the SEC.

     (c) The Company shall pay all Registration Expenses in connection with any registration
pursuant to Section 2(a) or Section 2(b) hereof. Each Holder shall pay all underwriting discounts
and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

     (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be
deemed to have become effective unless it has been declared effective by the SEC. A Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC or is automatically effective upon filing with the
SEC as provided by Rule 462 under the Securities Act.

7

 

In the event that either the Exchange Offer is not completed or the Shelf Registration Statement,
if required pursuant to Section 2(b)(i) or 2(b)(ii) hereof, does not become effective on or prior
to April 1, 2007 (the “Target Registration Date”), the interest rate on the Registrable Securities
will be increased by (i) 0.25% per annum for the first 90-day period immediately following the
Target Registration Date and (ii) an additional 0.25% per annum with respect to each subsequent
90-day period, in each case until the Exchange Offer is completed or the Shelf Registration
Statement, if required hereby, becomes effective or the Securities become freely tradable under the
Securities Act, up to a maximum of 1.00% per annum of additional interest. In the event that the
Company receives a Shelf Request pursuant to Section 2(b)(iii), and the Shelf Registration
Statement required to be filed thereby does not become effective by the later of (x) March 1, 2007
or (y) 90 days after the delivery of such Shelf Request (such later date, the “Shelf Additional
Interest Date”), then the interest rate on the Registrable Securities will be increased (i) 0.25%
per annum for the first 90-day period immediately following the Shelf Additional Interest Date and
(ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case
until the Shelf Registration Statement becomes effective or the Securities become freely tradable
under the Securities Act, up to a maximum of 1.00% per annum of additional interest.

     If the Shelf Registration Statement, if required hereby, has become effective and thereafter
either ceases to be effective or the Prospectus contained therein ceases to be usable, in each case
whether or not permitted by this Agreement, at any time during the Shelf Effectiveness Period, and
such failure to remain effective or usable exists for more than 30 days (whether or not
consecutive) in any 12-month period, then the interest rate on the Registrable Securities will be
increased by (i) 0.25% per annum commencing on the 31st day in such 12-month period and (ii) an
additional 0.25% per annum with respect to each subsequent 90-day period, in each case ending on
such date that the Shelf Registration Statement has again been declared effective or the Prospectus
again becomes usable, up to a maximum of 1.00% per annum of additional interest.

     (e) Without limiting the remedies available to the Initial Purchasers and the Holders, the
Company acknowledges that any failure by the Company to comply with its obligations under Section
2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to specifically enforce the
Company’s obligations under Section 2(a) and Section 2(b) hereof.

     (f) The Company represents, warrants and covenants that it (including its agents and
representatives) will not prepare, make, use, authorize, approve or refer to any Free Writing
Prospectus.

     3. Registration Procedures. (a) In connection with its obligations pursuant to
Section 2(a) and Section 2(b) hereof, the Company shall as expeditiously as possible:

8

 

     (i) prepare and file with the SEC a Registration Statement on the appropriate form under the
Securities Act, which form (x) shall be selected by the Company, (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by the Holders thereof and
(z) shall comply as to form in all material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be filed therewith; and use its
reasonable best efforts to cause such Registration Statement to become effective and remain
effective for the applicable period in accordance with Section 2 hereof;

     (ii) prepare and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement effective for the
applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented
by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act; and keep each Prospectus current during the period described in Section
4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange Securities;

     (iii) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities,
to counsel for the Initial Purchasers, to counsel for such Holders and to each Underwriter of an
Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each
Prospectus or preliminary prospectus, and any amendment or supplement thereto, as such Holder,
counsel or Underwriter may reasonably request in order to facilitate the sale or other disposition
of the Registrable Securities thereunder; and the Company consents to the use of such Prospectus,
preliminary prospectus and any amendment or supplement thereto in accordance with applicable law by
each of the Holders of Registrable Securities and any such Underwriters in connection with the
offering and sale of the Registrable Securities covered by and in the manner described in such
Prospectus, preliminary prospectus or any amendment or supplement thereto in accordance with
applicable law;

