<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 1995
REGISTRATION NO.
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
SERVICE CORPORATION INTERNATIONAL TEXAS 74-1488375
SCI FINANCE LLC TEXAS 76-0449189
SCI FINANCING CORPORATION DELAWARE 76-0473055
SCI FINANCING I DELAWARE 76-6107930
SCI FINANCING II DELAWARE 76-6107931
(EXACT NAME OF EACH REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
1929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
(713) 522-5141
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF THE REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES M. SHELGER, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SERVICE CORPORATION INTERNATIONAL
1929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
(713) 522-5141
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE FOR EACH REGISTRANT)
------------------------
With a copy to:
<TABLE>
<S> <C>
ARTHUR H. ROGERS, ESQ. GERALD S. TANENBAUM, ESQ.
FULBRIGHT & JAWORSKI L.L.P. CAHILL GORDON & REINDEL
1301 MCKINNEY STREET EIGHTY PINE STREET
HOUSTON, TEXAS 77010 NEW YORK, NEW YORK 10005
(713) 651-5151 (212) 701-3000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS DETERMINED
BY MARKET CONDITIONS.
------------------------
If the only Securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
(Cover continued on next page)
CALCULATION OF REGISTRATION FEE
<TABLE>
========================================================================================================================
<S> <C> <C> <C> <C>
PROPOSED PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2)(4)(5)(6) FEE(2)
- ------------------------------------------------------------------------------------------------------------------------
Preferred Securities of SCI Financing I...............
Preferred Securities of SCI Financing II..............
Preferred Securities of SCI Finance LLC...............
Debt Securities of Service Corporation International ( )
("SCI")(3).......................................... ( $888,740,000 100% $888,740,000 $306,462.07 )
Preferred Stock, par value $1.00, of SCI(3)........... ( )
Depositary Shares of SCI..............................
Common Stock, par value $1.00, of SCI.................
Guarantees of Preferred Securities of SCI Financing I,
SCI Financing II, and SCI Finance LLC by SCI(5).....
Warrants of SCI.......................................
Subordinated Debt Securities of SCI Financing
Corporation
("Financing")(5)....................................
Guarantee of Subordinated Debt Securities of Financing
by SCI(5)...........................................
Series C Junior Participating Preferred Stock Purchase
Rights
of SCI (currently traded with Common Stock).........
========================================================================================================================
</TABLE>
(Footnotes on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO THAT
SECTION 8(A), MAY DETERMINE.
===============================================================================
<PAGE> 2
(Cover continued)
If any of the Securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
(Footnotes from cover)
(1) Such indeterminate number of Preferred Securities of SCI Financing I, SCI
Financing II and SCI Finance LLC, such indeterminate principal amount of
Debt Securities of SCI, and such indeterminate number of Preferred Stock,
Common Stock, and Warrants of SCI, as may from time to time be issued at
indeterminate prices. Subordinated Debt Securities of Financing may be
issued and sold to SCI Financing I and SCI Financing II, in which event such
Debt Securities may later be distributed to the holders of Preferred
Securities upon a dissolution of SCI Financing I and SCI Financing II and
the distribution of the assets thereof.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. Pursuant to Rule 429 under the Securities Act of 1933,
as amended, the Prospectus included herein also relates to $111,260,000 of
Securities registered under Registration Statement No. 33-56069 for which a
registration fee of $38,365.51 was previously paid to the Commission. If any
of such previously registered Securities are offered prior to the effective
date of this registration statement, the amount of such Securities will not
be included in any Prospectus hereunder. The amount of Securities being
registered, together with the remaining Securities registered under
Registration Statement No. 33-56059, represents the maximum amount of
Securities that are expected to be offered for sale.
(3) Also includes such indeterminate number of shares of Common Stock as may be
issued upon conversion of or exchange for any other Debt Securities or
Preferred Stock that provide for conversion or exchange into other
Securities or upon exercise of Warrants for such Securities.
(4) Such amount represents the principal amount of any Debt Securities of SCI or
Financing issued at their principal amounts, the issue price rather than the
principal amount of any Debt Securities of SCI or Financing issued at an
original issue discount, the liquidation preference of any Preferred Stock
of SCI, the amount computed pursuant to Rule 457(c) for any Common Stock,
the issue price of any Warrants of SCI, but not the exercise price of any
Securities issuable upon the exercise of Warrants of SCI. Such amount also
represents the liquidation preference of Preferred Securities of SCI
Financing I, SCI Financing II and SCI Finance LLC.
(5) No separate consideration will be received for the Guarantees of Preferred
Securities of SCI Financing I, SCI Financing II or SCI Financing LLC or for
the Guarantees of the Subordinated Debt Securities of Financing.
(6) No separate consideration will be received for the Common Stock issuable
upon conversion of or in exchange for Debt Securities or Preferred Stock of
SCI or for the Common Stock or Preferred Stock of SCI issuable upon
conversion or exchange of Preferred Securities of SCI Financing LLC, SCI
Financing I or SCI Financing II.
<PAGE> 3
SUBJECT TO COMPLETION DATED JUNE 27, 1995
PROSPECTUS
$1,000,000,000
SERVICE CORPORATION INTERNATIONAL
Company Debt Securities, Common Stock, Preferred Stock,
Depositary Shares and Common Stock Warrants
SCI FINANCING CORPORATION
Financing Subordinated Debt Securities
SCI FINANCING I
SCI FINANCING II
Trust Preferred Securities
SCI FINANCE LLC
LLC Preferred Securities
Service Corporation International (the "Company" or "SCI") may from time to time
offer (i) debt securities (the "Company Debt Securities"), which may be any of
senior debt securities (the "Company Senior Debt Securities"), senior
subordinated debt securities (the "Company Senior Subordinated Debt Securities")
or subordinated debt securities (the "Company Subordinated Debt Securities"), in
each case consisting of debentures, notes and/or other unsecured evidences of
indebtedness, (ii) Common Stock, par value $1.00 per share ("Common Stock" or
"SCI Common Stock"), along with Series C Junior Participating Preferred Stock
Purchase Rights, (iii) Preferred Stock, par value $1.00 per share ("Preferred
Stock"), which, for any or all series of Preferred Stock, may be issued in the
form of depositary shares (the "Depositary Shares") evidenced by depositary
receipts and (iv) warrants to purchase Common Stock ("Common Stock Warrants").
SCI Financing Corporation ("Financing"), a wholly owned, indirect subsidiary of
the Company, may from time to time offer subordinated debt securities (the
"Financing Subordinated Debt Securities" and, together with the Company Debt
Securities, the "Debt Securities"), guaranteed by SCI to the extent described
herein and in the accompanying Prospectus Supplement. See "Description of
Financing Subordinated Debt Securities and Financing Debt Guarantees" for a
description of the various contractual undertakings of SCI with respect to the
Financing Subordinated Debt Securities. SCI Financing I and SCI Financing II
(each, an "SCI Trust") may offer, from time to time, preferred securities (the
"Trust Preferred Securities") with the payment of dividends and the payments on
liquidation or redemption of the Trust Preferred Securities guaranteed on a
subordinated basis by SCI to the extent described herein and in the accompanying
Prospectus Supplement. See "Description of Financing Subordinated Debt
Securities and Financing Debt Guarantees -- Description of Financing Debt
Guarantees" and "Description of Trust Preferred Securities and Trust
Guarantees -- Description of Trust Guarantees," for a description of the various
contractual undertakings of SCI with respect to the Trust Preferred Securities.
SCI Finance LLC ("SCI Finance LLC") may from time to time offer preferred
securities ("LLC Preferred Securities") in one or more series with the payment
of dividends and the payments on liquidation or redemption of the LLC Preferred
Securities guaranteed on a subordinated basis by SCI to the extent described
herein or in the accompanying Prospectus Supplement. See "Description of the LLC
Preferred Securities and LLC Guarantees -- Description of LLC Guarantees" and
"Description of the LLC Preferred Securities and LLC Guarantees -- Description
of the Loans" for a description of various contractual backup undertakings of
SCI with respect to the LLC Preferred Securities. The Debt Securities, the
Common Stock, along with Series C Junior Participating Preferred Stock Purchase
Rights, the Preferred Stock, the Depositary Shares, the Common Stock Warrants,
the Trust Preferred Securities and the LLC Preferred Securities are collectively
referred to as the "Securities," and will have an aggregate initial offering
price of up to $1,000,000,000 or the equivalent thereof if Debt Securities are
denominated in a currency other than U.S. dollars or in currency units. The
Securities may be offered as separate series, in amounts, at prices and on terms
to be determined at the time of sale.
The accompanying Prospectus Supplement sets forth with regard to the Securities
in respect of which this Prospectus is being delivered the terms of such
Securities, including, where applicable, (i) in the case of Debt Securities,
whether the issuer is SCI or Financing, the specific title (including whether
senior, senior subordinated or subordinated and whether or not convertible),
aggregate principal amount, denominations (which may be in U.S. dollars, in any
other currency or in composite currencies), maturity (which may be fixed or
extendible), interest rate, if any (which may be fixed or variable), and time of
payment of any interest, any terms for redemption at the option of the Company
or Financing, as the case may be, or the holder, any terms for sinking fund
payments, any class or classes of stock into which the Debt Securities are
convertible or exchangeable and other conversion or exchange terms, if any, any
covenants or events of default that are in addition to or different from those
described herein, any listing on a securities exchange, the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities, (ii) in the case of Common Stock, the initial public
offering price, (iii) in the case of Preferred Stock, the specific title, any
dividend, liquidation and other rights, any class or classes of stock into which
the Preferred Stock is convertible or exchangeable and other conversion or
exchange terms, if any, any redemption provisions, any sinking fund provisions,
any covenants, any listing on a securities exchange, the initial public offering
price and any other terms in connection with the offering and sale of such
Preferred Stock, (iv) in the case of Depositary Shares evidenced by depositary
receipts, the series of Preferred Stock represented by such Depositary Shares,
the fraction of such Preferred Stock represented by each such Depositary Share,
any listing on a securities exchange, the initial public offering price and any
other terms in connection with the offering and sale of such Depositary Shares,
(v) in the case of Common Stock Warrants, the duration, exercise price, initial
public offering price and any other terms in connection with the offering and
sale of such Common Stock Warrants, (vi) in the case of the Trust Preferred
Securities, any dividend, conversion or exchange and other rights, any listing
on a securities exchange, the initial public offering price and any other terms
in connection with the offering and sale of such Trust Preferred Securities and
(vii) in the case of LLC Preferred Securities, any dividend, conversion or
exchange and other rights, any listing on a securities exchange, the initial
public offering price and any other terms in connection with the offering and
sale of such LLC Preferred Securities.
The Company, Financing, the SCI Trusts and SCI Finance LLC may sell Securities
to or through underwriters, and also may sell Securities directly to other
purchasers or through agents. The accompanying Prospectus Supplement sets forth
the names of any underwriters or agents involved in the sale of the Securities
in respect of which this Prospectus is being delivered, the principal amounts,
if any, to be purchased by underwriters and the compensation, if any, of such
underwriters or agents.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 1995
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS, IF ANY, MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE
SECURITIES AND, IF THE SECURITIES ARE CONVERTIBLE OR EXCHANGEABLE, THE
OUTSTANDING CLASS OR CLASSES OF STOCK OF THE COMPANY INTO OR FOR WHICH THEY ARE
CONVERTIBLE OR EXCHANGEABLE, AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON ANY SECURITIES EXCHANGE
ON WHICH SUCH SECURITIES MAY BE LISTED, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company, Financing, any SCI Trust or SCI Finance LLC or any underwriter, dealer
or agent. Neither this Prospectus nor the accompanying Prospectus Supplement
constitutes an offer to sell or a solicitation of any offer to buy Securities in
any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation.
In this Prospectus, references to "dollar" and "$" are to United States dollars,
and the terms "United States" and "U.S." mean the United States of America, its
states, its territories, its possessions and all areas subject to its
jurisdiction.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information................ 3
Incorporation of Certain Documents by
Reference.......................... 4
The Company.......................... 5
SCI Financing Corporation............ 5
The SCI Trusts....................... 5
SCI Finance LLC...................... 6
Use of Proceeds...................... 7
Description of Company Debt
Securities......................... 8
Description of Common Stock.......... 23
Description of Preferred Stock....... 25
Description of Depositary Shares..... 28
Description of Common Stock
Warrants........................... 30
<CAPTION>
PAGE
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<S> <C>
Description of Financing Subordinated
Debt Securities and Financing Debt
Guarantees......................... 33
Description of Trust Preferred
Securities and Trust Guarantees.... 45
Description of LLC Preferred
Securities
and LLC Guarantees................. 63
Book-Entry Only Issuance -- The
Depository Trust Company........... 78
Certain Federal Income Tax
Considerations Regarding the Trust
Preferred Securities or the LLC
Preferred Securities............... 81
Plan of Distribution................. 81
Legal Matters........................ 82
Experts.............................. 82
</TABLE>
2
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street N.W., Washington,
D.C. 20549; 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade
Center, New York, New York 10048. Copies of such material can also be obtained
from the public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Additional information regarding the Company, Financing, the SCI Trusts, SCI
Finance LLC and the Securities is contained in the Registration Statement, of
which this Prospectus is a part, and the exhibits relating thereto (the
"Registration Statement") filed with the Commission under the Securities Act of
1933, as amended (the "Act"). For further information pertaining to the Company,
Financing, the SCI Trusts, SCI Finance LLC and the Securities, reference is made
to the Registration Statement, which may be inspected without charge at the
office of the Commission at 450 Fifth Street N.W., Washington, D.C. 20549, and
copies thereof may be obtained from the Commission at prescribed rates. This
Prospectus and the accompanying Prospectus Supplement do not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements made in this Prospectus and the accompanying Prospectus Supplement as
to the contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
No separate financial statements of Financing, the SCI Trusts or SCI Finance LLC
have been included or incorporated by reference herein. None of SCI Finance LLC,
either of the SCI Trusts, Financing or SCI considers such financial statements
material to holders of Financing Subordinated Debt Securities, Trust Preferred
Securities or LLC Preferred Securities, because (i) all of the voting securities
of each of Financing, the SCI Trusts and of SCI Finance LLC will be owned,
directly or indirectly, by SCI, a reporting company under the Exchange Act, (ii)
none of Financing, either of the SCI Trusts or SCI Finance LLC has independent
operations but rather each exists for the purpose of issuing, in the case of
Financing, debt securities guaranteed by SCI, and in the case of the SCI Trusts
and SCI Finance LLC, securities representing undivided beneficial interests in
the assets of such SCI Trust or of SCI Financial LLC, as the case may be, and,
in the case of an SCI Trust, investing the proceeds thereof in Financing
Subordinated Debt Securities or, in the case of SCI Finance LLC, lending 99% of
the proceeds thereof to SCI International Limited ("SCI Limited"), and (iii) the
obligations of Financing under the Financing Subordinated Debt Securities, of
each of the SCI Trusts under the Trust Securities (as defined herein) and of SCI
Finance LLC under the LLC Preferred Securities are guaranteed on a subordinated
basis by SCI to the extent set forth herein. See "SCI Financing Corporation,"
"The SCI Trusts," "Description of Financing Subordinated Debt Securities and
Debt Guarantees," "Description of the Trust Preferred Securities and Trust
Guarantees -- Description of Trust Guarantees," "Description of the LLC
Preferred Securities and LLC Guarantees -- Description of LLC Guarantees" and
"Description of the LLC Preferred Securities and LLC Guarantees -- Description
of the Loans." Each of the SCI Trusts is a statutory business trust formed under
the laws of the State of Delaware. SCI Finance LLC is a limited liability
company organized under the laws of the State of Texas and will be managed by
SCI, as manager (sometimes referred to herein as the "Manager").
3
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by SCI with the Commission are
incorporated herein by reference:
(i) SCI's Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(ii) SCI's Quarterly Reports on Form 10-Q for the quarterly period ended March
31, 1995;
(iii) The Company's Current Report on Form 8-K dated May 23, 1995;
(iv) The Company's Current Report on Form 8-K dated June 7, 1995;
(v) Description of the Company's capital stock set forth under the caption
"Item 1. Description of Securities to be Registered -- Capital Stock" in the
Form 8, Amendment No. 3, dated September 15, 1982, to the Company's Registration
Statement on Form 8-A; and
(vi) Description of the Company's preferred share purchase rights contained in
the Company's Registration Statement on Form 8-A dated July 26, 1988, as amended
by Amendment No. 1 thereto filed under cover of Form 8 and dated May 11, 1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing such documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the request of any such person, a copy of any or
all of the documents which are incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to Service
Corporation International, 1929 Allen Parkway, Houston, Texas 77019, Attention:
James M. Shelger, Senior Vice President, General Counsel and Secretary,
telephone number: (713) 522-5141.
4
<PAGE> 7
THE COMPANY
The Company is the largest provider of funeral and cemetery services and
products in the world. As of March 31, 1995, the Company owned and operated
1,524 funeral homes, 238 cemeteries (including 102 funeral home and cemetery
combinations) and 102 crematoria located in 41 U.S. states, the District of
Columbia, Australia, Canada and the United Kingdom.
The Company was incorporated in Texas on July 5, 1962. The Company's principal
executive offices are located at 1929 Allen Parkway, Houston, Texas 77019,
telephone number: (713) 522-5141. As used herein, unless the context indicates
otherwise, the terms "Company" and "SCI" refer to the Company and its
subsidiaries.
SCI FINANCING CORPORATION
SCI Financing Corporation is a wholly owned subsidiary of SCI and was
incorporated under the laws of the State of Delaware in June 1995. Financing was
incorporated for the sole purpose of providing financing to SCI and affiliates
of SCI through the issuance of indebtedness guaranteed by SCI and has no
independent operations. The principal executive offices of Financing are located
at 1929 Allen Parkway, Houston, Texas 77019, telephone number: (713) 522-5141.
THE SCI TRUSTS
Each of SCI Financing I and SCI Financing II is a statutory business trust
formed under Delaware law pursuant to (i) a separate declaration of trust (each,
a "Declaration") executed by SCI, as sponsor for the trust (the "Sponsor"), and
the SCI Trustees (as defined herein) of the trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
June 26, 1995. Each SCI Trust exists for the exclusive purposes of (i) issuing
the Trust Preferred Securities and common securities representing undivided
beneficial interests in the assets of the Trust (the "Trust Common Securities"
and, together with the Trust Preferred Securities, the "Trust Securities"), (ii)
investing the gross proceeds from the sale of the Trust Securities in the
Financing Subordinated Debt Securities and (iii) engaging in only those other
activities necessary or incidental thereto. All of the Trust Common Securities
will be directly or indirectly owned by SCI. The Trust Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Trust
Preferred Securities, except that, upon an event of default under the
Declaration, the rights of the holders of the Trust Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. SCI will directly or indirectly acquire Trust Common
Securities in an aggregate liquidation amount up to 21% but not less than 3% of
the total capital of each SCI Trust. Each SCI Trust has a term of approximately
55 years but may terminate earlier, as provided in each Declaration.
Each SCI Trust's business and affairs will be conducted by the trustees (the
"SCI Trustees") appointed by SCI as the direct or indirect holder of all the
Trust Common Securities. The holder of the Trust Common Securities will be
entitled to appoint, remove or replace any of, or increase or reduce the number
of, the SCI Trustees of an SCI Trust. The duties and obligations of the SCI
Trustees shall be governed by the Declaration of each SCI Trust. At least one of
the SCI Trustees of each SCI Trust will be a person who is an employee or
officer of or who is affiliated with SCI (a "Regular Trustee"). In certain
limited circumstances set forth in a Prospectus Supplement, the holders of a
majority of the Preferred Securities will be entitled to appoint one additional
Regular Trustee, who need not be an employee or officer of or otherwise
affiliated with SCI. One SCI Trustee of each SCI Trust will be a financial
institution that is not affiliated with SCI and has a specified minimum amount
of aggregate capital, surplus, and undivided profits of not less than
$50,000,000, which shall act as property trustee and as indenture trustee for
the purposes of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), pursuant to the terms set forth in a Prospectus Supplement (the
"Property Trustee"). Unless otherwise set forth in the Prospectus Supplement,
the Property Trustee will be The Bank of New York, and the Delaware Trustee will
be The Bank of New York (Delaware). In addition, unless the Property Trustee
maintains a principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, one SCI Trustee of each SCI Trust will
have a principal place of business or reside in the State of Delaware (the
"Delaware Trustee"). SCI will pay all fees and expenses related to the SCI
Trusts and the offering of the Trust Securities, the payment of which will be
guaranteed by SCI. The office of the Delaware Trustee for
5
<PAGE> 8
each SCI Trust is The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware 19711. The address for each SCI Trust is c/o Service
Corporation International, the Sponsor of each SCI Trust, at SCI's corporate
headquarters located at 1929 Allen Parkway, Houston, Texas 77019, telephone
number: (713) 522-5141.
SCI FINANCE LLC
SCI Finance LLC is a limited liability company organized under the laws of the
State of Texas. The address of SCI Finance LLC's principal executive offices is
1929 Allen Parkway, Houston, Texas 77019, telephone number: (713) 522-5141. SCI
owns all of the LLC Common Shares, which are nontransferable. SCI Finance LLC
exists for the sole purpose of issuing LLC Common Shares and LLC Preferred
Shares and lending 99% of the proceeds thereof to SCI Limited. The remaining 1%
of the proceeds from the issuance of LLC Common Shares and LLC Preferred Shares
will be invested by SCI Finance LLC in Eligible Investments (as defined in SCI
Finance LLC's Articles of Organization (the "LLC Articles")). See "Use of
Proceeds."
6
<PAGE> 9
USE OF PROCEEDS
Except as may be otherwise set forth in the Prospectus Supplement accompanying
this Prospectus, the net proceeds to the Company from the sale or sales of the
Securities other than Financing Subordinated Debt Securities, Trust Preferred
Securities and LLC Preferred Securities will be used for general corporate
purposes including (without limitation) repurchases of outstanding long-term
debt securities, capital expenditures, investments in subsidiaries, working
capital, repayment of borrowings under bank credit agreements, acquisitions and
other business opportunities. Except as set forth in the Prospectus Supplement
accompanying this Prospectus, 99% of the proceeds from any offering of the LLC
Preferred Securities will be lent by SCI Finance LLC to SCI Limited (the
"Loans"), which will use such proceeds for loans to SCI and affiliates of SCI
for use for general corporate purposes, and the remaining 1% will be invested by
SCI Finance LLC in Eligible Investments. Except as set forth in the Prospectus
Supplement accompanying this Prospectus, each SCI Trust will use all proceeds
received from the sale of Trust Preferred Securities to purchase Financing
Subordinated Debt Securities from Financing. Financing intends to use the net
proceeds from the sale of Financing Subordinated Debt Securities for loans to
SCI and affiliates of SCI for use for general corporate purposes.
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DESCRIPTION OF COMPANY DEBT SECURITIES
The Company Debt Securities will constitute any of Company Senior Debt
Securities, Company Senior Subordinated Debt Securities or Company Subordinated
Debt Securities and will be issued, in the case of Company Senior Debt
Securities, under a Senior Indenture (the "Senior Debt Indenture") dated as of
February 1, 1993, between the Company and The Bank of New York, as trustee; in
the case of Company Senior Subordinated Debt Securities, under a Senior
Subordinated Indenture (the "Senior Subordinated Debt Indenture") to be entered
into between the Company and Texas Commerce Bank National Association ("Texas
Commerce Bank"), as trustee; and, in the case of Company Subordinated Debt
Securities under a Subordinated Indenture (the "Subordinated Debt Indenture")
dated as of September 1, 1991 between the Company and Texas Commerce Bank, as
trustee. The Senior Debt Indenture, the Senior Subordinated Debt Indenture and
the Subordinated Debt Indenture are sometimes hereinafter referred to
individually as an "Indenture" and collectively as the "Indentures." Each of The
Bank of New York and Texas Commerce Bank (and any successors thereto as trustees
under the respective Indentures) is hereinafter referred to as the "Trustee"
with respect to the Indenture under which it acts as Trustee. The Indentures are
filed as exhibits to the Registration Statement. The following summaries of
certain provisions of the Indentures and the Company Debt Securities do not
purport to be complete, and such summaries are subject to the detailed
provisions of the applicable Indenture to which reference is hereby made for a
full description of such provisions, including the definition of certain
capitalized terms used herein but not otherwise defined herein. Whenever defined
terms of the applicable Indenture are referred to, such defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. The Indentures are
substantially identical, except for certain covenants of the Company, events of
default and provisions relating to subordination and conversion.
The Company Debt Securities may be issued from time to time in one or more
series. The following description of the Company Debt Securities sets forth
certain general terms and provisions of the Company Debt Securities of all
series. The particular terms of each series of Company Debt Securities offered
by any Prospectus Supplement will be described therein.
PROVISIONS APPLICABLE TO COMPANY SENIOR DEBT SECURITIES, COMPANY SENIOR
SUBORDINATED DEBT SECURITIES AND COMPANY SUBORDINATED DEBT SECURITIES
General. The Company Debt Securities will be unsecured senior, senior
subordinated or subordinated obligations of the Company and may be issued from
time to time in one or more series. The Indentures will not limit the amount of
Company Debt Securities, Senior Indebtedness, debentures, notes or other types
of indebtedness that may be issued by the Company or any of its Subsidiaries nor
will they restrict transactions between the Company and its Affiliates, the
payment of dividends or the making of investments by the Company or the transfer
of assets by the Company to its Subsidiaries. The Company currently conducts
substantially all its operations through Subsidiaries. Consequently, the rights
of the Company to receive assets of any Subsidiary (and thus the ability of
holders of Company Debt Securities to benefit indirectly from such assets) are
subject to the prior claims of creditors of that Subsidiary. Other than as may
be set forth in any Prospectus Supplement, the Indentures and the Company Debt
Securities will not contain any covenants or other provisions that are intended
to afford holders of the Company Debt Securities special protection in the event
of a highly leveraged transaction by the Company. As of March 31, 1995, the
Company had outstanding approximately $1,305 million of secured debt or Senior
Indebtedness (including approximately $53 million principal amount of
guarantees) and approximately $220 million of unsecured subordinated debt.
Reference is made to the Prospectus Supplement relating to any Company Debt
Securities for the following terms of and information relating to such Company
Debt Securities (to the extent such terms are applicable thereto): (i) the title
of such Company Debt Securities; (ii) classification as Company Senior Debt
Securities, Company Senior Subordinated Debt Securities or Company Subordinated
Debt Securities, aggregate principal amount, purchase price and denomination;
(iii) whether such Company Debt Securities that constitute Company Senior
Subordinated Debt Securities or Company Subordinated Debt Securities are
convertible into Common Stock and, if so, the terms and conditions upon which
such conversion will be effected including the initial conversion price or
conversion rate and any adjustments thereto in addition to or different from
those described herein, the conversion period and other conversion provisions in
addition to or in lieu of those described herein; (iv) the
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date or dates on which such Company Debt Securities will mature; (v) the method
by which amounts payable in respect of principal of or premium, if any, or
interest, if any, on or upon the redemption of such Company Debt Securities may
be calculated; (vi) the interest rate or rates (or the method by which such will
be determined), and the dates from which such interest, if any, will accrue;
(vii) the date or dates on which any such interest will be payable; (viii) the
place or places where and the manner in which the principal of and premium, if
any, and interest, if any, on such Company Debt Securities will be payable and
the place or places where such Company Debt Securities may be presented for
transfer and, if applicable, conversion; (ix) the obligations, if any, of the
Company to redeem, repay or purchase such Company Debt Securities pursuant to
any sinking fund or analogous provisions or at the option of a holder thereof or
the right, if any, of the Company to redeem, repay or purchase such Company Debt
Securities at its option and the period or periods within which, the price or
prices at which and the terms and conditions upon which such Company Debt
Securities will be redeemed, repaid or purchased pursuant to any such obligation
or right (including the form or method of payment thereof if other than cash);
(x) any terms applicable to such Company Debt Securities issued at an original
issue discount below their stated principal amount, including the issue price
thereof and the rate or rates at which such original issue discount shall
accrue; (xi) any index used to determine the amount of payments of principal of
and any premium and interest on such Company Debt Securities; (xii) any special
United States federal income tax consequences; and (xiii) any other specified
terms of such Company Debt Securities, including any additional or different
events of default or remedies or any additional covenants provided with respect
to such Company Debt Securities, and any terms which may be required by or
advisable under applicable laws or regulations.
Unless otherwise specified in any Prospectus Supplement, the Company Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. No service charge will be made for any
transfer or exchange of any Company Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Company Debt Securities may bear interest at a fixed rate or a floating rate.
Company Debt Securities bearing no interest or interest at a rate that at the
time of issuance is below the prevailing market rate may be sold at a discount
below their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Company Debt Securities or to
certain Company Debt Securities issued at par that are treated as having been
issued at a discount for United States federal income tax purposes will be
described in the applicable Prospectus Supplement.
The Indentures and the Company Debt Securities will be governed by Texas law.
Global Securities. The Company Debt Securities of a series may be issued in
whole or in part in the form of one or more global securities ("Global
Securities") that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Company Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to the nominee of the Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
The specific terms of the depositary arrangement with respect to a series of
Company Debt Securities will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global Security
or its nominee will credit, on its book-entry registration and transfer system,
the respective principal amounts of the individual Company Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Company Debt Securities or by the
Company if such Company Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be limited
to persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with
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respect to interests of participants) and the records of participants (with
respect to interests of persons other than participants). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security or its nominee is the registered
owner of such Global Security, such Depositary or its nominee, as the case may
be, will be considered the sole owner or holder of the Company Debt Securities
of the series represented by such Global Security for all purposes under the
Indenture governing such Company Debt Securities. Except as provided below,
owners of beneficial interests in a Global Security will not be entitled to have
any of the individual Company Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Company Debt Securities in definitive form
and will not be considered the owners or holders thereof under the Indenture
governing such Company Debt Securities.
Payments of principal of and premium, if any, and interest, if any, on
individual Company Debt Securities represented by a Global Security registered
in the name of a Depositary or its nominees will be made to the Depositary or
its nominee, as the case may be, as the registered owner of the Global Security
representing such Company Debt Securities. None of the Company, the Trustee for
such Company Debt Securities, any paying agent and the registrar for such
Company Debt Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Company Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Company Debt Securities
or its nominee, upon receipt of any payment of principal, premium or interest in
respect of a Global Security representing any such Company Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Company Debt Securities as shown on the records
of such Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such participants.
If the Depositary for a series of Company Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Company Debt Securities of such series in exchange for the
Global Security representing such series of Company Debt Securities. In
addition, the Company may at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such Company Debt
Securities, determine not to have any Company Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue
individual Company Debt Securities of such series in exchange for the Global
Security or Securities representing such series of Company Debt Securities.
Further, if the Company so specifies with respect to the Company Debt Securities
of a series, an owner of a beneficial interest in a Global Security representing
Company Debt Securities of such series may, on terms acceptable to the Company
and the Depositary for such Global Security, receive individual Company Debt
Securities of such series in exchange for such beneficial interests, subject to
any limitations described in the Prospectus Supplement relating to such Company
Debt Securities. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to a physical delivery of individual Company
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Company Debt
Securities registered in its name. Individual Company Debt Securities of such
series so issued will be issued in denominations, unless otherwise specified by
the Company, of $1,000 and integral multiples thereof.
Consolidation, Merger, Sale. Each Indenture provides that the Company may
consolidate or merge with or into any other corporation, and may sell, lease,
exchange or otherwise dispose of all or substantially all of its property and
assets to any other corporation authorized to acquire and operate the same,
provided that in any such case (i) immediately after such transaction the
Company or such other corporation formed by or surviving any such consolidation
or merger, or to which such sale, lease, exchange or other disposition shall
have been made, will
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not be in default in the performance or observance of any of the terms,
covenants and conditions in the Indenture to be kept or performed by the
Company, (ii) the corporation (if other than the Company) formed by or surviving
any such consolidation or merger, or to which such sale, lease exchange or other
disposition shall have been made, shall be a corporation organized under the
laws of the United States of America, any state thereof or the District of
Columbia, and (iii) the corporation (if other than the Company) formed by such
consolidation, or into which the Company shall have been merged, or the
corporation which shall have acquired or leased such property and assets, shall
assume, by a supplemental indenture, the Company's obligations under such
Indenture. In case of any such consolidation, merger, sale, lease, exchange or
other disposition and upon any such assumption by the successor corporation,
such successor corporation shall succeed to and be substituted for the Company,
with the same effect as if it had been named in such Indenture as the Company
and subject to the conditions set forth in the Indenture, and the Company shall
be relieved of any further obligation under such Indenture and any Company Debt
Securities issued thereunder.
Discharge and Defeasance. The Company may discharge or defease its obligations
with respect to each series of Company Debt Securities as set forth below.
The Company may discharge all of its obligations (except those set forth below)
to holders of any series of Company Debt Securities issued under any Indenture,
which Company Debt Securities have not already been delivered to the Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year (or are to be called for redemption within one
year) by depositing with the Trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient to
pay when due the principal of and premium, if any, and interest, if any, on all
outstanding Company Debt Securities of such series and to make any mandatory
sinking fund payments thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the Company
may also discharge at any time all of its obligations (except those set forth
below) to holders of any series of Company Debt Securities issued under any
Indenture (other than convertible Company Debt Securities) ("defeasance") if,
among other things: (i) the Company irrevocably deposits with the Trustee cash
or U.S. Government Obligations, or a combination thereof, as trust funds in an
amount certified to be sufficient to pay the principal of and premium, if any,
and interest, if any, on all outstanding Company Debt Securities of such series
when due and to make any mandatory sinking fund payments thereon when due, and
such funds have been so deposited for 91 days; (ii) such deposit will not result
in a breach or violation of, or cause a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and (iii)
the Company delivers to the Trustee an opinion of counsel to the effect that the
holders of such series of Company Debt Securities will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
defeasance, and that such defeasance will not otherwise alter the United States
federal income tax treatment of principal and interest payments on such series
of Company Debt Securities. Such opinion of counsel must be based on a ruling of
the Internal Revenue Service or a change in United States federal income tax law
occurring after the date of the Indenture relating to the Company Debt
Securities of such series, since such a result would not occur under current tax
law.
In the event of such discharge and defeasance of a series of Company Debt
Securities, the holders thereof would be entitled to look only to such trust
funds for payment of the principal of and any premium and interest on such
Company Debt Securities.
Notwithstanding the foregoing, no discharge or defeasance described above shall
affect the following obligations to or rights of the holders of any series of
Company Debt Securities: (i) rights of registration of transfer and exchange of
Company Debt Securities of such series; (ii) rights of substitution of
mutilated, defaced, destroyed, lost or stolen Company Debt Securities of such
series; (iii) rights of holders of Company Debt Securities of such series to
receive payments of principal thereof and interest, if any, thereon when due and
to receive mandatory sinking fund payments, if any, thereon when due from the
trust funds held by the Trustee; (iv) the rights, obligations, duties and
immunities of the Trustee; (v) the rights of holders of Company Debt Securities
of such series as beneficiaries with respect to property deposited with the
Trustee payable to all or any of them; (vi) the obligations of the Company to
maintain an office or agency in respect of Company Debt Securities of such
series; and (vii) if applicable, the obligations of the Company with respect to
the conversion of Company Debt Securities of such series into Common Stock.
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Modification of the Indenture. Each Indenture provides that the Company and the
Trustee may enter into supplemental indentures without the consent of the
holders of the Company Debt Securities to (i) evidence the assumption by a
successor corporation of the obligations of the Company under such Indenture,
(ii) add covenants or new events of default for the protection of the holders of
such Company Debt Securities, (iii) cure any ambiguity or correct any
inconsistency in the Indenture, (iv) establish the form and terms of any series
of Company Debt Securities and to provide for adjustment of conversion rights,
(v) evidence the acceptance of appointment by a successor trustee, (vi) amend
the Indenture in any other manner which the Company may deem necessary or
desirable and which will not adversely affect the interests of the holders of
Company Debt Securities issued thereunder or (vii) in the case of Senior Company
Debt Securities, secure such Company Debt Securities.
Each Indenture also contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Company Debt Securities then Outstanding of each series
affected by such supplemental Indenture, to add any provisions to, or change in
any manner or eliminate any of the provisions of, such Indenture or modify in
any manner the rights of the holders of the Company Debt Securities of such
series; provided that the Company and the Trustee may not, without the consent
of the holder of each outstanding Company Debt Security affected thereby, (i)
extend the stated maturity of the principal of any Company Debt Security, reduce
the principal amount thereof, reduce the rate or extend the time of payment of
any interest thereon, reduce or alter the method of computation of any amount
payable on redemption, repayment or purchase thereof, reduce the portion of the
principal amount of any Original Issue Discount Security payable upon
acceleration or provable in bankruptcy, change the coin or currency in which
principal and interest, if any, are payable, impair or affect the right to
institute suit for the enforcement of any payment, repayment or purchase thereof
or, if applicable, adversely affect the right to convert Company Debt
Securities, any right of repayment at the option of the holder or (solely with
respect to the Senior Subordinated Debt Indenture) change, amend or modify the
subordination provisions of such Indenture or any of the definitions used in the
subordination provisions of such Indenture or consent to the departure from any
of the terms of the subordination provisions of such Indenture in each case in
any manner that would adversely affect the holders of any of the Company Senior
Subordinated Debt Securities issued thereunder or (ii) reduce the percentage in
aggregate principal amount of Company Debt Securities of any series issued under
such Indenture, the consent of the holders of which is required for any such
modification.
The Senior Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Company Senior Subordinated Debt Securities,
and the Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Company Subordinated Debt Securities, in each
case without the consent of each holder of Senior Indebtedness then outstanding
that would be adversely affected thereby.
Each of the Indentures provides that the term "Original Issue Discount Security"
means any Company Debt Security that provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to the terms of the Indenture.
In each of the Indentures, the definition of the term "Outstanding," with
reference to Company Debt Securities, provides that in determining whether the
holders of the requisite aggregate principal amount of Outstanding Company Debt
Securities of any or all series have given any request, demand, authorization,
direction, notice, consent or waiver under the applicable Indenture, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the portion of the principal amount
thereof that would be due and payable as of the date of such determination (as
certified by the Company to the Trustee) upon a declaration of acceleration of
the maturity thereof pursuant to the terms of the Indenture.
PROVISIONS APPLICABLE SOLELY TO COMPANY SENIOR DEBT SECURITIES
General. Company Senior Debt Securities will be issued under the Senior Debt
Indenture, and each series will rank pari passu as to the right of payment of
principal, premium, if any, and interest, if any, with each other series and
with all other Senior Indebtedness of the Company.
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Events of Default. Unless otherwise specified in the Prospectus Supplement, an
Event of Default is defined under the Senior Debt Indenture with respect to the
Company Senior Debt Securities of any series issued thereunder as being any one
or more of the following events:
(i) default in the payment of any installment of interest upon any of the
Company Senior Debt Securities of such series as and when the same shall become
due and payable, and continuance of such default for a period of 30 days;
(ii) default in the payment of the principal of any of the Company Senior Debt
Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise;
(iii) default in the payment or satisfaction of any sinking fund or other
purchase obligation with respect to Company Senior Debt Securities of such
series, as and when such obligation shall become due and payable;
(iv) failure on the part of the Company duly to observe or perform any other of
the covenants or agreements on the part of the Company in the Company Senior
Debt Securities of such series or in the Senior Debt Indenture continuing for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by the
Trustee by registered or certified mail, or to the Company and the Trustee by
the holders of at least 25 percent in aggregate principal amount of the Company
Senior Debt Securities of such series then Outstanding;
(v) without the consent of the Company, a court having jurisdiction shall enter
an order for relief with respect to the Company under the Bankruptcy Code or,
without the consent of the Company, a court having jurisdiction shall enter a
judgment, order or decree adjudging the Company a bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Bankruptcy Code or
applicable state insolvency law and the continuance of any such judgment, order
or decree is unstayed and in effect for a period of 60 consecutive days;
(vi) the Company shall institute proceedings for entry of an order for relief
with respect to the Company under the Bankruptcy Code or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent to,
reorganization, arrangement, composition or relief under the Bankruptcy Code or
any applicable state law, or shall consent to the filing of such petition or to
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of substantially all of its
property, or the Company shall make a general assignment for the benefit of
creditors as recognized under the Bankruptcy Code;
(vii) default under any bond, debenture, note or other evidence of Indebtedness
for money borrowed by the Company 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 Company or any
Subsidiary (other than Non-Recourse Indebtedness), whether such Indebtedness
exists on the date of the Senior Debt Indenture or shall thereafter 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 $5,000,000, 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 Company by the Trustee by registered mail, or
to the Company and the Trustee by the holders of at least 25 percent in
aggregate principal amount of the Company Senior Debt Securities of such series
then Outstanding, a written notice specifying each such default and requiring
the Company to cause each such default and acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" under the Senior
Debt Indenture; or
(viii) any other Event of Default provided with respect to the Company Senior
Debt Securities of such series.
If an Event of Default with respect to Company Senior Debt 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 Company Senior Debt 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 Company
Senior Debt Securities of such series then
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Outstanding, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the unpaid principal amount (or, if the Company
Senior Debt 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 Company Senior Debt Securities of such series 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, anything in the Senior Debt Indenture or in the Company Senior Debt
Securities of such series contained to the contrary notwithstanding. This
provision, however, is subject to the condition that, if at any time after the
unpaid principal amount (or such specified amount) of the Company Senior Debt
Securities of such series shall have been so declared due and payable and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Company Senior Debt Securities of such series and the principal of any and
all Company Senior Debt Securities of such series which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest, if any, to the extent that payment of such interest is enforceable
under applicable law and on such principal at the rate borne by the Company
Senior Debt Securities of such series to the date of such payment or deposit)
and the reasonable compensation, disbursements, expenses and advances of the
Trustee, and any and all defaults under the Senior Debt Indenture, other than
the nonpayment of such portion of the principal amount of and accrued interest,
if any, on Company Senior Debt Securities of such series which shall have become
due by acceleration, shall have been cured or shall have been waived in
accordance with the Senior Debt Indenture or provision deemed by the Trustee to
be adequate shall have been made therefor -- then and in every such case the
holders of a majority in aggregate principal amount of the Company Senior Debt
Securities of such series then Outstanding, by written notice to the Company and
to the Trustee, may rescind and annul such declaration and its consequences; but
no such rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon. If any Event of Default
with respect to the Company specified in clause (v) or (vi) above occurs, the
unpaid principal amount (or, if the Company Senior Debt Securities of any series
then Outstanding are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of each such series) and
accrued interest on all Company Senior Debt Securities of each series then
Outstanding shall ipso facto become and be immediately due and payable without
any declaration or other act by the Trustee or any Securityholder. If the
Trustee shall have proceeded to enforce any right under the Senior Debt
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Trustee and the Securityholders shall be restored respectively to their
several positions and rights under the Senior Debt Indenture, and all rights,
remedies and powers of the Company, the Trustee and the Securityholders shall
continue as though no such proceeding had been taken. Except with respect to an
Event of Default pursuant to clause (i), (ii) or (iii) above, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to the Trustee by the Company, a paying agent or
any Securityholder.
The Senior Debt Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the Senior
Debt Indenture at the request or direction of any of the holders of Company
Senior Debt Securities issued under the Senior Debt Indenture, unless such
holders shall have offered to the Trustee reasonable security or indemnity.
No holder of any Company Senior Debt Securities of any series then Outstanding
shall have any right by virtue of or by availing of any provision of the Senior
Debt Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to the Senior Debt Indenture or the Company Senior
Debt Securities or for the appointment of a receiver or trustee or similar
official, or for any other remedy under the Senior Debt Indenture or under the
Company Senior Debt Securities, unless such holder previously shall have given
to the Trustee written notice of default and of the continuance thereof, and
unless the holders of not less than 25 percent in aggregate principal amount of
the Company Senior Debt Securities of such series then Outstanding shall have
made written request to the Trustee to institute such action, suit or proceeding
in its own name as Trustee and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such
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notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. Notwithstanding any other
provisions in the Senior Debt Indenture, however, the right of any holder of any
Company Senior Debt Security to receive payment of the principal of and
interest, if any, on such Company Senior Debt Security, on or after the
respective due dates expressed in such Company Senior Debt Security, or to
institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of such
holder.
The holders of at least a majority in aggregate principal amount of the Company
Senior Debt Securities of any series then Outstanding shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to Company Senior Debt Securities of such series; provided,
that (subject to certain exceptions) the Trustee shall have the right to decline
to follow any such direction if the Trustee shall determine upon advice of
counsel that the action or proceeding so directed may not lawfully be taken or
if the Trustee in good faith shall determine that the action or proceeding so
directed would involve the Trustee in personal liability. The holders of 66 2/3%
in aggregate principal amount of the Company Senior Debt Securities of any
series then Outstanding may on behalf of the holders of all of the Company
Senior Debt Securities of such series waive any past default or Event of Default
and its consequences except a default in the payment of interest, if any, on, or
the principal of, the Company Senior Debt Securities of such series. Upon any
such waiver the Company, the Trustee and the holders of the Company Senior Debt
Securities of such series shall be restored to their former positions and rights
under the Senior Debt Indenture, respectively; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default shall have been
waived as permitted, said default or Event of Default shall for all purposes of
the Senior Company Debt Securities and the Senior Debt Indenture be deemed to
have been cured and to be not continuing.
The Trustee shall, within 90 days after the occurrence of a default, with
respect to Company Senior Debt Securities of any series then Outstanding, mail
to all holders of Company Senior Debt Securities of such series, as the names
and the addresses of such holders appear upon the Company Senior Debt Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of these provisions being hereby
defined to be the events specified in clauses (i), (ii), (iii), (iv), (v), (vi),
(vii) and (viii) of "-- Provisions Applicable Solely to Company Senior Debt
Securities -- Events of Default" above, not including periods of grace, if any,
provided for therein and irrespective of the giving of the written notice
specified in said clause (iv) or (vii) but in the case of any default of the
character specified in said clause (iv) or (vii) no such notice to
Securityholders shall be given until at least 60 days after the giving of
written notice thereof to the Company pursuant to said clause (iv) or (vii), as
the case may be); provided, that, except in the case of default in the payment
of the principal of or interest, if any, on any of the Company Senior Debt
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such notice
if and so long as the Trustee in good faith determines that the withholding of
such notice is in the best interests of the Securityholders.
The Company is required to furnish to the Trustee annually a statement as to the
fulfillment by the Company of all of its obligations under the Senior Debt
Indenture.
Limitation on Liens. The Company may not, nor may any Subsidiary, mortgage,
pledge, encumber or subject to any lien or security interest to secure any
obligation of the Company or any obligation of any Subsidiary (other than
obligations owing to the Company or a wholly owned Subsidiary) any assets,
whether owned as of the date the Senior Debt Indenture was executed or
thereafter acquired, without effectively providing that the Company Senior Debt
Securities shall be secured equally and ratably with (or prior to) such
obligation, unless, after given effect thereto, the aggregate amount of all such
secured debt of the Company and its Subsidiaries (excluding secured Indebtedness
existing as of the date the Senior Debt Indenture was executed 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 clauses (i), (ii), (iii) and (iv) set forth in
this paragraph below) would not exceed 10% of Consolidated Net Worth of the
Company and its Subsidiaries; provided, that this restriction will not prevent
the Company or any Subsidiary: (i) from acquiring and retaining property subject
to mortgages, pledges, encumbrances, liens or security interests existing
thereon at the
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<PAGE> 18
date of acquisition thereof, or from creating within one year of such
acquisition mortgages, pledges, encumbrances or liens upon property acquired by
it after the date of the Senior Debt Indenture, 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;
(ii) from mortgaging, pledging, encumbering or subjecting to any lien or
security interest Current Assets to secure Current Liabilities; (iii) 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 (iv) 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 United States
Government or any agency thereof, or pledges or deposits for similar purposes in
the ordinary course of business.
"Consolidated Net Worth" means, at any date, the sum of (i) the par value (or
value stated on the books of the Company) of the capital stock of all classes of
the Company (including preferred stock), plus (or minus in the case of a
deficit) (ii) the amount of the consolidated surplus, whether capital or earned,
of the Company and its Subsidiaries, determined in accordance with generally
accepted accounting principles.
"Current Assets" of any Person includes all assets of such Person which would be
classified as current assets in accordance with generally accepted accounting
principles.
"Current Liabilities" of any Person includes all liabilities of such Person
which would be classified as current liabilities in accordance with generally
accepted accounting principles.
Limitation on Sale and Leaseback Transactions. Neither the Company nor any
Subsidiary will enter into any transaction with any bank, insurance company or
other lender or investor, or to which any such lender or investor is a party,
providing for the leasing to the Company or a Subsidiary of any real property
(except a lease for a temporary period not to exceed three years by the end of
which it is intended that the use of such real property by the lessee will be
discontinued) which has been or is to be sold or transferred by the Company or
such Subsidiary to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
real property unless either: (i) such transaction is the substantial equivalent
of a mortgage, pledge, encumbrance, lien or security interest which the Company
or any Subsidiary would have been permitted to create under the covenant
described in "-- Provisions Applicable Solely to Company Senior Debt
Securities -- Limitation on Liens" without equally and ratably securing the
Company Senior Debt Securities, or (ii) the Company within 120 days after such
transaction applied (and in any such case the Company covenants that it will so
apply) an amount equal to the greater of (a) the net proceeds of the sale of the
real property leased pursuant to such transaction or (b) the fair value of the
real property so leased at the time of entering into such transaction (as
determined by the Board of Directors), to the retirement of Funded Debt of the
Company; provided that the amount to be applied to the retirement of Funded Debt
of the Company shall be reduced by: (x) the principal amount of any Company
Senior Debt Securities (for this purpose if the Company Senior Debt Securities
of that series are Original Issue Discount Securities, the principal amount of
the Outstanding Company Senior Debt Securities of that series shall be computed
and adjusted as may be specified in the terms of that series) delivered within
120 days after such sale to the Trustee for retirement and cancellation and (y)
the principal amount of Funded Debt, other than Company Senior Debt Securities,
voluntarily retired by the Company within 120 days after such sale; provided,
that no retirement referred to in this clause (ii) may be effected by payment at
maturity or pursuant to any mandatory sinking fund payment or any mandatory
prepayment provision.
"Funded Debt" means Indebtedness for money borrowed which by its terms matures
at or is extendible or renewable at the option of the obligor to a date more
than 12 months after the date of the creation of such Indebtedness.
PROVISION APPLICABLE SOLELY TO COMPANY SENIOR SUBORDINATED DEBT SECURITIES
Prohibition on Incurrence of Senior Subordinated Debt. The Company will not
incur or suffer to exist Indebtedness that is or purports to be, pursuant to its
terms or the terms of any agreement relating thereto, senior
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<PAGE> 19
in right of payment to the Company Senior Subordinated Debt Securities and
subordinate or junior in right of payment to any other Indebtedness of the
Company; provided, that no Indebtedness of the Company shall be deemed to be
subordinate to any other Indebtedness of the Company solely by virtue of any
such other Indebtedness being secured or otherwise having the benefit of any
lien or security interest.
PROVISIONS APPLICABLE SOLELY TO COMPANY SENIOR SUBORDINATED DEBT SECURITIES AND
COMPANY SUBORDINATED DEBT SECURITIES
Events of Default. Unless otherwise specified in the Prospectus Supplement, an
Event of Default is defined under each of the Senior Subordinated Indenture and
Subordinated Indenture (together, the "Subordinated Indentures") with respect to
the Company Senior Subordinated Debt Securities and Company Subordinated Debt
Securities (together, the "Subordinated Securities") of any series issued under
such Indenture being as one or more of the following events:
(i) default in the payment of any installment of interest upon any of the
Subordinated Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days;
(ii) default in the payment of the principal of any of the Subordinated
Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise;
(iii) default in the payment or satisfaction of any sinking fund or other
purchase obligation with respect to Subordinated Securities of such series, as
and when such obligation shall become due and payable;
(iv) failure on the part of the Company duly to observe or perform any other of
the covenants or agreements on the part of the Company in the Subordinated
Securities of such series or in the Subordinated Indenture applicable to such
series continued for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Company by the Trustee by registered mail, or to the Company and the Trustee by
the holders of at least 25 percent in aggregate principal amount of the
Subordinated Securities of such series issued under the applicable Subordinated
Indenture then Outstanding;
(v) without the consent of the Company a court having jurisdiction shall enter
an order for relief with respect to the Company under the Bankruptcy Code or
without the consent of the Company a court having jurisdiction shall enter a
judgment, order or decree adjudging the Company a bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Bankruptcy Code or
applicable state insolvency law and the continuance or any such judgment, order
or decree is unstayed and in effect for a period of 60 consecutive days;
(vi) the Company shall institute proceedings for entry of an order for relief
with respect to the Company under the Bankruptcy Code or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent to
reorganization, arrangement composition or relief under the Bankruptcy Code or
any applicable state law, or shall consent to filing of such petition or to the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of substantially all of its
property, or the Company shall make a general assignment for the benefit of
creditors as recognized under the Bankruptcy Code;
(vii) default under any bond, debenture, note or other evidence of Indebtedness
for money borrowed by the Company 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 Company, whether such Indebtedness
exists on the date of such Subordinated Indenture or shall thereafter 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 instrument, 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 $5,000,000, 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 Company by the Trustee by
registered mail, or to the Company and the Trustee by the holders of at least 25
percent in aggregate principal amount of the Subordinated Securities of such
series then Outstanding, a written notice specifying
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<PAGE> 20
each such default and requiring the Company to cause each such default and
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" under the applicable Subordinated Indenture; or
(viii) any other Event of Default provided with respect to the Subordinated
Securities of such series under the applicable Subordinated Indenture.
If an Event of Default with respect to Subordinated 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 Subordinated 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 Subordinated
Securities of such series then Outstanding, by notice in writing to the Company
(and to the Trustee if given by Securityholders), may declare the unpaid
principal amount (or, if the Subordinated 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 Subordinated Securities of
such series 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, anything in the applicable Subordinated Indenture
or in the Subordinated Securities of such series contained to the contrary
notwithstanding. This provision, however, is subject to the condition that, if
at any time after the unpaid principal amount (or such specified amount) of the
Subordinated Securities of such series shall have been so declared due and
payable and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered, the Company shall pay or shall deposit with
the Trustee a sum sufficient to pay all matured installments of interest, if
any, upon all of the Subordinated Securities of such series and the principal of
any and all Subordinated Securities of such series which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest, if any, to the extent that payment of such interest is enforceable
under applicable law and on such principal at the rate borne by the Subordinated
Securities of such series to the date of such payment or deposit) and the
reasonable compensation, disbursements, expenses and advances of the Trustee,
its agents, attorneys and counsel, and any and all defaults under the applicable
Subordinated Indenture, other than the nonpayment of such portion of the
principal amount of and accrued interest, if any, on Subordinated Securities of
such series which shall have become due by acceleration, shall have been cured
or shall have been waived in accordance with the applicable Subordinated
Indenture or provision deemed by the Trustee to be adequate shall have been made
therefor -- then and in every such case the holders of a majority in aggregate
principal amount of the Subordinated Securities of such series then Outstanding,
by written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon. If any Event of Default with respect to the Company
specified in clause (v) or (vi) above occurs, the unpaid principal amount (or,
if the Subordinated Securities of any series then Outstanding are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of each such series) and accrued interest on all Subordinated
Securities of each series then Outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act by the Trustee
or any Securityholder. If the Trustee shall have proceeded to enforce any right
under the applicable Subordinated Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Company, the Trustee and the Securityholders shall be
restored respectively to their several positions and rights under the applicable
Subordinated Indenture, and all rights, remedies and powers of the Company, the
Trustee and the Securityholders shall continue as though no such proceeding had
been taken. Except with respect to an Event of Default pursuant to clause (i),
(ii) or (iii) above, the Trustee shall not be charged with knowledge of any
Event of Default unless written notice thereof shall have been given to the
Trustee by the Company, a Paying Agent or any Securityholder.
Each of the Subordinated Indentures provides that, subject to the duty of the
Trustee during default to act with the required standard of care, the Trustee
will be under no obligation to exercise any of its rights or powers under such
Subordinated Indenture at the request or direction of any of the holders or
Subordinated Securities issued under the such Subordinated Indenture, unless
such holders shall have offered to the Trustee reasonable security or indemnity.
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<PAGE> 21
No holder of any Subordinated Securities of any series then Outstanding shall
have any right by virtue of or by availing of any provision of the applicable
Subordinated Indenture to institute any suit, action or proceeding in equity or
at law upon or under or with respect to such Subordinated Indenture or the
Subordinated Securities issued under such Subordinated Indenture or for the
appointment of a receiver or trustee or similar official, or for any other
remedy under such Subordinated Indenture or thereunder, unless such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as provided in such Subordinated Indenture, and unless the
holders of not less than 25 percent in aggregate principal amount of the
Subordinated Securities of such series then Outstanding shall have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee under such Subordinated Indenture and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding.
Notwithstanding any other provisions in the applicable Subordinated Indenture,
but subject to the subordination provisions of the applicable Subordinated
Indenture, the right of any holder of any Subordinated Security to receive
payment of the principal of and interest, if any, on such Subordinated Security,
on or after the respective due dates expressed in such Subordinated Security,
or, if applicable, to convert such Subordinated Security as provided in the
applicable Subordinated Indenture, or to institute suit for the enforcement of
any such payment on or after such respective dates or for the enforcement of any
such right to convert shall not be impaired or affected without the consent of
such holder.
The holders of a majority in aggregate principal amount of the Subordinated
Securities of any series then Outstanding shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to Subordinated Securities of such series; provided, that (subject to
certain exceptions) the Trustee shall have the right to decline to follow any
such direction if the Trustee shall determine upon advice of counsel that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith shall determine that the action or proceeding so directed would
involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Subordinated Securities of any series then
Outstanding may on behalf of the holders of all of the Subordinated Securities
of such series waive any past default or Event of Default under the applicable
Subordinated Indenture and its consequences except a default in the payment of
interest, if any, on, or the principal of, the Subordinated Securities of such
series. Upon any such waiver the Company, the Trustee and the holders of the
Subordinated Securities of such series shall be restored to their former
positions and rights under the applicable Subordinated Indenture, respectively;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default shall have been waived as permitted, said default or Event of Default
shall for all purposes of the applicable Subordinated Securities and the
applicable Subordinated Indenture be deemed to have been cured and to be not
continuing.
The Trustee shall, within 90 days after the occurrence of a default, with
respect to Subordinated Securities of any series then Outstanding, mail to all
holders of Subordinated Securities of such series, as the names and the
addresses of such holders appear upon the applicable Subordinated Security
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of these provisions being hereby
defined to be the events specified in clauses (i), (ii), (iii), (iv), (v), (vi),
(vii) and (viii) of " -- Provisions Applicable Solely to Company Senior
Subordinated Debt Securities and Company Subordinated Debt Securities -- Events
of Default" above, not including periods of grace, if any, provided for therein
and irrespective of the giving of the written notice specified in clause (iv) or
(vii) but in the case of any default of the character specified in said clause
(iv) or (vii) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Company pursuant to said
clause (iv) or (vii), as the case may be); provided, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Subordinated Securities, or in the payment or satisfaction of any sinking fund
or other purchase obligation, the Trustee shall be protected in withholding such
notice if and so long as the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Securityholders.
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<PAGE> 22
The Company is required to furnish to the Trustee annually a statement as to the
fulfillment by the Company of all of its obligations under the applicable
Subordinated Indenture.
Subordination. The Subordinated Securities will be subordinate and junior in
right to payment, to the extent set forth in the applicable Subordinated
Indenture, to all Senior Indebtedness (as defined below for each of the
Subordinated Indentures) of the Company. If the Company should default in the
payment of any principal of or premium or interest on any Senior Indebtedness
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration of acceleration or otherwise, then, upon
written notice of such default to the Company by the holders of such Senior
Indebtedness or any trustee therefor and subject to certain rights of the
Company to dispute such default and subject to proper notification of the
Trustee, unless and until such default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) will be made or agreed to be made for
principal of or premium, if any, or interest, if any, on the applicable
Subordinated Securities, or in respect of any redemption, retirement, purchase
or other acquisition of the applicable Subordinated Securities other than those
made in capital stock of the Company (or cash in lieu of fractional shares
thereof) pursuant to any conversion right of the Subordinated Securities or
otherwise made in capital stock of the Company.
"Senior Indebtedness" is defined in the Senior Subordinated Debt Indenture as
Indebtedness of the Company outstanding at any time except (i) any Indebtedness
of the Company that pursuant to its terms or the terms of any agreement relating
thereto or by operation of law is subordinate or junior in right of payment to
any other Indebtedness of the Company; provided, that no Indebtedness of the
Company shall be deemed to be subordinate to any other Indebtedness of the
Company solely by virtue of any such other Indebtedness being secured or
otherwise having the benefit of any lien or security interest, (ii) any
Indebtedness as to which, by the terms of the instrument creating or evidencing
the same, it is provided that such Indebtedness is not senior in right of
payment to the Company Senior Subordinated Debt Securities, (iii) the Company
Senior Subordinated Debt Securities, (iv) the Company's subordinated
indebtedness existing on the date of the Senior Subordinated Debt Indenture, (v)
any Indebtedness of the Company to a wholly owned Subsidiary of the Company,
(vi) interest accruing after the filing of a petition initiating certain
bankruptcy or insolvency proceedings unless such interest is an allowed claim
enforceable against the Company in a proceeding under federal or state
bankruptcy laws and (vii) trade accounts payable.
"Senior Indebtedness" is defined in the Subordinated Debt Indenture as
Indebtedness of the Company outstanding at any time except (i) any Indebtedness
as to which, by the terms of the instrument creating or evidencing the same, it
is provided that such Indebtedness is not senior in right of payment to the
Company Subordinated Debt Securities, (ii) the Company Subordinated Debt
Securities, (iii) the Company's subordinated indebtedness existing on the date
of the Subordinated Debt Indenture, (iv) any Indebtedness of the Company to a
wholly owned Subsidiary of the Company, (v) interest accruing after the filing
of a petition initiating certain bankruptcy or insolvency proceedings unless
such interest is an allowed claim enforceable against the Company in a
proceeding under federal or state bankruptcy laws and (vi) trade accounts
payable.
"Indebtedness" is defined in each Subordinated Indenture as, with respect to any
Person, (i)(a) the principal of and premium and interest, if any, on
indebtedness for money borrowed of such Person evidenced by bonds, notes,
debentures or similar obligations, including any guaranty by such person of any
indebtedness for money borrowed of any other Person, whether any such
indebtedness or guaranty is outstanding on the date of such Subordinated
Indenture or is thereafter created, assumed or incurred, (b) the principal of
and premium and interest, if any, on indebtedness for money borrowed, incurred,
assumed or guaranteed by such Person in connection with the acquisition by it or
any of its subsidiaries of any other businesses, properties or other assets and
(c) lease obligations which such Person capitalizes in accordance with Statement
of Financial Accounting Standards No. 13 promulgated by the Financial Accounting
Standards Board or such other generally accepted accounting principles as may be
from time to time in effect, (ii) any other indebtedness of such Person,
including any indebtedness representing the deferred and unpaid balance of the
purchase price of any property or interest therein, including any such balance
that constitutes a trade account payable, and any guaranty, endorsement or other
contingent obligation of such Person in respect of any indebtedness of another,
which is outstanding on the date of such Subordinated Indenture or is thereafter
created, assumed or incurred by such Person and (iii) any
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<PAGE> 23
amendments, modifications, refundings, renewals or extensions of any
indebtedness or obligation described as Indebtedness in clause (i) or (ii)
above.
If (i) without the consent of the Company a court having jurisdiction shall
enter (a) an order for relief with respect to the Company under the United
States federal bankruptcy laws, (b) a judgment, order or decree adjudging the
Company as bankrupt or insolvent or (c) an order for relief for reorganization,
arrangement, adjustment or composition of or in respect of the Company under the
United States federal bankruptcy laws or state insolvency laws or (ii) the
Company shall institute proceedings for the entry of an order for relief with
respect to the Company under the United States federal bankruptcy laws or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy or
insolvency proceedings against it, or shall file a petition seeking, or seek or
consent to reorganization, arrangement, composition or similar relief under the
United States federal bankruptcy laws or any applicable state law, or shall
consent to the filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official in
respect of the Company or of substantially all of its property, or the Company
shall make a general assignment for the benefit of creditors, then all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) will first be paid in full before any payment or
distribution, whether in cash, securities or other property, is made on account
of the principal of or premium, if any, or interest, if any, on the applicable
Subordinated Securities. In such event, any payment or distribution on account
of the principal of or premium, if any, or interest, if any, on the applicable
Subordinated Securities, whether in cash, securities or other property (other
than securities of the Company or any other corporation provided for by a plan
of reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in the subordination provisions with respect to the
applicable Subordinated Securities, to the payment of all Senior Indebtedness
then outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the applicable
Subordinated Securities will be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any interest thereon accruing
after the commencement of any such proceedings) has been paid in full. In the
event of any such proceeding, after payment in full of all sums owing with
respect to Senior Indebtedness, the holders of Subordinated Securities, together
with the holders of any obligations of the Company ranking on a parity with the
Subordinated Securities issued under the applicable Subordinated Indenture, will
be entitled to be repaid from the remaining assets of the Company the amounts at
the time due and owing on account of unpaid principal of or any premium or any
interest on the Subordinated Securities issued under the applicable Subordinated
Indenture and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or obligations of the Company ranking junior to the Subordinated
Securities issued under the applicable Subordinated Indenture and such other
obligations. If, notwithstanding the foregoing, any payment or distribution on
the Subordinated Securities issued under the applicable Subordinated Indenture
of any character, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Securities issued under the applicable Subordinated Indenture, to
the payment of all Senior Indebtedness then outstanding and to any securities
issued in respect thereof under any such plan or reorganization or
readjustment), shall be received by the Trustee or any holder of any
Subordinated Securities issued under the applicable Subordinated Indenture in
contravention of any of the terms of the applicable Subordinated Indenture, such
payment or distribution will be received in trust for the benefit of, and will
be paid over or delivered and transferred to, the holders of the Senior
Indebtedness then outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all such Senior Indebtedness in
full. In the event of the failure of the Trustee or any holder to endorse or
assign any such payment, distribution or security, each holder of Senior
Indebtedness is irrevocably authorized to endorse or assign the same.
Each of the Subordinated Indentures will provide that Senior Indebtedness shall
not be deemed to have been paid in full unless the holders thereof shall have
received cash, securities or other property equal to the amount of such Senior
Indebtedness then outstanding. Upon the payment in full of all Senior
Indebtedness, the holders of
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Subordinated Securities of each series shall be subrogated to all rights of any
holders of Senior Indebtedness to receive any further payments or distributions
applicable to such Senior Indebtedness until the indebtedness evidenced by the
Subordinated Securities of such series shall have been paid in full, and such
payments or distributions received by such holders, by reason of such
subrogation, of cash, securities or other property that otherwise would be paid
or distributed to the holders of Senior Indebtedness with respect to such
series, shall, as between the Company and its creditors other than the holders
of such Senior Indebtedness, on the one hand, and such holders, on the other
hand, be deemed to be a payment by the Company on account of such Senior
Indebtedness, and not on account of the Subordinated Securities of such series.
By reason of such subordination, in the event of the insolvency of the Company,
holders of Senior Indebtedness and holders of other obligations of the Company
that are not subordinated to Senior Indebtedness may receive more, ratably, than
holders of the Subordinated Securities. Such subordination will not prevent the
occurrence of an Event of Default or limit the right of acceleration in respect
of the Subordinated Securities.
Conversion. Each of the Subordinated Indentures will provide that a series of
Subordinated Securities may be convertible into Common Stock (or cash in lieu
thereof). The following provisions will apply to Company Debt Securities that
are convertible Subordinated Securities unless otherwise provided in the
Prospectus Supplement for such Company Debt Securities.
The holder of any convertible Subordinated Securities will have the right
exercisable at any time prior to maturity, subject to prior redemption by the
Company, to convert such Subordinated Securities into shares of Common Stock at
the conversion price or conversion rate set forth in the Prospectus Supplement,
subject to adjustment. The holder of convertible Subordinated Securities may
convert any portion thereof which is $1,000 in principal amount or any integral
multiple thereof.
In certain events, the conversion price or conversion rate will be subject to
adjustment as set forth in the applicable Subordinated Indenture. Such events
include issuance of shares of Common Stock as a dividend or distribution on the
Common Stock; subdivisions, combinations and reclassifications of the Common
Stock; redemption of the preferred share purchase rights associated with the
Common Stock; the issuance to all holders of Common Stock of rights or warrants
entitling the holders thereof (for a period not exceeding 45 days) to subscribe
for or purchase shares of Common Stock at a price per share less than the then
current market price per share of Common Stock (as determined pursuant to the
applicable Subordinated Indenture); and the distribution to substantially all
holders of Common Stock of evidences of indebtedness, equity securities
(including equity interests in the Company's Subsidiaries) other than Common
Stock, or other assets (excluding cash dividends paid from surplus) or
subscription rights or warrants (other than those referred to above). No
adjustment of the conversion price or conversion rate will be required unless an
adjustment would require a cumulative increase or decrease of at least 1% in
such price or rate. The Company has been advised by its counsel that certain
adjustments in the conversion price or conversion rate in accordance with the
foregoing provisions may result in constructive distributions to either holders
of the Subordinated Securities issued under the applicable Subordinated
Indenture or holders of Common Stock that would be taxable pursuant to Treasury
Regulations issued under Section 305 of the Internal Revenue Code of 1986, as
amended. The amount of any such taxable constructive distribution will be the
fair market value of the Common Stock that is treated as having been
constructively received, such value being determined as of the time the
adjustment resulting in the constructive distribution is made.
Fractional shares of Common Stock will not be issued upon conversion, but, in
lieu thereof, the Company will pay a cash adjustment based on the then current
market price for the Common Stock. Upon conversion, no adjustments will be made
for accrued interest or dividends, and therefore convertible Subordinated
Securities surrendered for conversion between the record date for an interest
payment and the interest payment date (except convertible Subordinated
Securities called for redemption on a redemption date during such period) must
be accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive.
In the case of any consolidation or merger of the Company (with certain
exceptions) or any sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Company, the holder of
convertible Subordinated Securities, after the consolidation, merger, sale,
lease, exchange or other disposition, will have the right to convert such
convertible Subordinated Securities into the kind and amount of securities,
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<PAGE> 25
cash and other property that the holder would have been entitled to receive upon
or in connection with such consolidation, merger, sale, lease, exchange or other
disposition, if the holder had held the Common Stock issuable upon conversion of
such convertible Subordinated Securities issued under the applicable
Subordinated Indenture immediately prior to such consolidation, merger, sale,
lease, exchange or other disposition.
CONCERNING THE TRUSTEES
Each of the Trustees is a depositary for funds of, makes loans to and performs
other services for the Company in the normal course of business.
In addition to serving as Trustee under the Senior Subordinated Indenture and
the Subordinated Indenture, Texas Commerce Bank also serves as Trustee under (i)
the Debenture Indenture (the "Debenture Indenture") dated as of June 15, 1992,
between the Company and Texas Commerce Bank, as trustee, and (ii) the Guarantees
of Notes of Subsidiaries Indenture (the "Guarantees Indenture") dated as of May
1, 1970, between the Company and Texas Commerce Bank, as trustee. Debt of the
Company issued pursuant to the Debenture Indenture and the Guarantees Indenture
constitutes Senior Indebtedness. As of March 31, 1995, the Company had
outstanding approximately $26 million principal amount of Senior Indebtedness
issued pursuant to the Debenture Indenture and approximately $53 million
principal amount of guarantees issued pursuant to the Guarantees Indenture.
SCI and certain of its affiliates maintain a deposit account and banking
relationship with The Bank of New York. The Bank of New York serves as Trustee
under the Senior Indenture pursuant to which unsecured debt securities of SCI
are outstanding representing approximately $579.7 million of Senior Indebtedness
as of March 31, 1995 and will serve as Property Trustee of the SCI Trusts and
Trust Guarantee Trustee (see "Description of Trust Preferred Securities and
Trust Guarantees -- Description of Trust Guarantees"). An affiliate of The Bank
of New York will serve as the Delaware Trustee of the SCI Trusts.
Pursuant to the Trust Indenture Act, a trustee under an indenture may be deemed
to have a conflicting interest, and may, under certain circumstances set forth
in the Trust Indenture Act, be required to resign as trustee under such
indenture, if the securities issued under such indenture are in default (as such
term is defined in such indenture) and the trustee is the trustee under another
indenture under which any other securities of the same obligor are outstanding,
subject to certain exceptions set forth in the Trust Indenture Act. In such
event, the obligor must take prompt steps to have a successor trustee appointed
in the manner provided in the indenture from which the trustee has resigned.
Pursuant to the Trust Indenture Act, Texas Commerce Bank, as trustee under the
Senior Subordinated Indenture, the Subordinated Indenture, the Debenture
Indenture and the Guarantees Indenture, could be required to resign as trustee
under one or more of such indentures should a default occur under one or more of
such indentures. In such event, the Company would be required to take prompt
steps to have a successor trustee or successor trustees appointed in the manner
provided in the applicable indenture or indentures.
Pursuant to the Trust Indenture Act, The Bank Of New York, as trustee under the
Senior Indenture and the Financing Indenture and Property Trustee of each SCI
Trust could be required to resign as trustee under one or more of such
Indentures or of an SCI Trust should a default occur on one or more of such
Indentures or the applicable Declaration of an SCI Trust. In such event, the
Company would be required to take prompt steps to have a successor trustee or
successor trustees appointed in the manner in the applicable Indenture or
Indentures or SCI Trust.
DESCRIPTION OF COMMON STOCK
GENERAL
The authorized capital stock of the Company consists of 1,000,000 shares of
Preferred Stock and 200,000,000 shares of Common Stock. As of May 31, 1995, the
Company had outstanding 96,090,042 shares of Common Stock, and 25,493,041 shares
were reserved for future issuance. No shares of Preferred Stock were outstanding
on such date.
The following description of the Common Stock does not purport to be complete
and is qualified in its entirety by reference to applicable provisions of Texas
law, the Company's Restated Articles of Incorporation, as amended (the "Articles
of Incorporation"), the Company's Bylaws (the "Bylaws"), and the Rights
Agreement dated as of July 18, 1988, as amended (the "Rights Agreement"),
between the Company and Society National Bank, as successor agent thereunder
(the "Rights Agent").
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COMMON STOCK
Subject to the prior rights of holders of shares of the Preferred Stock, the
holders of shares of Common Stock (i) are entitled to such dividends as may be
declared by the Board of Directors of the Company out of funds legally available
therefor; (ii) are entitled to one vote per share; (iii) have no preemptive or
conversion rights; (iv) are not subject to, or entitled to the benefits of, any
redemption or sinking fund provision; and (v) are entitled upon liquidation to
receive the assets of the Company remaining after the payment of corporate debts
and the satisfaction of liquidation preference of the Preferred Stock. Voting is
non-cumulative. The outstanding shares of Common Stock are fully paid and
non-assessable.
Under the terms of certain credit agreements between the Company and certain
banks, there are certain restrictions upon the payment of cash dividends on, and
repurchase of, the Common Stock. To date, such restrictions have not affected
the Company's ability to declare regular quarterly cash dividends.
The Transfer Agent and Registrar for the Common Stock is Society National Bank,
Houston, Texas.
CERTAIN PROVISIONS AFFECTING CONTROL OF THE COMPANY
The Articles of Incorporation contain various provisions that may be deemed to
have an anti-takeover effect. These provisions include the following: (i) the
requirement of a four-fifths vote of outstanding shares of capital stock (a) to
approve the merger of consolidation of the Company, or the exchange by the
Company of its securities, with a holder of 10% or more of the Company's capital
stock, (b) to remove directors with or without cause and (c) to amend or repeal
any of these provisions; (ii) the creation of a classified Board of Directors
consisting of three classes; (iii) the establishment of a minimum of nine and a
maximum of 15 directors; (iv) the ability of the directors, by four-fifths vote,
to remove a director subject to a majority vote of the shareholders; and (v) the
right of directors to fill vacancies on the board without the approval of
shareholders.
SHAREHOLDER RIGHTS PLAN
On July 18, 1988, the Board of Directors of the Company (i) declared a dividend
of one preferred share purchase right (a "Right") for each share of Common Stock
outstanding at the close of business on July 28, 1988 (the "Record Date") and
(ii) provided that one Right will be issued with each share of Common Stock that
shall become outstanding after the Record Date and prior to the earliest of the
Distribution Date (as hereinafter defined), the date the Rights are redeemed or
the date the Rights expire. Each Right entitles the registered holder to
purchase from the Company one one-hundred fiftieth interest in a share of Series
C Junior Participating Preferred Stock, $1.00 par value (a "Preferred Share"),
of the Company, at a price of $56 2/3 per one-hundred fiftieth interest (the
"Purchase Price"), upon the terms and subject to the conditions set forth in the
Rights Agreement.
Until the earlier of (i) ten days after a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the Common Stock outstanding or (ii) ten
business days after the commencement of, or public announcement of, a tender or
exchange offer the consummation of which would result in beneficial ownership by
a person or group of 20% or more of the Common Stock outstanding (the earlier of
such dates being called the "Distribution Date"), the Rights are evidenced, with
respect to any certificate for Common Stock outstanding as of the Record Date,
by such certificate together with a copy of a summary of rights and, with
respect to any certificate for Common Stock issued after the Record Date and
before the Distribution Date (or earlier redemption or expiration of the
Rights), by such certificate, which will bear notation incorporating the Rights
Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
(i) the Rights will be transferred with and only with the Common Stock and (ii)
the surrender for transfer of any certificate for Common Stock will also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of Common Stock as of the
close of business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire on
July 28, 1998, unless extended or earlier redeemed by the Company as described
below.
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The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment to prevent dilution in the event of certain actions taken by the
Company.
If the Company is acquired in a merger or other business combination or 50% or
more of its consolidated assets or earning power is sold, each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current Exercise Price (defined below) of the Right, that number of shares of
common stock of the Acquiring Person that, at the time of such transaction, will
have a market value of two times the exercise price of the Right. If any person
becomes an Acquiring Person, each holder of a Right, other than the Acquiring
Person, will thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price multiplied by the number of one
one-hundred fiftieths of a Preferred Share for which a Right is then exercisable
(the "Exercise Price"), and in lieu of Preferred Shares, such number of shares
of Common Stock as shall equal the result obtained by dividing the Exercise
Price by 50% of the then current market price per share of Common Stock at the
date such person becomes an Acquiring Person.
Under certain circumstances, after a person becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by the Acquiring Person, which are void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
At any time before a person has become an Acquiring Person, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right,
subject to adjustment (the "Redemption Price"). Immediately upon the action of
the Board of Directors to redeem the Rights, the Company will announce the
redemption, the right to exercise the Rights will terminate, and the only right
of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause substantial
dilution to a person or group that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Company since the Board of Directors
may, at its option, at any time prior to the time a person has become an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at the Redemption Price.
DESCRIPTION OF PREFERRED STOCK
GENERAL
Under the Articles of Incorporation, SCI has the authority to issue 1,000,000
shares of Preferred Stock. The Preferred Stock may be divided into such amounts
and issued from time to time in one or more series as may be fixed and
determined by the Board of Directors. The relative rights and preferences among
each series of Preferred Stock shall be such as are provided in any resolutions
adopted by the Board of Directors providing for the issue of such series of
Preferred Stock (each such resolution, a "Directors' Resolution"). The Board of
Directors is authorized to fix and determine such variations and the relative
rights and preferences as between series as shall be stated in a Directors'
Resolution. The preemptive rights of shareholders of Preferred Stock to acquire
authorized but unissued shares, or to acquire treasury shares, is expressly
denied. There are no shares of any series of Preferred Stock currently
outstanding. However, in connection with the adoption of the Company's
shareholders' rights plans the Company has designated and reserved for issuance,
upon exercise of rights granted to its shareholders, 600,000 shares of Series C
Junior Participating Preferred Stock.
The Preferred Stock may be issued or sold to such persons and for such
consideration as may be determined from time to time by the Board of Directors
and, whether or not convertible into Common Stock, need not first be offered to
the holders of Common Stock, and when issued such shares of Preferred Stock
shall be considered fully paid and non-assessable.
The following summaries of certain provisions of the Preferred Stock do not
purport to be complete and are subject, and are qualified in their entirety by
reference, with respect to any particular series of Preferred Stock, to the
description of the terms thereof included in the applicable Prospectus
Supplement and to the applicable
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provisions of Texas law, the Articles of Incorporation and the Bylaws. The
accompanying Prospectus Supplement with respect to any series of Preferred Stock
will set forth the following terms:
(i) The designation of such series;
(ii) The number of shares constituting such series;
(iii) The rate of dividends;
(iv) The price at and the terms and conditions on which shares of such series
may be redeemed;
(v) The amount payable upon shares of such series in the event of involuntary
liquidation;
(vi) The amount payable upon shares of each series in the event of voluntary
liquidation;
(vii) Sinking fund provisions for the redemption or purchase of such series;
(viii) The terms and conditions on which shares of such series may be converted;
and
(ix) Any special rights of the shares of such series (and the accompanying
Prospectus Supplement may state that any of the terms set forth herein is
inapplicable to such series).
DIVIDENDS
The Preferred Stock of each series will be entitled to receive dividends, when
and as declared by the Board of Directors, at the rate and on such other terms
and conditions as may be fixed for such series, in preference to dividends on
the Common Stock or on other shares of capital stock of the Company ranking
junior to the Preferred Stock as to dividends ("Junior Stock").
DIVIDEND PREFERENCE
Subject to such further conditions or restrictions as may be imposed in any
Directors' Resolution, so long as any shares of Preferred Stock are outstanding,
the Company will not declare or pay any dividend, in cash or stock or otherwise
(other than dividends payable in shares of Junior Stock), on any shares of
Junior Stock or make any distribution upon or purchase or redeem or otherwise
acquire for a valuable consideration any shares of Junior Stock (i) unless all
dividends for Preferred Stock for all past dividend periods will have been paid
or declared and a sum sufficient for the payment thereof set apart for payment
and be in the process of payment, and the full dividend thereon for the current
dividend period will have been paid or declared, and (ii) unless, as to each
series of the Preferred Stock for which a sinking fund will have been provided,
the Company will have retired the number of shares of Preferred Stock of such
series required to have been retired for the sinking fund or otherwise will have
met the obligations of said sinking fund.
REDEMPTION
Subject to such further conditions or restrictions as may be imposed in any
Directors' Resolution, the shares of any series of Preferred Stock will be
subject to redemption in whole or in part at the applicable redemption price as
provided for such series on the terms and conditions and upon notice as set
forth in the applicable Prospectus Supplement.
Notice of any such redemption will be given to each holder of shares being
called, either personally or by mail, not less than 20 nor more than 50 days
before the date fixed for redemption. If mailed, such notice will be deemed to
be delivered when deposited in the United States mail addressed to the
shareholder at the address as it appears on the stock transfer book of the
Company, with postage thereon prepaid.
If less than all outstanding shares of the series are to be redeemed, the shares
to be redeemed will be selected for redemption ratably or by lot in such manner
as may be prescribed by resolution of the Board of Directors. The notice of
redemption will set forth the designation of the series of which the shares to
be redeemed constitute a part, the date fixed for redemption, the redemption
price, the place at which the shareholders may obtain payment of the redemption
price upon the surrender of their respective share certificates and will include
a statement with respect to the existence of any right of conversion with
respect to the shares to be redeemed and the period within which such right may
be exercised.
The Company may, on or prior to the date fixed for redemption of any shares of
Preferred Stock, deposit with any bank or trust company in Texas, or any bank or
trust company in the United States, duly appointed and acting
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as transfer agent for the Company, as a trust fund, a sum sufficient to redeem
shares called for redemption with irrevocable instructions and authority to such
bank or trust company to give or complete the notice of redemption thereof and
to pay, on or after the date fixed for such redemption, to the respective
holders of the shares as evidenced by a list of holders, the redemption price
upon the surrender of their respective share certificates. Thereafter, from and
after the date fixed for redemption, such shares will be redeemed and dividends
thereon will cease to accrue after such date fixed for redemption. Such deposit
will be deemed to constitute full payment of such shares to their holders.
Thereafter, such shares will no longer be deemed to be outstanding, and the
holders thereof will cease to be shareholders with respect to such shares, and
will have no rights with respect thereto except the right to receive from the
bank or trust company payment of the redemption price of such shares without
interest, upon the surrender of their respective certificates therefor, and any
right to convert such shares which may exist. In case the holders of such shares
will not, within six years after such deposit, claim the amount deposited for
redemption thereof, such bank or trust company will upon demand pay over to the
Company the balance of such amounts so deposited to be held in trust in such
bank or trust company and such trust company thereupon will be relieved of all
responsibility to the holders thereof.
Any shares of Preferred Stock which are redeemed or purchased by the Company and
cancelled will be restored to the status of authorized but unissued shares and
may be reissued as shares of another series.
VOTING
The holders of the Preferred Stock together with the holders of the Common
Stock, all voting as one class, will possess voting power for the election of
directors and for all other purposes, subject to such limitations as may be
imposed by law and by any provision of the Articles of Incorporation. In the
exercise of its voting power, the Preferred Stock will be entitled to one vote
for each share held.
SPECIAL DIRECTORS
Whenever, at any time or times, dividends payable on any series of Preferred
Stock are in arrears in an aggregate amount equivalent as to such series to six
full dividends, there will be vested in the holders of shares of all outstanding
Preferred Stock, voting as one class and with one vote for each share, the right
to elect two directors of the Company. Such right of the holders of Preferred
Stock to vote for the election of two directors may be exercised at any annual
meeting or at any special meeting called for such purpose, or at any reconvened
meeting after an adjournment thereof, until all arrearages and dividends on the
outstanding shares of Preferred Stock have been paid in full or declared and
funds sufficient for the payment thereof deposited in trust, and when so paid or
provided for, then such right will cease. So long as such right to vote
continues, the Secretary of the Company may call, and upon written request of
the holders of record of ten per cent or more of the outstanding Preferred
Stock, addressed to the Secretary at the principal office of the Company, will
call a special meeting of the holders of Preferred Stock for the election of
such two directors. Such meeting will be held within 50 days after delivery of
such request to such Secretary, at the place and upon the notice provided by law
and in the Bylaws for the holding of meeting of its shareholders. If at any such
meeting or any reconvened meeting after an adjournment thereof the holders of at
least a majority of the then outstanding shares of Preferred Stock then entitled
to vote in such election are present or represented by proxy, then, by vote of
the holders of at least a majority of all such shares of Preferred Stock present
or represented in such meeting, the then authorized number of directors of the
Company will be increased by two, and the holders of such shares of Preferred
Stock will be entitled to elect such two additional directors. Directors so
elected will serve until the next annual meeting or until their successors are
elected and will qualify; provided, that whenever all arrearages and dividends
on all outstanding shares of Preferred Stock have been paid or declared and
funds sufficient for the payment thereof deposited in trust, the term of the
office of the persons so elected as directors will forthwith terminate, and the
number of the whole Board of Directors of the Company will be reduced
accordingly. In case of any vacancy occurring among the directors so elected,
the remaining director who has been so elected may appoint a successor to hold
office for the unexpired term of the director whose place is vacant. If both
directors so elected by the holders of the Preferred Stock cease to serve as
directors before their term expires, the holders of Preferred Stock then
outstanding may, at a special meeting of such holders called as provided in the
Articles of Incorporation, elect successors to hold office for the unexpired
terms of the directors whose places are vacant. In
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any vote for directors as provided in the Articles of Incorporation, each share
of Preferred Stock will be entitled to vote.
APPROVAL OF CHANGES
The Company will not, without the approval (by vote at a meeting or by consent
in writing) of the holders of at least two-thirds of the outstanding shares of
Preferred Stock and subject to the provisions in the Articles of Incorporation
with respect to certain additional supermajority voting requirements:
(i) Amend or repeal any provision of, or add any provision to the Articles of
Incorporation or Bylaws if such action would alter or change the preferences,
rights, privileges or powers of, or the restrictions provided for the benefit
of, the Preferred Stock;
(ii) Authorize or create shares of any class of stock having any preference or
priority as to dividends, assets or other characteristics superior to the
Preferred Stock, or authorize or create shares of stock of any class or any
bonds, indentures, notes or other obligations convertible into or exchangeable
for or having option or rights to purchase, any shares of stock having any such
preference or priority;
(iii) Reclassify any Junior Stock into Preferred Stock or into shares having any
preference or priority as to dividends, assets or any other characteristics
superior to the Preferred Stock; or
(iv) Increase the aggregate number of authorized shares of Preferred Stock or
create a new class of shares having rights and preferences equal to the shares
of Preferred Stock.
LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution or winding up of the Company, the
Preferred Stock of each series shall be entitled to payment of such amount or
amounts in preference to any payment on Junior Stock as shall be provided in the
Directors' Resolution providing for the issuance of such shares of Preferred
Stock. In any such event, if the assets available for distribution shall be
insufficient to permit payment of the full preferential amount to all holders of
Preferred Stock, then distribution shall be made ratably among such holders
according to the amount due to each.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below of certain provisions of the Deposit Agreement
(defined below) and of the Depositary Shares and Depositary Receipts (as defined
below) does not purport to be complete and is subject to and qualified in its
entirety by reference to the forms of Deposit Agreement and Deposit Receipt
relating to the Preferred Stock, included as exhibits to the Registration
Statement of which this Prospectus is a part.
GENERAL
SCI may, at its option, elect to offer fractional shares of Preferred Stock,
rather than full shares of Preferred Stock. If such option is exercised, SCI
will issue receipts for Depositary Shares, each of which will represent a
fraction (to be set forth in the Prospectus Supplement relating to a particular
series of Preferred Stock) of a share of a particular series of Preferred Stock
as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
SCI and a bank or trust company selected by SCI having its principal office in
the United States and having a combined capital and surplus of at least
$50,000,000 (the "Preferred Stock Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion
and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued pursuant
to the Deposit Agreement (the "Depositary Receipts"). Depositary Receipts will
be distributed to those persons purchasing the fractional shares of Preferred
Stock in accordance with the terms of the offering.
Pending the preparation of definitive Depositary Receipts, the Preferred Stock
Depositary may, upon the written order of SCI or any holder of deposited
Preferred Stock, execute and deliver temporary Depositary Receipts
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which are substantially identical to, and entitle the holders thereof to all the
rights pertaining to, the definitive Depositary Receipts. Depositary Receipts
will be prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at SCI's
expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other cash
distributions received in respect of the deposited Preferred Stock to the record
holders of Depositary Shares relating to such Preferred Stock in proportion to
the numbers of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto. If the Preferred Stock Depositary determines
that it is not feasible to make such distribution, it may, with the approval of
SCI, sell such property and distribute the net proceeds from such sale to such
holders.
REDEMPTION OF STOCK
If a series of Preferred Stock represented by Depositary Shares is to be
redeemed, the Depositary Shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of such series of Preferred Stock held by the Preferred Stock Depositary.
The Depositary Shares will be redeemed by the Preferred Stock Depositary at a
price per Depositary Share equal to the applicable fraction of the redemption
price per share payable in respect of the shares of Preferred Stock so redeemed.
Whenever SCI redeems shares of Preferred Stock held by the Preferred Stock
Depositary, the Preferred Stock Depositary will redeem as of the same date the
number of Depositary Shares representing shares of Preferred Stock so redeemed.
If fewer than all the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by the Preferred Stock Depositary by lot
or pro rata or by any other equitable method as may be determined by the
Preferred Stock Depositary.
WITHDRAWAL OF STOCK
Any holder of Depositary Shares may, upon surrender of the Depositary Receipts
at the corporate trust office of the Preferred Stock Depositary (unless the
related Depositary Shares have previously been called for redemption), receive
the number of whole shares of the related series of Preferred Stock and any
money or other property represented by such Depositary Receipts. Holders of
Depositary Shares making such withdrawals will be entitled to receive whole
shares of Preferred Stock on the basis set forth in the related Prospectus
Supplement for such series of Preferred Stock, but holders of such whole shares
of Preferred Stock will not thereafter be entitled to deposit such Preferred
Stock under the Deposit Agreement or to receive Depositary Receipts therefor. If
the Depositary Shares surrendered by the holder in connection with such
withdrawal exceed the number of Depositary Shares that represent the number of
whole shares of Preferred Stock to be withdrawn, the Preferred Stock Depositary
will deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares.
VOTING DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
deposited Preferred Stock are entitled to vote, the Preferred Stock Depositary
will mail the information contained in such notice of meeting to the record
holders of the Depositary Shares relating to such series of Preferred Stock.
Each record holder of such Depositary Shares on the record date (which will be
the same date as the record date for the relevant series of Preferred Stock)
will be entitled to instruct the Preferred Stock Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Stock represented
by such holder's Depositary Shares. The Preferred Stock Depositary will
endeavor, insofar as practicable, to vote the amount of such series of Preferred
Stock represented by such Depositary Shares in accordance with such
instructions, and SCI will agree to take all reasonable actions that may be
deemed necessary by the Preferred Stock Depositary to enable the Preferred Stock
Depositary to do so. The Depositary will abstain from voting shares of the
Preferred Stock to the extent it does not receive specific instructions from the
holder of Depositary Shares representing such Preferred Stock.
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AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between SCI and the Preferred Stock Depositary. However, any amendment that
materially and adversely alters the rights of the holders of the Depositary
Shares representing Preferred Stock of any series will not be effective unless
such amendment has been approved by the holders of at least the amount of the
Depositary Shares then outstanding representing the minimum amount of Preferred
Stock of such series necessary to approve any amendment that would materially
and adversely affect the rights of the holders of the Preferred Stock of such
series. Every holder of an outstanding Depositary Receipt at the time any such
amendment becomes effective, or any transferee of such holder, shall be deemed,
by continuing to hold such Depositary Receipt, or by reason of the acquisition
thereof, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. The Deposit Agreement automatically terminates if
(i) all outstanding Depositary Shares have been redeemed; (ii) each share of
Preferred Stock has been converted into other preferred stock or Common Stock or
has been exchanged for debt securities; or (iii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of SCI and such distribution has been
distributed to the holders of the Depositary Shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
SCI will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. SCI will pay all
charges of the Preferred Stock Depositary in connection with the initial deposit
of the relevant series of Preferred Stock and any redemption of such Preferred
Stock. Holders of Depositary Receipts will pay other transfer and other taxes
and governmental charges and such other charges or expenses as are expressly
provided in the Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF PREFERRED STOCK DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to SCI
notice of its election to do so, and SCI may at any time remove the Preferred
Stock Depositary, any such resignation or removal to take effect upon the
appointment of a successor Preferred Stock Depositary and its acceptance of such
appointment. Such successor Preferred Stock Depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,0000.
MISCELLANEOUS
The Preferred Stock Depositary will forward all reports and communications from
SCI which are delivered to the Preferred Stock Depositary and which SCI is
required to furnish to the holders of the deposited Preferred Stock.
Neither the Preferred Stock Depositary nor SCI will be liable if it is prevented
or delayed by law or any circumstances beyond its control in performing its
obligations under the Deposit Agreement. The obligations of SCI and the
Preferred Stock Depositary under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares, Depositary Receipts or shares of Preferred Stock unless
satisfactory indemnity is furnished. They may rely upon written advice of
counsel or accountants, or upon information provided by holders of Depositary
Receipts or other persons believed to be competent and on documents believed to
be genuine.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants (which may be titled either
"options" or "warrants") for the purchase of Common Stock. The Common Stock
Warrants may be issued independently or together with any Securities offered by
any Prospectus Supplement and may be attached to or separate from such
Securities. Each series of Common Stock Warrants will be issued under a separate
warrant agreement (a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as Warrant Agent, all as set forth in the
Prospectus Supplement relating to the particular issue of offered Common Stock
Warrants. The Warrant Agent
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will act solely as an agent of the Company in connection with certificates
representing Common Stock Warrants (the "Common Stock Warrant Certificates") and
will not assume any obligation or relationship of agency or trust for or with
any holders of Common Stock Warrant Certificates or beneficial owners of Common
Stock Warrants. The form of Warrant Agreement, including the form of Common
Stock Warrant Certificate representing the Common Stock Warrants, is filed as an
exhibit to the Registration Statement to which this Prospectus pertains. The
following summaries of certain provisions of the form of Warrant Agreement and
Common Stock Warrant Certificate do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all the provisions of
the Warrant Agreement and the Common Stock Warrant Certificate.
GENERAL
Reference is made to the accompanying Prospectus Supplement relating to the
Common Stock Warrants, if Common Stock Warrants are offered, for the following
terms of the Common Stock Warrants:
(i) the offering price;
(ii) the number of shares of Common Stock purchasable upon exercise of each such
Common Stock Warrant and the price at which such number of shares of Common
Stock may be purchased upon such exercise;
(iii) the date on which the right to exercise such Common Stock Warrants shall
commence and the date on which such right shall expire (the "Expiration Date");
and
(iv) any other terms of such Common Stock Warrants (and the accompanying
Prospectus Supplement may state that any of the terms set forth herein is
inapplicable to such series).
Common Stock Warrants for the purchase of Common Stock will be offered and
exercisable for U.S. dollars only and will be in registered form only.
Common Stock Warrant Certificates may be exchanged for new Common Stock Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration or transfer, and may be exercised at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement. Prior to the exercise of any Common Stock
Warrants, holders of such Common Stock Warrants will not have any rights of
holders of the Common Stock purchasable upon such exercise, including the right
to receive payments of dividends, if any, on the Common Stock purchasable upon
such exercise or to exercise any applicable right to vote.
EXERCISE OF COMMON STOCK WARRANTS
Each Common Stock Warrant will entitle the holder thereof to purchase such
shares of Common Stock at such exercise price as shall in each case be set forth
in, or calculable from, the Prospectus Supplement relating to the offered Common
Stock Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company)
unexercised Common Stock Warrants will become void.
Common Stock Warrants may be exercised by delivering to the Warrant Agent
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Common Stock purchasable upon such exercise together
with certain information set forth on the reverse side of the Common Stock
Warrant Certificate. Common Stock Warrants will be deemed to have been exercised
upon receipt of payment of the exercise price, subject to the receipt, within
five business days, of the Common Stock Warrant Certificate evidencing such
Common Stock Warrants. Upon receipt of such payment and the Common Stock Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the
Common Stock purchasable upon such exercise. If fewer than all of the Common
Stock Warrants represented by such Common Stock Warrant Certificate are
exercised, a new Common Stock Warrant Certificate will be issued for the
remaining amount of Common Stock Warrants.
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AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
The Warrant Agreement for a series of Common Stock Warrants may be amended or
supplemented without the consent of the holders of the Common Stock Warrants
issued thereunder to effect changes that are not inconsistent with the
provisions of the Common Stock Warrants and that do not adversely affect the
interests of the holders of the Common Stock Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the exercise
price of, and the number of shares of Common Stock covered by, a Common Stock
Warrant are subject to adjustment in certain events, including: (i) the issuance
of Common Stock as a dividend or distribution on the Common Stock; (ii)
subdivisions and combinations of the Common Stock; (iii) the issuance to all
holders of Common Stock of certain rights or warrants entitling them to
subscribe for or purchase Common Stock within 45 days after the date fixed for
the determination of the shareholders entitled to receive such rights or
warrants, at less than the current market price (as defined in the Warrant
Agreement for such series of Common Stock Warrants); and (iv) the distribution
to all holders of Common Stock of evidences of indebtedness or assets of the
Company (excluding certain cash dividends and distributions described below) or
rights or warrants (excluding those referred to above). If the Company shall
distribute any rights or warrants to acquire capital stock pursuant to clause
(iv) above (the "Capital Stock Rights"), pursuant to which separate certificates
representing such Capital Stock Rights will be distributed subsequent to the
initial distribution of such Capital Stock Rights (whether or not such
distribution shall have occurred prior to the date of the issuance of a series
of Common Stock Warrants), such subsequent distribution shall be deemed to be
the distribution of such Capital Stock Rights; provided that the Company may, in
lieu of making any adjustment in the exercise price of, and the number of shares
of Common Stock covered by, a Common Stock Warrant upon a distribution of
separate certificates representing such Capital Stock Rights, make proper
provision so that each holder of such a Common Stock Warrant who exercises such
Common Stock Warrant (or any portion thereof) (a) before the record date for
such distribution of separate certificates shall be entitled to receive upon
such exercise shares of Common Stock issued with Capital Stock Rights and (b)
after such record date and prior to the expiration, redemption or termination of
such Capital Stock Rights shall be entitled to receive upon such exercise, in
addition to the shares of Common Stock issuable upon such exercise, the same
number of such Capital Stock Rights as would a holder of the number of shares of
Common Stock that such Common Stock Warrant so exercised would have entitled the
holder thereof to acquire in accordance with the terms and provisions applicable
to the Capital Stock Rights if such Common Stock Warrant was exercised
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment required pursuant to
clause (iv) of this paragraph.
No adjustment in the exercise price of, and the number of shares of Common Stock
covered by, a Common Stock Warrant will be made for regular quarterly or other
periodic or recurring cash dividends or distributions or for cash dividends or
distributions to the extent paid from retained earnings. No adjustment will be
required unless such adjustment would require a change of at least 1% in the
exercise price then in effect; provided that any such adjustment not so made
will be carried forward and taken into account in any subsequent adjustment; and
provided further that any such adjustment not so made shall be made no later
than three years after the occurrence of the event requiring such adjustment to
be made or carried forward. Except as stated above, the exercise price of, and
the number of shares of Common Stock covered by, a Common Stock Warrant will not
be adjusted for the issuance of Common Stock or any securities convertible into
or exchangeable for Common Stock, or securities carrying the right to purchase
any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Company or (iii) a sale or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which holders of the
Company's Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in exchange for such
Common Stock, the holders of the Common Stock Warrants then outstanding will be
entitled thereafter to convert such Common Stock Warrants into the kind and
amount of shares of stock and other securities or property which they would have
received upon such reclassification, change, consolidation, merger,
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sale or conveyance had such Common Stock Warrants been exercised immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance.
DESCRIPTION OF FINANCING SUBORDINATED DEBT SECURITIES
AND FINANCING DEBT GUARANTEES
Financing Subordinated Debt Securities may be issued from time to time in one or
more series under an Indenture (the "Financing Indenture"), to be entered into
among SCI, Financing and The Bank of New York, as Trustee (the "Financing Debt
Trustee"). The terms of the Financing Subordinated Debt Securities will include
those stated in the Financing Indenture and those made part of the Financing
Indenture by reference to the Trust Indenture Act. The following summary does
not purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the Financing Indenture, which
is filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. Whenever particular provisions or
defined terms in the Financing Indenture are referred to herein, such provisions
or defined terms are incorporated by reference herein. Section and Article
references used herein are references to provisions of the Financing Indenture
unless otherwise noted.