     (iv) use its reasonable best efforts to register or qualify the Registrable Securities under
all applicable state securities or blue sky laws of such jurisdictions as any Holder of Registrable
Securities covered by a Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement becomes effective; cooperate with such Holders in connection with
any filings required to be made with the National Association of Securities Dealers, Inc.; and do
any and all other acts and things that may be reasonably necessary or advisable to enable each
Holder to complete the disposition in each such jurisdiction of the Registrable Securities owned by
such Holder; provided that the Company shall not be required to (1) qualify as a foreign
corporation or other entity or as a dealer in securities in any such jurisdiction where it would
not otherwise be required to so qualify, (2) file any general consent to service of process in any
such jurisdiction or (3) subject itself to taxation in any such jurisdiction if it is not so
subject;

9

 

     (v) notify counsel for the Initial Purchasers and, in the case of a Shelf Registration, notify
each Holder of Registrable Securities and counsel for such Holders promptly and, if requested by
any such Holder or counsel, confirm such advice in writing (1) when a Registration Statement has
become effective, when any post-effective amendment thereto has been filed and becomes effective
and when any amendment or supplement to the Prospectus has been filed, (2) of any request by the
SEC or any state securities authority for amendments and supplements to a Registration Statement or
Prospectus or for additional information after the Registration Statement has become effective, (3)
of the issuance by the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings for that purpose,
including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf
Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the
Securities Act, (4) if, between the applicable effective date of a Shelf Registration Statement and
the closing of any sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to an offering of such Registrable Securities cease to be
true and correct in all material respects or if the Company receives any notification with respect
to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction
or the initiation of any proceeding for such purpose, (5) of the happening of any event during the
period a Registration Statement is effective that makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or that requires the making of
any changes in such Registration Statement or Prospectus in order to make the statements therein
not misleading and (6) of any determination by the Company that a post-effective amendment to a
Registration Statement or any amendment or supplement to the Prospectus would be appropriate;

     (vi) use its reasonable best efforts to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement or, in the case of a Shelf Registration, the resolution
of any objection of the SEC pursuant to Rule 401(g)(2), including by filing an amendment to such
Shelf Registration Statement on the proper form, at the earliest possible moment and provide
immediate notice to each Holder of the withdrawal of any such order or such resolution;

     (vii) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities,
without charge, at least one conformed copy of each Registration Statement and any post-effective
amendment thereto (without any documents incorporated therein by reference or exhibits thereto,
unless requested);

     (viii) in the case of a Shelf Registration, cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and enable such
Registrable Securities to be issued in such denominations and registered in such names (consistent
with the provisions of the Indenture) as such Holders may reasonably request at least one Business
Day prior to the closing of any sale of Registrable Securities;

10

 

     (ix) in the case of a Shelf Registration, upon the occurrence of any event contemplated by
Section 3(a)(v)(5) hereof, use its reasonable best efforts to prepare and file with the SEC a
supplement or post-effective amendment to such Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered (or, to the extent permitted by law, made available) to purchasers of
the Registrable Securities, such Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company shall notify the Holders
of Registrable Securities to suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and such Holders hereby agree to suspend use of the Prospectus until
the Company has amended or supplemented the Prospectus to correct such misstatement or omission;

     (x) a reasonable time prior to the filing of any Registration Statement, any Prospectus, any
amendment to a Registration Statement or amendment or supplement to a Prospectus or of any document
that is to be incorporated by reference into a Registration Statement or a Prospectus after initial
filing of a Registration Statement, provide copies of such document to the Initial Purchasers and
their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable
Securities and their counsel) and make such of the representatives of the Company as shall be
reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf
Registration Statement, the Holders of Registrable Securities or their counsel) available for
discussion of such document; and the Company shall not, at any time after initial filing of a
Registration Statement, use or file any Prospectus, any amendment of or supplement to a
Registration Statement or a Prospectus, or any document that is to be incorporated by reference
into a Registration Statement or a Prospectus, of which the Initial Purchasers and their counsel
(and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities and
their counsel) shall not have previously been advised and furnished a copy or to which the Initial
Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders of
Registrable Securities or their counsel) shall object;