GENERAL
The Financing Subordinated Debt Securities will be unsecured, subordinated
obligations of Financing. The Financing Indenture does not limit the aggregate
principal amount of Financing Subordinated Debt Securities that may be issued
thereunder and provides that the Financing Subordinated Debt Securities may be
issued from time to time in one or more series. The Financing Subordinated Debt
Securities are issuable in one or more series pursuant to an indenture
supplement to the Financing Indenture or a resolution of each of the respective
Boards of Directors of Financing and SCI or a special committee thereof (each, a
"Financing Supplemental Indenture").
Reference is made to the Prospectus Supplement which will accompany this
Prospectus, if Financing Subordinated Debt Securities are offered, for the
following terms of the series of Financing Subordinated Debt Securities being
offered thereby: (i) the specific title of such Financing Subordinated Debt
Securities, (ii) any limit on the aggregate principal amount of such Financing
Subordinated Debt Securities, (iii) the date or dates on which the principal of
such Financing Subordinated Debt Securities is payable and the right, if any, to
extend such date or dates; (iv) the rate or rates at which such Financing
Subordinated Debt Securities will bear interest or the method of determination
of such rate or rates; (v) the date or dates from which such interest shall
accrue, the interest payment dates on which such interest will be payable or the
manner of determination of such interest payment dates and the record dates for
the determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, to extend the interest payment periods
and the duration of such extension; (vii) the period or periods within which,
the price or prices at which, and the terms and conditions upon which, such
Financing Subordinated Debt Securities may be redeemed, in whole or in part, at
the option of Financing; (viii) the right and/or obligation, if any, of
Financing to redeem or purchase such Financing Subordinated Debt Securities
pursuant to any sinking fund or analogous provisions or at the option of the
holder thereof and the period or periods for which, the price or prices at
which, and the terms and conditions upon which, such Financing Subordinated Debt
Securities shall be redeemed or purchased, in whole or part, pursuant to such
right and/or obligation; (ix) the terms and conditions, if any, upon which such
Financing Subordinated Debt Securities may be converted into shares of SCI
Common Stock or exchanged for shares of a series of Preferred Stock, including
the conversion or exchange price and the circumstances under which any such
conversion or exchange right shall expire; (x) the terms of subordination
(unless issued to an SCI Trust, in which case the terms of subordination shall
be as set forth below under "-- Provisions Applicable to Financing Subordinated
Debt Securities Issued to SCI Trusts"), (xi) the form of such Financing
Subordinated Debt Securities; (xii) if other than denominations of $25 or any
integral multiple thereof, the denominations in which such Financing
Subordinated Debt Securities shall be issuable; (xiii) any and all other terms
with respect to such series; and (xiv) whether such Financing Subordinated Debt
Securities are issuable as a global security, and in such case, the identity of
the depositary. Unless otherwise set forth in the applicable Prospectus
Supplement, if a series of Financing Subordinated Debt Securities are issued to
an SCI Trust in
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connection with the issuance of Trust Securities by an SCI Trust, such series of
Financing Subordinated Debt Securities shall have the terms set forth in
"-- Provisions Applicable to Financing Subordinated Debt Securities Issued to
SCI Trusts" below.
The Financing Indenture does not contain any provisions that afford holders of
Financing Subordinated Debt Securities protection in the event of a highly
leveraged transaction involving SCI or Financing.
DESCRIPTION OF FINANCING DEBT GUARANTEES
The Financing Indenture provides that SCI will fully and unconditionally
guarantee on a subordinated basis (the "Financing Debt Guarantees") the due and
punctual payment of the principal, premium, if any, and interest on the
Financing Subordinated Debt Securities when and as the same shall become due and
payable, whether at maturity, upon redemption or otherwise. Since SCI is a
holding company, the right of SCI and, hence, the right of creditors of SCI
(including the holders of the SCI Financing Subordinated Debt Securities) to
participate in any distribution of the assets of any subsidiaries of SCI,
whether upon liquidation, reorganization, or otherwise, is subject to prior
claims of creditors of the subsidiary, except to the extent that claims of SCI
itself as a creditor of a subsidiary may be recognized.
SUBORDINATION
The Financing Subordinated Debt Securities will be subordinated and junior in
right of payment to certain other indebtedness of Financing, and the Financing
Debt Guarantees will be subordinated and junior in right of payment to certain
other indebtedness of SCI, in each case, to the extent set forth in the
Prospectus Supplement that will accompany this Prospectus. If a series of
Financing Subordinated Debt Securities are issued to an SCI Trust in connection
with the issuance of Trust Securities by an SCI Trust, such series of Financing
Subordinated Debt Securities and the Financing Debt Guarantees will be
subordinated and junior in right of payment to the extent set forth in
"-- Provisions Applicable to Financing Subordinated Debt Securities Issued to a
SCI Trusts" below.
PROVISIONS APPLICABLE TO FINANCING SUBORDINATED DEBT SECURITIES ISSUED TO SCI
TRUSTS
If a series of Financing Subordinated Debt Securities are issued to an SCI Trust
or a trustee of such SCI Trust in connection with the issuance of Trust
Securities by such SCI Trust, the following description will apply to such
series of the Financing Subordinated Debt Securities and the related Financing
Debt Guarantees unless otherwise set forth in the applicable Prospectus
Supplement.
General. Under certain circumstances involving the dissolution of an SCI Trust
following the occurrence of a Tax Event, Financing Subordinated Debt Securities
may be distributed to the holders of the Trust Securities in liquidation of an
SCI Trust. See "Description of the Trust Preferred Securities and Trust
Guarantees -- Tax Event Redemption or Distribution."
If the Financing Subordinated Debt Securities are distributed to the holders of
the Trust Preferred Securities, Financing will use its best efforts to have the
Financing Subordinated Debt Securities listed on the New York Stock Exchange or
on such other national securities exchange or similar organization on which the
Trust Preferred Securities are then listed or quoted.
If Financing Subordinated Debt Securities are distributed to holders of Trust
Preferred Securities in liquidation of such holders' interests in an SCI Trust,
such Financing Subordinated Debt Securities will initially be issued as a
Financing Global Security (defined below). As described herein, under certain
limited circumstances, Financing Subordinated Debt Securities may be issued in
certificated form in exchange for a Financing Global Security. See
"-- Book-Entry and Settlement" below. If Financing Subordinated Debt Securities
are issued in certificated form, such Financing Subordinated Debt Securities
will be in denominations set forth in the applicable Prospectus Supplement and
may be transferred or exchanged at the offices described below. Payments on
Financing Subordinated Debt Securities issued as a Financing Global Security
will be made to DTC, a successor depositary thereof or, if no depositary is
used, to a paying agent for the Financing Subordinated Debt Securities. If
Financing Subordinated Debt Securities are issued in certificated form,
principal and interest will be payable, the transfer of the Financing
Subordinated Debt Securities will be registrable, and Financing Subordinated
Debt Securities will be exchangeable for Financing Subordinated Debt Securities
of other
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denominations of a like aggregate principal amount at the corporate trust office
of the Financing Debt Trustee in New York, New York; provided that, payment of
interest may be made at the option of Financing by check mailed to the address
of the persons entitled thereto.
Subordination. The Financing Supplemental Indenture in respect of the applicable
series of Financing Subordinated Debt Securities issued to an SCI Trust will
provide that the Financing Subordinated Debt Securities are subordinated and
junior in right of payment to all Senior Indebtedness of Financing and that the
Financing Debt Guarantees are subordinated in right of payment to all Senior
Indebtedness of SCI. No payment of principal (including redemption and sinking
fund payments), premium, if any, or interest on the Financing Subordinated Debt
Securities and no payment under the Financing Debt Guarantees may be made (i) if
any Senior Indebtedness of Financing or SCI, as the case may be, is not paid
when due, (ii) any applicable grace period with respect to such default has
ended, and such default has not been cured or waived or ceased to exist, or
(iii) if the maturity of any Senior Indebtedness of Financing or SCI, as the
case may be, has been accelerated because of a default. Upon any distribution of
assets of Financing or SCI to creditors upon any dissolution, winding-up,
liquidation or reorganization, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all principal,
premium, if any, and interest due or to become due on all Senior Indebtedness of
Financing or SCI, as the case may be, must be paid in full before the holders of
Financing Subordinated Debt Securities are entitled to receive or retain any
payment. The rights of the holders of the Financing Subordinated Debt Securities
and the Financing Debt Guarantees to receive payments or distributions
applicable to the Financial Subordinated Debt Securities or the Debt Guarantees,
as the case may be, will be subrogated to the rights of the holders of Senior
Indebtedness of Financing or SCI, as the case may be, to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Senior Indebtedness, are paid in full. In addition, the Financing Subordinated
Debt Securities and the Financing Debt Guarantees issued to any SCI Trust will
rank at least pari passu with all other subordinated debt securities and debt
guarantees issued under the Financing Indenture to other SCI Trusts or to other
trusts, partnerships or other entities affiliated with Financing, in connection
with an issuance of securities similar to the Trust Preferred Securities. The
Financing Debt Guarantees will rank pari passu with SCI's guarantee of SCI
Limited's obligations under the Loans.
For purposes of Financing Subordinated Debt Securities issued to an SCI Trust,
the term "Senior Indebtedness" means, with respect to Financing or SCI, as the
case may be, (i) the principal, premium, if any, and interest in respect of (a)
indebtedness of such obligor, for money borrowed and (b) indebtedness evidenced
by securities, debentures, bonds or other similar instruments issued by such
obligor, (ii) all capital lease obligations of such obligor, (iii) all
obligations of such obligor issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such obligor and all obligations
of such obligor under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business), (iv) all
obligations of such obligor for the reimbursement on any letter of credit,
banker's acceptance, security purchase facility or similar credit transaction,
(v) all obligations of the type referred to in clauses (i) through (iv) of this
paragraph of other persons for the payment of which such obligor is responsible
or liable as obligor, guarantor or otherwise, (vi) all obligations of the type
referred to in clauses (i) through (v) of this paragraph of other persons
secured by any lien on any property or asset of such obligor (whether or not
such obligation is assumed by such obligor) and (vii) any Subordinated
Indebtedness of the Company of as of the date of this Prospectus, except for (a)
any such indebtedness of the Company issued after the date of this Prospectus
that is by its terms subordinated to or pari passu with the Financing
Subordinated Debt Securities or Financing Debt Guarantees, as the case may be,
(b) any indebtedness between or among such obligor or its affiliates, including
all other debt securities and guarantees in respect of those debt securities
(including guarantees), issued to (1) any other financing trust or a trustee of
such trust and (2) any other SCI Trust, or a trustee of such trust, partnership
or other entity affiliated with Financing that is a financing vehicle of
Financing (a "financing entity") in connection with the issuance by such
financial entity of Trust Preferred Securities or other securities that rank
pari passu with, or junior to, the Trust Preferred Securities and (c) any
guarantee by of the LLC Preferred Securities of the SCI Limited's obligations
under the Loans. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness that
may be issued by Financing.
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Optional Redemption. Financing shall have the right to redeem the Financing
Subordinated Debt Securities, in whole or in part, from time to time, on or
after the date set forth in the applicable Prospectus Supplement, or at any time
in certain circumstances upon the occurrence of a Tax Event as described under
"Description of Trust Preferred Securities and Trust Guarantees -- Tax Event
Redemption or Distribution," upon not less than 30 nor more than 60 days notice,
at a redemption price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest, including Additional Interest, if any, to the
redemption date. If a partial redemption of the Trust Preferred Securities
resulting from a partial redemption of the Financing Subordinated Debt
Securities would result in the delisting of the Trust Preferred Securities,
Financing may only redeem the Financing Subordinated Debt Securities in whole.
Interest. Each Financing Subordinated Debt Security shall bear interest at the
rate set forth on the applicable Prospectus Supplement from the original date of
issuance, payable quarterly in arrears on the dates set forth in the applicable
Prospectus Supplement (each an "Interest Payment Date"), to the person in whose
name such Financing Subordinated Debt Security is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. If the Financing Subordinated Debt Securities shall not
continue to remain in book-entry only form, Financing shall have the right to
select record dates, which shall be more than one Business Day prior to the
Interest Payment Date.
The amount of interest payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. The amount of interest payable for any
period shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed per 30-day month.
If any date on which interest is payable on the Financing Subordinated Debt
Securities is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, then such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
Option to Extend Maturity Date. The maturity date of the Financing Subordinated
Debt Securities will be set forth in the applicable Prospectus Supplement (the
"Scheduled Maturity Date"). Financing, however, may, before the Scheduled
Maturity Date, extend such maturity date no more than one time for up to an
additional 19 years from the Scheduled Maturity Date; provided, that (i)
Financing is not in bankruptcy or otherwise insolvent, (ii) Financing is not in
default on any Financing Subordinated Debt Securities issued to an SCI Trust or
to any trustee of such trust in connection with an issuance of Trust Securities
by such SCI Trust, (iii) Financing has made timely payments on the Financing
Subordinated Debt Securities for the immediately preceding six quarters without
deferrals, (iv) an SCI Trust is not in arrears on payments of distributions on
the Trust Preferred Securities, (v) the Financing Subordinated Debt Securities
are rated Investment Grade by any one of Standard & Poor's Corporation, Moody's
Investors Service, Inc., Fitch Investor Services, Duff & Phelps Credit Rating
Company or any other nationally recognized statistical rating organization, and
(vi) the final maturity of such Financing Subordinated Debt Securities is not
later than the 49th anniversary of the issuance of the Trust Preferred
Securities. Pursuant to the Declaration of such SCI Trust, the Regular Trustee
is required to give notice of Financing's election to extend the Scheduled
Maturity Date to the holders of the Trust Preferred Securities.
Option to Extend Interest Payment Period. Financing shall have the right at any
time, and from time to time, during the term of the Financing Subordinated Debt
Securities to defer payments of interest by extending the interest payment
period for a period (the "Extension Period") not exceeding 20 consecutive
quarters, at the end of which Extension Period, Financing shall pay all interest
then accrued and unpaid (including any Additional Interest, as herein defined)
together with interest thereon compounded quarterly at the rate specified for
the Financing Subordinated Debt Securities to the extent permitted by applicable
law ("Compound Interest"); provided, that, during any such Extension Period, (i)
Financing and SCI shall not, and SCI shall cause any subsidiary of SCI that is
not a wholly owned subsidiary of SCI not to, declare or pay dividends on, make
any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock or the capital
stock of any such subsidiary or make any payment in respect of any capital stock
of any affiliate of SCI guaranteed by SCI or any of its subsidiaries; provided,
further, that the foregoing shall not prevent or delay (a) the acquisition of
any Trust Preferred Securities or LLC Preferred
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Securities upon the conversion thereof into SCI Common Stock, (b) the
distribution of Financing Subordinated Debt Securities upon the occurrence of a
Tax Event as described under "Description of Trust Preferred Securities and
Trust Guarantees -- Tax Event Redemption or Distribution," (c) the redemption by
the Company of the Rights in accordance with the Rights Agreement and any
reacquisition by the Company of any of its stock issued in any acquisition as a
result of a purchase price adjustment or settlement of breach of warranties in
connection with such acquisition, (d) the redemption of the LLC Preferred
Securities upon the occurrence of any LLC Tax Event as described under
"Description of the LLC Preferred Securities and LLC Guarantees -- Tax Event
Redemption," (e) acquisitions of shares of SCI Common Stock in connection with
the satisfaction by SCI or any of its majority owned subsidiaries of its
obligations under any employee benefit plans or the satisfaction by SCI of its
obligations pursuant to any put contract requiring SCI to purchase shares of SCI
Common Stock, (f) as a result of a reclassification of capital stock or the
exchange or conversion of one class or series of capital stock for another class
or series of capital stock and (g) the purchase of fractional interests in
shares of capital stock pursuant to conversion or exchange provisions of such
capital stock or the security being converted or exchanged, and (ii) Financing
and SCI shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by Financing or SCI
that rank pari passu with or junior to the Financing Subordinated Debt
Securities and the Financing Debt Guarantees, or make any payment in respect of
any guarantee of indebtedness of any other person that ranks pari passu with or
junior to the Financing Subordinated Debt Securities or the Financing Debt
Guarantees; provided, that the foregoing shall not prevent or delay the
acquisition of any Financing Subordinated Debt Securities upon conversion of the
Trust Preferred Securities into SCI Common Stock." Prior to the termination of
any such Extension Period, Financing may further defer payments of interest by
extending the interest payment period; provided, that, such Extension Period,
including all such previous and further extensions, may not exceed 20
consecutive quarters. Upon the termination of any Extension Period and the
payment of all amounts then due, Financing may commence a new Extension Period,
subject to the terms set forth in this section. No interest during an Extension
Period, except at the end thereof, shall be due and payable. Financing has no
present intention of exercising its right to defer payments of interest by
extending the interest payment period on the Financing Subordinated Debt
Securities. If the Property Trustee shall be the sole holder of the Financing
Subordinated Debt Securities and Financing Debt Guarantees, Financing shall give
the Regular Trustee and the Property Trustee notice of its selection of such
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Trust Preferred Securities are payable or (ii) the date the
Regular Trustee is required to give notice to the New York Stock Exchange (or
other applicable self-regulatory organization) or to holders of the Trust
Preferred Securities of the record date or the date such distribution is
payable. The Regular Trustee shall give notice of Financing's selection of such
Extension Period to the holders of the Trust Preferred Securities. If the
Property Trustee shall not be the sole holder of the Financing Subordinated Debt
Securities, Financing shall give the holders of the Financing Subordinated Debt
Securities notice of its selection of such Extension Period 10 Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) the date upon
which Financing is required to give notice to the New York Stock Exchange (or
other applicable self-regulatory organization) or to holders of the Financing
Subordinated Debt Securities of the record or payment date of such related
interest payment.
Additional Interest. If at any time an SCI Trust shall be required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, Financing will pay as additional interest
("Additional Interest") such additional amounts as shall be required so that the
net amounts received and retained by an SCI Trust after paying any such taxes,
duties, assessments or other governmental charges will be not less than the
amounts an SCI Trust would have received had no such taxes, duties, assessments
or other governmental charges been imposed.
Indenture Events of Default. If any Indenture Event of Default shall occur and
be continuing, the Property Trustee, as the holder of the Financing Subordinated
Financing Debt Securities and the Financing Debt Guarantees, will have the right
to declare the principal of and the interest on the Financing Subordinated Debt
Securities (including any Compound Interest and Additional Interest, if any) and
any other amounts payable under the Financing Indenture to be forthwith due and
payable and to enforce its other rights as a creditor with respect to the
Financing Subordinated Debt Securities. See "-- Events of Default." An Indenture
Event of
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Default also constitutes a Declaration Event of Default. The holders of Trust
Preferred Securities in certain circumstances have the right to direct the
Property Trustee to exercise its rights as the holder of the Financing
Subordinated Debt Securities. See "Description of Trust Preferred Securities and
Trust Guarantees -- Declaration Events of Default" and "Description of Trust
Preferred Securities and Trust Guarantees -- Voting Rights."
Book-Entry and Settlement. If distributed to holders of Trust Preferred
Securities in connection with the involuntary or voluntary dissolution,
winding-up or liquidation of an SCI Trust as a result of the occurrence of a Tax
Event, the Financing Subordinated Debt Securities will be issued in the form of
one or more global certificates (each a "Financing Global Security") registered
in the name of the depositary or its nominee. Except under the limited
circumstances described below, Financing Subordinated Debt Securities
represented by the Financing Global Security will not be exchangeable for, and
will not otherwise be issuable as, Financing Subordinated Debt Securities in
definitive form. The Financing Global Securities described above may not be
transferred 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 to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Financing Global
Security.
Except as provided below, owners of beneficial interests in such a Financing
Global Security will not be entitled to receive physical delivery of Financing
Subordinated Debt Securities in definitive form and will not be considered the
holders (as defined in the Financing Indenture) thereof for any purpose under
the Financing Indenture, and no Financing Global Security representing Financing
Subordinated Debt Securities shall be exchangeable, except for another Financing
Global Security of like denomination and tenor to be registered in the name of
the depositary or its nominee or to a successor depositary or its nominee.
Accordingly, each Beneficial Owner must rely on the procedures of the depositary
or if such person is not a participant, on the procedures of the Participant
through which such person owns its interest to exercise any rights of a holder
under the Indenture.
The Depositary. If Financing Subordinated Debt Securities are distributed to
holders of Trust Preferred Securities in liquidation of such holders' interests
in an SCI Trust, The Depositary Trust Company ("DTC") will act as securities
depositary for the Financing Subordinated Debt Securities. For a description of
DTC and the specific terms of the depositary arrangements, see "Description of
Trust Preferred Securities and Trust Guarantees -- Book-Entry Only Issuance." As
of the date of this Prospectus Supplement, the description therein of DTC's
book-entry system and DTC's practices as they relate to purchases, transfers,
notices and payments with respect to the Trust Preferred Securities apply in all
material respects to any debt obligations represented by one or more Financing
Global Securities held by DTC. Financing may appoint a successor to DTC or any
successor depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depository for the Financing Global Securities.
None of Financing, any SCI Trust, the Financing Debt Trustee, any paying agent
or any other agent of Financing or the Debt Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Financing Global Security for
such Financing Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Discontinuance of the Depositary's Services. A Financing Global Security shall
be exchangeable for Financing Subordinated Debt Securities registered in the
names of persons other than the depositary or its nominee only if (i) the
depositary notifies Financing that it is unwilling or unable to continue as a
depositary for such Financing Global Security and no successor depositary shall
have been appointed, (ii) the depositary, at any time, ceases to be a clearing
agency registered under the Exchange Act at which time the depositary is
required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) Financing, in its sole discretion,
determines that such Financing Global Security shall be so exchangeable or (iv)
there shall have occurred an Event of Default with respect to such Financing
Subordinated Debt Securities. Any Financing Global Security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for Financing
Subordinated Debt Securities registered in such names as the depositary shall
direct. It is expected that such
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instructions will be based upon directions received by the depositary from its
Participants with respect to ownership of beneficial interests in such Financing
Global Security.
Miscellaneous. The Financing Indenture will provide that Financing will pay all
fees and expenses related to (i) the offering of the Trust Securities and the
Financing Subordinated Debt Securities, (ii) the organization, maintenance and
dissolution of an SCI Trust, (iii) the retention of the Financing Debt Trustees
and (iv) the enforcement by the Property Trustee of the rights of the holders of
the Trust Preferred Securities. The payment of such fees and expenses will be
fully and unconditionally guaranteed by Financing.
CERTAIN COVENANTS
The Financing Subordinated Debt Securities subsequently may be distributed pro
rata to the holders of such Trust Securities in connection with the dissolution
of such SCI Trust upon the occurrence of certain events relating to such Trust
Securities. See "Description of Trust Preferred Securities and Trust
Guarantees." Only one series of Financing Subordinated Debt Securities will be
issued to an SCI Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such SCI Trust. If (i) there shall have occurred
any event that would constitute an Event of Default with respect to such
Financing Subordinated Debt Securities, (ii) SCI shall be in default with
respect to its payment of any obligations under its related guarantee of Trust
Preferred Securities or Trust Common Securities or (iii) Financing shall have
given notice of its election to defer payments on the Financing Subordinated
Debt Securities by extending the interest payment period as provided in the
Financing Indenture and such period, or any extension, shall be continuing, then
(a) neither SCI nor Financing shall, and SCI shall cause any subsidiary of SCI
that is a wholly owned subsidiary of SCI not to, declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of it's capital stock or any capital
stock of such subsidiary or make any payment in respect of any capital stock of
any affiliate of SCI guaranteed by SCI or any of its subsidiaries; provided,
that the foregoing shall not prevent or delay (1) the acquisition of any Trust
Preferred Securities or LLC Preferred Securities upon the conversion thereof
into SCI Common Stock, (2) the distribution of Financing Subordinated Debt
Securities upon the occurrence of a Tax Event as described under "Description of
Trust Preferred Securities and Trust Guarantees -- Tax Event Redemption or
Distribution," (3) the redemption by the Company of the Rights in accordance
with the Rights Agreement and any reacquisition by the Company of any of its
stock issued in any acquisition as a result of a purchase price adjustment or
settlement of breach of warranties in connection with such acquisition, (4) the
redemption of the LLC Preferred Securities upon the occurrence of any LLC Tax
Event as described under "Description of the LLC Preferred Securities and LLC
Guarantees -- Tax Event Redemption," (5) acquisitions of shares of SCI Common
Stock in connection with the satisfaction by SCI or any of its majority owned
subsidiaries of its obligations under any employee benefit plans or the
satisfaction by SCI of its obligations pursuant to any put contract requiring
SCI to purchase shares of SCI Common Stock, (6) as a result of a
reclassification of capital stock or the exchange or conversion of one class or
series of capital stock for another class or series of capital stock, and (7)
the purchase of fractional interests in shares of capital stock pursuant to
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (b) SCI and Financing shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by SCI or Financing that rank pari passu with or junior
to the Financing Subordinated Debt Securities or the Financing Debt Guarantees,
or make any payment in respect of any guarantee of any indebtedness of any other
person that ranks pari passu with or junior to such Financing Subordinated Debt
Securities or such Financing Debt Guarantee; provided, that the foregoing shall
not prevent or delay the acquisition of any Financing Subordinated Debt
Securities upon conversion of the Trust Preferred Securities into SCI Common
Stock
For so long as such Trust Securities remain outstanding, SCI will covenant (i)
to directly or indirectly maintain 100% ownership of the Common Securities of
such SCI Trust; provided, that any permitted successor of SCI under the
Financing Indenture may succeed to SCI's ownership of such Common Securities,
(ii) to use its reasonable efforts to cause such SCI Trust (a) to remain a
statutory business trust, except in connection with the distribution of
Financing Subordinated Debt Securities to the holders of Trust Securities in
liquidation of such SCI Trust, the redemption of all of the Trust Securities of
such SCI Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such SCI Trust, and (b) to otherwise continue
not to be classified as an association taxable as a corporation or partnership
for United States federal income tax purposes
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and (iii) to use its reasonable efforts to cause each holder of Trust Securities
to be treated as owning an undivided beneficial interest in the Financing
Subordinated Debt Securities.
CONVERSION RIGHTS
If a series of Financing Subordinated Debt Securities is issued to an SCI Trust
and is convertible into SCI Common Stock, the following description of
conversion rights shall apply unless otherwise set forth in the applicable
Prospectus Supplement.
Conversion into SCI Common Stock. The Financing Subordinated Debt Securities
will be convertible into SCI Common Stock at the option of the holders of the
Financing Subordinated Debt Securities at any time on or before the earlier of
the Conversion Expiration Date or the Conversion Expiration Date of the
Financing Subordinated Debt Securities (as defined herein) at the initial
conversion price set forth in the applicable Prospectus Supplement, subject to
the conversion price adjustments described under "Description of the Trust
Preferred Securities and Trust Guarantees -- Conversion Rights." The procedures
for conversion of the Financing Subordinated Debt Securities for SCI Common
Stock will be as described under "Description of the Trust Preferred Securities
and Trust Guarantees -- Conversion Rights." Prior to the Conversion Expiration
Date of the Financing Subordinated Debt Securities, a holder of Financing
Subordinated Debt Securities may surrender such Securities, together with an
irrevocable conversion notice, for conversion to the Conversion Agent, which
will then convert the surrendered Subordinated Debt Securities, or the portion
thereof to be converted, into shares of SCI Common Stock at the then applicable
conversion price. No fractional shares will be issued upon conversion. In lieu
thereof, cash will be paid by SCI based upon the Current Market Price of SCI
Common Stock on the date the conversion notice was received by the Conversion
Agent. Holders of Financing Subordinated Debt Securities may obtain copies of
the required form of conversion notice from the Conversion Agent. Financing's
delivery to the holders of the Financing Subordinated Debt Securities (through
the Conversion Agent or otherwise) of the whole number of shares of SCI Common
Stock into which the Financing Subordinated Debt Securities so delivered are
convertible (together with the cash payment, if any, in lieu of fractional
shares) will be deemed to satisfy Financing's obligation to pay the principal
amount of such Financing Subordinated Debt Securities, and the accrued and
unpaid interest thereon, including any Additional Interest (other than any
Additional Amounts), and no payment shall be made for accrued interest, whether
or not in arrears. If, however, any Financing Subordinated Debt Security is
converted between a record date for the payment of interest and the related
interest payment date, the interest payable on such succeeding interest payment
date with respect to such Financing Subordinated Debt Security shall be paid
despite such conversion. Each conversion will be deemed to have been effected
immediately prior to the close of business on the day on which the related
conversion notice was received by the Conversion Agent.
On and after the date specified in the applicable Prospectus Supplement,
Financing may, at its option, cause the conversion rights of holders of the
Financing Subordinated Debt Securities to expire if (i) Financing is then
current in the payment of interest (without regard to any extension of the
interest payment period) on the Financing Subordinated Debt Securities and (ii)
for 20 trading days within any period of 30 consecutive trading days, including
the last trading day of such period, the Current Market Price of SCI Common
Stock shall have exceeded 120% of the then applicable conversion price of the
Financing Subordinated Debt Securities. To exercise its conversion expiration
option, SCI must issue a press release for publication on the Dow Jones News
Service or on a comparable news service announcing the Conversion Expiration
Date of the Financing Subordinated Debt Securities. Financing is also required
to give notice by first-class mail to holders of the Financing Subordinated Debt
Securities in the manner provided for holders of Trust Preferred Securities
under "Description of Trust Preferred Securities and Trust
Guarantees -- Conversion Rights -- Expiration of Conversion Rights." The
"Conversion Expiration Date of the Financing Subordinated Debt Securities" will
be the close of business on a date selected by Financing which is not less than
30 nor more than 60 calendar days after the date on which such press release is
issued; provided, that if Financing has not exercised its conversion expiration
option, the Conversion Expiration Date of the Financing Subordinated Debt
Securities with respect to any principal amount of Financing Subordinated Debt
Securities that is called for redemption will be the close of business on the
third Business Day prior to the scheduled date for such redemption and in any
other case will be the close of business on the third Business Day prior to the
stated maturity date of the Financing Subordinated Debt Securities.
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FORM, EXCHANGE, REGISTRATION AND TRANSFER
Financing Subordinated Debt Securities of each series will be issued in
registered form and in either certificated form or represented by one or more
global securities. If not represented by one or more global securities,
Financing Subordinated Debt Securities may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed) or exchange,
at the office of the registrar for Financing Subordinated Debt Securities (the
"Financing Registrar") or at the office of any transfer agent designated by
Financing for such purpose with respect to any series of Financing Subordinated
Debt Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Financing Indenture. Such transfer or exchange will be effected
upon the Financing Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. Financing has appointed the Financing Debt Trustee as Financing
Registrar with respect to the Financing Subordinated Debt Securities. If a
Prospectus Supplement refers to any transfer agents (in addition to the
Financing Registrar) initially designated by Financing with respect to any
series of Financing Subordinated Debt Securities, Financing may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that Financing will
be required to maintain a transfer agent in each place of payment for such
series. Financing may at any time designate additional transfer agents with
respect to any series of Financing Subordinated Debt Securities.
In the event of any redemption in part, Financing shall not be required to (i)
issue, register the transfer of or exchange any Financing Subordinated Debt
Securities during a period beginning at the opening of business 15 days before
any selection for redemption of Financing Subordinated Debt Securities of like
tenor and of the series of which such Financing Subordinated Debt Securities are
a part, and ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all holders of
Financing Subordinated Debt Securities of like tenor and of such series to be
redeemed and (ii) register the transfer of or exchange any Financing
Subordinated Debt Securities so selected for redemption, in whole or in part,
except the unredeemed portion of any Financing Subordinated Debt Securities
being redeemed in part.
PAYMENT AND FINANCING PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and premium (if any) on any Financing Subordinated Debt Securities
will be made only against surrender to the paying agent (the "Financing Paying
Agent") of such Financing Subordinated Debt Securities. Unless otherwise
indicated in an applicable Prospectus Supplement payment, principal of and any
premium and interest, if any, on Financing Subordinated Debt Securities will be
payable, subject to any applicable laws and regulations, at the office of such
Financing Paying Agent or Financing Paying Agents as Financing may designate
from time to time, except that at the option of Financing payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Financing Register with respect to
such Financing Subordinated Debt Securities. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of interest on a Financing
Subordinated Debt Security on any Interest Payment Date will be made to the
person in whose name such Financing Subordinated Debt Security (or predecessor
security) is registered at the close of business on the Regular Record Date for
such interest payment.
Financing will act as Financing Paying Agent with respect to the Financing
Subordinated Debt Securities. Financing may at any time designate additional
Financing Paying Agents or rescind the designation of any Financing Paying
Agents or approve a change in the office through which any Financing Paying
Agent acts, except that Financing will be required to maintain a Financing
Paying Agent in each place of payment for each series of the respective
Financing Subordinated Debt Securities.
All moneys paid by Financing to a Financing Paying Agent for the payment of the
principal of or premium or interest, if any, on any Financing Subordinated Debt
Securities of any series which remain unclaimed at the end of two years after
such principal, premium, if any, or interest shall have become due and payable
will be repaid to Financing, and the holder of such Financing Subordinated Debt
Securities will thereafter look only to Financing for payment thereof.
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FINANCING GLOBAL SECURITIES
If any Financing Subordinated Debt Securities of a series are represented by one
or more Financing Global Securities, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such Financing Global Security may exchange such interests for Financing
Subordinated Debt Securities of such series and of like tenor and principal
amount in any authorized form and denomination. Principal of and any premium and
interest on a Financing Global Security will be payable in the manner described
in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion of
a series of Financing Subordinated Debt Securities to be represented by a
Financing Global Security will be described in the applicable Prospectus
Supplement.
MODIFICATION OF THE FINANCING INDENTURE
The Financing Indenture contains provisions permitting SCI, Financing and the
Financing Debt Trustee, with the consent of the holders of not less than a
majority in principal amount of the Financing Subordinated Debt Securities of
each series which are affected by the modification, to modify the Financing
Indenture or any supplemental indenture affecting that series or the rights of
the holders of that series of Financing Subordinated Debt Securities; provided
that no such modification may, without the consent of the holder of each
outstanding Financing Subordinated Debt Security affected thereby, (i) extend
the fixed maturity of any Financing Subordinated Debt Securities of any series,
it being understood that any extension of the maturity of the Financing
Subordinated Debt Securities in accordance with the provisions described in
"-- Provisions Applicable to Financing Subordinated Debt Securities Issued to
SCI Trusts -- Option to Extend Maturity Date," shall not be deemed an extension
of the fixed maturity of the Financing Subordinated Debt Securities for the
purposes of this provision) or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, it being understood
that any extension of the time to pay interest on the Financing Subordinated
Debt Securities in accordance with the provisions described in "-- Provisions
Applicable to Financing Subordinated Debt Securities Issued to SCI
Trusts -- Option to Extend Interest Payment Period," shall not be deemed an
extension of the time of payment of interest on the Financing Subordinated Debt
Securities for the purposes of this provision) or reduce any premium payable
upon the redemption thereof, without the consent of the holder of each Financing
Subordinated Debt Security so affected, (ii) reduce the percentage of Financing
Subordinated Debt Securities, the holders of which are required to consent to
any such supplemental indenture without the consent of the holders of each then
outstanding Financing Subordinated Debt Security affected thereby, or (iii) make
any change that adversely affects the right to convert any Financing
Subordinated Debt Security or make any change to the terms and provisions
(including related definitions) governing the right to convert the Financing
Subordinated Debt Securities in any manner that adversely affects the rights of
the holders thereof.
In addition, SCI, Financing and the Financing Debt Trustee may execute, without
the consent of any holder of Financing Subordinated Debt Securities, any
supplemental indenture for certain other usual purposes including the creation
of any new series of Financing Subordinated Debt Securities.
EVENTS OF DEFAULT
The Financing Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes an "Event of Default"
with respect to each series of Financing Subordinated Debt Securities:
(i) failure for 30 days to pay interest on the Financing Subordinated Debt
Securities of that series, including any Additional Interest in respect thereof,
when due; provided, that a valid extension of the interest payment period by
Financing shall not constitute a default in the payment of interest for this
purpose;
(ii) failure to pay principal or premium, if any, on the Financing Subordinated
Debt Securities of that series when due whether at maturity, upon redemption by
declaration or otherwise, or to make any sinking fund payment with respect to
that series; provided, that a valid extension of the maturity of such Financing
Subordinated Debt Securities shall not constitute a default for this purpose;
(iii) failure to provide SCI Common Stock upon a conversion of Financing
Subordinated Debt Securities;
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(iv) failure to observe or perform any other covenant (other than those
specifically relating to another series) contained in the Financing Indenture
for 90 days after written notice to Financing from the Financing Debt Trustee or
the holders of at least 25% in principal amount of the outstanding Financing
Subordinated Debt Securities of that series;
(v) certain events in bankruptcy, insolvency or reorganization of SCI or
Financing; or
(vi) if Financing Subordinated Debt Securities are issued to an SCI Trust or a
SCI Trustee of such SCI Trust in connection with the issuance of Trust
Securities by such SCI Trust, the voluntary or involuntary dissolution,
winding-up or termination of such SCI Trust, except in connection with the
distribution of Financing Subordinated Debt Securities to the holders of Trust
Securities in liquidation of such SCI Trust, the redemption of all of the Trust
Securities of such SCI Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such SCI Trust.
The holders of a majority in aggregate outstanding principal amount of any
series of the Financing Subordinated Debt Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Financing Debt Trustee for that series. The Financing Debt Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of any
particular series of the Financing Subordinated Debt Securities may declare the
principal due and payable immediately on default with respect to such series,
but the holders of a majority in aggregate outstanding principal amount of such
series may annul such declaration and waive the default with respect to such
series if the default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration and
any applicable premium has been deposited with the Financing Debt Trustee.
The holders of a majority in aggregate outstanding principal amount of any
series of the Financing Subordinated Debt Securities affected thereby may, on
behalf of the holders of all the Financing Subordinated Debt Securities of such
series, waive any past default, except (i) a default in the payment of
principal, premium, if any, or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration and any applicable premium has been deposited
with the Financing Debt Trustee) or a default in the obligation to issue SCI
Common Stock upon the conversion of the Financing Subordinated Debt Securities,
(ii) a default in the covenant of each of Financing, SCI and certain of its
subsidiaries not to declare or pay dividends on, or redeem, purchase or acquire
any of its capital stock during an interest deferral period (except as permitted
by such covenant), or (iii) a default in the covenant of Financing or SCI to
defer interest payments on all Financing Subordinated Debt Securities held by
the other SCI Trusts during such interest deferral period and not to make any
payment in respect of any indebtedness incurred or guaranteed by Financing or
SCI ranking pari passu with or junior to the Financing Subordinated Debt
Securities or the Financing Debt Guarantees (except as permitted by such
covenant).
CONSOLIDATION, MERGER AND SALE
The Financing Indenture does not contain any covenant that restricts the ability
of SCI or Financing to merge or consolidate with or into any other corporation,
sell or convey all or substantially all of its assets to any person, firm or
corporation or otherwise engage in restructuring transactions.
DEFEASANCE AND DISCHARGE
Financing may discharge or defease its obligations with respect to each series
of Financing Subordinated Debt Securities as set forth below.
Financing may discharge all of its obligations (except those set forth below) to
holders of any series of Financing Subordinated Debt Securities issued under the
Financing Indenture, which Financing Subordinated Debt Securities have not
already been delivered to the Financing Debt Trustee for cancellation and which
either have become due and payable or are by their terms due and payable within
one year (or are to be called for redemption within one year) by depositing with
the Financing Debt Trustee cash or U.S. Government Obligations, or a combination
thereof, as trust funds in an amount certified to be sufficient to pay when due
the principal of and premium, if any, and interest, if any, on all outstanding
Financing Subordinated Debt Securities of such series and to make any mandatory
sinking fund payments thereon when due.
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Unless otherwise provided in the applicable Prospectus Supplement, Financing may
also discharge at any time all of its obligations (except those set forth below)
to holders of any series of Financing Subordinated Debt Securities issued under
the Financing Indenture (other than convertible Financing Subordinated Debt
Securities) ("defeasance") if, among other things: (i) Financing irrevocably
deposits with the Financing Debt Trustee cash or U.S. Government Obligations, or
a combination thereof, as trust funds in an amount certified to be sufficient to
pay the principal of and premium, if any, and interest, if any, on all
outstanding Financing Subordinated Debt Securities of such series when due and
to make any mandatory sinking fund payments thereon when due, and such funds
have been so deposited for 91 days; (ii) such deposit will not result in a
breach or violation of, or cause a default under, any agreement or instrument to
which Financing is a party or by which it is bound; and (iii) Financing delivers
to the Financing Debt Trustee an opinion of counsel to the effect that the
holders of such series of Financing Subordinated Debt Securities will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such defeasance, and that such defeasance will not otherwise alter
the United States federal income tax treatment of principal and interest
payments on such series of Financing Subordinated Debt Securities. Such opinion
of counsel must be based on a ruling of the Internal Revenue Service or a change
in United States federal income tax law occurring after the date of the
Financing Indenture relating to the Financing Subordinated Debt Securities of
such series, since such a result would not occur under current tax law.
In the event of such discharge and defeasance of a series of Financing
Subordinated Debt Securities, the holders thereof would be entitled to look only
to such trust funds for payment of the principal of and any premium and interest
on such Financing Subordinated Debt Securities.
Notwithstanding the foregoing, no discharge or defeasance described above shall
affect the following obligations to or rights of the holders of any series of
Financing Subordinated Debt Securities: (i) rights of registration of transfer
and exchange of Financing Subordinated Debt Securities of such series; (ii)
rights of substitution of mutilated, defaced, destroyed, lost or stolen
Financing Subordinated Debt Securities of such series; (iii) rights of holders
of Financing Subordinated Debt Securities of such series to receive payments of
principal thereof and interest, if any, thereon when due and to receive
mandatory sinking fund payments, if any, thereon when due from the trust funds
held by the Financing Debt Trustee; (iv) the rights, obligations, duties and
immunities of the Financing Debt Trustee; (v) the rights of holders of Financing
Subordinated Debt Securities of such series as beneficiaries with respect to
property deposited with the Financing Debt Trustee payable to all or any of
them; (vi) the obligations of Financing to maintain an office or agency in
respect of Financing Subordinated Debt Securities of such series; and (vii) if
applicable, the obligations of the Company with respect to the conversion of
Financing Subordinated Debt Securities of such series into SCI Common Stock.
GOVERNING LAW
The Financing Indenture, the Financing Subordinated Debt Securities and the
Financing Debt Guarantees will be governed by, and construed in accordance with,
the internal laws of the State of Texas.
INFORMATION CONCERNING THE FINANCING DEBT TRUSTEE
The Financing Debt Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Financing Indenture and, after
default, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provision,
the Financing Debt Trustee is under no obligation to exercise any of the powers
vested in it by the Financing Indenture at the request of any holder of
Financing Subordinated Debt Securities, unless offered reasonable indemnity by
such holder against the costs, expenses and liabilities which might be incurred
thereby. The Financing Debt Trustee is not required to expand or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Financing Debt Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
SCI and certain of its affiliates, including Financing, maintain a deposit
account and banking relationship with the Financing Debt Trustee. The Financing
Debt Trustee serves as Trustee under the Senior Indenture pursuant to which
unsecured debt securities of SCI are outstanding representing approximately
$579.7 million of Senior Indebtedness as of March 31, 1995 and will serve as
Property Trustee of the SCI Trusts and Trust Guarantee
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Trustee (see "Description of Trust Preferred Securities and Trust
Guarantees -- Description of Trust Guarantees"). An affiliate of the Financing
Debt Trustee will serve as the Delaware Trustee of the SCI Trusts.
Pursuant to the Trust Indenture Act, a trustee under an Indenture may be deemed
to have a conflicting interest, and may under certain circumstances set forth in
the Trust Indenture Act, be required to resign as trustee under such Indenture,
if the securities issued under such Indenture are in default (as such terms
defined in such Indenture) and the trustee is the trustee under another
Indenture under which any other securities the same obligor are outstanding,
subject to certain exceptions set forth in the Trust Indenture Act. In such
event, the obligor must take prompt steps to have a successor trustee appointed
in the manner provided in the Indenture from which the trustee has resigned.
Pursuant to the Trust Indenture Act, The Bank Of New York, as trustee under the
Senior Indenture and the Financing Indenture and Property Trustee of each SCI
Trust could be required to resign as trustee under one or more of such
Indentures or of an SCI Trust should a default occur on one or more of such
Indentures or the applicable Declaration of an SCI Trust. In such event, the
Company would be required to take prompt steps to have a successor trustee or
successor trustees appointed in the manner in the applicable Indenture or
Indentures or SCI Trust.
MISCELLANEOUS
Financing and SCI will have the right at all times to assign any of their
respective rights or obligations under the Financing Indenture to a direct or
indirect wholly owned subsidiary of SCI; provided that, in the event of any such
assignment, Financing and SCI, as the case may be, will remain liable for all of
their respective obligations. Subject to the foregoing, the Financing Indenture
will be binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Financing Indenture provides that it may
not otherwise be assigned by the parties thereto.
DESCRIPTION OF TRUST PREFERRED SECURITIES AND TRUST GUARANTEES
GENERAL
Each SCI Trust may issue only one series of Trust Preferred Securities having
terms described in the Prospectus Supplement relating thereto. The Declaration
of each SCI Trust authorizes the Regular Trustees of such SCI Trust to issue on
behalf of such SCI Trust one series of Trust Preferred Securities and one series
of Trust Common Securities. The Declaration will be qualified as an indenture
under the Trust Indenture Act.
The Trust Preferred Securities will have such terms, including distributions,
redemption, voting, conversion, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the Declaration or made part of the Declaration by the Trust Indenture Act.
Reference is made to any Prospectus Supplement relating to the Trust Preferred
Securities of an SCI Trust for specific terms, including (i) the distinctive
designation of such Trust Preferred Securities, (ii) the number of Trust
Preferred Securities issued by such SCI Trust, (iii) the annual distribution
rate (or method of determining such rate) for Trust Preferred Securities issued
by such SCI Trust and the date or dates upon which such distributions shall be
payable (provided, that distributions on such Trust Preferred Securities shall
be payable on a quarterly basis to holders of such Trust Preferred Securities as
of a record date in each quarter during which such Trust Preferred Securities
are outstanding), (iv) whether distributions on Trust Preferred Securities
issued by such SCI Trust shall be cumulative, and, in the case of Trust
Preferred Securities having such cumulative distribution rights, the date or
dates or method of determining the date or dates from which distributions on
Trust Preferred Securities issued by such SCI Trust shall be cumulative, (v) the
amount or amounts which shall be paid out of the assets of such SCI Trust to the
holders of Trust Preferred Securities of such SCI Trust upon voluntary or
involuntary dissolution, winding-up or termination of such SCI Trust, (vi) the
terms and conditions, if any, under which Trust Preferred Securities of such SCI
Trust series may be converted into shares of Common Stock, including the
conversion price per share and the circumstances, if any, under which any such
conversion right shall expire, (vii) the terms and conditions, if any, under
which Trust Preferred Securities of such SCI Trust may be exchanged for shares
of a series of Preferred Stock or Depositary Shares representing Preferred
Stock, (viii) the terms and conditions, if any, upon which the related series of
the applicable Financing Subordinated Debt
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Securities may be distributed to holders of Trust Preferred Securities of such
SCI Trust, (ix) the obligation, if any, of such SCI Trust to purchase or redeem
Trust Preferred Securities issued by such SCI Trust and the price or prices at
which, the period or periods within which and the terms and conditions upon
which Trust Preferred Securities issued by such SCI Trust shall be purchased or
redeemed, in whole or in part, pursuant to such obligation, (x) the voting
rights, if any, of Trust Preferred Securities issued by such SCI Trust in
addition to those required by law, including the number of votes per Trust
Preferred Security and any requirement for the approval by the holders of Trust
Preferred Securities, or of Trust Preferred Securities issued by one or more SCI
Trusts, or of both, as a condition to specified action or amendments to the
Declaration of such SCI Trust, and (xi) any other relevant rights, preferences,
privileges, limitations or restrictions of Trust Preferred Securities issued by
such SCI Trust consistent with the Declaration of such SCI Trust or with
applicable law. All Trust Preferred Securities offered hereby will be guaranteed
by SCI to the extent set forth below under "-- Description of Trust Guarantees."
Pursuant to the Declaration, the Property Trustee will own the Financing
Subordinated Debt Securities purchased by each SCI Trust for the benefit of the
holders of the Trust Securities. The payment of distributions out of money held
by an SCI Trust, and payments upon redemption of Trust Preferred Securities or
liquidation of an SCI Trust, are guaranteed (the "Trust Guarantees") by SCI to
the extent described under "-- Description of Trust Guarantees." The Trust
Guarantees will be held by the Bank of New York, the Guarantee Trustee, for the
benefit of the holders of the Trust Preferred Securities. The Trust Guarantee
does not cover payment of distributions when an SCI Trust does not have
sufficient available funds to pay such distributions. In such event, the remedy
of a holder of Trust Preferred Securities is to vote to appoint a special
Regular Trustee and to direct the Property Trustee to enforce the Property
Trustee's rights under the applicable Financing Subordinated Debt Securities.
See "-- Voting Rights." Certain federal income tax considerations applicable to
an investment in Trust Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Trust Preferred Securities, each SCI Trust
will also issue one series of Trust Common Securities. The Declaration of each
SCI Trust authorizes the Regular Trustee of such trust to issue on behalf of
such SCI Trust one series of Trust Common Securities having such terms including
distributions, conversion, redemption, voting, liquidation rights or such
restrictions as shall be set forth therein. The terms of the Trust Common
Securities issued by an SCI Trust will be substantially identical to the terms
of the Trust Preferred Securities issued by such SCI Trust, and the Trust Common
Securities will rank pari passu, and payments will be made thereon pro rata with
the Trust Preferred Securities except that, upon an event of default under the
Declaration, the rights of the holders of the Trust Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. Except in certain limited circumstances, the Trust Common
Securities will also carry the right to vote and to appoint, remove or replace
any of the SCI Trustees of an SCI Trust. All of the Trust Common Securities of
an SCI Trust will be directly or indirectly owned by SCI.
DISTRIBUTIONS
Distributions on the Trust Preferred Securities of the applicable SCI Trust will
be fixed at a rate per annum of the stated liquidation amount per Trust
Preferred Security as set forth in the applicable Prospectus Supplement.
Distributions in arrears for more than one quarter will bear interest thereon at
such rate per annum compounded quarterly. The term "distribution" as used herein
includes any such interest payable unless otherwise stated. The amount of
distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months.
The distribution rate and the distribution payment date and other payment dates
for the Trust Preferred Securities of an SCI Trust will correspond to the
interest rate and interest payment date and other payment dates on either
Financing Subordinated Debt Securities, a series of one of which will be the
sole assets of such SCI Trust. As a result, if principal or interest is not paid
on such Financing Subordinated Debt Securities and the Financing Debt
Guarantees, no amounts will be paid on the Trust Preferred Securities. If
Financing does not make principal or interest payments on the Financing
Subordinated Debt Securities and SCI does not make payment under the Financing
Debt Guarantees, the SCI Trust will not have sufficient funds to make
distributions on the Trust Preferred Securities, in which event the Trust
Guarantee will not apply to such distributions until such SCI Trust has
sufficient funds available therefor.