     (xi) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case
may be, not later than the initial effective date of a Registration Statement;

     (xii) cause the Indenture to be qualified under the Trust Indenture Act in connection with the
registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute,
and use its reasonable best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required to be filed with the SEC
to enable the Indenture to be so qualified in a timely manner;

11

 

     (xiii) in the case of a Shelf Registration, make available for inspection by a representative
of the Holders of the Registrable Securities (an “Inspector”), any Underwriter participating in any
disposition pursuant to such Shelf Registration Statement, any attorneys and accountants designated
by a majority of the Holders of Registrable Securities to be included in such Shelf Registration
and any attorneys and accountants designated by such Underwriter, at reasonable times and in a
reasonable manner, all pertinent financial and other records, documents and properties of the
Company and its subsidiaries, and cause the respective officers, directors and employees of the
Company to supply all information reasonably requested by any such Inspector, Underwriter, attorney
or accountant in connection with a Shelf Registration Statement; provided that if any such
information is identified by the Company as being confidential or proprietary, each Person
receiving such information shall take such actions as are reasonably necessary to protect the
confidentiality of such information to the extent such action is otherwise not inconsistent with,
an impairment of or in derogation of the rights and interests of any Inspector, Holder or
Underwriter);

     (xiv) in the case of a Shelf Registration, use its reasonable best efforts to cause all
Registrable Securities to be listed on any securities exchange or any automated quotation system on
which similar securities issued or guaranteed by the Company are then listed if requested by the
Majority Holders, to the extent such Registrable Securities satisfy applicable listing
requirements;

     (xv) if reasonably requested by any Holder of Registrable Securities covered by a Shelf
Registration Statement, promptly include in a Prospectus supplement or post-effective amendment
such information with respect to such Holder as such Holder reasonably requests to be included
therein and make all required filings of such Prospectus supplement or such post-effective
amendment as soon as the Company has received notification of the matters to be so included in such
filing;

     (xvi) in the case of a Shelf Registration, enter into such customary agreements and take all
such other actions in connection therewith (including those requested by the Holders of a majority
in principal amount of the Registrable Securities covered by the Shelf Registration Statement) in
order to expedite or facilitate the disposition of such Registrable Securities including, but not
limited to, an Underwritten Offering and in such connection, (1) to the extent possible, make such
representations and warranties to the Holders and any Underwriters of such Registrable Securities
with respect to the business of the Company and its subsidiaries and the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in
each case, in form, substance and scope as are customarily made by issuers to underwriters in
underwritten offerings and confirm the same if and when requested, (2) obtain opinions of counsel
to the Company (which counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective counsel) addressed to each
selling Holder and Underwriter of Registrable Securities, covering the matters customarily covered
in opinions requested in underwritten offerings, (3) obtain “comfort” letters from the independent
certified public accountants of the Company (and, if necessary, any other certified public
accountant of any subsidiary of

12

 

the Company, or of any business acquired by the Company for which financial statements and
financial data are or are required to be included in the Registration Statement) addressed to each
selling Holder (to the extent permitted by applicable professional standards) and Underwriter of
Registrable Securities, such letters to be in customary form and covering matters of the type
customarily covered in “comfort” letters in connection with underwritten offerings, including but
not limited to financial information contained in any preliminary prospectus or Prospectus and (4)
deliver such documents and certificates as may be reasonably requested by the Holders of a majority
in principal amount of the Registrable Securities being sold or the Underwriters, and which are
customarily delivered in underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause (1) above and to evidence
compliance with any customary conditions contained in an underwriting agreement.

     (b) In the case of a Shelf Registration Statement, the Company may require each Holder of
Registrable Securities to furnish to the Company such information regarding such Holder and the
proposed disposition by such Holder of such Registrable Securities as the Company may from time to
time reasonably request in writing.