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Financing has the right under the Financing Indenture to defer payments of
interest on the Financing Subordinated Debt Securities by extending the interest
payment period from time to time on the Financing Subordinated Debt Securities,
which, if exercised, would defer quarterly distributions on the Trust Preferred
Securities of the SCI Trust holding such Financing Subordinated Debt Securities
(though such distributions would continue to accrue with interest since interest
would continue to accrue on the Financing Subordinated Debt Securities) during
any such extended interest payment period. Such right to extend the interest
payment period for the Financing Subordinated Debt Securities is limited a
period not exceeding 20 consecutive quarters. If Financing exercises this right,
then (i) neither SCI nor Financing shall, and SCI shall cause any subsidiary of
SCI that is a wholly owned subsidiary of SCI not to, declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire, or make
a liquidation payment with respect to, any of its capital stock or capital stock
of any such subsidiary or make any payment in respect of any capital stock of
any affiliate of SCI guaranteed by SCI or any of its subsidiaries; provided,
that the foregoing shall not prevent or delay (a) the acquisition of any Trust
Preferred Securities or LLC Preferred Securities upon the conversion thereof
into SCI Common Stock, (b) the distribution of the Financing Subordinated Debt
Securities upon the occurrence of a Tax Event as described under "-- Tax Event
Redemption or Distribution" or the exchange of the Trust Preferred Securities
for Financing Subordinated Debt Securities upon an Exchange Election as
described under "Description of Financing Subordinated Debt Securities and
Financing Debt Guarantees -- Conversion Rights -- Exchange of Financing
Subordinated Debt Securities," (c) the redemption by the Rights in accordance
with the Rights Agreement and any reacquisition by the Company of any of its
stock issued in any acquisition as a result of a purchase price adjustment or
settlement of breach of warranties in connection with such acquisition, (d) the
redemption of the LLC Preferred Securities upon the occurrence of any LLC Tax
Event as described under "Description of LLC Preferred Securities and LLC
Guarantees -- Tax Event Redemption," (e) acquisitions of shares of SCI Common
Stock in connection with the satisfaction by SCI or any of its majority owned
subsidiaries of its obligations under any employee benefit plans or the
satisfaction by SCI of its obligations pursuant to any put contract requiring
SCI to purchase shares of SCI Common Stock, (f) as a result of a
reclassification of capital stock or the exchange or conversion of one class or
series of capital stock for another class or series of capital stock, and (g)
the purchase of fractional interests in shares of capital stock pursuant to
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (ii) neither SCI nor Financing shall make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by SCI or Financing that rank pari passu with
or junior to the Financing Subordinated Debt Securities or the Financing Debt
Guarantees or make any payment in respect of any guarantee of any indebtedness
of any other person that ranks pari passu with or junior to such Financing
Subordinated Debt Securities or the Financing Debt Guarantee; provided, that the
foregoing shall not prevent or delay the acquisition of any Financing
Subordinated Debt Securities upon conversion of the Trust Preferred Securities
into SCI Common Stock. Prior to the termination of any such Extension Period,
Financing may further extend the interest payment period; provided, that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters. Upon the termination of any
Extension Period and the payment of all amounts then due, SCI may select a new
Extension Period, subject to the above requirements. If distributions are
deferred, the deferred distributions and accrued interest thereon shall be paid
to holders of record of the Trust Preferred Securities as they appear on the
books and records of the applicable SCI Trust on the record date next following
the termination of such deferral period.
Distributions on the Trust Preferred Securities of each SCI Trust must be paid
on the dates payable to the extent that such SCI Trust has funds available for
the payment of such distributions in the Property Account. SCI Trust's funds
available for distribution to the holders of the Trust Preferred Securities will
be limited to payments received from SCI on the Financing Subordinated Debt
Securities or the Financing Debt Guarantee. See "Description of Financing
Subordinated Debt Securities and Financing Debt Guarantees." The payment of
distributions out of moneys held by such SCI Trust is guaranteed by SCI to the
extent set forth under "-- Description of Trust Guarantees".
Distributions on the Trust Preferred Securities will be payable to the holders
thereof as they appear on the books and records of the applicable SCI Trust on
the relevant record dates, which, as long as the Trust Preferred Securities
remain in book-entry only form, will be one Business Day prior to the relevant
payment dates. Such distributions will be paid through the Property Trustee who
will hold amounts received, from time to time, in
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respect of the Financing Subordinated Debt Securities in the Property Account
for the benefit of the holders of the Trust Securities. Subject to any
applicable laws and regulations and the provisions of the Declaration, each such
payment will be made as described under "-- Miscellaneous -- Book-Entry Only
Issuance" below. If the Trust Preferred Securities do not continue to remain in
book-entry only form, the Regular Trustees of the applicable SCI Trust shall
have the right to select relevant record dates, which shall be more than one
Business Day prior to the relevant payment dates. If any date on which
distributions are to be made on the Trust Preferred Securities is not a Business
Day, then payment of the distributions payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such record date. A "Business Day" shall mean any day other than Saturday,
Sunday or any other day on which banking institutions in the City of New York
(in the state of New York) are permitted or required by any applicable law to
close.
CONVERSION RIGHTS
Unless otherwise set forth in the applicable Prospectus Supplement with respect
to Trust Preferred Securities of an SCI Trust, the terms and provisions
described below shall apply to Trust Preferred Securities that are convertible
into SCI Common Stock.
The Trust Preferred Securities will be convertible at any time prior to the
Conversion Expiration Date (defined below), at the option of the holders thereof
and in the manner described below, into shares of SCI Common Stock at an initial
conversion price set forth in the applicable Prospectus Supplement, subject to
adjustment as described under "-- Conversion Price Adjustments" below. Whenever
SCI issues shares of SCI Common Stock upon conversion of Trust Preferred
Securities, SCI will issue, together with each such share of SCI Common Stock,
one right entitling the holder thereof, under certain circumstances, to purchase
Series C Junior Participating Preferred Stock of SCI (or other securities in
lieu thereof) pursuant to the Rights Agreement or any similar rights issued to
holders of SCI Common Stock in addition thereto or in replacement thereof,
whether or not such Rights shall be exercisable at such time, but only if such
Rights are issued and outstanding and held by other holders of SCI Common Stock
(or are evidenced by outstanding share certificates representing SCI Common
Stock) at such time and have not expired or been redeemed. See "Description of
Common Stock -- Shareholder Rights Plan." The terms of the Trust Preferred
Security may provide that a holder of a Trust Preferred Security wishing to
exercise its conversion right shall surrender such Trust Preferred Security,
together with an irrevocable conversion notice, to the Conversion Agent, which
shall, on behalf of such holder, exchange such Trust Preferred Security for a
principal amount of the Financing Subordinated Debt Securities equal to the
stated liquidation preference of the Trust Preferred Security and immediately
convert such Financing Subordinated Debt Securities into SCI Common Stock.
Holders may obtain copies of the required form of the conversion notice from the
Conversion Agent. So long as a book-entry system for the Trust Preferred
Securities is in effect, however, procedures for converting the Trust Preferred
Securities into shares of SCI Common Stock will differ, as described under
"-- Miscellaneous -- Book-Entry-Only Issuance" below.
Holders of Trust Preferred Securities at the close of business on a dividend
record date will be entitled to receive any declared distribution on such Trust
Preferred Securities with respect to the corresponding distribution payment date
notwithstanding the conversion of such Trust Preferred Securities following such
distribution record date but prior to such distribution payment date. Except as
provided in the immediately preceding sentence, neither Financing nor SCI will
make, or be required to make, any payment, allowance or adjustment for
accumulated and unpaid distributions, whether or not in arrears, on converted
Trust Preferred Securities. SCI will make no payment or allowance for
distributions on the shares of SCI Common Stock issued upon such conversion,
except to the extent that such shares of SCI Common Stock are held of record on
the record date for any such dividends. Each conversion will be deemed to have
been effected immediately prior to the close of business on the day on which the
related conversion notice was received by the Conversion Agent.
No fractional shares of SCI Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by SCI in
cash based on the Current Market Price of the SCI Common Stock on the date the
relevant Trust Preferred Securities are surrendered for conversion.
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Expiration of Conversion Rights. On and after the date specified in the
applicable Prospectus Supplement (the "Expiration Trigger Date"), the applicable
SCI Trust may, at its option, cause the conversion rights of holders of Trust
Preferred Securities to expire or the Conversion Expiration Date if (i) such SCI
Trust has paid in full all accumulated and unpaid distributions (whether or not
earned or declared), including Additional Distributions, on the Trust Preferred
Securities for all dividend periods terminating on or prior to such date and
(ii) for 20 trading days within any period of 30 consecutive trading days,
including the last trading day of such period, the Current Market Price of SCI
Common Stock shall have exceeded 120% of the then effective conversion price,
subject to adjustment in certain circumstances. To exercise its conversion
expiration option, such SCI Trust must issue a press release for publication on
the Dow Jones News Service prior to the opening of business on the second
trading day after a period in which the conditions in the preceding sentence
have been met, but in no event prior to the Expiration Trigger Date. The press
release shall specify the Conversion Expiration Date (as determined in the
manner set forth below) and provide the conversion price and the Current Market
Price of SCI Common Stock, in each case as of the close of business on the
trading day next preceding the date of the press release. SCI has the right to
cause an SCI Trust to exercise the conversion expiration option described
herein.
Notice of the expiration of conversion rights will be given by first-class mail
to the holders of Trust Preferred Securities not more than four Business Days
after such SCI Trust issues the press release. The "Conversion Expiration Date"
will be the close of business on a date selected by such SCI Trust which is not
less than 30 nor more than 60 calendar days after the date on which such SCI
Trust issues the press release announcing its intention to terminate conversion
rights related to the Trust Preferred Securities; provided, that if such SCI
Trust has not exercised its conversion expiration option, the Conversion
Expiration Date with respect to any Trust Preferred Securities which are called
for redemption will be the close of business on the third Business Day prior to
the scheduled date for such redemption.
The term "Current Market Price" of SCI Common Stock for any day means the
reported last sale price, regular way, on such day, or, if no sale takes place
on such day, the average of the reported closing bid and asked prices on such
day, regular way, in either case as reported on the New York Stock Exchange
Composite Tape, or, if the SCI Common Stock is not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities exchange on
which the SCI Common Stock is listed or admitted to trading, or if the SCI
Common Stock is not listed or admitted to trading on a national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc., or, if the SCI Common Stock is not quoted or admitted
to trading on such quotation system, on the principal quotation system on which
the SCI Common Stock is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of the SCI
Common Stock in the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Directors of SCI for that purpose or, if not so available in such manner, as
otherwise determined in good faith by such Board of Directors.
Conversion Price Adjustments -- General. The conversion price will be subject
to adjustment in certain events including, without duplication: (i) the payment
of dividends (and other distributions) payable in SCI Common Stock on any class
of capital stock of SCI; (ii) the issuance to all holders of SCI Common Stock of
rights (other than Rights) or warrants entitling holders of such rights or
warrants to subscribe for or purchase SCI Common Stock at less than the then
Current Price (as defined below); (iii) subdivisions and combinations of SCI
Common Stock; (iv) the payment of dividends (and other distributions) to all
holders of SCI Common Stock consisting of evidences of indebtedness of SCI,
securities or capital stock, cash, or assets (including securities, but
excluding (a) those dividends, distributions, rights and warrants referred to in
clauses (i) and (ii) and Rights, (b) any regular cash dividend that does not
exceed the per share amount of the immediately preceding regular cash dividend
(as adjusted to reflect stock splits, reverse stock splits and the like and to
reflect certain of the other events referred to in this sentence) and (c) any
other dividends or distributions (cash or otherwise) if the per share amount
thereof, when added to the per share amount of other distributions made in the
preceding 12 months (other than those distributions that resulted in a
conversion price adjustment and certain other exceptions), does not exceed 15%
of the Current Price per share of SCI Common Stock on the trading day
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immediately preceding the date of declaration of such dividend); and (v) payment
to holders of SCI Common Stock in respect of a tender or exchange offer (other
than an odd-lot offer) by SCI or any majority owned subsidiary of SCI for SCI
Common Stock at a price in excess of 110% of the Current Price per share of SCI
Common Stock on the trading day next succeeding the last date tenders or
exchanges may be made pursuant to such tender or exchange offer. The "Current
Price" per share of SCI Common Stock on any date means, subject to certain
adjustments, the average of the daily closing prices for the five consecutive
trading days selected by SCI commencing not more than 20 trading days before
such day or the relevant "ex" date.
Financing from time to time may reduce the conversion price of the Financing
Subordinated Debt Securities (and thus the conversion price of the Trust
Preferred Securities) by any amount selected by Financing for any period of at
least 20 days, in which case Financing shall give at least 15 days' notice of
such reduction. Financing may, at its option, make such reductions in the
conversion price, in addition to those set forth above, as the Board of
Directors of Financing deems advisable to avoid or diminish any income tax to
holders of SCI Common Stock (or holders of rights to acquire SCI Common Stock or
securities convertible into SCI Common Stock) resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. Certain federal income tax considerations
regarding the Trust Preferred Securities will be set forth in the applicable
Prospectus Supplement.
No adjustment of the conversion price will be made upon the issuance of any
shares of SCI Common Stock pursuant to any present or future plan providing for
the reinvestment of dividends or interest payable on securities of SCI and the
investment of additional optional amounts in shares of SCI Common Stock under
any such plan, or the issuance of any shares of SCI Common Stock or options or
rights to purchase such shares pursuant to any present or future employee,
director, or consultant benefit plan, program or agreement of SCI or a
subsidiary of SCI or pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security outstanding as of the date the terms of the
Financing Subordinated Debt Securities were first established. The distribution
or exercise of Rights will not result in an adjustment of the conversion price.
There shall also be no adjustment of the conversion price in case of the
issuance of any SCI capital stock (or securities convertible into or
exchangeable for SCI capital stock), except as specifically described above. If
any action would require adjustment of the conversion price pursuant to more
than one of the anti-dilution provisions, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that has the highest absolute
value to holders of the Trust Preferred Securities. No adjustment in the
conversion price will be required unless such adjustment would require an
increase or decrease of at least 1% of the conversion price, but any adjustment
that would otherwise be required to be made shall be carried forward and taken
into account in any subsequent adjustment.
Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of
SCI. If SCI is a party to any transaction (including, without limitation, a
merger, consolidation, sale of all or substantially all of the assets of SCI,
recapitalization or reclassification of SCI Common Stock or any compulsory share
exchange (each of the foregoing, and any other transaction, being referred to as
a "Transaction")), in each case, as a result of which shares of SCI Common Stock
shall be converted into the right (i) in the case of any Transaction other than
a Transaction involving a Common Stock Fundamental Change (as defined herein),
to receive securities, cash or other property, each Trust Preferred Security
shall thereafter be convertible into the kind and amount of securities, cash and
other property receivable upon the consummation of such Transaction by a holder
of that number of shares of SCI Common Stock into which a Trust Preferred
Security was convertible immediately prior to such Transaction, or (ii) in the
case of a Transaction involving a Common Stock Fundamental Change, to receive
common stock of the kind received by holders of SCI Common Stock (but in each
case after giving effect to any adjustment discussed below relating to a
Fundamental Change if such Transaction constitutes a Fundamental Change). The
holders of Trust Preferred Securities will have no voting rights with respect to
any Transaction described in this section.
If any Fundamental Change occurs, then the conversion price in effect will be
adjusted immediately after such Fundamental Change as described below. In
addition, in the event of a Common Stock Fundamental Change, each Trust
Preferred Security shall be convertible solely into common stock of the kind
received by holders of SCI Common Stock as a result of such Common Stock
Fundamental Change.
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The conversion price in the case of any Transaction involving a Fundamental
Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined herein),
the conversion price of the Trust Preferred Securities will thereupon
become the lower of (a) the conversion price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments, and (b) the result obtained by multiplying the greater
of the Applicable Price (as defined herein) or the then applicable
Reference Market Price (as defined herein) by a fraction of which the
numerator will be the liquidation preference set forth in the applicable
Prospectus Supplement and the denominator will be the redemption price set
forth in the applicable Prospectus Supplement set forth below (based on the
date such Non-Stock Fundamental Change occurs);
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Trust Preferred Securities in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other prior
adjustments, will thereupon be adjusted by multiplying such conversion
price by a fraction of which the numerator will be the Purchaser Stock
Price (as defined herein) and the denominator will be the Applicable Price;
provided, that in the event of a Common Stock Fundamental Change in which
(a) 100% of the value of the consideration received by a holder of SCI
Common Stock is common stock of the successor, acquiror, or other third
party (and cash, if any, is paid only with respect to any fractional
interests in such common stock resulting from such Common Stock Fundamental
Change) and (b) all of the SCI Common Stock will have been exchanged for,
converted into, or acquired for common stock (and cash with respect to
fractional interests) of the successor, acquiror, or other third party, the
conversion price of the Trust Preferred Securities in effect immediately
prior to such Common Stock Fundamental Change will thereupon be adjusted by
multiplying such conversion price by a fraction of which the numerator will
be one and the denominator will be the number of shares of common stock of
the successor, acquiror, or other third party received by a holder of one
share of SCI Common Stock as a result of such Common Stock Fundamental
Change.
In the absence of the Fundamental Change provisions, in the case of a
Transaction each Trust Preferred Security would become convertible into the
securities, cash, or property receivable by a holder of the number of shares of
SCI Common Stock into which such Trust Preferred Security was convertible
immediately prior to such Transaction. Thus, in the absence of the Fundamental
Change provisions, a Transaction could substantially lessen or eliminate the
value of the conversion privilege associated with the Trust Preferred
Securities. For example, if SCI were acquired in a cash merger, each Trust
Preferred Security would become convertible solely into cash and would no longer
be convertible into securities whose value would vary depending on the future
prospects of SCI and other factors.
The foregoing conversion price adjustments are designed, in "Fundamental Change"
transactions, where all or substantially all the SCI Common Stock is converted
into securities, cash, or property and not more than 50% of the value received
by the holders of SCI Common Stock consists of stock listed or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the National Market System of the National Association of Securities
Dealers, Inc. (a "Non-Stock Fundamental Change," as defined herein), to increase
the securities, cash, or property into which each Trust Preferred Security is
convertible.
In a Non-Stock Fundamental Change transaction where the initial value received
per share of SCI Common Stock (measured as described in the definition of
Applicable Price below) is lower than the then applicable conversion price of
the Trust Preferred Security but greater than or equal to the Reference Market
Price (defined below), the conversion price will be adjusted as described above
with the effect that each Trust Preferred Security will be convertible into
securities, cash or property of the same type received by the holders of SCI
Common Stock in such transaction but in an amount per Trust Preferred Security
equal to the amount indicated as the denominator as of the date of such
transaction as set forth in clause (i) above with respect to conversion prices
for Non-Stock Fundamental Changes.
In a Non-Stock Fundamental Change transaction where the initial value received
per share of SCI Common Stock (measured as described in the definition of
Applicable Price below) is lower than both the then applicable conversion price
of a Trust Preferred Security and the Reference Market Price, the conversion
price will be adjusted as described above but calculated as though such initial
value had been the Reference Market Price.
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In a Fundamental Change transaction where all or substantially all the SCI
Common Stock is converted into securities, cash, or property and more than 50%
of the value received by the holders of SCI Common Stock consists of listed or
National Market System traded common stock (a "Common Stock Fundamental Change,"
as defined herein), the foregoing adjustments are designed to provide in effect
that (i) where SCI Common Stock is converted partly into such common stock and
partly into other securities, cash, or property, each Trust Preferred Security
will be convertible solely into a number of shares of such common stock
determined so that the initial value of such shares (measured as described in
the definition of Purchaser Stock Price below) equals the value of the shares of
SCI Common Stock into which such Trust Preferred Security was convertible
immediately before the transaction (measured as aforesaid) and (ii) where SCI
Common Stock is converted solely into such common stock, each Trust Preferred
Security will be convertible into the same number of shares of such common stock
receivable by a holder of the number of shares of SCI Common Stock into which
such Trust Preferred Security was convertible immediately before such
transaction.
The term "Applicable Price" in this "-- Conversion Rights" section means (i) in
the case of a Non-Stock Fundamental Change in which the holders of the SCI
Common Stock receive only cash, the amount of cash received by the holder of one
share of SCI Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the average of the
Closing Prices (as defined herein) for the SCI Common Stock during the ten
consecutive trading days prior to and including the record date for the
determination of the holders of SCI Common Stock entitled to receive such
securities, cash, or other property in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change or, if there is no such
record date, the date upon which the holders of the SCI Common Stock shall have
the right to receive such securities, cash, or other property (such record date
or distribution date being hereinafter referred to as the "Entitlement Date"),
in each case as adjusted in good faith by SCI to appropriately reflect any of
the events referred to in clauses (i) through (v) of the first paragraph under
"-- Conversion Price Adjustments -- General."
The term "Closing Price" of any common stock on any day means the reported last
sale price, regular way, on such day, or, if no such sale takes place on such
day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the principal national securities
exchange on which such common stock is listed or admitted to trading, or if such
common stock is not listed or admitted to trading on a national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc., or, if such common stock is not quoted or admitted to
trading on such quotation system, on the principal quotation system on which
such common stock is listed or admitted to trading or quoted, or, if not listed
or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such common
stock in the over-the-counter market on the day in question as reported by the
National Quotation Bureau Inc., or a similar generally accepted reporting
service, or, if not so available in such manner, as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
of SCI for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors of SCI.
The term "Common Stock Fundamental Change" in this "-- Conversion Rights"
section means any Fundamental Change in which more than 50% of the value (as
determined in good faith by the Board of Directors of SCI) of the consideration
received by holders of SCI Common Stock consists of common stock that for each
of the ten consecutive trading days prior to the Entitlement Date has been
admitted for listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the National Market System of the
National Association of Securities Dealers, Inc.; provided, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) SCI
continues to exist after the occurrence of such Fundamental Change and the
outstanding Trust Preferred Securities continue to exist as outstanding Trust
Preferred Securities, or (ii) the outstanding Trust Preferred Securities
continue to exist as Trust Preferred Securities and convertible into common
stock of the successor to SCI.
The term "Fundamental Change" in this "-- Conversion Rights" section means the
occurrence of any transaction or event in connection with a plan pursuant to
which all or substantially all of the SCI Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to receive
securities, cash or other property (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger,
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combination, reclassification, recapitalization, or otherwise); provided, that,
in the case of a plan involving more than one such transaction or event, for
purposes of adjustment of the conversion price, such Fundamental Change shall be
deemed to have occurred when substantially all of the SCI Common Stock shall be
exchanged for, converted into, or acquired for or constitute solely the right to
receive securities, cash or other property, but the adjustment shall be based
upon the highest weighted average per share consideration that a holder of SCI
Common Stock could have received in such transactions or events as a result of
which more than 50% of the SCI Common Stock shall have been exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash or other property.
The term "Non-Stock Fundamental Change" in this "-- Conversion Rights" section
means any Fundamental Change other than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" in this "-- Conversion Rights" section means,
with respect to any Common Stock Fundamental Change, the average of the Closing
Prices for the common stock received in such Common Stock Fundamental Change for
the ten consecutive trading days prior to and including the Entitlement Date, as
adjusted in good faith by the Board of Directors of Financing to appropriately
reflect any of the events referred to in clauses (i) through (v) of the first
paragraph under "-- Conversion Price Adjustments -- General."
The term "Reference Market Price" in this "-- Conversion Rights" section means
the amount set forth in the applicable Prospectus Supplement (which unless
otherwise set forth in the applicable Prospectus Supplement is an amount equal
to 66 2/3% of the reported last sale price for SCI Common Stock on the New York
Stock Exchange Composite Tape on the date of the accompanying Prospectus
Supplement) and in the event of any adjustment to the conversion price other
than as a result of a Non-Stock Fundamental Change, the Reference Market Price
shall also be adjusted so that the ratio of the Reference Market Price to the
conversion price after giving effect to any such adjustment shall always be the
same as the ratio of the Initial Reference Market Price set forth in the
accompanying Prospectus Supplement to the initial conversion price.
PROPERTY TRUSTEE, TRANSFER AGENT, REGISTRAR, PAYING AGENT AND CONVERSION AGENT
The Bank of New York will act as Transfer Agent, Registrar and Paying Agent, and
Conversion Agent for the Trust Preferred Securities, but the relevant SCI Trust
may designate an additional or substitute Transfer Agent, Registrar and Paying
Agent, or Conversion Agent. If the Trust Preferred Securities do not remain in
book-entry-only form, registration of transfers of Trust Preferred Securities
will be effected without charge by or on behalf of such SCI Trust, but upon
payment in respect of any tax or other governmental charges which may be imposed
in connection therewith (and/or the giving of such indemnity as such SCI Trust
may require with respect thereto). Exchanges of Trust Preferred Securities for
Financing Subordinated Debt Securities will be effected without charge by or on
behalf of such SCI Trust, but upon payment in respect of any tax or other
governmental charges which may be imposed (and/or the giving of such indemnity
as such SCI Trust may require with respect thereto) in connection with the
issuance of any Financing Subordinated Debt Securities in the name of any person
other than the registered holder of the Trust Preferred Security for which the
Financing Subordinated Debt Security is being exchanged or for any reason other
than such exchange. Such SCI Trust will not be required to register or cause to
be registered the transfer of Trust Preferred Securities after such Trust
Preferred Securities have been called for redemption or exchange.
SCI and certain of its affiliates maintain a deposit account and banking
relationship with The Bank of New York. The Bank of New York serves as Trustee
under the Senior Indenture pursuant to which unsecured debt securities of SCI
are outstanding representing approximately $579.7 million of Senior Indebtedness
as of March 31, 1995 and will serve as Property Trustee of the SCI Trusts and
Trust Guarantee Trustee (see " -- Description of Trust Guarantees"). An
affiliate The Bank of New York will serve as the Delaware Trustee of the SCI
Trusts.
Pursuant to the Trust Indenture Act, a trustee under an Indenture may be deemed
to have a conflicting interest, and may under certain circumstances set forth in
the Trust Indenture Act, be required to resign as trustee under such Indenture,
if the securities issued under such Indenture are in default (as such terms
defined in such Indenture) and the trustee is the trustee under another
Indenture under which any other securities the same obligor are outstanding,
subject to certain exceptions set forth in the Trust Indenture Act. In such
event, the
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obligor must take prompt steps to have a successor trustee appointed in the
manner provided in the Indenture from which the trustee has resigned.
Pursuant to the Trust Indenture Act, The Bank Of New York, as trustee under the
Senior Indenture and the Financing Indenture and Property Trustee of each SCI
Trust could be required to resign as trustee under one or more of such
Indentures or of an SCI Trust should a default occur on one or more of such
Indentures or the applicable Declaration of an SCI Trust. In such event, the
Company would be required to take prompt steps to have a successor trustee or
successor trustees appointed in the manner in the applicable Indenture or
Indentures or SCI Trust.
Mandatory Redemption. Upon the repayment of the Financing Subordinated Debt
Securities, whether at maturity or upon redemption, the proceeds from such
repayment or payment shall simultaneously be applied to redeem Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Financing Subordinated Debt Securities so repaid or redeemed at the
Redemption Price; provided that, holders of Trust Securities shall be given not
less than 30 nor more than 60 days notice of such redemption. If fewer than all
of the outstanding Trust Preferred Securities are to be redeemed, the Trust
Preferred Securities will be redeemed pro rata as described under
"-- Miscellaneous -- Book-Entry Only Issuance" below.
TAX EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees of the applicable SCI Trust shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that, as
a result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein or (b) any
amendment to or change in an interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination on or after such date), there is
more than an insubstantial risk that (i) such SCI Trust would be subject to
United States federal income tax with respect to income accrued or received on
the Financing Subordinated Debt Securities, (ii) interest payable to such SCI
Trust on the Financing Subordinated Debt Securities would not be deductible by
SCI for United States federal income tax purposes or (iii) such SCI Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, which change or amendment becomes effective on or after
the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, such SCI Trust
shall, except in the limited circumstances described below, be dissolved with
the result that the Financing Subordinated Debt Securities with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Trust Securities,
would be distributed to the holders of the Trust Securities in liquidation of
such holders' interests in such SCI Trust on a pro rata basis within 90 days
following the occurrence of such Tax Event; provided that, such dissolution and
distribution shall be conditioned on (i) the Regular Trustees' receipt of an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the holders
of the Trust Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of such dissolution and distribution of
Financing Subordinated Debt Securities, and (ii) SCI being unable to avoid such
Tax Event within such 90 day period by taking some ministerial action or
pursuing some other reasonable measure that will have no adverse effect on such
SCI Trust, SCI or the holders of the Trust Securities. Furthermore, if after
receipt of a Dissolution Tax Opinion by the Regular Trustees of such SCI Trust
(i) SCI has received an opinion (a "Redemption Tax Opinion") of nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that SCI would be
precluded from deducting the interest on the Financing Subordinated Debt
Securities for United States federal income tax purposes, even after the
Financing Subordinated Debt Securities were distributed to the holders of Trust
Securities in liquidation of such holders' interests in such SCI Trust as
described above, or (ii) the Regular Trustees shall have been informed by such
tax counsel that it cannot deliver a No Recognition Opinion to such SCI Trust,
Financing shall have the right, upon not less than 30 nor more than 60 days
notice,
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to redeem the Financing Subordinated Debt Securities, in whole or in part, for
cash within 90 days following the occurrence of such Tax Event, and, following
such redemption, Trust Securities with an aggregate liquidation amount equal to
the aggregate principal amount of the Financing Subordinated Debt Securities so
redeemed shall be redeemed by such SCI Trust at the Redemption Price on a pro
rata basis; provided, that, if at the time there is available to such SCI Trust
the opportunity to eliminate, within such 90 day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election or pursuing
some other similar reasonable measure that has no adverse effect on such SCI
Trust or the holders of the Trust Securities, such SCI Trust will pursue such
measure in lieu of redemption.
If the Financing Subordinated Debt Securities are distributed to the holders of
the Trust Preferred Securities of an SCI Trust, SCI will use its best efforts to
cause the Financing Subordinated Debt Securities to be listed on the New York
Stock Exchange or on such other exchange as the Trust Preferred Securities are
then listed.
After the date for any distribution of Financing Subordinated Debt Securities
upon dissolution of an SCI Trust, (i) the Trust Preferred Securities will no
longer be deemed to be outstanding, (ii) the SCI Trust Depositary (defined
below) or its nominee, as the record holder of the Trust Preferred Securities of
such SCI Trust, will receive a registered global certificate or certificates
representing the applicable Financing Subordinated Debt Securities to be
delivered upon such distribution, and (iii) any certificates representing Trust
Preferred Securities of such SCI Trust not held by the SCI Trust Depositary or
its nominee will be deemed to represent the applicable Financing Subordinated
Debt Securities having an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on such Trust Preferred Securities until such certificates
are presented to SCI or its agent for transfer or reissuance.
There can be no assurance as to the market prices for either the Trust Preferred
Securities of an SCI Trust or the Financing Subordinated Debt Securities that
may be distributed in exchange for the Trust Preferred Securities of such SCI
Trust if a dissolution and liquidation of such SCI Trust were to occur.
Accordingly, the Trust Preferred Securities of an SCI Trust that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Financing Subordinated Debt Securities that an investor may receive if a
dissolution and liquidation of such SCI Trust were to occur, may trade at a
discount to the price that the investor paid to purchase the Trust Preferred
Securities.
Redemption Procedures. Each SCI Trust may not redeem fewer than all of the
outstanding Trust Preferred Securities unless all accrued and unpaid
distributions have been paid on all Trust Preferred Securities of such SCI Trust
for all quarterly distribution periods terminating on or prior to the date of
redemption.
If an SCI Trust gives a notice of redemption in respect of Trust Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, and if Financing has paid to the Property
Trustee of such SCI Trust a sufficient amount of cash in connection with the
related redemption or maturity of the Financing Subordinated Debt Securities,
then such SCI Trust will irrevocably deposit with the SCI Trust Depositary funds
sufficient to pay the applicable Redemption Price and will give the SCI Trust
Depositary irrevocable instructions and authority to pay the Redemption Price to
the holders of the Trust Preferred Securities. See "Book-Entry Only
Issuance -- The Depository Trust Company." If notice of redemption shall have
been given and funds deposited as required, then, immediately prior to the close
of business on the date of such deposit, distributions will cease to accrue and
all rights of holders of such Trust Preferred Securities so called for
redemption will cease, except the right of the holders of such Trust Preferred
Securities to receive the Redemption Price but without interest on such
Redemption Price. If any date fixed for redemption of Trust Preferred Securities
of such SCI Trust is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a Business
Day (without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. If payment of the Redemption
Price in respect of Trust Preferred Securities is improperly withheld or refused
and not paid either by such SCI Trust, or by SCI pursuant to the Trust
Guarantee, distributions on such Trust Preferred Securities will continue to
accrue at the then applicable rate from the original redemption date to the date
of payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
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If fewer than all of the outstanding Trust Preferred Securities of an SCI Trust
are to be redeemed, the Trust Preferred Securities will be redeemed pro rata as
described below under "Book-Entry Only Issuance -- The Depository Trust
Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), SCI or its subsidiaries may at any time,
and from time to time, purchase outstanding Trust Preferred Securities of any
SCI Trust by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of an SCI Trust (each a "Liquidation"), the then
holders of the Trust Preferred Securities of such SCI Trust will be entitled to
receive out of the assets of such SCI Trust, after satisfaction of liabilities
to creditors, distributions in an amount equal to the aggregate of the stated
liquidation amount per Trust Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (the "Liquidation Distribution"),
unless, in connection with such Liquidation, Financing Subordinated Debt
Securities in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the distribution rate
of, and accrued and unpaid interest equal to accrued and unpaid distributions
on, the Trust Preferred Securities have been distributed on a pro rata basis to
the holders of the Trust Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only in
part because such SCI Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
SCI Trust on the Trust Preferred Securities shall be paid on a pro rata basis.
The holders of the Trust Common Securities of each SCI Trust will be entitled to
receive distributions upon any such dissolution pro rata with the holders of the
Trust Preferred Securities of such SCI Trust, except that if a Declaration Event
of Default has occurred and is continuing, the Trust Preferred Securities of
such SCI Trust shall have a preference over the Trust Common Securities with
regard to such distributions.
Pursuant to its Declaration, each SCI Trust shall terminate (i) upon the
expiration of the term of SCI Trust set forth in the applicable Prospectus
Supplement, (ii) upon the bankruptcy of SCI or the holder of the Trust Common
Securities, (iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the holder of the Trust Common Securities or SCI, the
filing of a certificate of cancellation with respect to the applicable SCI
Trust, or the revocation of the charter of the holder of the Trust Common
Securities or SCI and the expiration of 90 days after the date of revocation
without a reinstatement thereof, (iv) upon the distribution of Financing
Subordinated Debt Securities upon the occurrence of a Tax Event, (v) upon the
entry of a decree of a judicial dissolution of the holder of the Trust Common
Securities, SCI or SCI Trust, or (vi) upon the redemption of all the Trust
Securities.
DECLARATION EVENTS OF DEFAULT
With respect to the Financing Subordinated Debt Securities held by an SCI Trust,
an event of default under the Financing Indenture (an "Indenture Event of
Default") will constitute an event of default under the Declaration of such SCI
Trust with respect to the Trust Securities (a "Declaration Event of Default");
provided that, pursuant to the Declaration, the holder of the Trust Common
Securities will be deemed to have waived any Declaration Event of Default with
respect to the Trust Common Securities until all Declaration Events of Default
with respect to the Trust Preferred Securities of such SCI Trust have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Trust Preferred Securities of such SCI Trust have been so
cured, waived, or otherwise eliminated, the Property Trustee will be deemed to
be acting solely on behalf of the holders of the Trust Preferred Securities of
such SCI Trust, and only the holders of the Trust Preferred Securities will have
the right to direct the Property Trustee with respect to certain matters under
the Declaration of such SCI Trust, and therefore the Financing Indenture.
Upon the occurrence of a Declaration Event of Default, the Property Trustee of
such SCI Trust as the sole holder of the Financing Subordinated Debt Securities
will have the right under the Financing Indenture to declare the principal of
and interest on the Financing Subordinated Debt Securities to be immediately due
and payable. Financing and such SCI Trust are each required to file annually
with the Property Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declaration.
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VOTING RIGHTS
Except as described herein, and as otherwise required by law, including the
Trust Indenture Act and the Delaware Business Trust Act, and the Declaration,
the holders of the Trust Preferred Securities of each SCI Trust will have no
voting rights.
If (i) an SCI Trust fails to pay distributions in full on the Trust Preferred
Securities for six consecutive quarterly distribution periods or (ii) a
Declaration Event of Default occurs and is continuing (each an "Appointment
Event"), then the holders of the Trust Preferred Securities of such SCI Trust,
acting as a single class, will be entitled by the majority vote of such holders
to appoint a special Regular Trustee ("Special Regular Trustee"). For purposes
of determining whether such SCI Trust has failed to pay distributions in full
for six consecutive quarterly distribution periods, distributions shall be
deemed to remain in arrears, notwithstanding any payments in respect thereof,
until full cumulative distributions have been or contemporaneously are paid with
respect to all quarterly distribution periods terminating on or prior to the
date of payment of such cumulative distributions. Any holder of Trust Preferred
Securities of such SCI Trust (other than SCI or any of its affiliates) shall be
entitled to nominate any person to be appointed as Special Regular Trustee. Not
later than 30 days after such right to appoint a Special Regular Trustee arises,
the Regular Trustee shall convene a meeting of the holders of Trust Preferred
Securities of such SCI Trust for the purpose of appointing a Special Regular
Trustee. If the Regular Trustee of such SCI Trust fails to convene such meeting
within such 30-day period the holders of not less than 10% of the aggregate
stated liquidation amount of the outstanding Trust Preferred Securities will be
entitled to convene such meeting. The provisions of the Declaration relating to
the convening and conduct of the meetings of the holders will apply with respect
to any such meeting. Any Special Regular Trustee so appointed shall cease to be
a Special Regular Trustee if the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease to be
continuing. Notwithstanding the appointment of any such Special Regular Trustee,
Financing shall retain all rights under the Financing Indenture, including the
right to defer payments of interest by extending the interest payment period as
provided under "Description of Financing Subordinated Debt Securities and
Financing Debt Guarantees -- Provisions Applicable to Financing Subordinated
Debt Securities Issued to SCI Trusts -- Option to Extend Interest Payment
Period." If such an extension occurs, there will be no Indenture Event of
Default and, consequently, no Declaration Event of Default for failure to make
any scheduled interest payment during the Extension Period on the date
originally scheduled.
Subject to the requirement of the Property Trustee obtaining a tax opinion in
certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Trust Preferred
Securities of an SCI Trust, have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee,
or direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration of the applicable SCI Trust including the right to direct
the Property Trustee, as holder of the Financing Subordinated Debt Securities
and the Financing Debt Guarantee, to (i) exercise the remedies available under
the Financing Indenture with respect to the applicable Financing Subordinated
Debt Securities and Financing Debt Guarantees, (ii) waive any past Indenture
Event of Default that is waivable under the Base Indenture (as defined herein),
or (iii) exercise any right to rescind or annul a declaration that the principal
of all the Financing Subordinated Debt Securities shall be due and payable;
provided, that, where a consent or action under the Financing Indenture would
require the consent or act of more than a majority of the holders (a
"Super-Majority") affected thereby, only the holders of at least such
Super-Majority of the Trust Preferred Securities of such SCI Trust may direct
the Property Trustee to give such consent or take such action. If the Property
Trustee fails to enforce its rights under the Financing Subordinated Debt
Securities, a record holder of Trust Preferred Securities may, after a period of
30 days has elapsed from such holder's written request to the Property Trustee
to enforce such rights, institute a legal proceeding directly against SCI or
Financing to enforce the Property Trustee's rights under the Financing
Subordinated Debt Securities and Financing Debt Guarantees without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. The Property Trustee shall notify all holders of the Trust
Preferred Securities of such SCI Trust of any notice of default received from
the Financing Debt Trustee with respect to the applicable Financing Subordinated
Debt Securities. Such notice shall state that such Indenture Event of Default
also constitutes a Declaration Event of Default under the Declaration of such
SCI Trust. Except with respect to
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directing the time, method and place of conducting a proceeding for a remedy,
the Property Trustee shall not take any of the actions described in clauses (i),
(ii) or (iii) in this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such action, the
applicable SCI Trust will not fail to be classified as a grantor trust for
United States federal income tax purposes.
If the consent of the Property Trustee, as the holder of the applicable
Financing Subordinated Debt Securities and Financing Debt Guarantees, is
required under the Financing Indenture with respect to any amendment,
modification or termination of the Financing Indenture, the Property Trustee of
each SCI Trust shall request the direction of the holders of the Trust
Securities of such SCI Trust with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities of such SCI Trust voting together as a single class; provided, that
where a consent under the Financing Indenture would require the consent of a
Super-Majority, the Property Trustee may only give such consent at the direction
of the holders of at least the proportion in liquidation amount of the Trust
Securities which the relevant Super-Majority represents of the aggregate
principal amount of the Financing Subordinated Debt Securities outstanding. The
Property Trustee shall be under no obligation to take any such action in
accordance with the directions of the holders of the Trust Securities of any SCI
Trust unless the Property Trustee has obtained an opinion of tax counsel to the
affect that for the purposes of United States federal income tax such SCI Trust
will not be classified as other than a grantor trust.
A waiver of an Indenture Event of Default in respect of the applicable Financing
Subordinated Debt Securities held by an SCI Trust will constitute a waiver of
the corresponding Declaration Event of Default under the Declaration of the
applicable SCI Trust.
Any required approval or direction of holders of Trust Preferred Securities of
an SCI Trust may be given at a separate meeting of holders of Trust Preferred
Securities of such SCI Trust convened for such purpose, at a meeting of all of
the holders of Trust Securities of such SCI Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
holders of Trust Preferred Securities of such SCI Trust are entitled to vote, or
of any matter upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of Trust Preferred Securities of
such SCI Trust. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents. No vote or consent of the holders of Trust
Preferred Securities or SCI Trust will be required for such SCI Trust to redeem
and cancel Trust Preferred Securities or distribute Financing Subordinated Debt
Securities and Financing Debt Guarantees in accordance with the Declaration.
Notwithstanding that holders of Trust Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Trust
Preferred Securities of an SCI Trust that are owned at such time by SCI or any
entity directly or indirectly controlling or controlled by, or under direct or
indirect common control with, SCI, shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Trust
Preferred Securities of such SCI Trust were not outstanding.
The procedures by which holders of Trust Preferred Securities may exercise their
voting rights are described below. See "-- Miscellaneous -- Book-Entry Only
Issuance" below.
Except in the limited circumstances described above, in connection with the
appointment of a Special Regular Trustee, holders of the Trust Preferred
Securities of each SCI Trust will have no rights to appoint or remove the SCI
Trustees, who may be appointed, removed or replaced solely by SCI as the
indirect or direct holder of all of the Trust Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration of an SCI Trust may be modified and amended if approved by a
majority of the Regular Trustees (and in certain circumstances the Property
Trustee); provided, that if any proposed amendment provides for, or the Regular
Trustees otherwise proposes to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Trust Securities of such
SCI Trust, whether by way of amendment to the
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Declaration or otherwise, or (ii) the dissolution, winding-up or termination of
such SCI Trust other than pursuant to the terms of the applicable Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of at least 66 2/3% in
liquidation amount of the Trust Securities of such SCI Trust affected thereby;
provided further that, the rights of holders of Trust Preferred Securities to
appoint a Special Regular Trustee shall not be amended without the consent of
each holder of Trust Preferred Securities of such SCI Trust; provided further
that, if any amendment or proposal referred to in clause (i) of this paragraph
would adversely affect only the Trust Preferred Securities or the Trust Common
Securities of such SCI Trust, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of 66 2/3% in liquidation amount of such
class of Securities.
Notwithstanding the foregoing, no amendment or modification may be made to the
Declaration of an SCI Trust if such amendment or modification would (i) cause
such SCI Trust to be classified for purposes of United States federal income
taxation as other than a grantor trust, (ii) reduce or otherwise adversely
affect the powers of the Property Trustee or (iii) cause SCI Trust to be deemed
an "investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
Each SCI Trust may not consolidate, amalgamate, merge or be replaced by, or
convey, transfer or lease its properties and assets substantially as an
entirety, to any corporation or other body, except as described below in this
paragraph. An SCI Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any state; provided that, (i) such successor entity either (a)
expressly assumes all of the obligations of such SCI Trust under the Trust
Securities or (b) substitutes for the Trust Preferred Securities of such SCI
Trust other securities having substantially the same terms as the Trust
Securities (the "Successor Securities"), so long as the Successor Securities
rank the same as the Trust Securities rank with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) SCI and Financing
expressly acknowledge a trustee of such successor entity possessing the same
powers and duties as the Property Trustee as the holder of the Financing
Subordinated Debt Securities and Financing Debt Guarantees, (iii) the Trust
Preferred Securities of such SCI Trust or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the Trust
Preferred Securities of such SCI Trust are then listed or quoted, (iv) such
merger, consolidation, amalgamation or replacement does not cause the Trust
Preferred Securities of such SCI Trust (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities of such SCI Trust (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such successor entity has a purpose identical
to that of such SCI Trust, (vii) prior to such merger, consolidation,
amalgamation or replacement, Financing has received an opinion of a nationally
recognized independent counsel to such SCI Trust experienced in such matters to
the effect that, (a) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the holders
of the Trust Securities of such SCI Trust (including any Successor Securities)
in any material respect (other than with respect to any dilution of the holders'
interest in the new entity), and (b) following such merger, consolidation,
amalgamation or replacement, neither such SCI Trust nor such successor entity
will be required to register as an investment company under the 1940 Act and
(viii) SCI guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Trust Guarantee and
the guarantee of the Common Securities. Notwithstanding the foregoing, such SCI
Trust shall not, except with the consent of holders of 100% in liquidation
amount of the Trust Securities, consolidate, amalgamate, merge with or into, or
be replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if such consolidation,
amalgamation, merger or replacement would cause such SCI Trust or the successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.
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MISCELLANEOUS
Book-Entry Only Issuance. Unless otherwise set forth in the applicable
Prospectus Supplement, DTC will act as securities depositary (the "SCI Trust
Depositary") for the Trust Preferred Securities of each SCI Trust. See "Book
Entry Only Issuance -- The Depositary Trust Company" below.
Paying Agent. If the Trust Preferred Securities of an SCI Trust do not remain
in book-entry only form, the following provisions would apply:
The Property Trustee of such SCI Trust will act as paying agent, and may
designate an additional or substitute paying agent at any time.
Registration of transfers of Trust Preferred Securities of such SCI Trust will
be effected without charge by or on behalf of such SCI Trust, but upon payment
(with the giving of such indemnity as such SCI Trust or SCI may require) in
respect of any tax or other government charges that may be imposed in relation
to it.
Each such SCI Trust will not be required to register or cause to be registered
the transfer of Trust Preferred Securities of such SCI Trust after such Trust
Preferred Securities have been called for redemption.
Governing Law. The Declaration and the Trust Preferred Securities will be
governed by, and construed in accordance with, the internal laws of the State of
Delaware.
Miscellaneous. The Regular Trustees of each SCI Trust are authorized and
directed to operate such SCI Trust in such a way so that such SCI Trust will not
be required to register as an "investment company" under the 1940 Act or
characterized as other than a grantor trust for United States federal income tax
purposes. Financing is authorized and directed to conduct its affairs so that
the Financing Subordinated Debt Securities will be treated as indebtedness of
Financing for United States federal income tax purposes. In this connection,
Financing and the Regular Trustees of the applicable SCI Trust are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of such SCI Trust or the certificate of incorporation of Financing, that each of
SCI and the Regular Trustees determine in its discretion to be necessary or
desirable to achieve such end, of such SCI Trust as long as such action does not
adversely affect the interests of the holders of the Trust Preferred Securities
or vary the terms thereof.
Holders of the Trust Preferred Securities of each SCI Trust have no preemptive
rights.
DESCRIPTION OF TRUST GUARANTEES
Set forth below is a summary of information concerning the Trust Guarantees that
will be executed and delivered by SCI for the benefit of the holders, from time
to time, of Trust Preferred Securities. Each Trust Guarantee will be qualified
as an indenture under the Trust Indenture Act. The Bank of New York will act as
indenture trustee under each Trust Guarantee (the "Trust Guarantee Trustee").
The terms of each Trust Guarantee will be those set forth in such Trust
Guarantee and those made part of such Trust Guarantee by the Trust Indenture
Act. The summary does not purport to be complete and is subject in all respects
to the provisions of, and is qualified in its entirety by reference to, the form
of Trust Guarantee, which is filed as an exhibit to the Registration Statement
of which this Prospectus forms a part, and the Trust Indenture Act. Each Trust
Guarantee will be held by the Trust Guarantee Trustee for the benefit of the
holders of the Trust Preferred Securities of the applicable SCI Trust.
General. Pursuant to each Trust Guarantee, SCI will irrevocably and
unconditionally agree, to the extent set forth herein, to pay in full to the
holders of the Trust Preferred Securities issued by an SCI Trust, the Trust
Guarantee Payments (as defined herein) (except to the extent paid by such SCI
Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which such SCI Trust may have or assert. The following payments
with respect to Trust Preferred Securities issued by an SCI Trust (the "Trust
Guarantee Payments"), to the extent not paid by such SCI Trust will be subject
to the Trust Guarantee (without duplication): (i) any accrued and unpaid
distributions that are required to be paid on such Trust Preferred Securities,
to the extent such SCI Trust shall have funds available therefor, (ii) the
redemption price, including all accrued and unpaid distributions (the
"Redemption Price"), to the extent such SCI Trust has funds available therefor
with respect to any Trust Preferred Securities called for redemption by such SCI
Trust and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of such SCI Trust (other than in connection with the
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distribution of Financing Subordinated Debt Securities to the holders of Trust
Preferred Securities or the redemption of all of the Trust Preferred Securities)
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on such Trust Preferred Securities to the date of payment
to the extent such SCI Trust has funds available therefor or (b) the amount of
assets of such SCI Trust remaining available for distribution to holders of such
Trust Preferred Securities in liquidation of such SCI Trust. SCI's obligation to
make a Trust Guarantee Payment may be satisfied by direct payment of the
required amounts by SCI to the holders of Trust Preferred Securities or by
causing the applicable SCI Trust to pay such amounts to such holders.
Each Trust Guarantee will be a full and unconditional guarantee with respect to
the Trust Preferred Securities issued by the applicable SCI Trust from the time
of issuance of such Trust Preferred Securities but will not apply to any payment
of distributions except to the extent such SCI Trust shall have funds available
therefor. If Financing does not make interest payments on the Financing
Subordinated Debt Securities purchased by an SCI Trust and SCI fails to make
payment on the Financing Debt Guarantee, such SCI Trust will not pay
distributions on the Trust Preferred Securities issued by such SCI Trust and
will not have funds available therefor.