     (c) In the case of a Shelf Registration Statement, each Holder of Registrable Securities
covered in such Shelf Registration Statement agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(a)(v)(3) or 3(a)(v)(5)
hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to
the Shelf Registration Statement until such Holder’s receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(a)(ix) hereof and, if so directed by the Company, such
Holder will deliver to the Company all copies in its possession, other than permanent file copies
then in such Holder’s possession, of the Prospectus covering such Registrable Securities that is
current at the time of receipt of such notice.

     (d) If the Company shall give any notice to suspend the disposition of Registrable Securities
pursuant to a Registration Statement, the Company shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such notice to and including
the date when the Holders of such Registrable Securities shall have received copies of the
supplemented or amended Prospectus necessary to resume such dispositions. The Company may give any
such notice only twice during any 365-day period and any such suspensions shall not exceed 30 days
for each suspension and there shall not be more than two suspensions in effect during any 365-day
period.

     (e) The Holders of Registrable Securities covered by a Shelf Registration Statement who desire
to do so may sell such Registrable Securities in an Underwritten Offering. In any such
Underwritten Offering, the investment bank or investment banks and manager or managers (each an
“Underwriter”) that will administer the offering will

13

 

be selected by the Holders of a majority in principal amount of the Registrable Securities
included in such offering.

     4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff has taken the
position that any broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an
“underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such Exchange Securities.

     The Company understands that it is the Staff’s position that if the Prospectus contained in
the Exchange Offer Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker-Dealers may resell the Exchange
Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers (or, to
the extent permitted by law, made available to purchasers) to satisfy their prospectus delivery
obligation under the Securities Act in connection with resales of Exchange Securities for their own
accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act.

     (b) In light of the above, and notwithstanding the other provisions of this Agreement, the
Company agrees to amend or supplement the Prospectus contained in the Exchange Offer Registration
Statement for a period of up to 180 days after the last Exchange Date (as such period may be
extended pursuant to Section 3(d) of this Agreement), in order to expedite or facilitate the
disposition of any Exchange Securities by Participating Broker-Dealers consistent with the
positions of the Staff recited in Section 4(a) above. The Company further agrees that
Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent
permitted by law, make available) during such period in connection with the resales contemplated by
this Section 4.

     (c) The Initial Purchasers shall have no liability to the Company or any Holder with respect
to any request that they may make pursuant to Section 4(b) above.

     5. Indemnification and Contribution. (a) The Company agrees to indemnify and hold
harmless each Initial Purchaser and each Holder, their respective affiliates, directors and
officers and each Person, if any, who controls any Initial Purchaser or any Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation, legal fees and
other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as
such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (1)
any untrue statement or alleged untrue statement of a material fact contained in any Registration
Statement or any omission or alleged omission to state therein a material fact required to be
stated therein

14

 

or necessary in order to make the statements therein not misleading, or (2) any untrue
statement or alleged untrue statement of a material fact contained in any Prospectus, any Free
Writing Prospectus used in violation of this Agreement or any “issuer information” (“Issuer
Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or
any omission or alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
in each case except insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to any Initial Purchaser or
information relating to any Holder furnished to the Company in writing through JPMorgan or any
selling Holder, respectively expressly for use therein. In connection with any Underwritten
Offering permitted by Section 3, the Company will also indemnify the Underwriters, if any, selling
brokers, dealers and similar securities industry professionals participating in the distribution,
their respective affiliates and each Person who controls such Persons (within the meaning of the
Securities Act and the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders, if requested in connection with any Registration Statement, any
Prospectus, any Free Writing Prospectus or any Issuer Information.

     (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company,
the Initial Purchasers and the other selling Holders, the directors of the Company, each officer of
the Company who signed the Registration Statement and each Person, if any, who controls the
Company, any Initial Purchaser and any other selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise
out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to such Holder furnished to
the Company in writing by such Holder expressly for use in any Registration Statement and any
Prospectus.