SCI has also agreed to irrevocably and unconditionally guarantee the obligations
of the SCI Trusts with respect to the Trust Common Securities (the "Trust Common
Securities Guarantees") to the same extent as the Trust Guarantees, except that,
upon an event of default under the Financing Indenture, holders of Trust
Preferred Securities under the Trust Guarantees shall have priority over holders
of Trust Common Securities under the Trust Common Securities Guarantee with
respect to distributions and payments on liquidation, redemption or otherwise.
Certain Covenants of SCI. In each Trust Guarantee, SCI will covenant that, so
long as any Trust Preferred Securities issued by the applicable SCI Trust remain
outstanding, if there shall have occurred any event that would constitute an
event of default under such Trust Guarantee or the Declaration of such SCI
Trust, then (i) SCI shall not, and shall cause any subsidiary of SCI which is
not a wholly owned subsidiary of SCI not to, declare or pay any dividend on, or
make any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or the capital
stock of any such subsidiary or make any payment in respect of any capital stock
of any affiliate of SCI guaranteed by SCI or any of its subsidiaries; provided,
that the foregoing shall not prevent or delay (a) the acquisition of any Trust
Preferred Securities or LLC Preferred Securities upon the conversion thereof
into SCI Common Stock, (b) the distribution of the Financing Subordinated Debt
Securities upon the occurrence of a Tax Event as described under "-- Tax Event
Redemption or Distribution," (c) the redemption by the Company of the Rights in
accordance with the Rights Agreement and any reacquisition by the Company of any
of its stock issued in any acquisition as a result of a purchase price
adjustment or settlement of breach of warranties in connection with such
acquisition, (d) the redemption of the LLC Preferred Securities upon the
occurrence of any LLC Tax Event as described under "Description of the LLC
Preferred Securities and LLC Guarantees -- Tax Event Redemption," (c)
acquisitions of shares of SCI Common Stock in connection with the satisfaction
by SCI or any of its majority owned subsidiaries of its obligations under any
employee benefit plans or the satisfaction by SCI of its obligations pursuant to
any put contract requiring SCI to purchase shares of SCI Common Stock, (d) as a
result of a reclassification of capital stock or the exchange or conversion of
one class or series of capital stock for another class or series of capital
stock, and (e) the purchase of fractional interests in shares of capital stock
pursuant to conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (ii) SCI shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by SCI which rank pari passu with or junior to such Trust
Guarantees or make payment in respect of any guarantee of indebtedness of any
other person that ranks pari passu with or junior to such Trust Guarantees;
provided, that the foregoing shall not prevent or delay the acquisition of any
Financing Subordinated Debt Securities upon conversion of the Trust Preferred
Securities into SCI Common Stock. However, each Trust Guarantee will except from
the foregoing any stock dividends paid by SCI, or any of its subsidiaries, where
the dividend stock is the same stock as that on which the dividend is being
paid.
Modification of the Trust Guarantees; Assignment. Except with respect to any
changes that do not adversely affect the rights of holders of Trust Preferred
Securities (in which case no vote will be required), each Trust Guarantee may be
amended only with the prior approval of the holders of not less than 66 2/3% in
liquidation
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amount of the outstanding Trust Preferred Securities issued by the applicable
SCI Trust. The manner of obtaining any such approval of holders of such Trust
Preferred Securities will be set forth in an accompanying Prospectus Supplement.
All guarantees and agreements contained in a Trust Guarantee shall bind the
successors, assignees, receivers, trustees and representatives of SCI and shall
inure to the benefit of the holders of the Trust Preferred Securities of the
applicable SCI Trust then outstanding.
Events of Default. An Event of Default under the Trust Guarantee will occur
upon the failure of SCI to perform any of its payments or other obligations
thereunder. The holders of a majority in liquidation amount of the Trust
Preferred Securities to which a Trust Guarantee relates have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trust Guarantee Trustee in respect of the Trust Guarantee or to direct
the exercise of any trust or power conferred upon the Trust Guarantee Trustee
under the Trust Guarantee.
If the Trust Guarantee Trustee fails to enforce such Trust Guarantee, any holder
of Trust Preferred Securities relating to such Trust Guarantee may, after such
holder's written request to the Trust Guarantee Trustee to enforce the Trust
Guarantee, institute a legal proceeding directly against SCI to enforce the
Trust Guarantee Trustee's rights under such Trust Guarantee without first
instituting a legal proceeding against the relevant SCI Trust, the Trust
Guarantee Trustee or any other person or entity.
SCI is required to file annually with the Trust Guarantee Trustee an officer's
certificate as to SCI's compliance with all conditions and covenants under each
of the Trust Guarantees.
Information Concerning the Guarantee Trustee. The Trust Guarantee Trustee,
prior to the occurrence of a default, undertakes to perform only such duties as
are specifically set forth in the Trust Guarantee and, after default with
respect to a Trust Guarantee, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provision, the Trust Guarantee Trustee is under no obligation to
exercise any of the powers vested in it by a Trust Guarantee at the request of
any holder of Trust Preferred Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
SCI and certain of its affiliates, including Financing, maintain a deposit
account and banking relationship with The Bank of New York. The Bank of New York
serves as Trustee under the Senior Indenture pursuant to which unsecured debt
securities of SCI are outstanding representing approximately $579.7 million of
Senior Indebtedness as of March 31, 1995 and will serve as Property Trustee of
the SCI Trusts and Trust Guarantee Trustee. An affiliate of The Bank of New York
will serve as the Delaware Trustee of the SCI Trusts.
Pursuant to the Trust Indenture Act, a trustee under an Indenture may be deemed
to have a conflicting interest, and may under certain circumstances set forth in
the Trust Indenture Act, be required to resign as trustee under such Indenture,
if the securities issued under such Indenture are in default (as such terms
defined in such Indenture) and the trustee is the trustee under another
Indenture under which any other securities the same obligor are outstanding,
subject to certain exceptions set forth in the Trust Indenture Act. In such
event, the obligor must take prompt steps to have a successor trustee appointed
in the manner provided in the Indenture from which the trustee has resigned.
Pursuant to the Trust Indenture Act, The Bank Of New York, as trustee under the
Senior Indenture and the Financing Indenture, as Property Trustee of the SCI
Trusts and as Trust Guarantee Trustee could be required to resign as trustee
under one or more of such Indentures or of an SCI Trust or as a Trust Guarantee
Trustee should a default occur on one or more of such Indentures or SCI Trust or
Trust Guarantee. In such event, the Company would be required to take prompt
steps to have a successor trustee or successor trustees appointed in the manner
in the applicable Indenture or Indentures, Declaration of an SCI Trust or Trust
Guarantee.
Termination of the Trust Guarantees. Each Trust Guarantee will terminate as to
the Trust Preferred Securities issued by the applicable SCI Trust upon full
payment of the Redemption Price of all Trust Preferred Securities of such SCI
Trust, upon distribution of the Financing Subordinated Debt Securities held by
such SCI Trust to the holders of the Trust Preferred Securities of such SCI
Trust or upon full payment of the amounts payable in accordance with the
Declaration of such SCI Trust upon liquidation of such SCI Trust. Each Trust
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Trust Preferred
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Securities issued by the applicable SCI Trust must restore payment of any sums
paid under such Trust Preferred Securities or such Trust Guarantee.
Status of the Trust Guarantees. Each Trust Guarantee will constitute an
unsecured obligation of SCI and will rank (i) subordinate and junior in right of
payment to all other liabilities of SCI other than any obligation in respect of
any guarantee of Trust Preferred Securities or LLC Preferred Securities, (ii) in
pari passu with the most senior preferred or preference stock now or hereafter
issued by SCI and with any guarantee now or hereafter entered into by SCI in
respect of any preferred or preference stock of any affiliate of SCI and (iii)
senior to the Common Stock. The terms of the Trust Preferred Securities provide
that each holder of Trust Preferred Securities issued by such SCI Trust by
acceptance thereof agrees to the subordination provisions and other terms of the
applicable Trust Guarantee.
Each Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under a Trust Guarantee
without instituting a legal proceeding against any other person or entity).
Governing Law. The Trust Guarantees will be governed by and construed in
accordance with the internal laws of the State of Texas.
DESCRIPTION OF LLC PREFERRED SECURITIES AND LLC GUARANTEES
The following is a summary of certain terms and provisions of the LLC Preferred
Securities that may be offered hereby. Reference is made to the LLC Articles,
the Regulations of SCI Finance LLC (the "LLC Regulations") and the amendment to
the LLC Regulations adopted or to be adopted by the Manager establishing the
rights, preferences, privileges, limitations and restrictions relating to the
LLC Preferred Securities (the "LLC Declaration"). The summaries set forth below
and in the accompanying Prospectus Supplement address the material terms of the
LLC Preferred Securities of any particular series but do not purport to be
complete and are subject to, and qualified in their entirety by reference to,
the LLC Articles, the LLC Regulations and the LLC Declaration. Capitalized terms
used in the summaries below and not otherwise defined herein have the respective
meanings set forth in the LLC Articles, the LLC Regulations and the LLC
Declaration.
GENERAL
SCI Finance LLC is authorized to issue up to 7,000,000 LLC Preferred Shares, in
one or more series or classes, with such dividend rights, liquidation
preferences per share, redemption provisions, voting rights, conversion or
exchange rights and other rights, preferences, privileges, limitations and
restrictions as are set forth in the LLC Articles, the LLC Regulations and the
LLC Declaration adopted or to be adopted by the Manager. All of the LLC
Preferred Shares which may be issued in one or more series or classes, including
the LLC Preferred Securities, will rank pari passu with each other with respect
to participation in profits and assets. The LLC Articles and the LLC Regulations
as currently in effect do not permit the issuance of any preference interests
ranking, as to participation in the profits or the assets of SCI Finance LLC,
senior to the LLC Preferred Shares. As of May 31, 1995, 3,450,000 LLC Preferred
Shares (which are LLC Preferred Securities) with a liquidation preference of $50
per LLC Preferred Share, are issued and outstanding, fully paid and
non-assessable.
Reference is made to the accompanying Prospectus Supplement relating to the LLC
Preferred Securities for the following terms of the LLC Preferred Securities:
(i) title;
(ii) the dividend terms (when dividends will accrue and be payable);
(iii) the optional redemption provisions and the Redemption Price;
(iv) the liquidation preference per LLC Preferred Security;
(v) the conversion rights for, and conversion price per share of, SCI Common
Stock;
(vi) certain provisions relating to Non-Stock or Common Stock Fundamental
Changes (as defined below);
(vii) the initial Reference Market Price (as defined below);
(viii) book entry provisions, if other than as set forth below; and
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(ix) any other terms of the series (and the accompanying Prospectus Supplement
may state that any of the terms set forth herein is inapplicable to such
series).
DIVIDENDS
Cumulative dividends on the LLC Preferred Securities will accrue and be payable
as set forth in the accompanying Prospectus Supplement, when, as and if declared
by SCI Finance LLC, except as otherwise described below.
The annual dividend payable on each LLC Preferred Security will be fixed as set
forth in the accompanying Prospectus Supplement. The amount of dividends is
computed on the basis of twelve 30-day months and a 360-day year and, for any
period shorter than a full monthly dividend period, will be computed on the
basis of the actual number of days elapsed in such period. Payment of dividends
generally is limited to the amount of funds held by SCI Finance LLC and legally
available therefor.
Dividends declared on the LLC Preferred Securities are payable to the record
holders thereof as they appear on the register for the LLC Preferred Securities
on the record date, which will be one Business Day prior to the relevant payment
date. In the event that any date on which dividends are payable on the LLC
Preferred Securities is not a Business Day, then payment of the dividend payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The term "Business Day" shall
mean any day other than a day on which banking institutions in The City of New
York are authorized or required by law to close.
Dividends on the LLC Preferred Securities of any series will be cumulative
(whether or not declared and whether or not there are profits, surplus or other
funds legally available for the payment of dividends). Dividends on the LLC
Preferred Securities must be declared by SCI Finance LLC, by action of the
Manager, in any calendar year or portion thereof to the extent that the Manager
reasonably anticipates that at the time of payment SCI Finance LLC will have,
and must be paid by SCI Finance to the extent that at the time of proposed
payment SCI Finance LLC has, (i) funds legally available for the payment of such
dividends and (ii) cash on hand sufficient to permit such payments. It is
anticipated that SCI Finance LLC's earnings will result almost exclusively from
payments under the Loans of proceeds from the sale of the LLC Preferred
Securities and the issuance of LLC Common Shares (as described under
"-- Description of the Loans"). SCI Limited will have the right to extend
interest payments on the Loans for up to 60 monthly interest payment periods
over the term of the Loans. Interest shall accrue on and be payable in respect
of any dividend payment on the LLC Preferred Securities which is in arrears at
the interest rate payable in respect of the Loans to the extent permitted by
applicable law.
CERTAIN RESTRICTIONS ON SCI FINANCE LLC
If dividends have not been paid in full on the LLC Preferred Securities, SCI
Finance LLC may not:
(i) pay, or declare and set aside for payment, any dividends on any other LLC
Preferred Shares ranking pari passu with the LLC Preferred Securities as regards
participation in profits of SCI Finance LLC ("SCI Finance LLC Dividend Parity
Shares"), unless the amount of any dividends declared on any SCI Finance LLC
Dividend Parity Shares is paid on SCI Finance LLC Dividend Parity Shares and the
LLC Preferred Securities on a pro rata basis on the date such dividends are paid
on such SCI Finance LLC Dividend Parity Shares, so that
(a)(x) the aggregate amount of dividends paid on the LLC Preferred
Securities bears the same ratio to (y) the aggregate amount of dividends
paid on such SCI Finance Dividend LLC Parity Shares as
(b)(x) the aggregate amount of all accumulated arrears of unpaid dividends
in respect of the LLC Preferred Securities bears to (y) the aggregate
amount of all accumulated arrears of unpaid dividends in respect of such
SCI Finance LLC Dividend Parity Shares;
(ii) pay, or declare and set aside for payment, any dividends on any interests
in SCI Finance LLC ranking junior to the LLC Preferred Securities as to
dividends ("SCI Finance LLC Dividend Junior Shares"); or
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(iii) call for redemption or redeem, purchase or otherwise acquire any SCI
Finance LLC Dividend Parity Shares or SCI Finance LLC Dividend Junior Shares or
any LLC Preferred Securities other than (a) the redemption of all outstanding
LLC Preferred Securities at the Redemption Price (as defined below), (b)
pursuant to a pro rata redemption of the LLC Preferred Securities at the
Redemption Price or (c) pursuant to a purchase or exchange offer made on the
same terms to all holders of the LLC Preferred Securities, it being understood
that this provision shall not limit the rights of holders of LLC Preferred
Securities to exercise their conversion rights until, in each case, such time as
all accumulated arrears of unpaid dividends (whether or not declared) on the LLC
Preferred Securities shall have been paid in full for all dividend periods
terminating on or prior to, in the case of clauses (i) and (ii), such payment,
and in the case of clause (iii), the date of such call, redemption, purchase or
acquisition. As of the date of this Prospectus, SCI Finance LLC has no SCI
Finance LLC Dividend Parity Shares outstanding and has no plans to issue such
shares.
MANDATORY REDEMPTION
The proceeds from any prepayment or repayment of principal on the Loans to SCI
Limited of proceeds from the issuance and sale of LLC Preferred Securities and
LLC Common Shares must be applied to redeem the LLC Preferred Securities at the
Redemption Price upon not less than 30 nor more than 60 days' notice in writing
by SCI Finance LLC to the holders of the LLC Preferred Securities except at
final maturity of the Loans, in which case the redemption of LLC Preferred
Securities will occur as soon as practicable thereafter.
OPTIONAL REDEMPTION
The LLC Preferred Securities are redeemable, at the option of SCI Finance LLC
subject to the prior consent of the Manager, in whole or in part from time to
time, on or after the date and subject to the terms set forth in the
accompanying Prospectus Supplement, upon not less than 30 nor more than 60 days'
notice in writing by SCI Finance LLC to the holders of LLC Preferred Securities,
at the prices set forth in the accompanying Prospectus Supplement (the
"Redemption Price"), in each case plus accrued and unpaid dividends (whether or
not declared) to the date fixed for redemption.
If fewer than all the outstanding LLC Preferred Securities are to be redeemed,
the LLC Preferred Securities to be redeemed will be selected as described under
"Book-Entry Issuance -- the Depository Trust Company" below, pro rata as nearly
as practicable or by lot, or by such other method as the Paying and Conversion
Agent may determine to be fair and appropriate. If any monthly dividend payable
on the LLC Preferred Securities is in arrears, LLC Preferred Securities may not
be redeemed unless by conversion of LLC Preferred Securities into shares of SCI
Common Stock, and neither SCI nor SCI Finance LLC nor any other subsidiary of
SCI may purchase or acquire any of such shares otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of record of
the LLC Preferred Securities.
If SCI Finance LLC gives a notice of redemption in respect of LLC Preferred
Securities, then, by 12:00 noon, New York time, on the redemption date, SCI
Finance LLC will irrevocably deposit with the Paying and Conversion Agent or the
DTC, as the case may be, funds sufficient to pay the Redemption Price and will
give the Paying and Conversion Agent or DTC, as the case may be, irrevocable
instructions and authority to pay the Redemption Price to the holders thereof.
If notice of redemption shall have been given and funds deposited as required,
then upon the date of such deposit, all rights of holders of LLC Preferred
Securities so called for redemption will cease, except the right of the holders
of such shares to receive the Redemption Price, but without interest, and such
shares will cease to be outstanding. If any date on which any payment in respect
of the redemption of LLC Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. If payment of the Redemption Price in respect of LLC Preferred Securities
is improperly withheld or refused and not paid either by SCI Finance LLC or by
SCI pursuant to the LLC Guarantee (defined below), dividends on such shares will
continue to accrue, at the then-applicable rate, from the original redemption
date to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
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Subject to the foregoing, SCI or its subsidiaries may at any time and from time
to time purchase outstanding LLC Preferred Securities by tender, in the open
market or by private agreement.
TAX EVENT REDEMPTION
If an LLC Tax Event (defined below) shall occur and be continuing, the LLC
Preferred Securities will be subject to redemption, at the option of SCI Finance
LLC, in whole but not in part, upon not less than 30 nor more than 60 days'
notice in writing by the Company to the holders of such LLC Preferred
Securities, such notice to be given within 90 days following the occurrence of
such LLC Tax Event at a redemption price or prices set forth in the accompanying
Prospectus Supplement.
"LLC Tax Event" means, with respect to any LLC Preferred Securities, that SCI
shall have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that, on or after the date of the
accompanying Prospectus Supplement relating to such LLC Preferred Securities, as
a result of (i) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (ii) any amendment
to, or change in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (iii) any official
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the generally accepted position or
(iv) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or effective or which
interpretation or pronouncement is issued or announced or which action is taken,
in each case on or after the date of such accompanying Prospectus Supplement,
there is more than an insubstantial risk that (a) SCI Finance LLC is subject to
federal income tax with respect to interest accrued or received on the Loans or
(b) SCI Finance LLC is subject to liability for more than a de minimis amount of
taxes, duties or other governmental charges.
LIQUIDATION DISTRIBUTION
In the event of any voluntary or involuntary liquidation, dissolution or winding
up of SCI Finance LLC, the holders of LLC Preferred Securities at the time
outstanding will be entitled to receive out of the assets of SCI Finance LLC
legally available for distribution to shareholders, before any distribution of
assets is made to holders of the LLC Common Shares or any other class of
interests in SCI Finance LLC ranking junior to the LLC Preferred Securities as
regards participation in assets of SCI Finance LLC, but together with the
holders of every other series of LLC Preferred Shares outstanding, if any,
ranking pari passu with the LLC Preferred Securities as regards participation in
the assets of SCI Finance LLC ("SCI Finance LLC Liquidation Parity Shares"), an
amount equal, in the case of the holders of the LLC Preferred Securities, to the
aggregate of the liquidation preference per LLC Preferred Security set forth in
the accompanying Prospectus Supplement and all accumulated and unpaid dividends
(whether or not declared) to the date of payment (the "LLC Liquidation
Distribution"). If, upon any such liquidation, the LLC Liquidation Distribution
can be paid only in part because SCI Finance LLC has insufficient assets
available to pay in full the aggregate LLC Liquidation Distribution and the
aggregate maximum liquidation distributions on SCI Finance LLC Liquidation
Parity Shares, then the amounts payable by SCI Finance LLC on the LLC Preferred
Securities and on such SCI Finance LLC Liquidation Parity Shares shall be paid
on a pro rata basis, so that
(i)(a) the aggregate amount paid in respect of the LLC Liquidation Distribution
bears the same ratio to (b) the aggregate amount paid as liquidation
distributions (including accrued and unpaid dividends) on SCI Finance LLC
Liquidation Parity Shares as
(ii)(a) the aggregate Liquidation Distribution bears to (b) the aggregate
liquidation preference (including accrued and unpaid dividends) on SCI Finance
LLC Liquidation Parity Shares.
Pursuant to the LLC Regulations, SCI Finance LLC will be considered to have
commenced voluntary wind-up and dissolution automatically (i) when the period
fixed for the duration of SCI Finance LLC expires, (ii) if the holders of the
LLC Common Shares pass a resolution requiring SCI Finance LLC to be wound up and
dissolved, (iii) upon the bankruptcy, resignation, withdrawal, expulsion,
termination, cessation or dissolution of SCI or the Manager (if other than SCI),
(iv) upon the happening of any event that would cause a holder of LLC Common
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Shares to cease to be a holder thereof or (v) if SCI transfers any LLC Common
Shares or if all of the LLC Common Shares are redeemed, repurchased or cancelled
by SCI Finance LLC.
VOTING RIGHTS
Except as provided below and under "-- Description of the LLC
Guarantee -- Amendments and Assignments" and "-- Description of the
Loans -- Miscellaneous," the holders of the LLC Preferred Securities will have
no voting rights.
If (i) SCI Finance LLC fails to pay dividends in full on the LLC Preferred
Securities (whether or not there are funds legally available therefor) for more
than 60 consecutive monthly dividend periods, (ii) an Event of Default (as
defined in the Loan Agreement relating to the Loans) occurs and is continuing on
the Loans or (iii) SCI is in default under any of its payment or other
obligations under the Payment, Guarantee and Conversion Agreement entered into
by the Company for the benefit of each holder of LLC Securities (the "LLC
Guarantee"), then the holders of outstanding LLC Preferred Securities, together
with the holders of any other series of LLC Preferred Shares having the right to
vote for the appointment of a trustee in such event, acting as a single class,
will be entitled, by resolution passed by the holders of a majority in
liquidation preference (plus all accrued and unpaid dividends per share) of such
shares present in person or represented by proxy at a meeting of such holders
convened for such purpose (or by written consent), to appoint and authorize a
trustee to enforce SCI Finance LLC's rights as a creditor under the Loans
against SCI Limited and SCI (including the acceleration of principal and accrued
interest on the Loans), enforce the obligations undertaken by SCI under the LLC
Guarantee and the Liability Assumption Agreement (as defined below) and declare
and pay dividends on the LLC Preferred Securities. For purposes of determining
whether SCI Finance LLC has failed to pay dividends in full for more than 60
consecutive monthly dividend periods, dividends shall be deemed to remain in
arrears, notwithstanding any payments in respect thereof, until full cumulative
dividends have been or contemporaneously are declared and paid with respect to
all monthly dividend periods terminating on or prior to the date of payment of
such full cumulative dividends. Not later than 45 days after such entitlement
arises, the Manager will convene a meeting for the above purposes. If the
Manager fails to convene such meeting within such 45-day period, the holders of
10% in liquidation preference (plus all accrued and unpaid dividends per share)
of the outstanding LLC Preferred Securities and such other LLC Preferred Shares
will be entitled to convene such meeting. The provisions of the LLC Regulations
regarding the convening and conduct of meetings will apply with respect to any
such meeting. Any trustee so appointed shall vacate office immediately with
respect to the LLC Preferred Securities, if SCI Finance LLC (or SCI pursuant to
the LLC Guarantee) shall have paid in full all accrued and unpaid dividends on
the LLC Preferred Securities or such default or breach by SCI shall have been
cured.
If any resolution is presented to the members of SCI Finance LLC providing for,
or the Manager otherwise proposes to effect (it being understood that the
automatic dissolution and liquidation events described in clauses (iii), (iv)
and (v) under "-- Liquidation Distribution" above will not be deemed to be a
proposal by the Manager, and are not subject to the approval procedures
described in this paragraph), (i) any amendment of the LLC Articles, the LLC
Regulations, the LLC Declaration or other action that adversely varies or
abrogates the rights, preferences or privileges of the LLC Preferred Securities
(including, without limitation, the authorization or issuance of any interests
in SCI Finance LLC ranking, as to participation in the profits or assets of SCI
Finance LLC, senior to the LLC Preferred Securities, or the issuance of any debt
by SCI Finance LLC), (ii) the liquidation, dissolution or winding up of SCI
Finance LLC or (iii) the modification of the provisions of the LLC Articles and
the LLC Regulations which absolutely prohibit transfers of LLC Common Shares,
then the holders of outstanding LLC Preferred Shares of all series (and, in the
case of a resolution described in clause (iii) in this paragraph above which
would equally adversely affect the rights, preferences or privileges of any SCI
Finance LLC Dividend Parity Shares or any SCI Finance LLC Liquidation Parity
Shares, such SCI Finance LLC Dividend Parity Shares or such SCI Finance LLC
Liquidation Parity Shares, as the case may be, or, in the case of any resolution
described in clause (ii) or (iii) in this paragraph above, all SCI Finance LLC
Liquidation Parity Shares) will be entitled to vote together as a class on such
resolution or action of the Manager (but not on any other resolution or action),
and such resolution or action shall not be effective except with the approval of
the holders of 66 2/3% in liquidation preference (plus all accrued and unpaid
dividends) of such outstanding shares; provided, that no such approval or
ratification shall be required if the liquidation, dissolution and winding
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up of SCI Finance LLC is proposed or initiated upon the initiation of
proceedings, or after proceedings have been initiated, for the liquidation,
dissolution or winding up of SCI or the Manager (if other than SCI).
No vote or consent of the holders of the LLC Preferred Securities will be
required for SCI Finance LLC to redeem and cancel LLC Preferred Securities in
accordance with the LLC Regulations and the LLC Declaration.
The rights attached to the LLC Preferred Securities will be deemed not to be
varied by the creation or issue of, and no vote will be required for the
creation of, any further series of LLC Preferred Shares or any other interests
in SCI Finance LLC ranking as regards participation in the profits or assets of
SCI Finance pari passu with or junior to the LLC Preferred Securities.
Any required approval of holders of LLC Preferred Securities may be given at a
meeting of such holders convened for such purpose, at a general meeting of
shareholders of SCI Finance LLC or pursuant to written consent. SCI Finance LLC
will cause a notice of any meeting at which holders of the LLC Preferred
Securities are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record of
the LLC Preferred Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such action is to be
taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
written consents.
Notwithstanding that holders of LLC Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the LLC Preferred
Securities and such other LLC Preferred Shares entitled to vote or consent with
such LLC Preferred Securities as a single class outstanding at such time that
are owned by SCI or any entity owned 50% or more by SCI, either directly or
indirectly, shall not be entitled to vote or consent and shall, for the purposes
of such vote or consent, be treated as if they were not outstanding.
CONVERSION RIGHTS
Except as otherwise provided in the Prospectus Supplement, the holders of the
LLC Preferred Securities will have the conversion rights as set forth below:
Each LLC Preferred Security will be convertible at any time at the option of the
holder thereof into such number of whole shares of SCI Common Stock as is equal
to the per share liquidation preference of the LLC Preferred Securities
surrendered for conversion divided by the initial conversion price per share of
SCI Common Stock set forth in the accompanying Prospectus Supplement, subject to
adjustment as described below. LLC Preferred Securities called for redemption
will not be convertible after the close of business on the second Business Day
preceding the date fixed for redemption, unless SCI Finance LLC defaults in
payment of the applicable Redemption Price or SCI defaults in its obligation to
deliver SCI Common Stock in exchange for shares of LLC Preferred Securities
previously surrendered for conversion. No fractional shares of SCI Common Stock
will be issued as a result of conversion, but in lieu thereof, in the sole
discretion of SCI, either (i) such fractional interest will be rounded upon the
next whole share or (ii) an appropriate amount will be paid in cash by SCI.
The initial conversion price is subject to adjustment (under formulae set forth
in the LLC Declaration) in certain events, including: (i) the issuance of SCI
Common Stock as a dividend or distribution on SCI Common Stock; (ii) certain
subdivisions and combinations of the SCI Common Stock; (iii) the issuance to all
holders of SCI Common Stock of certain rights or warrants to purchase SCI Common
Stock; (iv) the distribution to all holders of SCI Common Stock of (a) shares of
capital stock of SCI (other than SCI Common Stock), (b) evidences of
indebtedness of SCI and/or (c) other assets (including securities, but excluding
any rights or warrants referred to in clause (iii) of this sentence, any
dividends or distributions in connection with the liquidation, dissolution or
winding-up of SCI, any dividends payable solely in cash that may from time to
time be fixed by the Board of Directors of SCI and any dividends or
distributions referred to in clause (i) of this sentence); (v) distributions
consisting of cash, excluding (a) any cash dividends on the SCI Common Stock to
the extent that the aggregate cash dividends per share of SCI Common Stock in
any consecutive 12-month period do not exceed the greater of (x) the amount per
share of SCI Common Stock of the cash dividends paid on the SCI Common Stock in
the immediately preceding 12-month period, to the extent that such dividends for
the immediately preceding 12-month period did not require an adjustment of the
conversion price pursuant to this clause (v) (as adjusted to reflect
subdivisions or combinations of the SCI Common Stock), and (y) 15% of the
average of the daily Closing Price (as defined in the LLC Declaration) of the
SCI Common Stock for the ten consecutive
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Trading Days (as defined in the LLC Declaration) immediately prior to the date
of declaration of such dividend, and (b) any dividend or distribution in
connection with the liquidation, dissolution or winding up of SCI or a
redemption of any rights issued under a rights agreement (provided, that no
adjustment shall be made pursuant to this clause (v) if such distribution would
otherwise constitute a Fundamental Change (as defined below) and be reflected in
a resulting adjustment described below); and (vi) payment in respect of a tender
or exchange offer by SCI or any subsidiary of SCI for SCI Common Stock to the
extent that the cash and value of any other consideration included in such
payment per share of SCI Common Stock exceeds (by more than 10%, with any
smaller excess being disregarded in computing the adjustment provided hereby)
the first reported sale price per share of SCI Common Stock on the Trading Day
next succeeding the Expiration Time (as defined in the LLC Declaration) for such
tender or exchange offer. If any adjustment is required to be made as set forth
in clause (v) of the preceding sentence as a result of a distribution which is a
dividend described in subclause (a) of clause (v) of the preceding sentence
above, such adjustment would be based upon the amount by which such distribution
exceeds the amount of the dividend permitted to be excluded pursuant to such
subclause (a) of clause (v) of the preceding sentence. If an adjustment is
required to be made as set forth in clause (v) of the preceding sentence as a
result of a distribution which is not such a dividend, such adjustment would be
based upon the full amount of such distribution. If an adjustment is required to
be made as set forth in clause (vi) of the preceding sentence, such adjustment
would be calculated based upon the amount by which the aggregate consideration
paid for SCI Common Stock acquired in the tender or exchange offer exceeds the
value of such shares based on the first reported sale price of the SCI Common
Stock on the Trading Day next succeeding the Expiration Time. In lieu of making
such a conversion price adjustment in the case of certain dividends or
distributions, SCI may provide that upon the conversion of LLC Preferred
Securities the holder converting such LLC Preferred Securities will receive, in
addition to the shares of SCI Common Stock of which such holder is entitled, the
cash, securities or other property which such holder would have received if such
holder had, immediately prior to the record date for such dividend or
distribution, converted its LLC Preferred Securities into SCI Common Stock.
SCI Finance LLC from time to time may, to the extent permitted by law and with
the consent of the Manager, reduce the conversion price by any amount for any
period of at least 20 Business Days, in which case SCI Finance LLC shall give at
least 15 days' notice of such reduction to the holders of the LLC Preferred
Securities. SCI Finance LLC may, at its option and with the consent of the
Manager, make such reduction in the conversion price, in addition to those set
forth above, as SCI Finance deems advisable to avoid or diminish any income tax
to holders of SCI Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for tax
purposes or for any other reasons.
If SCI shall be a party to any transaction or series of transactions
constituting a Fundamental Change, including, without limitation, (i) any
recapitalization or reclassification of the SCI Common Stock (other than a
change in par value or as a result of a subdivision or combination of the SCI
Common Stock); (ii) any consolidation or merger of SCI with or into another
corporation as a result of which holders of SCI Common Stock shall be entitled
to receive securities or other property or assets (including cash) with respect
to or in exchange for the SCI Common Stock (other than a merger which does not
result in a reclassification, conversion, exchange or cancellation of
outstanding shares of SCI Common Stock); (iii) any sale or transfer of all or
substantially all of the assets of SCI; or (iv) any compulsory share exchange,
pursuant to any of which holders of SCI Common Stock shall be entitled to
receive other securities, cash or other property, then appropriate provision
shall be made so that the holder of each LLC Preferred Security then outstanding
shall have the right thereafter to convert such security only into (x) if any
such transaction constitutes a Non-Stock Fundamental Change (as defined below),
the kind and amount of the securities, cash or other property that would have
been receivable upon such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of
SCI Common Stock issuable upon conversion of such LLC Preferred Security
immediately prior to such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange, after giving effect to any adjustment
in the conversion price in accordance with clause (i) of the following
paragraph, and (y) if any such transaction constitutes a Common Stock
Fundamental Change (as defined below), common stock of the kind received by
holders of SCI Common Stock as a result of such Common Stock Fundamental Change
in an amount determined in accordance with clause (ii) of the following
paragraph. The company formed by such consolidation or resulting from such
merger or which acquires such assets or
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which acquires the SCI Common Stock, as the case may be, shall make provisions
in its certificate or articles of incorporation or other constituent document to
establish such right. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events subsequent
to the effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as practical to the relevant
adjustments provided for in the preceding paragraphs and in this paragraph.
Notwithstanding any other provision in the preceding paragraphs, if any
Fundamental Change (as defined below) occurs, the conversion price in effect
will be adjusted immediately after that Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the conversion price per
share of SCI Common Stock immediately following such Non-Stock Fundamental
Change will be the lower of (a) the conversion price in effect immediately prior
to such Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, and (b) the result
obtained by multiplying the greater of the Applicable Price (as defined below)
or the then applicable Reference Market Price (defined below) by a fraction of
which the numerator will be the liquidation preference of the LLC Preferred
Securities as set forth in the applicable Prospectus Supplement and the
denominator of which will be the then current Redemption Price per LLC Preferred
Security (or, if such Redemption Price is to be determined prior to the date on
which the LLC Preferred Securities may first be called for redemption, the
prices set forth in the Prospectus Supplement); and
(ii) in the case of a Common Stock Fundamental Change, the conversion price per
share of SCI Common Stock immediately following the Common Stock Fundamental
Change will be the conversion price in effect immediately prior to the Common
Stock Fundamental Change, but after giving effect to any other prior adjustments
effected pursuant to the preceding paragraphs, multiplied by a fraction, the
numerator of which is the Purchaser Stock Price (as defined below) and the
denominator of which is the Applicable Price; provided, that in the event of a
Common Stock Fundamental Change in which (a) 100% of the value of the
consideration received by a holder of SCI Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, paid with respect to
any fractional interests in that common stock resulting from the Common Stock
Fundamental Change) and (b) all of the SCI Common Stock shall have been
exchanged for, converted into, or acquired for, common stock of the successor,
acquiror or other third party, the conversion price per share of SCI Common
Stock immediately following the Common Stock Fundamental Change shall be the
conversion price in effect immediately prior to the Common Stock Fundamental
Change multiplied by a fraction, the numerator of which is one and the
denominator of which is the number of shares of common stock of the successor,
acquiror, or other third party received by a holder of one share of SCI Common
Stock as a result of the Common Stock Fundamental Change.
Depending upon whether the Fundamental Change is a Non-Stock Fundamental Change
or Common Stock Fundamental Change, a holder may receive significantly different
consideration upon conversion. In the event of a Non-Stock Fundamental Change,
the holder has the right to convert LLC Preferred Securities into the kind and
amount of shares of stock and other securities or property or assets (including
cash), except as otherwise provided above, as is determined by the number of
shares of SCI Common Stock receivable upon conversion at the conversion price as
adjusted in accordance with clause (i) of the preceding paragraph. However, in
the event of a Common Stock Fundamental Change in which less than 100% of the
value of the consideration received by a holder of SCI Common Stock is common
stock of the successor, acquiror or other third party, a holder of a LLC
Preferred Security who converts such share following the Common Stock
Fundamental Change will receive consideration in the form of such common stock
only, whereas a holder who converted such share prior to the Common Stock
Fundamental Change will have received consideration in the form of such common
stock as well as any other securities or assets (which may include cash)
issuable upon conversion of such LLC Preferred Security immediately prior to
such Common Stock Fundamental Change.
The term "Applicable Price" in this "-- Conversion Rights" section means (i) in
the event of a Non-Stock Fundamental Change in which the holders of SCI Common
Stock receive only cash, the amount of cash receivable by a holder of one share
of SCI Common Stock and (ii) in the event of any other Non-Stock Fundamental
Change or any Common Stock Fundamental Change, the average of the reported last
sale price for one share of the SCI Common Stock (determined as provided in the
LLC Declaration) during the ten Trading
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Days immediately prior to the record date for the determination of the holders
of SCI Common Stock entitled to receive cash, securities, property or other
assets in connection with such Non-Stock Fundamental Change or Common Stock
Fundamental Change or, if there is no such record date, prior to the date on
which the holders of the SCI Common Stock will have the right to receive such
cash, securities, property or other assets.
The term "Common Stock Fundamental Change" in this "-- Conversion Rights"
section means any Fundamental Change in which more than 50% of the value (as
determined in good faith by SCI's Board of Directors) of the consideration
received by holders of SCI Common Stock pursuant to such transaction consists of
common stock that, for the ten consecutive Trading Days immediately prior to
such Fundamental Change, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on the
Nasdaq National Market; provided, that a Fundamental Change will not be a Common
Stock Fundamental Change unless either (i) SCI continues to exist after the
occurrence of such Fundamental Change and the outstanding LLC Preferred
Securities continue to exist as outstanding LLC Preferred Securities, or (ii)
the outstanding LLC Preferred Securities continue to exist as LLC Preferred
Securities and are convertible into common stock of the successor to SCI.
The term "Fundamental Change" in this "-- Conversion Rights" section means the
occurrence of any transaction or event or series of transactions or events
pursuant to which all or substantially all of the SCI Common Stock is exchanged
for, converted into, acquired for or constitutes solely the right to receive
cash, securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, that in the case of
a plan involving more than one such transaction or event, for purposes of
adjustment of the conversion price, such Fundamental Change will be deemed to
have occurred when substantially all of the SCI Common Stock received in such
transaction has been exchanged for, converted into, or acquired for or
constitutes solely the right to receive cash, securities, property or other
assets but the adjustment shall be based upon the consideration that the holders
of SCI Common Stock received in the transaction or event as a result of which
more than 50% of the SCI Common Stock shall have been exchanged for, converted
into, or acquired for, or shall constitute solely the right to receive such
cash, securities, properties or other assets; and provided further, that such
term does not include (i) any transaction or event in which SCI and/or any of
its subsidiaries are the issuers of all the cash, securities, property or other
assets exchanged, acquired or otherwise issued in the transaction or event, or
(ii) any transaction or event in which the holders of SCI Common Stock receive
securities of an issuer other than SCI if, immediately following such
transaction or event, holders of SCI Common Stock hold a majority of the
securities having the power to vote normally in the election of directors of
such other issuer outstanding immediately following such transaction or other
event.
The term "Non-Stock Fundamental Change" in this "-- Conversion Rights" section
means any Fundamental Change other than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" in this "-- Conversion Rights" section means,
with respect to any Common Stock Fundamental Change, the average of the reported
last sale prices for one share of the common stock received by holders of SCI
Common Stock in such Common Stock Fundamental Change during the ten Trading Days
immediately prior to the record date for the determination of the holders of SCI
Common Stock entitled to receive such common stock or, if there is no such
record date, prior to the date upon which the holders of SCI Common Stock shall
have the right to receive the common stock.
The term "Reference Market Price" in this "-- Conversion Rights" section will
initially mean the price set forth in the accompanying Prospectus Supplement
(which unless otherwise specified in the accompanying Prospectus Supplement will
be 66 2/3% of the last reported sale price for SCI Common Stock on the New York
Stock Exchange on the date of such Prospectus Supplement) and, in the event of
any adjustment to the conversion price other than as a result of a Fundamental
Change, the Reference Market Price will also be adjusted so that the ratio of
the Reference Market Price to the conversion price after giving effect to any
adjustment will always be the same as the ratio of the initial Reference Market
Price to the initial conversion price of the LLC Preferred Securities.
No adjustment in the conversion price will be required unless the adjustment
would require a change of at least 1% in the conversion price then in effect;
provided, that any adjustment that would otherwise be required to be made shall
be carried forward and taken into account in any subsequent adjustment.
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The holders of LLC Preferred Securities at the close of the business on a
dividend payment record date will be entitled to receive the dividend payment on
those shares on the corresponding dividend payment date notwithstanding the
subsequent conversion thereof or SCI Finance LLC's default in payment of the
dividend due on that dividend payment date. A holder of LLC Preferred Securities
on a dividend payment record date who (or whose transferee) tenders any shares
for conversion on a dividend payment date will receive the dividend payable by
SCI Finance LLC on LLC Preferred Securities on that date.
MISCELLANEOUS
The Transfer Agent, Registrant and Paying and Conversion Agent for the LLC
Preferred Securities will be Society National Bank.
Registration of transfers of LLC Preferred Securities will be effected without
charge by the Transfer Agent, but upon payment (with the giving of such
indemnity as the Transfer Agent may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
The Transfer Agent will not be required to register or cause to be registered
the transfer of LLC Preferred Securities after such shares have been called for
redemption.
SCI Finance LLC is not subject to any mandatory redemption or sinking fund
provisions with respect to the LLC Preferred Securities. Holders of LLC
Preferred Securities have no preemptive rights.
SCI and SCI Finance LLC have entered into an agreement (the "Liability
Assumption Agreement") pursuant to which SCI, in its capacity as Manager and
otherwise, agrees to guarantee the payment of any liabilities incurred by SCI
Finance LLC (other than obligations to holders of LLC Preferred Securities). The
Liability Assumption Agreement expressly provides that such agreement is for the
benefit of, and is enforceable by, third parties to whom SCI Finance LLC owes
such obligations.
DESCRIPTION OF LLC GUARANTEES
Set forth below is a summary of information concerning the LLC Guarantee that
will be executed and delivered by SCI for the benefit of the holders from time
to time of the LLC Preferred Securities.
General. SCI will irrevocably and unconditionally agree, to the extent set forth
herein, to pay in full, to the holders of LLC Preferred Shares of any series
which may be issued by SCI Finance LLC, including the LLC Preferred Securities,
the Guarantee Payments (as defined below) (except to the extent paid by SCI
Finance LLC), as and when due, regardless of any defense, right of set-off or
counterclaim which SCI Finance LLC may have or assert. The following payments
constitute the "Guarantee Payments" for the LLC Preferred Shares: (i) any
accumulated and unpaid dividends which have been theretofore declared on the LLC
Preferred Shares of any series out of monies legally available therefor, (ii)
the redemption price (including all accumulated and unpaid dividends) to the
date of payment payable with respect to LLC Preferred Shares of any series
called for redemption by SCI Finance LLC out of monies legally available
therefor, and (iii) upon a liquidation of SCI Finance LLC, the lesser of (a) the
aggregate liquidation preference per LLC Preferred Share and all accumulated and
unpaid dividends (whether or not declared) to the date of payment and (b) the
amount of remaining assets of SCI Finance LLC legally available to holders of
LLC Preferred Shares. The LLC Guarantee also requires SCI to deliver upon
conversion of any LLC Preferred Shares all shares of SCI Common Stock or other
property into which such LLC Preferred Shares are convertible. SCI's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amount by SCI to the holders of LLC Preferred Shares of any series or by causing
SCI Finance LLC to pay such amounts to such holders.
Certain Covenants of SCI. In the LLC Guarantee, SCI will covenant that, so long
as any LLC Preferred Shares of any series remain outstanding, if at any time (i)
there shall have occurred any event that constitutes an Event of Default under
the Loan Agreement, (ii) SCI shall be in default with respect to its payment or
other obligations under the LLC Guarantee or the Manager shall be in default
under its obligations under the Liability Assumption Agreement or (iii) there
shall exist any nonpayment of interest under the Loans, including during any
valid extension of the interest payment periods (a) SCI shall not, and SCI shall
cause any subsidiary of SCI that is not a wholly owned subsidiary of SCI not to,
declare or pay any dividends on, make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to any of
its capital stock or the capital stock of any such subsidiary or make any
payment in respect of any capital stock of any
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affiliate of SCI guaranteed by SCI or any of its subsidiaries; provided, that
the foregoing shall not prevent or delay (A) the acquisition of any LLC
Preferred Securities or Trust Preferred Securities upon the conversion thereof
into SCI Common Stock, (B) the distribution of Financing Subordinated Debt
Securities upon the occurrence of a Tax Event as described under "Description of
the Trust Preferred Securities and Trust Guarantees -- Tax Event Redemption or
Distribution," (C) the redemption by the Company of Series C Junior
Participating Preferred Stock Purchase Rights in accordance with the Rights
Agreement and any reacquisition by the Company of any of its stock issued in any
acquisition as a result of a purchase price adjustment or settlement of breach
of warranties in connection with such acquisition and (D) the redemption of the
Trust Preferred Securities upon the occurrence of any Tax Event as described
under "Description of the Trust Preferred Securities and Trust Guarantees -- Tax
Event Redemption or Distribution and (b) SCI shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem debt
securities issued by SCI ranking pari passu with or junior to the LLC Guarantees
or make any payment in respect of any guarantee of any indebtedness of any other
person ranking pari passu with or junior to the LLC Guarantee (including,
without limitation, the Financing Debt Guarantee); provided, that the foregoing
shall not prevent or delay the acquisition of any Financing Subordinated Debt
Securities upon conversion of the Trust Preferred Securities into SCI Common
Stock.
In the LLC Guarantee, SCI will also covenant that, so long as any LLC Preferred
Shares of any series remaining outstanding, it will (i) maintain direct 100%
ownership of the LLC Common Shares and any other interests in SCI Finance LLC
(other than the LLC Preferred Shares); (ii) cause more than 20% of the total
value (initially measured by shareholders' equity determined under generally
accepted accounting principles) of SCI Finance LLC and, subject to the
preferential rights of the holders of LLC Preferred Securities as to dividends
and liquidation distributions, more than 20% of all interests in the capital,
income, gain, loss, deduction and credit of SCI Finance LLC to be represented by
LLC Common Shares; (iii) not voluntarily dissolve, wind-up or liquidate SCI
Finance LLC; (iv) remain the Manager of SCI Finance LLC and timely perform all
of its duties as Manager of SCI Finance LLC (including the duty to declare and
pay dividends on the LLC Preferred Shares to the extent set forth in the LLC
Articles) and (v) use reasonable efforts to cause SCI Finance LLC to remain a
limited liability company under the laws of the State of Texas (provided however
that SCI Finance LLC may reorganize under the laws of another jurisdiction
provided that SCI Finance LLC has received an opinion from nationally recognized
legal counsel that such reorganization will not have an adverse effect,
including, without limitation, an adverse tax effect, on the holders of the LLC
Preferred Securities) and use reasonable efforts to cause SCI Finance LLC to
continue to be treated as a partnership for United States Federal income tax
purposes.
Amendments and Assignments. Except with respect to any changes which do not
adversely affect the rights of holders of LLC Preferred Shares (in which case no
vote will be required), the LLC Guarantee may be changed only with the prior
approval of the holders of not less than 66 2/3% in liquidation preference (plus
all accrued and unpaid dividends per share) of each series of LLC Preferred
Shares then outstanding. The manner of obtaining any such approval of holders of
LLC Preferred Shares will be as set forth under "-- Voting Rights." All
guarantees and agreements contained in the LLC Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of SCI and shall
inure to the benefit of all LLC Preferred Shares then outstanding.
Termination of the LLC Guarantee. The LLC Guarantee will terminate and be of no
further force and effect as to a series of LLC Preferred Shares upon full
payment of the redemption price (including all accrued and unpaid dividends), or
the retirement or cancellation of all of such series of LLC Preferred Shares, or
delivery of all shares of SCI Common Stock or other property required to be
delivered upon conversion, with respect to all outstanding LLC Preferred Shares
of that series, or shall terminate completely upon full payment of the amounts
payable upon liquidation of SCI Finance LLC including the delivery of all shares
of SCI Common Stock or other property required to be delivered upon conversion
of any LLC Preferred Shares. The Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of LLC Preferred
Shares of such series must restore payment of any sums, SCI Common Stock or
other property paid under the LLC Preferred Shares of such series or the LLC
Guarantee.
Status of the LLC Guarantee. The LLC Guarantee will constitute an unsecured
obligation of SCI and will rank (i) junior in right of payment to all other
liabilities of SCI and will be subordinated in right of payment in the same
manner and to the same extent as SCI's guarantee of obligations under the Loan
Agreement is
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subordinated to Senior Indebtedness, (ii) senior to the preferred stock of any
series issued at or after the date of the LLC Guarantee by SCI and (iii) pari
passu with any guarantee entered into at or after the date of the LLC Guarantee
by SCI in respect of any preferred or preference stock of any affiliate of SCI.
See "-- Description of the Loans -- Subordination." The LLC Guarantee will
constitute a guarantee of payment and not of collection. A holder of LLC
Preferred Shares may enforce the LLC Guarantee directly against SCI, and SCI
will waive any right or remedy to require that any action be brought against SCI
Finance LLC or any person or entity before proceeding against SCI. The LLC
Guarantee will not be discharged except by payment of the Guarantee Payments in
full (to the extent not paid by SCI Finance LLC) and by complete performance of
all obligations under the LLC Guarantee.
Governing Law. The LLC Guarantee will be governed by and construed in accordance
with the laws of the State of New York.
DESCRIPTION OF THE LOANS
Set forth below is a summary of information concerning the Loans from SCI
Finance LLC to SCI Limited of 99% of the proceeds from the issuance of (i) the
LLC Preferred Securities and (ii) the LLC Common Shares and related capital
contributions ("Common Share Payments").
General. Pursuant to the Loan Agreement, SCI Finance LLC has agreed to make the
Loans to SCI Limited in an aggregate principal amount equal to 99% of the sum of
the aggregate liquidation preference of the LLC Preferred Securities issued and
sold by SCI Finance LLC and the aggregate Common Share Payments.
The entire principal amount of the Loans will become due and payable (together
with any accrued and unpaid interest thereon) on the earlier of the date set
forth in the accompanying Prospectus Supplement or the date upon which SCI, SCI
Limited or SCI Finance LLC shall be dissolved, wound-up or liquidated.
Mandatory Payment. If SCI Finance LLC redeems LLC Preferred Securities in
accordance with the terms thereof, the Loans will become due and payable in a
principal amount equal to the aggregate liquidation preference of the LLC
Preferred Securities so redeemed, together with any and all accrued but unpaid
interest thereon and any premium in excess of such principal amount. Any payment
pursuant to this provision shall be made in immediately available funds prior to
12:00 noon, New York time, on the date fixed for such redemption or at such
other time on such earlier date as SCI Finance LLC, SCI Limited and SCI shall
agree.
Optional Prepayment. SCI Limited will have the right to prepay the Loans, in
whole or in part (together with (i) a premium computed based on the same
percentage as the percentage difference between the then applicable Redemption
Price on the LLC Preferred Securities and the stated liquidation preference of
the LLC Preferred Securities and (ii) any accrued but unpaid interest), as set
forth in the accompanying Prospectus Supplement.
Interest. The Loans will bear interest at an annual rate as set forth in the
accompanying Prospectus Supplement from the date they are made until maturity.
Such interest shall be payable on the last day of each calendar month of each
year, commencing as set forth in the accompanying Prospectus Supplement. If any
date on which interest is payable on the Loans is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date, subject to certain rights of extension described below.
Extended Interest Payment Period. SCI Limited shall have the right at any time
or from time to time during the term of the Loans, so long as SCI Limited is not
in default in the payment of interest on the Loans, to extend interest payments
under the Loans for up to 60 monthly interest payment periods; and at the end of
such extended period SCI Limited shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Loans to the
extent permitted by applicable law); provided, that, during any such extended
interest payment period, or at any time during which there is an Event of
Default under the Loans, (i) SCI shall not, and SCI shall cause any subsidiary
of SCI that is not a wholly owned subsidiary of SCI not to, declare or pay any
dividends on, make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to any of its capital stock
or the capital stock of any such subsidiary or make any payment in respect of
any capital stock of any affiliate of SCI guaranteed by SCI or any of its
subsidiaries;
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provided, that the foregoing shall not prevent or delay (a) the acquisition of
any LLC Preferred Securities or Trust Preferred securities upon the conversion
thereof into SCI Common Stock, (b) the distribution of Financing Subordinated
Debt Securities upon the occurrence of a Tax Event as described under
"Description of the Trust Preferred Securities and Trust Guarantees -- Tax Event
Redemption or Distribution" (c) the redemption by the Company of the Rights in
accordance with the Rights Agreement and any reacquisition by the Company of any
of its stock issued in any acquisition as a result of a purchase price
adjustment or settlement of breach of warranties in connection with such
acquisition and (d) the redemption of the Trust Preferred Securities upon the
occurrence of any Tax Event as described under "Description of the Trust
Preferred Securities and Trust Guarantees -- Tax Event Redemption or
Distribution" and (ii) SCI shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem debt securities issued by SCI
ranking pari passu with or junior to the SCI guarantees of the Loans or make any
payment in respect of any guarantee of any indebtedness of any other person
ranking pari passu with or junior to the SCI guarantee of the Loans (including,
without limitation, the Financing Debt Guarantees; provided, that the foregoing
shall not prevent or delay the acquisition of any Financing Subordinated Debt
Securities upon conversion of the Trust Preferred Securities into SCI Common
Stock. Prior to the termination of any such extended interest payment period,
SCI Limited may further extend the interest payment period, provided, that such
extended interest payment period together with all such further extensions
thereof may not exceed 60 monthly interest payments in the aggregate over the
term of the Loans. SCI Limited shall give SCI Finance LLC notice of its
selection of an extended interest payment period at least one Business Day prior
to the earlier of (i) the date SCI Finance LLC declares, or would be scheduled
to declare, the related dividend or (ii) the date SCI Finance LLC is required to
give notice of the record or payment date of such related dividend to any
national securities exchange on which the LLC Preferred Securities are listed or
other applicable self-regulatory organization or to holders of the LLC Preferred
Securities, but in any event not less than two Business Days prior to such
record date. SCI shall cause SCI Finance LLC to give such notice of SCI
Limited's selection of such extended interest payment period to the holders of
the LLC Preferred Securities concurrently therewith.
Additional Interest. If at any time SCI Finance LLC is or will be required to
pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, SCI Limited also will pay as additional
interest such amounts as shall be required so that the net amounts received and
retained by SCI Finance LLC after paying any such taxes, duties, assessments or
governmental charges will not be less than the amounts SCI Finance LLC would
have received had no such taxes, duties, assessments or governmental charges
been imposed.
Method and Date of Payment. Each payment by Financing of principal of, premium,
if any, and interest on the Loans shall be made to SCI Finance LLC in lawful
money of the United States, at such place and to such accounts as may be
designated by SCI Finance LLC.
Subordination. The Loan Agreement provides that SCI's guarantee of the Loans is
subordinate and junior in right of payment to all Senior Indebtedness as
provided in the Loan Agreement. In this section, the term "Senior Indebtedness"
means the principal of, and premium, if any, and interest on (i) all
indebtedness of SCI, other than ordinary trade credit and other accounts payable
arising in the ordinary course of business, whether outstanding on the date of
the Loan Agreement or thereafter created, incurred or assumed, which is for
money borrowed, or evidenced by a note or similar instrument given in connection
with the acquisition of any business, properties or assets, including
securities, (ii) any indebtedness of others of the kinds described in the
preceding clause (i) for which SCI is responsible or liable as guarantor and
(iii) amendments, renewals, extensions and refundings of any such indebtedness,
unless in any instrument or instruments evidencing or securing such indebtedness
or pursuant to which the same is outstanding, or in any such amendment, renewal,
extension or refunding, it is expressly provided that such indebtedness is not
superior in right of payment to SCI's guarantee of the Loans. The Financing Debt
Guarantee and the Preferred Securities Guarantee shall each expressly provide
that all indebtedness and other obligations of SCI thereunder is not superior in
right of payment to SCI's guarantee of the Loans. The Senior Indebtedness shall
continue to be Senior Indebtedness and entitled to the benefits of the
subordination provisions of the Loan Agreement irrespective of any amendment,
modification or waiver of any term of the Senior Indebtedness or extension or
renewal of the Senior Indebtedness.
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The rights of SCI Limited and its creditors, including SCI Finance LLC as to the
Loans, and SCI and its creditors, including SCI Finance LLC pursuant to SCI's
guarantee of the Loans and the holders under the LLC Guarantee, to participate
in the assets of any subsidiary of SCI Limited or SCI upon any liquidation or
reorganization of such subsidiary or otherwise will be subject to the prior
claims of creditors of such subsidiary, except to the extent that SCI Limited or
SCI may itself be a creditor with recognized claims against the subsidiary. The
ability of SCI Limited or SCI to meet its obligations may be dependent upon the
payment to it of dividends, interest and other charges by its subsidiaries. The
ability of SCI Limited's subsidiaries and SCI's subsidiaries to pay dividends or
make other payments to SCI Limited or SCI, as the case may be, is not currently
subject to any contractual or legal restriction (except for limitations imposed
by applicable state corporation laws) which could materially affect SCI
Limited's and SCI's ability to meet their obligations under the Loan Agreement
and the LLC Guarantee. Through their ownership of their subsidiaries, SCI
Limited and SCI currently control (subject to applicable state corporation laws)
such subsidiaries' payment of dividends or other distributions; there can be no
assurance, however, that SCI Limited and SCI will continue such ownership and
control of their subsidiaries.
If (i) SCI shall default in the payment of any principal of, premium, if any, or
interest on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or declaration or
otherwise or (ii) an event of default occurs with respect to any Senior
Indebtedness permitting the holders thereof to accelerate the maturity thereof
and written notice of such event of default is given to SCI by the holders of
such Senior Indebtedness, then unless and until such default in payment or event
of default shall have been cured or waived or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) may be made or agreed to be made by SCI on account of SCI's guarantee
of the Loans or interest thereon or by SCI in respect of any repayment,
redemption, retirement, purchase or other acquisition of the Loans.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to SCI or its property or for the benefit of its creditors, (ii) any proceeding
for the liquidation, dissolution or other winding up of SCI, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by SCI for the benefit of creditors or (iv) any other
marshaling of the assets of SCI, all Senior Indebtedness (including, without
limitation, interest accruing thereon after the commencement of any such
proceeding, assignment or marshaling of assets) shall first be paid in full
before any payment or distribution, whether in cash, securities or other
property, may be made by SCI on account of its guarantee obligations under the
Loan Agreement and the Loans. In any such event, any payment or distribution,
whether in cash, securities or other property (other than securities of SCI or
any other corporation provided for by a plan of reorganization or a
readjustment, the payment of which is subordinate, at least to the extent
provided in the subordination provisions relating to SCI's guarantee obligations
under the Loan Agreement and the Loans with respect to the indebtedness
evidenced by the Loans, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), which would otherwise (but for the
subordination provision) be payable or deliverable in respect of SCI's guarantee
obligations under the Loan Agreement and the Loans shall be paid or delivered
directly to the holders of Senior Indebtedness (or their representative or
trustee) in accordance with the priorities then existing among such holders
until all Senior Indebtedness shall have been paid in full. No present or future
holder of any Senior Indebtedness may be prejudiced in the right to enforce
subordination of SCI's guarantee obligations under the Loan Agreement and the
Loans by any act or failure to act on the part of SCI.
Senior Indebtedness shall not be deemed to have been paid in full unless the
holders thereof shall have received cash, securities or other property equal to
the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, SCI Finance LLC shall be subrogated to all the
rights of any holders of Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until the Loans shall have
been paid in full, and such payments or distributions of cash, securities or
other property received by SCI Finance LLC, by reason of such subrogation, which
otherwise would be paid or distributed to the holders of Senior Indebtedness,
shall, as between SCI and its creditors other than the holders of Senior
Indebtedness on the one hand, and SCI Finance LLC, on the other, be deemed to be
a payment by SCI on account of Senior Indebtedness, and not on account of SCI's
guarantee obligations under the Loan Agreement and the Loans.
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Covenants. SCI will covenant that if at any time (i) there shall have occurred
any event that constitutes an Event of Default under the Loan Agreement, (ii)
SCI shall be in default with respect to its payment or other obligations under
the LLC Guarantee or SCI or the Manager shall be in default under its
obligations under the Liability Assumption Agreement or (iii) there shall exist
any nonpayment of interest under the Loans, including during any valid extension
of the interest payment periods (a) SCI shall not, and SCI shall cause any
subsidiary of SCI that is not a wholly owned subsidiary of SCI not to, declare
or pay any dividends on, make any distribution with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to any of its
capital stock or the capital stock of any such subsidiary or make any payment in
respect of any capital stock of any affiliate of SCI guaranteed by SCI or any of
its subsidiaries; provided, that the foregoing shall not prevent or delay (1)
the acquisition of any LLC Preferred Securities or Trust Preferred Securities
upon the conversion thereof into SCI Common Stock, (2) the distribution of
Financing Subordinated Debt Securities upon the occurrence of a Tax Event as
described under "Description of the Trust Preferred Securities and Trust
Guarantees -- Tax Event Redemption or Distribution," (3) the redemption by the
Company of the Rights in accordance with the Rights Agreement and any
reacquisition by the Company of any of its stock issued in any acquisition as a
result of a purchase price adjustment or settlement of breach of warranties in
connection with such acquisition and (4) the redemption of the Trust Preferred
Securities upon the occurrence of any Tax Event as described under "Description
of the Trust Preferred Securities and Trust Guarantees -- Tax Event Redemption
or Distribution" and (b) SCI shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem debt securities issued by
SCI ranking pari passu with or junior to the SCI guarantee of the Loans or make
any payment in respect of any guarantee of any indebtedness of any other person
ranking pari passu with or junior to the SCI guarantee of the Loans (including,
without limitation, the Financing Debt Guarantee); provided, that the foregoing
shall not prevent or delay the acquisition of any Financing Subordinated Debt
Securities upon conversion of the Trust Preferred Securities into SCI Common
Stock. SCI will also covenant (i) to maintain direct 100% ownership of the LLC
Common Shares and any other interests of SCI Finance LLC other than the LLC
Preferred Shares, (ii) to cause more than 20% of the total value (initially
measured by shareholders' equity determined in accordance with generally
accepted accounting principles) of SCI Finance LLC and, subject to the
preferential rights of the holders of LLC Preferred Shares as to dividends and
liquidation distributions, more than 20% of all interests in the capital,
income, gain, loss, deduction and credit of SCI Finance LLC to be represented by
LLC Common Shares, (iii) not to dissolve, wind-up or liquidate SCI Finance LLC
voluntarily, (iv) to remain the Manager of SCI Finance LLC and to timely perform
all of its duties as Manager (including the duty to declare and pay dividends on
the LLC Preferred Shares as described in "-- Dividends") and (v) to use its
reasonable efforts to cause SCI Finance LLC to remain a limited liability
company under the laws of the State of Texas (provided however that SCI Finance
LLC may reorganize under the laws of another jurisdiction provided that SCI
Finance LLC has received a legal opinion from nationally recognized legal
counsel that such reorganization will not have an adverse effect, including,
without limitation, an adverse tax effect, on the holders of the LLC Preferred
Securities) and use reasonable efforts to cause SCI Finance LLC to continue to
be treated as a partnership for United States Federal income tax purposes. In
addition, SCI has agreed to maintain and reserve sufficient authorized but
unissued Common Stock sufficient to satisfy all conversion rights under the LLC
Preferred Securities and to have available for issuance such other property as
may be subject to delivery pursuant to such conversion rights.
SCI Finance LLC may not waive compliance or waive any default in compliance by
SCI Limited of any covenant or other term in the Loan Agreement or by SCI of its
guarantee of the Loans without the approval of the same percentage of the
holders of LLC Preferred Securities, obtained in the same manner, as would be
required for an amendment of the Loan Agreement to the same effect.
Events of Default. If one or more of the following events (each an "Event of
Default") shall occur and be continuing:
(i) default in the payment of any interest on the Loans when due for 10 Business
Days; provided, however, that a valid extension of the interest payment period
by Financing shall not constitute a default in the payment of interest for this
purpose (see "-- Description of the Loans-- Interest"); or
(ii) default in the payment of principal of or premium of any, on the Loans when
due; or
(iii) failure of SCI to comply with the conversion provisions of the LLC
Preferred Securities; or
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(iv) the dissolution, winding-up or liquidation of SCI Finance LLC; or
(v) the bankruptcy, insolvency or liquidation of SCI or SCI Limited; or
(vi) breach by SCI Limited or SCI of any of its covenants under the Loan
Agreement continued for 30 days after notice to SCI Limited and SCI from the
holders of not less than 25 percent in liquidation preference of the LLC
Preferred Securities then outstanding;
then, SCI Finance LLC will have the right to declare the principal of and the
interest on the Loans (including any interest subject to an extension election)
and all other amounts payable under the Loan Agreement to be forthwith due and
payable and to enforce its other rights as a creditor with respect to the Loans.
Under the terms of the LLC Preferred Securities, the holders of outstanding LLC
Preferred Securities will have the rights referred to under "-- Voting Rights,"
including the right to appoint a trustee, which trustee will be authorized to
exercise SCI Finance LLC's right to accelerate the principal amount of the Loans
and to enforce SCI Finance's LLC other creditor rights under the Loans and the
Loan Agreement, and SCI Limited and SCI agree to cooperate with such trustee.
Miscellaneous. SCI Limited will have the right at all times to assign any of its
rights or obligations under the Loan Agreement to a direct or indirect wholly
owned subsidiary of SCI; provided, that, in the event of any such assignment,
SCI Limited will remain jointly and severally liable for all such obligations;
and provided further, that SCI Limited shall receive an opinion of legal counsel
that the effect of any such assignment does not cause SCI Finance to be
considered an "investment company" under the 1940 Act. SCI Finance LLC may not
assign any of its rights under the Loan Agreement without the prior written
consent of SCI Limited and SCI. Subject to the foregoing, the Loan Agreement
will be binding upon and inure to the benefit of SCI Limited, SCI and SCI
Finance LLC and their respective successors and assigns. The Loan Agreement
provides that it may not otherwise be assigned by SCI Limited, SCI Finance LLC
or SCI.
The Loan Agreement will provide that neither SCI Limited nor SCI may permit
another entity to merge with or into SCI Limited or SCI, as the case may be,
unless (i) at such time no Event of Default has occurred and is continuing, or
would occur as a result of such merger, and (ii) either (a) SCI Limited or SCI,
as the case may be, is the survivor of such merger or (b) the survivor is a
corporation organized under the laws of the United States or any state thereof
and expressly assumes all of the obligations of SCI Limited or SCI, as the case
may be, under the Loan Agreement and the Loans and SCI Limited receives an
opinion of counsel from nationally recognized legal counsel that the merger will
not result in the recognition of taxable gain or loss by the holders of the LLC
Preferred Securities.
The Loan Agreement will be governed by and construed in accordance with the laws
of the State of New York.
The Loan Agreement may be amended by mutual consent of the parties in the manner
the parties shall agree; provided, that, so long as any of the LLC Preferred
Securities remain outstanding, no such amendment shall be made that adversely
affects the holders of LLC Preferred Securities, no termination of the Loan
Agreement shall occur, and no Event of Default or compliance with any covenant
under the Loan Agreement may be waived by SCI Finance LLC, without the prior
consent of the holders of 66 2/3% in liquidation preference of the outstanding
LLC Preferred Securities, in writing or at a duly constituted meeting of such
holders.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depository for the Trust Preferred Securities and the
LLC Preferred Securities (together the "Preferred Securities"). The Preferred
Securities will be issued as fully-registered in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered global Trust Preferred
Security or LLC Preferred Security certificates will be issued, representing in
the aggregate the total number of applicable Preferred Securities, and will be
deposited with DTC. DTC may act as securities depository for any of the other
Securities; if it does so, a description of the applicable book-entry procedures
will be set forth in the applicable Prospectus Supplement.
DTC is a limited-purpose trust company organized under the New York Banking Law,
a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
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registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The Rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Preferred Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmations from DTC of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred Securities, except if use of the
book-entry system for the Preferred Securities is discontinued. The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such laws may impair the ability to transfer
beneficial interests in a global Preferred Security certificate.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices will be sent to Cede & Co. If less than all of the Preferred
Securities are being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such series to be redeemed.
Although voting with respect to the Preferred Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will consent or vote
with respect to Preferred Securities. Under its usual procedures, DTC mails an
Omnibus Proxy to SCI Finance LLC, in the case of LLC Securities, or the
applicable SCI Trust, in the case of Trust Preferred Securities, as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Dividend payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, SCI Finance LLC, any SCI Trust or SCI, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of dividends to DTC is the responsibility of SCI Finance LLC or the
applicable SCI Trust, as the case may be, disbursement of such payments to
Direct Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owner will be the responsibility of Direct and
Indirect Participants.
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DTC has advised SCI, the SCI Trusts and SCI Finance LLC that it will take any
action permitted to be taken by a holder of Preferred Securities (including,
without limitation, the presentation of a Preferred Security certificate for
conversion) only at the direction of one or more Participants to whose account
with DTC interest in such shares represented by a global certificate are
credited and only in respect of such number of Preferred Securities represented
by a global certificate as to which such Participant or Participants has or have
given such direction.
DTC may discontinue providing its services as securities depository with respect
to the Preferred Securities at any time by giving reasonable notice to SCI
Finance LLC or the applicable SCI Trust. Under such circumstances, if a
successor securities depository is not obtained, Preferred Securities
certificates are required to be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system has
been obtained from sources that SCI, the SCI Trusts and SCI Finance LLC believe
to be reliable, but none of SCI, either SCI Trust, SCI Finance LLC or any
underwriter or agent takes responsibility for the accuracy thereof.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
REGARDING THE TRUST PREFERRED SECURITIES
OR THE LLC PREFERRED SECURITIES
Certain United States federal income tax considerations applicable to any
offering of Trust Preferred Securities or LLC Preferred Securities will be
described in the Prospectus Supplement relating thereto.
PLAN OF DISTRIBUTION
The Company, each SCI Trust and/or SCI Finance LLC may sell Securities to or
through underwriters, and also may sell Securities directly to other purchasers
or through agents. The distribution of the Securities may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive compensation
from the Company, each SCI Trust and/or SCI Finance LLC or from purchasers of
Securities for whom they may act as agents in the form of discounts, concessions
or commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company, each SCI Trust
and/or SCI Finance LLC and any profit on the resale of Securities by them may be
deemed to be underwriting discounts and commissions, under the Act. Any such
underwriter or agent will be identified, and any such compensation received from
the Company, each SCI Trust and/or SCI Finance LLC will be described, in the
Prospectus Supplement.
Under agreements which may be entered into by the Company, each SCI Trust and/or
SCI Finance LLC, underwriters and agents who participate in the distribution of
Securities may be entitled to indemnification by the Company, each SCI Trust
and/or SCI Finance LLC against certain liabilities, including liabilities under
the Act.
If so indicated in the Prospectus Supplement, the Company, each SCI Trust and/or
SCI Finance LLC will authorize underwriters or other persons acting as the
Company's, an SCI Trust's and/or SCI Finance's LLC agents to solicit offers by
certain institutions to purchase Securities from the Company, each SCI Trust
and/or SCI Finance LLC pursuant to contracts providing for payments and delivery
on a future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all cases
such institutions must be approved by the Company, each SCI Trust and/or SCI
Finance LLC. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the offered Securities shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect of the validity or performance of such
contracts.
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LEGAL MATTERS
The validity of the Securities (other than the Trust Preferred Securities)
offered hereby will be passed upon for the Company, Financing and SCI Finance
LLC, respectively, by Fulbright & Jaworski L.L.P., Houston, Texas, special
counsel for the Company. The validity of the Trust Preferred Securities will be
passed upon for the Company by Skadden, Arps, Slate, Meagher & Flom, Wilmington,
Delaware, special counsel to the Company and the Underwriters with respect to
the Trust Preferred Securities. Certain tax matters with respect to the Trust
Preferred Securities and the LLC Preferred Securities will be passed upon for
the Company and SCI Finance LLC by Miller & Chevalier, Chartered, Washington,
D.C., special tax counsel for the Company. Certain legal matters in connection
with the Securities will be passed upon for any underwriters by Cahill Gordon &
Reindel (a partnership including a professional corporation), New York, New
York.
EXPERTS
The consolidated financial statements of Service Corporation International at
December 31, 1994, and for the two years then ended appearing in Service
Corporation International's Annual Report (Form 10-K) for the year ended
December 31, 1993, have been audited by Coopers & Lybrand L.L.P., independent
auditors, and at December 31, 1992, and for the year ended December 31, 1992, by
Ernst & Young LLP, independent auditors, as set forth in their respective
reports thereon incorporated herein by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing.
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[SCI LOGO]
<PAGE> 86
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate (except for the Securities and Exchange
Commission (the "Commission") registration fee) of the fees and expenses payable
by the Company in connection with the distribution of the Securities:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 306,462.07
Printing costs.............................................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ 13,500.00
Blue Sky fees and expenses.................................. *
Trustee fees and expenses................................... *
Paying and Conversion Agent fee............................. *
Rating agency fee........................................... *
Miscellaneous............................................... *
-------------
Total............................................. $ *
============
</TABLE>
- ---------------
* To be supplied by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company
The Company is a Texas corporation.
Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") provides that
any director or officer of a Texas corporation may be indemnified against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with or in defending any action, suit or
proceeding in which he is or is threatened to be made a named defendant by
reason of his position as director or officer, provided that he conducted
himself in good faith and reasonably believed that, in the case of conduct in
his official capacity as director or officer, such conduct was in the
corporation's best interests, or, in all other cases, that such conduct was not
opposed to the corporation's best interests. In the case of any criminal
proceeding, a director or officer may be indemnified only if he had no
reasonable cause to believe his conduct was unlawful. If a director or officer
is wholly successful, on the merits or otherwise, in connection with such a
proceeding, such indemnification is mandatory.
Under the Company's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), no director of the registrant will be liable to
the registrant or any of its shareholders for monetary damages for an act or
omission in the director's capacity as a director, except for liability (i) for
any breach of the director's duty of loyalty to the registrant or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for any transaction
for which the director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's office, (iv)
for acts or omissions for which the liability of a director is expressly
provided by statute, or (v) for acts related to an unlawful stock repurchase or
dividend payment. The Articles of Incorporation further provide that, if the
statutes of Texas are amended to further limit the liability of a director, then
the liability of the Company's directors will be limited to the fullest extent
permitted by any such provision.
The Company's Bylaws provide for indemnification of officers and directors of
the registrant and persons serving at the request of the registrant in such
capacities for other business organizations against certain losses, costs,
liabilities and expenses incurred by reason of their positions with the
registrant or such other business organizations. The Company also has policies
insuring its officers and directors and certain officers and directors of its
wholly owned subsidiaries against certain liabilities for actions taken in such
capacities, including liabilities under the Securities Act of 1933, as amended
(the "Act").
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SCI Trusts
The Declaration of each SCI Trust provides that no Regular Trustee, affiliate of
any Regular Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Regular Trustee, or any
employee or agent of such SCI Trust or its affiliates (each an "Indemnified
Person") shall be liable, responsible or accountable in damages or otherwise to
such SCI Trust or any employee or agent of the trust or its affiliates for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of such SCI Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by such Declaration or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omission. The Declaration of
each SCI Trust also provides that to the fullest extent permitted by applicable
law, SCI shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of such SCI Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such act or omissions. The Declaration of each SCI Trust further
provides that, to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by SCI
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified for the underlying cause of action as authorized by
such Declaration.
Financing
Financing is a Delaware corporation.
The Certificate of Incorporation and Bylaws of Financing provide that Financing
shall indemnify its officers, agents and directors to the full extent permitted
by the General Corporation Law of Delaware (the "GCL"). Section 145 of the GCL
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed proceeding
(other than a proceeding by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation in a similar
position of another entity against expenses (including attorneys' fees),
judgements, fines and settlements incurred by such person in connection with
such proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. Section 145 of
the GCL further provides that the corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed proceeding by or in the right of the corporation by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation in a similar
position of another entity against expenses (including attorneys' fees) incurred
by such person in connection with such proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation; provided, however, that no
indemnification shall be made with respect to any matter as to which such person
has been adjudged to be liable for negligence or misconduct in the performance
of such person's duty to the corporation, unless, and to the extent, the
Delaware Court of Chancery or such court in which such proceeding was brought,
despite the adjudication of liability, determines such person is entitled to
indemnity.
Section 145 of the GCL provides that such indemnity obligations of a corporation
shall only arise if authorized by (i) a majority of a quorum of directors who
are not a party to the proceeding, (ii) independent legal counsel to the
corporation if a quorum of such directors is not obtainable, (iii) independent
legal counsel to the corporation if a quorum of such directors is obtainable and
such directors direct such counsel to make the determination or (iv) the
stockholders. The board of directors of the corporation may authorize expenses
in connection with such a proceeding to be paid in advance of the final
disposition of such proceeding upon receipt
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of an undertaking by the person on whose behalf such expenses are to be paid to
repay such expenses in the event such person is not entitled to indemnify.
Section 145 of the GCL also provides that a corporation may maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation in a
similar position of another entity against any liability incurred by such person
in any such capacity, whether or not the corporation would have the power to
indemnify such person against such liability under the GCL.
Pursuant to Section 102(b)(7) of the GCL, the Certificate of Incorporation of
Financing provides that a director of Financing shall not be personally liable
to the Company or its stock holders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Company or its stockholders, (b) for acts or omissions
not in good faith or which involved intentional misconduct or a knowing
violation of law, (c) in connection with certain illegal dividend payments and
stock redemptions, or (d) for any transaction from which the director derived an
improper personal benefit.
SCI Finance LLC
SCI Finance LLC is a Texas limited liability company. The Texas Limited
Liability Company Act provides that a Texas limited liability company shall have
power to indemnify managers, officers, employees, agents and others to the same
extent a corporation may indemnify directors, employees, agents and others under
the TBCA. See Item 15 above, "The Company". Regulation 25 of SCI Finance LLC's
Regulations authorizes SCI Finance LLC to indemnify any officer, director,
employee or other agent of the Manager, in such agent's capacity as such, to the
fullest extent permitted by law; provided that no amendment to or repeal of the
Regulations shall adversely affect any right existing at the time of the
amendment of or repeal of the Regulations. Regulation 25 also permits SCI
Finance LLC to purchase and maintain insurance on behalf of the Manager and
certain other person, whether or not it would have the power under Regulation 25
to indemnify such persons against the related expense, liability or loss.
Additionally, Article Nine of the LLC Articles eliminates, to the extent
permitted by law, in certain circumstances the monetary liability of any
officer, director, employee or other agent of any manager of SCI Finance (each,
an "Agent") for an act or omission in such Agent's capacity as an Agent. This
provision does not eliminate or limit the liability of any such Agent to the
extent such Agent is found liable for (i) a breach of such Agent's duty of
loyalty to SCI Finance LLC or its members; (ii) an act or omission not in good
faith that constitutes a breach of duty of such Agent to SCI Finance LLC or an
act or omission that involves intentional misconduct or a knowing violation of
the law; (iii) a transaction from which such Agent received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of
such Agent's office; or (iv) an act or omission for which the liability of any
such Agent is expressly provided for by statute. Any repeal or amendment of
Article Nine by the members of SCI Finance LLC is prospective only and will not
adversely affect any limitations on the liability of any Agent existing at the
time of such repeal or amendment.
The Registrants
Reference is made to the Forms of Underwriting Agreements, filed as Exhibits
1.1, 1.2, 1.3 and 1.4 hereto, which contain provisions for indemnification of
each of the registrants, their directors, officers and any controlling persons,
by the Underwriters against certain liabilities for information furnished by the
Underwriters.
For a statement of the registrants' undertakings with respect to indemnification
of directors and officers, see Item 17 below.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------------------------------------------------------------------------------------------
<S> <C>
*1.1 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Equity Securities.
*1.2 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Company Debt Securities.
*1.3 -- Form of Underwriting Agreement among SCI Finance LLC, SCI and the
Underwriter(s) with respect to LLC Preferred Securities.
*1.4 -- Form of Underwriting Agreement among an SCI Trust, SCI and the
Underwriter(s) with respect to Trust Preferred Securities.
3.1 -- Restated Articles of Incorporation, as amended. (Incorporated by
reference to Exhibit 3.1 to Registration Statement No. 2-50721 on
Form S-1).
3.2 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit (4)(i)1 to Form 10-Q for the
fiscal quarter ended July 31, 1982).
3.3 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.1 to Form 10-Q for the fiscal
quarter ended July 31, 1983).
3.4 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.7 to Registration Statement
No. 33-8727 on Form S-3).
3.5 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to
Registration Statement No. 33-16678 on Form S-4).
3.6 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.8 to Registration Statement
No. 33-47097 on Form S-4).
3.7 -- Bylaws, as amended. (Incorporated by reference to Exhibit 3.7 to Form
10-K for the fiscal year ended December 31, 1991).
3.8 -- SCI Finance LLC Articles of Organization. (Incorporated by reference
to Exhibit 3.8 to Registration Statement No. 33-56069 on Form S-3).
3.9 -- SCI Finance LLC Regulations. (Incorporated by reference to Exhibit
3.9 to Registration Statement No. 33-56069 on Form S-3).
3.10 -- Form of Amendment to the Regulations of SCI Finance LLC.
(Incorporated by reference to Registration Statement No. 33-56069 on
Form S-3).
**3.11 -- Form of Second Amendment to the Regulations of SCI Finance LLC.
*3.12 -- Certificate of Trust of SCI Financing I.
*3.13 -- Certificate of Trust of SCI Financing II.
*3.14 -- Declaration of Trust of SCI Financing I.
*3.15 -- Declaration of Trust of SCI Financing II.
**3.16 -- Form of Amended and Restated Declaration of Trust.
*3.17 -- Certificate of Incorporation of Financing.
*3.18 -- Bylaws of Financing.
4.1 -- Senior Indenture, dated as of February 1, 1993, between SCI and the
Bank of New York, as Trustee. (Incorporated by reference to Exhibit
4.1 to Form 8-K dated January 26, 1993).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4.2 -- Senior Subordinated Indenture, dated as of , 1994, between
SCI and Texas Commerce Bank National Association, as Trustee.
(Incorporated by reference to Exhibit 4.2 to Registration Statement
No. 33-56069 on Form S-3).
4.3 -- Subordinated Indenture, dated as of September 1, 1991, between SCI
and Texas Commerce National Bank Association, as Trustee.
(Incorporated by reference to Exhibit 4.1 to Form 8-K dated October
23, 1991).
**4.4 -- Subordinated Indenture, dated as of , 1995, among SCI,
Financing and The Bank of New York, as Trustee.
4.5 -- Form of Common Stock Warrant Agreement (including Form of Warrant)
(Incorporated by reference to Exhibit 4.4 to Registration Statement
No. 33-56069 on Form S-3).
4.6 -- Forms of Additional Documents establishing the LLC Preferred
Securities.
(a) -- Form of SCI Payment, Guarantee and Conversion Agreement.
(Incorporated by reference to Exhibit 4.5(a) to Registration
Statement No.33-56069 on Form S-3).
(b) -- Form of Loan Agreement. (Incorporated by reference to Exhibit
4.5(b) to Registration Statement No. 33-56069 on Form S-3).
(c) -- Form of Liability Assumption Agreement. (Incorporated by
reference to Exhibit 4.5(c) to Registration Statement 33-56069
on Form S-3).
4.7 -- Rights Agreement dated as of July 18, 1988 between the Company and
Texas Commerce Bank National Association. (Incorporated by reference
to Exhibit 1 to Form 8-K dated July 18, 1988).
4.8 -- Amendment, dated as of May 10, 1990, to the Rights Agreement, dated
as of July 18, 1988, between the Company and Texas Commerce Bank
National Association. (Incorporated by reference to Exhibit 1 to Form
8-K dated May 10, 1990).
4.9 -- Agreement Appointing a Successor Rights Agent under Rights Agreement,
dated as of June 1, 1990, by the Company and Ameritrust Company
National Association. (Incorporated by reference to Exhibit 4.1 to
Form 10-Q for the fiscal quarter ended June 30, 1990).
*4.10 -- Undertaking to furnish instruments relating to long-term debt.
**5.1 -- Opinion of Fulbright & Jaworski L.L.P. regarding the Common Stock,
the Preferred Stock, the Debt Securities, the Guarantees and LLC
Preferred Securities.
**8 -- Opinion of special tax counsel regarding certain tax matters.
12.1 -- Ratio of Earnings to Fixed Charges. (Incorporated by reference to
Exhibit 12.2 to Form 10-Q for the fiscal quarter ended March 31,
1995.)
12.2 -- Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements. (Incorporated by reference to Exhibit 12.1 to
Form 10-K for the fiscal year ended December 31, 1994).
**23.1 -- Consent of Fulbright & Jaworski L.L.P. (included in their opinion
filed as Exhibit 5.2).
**23.2 -- Consent of special tax counsel (included in their opinion filed as
Exhibit 8).
*23.3 -- Consent of Independent Accountants (Coopers & Lybrand L.L.P.).
*23.4 -- Consent of Independent Accountants (Ernst & Young LLP).
*24 -- Powers of Attorney.
</TABLE>
II-5
<PAGE> 91
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
*25.1 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Debt Securities to be issued
pursuant to the Senior Debt Indenture, dated as of February 1, 1993,
between SCI and The Bank of New York, as Trustee.
**25.2 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Subordinated Debt Securities to be
issued pursuant to the Senior Subordinated Debt Indenture, dated as
of , 1994, between SCI and Texas Commerce Bank
National Association, as Trustee.
**25.3 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Subordinated Debt Securities to be issued
pursuant to the Subordinated Debt Indenture, dated as of September 1,
1991, among SCI and Texas Commerce Bank National Association, as
Trustee.
**25.4 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Financing Subordinated Debt Securities to be
issued pursuant to the Subordinated Debt Indenture dated as of
, 1995, among SCI, Financing and The Bank of New York, as
Trustee.
**25.5 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to Trust Preferred Securities to be issued under the
Amended and Restated Declaration of SCI Financing I dated as of
, 1995, among Gregory L. Cauthen, as Trustee, The Bank of New
York, as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee.
**25.6 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to Trust Preferred Securities to be issued under the
Amended and Restated Declaration of SCI Financing II dated as of
, 1995, among Gregory L. Cauthen, as Trustee, The Bank of New
York, as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee.
</TABLE>
- ---------------
* Included herewith.
** To be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES.
Financial statement schedules for the three years ended December 31, 1994.
<TABLE>
<CAPTION>
SCHEDULE
<C> <S>
II Valuation and Qualifying Accounts
</TABLE>
The Information required by Schedule II for the three years ended December 31,
1994 is incorporated herein by reference to the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission for the fiscal year ended
December 31, 1994, as amended.
ITEM 17. UNDERTAKINGS.
(a) The undersigned hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
II-6
<PAGE> 92
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned hereby undertake that, for purposes of determining any
liability under the Act, each filing of SCI's annual report pursuant to Section
13(a) or 15(d) or the Exchange Act (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the undersigned
pursuant to the foregoing provisions, or otherwise, the undersigned have been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. If a
claim for indemnification against such liabilities (other than the payment by
the undersigned of expenses incurred or paid by a director, officer or
controlling person of the undersigned in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the undersigned will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned hereby undertake to provide to the underwriters at the
closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned hereby undertake that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of a registration statement in
reliance upon Rule 430A and contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be
deemed to be part of the registration statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned hereby undertakes the following application for the purpose of
determining the eligibility of the applicable trustees to Act under subsection A
of Section 310 of the Trust Indenture Act, as amended, in accordance with the
Rules and Regulations prescribed by the Commission under Section 305(b)(2) of
that Act.
II-7
<PAGE> 93
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SERVICE CORPORATION
INTERNATIONAL CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON THIS 28TH DAY OF
JUNE, 1995.
SERVICE CORPORATION INTERNATIONAL
By: /s/ JAMES M. SHELGER
----------------------------------
James M. Shelger
Senior Vice President, General
Counsel and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
------------------------------------- Chairman of the Board and Chief June 28, 1995
R. L. Waltrip Executive Officer
*
------------------------------------- Senior Vice President June 28, 1995
George R. Champagne and Chief Financial Officer
(Principal Financial Officer)
*
------------------------------------- Managing Director -- Financial June 28, 1995
Wesley T. McRae Reporting (Principal Accounting
Officer)
*
------------------------------------- Director June 28, 1995
Anthony L. Coelho
*
------------------------------------- Director June 28, 1995
Douglas M. Conway
*
------------------------------------- Director June 28, 1995
Jack Finkelstein
*
------------------------------------- Director June 28, 1995
A. J. Foyt, Jr.
*
------------------------------------- Director June 28, 1995
James J. Gavin, Jr.
*
------------------------------------- Director June 28, 1995
James H. Greer
*
------------------------------------- Director June 28, 1995
L. William Heiligbrodt
*
------------------------------------- Director June 28, 1995
B. D. Hunter
</TABLE>
II-8
<PAGE> 94
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
------------------------------------- Director June 28, 1995
John W. Mecom, Jr.
*
------------------------------------- Director June 28, 1995
Clifton H. Morris, Jr.
*
------------------------------------- Director June 28, 1995
Samuel W. Rizzo
*
------------------------------------- Director June 28, 1995
E. H. Thornton, Jr.
*
------------------------------------- Director June 28, 1995
W. Blair Waltrip
*
------------------------------------- Director June 28, 1995
Edward E. Williams
*By: /s/ JAMES M. SHELGER
-------------------------------------
James M. Shelger
Attorney-in-Fact
</TABLE>
II-9
<PAGE> 95
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SCI FINANCE LLC
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON THIS 28TH DAY OF JUNE,
1995.
SCI FINANCE LLC
By: Service Corporation International, as
Manager
By: /s/ JAMES M. SHELGER
-----------------------------------------
Name: James M. Shelger
Title: Senior Vice President, General Counsel
and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES WITH THE
MANAGER INDICATED AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
------------------------------------- Chairman of the Board and June 28, 1995
R. L. Waltrip Chief Executive Officer
*
------------------------------------- Senior Vice President June 28, 1995
George R. Champagne and Chief Financial
Officer (Principal
Financial Officer)
*
------------------------------------- Managing June 28, 1995
Wesley T. McRae Director -- Financial
Reporting (Principal
Accounting Officer)
*
------------------------------------- Director June 28, 1995
Anthony L. Coelho
*
------------------------------------- Director June 28, 1995
Douglas M. Conway
*
------------------------------------- Director June 28, 1995
Jack Finkelstein
*
------------------------------------- Director June 28, 1995
A. J. Foyt, Jr.
*
------------------------------------- Director June 28, 1995
James J. Gavin, Jr.
*
------------------------------------- Director June 28, 1995
James H. Greer
*
------------------------------------- Director June 28, 1995
L. William Heiligbrodt
*
------------------------------------- Director June 28, 1995
B. D. Hunter
</TABLE>
II-10
<PAGE> 96
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
------------------------------------- Director June 28, 1995
John W. Mecom, Jr.
*
------------------------------------- Director June 28, 1995
Clifton H. Morris, Jr.
*
------------------------------------- Director June 28, 1995
Samuel W. Rizzo
*
------------------------------------- Director June 28, 1995
E. H. Thornton, Jr.
*
------------------------------------- Director June 28, 1995
W. Blair Waltrip
*
------------------------------------- Director June 28, 1995
Edward E. Williams
*By: /s/ JAMES M. SHELGER
-------------------------------------
James M. Shelger
Attorney-in-Fact
</TABLE>
II-11
<PAGE> 97
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SCI FINANCING
CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON THIS 28TH DAY OF
JUNE, 1995.
SCI FINANCING CORPORATION
By: /s/ JAMES M. SHELGER
-----------------------------------------
Name: James M. Shelger
Title: Senior Vice President, General Counsel
and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT
AND IN THE CAPACITIES INDICATED AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* President June , 1995
- ---------------------------------------------- (Chief Executive Officer)
Gregory L. Cauthen
* Treasurer June , 1995
- ---------------------------------------------- (Principal Financial
John H. Lohman, Jr. Officer)
* Vice President June , 1995
- ---------------------------------------------- (Principal Accounting
Wesley T. McRae Officer)
* Director June , 1995
- ----------------------------------------------
John H. Lohman, Jr.
* Director June , 1995
- ----------------------------------------------
Wesley T. McRae
* Director June , 1995
- ----------------------------------------------
Curtis G. Briggs
*By: /s/ JAMES M. SHELGER
------------------------------------------
James M. Shelger
Attorney-in-Fact
</TABLE>
II-12
<PAGE> 98
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, EACH OF SCI
FINANCING I AND SCI FINANCING II CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS
DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON THIS 28TH DAY OF JUNE, 1995.
SCI FINANCING I
By: /s/ GREGORY L. CAUTHEN
---------------------------------
Gregory L. Cauthen, as Trustee
THE BANK OF NEW YORK (DELAWARE), AS
TRUSTEE
By: /s/ JOSEPH F. LEARY
---------------------------------
Joseph F. Leary
Vice President
SCI FINANCING II
By: /s/ GREGORY L. CAUTHEN
---------------------------------
Gregory L. Cauthen, as Trustee
THE BANK OF NEW YORK (DELAWARE), AS
TRUSTEE
By: /s/ JOSEPH F. LEARY
---------------------------------
Joseph F. Leary
Vice President
II-13
<PAGE> 99
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------------------------------------------------------------------------------------------
<S> <C>
*1.1 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Equity Securities.
*1.2 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Company Debt Securities.
*1.3 -- Form of Underwriting Agreement among SCI Finance LLC, SCI and the
Underwriter(s) with respect to LLC Preferred Securities.
*1.4 -- Form of Underwriting Agreement among an SCI Trust, SCI and the
Underwriter(s) with respect to Trust Preferred Securities.
3.1 -- Restated Articles of Incorporation, as amended. (Incorporated by
reference to Exhibit 3.1 to Registration Statement No. 2-50721 on
Form S-1).
3.2 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit (4)(i)1 to Form 10-Q for the
fiscal quarter ended July 31, 1982).
3.3 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.1 to Form 10-Q for the fiscal
quarter ended July 31, 1983).
3.4 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.7 to Registration Statement
No. 33-8727 on Form S-3).
3.5 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to
Registration Statement No. 33-16678 on Form S-4).
3.6 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.8 to Registration Statement
No. 33-47097 on Form S-4).
3.7 -- Bylaws, as amended. (Incorporated by reference to Exhibit 3.7 to Form
10-K for the fiscal year ended December 31, 1991).
3.8 -- SCI Finance LLC Articles of Organization. (Incorporated by reference
to Exhibit 3.8 to Registration Statement No. 33-56069 on Form S-3).
3.9 -- SCI Finance LLC Regulations. (Incorporated by reference to Exhibit
3.9 to Registration Statement No. 33-56069 on Form S-3).
3.10 -- Form of Amendment to the Regulations of SCI Finance LLC.
(Incorporated by reference to Registration Statement No. 33-56069 on
Form S-3).
**3.11 -- Form of Second Amendment to the Regulations of SCI Finance LLC.
*3.12 -- Certificate of Trust of SCI Financing I.
*3.13 -- Certificate of Trust of SCI Financing II.
*3.14 -- Declaration of Trust of SCI Financing I.
*3.15 -- Declaration of Trust of SCI Financing II.
**3.16 -- Form of Amended and Restated Declaration of Trust.
*3.17 -- Certificate of Incorporation of Financing.
*3.18 -- Bylaws of Financing.
4.1 -- Senior Indenture, dated as of February 1, 1993, between SCI and the
Bank of New York, as Trustee. (Incorporated by reference to Exhibit
4.1 to Form 8-K dated January 26, 1993).
</TABLE>
<PAGE> 100
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4.2 -- Senior Subordinated Indenture, dated as of , 1994, between
SCI and Texas Commerce Bank National Association, as Trustee.
(Incorporated by reference to Exhibit 4.2 to Registration Statement
No. 33-56069 on Form S-3).
4.3 -- Subordinated Indenture, dated as of September 1, 1991, between SCI
and Texas Commerce National Bank Association, as Trustee.
(Incorporated by reference to Exhibit 4.1 to Form 8-K dated October
23, 1991).
**4.4 -- Subordinated Indenture, dated as of , 1995, among SCI,
Financing and The Bank of New York, as Trustee.
4.5 -- Form of Common Stock Warrant Agreement (including Form of Warrant)
(Incorporated by reference to Exhibit 4.4 to Registration Statement
No. 33-56069 on Form S-3).
4.6 -- Forms of Additional Documents establishing the LLC Preferred
Securities.
(a) -- Form of SCI Payment, Guarantee and Conversion Agreement.
(Incorporated by reference to Exhibit 4.5(a) to Registration
Statement No.33-56069 on Form S-3).
(b) -- Form of Loan Agreement. (Incorporated by reference to Exhibit
4.5(b) to Registration Statement No. 33-56069 on Form S-3).
(c) -- Form of Liability Assumption Agreement. (Incorporated by
reference to Exhibit 4.5(c) to Registration Statement 33-56069
on Form S-3).
4.7 -- Rights Agreement dated as of July 18, 1988 between the Company and
Texas Commerce Bank National Association. (Incorporated by reference
to Exhibit 1 to Form 8-K dated July 18, 1988).
4.8 -- Amendment, dated as of May 10, 1990, to the Rights Agreement, dated
as of July 18, 1988, between the Company and Texas Commerce Bank
National Association. (Incorporated by reference to Exhibit 1 to Form
8-K dated May 10, 1990).
4.9 -- Agreement Appointing a Successor Rights Agent under Rights Agreement,
dated as of June 1, 1990, by the Company and Ameritrust Company
National Association. (Incorporated by reference to Exhibit 4.1 to
Form 10-Q for the fiscal quarter ended June 30, 1990).
*4.10 -- Undertaking to furnish instruments relating to long-term debt.
**5.1 -- Opinion of Fulbright & Jaworski L.L.P. regarding the Common Stock,
the Preferred Stock, the Debt Securities, the Guarantees and LLC
Preferred Securities.
**8 -- Opinion of special tax counsel regarding certain tax matters.
12.1 -- Ratio of Earnings to Fixed Charges. (Incorporated by reference to
Exhibit 12.2 to Form 10-Q for the fiscal quarter ended March 31,
1995.)
12.2 -- Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements. (Incorporated by reference to Exhibit 12.1 to
Form 10-K for the fiscal year ended December 31, 1994).
**23.1 -- Consent of Fulbright & Jaworski L.L.P. (included in their opinion
filed as Exhibit 5.2).
**23.2 -- Consent of special tax counsel (included in their opinion filed as
Exhibit 8).
*23.3 -- Consent of Independent Accountants (Coopers & Lybrand L.L.P.).
*23.4 -- Consent of Independent Accountants (Ernst & Young LLP).
*24 -- Powers of Attorney.
</TABLE>
<PAGE> 101
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
*25.1 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Debt Securities to be issued
pursuant to the Senior Debt Indenture, dated as of February 1, 1993,
between SCI and The Bank of New York, as Trustee.
**25.2 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Subordinated Debt Securities to be
issued pursuant to the Senior Subordinated Debt Indenture, dated as
of , 1994, between SCI and Texas Commerce Bank
National Association, as Trustee.
**25.3 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Subordinated Debt Securities to be issued
pursuant to the Subordinated Debt Indenture, dated as of September 1,
1991, among SCI and Texas Commerce Bank National Association, as
Trustee.
**25.4 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Financing Subordinated Debt Securities to be
issued pursuant to the Subordinated Debt Indenture dated as of
, 1995, among SCI, Financing and The Bank of New York, as
Trustee.
**25.5 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to Trust Preferred Securities to be issued under the
Amended and Restated Declaration of SCI Financing I dated as of
, 1995, among Gregory L. Cauthen, as Trustee, The Bank of New
York, as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee.
**25.6 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to Trust Preferred Securities to be issued under the
Amended and Restated Declaration of SCI Financing II dated as of
, 1995, among Gregory L. Cauthen, as Trustee, The Bank of New
York, as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee.
</TABLE>
- ---------------
* Included herewith.