     (c) If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”)
shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Section 5 except to the extent that it
has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying Person
shall not relieve it from any liability that it may have to an Indemnified Person otherwise than
under this Section 5. If any such proceeding shall be brought or asserted against an Indemnified
Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall
retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 5 that the

15

 

Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such
proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm (x) for any Initial Purchaser, its
affiliates, directors and officers and any control Persons of such Initial Purchaser shall be
designated in writing by JPMorgan, (y) for any Holder, its directors and officers and any control
Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other
cases shall be designated in writing by the Company. The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable
for any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by the Indemnifying Person of such request, (ii) such
Indemnifying Person shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person,
effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from
all liability on claims that are the subject matter of such proceeding and (B) does not include any
statement as to or any admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.

     (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims,

16

 

damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in
lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received by the Company from
the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders
from receiving Securities or Exchange Securities registered under the Securities Act, on the other
hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Holders on the other in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and the Holders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company or by the
Holders and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

     (e) The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 5, in no event shall a Holder be
required to contribute any amount in excess of the amount by which the total price at which the
Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant
to this Section 5 are several and not joint.

     (f) The remedies provided for in this Section 5 are not exclusive and shall not limit any
rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     (g) The indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person
controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the officers
or directors of or any Person controlling the Company,

17

 

(iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities
pursuant to a Shelf Registration Statement.

     6. General.

     (a) No Inconsistent Agreements. The Company represents, warrants and agrees that (i) the
rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of any other outstanding securities issued by the Company
under any other agreement and (ii) the Company has not entered into, or on or after the date of
this Agreement will enter into, any agreement that is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions
hereof.

     (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company has obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or consent;
provided that no amendment, modification, supplement, waiver or consent to any departure
from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder. Any amendments, modifications,
supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by
each of the parties hereto.

     (c) Notices. All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the provisions of this Section
6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in
the Purchase Agreement; (ii) if to the Company, initially at the Company’s address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c); and (iii) to such other persons at their respective
addresses as provided in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 6(c). All such notices and
communications shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the
next Business Day if timely delivered to an air courier guaranteeing overnight delivery. Copies of
all such notices, demands or other communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the Indenture.

     (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors, assigns and transferees of each of the parties, including,

18

 

without limitation and without the need for an express assignment, subsequent Holders;
provided that nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Securities in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be held subject to all
the terms of this Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The
Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation
to the Company with respect to any failure by a Holder to comply with, or any breach by any Holder
of, any of the obligations of such Holder under this Agreement.

     (e) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the
agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the
other hand, and shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of other Holders
hereunder.

     (f) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

     (g) Headings. The headings in this Agreement are for convenience of reference only, are not a
part of this Agreement and shall not limit or otherwise affect the meaning hereof.

     (h) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

     (i) Entire Agreement; Severability. This Agreement contains the entire agreement between the
parties relating to the subject matter hereof and supersedes all oral statements and prior writings
with respect thereto. If any term, provision, covenant or restriction contained in this Agreement
is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public
policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated. The
Company and the Initial Purchasers shall endeavor in good faith negotiations to replace the
invalid, void or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, void or unenforceable provisions.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

19

 

	 	 	 	 	 	 	 	 	 
	 	 	SERVICE CORPORATION INTERNATIONAL,	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Eric D. Tanzberger
	 	 	 	 	 	 	 
	 	 	Name:	 	Eric D. Tanzberger	 	 
	 	 	Title:	 	Senior Vice President and	 	 
	 

	 	 	 	 	 	Chief Financial Officer	 	 

20

 

Confirmed and accepted as of the date first above written:

J.P. MORGAN SECURITIES INC.

Acting on behalf of itself and as the

Representative of the several Initial Purchasers

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Zulfe Ali
	 

	 	 	 	 	 	 
	 	 	Name:  Zulfe Ali	 	 
	 	 	Title:  Vice President	 	 

21

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