** To be filed by amendment.
<PAGE> 1
Exhibit 1.1
UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Equity Securities
[ ], 199[ ]
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the "Company"), may
issue and sell from time to time shares of the common stock, par value $1.00
per share, of the Company (such shares of common stock, together with the
rights (the "Rights") attached thereto to purchase the Company's Series C
Junior Participating Preferred Stock (the "Series C Preferred Stock") issued
pursuant to a Rights Agreement dated as of July 18, 1988 between the Company
and Texas Commerce Bank National Association as rights agent, as amended to
date (the "Rights Agreement"), being hereinafter referred to as the "Common
Stock") or shares of the Company's preferred stock, par value $1.00 per share
(the "Preferred Stock" and together with the Common Stock, the "Equity
Securities"). The Equity Securities are registered under the registration
statement referred to in Section 4(i) hereof. The Preferred Stock may be
issued in one or more series, may have varying dividend and liquidation
preferences, voting rights and redemption provisions, and may be convertible,
as described in the resolution or resolutions adopted by the board of directors
of the Company relating to the Offered Securities (the "Resolution"), into
shares of the Common Stock. The basic provisions set forth herein are intended
to be incorporated by reference in a terms agreement of the type referred to
below relating to, among other things, if applicable, the designation and
series of Preferred Stock and the number of shares of Common Stock or
Preferred Stock (the "Underwritten Securities") to be issued and sold by the
Company pursuant thereto and to be purchased, severally, by the underwriter or
several underwriters named therein (the "Underwriters"). The Terms Agreement,
which shall be in the form of Exhibit I hereto (the "Terms Agreement"),
relating to the Underwritten Securities and such additional shares of Equity
Securities that the Underwriters may be granted an option to purchase by the
Company to cover over-allotments in connection with any offering of
Underwritten Securities (the "Option Securities" and together with
<PAGE> 2
-2-
the Underwritten Securities, the "Offered Securities"), together with the
provisions hereof incorporated therein by reference (which provisions shall not
become effective until so incorporated by reference), is herein referred to as
this "Agreement." The Terms Agreement may reflect that a portion of the
Underwritten Securities are to be sold to the several U.S. underwriters named
therein (the "U.S. Underwriters") in connection with the offering and sale of a
portion of the Underwritten Securities in the United States and Canada (the
"U.S. Underwritten Securities") to United States and Canadian persons (as
defined in the instruments governing the coordination of the offering by the
U.S. Underwriters and the International Managers (as defined below) named
therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Company to sell,
the Offered Securities are evidenced by the Terms Agreement delivered at the
time the Company determines to sell the Offered Securities and, without the
execution and delivery of the Terms Agreement, the Company shall not be
obligated to sell, and the Underwriters shall not be obligated to purchase,
any Equity Securities pursuant to this Agreement. The Terms Agreement
specifies the firm or firms which will be Underwriters, the amount of the
Offered Securities to be purchased by each Underwriter, the purchase price to
be paid by the Underwriters for the Offered Securities, the public offering
price, if any, of the Offered Securities and, in the case of Preferred Stock,
any terms of the Offered Securities not otherwise specified in the Resolution
(including, but not limited to, designations, denominations, conversion or
exchange provisions, covenants, dividend rates and payment dates, liquidation
preferences and redemption provisions). The Terms Agreement specifies any
details of the terms of the offering that should be reflected in a
post-effective amendment to the applicable Registration Statement or the
Prospectus Supplement (each as hereinafter defined).
The terms which follow, when used in this Agreement, shall have the meanings
indicated. "Registration Statement" shall
<PAGE> 3
-3-
mean the registration statement or registration statements relating to the
Offered Securities (and such other securities of the Company as may be included
therein) which shall be the registration statement on Form S-3 filed under the
Securities Act of 1933, as amended (collectively with the rules and regulations
of the Securities and Exchange Commission (the "Commission") thereunder, the
"Securities Act"), referred to in Section 4(i) below, including all documents
incorporated therein by reference and all exhibits thereto, as from time to
time amended or supplemented pursuant to the Securities Act, the Securities
Exchange Act of 1934, as amended (collectively with the rules and regulations
of the Commission thereunder, the "Exchange Act"), or otherwise, including as
supplemented by the Prospectus Supplement, on or prior to the date of execution
and delivery of the Terms Agreement (the "Representation Date") and, in the
event any such amendment or supplement is filed prior to the Closing Date (as
defined in Section 3 hereof), including by the filing of any Prospectus
Supplement or document incorporated by reference, shall also mean such
registration statement as so amended or supplemented. "Prospectus" shall mean
the prospectus (including the related Prospectus Supplement with respect to the
Offered Securities) relating to the Equity Securities (and such other
securities of the Company as may be covered thereby), including all documents
incorporated therein by reference, as from time to time amended or supplemented
pursuant to the Securities Act, the Exchange Act or otherwise; provided,
however, that a Prospectus Supplement shall be deemed to have supplemented the
Prospectus only with respect to the Offered Securities to which it relates.
Any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the effective date of the Registration Statement,
or the issue date of any preliminary prospectus or the Prospectus, as the case
may be, and on or prior to the completion of the applicable offering and which
is deemed to be incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees to issue and sell
to each Underwriter as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees to purchase at the price per share
set forth in the Terms Agreement, severally and not jointly, from the Company
the respective number of Underwritten Securities set forth opposite the name of
such Underwriter on the annex or annexes to Exhibit 1 hereto (or such number of
Underwritten Securities, as the case may be, increased as set forth in Section
9 hereof, subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives in their sole discretion may make).
<PAGE> 4
-4-
If, pursuant to the Terms Agreement, the Company shall have granted the
option to the Underwriters to purchase Option Securities, the Company agrees to
sell to the Underwriters designated in the Terms Agreement to purchase option
Securities (each, an "Option Securities Underwriter" and collectively, the
"Option Securities Underwriters") the Option Securities, and the Option
Securities Underwriters shall have a one-time right to purchase, severally and
not jointly, the Option Securities on the terms set forth in the Terms
Agreement. Option Securities may be purchased as provided below solely for the
purpose of covering over-allotments made in connection with the offering of the
Underwritten Securities. If any Option Securities are to be purchased, each
Option Securities Underwriter agrees, severally and not jointly, to purchase
the number of Option Securities (subject to such adjustments to eliminate any
fractional Offered Securities as the Representatives designated in the Terms
Agreement in their sole discretion may make) that bears the same proportion to
the total number of Option Securities to be purchased as the number of
Underwritten Securities set forth in the annex or annexes to Exhibit 1 hereto
opposite the name of such Option Securities Underwriter bears to the total
number of Underwritten Securities to be purchased by all Option Securities
Underwriters.
The Option Securities Underwriters may exercise the option to purchase the
Option Securities at any time on or before the thirtieth day following the
Representation Date, by written notice from the Representatives designated in
the Terms Agreement to the Company. Such notice shall set forth the aggregate
number of Option Securities as to which the option is being exercised and the
date and time when the Option Securities are to be delivered and paid for,
which may be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later than the
tenth full Business Day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Such notice shall be given at least two Business Days prior
to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands that the Underwriters
intend (i) to make a public offering of the Offered Securities as soon after
the Prospectus Supplement has been filed and the Terms Agreement has been
executed and delivered as in the judgment of the Representatives is advisable
and (ii) initially to offer the Offered Securities upon the terms set forth in
the Prospectus Supplement and the Underwriters will advise the Company as to
any alteration in the terms of such offering that would require, pursuant to
the Securities Act, any amendment or supplement to the Prospectus Supplement.
<PAGE> 5
-5-
3. Delivery of the Offered Securities and Payment Therefor. Payment for
the Offered Securities shall be made to the Company or to the Company's order
by certified or official bank check or checks payable in New York Clearing
House or other next day funds in such location as the Representatives shall
designate in the Terms Agreement at, in the case of the Underwritten
Securities, such time and date as are specified in the Terms Agreement, or at
such other time on the same or such other date, not later than the fifth
Business Day (as hereinafter defined) thereafter, as the Representatives and
the Company may agree upon in writing or, in the case of the Option Securities,
on the date and at the time specified by the Representatives designated in the
Terms Agreement to exercise such option in the written notice by such
Representatives of the election to purchase such Option Securities by the
Option Securities Underwriters. The time and date of such payment for the
Underwritten Securities are referred to herein as the "Closing Date" and the
time and date for such payment for the Option Securities, if other than the
Closing Date, are herein referred to as the "Additional Closing Date". As used
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City.
Payment for the Offered Securities to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Offered Securities to be purchased on such date registered in such names
and in such denominations as the Representatives shall request in writing not
later than two full Business Days prior to the Closing Date or the Additional
Closing Date, as the case may be, with any transfer taxes payable in connection
with the transfer to the Underwriters of the Offered Securities duly paid by
the Company. The Company hereby agrees to pay any such transfer taxes. The
certificates for the Offered Securities will be made available for inspection
and packaging by the Representatives not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date or the Additional Closing
Date, as the case may be.
4. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter as of the Representation Date and as of the
Closing Date that:
(i) A registration statement on Form S-3 (Registration
No. 33-[ ]), including a prospectus, with respect to the Equity
Securities (and such other securities of the Company as may be covered
thereby), (i) has been prepared by the Company in conformity with the
requirements of the Securities Act, (ii) has been filed with the
Commission and (iii) has become effective. Such Registration
Statement and the related prospectus may have been amended or
supplemented from time to
<PAGE> 6
-6-
time prior to the Representation Date; any such amendment to the
applicable Registration Statement was so prepared and filed and any
such amendment has become effective. A prospectus supplement (the
"Prospectus Supplement"), including a prospectus, relating to the
Offered Securities has been prepared. The Prospectus Supplement and,
if not previously filed, such prospectus will be filed pursuant to
Rule 424 under the Securities Act. If the offering of the Offered
Securities is to be made by U.S. Underwriters and International
Managers, two such prospectus supplements, one relating to the Offered
Securities to be sold by the U.S. Underwriters and one relating to the
Underwritten Securities to be sold by the International Managers, and
each identical to the other except for the cover page, have been so
prepared and filed. In such event, the term "Prospectus Supplement"
refers to such international and U.S. prospectus supplements. Copies
of such Registration Statement and the Prospectus relating thereto,
any such amendment or supplement, the Prospectus Supplement and all
documents incorporated by reference therein which were filed with the
Commission on or prior to the Representation Date (including one fully
executed copy of the Registration Statement and of each amendment
thereto for counsel for the Underwriters) have been delivered to each
of the Representatives. The Company has included in the Registration
Statement, as amended at the date the Registration Statement was
declared effective (the "Effective Date"), all information (other than
information relating specifically to the terms of any particular
series of Equity Securities and the offering thereof) required by the
Securities Act to be included in the Prospectus with respect to the
Offered Securities and the offering and sale thereof. Except to the
extent that the Underwriters shall agree in writing to a modification,
the Registration Statement and the Prospectus shall be in all
substantive respects in the form furnished to the Underwriters prior
to the Representation Date or, to the extent not completed at the
Representation Date, shall contain only such specific additional
information and other changes as the Company has advised the
Underwriters, a reasonable time prior to the Representation Date, is
to be included or made therein and as to which the Underwriters have
not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act; and no such document
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated
<PAGE> 7
-7-
therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they
were made) not misleading; provided, however, that the Company makes
no representation or warranty as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information relating to any
Underwriter furnished to the Company by or on behalf of any
Underwriter expressly for use therein.
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of
the Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) Ernst & Young and Coopers & Lybrand, who are
reporting upon the audited financial statements and the supporting
schedules of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, in the case of Ernst &
Young, were, at the time of their report, and, in the case of Coopers
& Lybrand, are, independent public accountants within the meaning of
the Securities Act. The financial statements, and the related notes
thereto, included or incorporated by reference in the Registration
Statement and the Prospectus, present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as
of the dates indicated and the results of their operations and the
changes in their consolidated cash flows for the periods specified;
and said financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis, except as set forth therein, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated
therein. If pro forma financial information is included in or
incorporated by reference into the Registration Statement and the
Prospectus, such pro forma financial information (including, without
limitation, the notes thereto) as of the date presented (A) presented
fairly in all material respects the information shown therein, (B) was
prepared in accordance with applicable requirements of
<PAGE> 8
-8-
Regulation S-X promulgated under the Exchange Act, (C) was prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and (D) was properly computed on the
bases described therein. In the opinion of the Company, the
assumptions used in the preparation of any such pro forma financial
information (including, without limitation, the notes thereto) were
fair and reasonable and the adjustments used therein were appropriate
to give effect to the transactions or circumstances referred to
therein. No pro forma financial statements or other pro forma
financial information is required to be included or incorporated by
reference in the Registration Statement and the Prospectus other than
those included or incorporated by reference therein.
(vi) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Registration Statement
and the Prospectus and to enter into this Agreement and the Terms
Agreement, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and the Subsidiaries (as hereinafter defined), taken as a
whole (each, a "Material Adverse Effect").
(vii) Each direct and indirect foreign and domestic
subsidiary of the Company listed on Schedule I hereto, which
constitute all of the significant subsidiaries of the Company within
the meaning of Rule 1-02 of Regulation S-X under the Exchange Act
(each, a "Subsidiary" and collectively, the "Subsidiaries") has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Registration Statement and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so incorporated, be in
existence, have such power and authority, be so qualified or be in
good standing could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized
and validly
<PAGE> 9
-9-
issued, are fully paid and non-assessable, and, except as set forth in
the Registration Statement and the Prospectus, are owned by the
Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests, claims and restrictions on
transferability and voting (other than any restrictions on
transferability as may arise under state and federal securities laws).
Except as set forth in the Registration Statement and the Prospectus,
there are no outstanding (i) securities or obligations convertible
into or exchangeable or exercisable for any shares of capital stock
of, or other interest in, the Company or any Subsidiary, (ii) rights,
warrants or options to acquire or purchase any shares of capital stock
of, or other interest in, the Company or any Subsidiary or any such
convertible, exchangeable or exercisable securities or obligations, or
(iii) obligations or understandings to issue or sell any shares of
capital stock of, or other interest in, the Company or any Subsidiary,
any such convertible, exchangeable or exercisable securities or
obligations, or any such warrants, rights or options, except as have
been disclosed to the Underwriters in writing prior to the date hereof
and except for (A) issuances of shares of Common Stock and options to
acquire Common Stock after the date of the most recent information set
forth in the Registration Statement and the Prospectus pursuant to the
Company's employee benefit plans as in effect on the date hereof and
(B) issuances after the date of the most recent information set forth
in the Registration Statement and the Prospectus of convertible
debentures of the Company and Common Stock pursuant to the Company's
Registration Statement on Form S-4 (Registration No. 33-54996) (the
"S-4").
(viii) There are no partnerships in which the Company or
any of the Subsidiaries has any direct or indirect controlling
interest that would constitute a significant subsidiary within the
meaning of Rule 1-02 of Regulation S-X under the Exchange Act. Except
for the capital stock of the Subsidiaries and except as set forth in
the Registration Statement and the Prospectus, the Company does not
own, directly or indirectly, any shares of stock or any other equity
or long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity.
(ix) This Agreement and the Terms Agreement have been
duly and validly authorized, executed and delivered by the Company.
(x) Since the date of the latest consolidated
financial statements of the Company and the Subsidiaries included in
the Registration Statement and the Prospectus, except as set forth in
or expressly contemplated by the Registration Statement and the
Prospectus, there has not been
<PAGE> 10
-10-
(A) any change in the Company's issued capital stock or options,
except (I) pursuant to the exercise of options or the conversion,
exchange or exercise of outstanding convertible, exchangeable or
exercisable securities of the Company, (II) issuances of shares of
Common Stock and options to acquire Common Stock issued after the date
of such financial statements pursuant to the Company's employee
benefit plans as in effect on the date hereof and (III) issuances
after the date of such financial statements of convertible debentures
of the Company and Common Stock pursuant to the S-4, or (B) any
material adverse change in the management, condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and the Subsidiaries, taken as a whole (each, a Material
Adverse Change," and any event or state of facts which could, singly
or in the aggregate, reasonably be expected to result in a Material
Adverse Change is herein referred to as a "Prospective Material
Adverse Change"), whether or not arising from transactions or events
occurring in the ordinary course of business.
(xi) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company or any of the Subsidiaries (other than those in the ordinary
course of business) which are material to the Company and the
Subsidiaries, taken as a whole and (B) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock, other than regularly scheduled quarterly
dividends in accordance with the past practice of the Company.
(xii) As of the date of the Prospectus Supplement, the
Company has the authorized, issued and outstanding capitalization set
forth in the Prospectus under "Capitalization." The authorized
capital stock of the Company conforms as to legal matters to the
description thereof contained in the Registration Statement and the
Prospectus, and all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and non-assessable and are not subject to any preemptive or similar
rights. The Rights Agreement has been duly authorized, executed and
delivered by the Company; the Rights outstanding thereunder and, if
the Offered Securities include, or are convertible into or
exchangeable or exercisable for, shares of Common Stock, to be issued
upon issuance of the Offered Securities or the conversion, exchange or
exercise thereof, have been duly authorized; the Series C Preferred
Stock to be issued upon exercise of the Rights has been duly
authorized; and the description of the Rights
<PAGE> 11
-11-
Agreement and the Rights set forth in the Registration Statement and
the Prospectus is accurate in all material respects.
(xiii) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and
sufficiently taken. The Offered Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement
and the Terms Agreement and, when issued and delivered by the Company
pursuant to this Agreement and the Terms Agreement against payment of
the consideration set forth in the Terms Agreement, the Offered
Securities will be validly issued and fully paid and nonassessable; no
holder thereof will be subject to personal liability solely by reason
of being such a holder; the Offered Securities will not be subject to
the preemptive rights of any stockholder of the Company. If the
Offered Securities are convertible into, or exchangeable or
exercisable for, Common Stock, the Offered Securities are convertible
into, or exchangeable or exercisable for, Common Stock in accordance
with their terms and the terms of the Resolution.
(xiv) If the Offered Securities are convertible into or
exchangeable or exercisable for Common Stock, the Common Stock
issuable upon conversion, exchange or exercise of the Offered
Securities pursuant to the terms of the Resolution has been duly
authorized and validly reserved for issuance upon such conversion,
exchange or exercise by all necessary corporate action and such Common
Stock, when duly issued upon such conversion, exchange or exercise,
will be validly issued and fully paid and nonassessable; no holder
thereof will be subject to personal liability solely by reason of
being such a holder; and the issuance of such Common Stock upon such
conversion, exchange or exercise will not be subject to preemptive
rights.
(xv) The execution and delivery by the Company of, and
the full and timely performance by the Company of its obligations
under, this Agreement and the Terms Agreement, the filing of the
Resolution with the Secretary of State of the State of Texas, the
consummation of each of the transactions contemplated herein
(including, without limitation, the issuance, sale and delivery of the
Offered Securities and, if applicable, the issuance of the Common
Stock upon conversion, exchange or exercise of the Offered
Securities), therein and, if applicable, in the Resolution, (A) have
been duly authorized by all necessary corporate action on the part of
the Company, (B) do not and will not result in any violation of the
articles of incorporation or by-laws of the Company and (C) do not and
will not conflict with, or result in a breach
<PAGE> 12
-12-
or violation of, any of the terms or provisions of, or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or give rise to any right to
accelerate the maturity or require the prepayment of any indebtedness
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any material property or assets of the Company or of
any Subsidiary under (I) any indenture, mortgage, loan agreement,
note, lease, license, partnership agreement, franchise agreement or
other agreement or instrument to which the Company or any Subsidiary
is a party or by which any of them may be bound or affected or to
which any of their respective properties or assets may be subject
(each, a "Contract" and collectively, the "Contracts"), other than any
such conflict, breach, default, acceleration, prepayment, lien, charge
or encumbrance that could not, individually or in the aggregate,
reasonably be expected to result in any Material Adverse Effect, (II)
any existing applicable law, rule or regulation (other than the
securities or Blue Sky laws of the various states and other
jurisdictions of the United States of America) or (III) any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or
any Subsidiary or any of their respective properties or assets.
(xvi) No authorization, approval, consent or license of,
or filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act or as may be
required under the securities or Blue Sky laws of the various states
and other jurisdictions of the United States of America) is required
for the valid authorization, issuance, sale and delivery of the
Offered Securities by the Company, if applicable, the issuance of the
Common Stock upon conversion, exchange or exercise of the Offered
Securities, if applicable, the filing of the Resolution with the
Secretary of State of the State of Texas, the execution and delivery
by the Company of, or the full and timely performance by the Company
of each of its obligations under, this Agreement and the Terms
Agreement.
(xvii) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(xviii) No holder of any securities of the Company has any
rights, not effectively satisfied or waived, to require the Company to
register the sale of any securities under the Securities Act in
connection with the filing of the
<PAGE> 13
-13-
Registration Statement or the consummation of the transactions
contemplated therein or pursuant to this Agreement or the Terms
Agreement.
(xix) The Company and the Subsidiaries are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health or the
environment or imposing liability or standards of conduct concerning
any Hazardous Material (collectively, "Environmental Laws"), except
where such noncompliance with Environmental Laws could not, singly or
in the aggregate, reasonably be expected to have a Material Adverse
Effect. The term "Hazardous Material" means (i) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl, and (v) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
(xx) Each of the Company and each of the Subsidiaries
owns, possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and
other governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
conducted as of the date hereof, except in each case where the failure
to obtain licenses, permits, certificates, consents, orders, approvals
and other authorizations, or to make all declarations and filings,
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect, and neither the Company nor any Subsidiary
has received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the
Registration Statement and the Prospectus and except, in each case,
where such revocation or modification could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
and the Company and each Subsidiary are in compliance with all laws
and regulations relating to the conduct of their respective businesses
as conducted as set forth in the Registration Statement and the
Prospectus, except where noncompliance with such laws or regulations
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
<PAGE> 14
-14-
(xxi) To the best knowledge of the Company, each of the
Company and the Subsidiaries owns or possesses the patents, patent
licenses, trademarks, service marks, trade names, copyrights and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property, except for notices the
content of which if accurate could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xxii) Except as set forth in the Registration Statement
and the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in
which the Company or any of the Subsidiaries conduct their respective
businesses in connection with the ownership by the Company of capital
stock of any Subsidiary, any foreign exchange controls or the
repatriation of any amount from or to the Company and the
Subsidiaries, except to the extent such authorizations, approvals or
consents have been obtained and are in full force and effect and
except to the extent that the failure to obtain such authorization,
approval or consent could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(xxiii) The Company has not taken and will not take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Offered Securities (or the Common
Stock, if applicable), and the Company has not distributed and will
not distribute any prospectus or other offering material in connection
with the offering and sale of the Offered Securities other than any
preliminary prospectus filed with the Commission or the Prospectus or
other materials permitted under the Securities Act.
(xxiv) Except as set forth in the Registration Statement
and the Prospectus, there is no action, suit or proceeding before or
by any government, governmental or regulatory instrumentality, agency
or body or court, domestic or foreign, or any arbitrator, now pending
or, to the best knowledge of the Company, threatened against or
affecting the Company or
<PAGE> 15
-15-
any Subsidiary or any affiliate of the Company that, singly or in the
aggregate with all such actions, suits and proceedings (i) could
reasonably be expected to have a Material Adverse Effect or could
reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated in this Agreement or
(ii) is required to be described in the Registration Statement or the
Prospectus that is not so described.
(xxv) Neither the Company nor any Subsidiary (i) is in
violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement or any Contract or of any permit, order, decree,
judgment, statute, rule or regulation, foreign or domestic, applicable
to the Company or any Subsidiary, except for such violations, breaches
or defaults that could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xxvi) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended or a holding
company or a subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
(xxvii) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(xxviii) The statistical and market-related data included
or incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(xxix) The Company knows of no outstanding claims for
services, either in the nature of a finder's fee or origination fee,
with respect to the transactions contemplated hereby and by the Terms
Agreement, other than the underwriting fees and compensation to be
paid to the Underwriters in accordance with this Agreement.
(xxx) No labor disputes exist with employees of the
Company or of the Subsidiaries that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
<PAGE> 16
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Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
5. Agreements of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) To use its reasonable best efforts to cause any
amendment to the Registration Statement to become effective at the
earliest possible time.
(b) To furnish to each of the Representatives, without
charge, as many signed copies of the Registration Statement (as
originally filed) and each amendment thereto and each document
incorporated or deemed incorporated therein, in each case including
exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of the
Company's intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the Securities Act, the Exchange Act
or otherwise, to furnish the Underwriters and their counsel with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and not to
file any such amendment or supplement or use any such prospectus to
which the Underwriters or counsel for the Underwriters shall object.
Subject to the foregoing sentence, the Company will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
(d) To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any
<PAGE> 17
-17-
comments from the Commission or of any request by the Commission for
any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for any additional information, (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any Prospectus or Prospectus Supplement or
the initiation or threatening of any proceeding for that purpose and
(v) of the receipt by the Company of any notification with respect to
any suspension of the qualification of the Offered Securities for
offer and sale in any jurisdiction or the initiation of any proceeding
for such purpose; and to use its reasonable best efforts to prevent
the issuance of any such stop order or notification and, if issued, to
obtain as soon as possible the withdrawal thereof.
(e) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Company, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company)
to which Offered Securities may have been sold by the Representatives
on behalf of the Underwriters and to any other dealers upon request,
such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
(f) To endeavor to qualify the Offered Securities (and
the Common Stock, if applicable) for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to pay all fees and expenses (including fees and disbursements of
counsel to the Underwriters) incurred in connection with such
qualification; provided, however, that the Company shall not be
required to file a general consent to service of process in any
<PAGE> 18
-18-
jurisdiction or subject itself to general taxation in any jurisdiction.
(g) To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months, after the date of each Terms Agreement an earnings
statement, covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement, (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of
such Terms Agreement, which will satisfy the provisions of Rule 158
under the Securities Act and Section 11(a) of the Securities Act.
(h) For a period of 120 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
Subsidiary to, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, any shares of Equity Securities of
the same class as the Offered Securities (including, without
limitation, any depository shares representing the same) or any
securities convertible into or exchangeable or exercisable for shares
of Equity Securities of the same class as the Offered Securities,
other than (A) the Offered Securities to be sold pursuant to the Terms
Agreement, (B) shares of capital stock of the Company issued upon
conversion, exchange or exercise of convertible, exchangeable or
exercisable securities of the Company or of any Subsidiary outstanding
on the Representation Date and (C) shares of Common Stock and options
thereunder issued pursuant to employee benefit plans of the Company in
place on the Representation Date as in effect on the Representation
Date, and other than pursuant to such other exceptions, if any, as are
agreed to by the Representatives and set forth in the Terms Agreement.
(i) Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Company's
obligations hereunder, including, without limiting the generality of
the foregoing, all costs and expenses (i) incurred in connection with
the preparation, issuance, execution and delivery of the Offered
Securities (including, if applicable, the Common Stock issuable upon
conversion, exchange or exercise thereof), (ii) incurred in connection
with the preparation, printing and filing under the Securities Act and
the Exchange Act of the Registration Statement, the
<PAGE> 19
-19-
Prospectus, any preliminary prospectus and each Prospectus Supplement
(including in each case all exhibits, amendments and supplements
thereto and all documents incorporated therein by reference), (iii)
incurred in connection with the registration or qualification of the
Offered Securities (including, if applicable, the Common Stock
issuable upon conversion, exchange or exercise thereof) under the laws
of such jurisdictions as the Representatives may request (including
filing fees and the fees of counsel for the Underwriters and their
disbursements), (iv) in connection with the listing of the Offered
Securities on the New York Stock Exchange, (v) relating to any filing
with the National Association of Securities Dealers Inc. (the "NASD")
in connection with the offering of the Offered Securities, (vi)
incurred in connection with the engagement of any qualified
independent underwriter as may be required by NASD rules and
regulations, (vii) incurred in connection with the rating of the
Offered Securities, (viii) incurred in connection with advertising
relating to the Offered Securities approved by the Company (which
approval shall not be unreasonably withheld or delayed), (ix) relating
to the fees and expenses of the transfer agent and registrar for the
Offered Securities and (x) relating to or in connection with the
printing (including word processing and duplication costs) and
delivery of this Agreement, the Terms Agreement, the agreement among
underwriters, each other document or instrument relating to the
underwriting arrangements and the coordination of the offering of the
Offered Securities by the U.S. Underwriters and the International
Managers, if applicable, any dealer agreements, the Preliminary and
Supplemental Blue Sky Memoranda and the furnishing to the
Underwriters and dealers of copies of the Registration Statement, the
Prospectus and each Prospectus Supplement, including mailing and
shipping, as herein provided.
(j) To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Company's capital stock, and copies of any reports and financial
statements furnished to or filed with the Commission.
(k) To use the net proceeds of the offering of the
Offered Securities as set forth in the Prospectus under the caption
"Use of Proceeds."
(l) During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, to file all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within
<PAGE> 20
-20-
the time period required by the Exchange Act and the Exchange Act
Regulations.
(m) To use its best efforts to effect the listing of the
Offered Securities (including, if applicable, the shares of Common
Stock issuable upon the conversion of the Offered Securities) on the
New York Stock Exchange on the Representation Date.
(n) To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion, exchange
or exercise of all of the Offered Securities that are convertible into
or exchangeable or exercisable for the Common Stock.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
(a) If any amendment to the Registration Statement filed
prior to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M. on the Representation Date; and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission. The
price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided evidence satisfactory to the Underwriters of such timely
filing.
(b) The representations and warranties of the Company
contained herein and in the Terms Agreement shall be true and correct
on and as of the Closing Date as if made on and as of the Closing Date
and the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to
the Closing Date, there shall not have occurred any Material Adverse
Change or any development involving a Prospective Material Adverse
Change other than as set forth in the Registration Statement and the
Prospectus, the effect of which in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public
offering or the
<PAGE> 21
-21-
delivery of the Underwritten Securities on the terms and in the manner
contemplated in the Registration Statement and the Prospectus. As
used in this Section 6(c), "Prospectus" shall mean the Prospectus
first used to confirm sales of the Offered Securities exclusive of any
amendment or supplement thereto thereafter.
(d) The Representatives shall have received on and as of
the Closing Date a certificate of the Company signed by the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial
Officer of the Company to the effect set forth in subsections (a) and
(b) of this Section 6 and to the further effect that since the most
recent date as of which information is given in the Prospectus there
shall not have occurred any Material Adverse Change, or any
development involving a Prospective Material Adverse Change. As used
in this Section 6(d), "Prospectus" shall mean the Prospectus first used
to confirm sales of the Offered Securities exclusive of any amendment
or supplement thereto thereafter.
(e) The Representatives shall have received on the
Closing Date a signed opinion of Fulbright & Jaworski L.L.P., special
counsel for the Company, addressed to the Underwriters and dated the
Closing Date and satisfactory to counsel for the Underwriters, to the
effect that:
(i) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(ii) The number of authorized shares of
capital stock of the Company is as set forth in the Prospectus
under "Capitalization" and the authorized capital stock of the
Company conforms as to legal matters to the description
thereof contained in the Prospectus.
(iii) The Offered Securities have been duly
authorized for issuance and sale to the Underwriters in
accordance with this Agreement and the Terms Agreement and,
when issued and delivered by the Company to the Underwriters
pursuant to this Agreement and the Terms Agreement against
payment of the consideration set forth in the Terms Agreement,
will be validly issued and fully paid and non-assessable.
(iv) The issuance of the Offered Securities
is not subject to preemptive rights arising by operation of
law or under the charter or by-laws of the Company; and no
holder of the Offered Securities will be subject to personal
liability solely by reason of being such a holder.
<PAGE> 22
-22-
(v) If the Offered Securities are
convertible into or exchangeable or exercisable for Common
Stock, upon issuance and delivery of the Offered Securities,
the Offered Securities shall be convertible, exchangeable or
exercisable at the option of the holder thereof into or for
Common Stock in accordance with the terms of the Offered
Securities and the Resolution; the Common Stock issuable upon
conversion, exchange or exercise of the Offered Securities
has been duly authorized and validly reserved for issuance
upon such conversion, exchange or exercise by all necessary
corporate action, and such Common Stock, when issued upon such
conversion, exchange or exercise, will be validly issued,
fully paid and nonassessable; no holder of the Common Stock
will be subject to personal liability solely by reason of
being such a holder; and the issuance of such shares upon such
conversion, exchange or exercise will not be subject to
preemptive rights arising by operation of law or under the
charter or by-laws of the Company.
(vi) At the time the Registration Statement
and each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) appear on their face to be
appropriately responsive to the applicable requirements of the
Securities Act.
(vii) The statements set forth or
incorporated by reference in the Registration Statement and
the Prospectus insofar as such statements purport to summarize
certain provisions of the Offered Securities (and the Common
Stock, if applicable) provide a fair summary of such
provisions.
(viii) Such counsel does not know of any
legal or governmental actions, suits or proceedings, pending
or threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(ix) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in
<PAGE> 23
-23-
connection with (A) the offering, issuance or sale of the
Offered Securities, if applicable, the filing of the
Resolution with the Secretary of State of the State of Texas,
or, if applicable, the valid authorization, issuance and
delivery of the Common Stock issuable upon conversion,
exchange or exercise of the Offered Securities, or (B) the
execution, delivery or full and timely performance of this
Agreement or the Terms Agreement by the Company, except such
as may be required under the Securities Act or state
securities laws or under the Company's listing agreement with
the New York Stock Exchange, Inc.
(x) To the best of such counsel's
knowledge and information, the execution, delivery and the
full and timely performance of this Agreement and the Terms
Agreement, the filing of the Resolution with the Secretary of
State of the State of Texas, the consummation of each of the
transactions contemplated herein (including, without
limitation, the issuance, sale and delivery of the Offered
Securities and, if applicable, the issuance of the Common
Stock upon conversion, exchange or exercise of the Offered
Securities), therein and, if applicable, in the Resolution
will not constitute a breach of, or default under (including,
without limitation, any event which with notice or lapse of
time, or both, would constitute a breach of or a default
under), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion, nor will such action
result in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law, rule,
regulation or administrative, regulatory or court judgment,
order or decree, except for any breach, default, lien, charge
or encumbrance under any such contract as could not, singly or
in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(xi) Each document filed pursuant to the
Exchange Act (other than the financial statements, schedules
and other financial and statistical data included therein, as
to which such counsel need express no opinion) and
incorporated or deemed to be incorporated by reference in the
Prospectus appears on its face to be appropriately responsive
to the applicable requirements of the Exchange Act.
(xii) The Company is not an investment
company under the Investment Company Act of 1940, nor a holding
<PAGE> 24
-24-
company or a subsidiary of a holding company under the Public
Utility Holding Company Act of 1935.
Such counsel shall also state that they have been advised by
the Commission that the Registration Statement became effective under
the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (2) the Prospectus (other than the
financial statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to which such
counsel need not make any statement or express any opinion) as of its
date or at the Representation Date contained and, as of the date such
opinion is delivered, contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of any jurisdiction other
than the State of Texas, the State of New York or the United States or
the General Corporation Law of the State of Delaware, to the extent
such counsel deems proper and specifies in such opinion, upon the
opinion of other counsel who are reasonably satisfactory to counsel
for the Underwriters; provided, however, that such counsel shall state
<PAGE> 25
-25-
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such opinion.
(f) The Representatives shall have received on the
Closing Date a signed opinion of James M. Shelger, General Counsel of
the Company, addressed to the Underwriters and dated the Closing Date
and satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to the
best of such counsel's knowledge and information is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(ii) Each Subsidiary has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing could not, singly or in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(iii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iv) The number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization" and the authorized capital stock of the
Company conforms as to legal matters to the description
thereof contained in the Prospectus.
(v) The Offered Securities have been duly
authorized for issuance and sale to the Underwriters in
accordance with this Agreement and the Terms Agreement and,
when issued and delivered by the Company to the Underwriters
pursuant to this Agreement and the Terms
<PAGE> 26
-26-
Agreement against payment of the consideration set forth in
the Terms Agreement, will be validly issued and fully paid and
non-assessable.
(vi) The issuance of the Offered Securities is
not subject to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the
Company; and no holder of the Offered Securities will be
subject to personal liability solely by reason of being such a
holder.
(vii) If the Offered Securities are convertible
into or exchangeable or exercisable for Common Stock, upon
issuance and delivery of the Offered Securities, the Offered
Securities shall be convertible, exchangeable or exercisable
at the option of the holder thereof into or for Common Stock
in accordance with the terms of the Offered Securities and the
Resolution; the Common Stock issuable upon conversion,
exchange or exercise of the Offered Securities has been duly
authorized and validly reserved for issuance upon such
conversion, exchange or exercise by all necessary corporate
action, and such Common Stock, when issued upon such
conversion, exchange or exercise, will be validly issued,
fully paid and nonassessable; no holder of the Common Stock
will be subject to personal liability solely by reason of
being such a holder; and the issuance of such shares upon such
conversion, exchange or exercise will not be subject to
preemptive rights arising by operation of law or under the
charter or by-laws of the Company.
(viii) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Company, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge, after due inquiry, any other
security interests or claims.
(ix) The statements set forth or incorporated
by reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable) provide a fair summary of such provisions.
(x) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
<PAGE> 27
-27-
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(xi) To the best of such counsel's knowledge
and information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities, if
applicable, the filing of the Resolution with the Secretary of
State of the State of Texas, or, if applicable, the valid
authorization, issuance and delivery of the Common Stock
issuable upon conversion, exchange or exercise of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement or the Terms Agreement by the
Company, except such as may be required under the Securities
Act or state securities laws or under the Company's listing
agreement with the New York Stock Exchange, Inc.
(xiii) To the best of such counsel's knowledge
and information, the execution, delivery and the full and
timely performance of this Agreement and the Terms Agreement,
the filing of the Resolution with the Secretary of State of
the State of Texas, the consummation of each of the
transactions contemplated herein (including, without
limitation, the issuance, sale and delivery of the Offered
Securities and, if applicable, the issuance of the Common
Stock upon conversion, exchange or exercise of the Offered
Securities), therein and, if applicable, in the Resolution,
and compliance by the Company with its obligations hereunder
and thereunder will not conflict with or constitute a breach
of, or default under (including, without limitation, any event
which with notice or lapse of time, or both, would constitute
a breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
<PAGE> 28
-28-
property or assets of the Company or any of the Subsidiaries
pursuant to, any contract identified on a schedule to such
opinion, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company, or any
applicable law, rule, regulation or administrative, regulatory
or court judgment, order or decree, except for any breach,
default, lien, charge or encumbrance under any such contract
as could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (2) the Prospectus (other than the
financial statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to which such
counsel need not make any statement or express any opinion) as of its
date or at the Representation Date contained and, as of the date such
opinion is delivered, contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of (1) the State of New
York or the General Corporation Law of the State of Delaware, upon the
written opinion of Fulbright & Jaworski L.L.P. delivered pursuant to
clause (e) above of this Section 6 and (2) any jurisdiction other than
the State of Texas or the United States, to the extent such counsel
deems proper and specifies in such opinion, upon the opinion of other
counsel who are reasonably satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall state that
such counsel, the Underwriters and counsel for the Underwriters are
justified in relying upon such opinion.
<PAGE> 29
-29-
(g) On the Representation Date and also on the Closing
Date, Ernst & Young and Coopers & Lybrand shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
(h) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Cahill Gordon & Reindel,
counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(i) On the Representation Date, the Offered Securities
and, if applicable, the Common Stock issuable upon conversion of the
Offered Securities shall have been approved for listing on the New
York Stock Exchange upon notice of issuance.
(j) At the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities
(and, if applicable, the Common Stock) as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(k) On or prior to the Closing Date the Company shall
have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
(l) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally
recognized
<PAGE> 30
-30-
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act.
(m) The Company shall have delivered to the
Representatives written agreements, in form and substance satisfactory
to the Representative designated in the Terms Agreement, with each of
its executive officers who own capital stock of the Company of a class
which includes the Offered Securities that no offer, sale or other
disposition, or request or demand for registration under the
Securities Act or inclusion in any other registration statement filed
by the Company under the Securities Act, of any capital stock of the
Company of a class which includes the Offered Securities, or warrants,
options, convertible, exercisable or exchangeable securities, or other
rights to purchase or acquire, such capital stock (or any such right
or exchangeable, exercisable or convertible security) owned by such
person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the
Representation Date, directly or indirectly, by such executive
officer, otherwise than (i) with the prior written consent of the
Representative designated in the Terms Agreement and (ii) pursuant to
such exceptions, if any, as are agreed to by the Representatives and
set forth in the Terms Agreement.
(n) There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
The several obligations of the Underwriters designated in the Terms Agreement
to purchase Option Securities hereunder on the Additional Closing Date are,
unless otherwise agreed by the Underwriters designated in the Terms Agreement,
subject to the conditions set forth in paragraph (a) to and including paragraph
(n) above on and as of the Additional Closing Date (references therein to the
Closing Date shall be deemed references to the Additional Closing Date for this
purpose), except that the certificate called for by paragraph (d), the opinions
called for by paragraphs (e), (f) and (h) and the letters called for by
paragraph (g) shall be dated as of, and delivered on, the Additional Closing
Date, and to the delivery to the Representatives on the Additional Closing Date
of such other documents as they may reasonably request.
7. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either 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 the
legal fees and other expenses reasonably incurred in connection with defending
or
<PAGE> 31
-31-
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein; provided,
however, that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Offered Securities if
such untrue statement or omission or alleged untrue statement or omission made
in such preliminary prospectus and is eliminated or remedied in the Prospectus
and the Company has provided such Prospectus in accordance with paragraph 5(ii)
hereof (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) and if it shall be established in the
related action or proceeding that a copy of the Prospectus, if required by law
(as so amended or supplemented, but exclusive of any documents incorporated
therein by reference), shall not have been furnished to such person at or prior
to the written confirmation of the sale of such Offered Securities to such
person, except to the extent that such Prospectus contains any other untrue
statement or omission or alleged untrue statement or omission of a material
fact that was the subject matter of the related action or proceeding. For
purposes of the proviso to the immediately preceding sentence, the term
"Prospectus" shall not be deemed to include the documents incorporated therein
by reference, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in any
preliminary prospectus or the Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either 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, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by
<PAGE> 32
-32-
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished
to the Company in writing by such Underwriter through the Representatives
expressly for use in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any preliminary prospectus. For purposes of this
Section 7 and Section 4(ii), the only written information furnished by the
Underwriters to the Company expressly for use in the Registration Statement and
the Prospectus is the information in the last paragraph of the cover page of
the Prospectus Supplement and [ ] and [ ] under the table under the caption
"Underwriting" in the Prospectus Supplement.
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 indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall promptly retain counsel satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. 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) there has been a failure by the
Indemnifying Person to retain promptly counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties to 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 that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Underwriters and such control
persons of Underwriters, such firm shall be designated in writing
<PAGE> 33
-33-
by the Representatives. In the case of any such separate firm for the Company,
and such directors, officers and control persons of the Company, such firm
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 any 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 an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such Indemnifying Person of the aforesaid request and (ii) such 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 prior 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 indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement (1)
includes an unconditional written release of such Indemnified Person, in form
and substance satisfactory to such Indemnified Person, from all liability on
claims that are the subject matter of such proceeding and (2) does not include
any statement as to an admission of fault, culpability or failure to act by or
on behalf of any Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, 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 as follows: as between the
Company on the one hand and the Underwriters on the other (i) in such
proportion as is appropriate to reflect the aggregate relative benefits
received by the Company and by the Underwriters from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters 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 benefits received by the Company on the one hand and by the
Underwriters on the other shall be deemed to be in the same respective
proportions as
<PAGE> 34
-34-
the net proceeds from the offering (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus bear to the aggregate public offering price of the Offered
Securities. The relative fault of the Company on the one hand and of the
Underwriters 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 Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters 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 the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter 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
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective number of Offered Securities they have
purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement 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 any
<PAGE> 35
-35-
Underwriter or any person controlling any Underwriter or the Company, its
officers or directors or any other person controlling the Company and (iii)
acceptance of and payment for any of the Offered Securities.
8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Securities, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the National Association of Securities Dealers, Inc., the American
Stock Exchange or the [ ], (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York or [
] shall have been declared by either U.S. Federal, New York State or [
] authorities or exchange controls shall have been imposed by the United
States, or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in the judgment of the Representatives, is material and adverse and which, in
the judgment of the Representatives, makes it impracticable to market the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Offered Securities which it or they have agreed to purchase hereunder
on such date, and the aggregate number of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Offered Securities to be
purchased on such date, the other Underwriters (with respect to the Option
Securities, to the extent such Underwriters are Option Securities Underwriters)
shall be obligated severally in the proportions that (1) with respect to
Underwritten Securities the number of Underwritten Securities set forth
opposite their respective names in the annex or annexes to Exhibit 1 hereto
bears to the aggregate number of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters and
<PAGE> 36
-36-
(2) with respect to Option Securities, the number of Underwritten Securities
set forth opposite their respective names in the annex or annexes to Exhibit 1
hereto bears to the aggregate number of Underwritten Securities set forth
opposite the names of all such non-defaulting Underwriters who are Option
Securities Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided, however, that in no event shall the number of Offered
Securities that any Underwriter has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Offered Securities without the written consent of such
Underwriter. If, on the Closing Date or the Additional Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Offered Securities which it or they have agreed to purchase hereunder on such
date, and the number of Offered Securities with respect to which such default
occurs is more than one-tenth of the aggregate number of Offered Securities to
be purchased on such date, and arrangements satisfactory to the Representatives
and the Company for the purchase of such Offered Securities are not made within
36 hours after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Securities, as the case may be) shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Representatives or the Company shall
have the right to postpone the Closing Date (or, in the case of the Option
Securities, the Additional Closing Date), but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them, because
of any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder and pursuant to the Terms Agreement. In no
event, however, shall the Company be responsible to the Underwriters for any
loss of profits for failure to consummate the offering and sale of the Offered
Securities.
<PAGE> 37
-37-
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Company, the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Offered Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives at the address as set
forth in the Terms Agreement. Notices to the Company shall be given to it at
Service Corporation International, 1929 Allen Parkway, Houston, Texas 77019
(facsimile: (713) [ ]); Attention: [ ].
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
<PAGE> 38
-38-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION
INTERNATIONAL
By:______________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
[Insert Signature block(s) for the
Representative or Representatives
acting on behalf of the Underwriters,
or for each Underwriter if
no Syndicate]
<PAGE> 39
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
[ ] Shares
[TITLE OF EQUITY SECURITIES]
TERMS AGREEMENT
[ ], 199[ ]
Service Corporation International
1929 Allen Parkway
Houston, Texas 77019
Attention: [ ]
Ladies and Gentlemen:
[ ] (the "Representative(s)") understand that
Service Corporation International, a Texas corporation (the "Company"),
proposes to issue and sell [ ] shares of its [describe Equity Securities]
(the "Underwritten Securities"). Subject to the terms and conditions set forth
herein or incorporated by reference herein, the [U.S.] Underwriters named in
Annex A attached hereto [and the International Managers named in Annex B
attached hereto] offer to purchase, severally and not jointly, the number of
Underwritten Securities set forth opposite the name of each such Underwriter on
Annex A [and Annex B] hereto at a price of $[ ] per share (the "Purchase
Price"). The Closing Date shall be [ ], 199[ ], at [ ] A.M. at the
offices of [ ].
[It is understood that, subject to the conditions hereinafter
stated, [ ] Underwritten Securities (the "U.S. Underwritten
Securities") will be sold to the several U.S. Underwriters named in Annex A
hereto (the "U.S. Underwriters") in connection with the offering and sale of
such U.S. Underwritten Securities in the United States and Canada to United
States and Canadian Persons (as such terms are defined in the Agreement
between U.S. and International Underwriting Syndicates of even date herewith
between the U.S. Underwriters and the International Managers), and [
] Underwritten Securities (the "International Securities") will be sold to the
several international managers named in Annex B hereto (the "International
Managers") in connection with the offering and sale of such
<PAGE> 40
-2-
International Securities outside the United States and Canada to persons other
than United States and Canadian Persons. [ ] shall act
as representatives (the "U.S. Representatives") of the several U.S.
Underwriters, and [ ] shall act as representatives (the
"International Representatives") of the several International Managers. The
U.S. Underwriters and the International Managers are hereinafter collectively
referred to as the "Underwriters", and the U.S. Representatives and the
International Representatives are hereinafter collectively referred to as the
"Representatives."]
[In addition, the Representatives understand that the Company
proposes to issue and sell to the several [U.S.] Underwriters, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Securities, at the option of the [U.S.] Underwriters, up to an
additional [ ] shares of the [describe Equity Securities] (the "Option
Securities"). The Underwritten Securities and the Option Securities are herein
referred to as the "Offered Securities."]
[The offer herein contained is further conditioned upon the
Company agreeing to sell to the [U.S.] Underwriters the Option Securities, and
agreeing that the [U.S.] Underwriters shall have a one-time right to purchase,
severally and not jointly, up to [ ] Option Securities at the Purchase
Price. Option Securities may be purchased as provided below solely for the
purpose of covering over- allotments made in connection with the offering of
the Underwritten Securities. If any Option Securities are to be purchased,
each [U.S.] Underwriter agrees, severally and not jointly, to purchase the
number of Option Securities (subject to such adjustments to eliminate any
fractional Offered Securities as the [U.S.] Representatives in their sole
discretion may make) that bears the same proportion to the total number of
Option Securities to be purchased as the number of [U.S.] Underwritten
Securities set forth in Annex A hereto opposite the name of such [U.S.]
Underwriter bears to the total number of [U.S.] Underwritten Securities.]
[The Company's agreement to sell the Option Securities shall
entitle the [U.S.] Underwriters to exercise the option to purchase the Option
Securities at any time on or before the thirtieth day following the date of
this Terms Agreement, by written notice from the [U.S.] Representatives to the
Company. Such notice shall set forth the aggregate number of Option Securities
as to which the option is being exercised and the date and time when the Option
Securities are to be delivered and paid for which may be the same date and time
as the Closing Date but shall not be earlier than the Closing Date nor later
than the tenth full Business Day after the date of such notice (unless such
time and date are postponed in accordance with the provisions of Section 9 of
the Underwriting Agreement referred to below). Such
<PAGE> 41
-3-
notice shall be given at least two Business Days prior to the date and time of
delivery specified therein.]
The Underwritten Securities shall have the following terms:
Title: [ ]
Liquidation preference: [ ]
Dividend rate: [ ]
Dividend payment dates: [ ]
Conversion, exchange or exercise provisions: [ ]
Redemption provisions: [ ]
Public offering price: $[ ] per share
Additional terms: [ ]
All the provisions contained in the document entitled
"Underwriting Agreement -- Service Corporation International -- Equity
Securities" (the "Underwriting Agreement") and dated [ ], 199[ ] (the
"Basic Provisions"), a copy of which you have previously received, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Terms Agreement to the same extent as if the Basic Provisions had been set
forth in full herein. Terms defined in the Basic Provisions are used herein as
therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is [
]. [The additional exceptions to Section 5(h) are [ ].]
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by [ ] alone on behalf of the
Representatives, and any such action taken by [ ] alone shall be
binding upon the Representatives. Notices to the Underwriters shall be given
to the Representatives c/o [ ] (facsimile: ([ ]) [
]); Attention: [ ].
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof.
Please accept this offer no later than [ ] o'clock [ ].M.
on [ ], 199[ ], by signing a copy of this Terms Agreement in the
space set forth below and returning the signed
<PAGE> 42
-4-
copy to us, or by sending us a written acceptance in the following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated [ ], 199[ ], to purchase the Underwritten Securities
on the terms set forth therein [and hereby grant to the [U.S.] Underwriters the
option to purchase the Option Securities more fully set forth in the Terms
Agreement] and agree to and accept all other terms and provisions of the Terms
Agreement."
Very truly yours,
By: _________________________
Name:
Title:
Accepted as of the date
first above written:
SERVICE CORPORATION INTERNATIONAL
By: _______________________________
Name:
Title:
<PAGE> 43
ANNEX A
<TABLE>
<CAPTION>
Number of
[U.S.] Underwritten
Securities
[U.S.] Underwriters To Be Purchased
- ------------------- -------------------
<S> <C>
---------
Total: . . . . . . . . . . . . . . . . . . . . . . . . .
=========
</TABLE>
<PAGE> 44
ANNEX B
<TABLE>
<CAPTION>
Number of
International
Underwritten
International Securities
Managers To Be Purchased
- ------------- ---------------
<S> <C>
---------
Total: . . . . . . . . . . . . . . . . . . . . . . . .
=========
</TABLE>
<PAGE> 45
SCHEDULE I
Significant Subsidiaries of the Company
Within the Meaning of Rule 1-02 of Regulation S-X
Under the Securities Exchange Act of 1934
<PAGE> 1
Exhibit 1.2
UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Debt Securities
[ ], 199[ ]
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the "Company"), may
issue and sell from time to time its debt securities, consisting of (i)
unsecured senior debt securities (the "Senior Debt Securities"), (ii) unsecured
senior subordinated debt securities (the "Senior Subordinated Debt Securities")
and (iii) subordinated debt securities (the "Subordinated Debt Securities" and,
together with the Senior Debt Securities and the Senior Subordinated Debt
Securities, the "Debt Securities"). The Debt Securities are registered under
the registration statement referred to in Section 4(i) hereof. The Debt
Securities may be issued in one or more series and may have varying
designations, denominations, interest rates and payment dates, maturities,
redemption provisions, conversion provisions, exchange provisions and selling
prices. The Senior Debt Securities will be issued under an indenture (the
"Senior Indenture") dated February 1, 1993 entered into between the Company and
The Bank of New York, as trustee (the "Senior Trustee"). The Senior
Subordinated Debt Securities will be issued under an indenture (the "Senior
Subordinated Indenture") to be entered into between the Company and [ ],
as trustee (the "Senior Subordinated Trustee"). The Subordinated Debt
Securities will be issued under an indenture (the "Subordinated Indenture" and,
together with the Senior Indenture and the Senior Subordinated Indenture, the
"Indentures") dated September 1, 1991 between the Company and Texas Commerce
Bank National Association, as trustee (the "Subordinated Trustee" and, together
with the Senior Trustee and the Senior Subordinated Trustee, the "Trustees").
The Senior Subordinated Debt Securities and the Subordinated Debt Securities
may be convertible into shares of common stock, par value $1.00 per share, of
the Company (the "Common Stock"). The basic provisions set forth herein are
intended to be incorporated by reference in a terms agreement of the type
referred to below relating to, among other things, the designation and series
of Debt Securities and the aggregate
<PAGE> 2
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principal amount of Debt Securities (the "Underwritten Securities") to be
issued and sold by the Company pursuant thereto and to be purchased, severally,
by the underwriter or several underwriters named therein (the "Underwriters").
The Terms Agreement, which shall be in the form of Exhibit I hereto (the "Terms
Agreement"), relating to the Underwritten Securities and such additional
aggregate principal amount of Debt Securities that the Underwriters may be
granted an option to purchase by the Company to cover over-allotments in
connection with any offering of Underwritten Securities (the "Option
Securities" and together with the Underwritten Securities, the "Offered
Securities"), together with the provisions hereof incorporated therein by
reference (which provisions shall not become effective until so incorporated by
reference), is herein referred to as this "Agreement." The Terms Agreement may
reflect that a portion of the Underwritten Securities are to be sold to the
several U.S. underwriters named therein (the "U.S. Underwriters") in connection
with the offering and sale of a portion of the Underwritten Securities in the
United States and Canada (the "U.S. Underwritten Securities") to United States
and Canadian persons (as defined in the instruments governing the coordination
of the offering by the U.S. Underwriters and the International Managers (as
defined below) named therein) and that the balance of the Underwritten
Securities (the "International Underwritten Securities") are to be sold to the
several international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Company to sell,
the Offered Securities are evidenced by the Terms Agreement delivered at the
time the Company determines to sell the Offered Securities and, without the
execution and delivery of the Terms Agreement, the Company shall not be
obligated to sell, and the Underwriters shall not be obligated to purchase, any
Debt Securities pursuant to this Agreement. The Terms Agreement specifies the
firm or firms which will be Underwriters, the aggregate principal amount of the
Offered Securities to be purchased by each Underwriter, the purchase price to
be paid by the Underwriters for the Offered Securities, the public offering
price, if any, of the Offered Securities and any terms of the Offered
Securities not otherwise specified in the applicable Indenture
<PAGE> 3
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(including, but not limited to, designations, denominations, conversion or
exchange provisions, covenants, interest rates and payment dates, maturity,
redemption provisions and sinking fund requirements). The Terms Agreement
specifies any details of the terms of the offering that should be reflected in
a post-effective amendment to the applicable Registration Statement or the
Prospectus Supplement (each as hereinafter defined).
The terms which follow, when used in this Agreement, shall have the meanings
indicated. "Registration Statement" shall mean the registration statement or
registration statements relating to the Offered Securities (and such other
securities of the Company as may be included therein) which shall be the
registration statement on Form S-3 filed under the Securities Act of 1933, as
amended (collectively with the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder, the "Securities Act"),
referred to in Section 4(i) below, including all documents incorporated therein
by reference and all exhibits thereto, as from time to time amended or
supplemented pursuant to the Securities Act, the Securities Exchange Act of
1934, as amended (collectively with the rules and regulations of the Commission
thereunder, the "Exchange Act"), or otherwise, including as supplemented by the
Prospectus Supplement, on or prior to the date of execution and delivery of the
Terms Agreement (the "Representation Date") and, in the event any such
amendment or supplement is filed prior to the Closing Date (as defined in
Section 3 hereof), including by the filing of any Prospectus Supplement or
document incorporated by reference, shall also mean such registration statement
as so amended or supplemented. "Prospectus" shall mean the prospectus
(including the related Prospectus Supplement with respect to the Offered
Securities) relating to the Debt Securities (and such other securities of the
Company as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or otherwise; provided, however, that a
Prospectus Supplement shall be deemed to have supplemented the Prospectus only
with respect to the Offered Securities to which it relates. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange
Act after the effective date of the Registration Statement, or the issue date
of any preliminary prospectus or the Prospectus, as the case may be, and on or
prior to the completion of the applicable offering and which is deemed to be
incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees to issue and sell
to each Underwriter as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to
the conditions
<PAGE> 4
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hereinafter stated, agrees to purchase at the purchase price set forth in the
Terms Agreement, severally and not jointly, from the Company the respective
aggregate principal amount of Underwritten Securities set forth opposite the
name of such Underwriter on the annex or annexes to Exhibit 1 hereto (or such
aggregate principal amount of Underwritten Securities, as the case may be,
increased as set forth in Section 9 hereof, subject to such adjustments to
eliminate any fractional Offered Securities as the Representatives in their
sole discretion may make).
If, pursuant to the Terms Agreement, the Company shall have granted the
option to the Underwriters to purchase Option Securities, the Company agrees to
sell to the Underwriters designated in the Terms Agreement to purchase Option
Securities (each an "Option Securities Underwriter" and collectively, the
"Option Securities Underwriters") the Option Securities, and the Option
Securities Underwriters shall have a one-time right to purchase, severally and
not jointly, the Option Securities on the terms set forth in the Terms
Agreement. Option Securities may be purchased as provided below solely for the
purpose of covering over-allotments made in connection with the offering of the
Underwritten Securities. If any Option Securities are to be purchased, each
Option Securities Underwriter agrees, severally and not jointly, to purchase
the number of Option Securities (subject to such adjustments to eliminate any
fractional Offered Securities as the Representatives designated in the Terms
Agreement in their sole discretion may make) that bears the same proportion to
the total number of Option Securities to be purchased as the number of
Underwritten Securities set forth in the annex or annexes to Exhibit 1 hereto
opposite the name of such Option Securities Underwriter bears to the total
number of Underwritten Securities to be purchased by all Option Securities
Underwriters.
The Option Securities Underwriters may exercise the option to purchase the
Option Securities at any time on or before the thirtieth day following the
Representation Date, by written notice from the Representatives designated in
the Terms Agreement to the Company. Such notice shall set forth the aggregate
number of Option Securities as to which the option is being exercised and the
date and time when the Option Securities are to be delivered and paid for,
which may be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later than the
tenth full Business Day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Such notice shall be given at least two Business Days prior
to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands that the Underwriters
intend (i) to make a public offering of the
<PAGE> 5
-5-
Offered Securities as soon after the Prospectus Supplement has been filed and
the Terms Agreement has been executed and delivered as in the judgment of the
Representatives is advisable and (ii) initially to offer the Offered Securities
upon the terms set forth in the Prospectus Supplement and the Underwriters will
advise the Company as to any alteration in the terms of such offering that
would require, pursuant to the Securities Act, any amendment or supplement to
the Prospectus Supplement.
3. Delivery of the Offered Securities and Payment Therefor. Payment for
the Offered Securities shall be made to the Company or to the Company's order
by certified or official bank check or checks payable in New York Clearing
House or other next day funds in such location as the Representatives shall
designate in the Terms Agreement at, in the case of the Underwritten
Securities, such time and date as are specified in the Terms Agreement, or at
such other time on the same or such other date, not later than the fifth
Business Day (as hereinafter defined) thereafter, as the Representatives and
the Company may agree upon in writing or, in the case of the Option Securities,
on the date and at the time specified by the Representatives designated in the
Terms Agreement to exercise such option in the written notice by such
Representatives of the election to purchase such Option Securities by the
Option Securities Underwriters. The time and date of such payment for the
Underwritten Securities are referred to herein as the "Closing Date" and the
time and date for such payment for the Option Securities, if other than the
Closing Date, are herein referred to as the "Additional Closing Date". As used
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City.
Payment for the Offered Securities to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Offered Securities to be purchased on such date registered in such names
and in such denominations as the Representatives shall request in writing not
later than two full Business Days prior to the Closing Date or the Additional
Closing Date, as the case may be, with any transfer taxes payable in connection
with the transfer to the Underwriters of the Offered Securities duly paid by
the Company. The Company hereby agrees to pay any such transfer taxes. The
certificates for the Offered Securities will be made available for inspection
and packaging by the Representatives not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date or the Additional Closing
Date, as the case may be.
4. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter as of the Representation Date and as of the
Closing Date that:
<PAGE> 6
-6-
(1) A registration statement on Form S-3 (Registration
No. 33-[ ]), including a prospectus, with respect to the Debt
Securities (and such other securities of the Company as may be covered
thereby), (i) has been prepared by the Company in conformity with the
requirements of the Securities Act, (ii) has been filed with the
Commission and (iii) has become effective. Such Registration
Statement and the related prospectus may have been amended or
supplemented from time to time prior to the Representation Date; any
such amendment to the applicable Registration Statement was so
prepared and filed and any such amendment has become effective. A
prospectus supplement (the "Prospectus Supplement"), including a
prospectus, relating to the Offered Securities has been prepared. The
Prospectus Supplement and, if not previously filed, such prospectus
will be filed pursuant to Rule 424 under the Securities Act. If the
offering of the Offered Securities is to be made by U.S. Underwriters
and International Managers, two such prospectus supplements, one
relating to the Offered Securities to be sold by the U.S. Underwriters
and one relating to the Underwritten Securities to be sold by the
International Managers, and each identical to the other except for the
cover page, have been so prepared and filed. In such event, the term
"Prospectus Supplement" refers to such international and U.S.
prospectus supplements. Copies of such Registration Statement and the
Prospectus relating thereto, any such amendment or supplement, the
Prospectus Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior to the
Representation Date (including one fully executed copy of the
Registration Statement and of each amendment thereto for counsel for
the Underwriters) have been delivered to each of the Representatives.
The Company has included in the Registration Statement, as amended at
the date the Registration Statement was declared effective (the
"Effective Date"), all information (other than information relating
specifically to the terms of any particular series of Debt Securities
and the offering thereof) required by the Securities Act to be
included in the Prospectus with respect to the Offered Securities (and
the Common Stock, if applicable) and the offering and sale thereof.
Except to the extent that the Underwriters shall agree in writing to a
modification, the Registration Statement and the Prospectus shall be
in all substantive respects in the form furnished to the Underwriters
prior to the Representation Date or, to the extent not completed at
the Representation Date, shall contain only such specific additional
information and other changes as the Company has advised the
Underwriters, a reasonable time prior to the Representation Date, is
to be included or made therein and as to which the Underwriters have
not reasonably objected.
<PAGE> 7
-7-
(2) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act and the Trust Indenture Act
of 1939, as amended, and the Rules and Regulations of the Commission
thereunder (the Trust Indenture Act"); and no such document included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were
made) not misleading; provided, however, that the Company makes no
representation or warranty as to (a) information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information relating to any
Underwriter furnished to the Company by or on behalf of any
Underwriter expressly for use therein and (b) that part of the
Registration Statement that constitutes the Statement of Eligibility
on Form T-1 of any of the Trustees under the Trust Indenture Act filed
as an exhibit to the Registration Statement (the Form T-1").
(3) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(4) (A) No stop order suspending the effectiveness of
the Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(5) Ernst & Young and Coopers & Lybrand, who are
reporting upon the audited financial statements and the supporting
schedules of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, in the case of Ernst &
Young, were, at the time of their report, and, in the case of Coopers
& Lybrand, are, independent public accountants within the meaning of
the Securities Act. The financial statements, and the related notes
thereto, included or incorporated by reference in the Registration
Statement and the Prospectus, present fairly the consolidated
financial position of the Company and its
<PAGE> 8
-8-
consolidated subsidiaries as of the dates indicated and the results of
their operations and the changes in their consolidated cash flows for
the periods specified; and said financial statements have been
prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis, except as set
forth therein, and the supporting schedules included or incorporated
by reference in the Registration Statement present fairly the
information required to be stated therein. If pro forma financial
information is included in or incorporated by reference into the
Registration Statement and the Prospectus, such pro forma financial
information (including, without limitation, the notes thereto) as of
the date presented (A) presented fairly in all material respects the
information shown therein, (B) was prepared in accordance with
applicable requirements of Regulation S-X promulgated under the
Exchange Act, (C) was prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements
and (D) was properly computed on the bases described therein. In the
opinion of the Company, the assumptions used in the preparation of any
such pro forma financial information (including, without limitation,
the notes thereto) were fair and reasonable and the adjustments used
therein were appropriate to give effect to the transactions or
circumstances referred to therein. No pro forma financial statements
or other pro forma financial information is required to be included or
incorporated by reference in the Registration Statement and the
Prospectus other than those included or incorporated by reference
therein.
(6) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Registration Statement
and the Prospectus and to enter into this Agreement and the Terms
Agreement, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and the Subsidiaries (as hereinafter defined), taken as a
whole (each, a "Material Adverse Effect").
(7) Each direct and indirect foreign and domestic
subsidiary of the Company listed on Schedule I hereto, which
constitute all of the significant subsidiaries of the Company within
the meaning of Rule 1-02 of Regulation S-X under the
<PAGE> 9
-9-
Exchange Act (each, a Subsidiary" and collectively, the
"Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Registration
Statement and the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so incorporated, be in existence, have such power and authority, be
so qualified or be in good standing could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
All of the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued, are fully paid and
nonassessable, and, except as set forth in the Registration Statement
and the Prospectus, are owned by the Company, directly or indirectly,
free and clear of all liens, encumbrances, security interests, claims
and restrictions on transferability and voting (other than any
restrictions on transferability as may arise under state and federal
securities laws). Except as set forth in the Registration Statement
and the Prospectus, there are no outstanding (i) securities or
obligations convertible into or exchangeable or exercisable for any
shares of capital stock of, or other interest in, the Company or any
Subsidiary, (ii) rights, warrants or options to acquire or purchase
any shares of capital stock of, or other interest in, the Company or
any Subsidiary or any such convertible, exchangeable or exercisable
securities or obligations, or (iii) obligations or understandings to
issue or sell any shares of capital stock of, or other interest in,
the Company or any Subsidiary, any such convertible, exchangeable or
exercisable securities or obligations, or any such warrants, rights or
options, except as have been disclosed to the Underwriters in writing
prior to the date hereof and except for (A) issuances of shares of
Common Stock and options to acquire Common Stock after the date of the
most recent information set forth in the Registration Statement and
the Prospectus pursuant to the Company's employee benefit plans as in
effect on the date hereof and (B) issuances after the date of the most
recent information set forth in the Registration Statement and the
Prospectus of convertible debentures of the Company and Common Stock
pursuant to the Company's Registration Statement on Form S-4
(Registration No. 33-54996) (the "S-4").
(8) There are no partnerships in which the Company or
any of the Subsidiaries has any direct or indirect controlling
interest that would constitute a significant subsidiary within the
meaning of Rule 1-02 of Regulation S-X under the Exchange Act. Except
for the capital stock of the Subsidiaries and
<PAGE> 10
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except as set forth in the Registration Statement and the Prospectus,
the Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity.
(9) This Agreement and the Terms Agreement have been
duly and validly authorized, executed and delivered by the Company.
(10) Since the date of the latest consolidated
financial statements of the Company and the Subsidiaries included in
the Registration Statement and the Prospectus, except as set forth in
or expressly contemplated by the Registration Statement and the
Prospectus, there has not been (A) any change in the Company's issued
capital stock or options, except (I) pursuant to the exercise of
options or the conversion or exchange of outstanding convertible or
exchangeable securities of the Company, (II) issuances of shares of
Common Stock and options to acquire Common Stock issued after the date
of such financial statements pursuant to the Company's employee
benefit plans as in effect on the date hereof and (III) issuances
after the date of such financial statements of convertible debentures
of the Company and Common Stock pursuant to the S-4, or (B) any
material adverse change in the management, condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and the Subsidiaries, taken as a whole (each, a "Material
Adverse Change," and any event or state of facts which could, singly
or in the aggregate, reasonably be expected to result in a Material
Adverse Change is herein referred to as a Prospective Material Adverse
Change"), whether or not arising from transactions or events occurring
in the ordinary course of business.
(11) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company or any of the Subsidiaries (other than those in the ordinary
course of business) which are material to the Company and the
Subsidiaries, taken as a whole and (B) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock, other than regularly scheduled quarterly
dividends in accordance with the past practice of the Company.
(12) As of the date of the Prospectus Supplement, the
Company has the authorized, issued and outstanding capitalization set
forth in the Prospectus under
<PAGE> 11
-11-
"Capitalization." The authorized capital stock of the Company
(including, without limitation, the Common Stock issuable upon
conversion or exchange of the Offered Securities, if applicable)
conforms as to legal matters to the description thereof contained in
the Registration Statement and the Prospectus, and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and
are not subject to any preemptive or similar rights. The rights
agreement dated as of July 18, 1988 between the Company and Texas
Commerce Bank National Association as rights agent, as amended to date
(the Rights Agreement"), has been duly authorized, executed and
delivered by the Company; the rights (the "Rights") to purchase the
Company's Series C Junior Participating Preferred Stock (the "Series C
Preferred Stock") outstanding thereunder and, if the Offered
Securities are convertible into shares of Common Stock, to be issued
upon issuance of the Common Stock upon conversion of such Offered
Securities, have been duly authorized; the Series C Preferred Stock to
be issued upon exercise of the Rights has been duly authorized; and
the description of the Rights Agreement and the Rights set forth in
the Registration Statement and the Prospectus is accurate in all
material respects.
(13) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and
sufficiently taken. The Offered Securities, when executed by the
Company and authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture (assuming the due authorization,
execution and delivery of such Indenture by the Trustee thereunder),
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement and the Terms Agreement and the applicable
Indenture (assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), will constitute the valid and
binding obligations of the Company entitled to the benefits of the
applicable Indenture and enforceable against the Company in accordance
with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law). The Company has all the requisite corporate power
and authority to execute and deliver the applicable Indenture and any
supplemental indenture to such Indenture relating to the Offered
Securities (the "Supplemental Indenture") and to incur and perform its
obligations provided for therein. Each of the Indenture and the
Supplemental Indenture relating to the Offered Securities, when
executed by the Company and the
<PAGE> 12
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Trustee thereunder (assuming the due authorization, execution and
delivery of such Indenture and Supplemental Indenture by the Trustee
thereunder), will constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
If the Offered Securities are convertible into Common Stock, the
Offered Securities are convertible into Common Stock in accordance
with their terms and the terms of the applicable Supplemental
Indenture relating to the Offered Securities.
(14) If the Offered Securities are convertible into
Common Stock, the Common Stock issuable upon conversion of the Offered
Securities pursuant to the terms of the Supplemental Indenture has
been duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action and such Common Stock,
when duly issued upon such conversion will be validly issued and fully
paid and nonassessable; no holder thereof will be subject to personal
liability solely by reason of being such a holder; and the issuance of
such Common Stock upon such conversion will not be subject to
preemptive rights.
(15) The Offered Securities and the Indenture and
Supplemental Indenture relating thereto conform in all material
respects to the descriptions thereof in the Prospectus.
(16) The execution and delivery by the Company of, and
the full and timely performance by the Company of its obligations
under, this Agreement and the Terms Agreement, the Indenture relating
to the Offered Securities, the Supplemental Indenture relating to the
Offered Securities, the compliance by the Company with the terms
thereof, and the consummation of each of the transactions contemplated
herein and therein, (A) have been duly authorized by all necessary
corporate action on the part of the Company, (B) do not and will not
result in any violation of the articles of incorporation or by-laws of
the Company and (C) do not and will not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or give rise to any
right to accelerate the maturity or require the prepayment of any
indebtedness under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material property or assets of
the Company or of any Subsidiary under (I) any indenture, mortgage,
loan agreement, note, lease, license, partnership agreement, franchise
<PAGE> 13
-13-
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them may be bound or affected
or to which any of their respective properties or assets may be
subject (each, a Contract" and collectively, the "Contracts"), other
than any such conflict, breach, default, acceleration, prepayment,
lien, charge or encumbrance that, could not individually or in the
aggregate, reasonably be expected to result in any Material Adverse
Effect, (II) any existing applicable law, rule or regulation (other
than the securities or Blue Sky laws of the various states and other
jurisdictions of the United States of America) or (III) any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or
any Subsidiary or any of their respective properties or assets.
(17) No authorization, approval, consent or license of,
or filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act and the Trust
Indenture Act or as may be required under the securities or Blue Sky
laws of the various states and other jurisdictions of the United
States of America) is required for the valid authorization, issuance,
sale and delivery of the Offered Securities by the Company, the
execution and delivery by the Company of, or the full and timely
performance by the Company of each of its obligations under, this
Agreement, the Terms Agreement, the Indenture relating to the Offered
Securities, the Supplemental Indenture relating to the Offered
Securities, and the compliance by the Company with its obligations
thereunder.
(18) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(19) No holder of any securities of the Company has any
rights, not effectively satisfied or waived, to require the Company to
register the sale of any securities under the Securities Act in
connection with the filing of the Registration Statement or the
consummation of the transactions contemplated therein or pursuant to
this Agreement or the Terms Agreement.
(20) The Company and the Subsidiaries are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health, or the
environment or imposing liability or standards of conduct concerning
Hazardous Material (collectively,
<PAGE> 14
-14-
"Environmental Laws"), except where such noncompliance with
Environmental Laws could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The term Hazardous
Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, (ii) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (iii) any
petroleum or petroleum product, (iv) any polychlorinated biphenyl, and
(v) any pollutant or contaminant or hazardous, dangerous, or toxic
chemical, material, waste or substance regulated under or within the
meaning of any other Environmental Law.
(21) Each of the Company and each of the Subsidiaries
owns, possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and
other governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
conducted as of the date hereof, except in each case where the failure
to obtain licenses, permits, certificates, consents, orders, approvals
and other authorizations, or to make all declarations and filings,
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect, and neither the Company nor any Subsidiary
has received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the
Registration Statement and the Prospectus and except, in each case,
where such revocation or modification could not, reasonably be
expected to singly or in the aggregate, have a Material Adverse
Effect; and the Company and each Subsidiary are in compliance with all
laws and regulations relating to the conduct of their respective
businesses as conducted as set forth in the Registration Statement and
the Prospectus, except where noncompliance with such laws or
regulations could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(22) To the best knowledge of the Company, each of the
Company and the Subsidiaries owns or possesses the patents, patent
licenses, trademarks, service marks, trade names, copyrights and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof,
<PAGE> 15
-15-
except to the extent that the failure to own or possess such
Intellectual Property could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and, except
as set forth in the Registration Statement and the Prospectus, neither
the Company nor any Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any
Intellectual Property, except for notices the content of which if
accurate could not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(23) Except as set forth in the Registration Statement
and the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in
which the Company or any of the Subsidiaries conduct their respective
businesses in connection with the ownership by the Company of capital
stock of any Subsidiary, any foreign exchange controls or the
repatriation of any amount from or to the Company and the
Subsidiaries, except to the extent such authorizations, approvals or
consents have been obtained and are in full force and effect and
except to the extent that the failure to obtain such authorization,
approval or consent could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(24) The Company has not taken and will not take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Offered Securities (or the Common
Stock, if applicable), and the Company has not distributed and will
not distribute any prospectus or other offering material in connection
with the offering and sale of the Offered Securities other than any
preliminary prospectus filed with the Commission or the Prospectus or
other materials permitted under the Securities Act.
(25) Except as set forth in the Registration Statement
and the Prospectus, there is no action, suit or proceeding before or
by any government, governmental or regulatory instrumentality, agency
or body or court, domestic or foreign, or any arbitrator, now pending
or, to the best knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any affiliate of the
Company that, singly or in the aggregate with all such actions, suits
and proceedings (i) could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to have a material
adverse effect on the consummation of the transactions contemplated in
this Agreement or (ii) is required to be described in the Registration
Statement or the Prospectus that is not so described.
<PAGE> 16
-16-
(26) Neither the Company nor any Subsidiary (i) is in
violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement or any Contract or of any permit, order, decree,
judgment, statute, rule or regulation, foreign or domestic, applicable
to the Company or any Subsidiary, except for such violations, breaches
or defaults that, could not singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(27) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended or a holding
company or a subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
(28) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-1933 8, Laws of
Florida).
(29) The statistical and market-related data included
or incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(30) The Company knows of no outstanding claims for
services, either in the nature of a finder's fee or origination fee,
with respect to the transactions contemplated hereby and by the Terms
Agreement, other than the underwriting fees and compensation to be
paid to the Underwriters in accordance with this Agreement.
(31) No labor disputes exist with employees of the
Company or of the Subsidiaries that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
5. Agreements of the Company. The Company covenants and
agrees with each Underwriter as follows:
<PAGE> 17
-17-
a. To use its reasonable best efforts to cause any
amendment to the Registration Statement to become effective at the
earliest possible time.
b. To furnish to each of the Representatives, without
charge, as many signed copies of the Registration Statement (as
originally filed) and each amendment thereto and each document
incorporated or deemed incorporated therein, in each case including
exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
c. To give the Underwriters prompt notice of the
Company's intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the Securities Act, the Exchange Act
or otherwise, to furnish the Underwriters and their counsel with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and not to
file any such amendment or supplement or use any such prospectus to
which the Underwriters or counsel for the Underwriters shall object.
Subject to the foregoing sentence, the Company will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
d. To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any comments from the Commission or of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Prospectus or Prospectus
Supplement or the initiation or threatening of any proceeding for that
<PAGE> 18
-18-
purpose and (v) of the receipt by the Company of any notification with
respect to any suspension of the qualification of the Offered
Securities for offer and sale in any jurisdiction or the initiation of
any proceeding for such purpose; and to use its reasonable best
efforts to prevent the issuance of any such stop order or notification
and, if issued, to obtain as soon as possible the withdrawal thereof.
e. If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Company, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company)
to which Offered Securities may have been sold by the Representatives
on behalf of the Underwriters and to any other dealers, upon request,
such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
f. To endeavor to qualify the Offered Securities (and,
if applicable, the Common Stock) for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to pay all fees and expenses (including fees and disbursements of
counsel to the Underwriters) incurred in connection with such
qualification;provided, however, that the Company shall not be
required to file a general consent to service of process in any
jurisdiction or subject itself to general taxation in any
jurisdiction.
g. To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months, after the date of each Terms Agreement an earnings
statement, covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement, (ii)
the effective date of the most
<PAGE> 19
-19-
recent post-effective amendment to the Registration Statement to
become effective prior to the date of such Terms Agreement and (iii)
the date of the Company's most recent Annual Report on Form 10-K filed
with the Commission prior to the date of such Terms Agreement, which
will satisfy the provisions of Rule 158 under the Securities Act and
Section 11(a) of the Securities Act.
h. For a period of 120 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
Subsidiary to, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, any Debt Securities or any
securities convertible into or exchangeable or exercisable for Debt
Securities, other than the Offered Securities to be sold pursuant to
the Terms Agreement and other than pursuant to such other exceptions,
if any, as are agreed to by the Representatives and set forth in the
Terms Agreement. If the Offered Securities are convertible into
Common Stock, during a period of 120 days from the Representation
Date, the Company will not, without the prior written consent of the
Representative designated in the Terms Agreement, directly or
indirectly, effect any offer, sale or other disposition of, or
registration of, shares of Common Stock or any right to purchase or
other security convertible into or exchangeable or exercisable for or
any securities of the Company substantially similar to any such
shares, other than (A) the Offered Securities to be sold pursuant to
the Terms Agreement, (B) shares of Common Stock issued upon
conversion, exercise or exchange of convertible, exchangeable or
exercisable securities of the Company or of any Subsidiary outstanding
on the Representation Date and (C) shares of Common Stock and options
thereunder issued pursuant to employee benefit plans of the Company in
place on the Representation Date as in effect on the Representation
Date, and other than pursuant to such other exceptions, if any, as are
agreed to by the Representatives and set forth in the Terms Agreement.
i. Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Company's
obligations hereunder, including, without limiting the generality of
the foregoing, all costs and expenses (i) incurred in connection with
the preparation, issuance, execution and delivery of the Offered
Securities (including, if applicable, the Common Stock issuable upon
conversion thereof), (ii) incurred in connection with the preparation,
printing and filing under the Securities Act and the Exchange Act of
the Registration Statement, the Prospectus, any
<PAGE> 20
-20-
preliminary prospectus and each Prospectus Supplement (including in
each case all exhibits, amendments and supplements thereto and all
documents incorporated therein by reference), (iii) incurred in
connection with the registration or qualification of the Offered
Securities (including, if applicable, the Common Stock issuable upon
conversion or exchange thereof) under the laws of such jurisdictions
as the Representatives may request (including filing fees and the fees
of counsel for the Underwriters and their disbursements), (iv) in
connection with the listing of the Offered Securities on the [ ]
and, if the Offered Securities are convertible into Common Stock, the
listing of such Common Stock on the New York Stock Exchange, (v)
relating to any filing with the National Association of Securities
Dealers Inc. (the "NASD") in connection with the offering of the
Offered Securities, (vi) incurred in connection with the engagement of
any qualified independent underwriter as may be required by NASD rules
and regulations, (vii) incurred in connection with the rating of the
Offered Securities, (viii) incurred in connection with advertising
relating to the Offered Securities approved by the Company (which
approval shall not be unreasonably withheld or delayed), (ix)
relating to the fees and expenses of the applicable Trustee, including
the fees and expenses of counsel to the applicable Trustee, and of the
transfer agent and registrar for the Common Stock if the Offered
Securities are convertible into the Common Stock and (x) relating to
or in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Terms
Agreement, the Indenture relating to the Offered Securities, any
Supplemental Indenture relating thereto, the agreement among
underwriters, each other document or instrument relating to the
underwriting arrangements and the coordination of the offering of the
Offered Securities by the U.S. Underwriters and the International
Managers, if applicable, any dealer agreements, the Preliminary and
Supplemental Blue Sky Memoranda and the furnishing to the Underwriters
and dealers of copies of the Registration Statement, the Prospectus
and each Prospectus Supplement, including mailing and shipping, as
herein provided.
j. To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Company's capital stock, and copies of any reports and financial
statements furnished to or filed with the Commission.
k. To use the net proceeds of the offering of the
Offered Securities as set forth in the Prospectus under the caption
"Use of Proceeds."
<PAGE> 21
-21-
l. During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, to file all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time period required by
the Exchange Act and the Exchange Act Regulations.
m. [To use its best efforts to effect the listing of the
Offered Securities on the [ ] on the Representation
Date.] If the Offered Securities are convertible into Common Stock,
the Company will use its best efforts to effect the listing of the
shares of Common Stock issuable upon conversion of the Offered
Securities on the New York Stock Exchange on the Representation Date.
n. To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion of all of
the Offered Securities that are convertible into the Common Stock.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
a. If any amendment to the Registration Statement filed
prior to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M. on the Representation Date; and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission. The
price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided evidence satisfactory to the Underwriters of such timely
filing.
b. The representations and warranties of the Company
contained herein and in the Terms Agreement shall be true and correct
on and as of the Closing Date as if made on and as of the Closing Date
and the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date.
c. Subsequent to the Representation Date and prior to
the Closing Date, there shall not have occurred any Material
<PAGE> 22
-22-
Adverse Change or any development involving a Prospective Material
Adverse Change other than as set forth in the Registration Statement
and the Prospectus, the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Underwritten Securities on
the terms and in the manner contemplated in the Registration Statement
and the Prospectus. As used in this Section 6(c), Prospectus" shall
mean the Prospectus first used to confirm sales of the Offered
Securities exclusive of any amendment or supplement thereto
thereafter.
d. The Representatives shall have received on and as of
the Closing Date a certificate of the Company signed by the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial
Officer of the Company to the effect set forth in subsections (a) and
(b) of this Section 6 and to the further effect that since the most
recent date as of which information is given in the Prospectus there
shall not have occurred any Material Adverse Change, or any
development involving a Prospective Material Adverse Change. As used
in this Section 6(d), Prospectus" shall mean the Prospectus first used
to confirm sales of the Offered Securities exclusive of any amendment
or supplement thereto thereafter.
e. The Representatives shall have received on the
Closing Date a signed opinion of Fulbright & Jaworski L.L.P., special
counsel for the Company, addressed to the Underwriters and dated the
Closing Date and satisfactory to counsel for the Underwriters, to the
effect that:
(1) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(2) The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations under the Indenture relating to the Offered
Securities, and such Indenture has been duly authorized,
executed and delivered by the Company and has been duly
qualified under the Trust Indenture Act and (assuming the due
authorization, execution and delivery by the Trustee
thereunder) constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to the
effect of general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
<PAGE> 23
-23-
law) and the discretion of the court before which any
proceeding therefor may be brought.
(3) The Company has the requisite corporate
power and authority to issue and deliver the Offered
Securities, and the Offered Securities have been duly
authorized by the Company for issuance. The Offered
Securities, when executed by the Company and authenticated by
the Trustee in accordance with the Indenture relating to the
Offered Securities (assuming the due authorization, execution
and delivery of the Indenture by the Trustee thereunder) and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and the Terms Agreement will
constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(4) The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations under the Supplemental Indenture relating to the
Offered Securities, and the Supplemental Indenture has been
duly authorized, executed and delivered by the Company and
(assuming the due authorization, execution and delivery by the
Trustee under the Indenture relating to the Offered
Securities) constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(5) The statements set forth or incorporated
by reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and
<PAGE> 24
-24-
the Supplemental Indenture provide a fair summary of such
provisions.
(6) The number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization" and the authorized capital stock of the
Company conforms as to legal matters to the description
thereof contained in the Prospectus.
(7) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture relating thereto; the Common Stock issuable upon
conversion of the Offered Securities have been duly authorized
and validly reserved for issuance upon such conversion by all
necessary corporate action, and such Common Stock, when issued
upon such conversion, will be validly issued, fully paid and
nonassessable; no holder of the Common Stock will be subject
to personal liability solely by reason of being such a holder;
and the issuance of such shares upon such conversion will not
be subject to preemptive rights arising by operation of law or
under the charter or by-laws of the Company.
(8) At the time the Registration Statement and
each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the Form T-1 and the financial
statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to
which such counsel need express no opinion) appear on their
face to be appropriately responsive to the applicable
requirements of the Securities Act. The applicable Indenture,
as amended by the Supplemental Indenture, complies with the
requirements of the Trust Indenture Act.
(9) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
<PAGE> 25
-25-
(10) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture or the Supplemental Indenture by the Company, except
such as may be required under the Securities Act, the Trust
Indenture Act or state securities laws.
(11) To the best of such counsel's knowledge
and information, the execution, delivery and the full and
timely performance of this Agreement, the Terms Agreement, the
Indenture and the Supplemental Indenture and the consummation
of the transactions contemplated herein (including the
issuance, sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), will not constitute a breach of,
or default under (including, without limitation, any event
which with notice or lapse of time, or both, would constitute
a breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries
pursuant to, any contract identified on a schedule to such
opinion, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company, or any
applicable law, rule, regulation or administrative, regulatory
or court judgment, order or decree, except for any breach,
default, lien, charge or encumbrance under any such contract
as could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(12) Each document filed pursuant to the
Exchange Act (other than the financial statements, schedules
and other financial and statistical data included therein, as
to which such counsel need express no opinion) and
incorporated or deemed to be incorporated by reference in the
Prospectus appears on its face to be appropriately responsive
to the applicable requirements of the Exchange Act.
(13) The Company is not an investment company
under the Investment Company Act of 1940, nor a holding
company or a subsidiary of a holding company under the Public
Utility Holding Company Act of 1935.
<PAGE> 26
-26-
Such counsel shall also state that they have been advised by
the Commission that the Indenture has been qualified under the Trust
Indenture Act and that the Registration Statement became effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (2) the Prospectus (other than the
financial statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to which such
counsel need not make any statement or express any opinion) as of its
date or at the Representation Date contained and, as of the date such
opinion is delivered, contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of jurisdiction other
than the State of Texas, the State of New York or the United States or
the General Corporation Law of the State of Delaware, to the extent
they deem proper and specified in such opinion, upon the opinion of
other counsel who are reasonably satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall state that
such counsel, the Underwriters and counsel for the Underwriters are
justified in relying upon such opinion.
<PAGE> 27
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f. The Representatives shall have received on the
Closing Date a signed opinion of James M. Shelger, General Counsel of
the Company, addressed to the Underwriters and dated the Closing Date
and satisfactory to counsel for the Underwriters, to the effect that:
(1) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to the
best of such counsel's knowledge and information is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(2) Each Subsidiary has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing could not, singly or in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(3) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(4) The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations under the Indenture relating to the Offered
Securities, and such Indenture has been duly authorized,
executed and delivered by the Company and has been duly
qualified under the Trust Indenture Act and (assuming the due
authorization, execution and delivery by the Trustee
thereunder) constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to the
effect of general principles of equity (regardless of whether
<PAGE> 28
-28-
enforcement is sought in a proceeding in equity or at law)
and the discretion of the court before which any proceeding
therefor may be brought.
(5) The Company has the requisite corporate
power and authority to issue and deliver the Offered
Securities, and the Offered Securities have been duly
authorized by the Company for issuance. The Offered
Securities, when executed by the Company and authenticated by
the Trustee in accordance with the Indenture relating to the
Offered Securities (assuming the due authorization, execution
and delivery of the Indenture by the Trustee thereunder) and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and the Terms Agreement will
constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(6) The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations under the Supplemental Indenture relating to the
Offered Securities, and the Supplemental Indenture has been
duly authorized, executed and delivered by the Company and
(assuming the due authorization, execution and delivery by the
Trustee under the Indenture relating to the Offered
Securities) constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(7) The statements set forth or incorporated
by reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and
<PAGE> 29
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the Supplemental Indenture provide a fair summary of such
provisions.
(8) The number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization" and the authorized capital stock of the
Company conforms as to legal matters to the description
thereof contained in the Prospectus.
(9) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture relating thereto; the Common Stock issuable upon
conversion of the Offered Securities have been duly authorized
and validly reserved for issuance upon such conversion by all
necessary corporate action, and such Common Stock, when issued
upon such conversion, will be validly issued, fully paid and
nonassessable; no holder of the Common Stock will be subject
to personal liability solely by reason of being such a holder;
and the issuance of such shares upon such conversion will not
be subject to preemptive rights arising by operation of law or
under the charter or by-laws of the Company.
(10) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Company, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge, after due inquiry, any other
security interests or claims.
(11) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(12) To the best of such counsel's knowledge
and information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to
<PAGE> 30
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in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto.
(13) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture or the Supplemental Indenture by the Company, except
such as may be required under the Securities Act, the Trust
Indenture Act or state securities laws.
(14) To the best of such counsel's knowledge
and information, the execution, delivery and the full and
timely performance of this Agreement, the Terms Agreement, the
Indenture and the Supplemental Indenture, the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), and compliance by the Company with
its obligations hereunder and thereunder will not conflict
with or constitute a breach of, or default under (including,
without limitation, any event which, with notice or lapse of
time, or both, would constitute a breach of or a default
under), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule for such opinion, nor will such
action result in any violation of the provisions of the
charter or by-laws of the Company, or any applicable law,
rule, regulation or administrative, regulatory or court
judgment, order or decree, except for any breach, default,
lien, charge or encumbrance under any such contract as could
not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which
<PAGE> 31
-31-
such counsel need not make any statement or express any opinion), when
it became effective contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of (1) the State of New
York or the General Corporation Law of the State of Delaware upon the
written opinion of Fulbright & Jaworski L.L.P. delivered pursuant to
clause (e) above of this Section 6 and (2) any jurisdiction other than
the State of Texas or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel who are reasonably satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall state that
such counsel, the Underwriters and counsel for the Underwriters are
justified in relying upon such opinion.
g. On the Representation Date and also on the Closing
Date, Ernst & Young and Coopers & Lybrand shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
h. The Representatives shall have received on and as of
the Closing Date a favorable opinion of Cahill Gordon & Reindel,
counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and
<PAGE> 32
-32-
such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters.
i. [On the Representation Date, the Offered Securities
shall have been approved for listing on the [ ] upon notice
of issuance.] If the Offered Securities are convertible into Common
Stock, on the Representation Date, the Common Stock issuable upon
conversion of the Offered Securities shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
j. At the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities
(and, if applicable, the Common Stock) as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
k. On or prior to the Closing Date the Company shall
have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
l. Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
m. If the Offered Securities are convertible into Common
Stock, the Company shall have delivered to the Representatives written
agreements, in form and substance satisfactory to the Representative
designated in the Terms Agreement, with each of its executive officers
who owns Common Stock that no offer, sale or other disposition, or
request or demand for registration under the Securities Act or
inclusion in any other registration statement filed by the Company
under the Securities Act, of any Common Stock or other capital stock
of the Company, or warrants, options, convertible, exercisable or
exchangeable securities, or other rights to purchase or
<PAGE> 33
-33-
acquire, Common Stock or other capital stock (or any such right or
exchangeable, exercisable or convertible security) owned by such
person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the date of
this Agreement, directly or indirectly, by such executive officer,
otherwise than (i) with the prior written consent of the
Representative designated in the Terms Agreement and (ii) pursuant to
such exceptions, if any, as are agreed to by the Representatives and
set forth in the Terms Agreement.
n. There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement, subject to the conditions set forth in paragraph (a) to and
including paragraph (n) above on and as of the Additional Closing Date
(references therein to the Closing Date shall be deemed references to the
Additional Closing Date for this purpose), except that the certificate called
for by paragraph (d), the opinions called for by paragraphs (e), (f) and (h)
and the letters called for by paragraph (g) shall be dated as of, and delivered
on, the Additional Closing Date, and to the delivery to the Representatives on
the Additional Closing Date of such other documents as they may reasonably
request.
7. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either 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 the
legal fees and other expenses reasonably incurred in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein; provided,
however, that the foregoing indemnity with respect to any preliminary
<PAGE> 34
-34-
prospectus shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Offered Securities if
such untrue statement or omission or alleged untrue statement or omission made
in such preliminary prospectus and is eliminated or remedied in the Prospectus
and the Company has provided such Prospectus in accordance with paragraph 5(ii)
hereof (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) and if it shall be established in the
related action or proceeding that a copy of the Prospectus, if required by law
(as so amended or supplemented, but exclusive of any documents incorporated
therein by reference), shall not have been furnished to such person at or prior
to the written confirmation of the sale of such Offered Securities to such
person, except to the extent that such Prospectus contains any other untrue
statement or omission or alleged untrue statement or omission of a material
fact that was the subject matter of the related action or proceeding . For
purposes of the proviso to the immediately preceding sentence, the term
"Prospectus" shall not be deemed to include the documents incorporated therein
by reference, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in any
preliminary prospectus or the Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either 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, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. For purposes of this Section 7 and Section 4(ii), the only written
information furnished by the Underwriters to the Company expressly for use in
the Registration Statement and the Prospectus is the information in the last
paragraph of the cover page of the Prospectus Supplement and [ ] and [ ]
under the table under the caption "Underwriting" in the Prospectus Supplement.
<PAGE> 35
-35-
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 indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall promptly retain counsel satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. 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) there has been a failure by the
Indemnifying Person to retain promptly counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties to 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 that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Underwriters and such control
persons of Underwriters, such firm shall be designated in writing by the
Representatives. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any ettlement 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 any 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 an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its
<PAGE> 36
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written consent if (i) such settlement is entered into more than 30 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
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 prior 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
indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement (1) includes an unconditional written release of such
Indemnified Person, in form and substance satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (2) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, 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 as follows: as between the
Company on the one hand and the Underwriters on the other (i) in such
proportion as is appropriate to reflect the aggregate relative benefits
received by the Company and by the Underwriters from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters 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 benefits received by the Company on the one hand and by the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and of
the Underwriters 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 Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
<PAGE> 37
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The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters 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 the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter 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
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective number of Offered Securities they have
purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement 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 any Underwriter or any person controlling any Underwriter or the
Company, its officers or directors or any other person controlling the Company
and (iii) acceptance of and payment for any of the Offered Securities.
8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Securities, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any
<PAGE> 38
-38-
of the New York Stock Exchange, the National Association of Securities Dealers,
Inc., the American Stock Exchange or the [ ], (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York or [ ] shall have been declared by either U.S.
Federal, New York State or [ ] authorities or exchange controls shall
have been imposed by the United States, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material
and adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Offered Securities which it or they have agreed to purchase hereunder
on such date, and the aggregate number of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Offered Securities to be
purchased on such date, the other Underwriters (with respect to the Option
Securities, to the extent such Underwriters are Option Securities Underwriters)
shall be obligated severally in the proportions that (1) with respect to
Underwritten Securities, the number of Underwritten Securities set forth
opposite their respective names in the annex or annexes to Exhibit 1 hereto
bears to the aggregate number of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters and (2) with respect to Option
Securities, the number of Underwritten Securities set forth opposite their
respective names in the annex or annexes to Exhibit 1 hereto bears to the
aggregate number of Underwritten Securities set forth opposite the names of all
such non-defaulting Underwriters who are Option Securities Underwriters, or in
such other proportions as the Representatives may specify, to purchase the
Offered Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided, however, that in no event
shall the number of Offered Securities that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Offered Securities without the
written consent of such Underwriter. If, on the Closing Date or the Additional
Closing Date, as the case may be,
<PAGE> 39
-39-
any Underwriter or Underwriters shall fail or refuse to purchase Offered
Securities which it or they have agreed to purchase hereunder on such date, and
the number of Offered Securities with respect to which such default occurs is
more than one-tenth of the aggregate number of Offered Securities to be
purchased on such date, and arrangements satisfactory to the Representatives
and the Company for the purchase of such Offered Securities are not made within
36 hours after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Securities, as the case may be) shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Representatives or the Company shall
have the right to postpone the Closing Date (or, in the case of the Option
Securities, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them, because
of any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder and pursuant to the Terms Agreement. In no
event, however, shall the Company be responsible to the Underwriters for any
loss of profits for failure to consummate the offering and sale of the Offered
Securities.
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Company, the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Offered Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of
<PAGE> 40
-40-
telecommunication. Notices to the Underwriters shall be given to the
Representatives at the address as set forth in the Terms Agreement. Notices to
the Company shall be given to it at Service Corporation International, 1929
Allen Parkway, Houston, Texas 77019 (facsimile: (713) [ ]); Attention:
[ ].
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
<PAGE> 41
-41-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION
INTERNATIONAL
By: ________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
[Insert Signature block(s) for the
Representative or Representatives
acting on behalf of the Underwriters,
or for each Underwriter if
no Syndicate]
<PAGE> 42
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
$[ ]
[TITLE OF DEBT SECURITIES]
TERMS AGREEMENT
Service Corporation International [ ], 199[ ]
1929 Allen Parkway
Houston, Texas 77019
Attention: [ ]
Ladies and Gentlemen:
[ ] (the "Representative(s)") understand that
Service Corporation International, a Texas corporation (the "Company"),
proposes to issue and sell $[ ] aggregate principal amount of its [describe
Debt Securities] (the "Underwritten Securities"). Subject to the terms and
conditions set forth herein or incorporated by reference herein, the [U.S.]
Underwriters named in Annex A attached hereto [and the International Managers
named in Annex B attached hereto] offer to purchase, severally and not jointly,
the aggregate principal amount of Underwritten Securities set forth opposite
the name of each such Underwriter on Annex A [and Annex B] hereto at a price of
[ ]% of the principal amount thereof (the "Purchase Price"). The Closing
Date shall be [ ], 199[ ], at [ ] A.M. at the offices of
[ ].
[It is understood that, subject to the conditions hereinafter
stated, $[ ] aggregate principal amount of Underwritten Securities
(the "U.S. Underwritten Securities") will be sold to the several U.S.
Underwriters named in Annex A hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Underwritten Securities in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement between U.S. and International Underwriting Syndicates
of even date herewith between the U.S. Underwriters and the International
Managers), and $[ ] aggregate principal amount of Underwritten
Securities (the "International Securities") will be sold to the several
international managers named in Annex B hereto (the "International Managers")
in connection with the offering and sale of such International Securities
outside the United States and Canada to persons other than United States and
Canadian Persons. [ ] shall act as representatives
(the "U.S.
<PAGE> 43
-2-
Representatives") of the several U.S. Underwriters, and [ ] shall
act as representatives (the "International Representatives") of the several
International Managers. The U.S. Underwriters and the International Managers
are hereinafter collectively referred to as the "Underwriters", and the U.S.
Representatives and the International Representatives are hereinafter
collectively referred to as the "Representatives."]
[In addition, the Representatives understand that the Company
proposes to issue and sell to the several [U.S.] Underwriters, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Securities, at the option of the [U.S.] Underwriters, up to an
additional $[ ] aggregate principal amount of the [describe Debt
Securities] (the "Option Securities"). The Underwritten Securities and the
Option Securities are herein referred to as the "Offered Securities."]
[The offer herein contained is further conditioned upon the
Company agreeing to sell to the [U.S.] Underwriters the Option Securities, and
agreeing that the [U.S.] Underwriters shall have a one-time right to purchase,
severally and not jointly, up to $[ ] aggregate principal amount of Option
Securities at the Purchase Price. Option Securities may be purchased as
provided below solely for the purpose of covering over-allotments made in
connection with the offering of the Underwritten Securities. If any Option
Securities are to be purchased, each [U.S.] Underwriter agrees, severally and
not jointly, to purchase the aggregate principal amount of Option Securities
(subject to such adjustments to eliminate any fractional Offered Securities as
the [U.S.] Representatives in their sole discretion may make) that bears the
same proportion to the total aggregate principal amount of Option Securities to
be purchased as the aggregate principal amount of [U.S.] Underwritten
Securities set forth in Annex A hereto opposite the name of such [U.S.]
Underwriter bears to the total aggregate principal amount of [U.S.]
Underwritten Securities.]
[The Company's agreement to sell the Option Securities shall
entitle the [U.S.] Underwriters to exercise the option to purchase the Option
Securities at any time on or before the thirtieth day following the date of
this Terms Agreement, by written notice from the [U.S.] Representatives to the
Company. Such notice shall set forth the aggregate principal amount of Option
Securities as to which the option is being exercised and the date and time when
the Option Securities are to be delivered and paid for which may be the same
date and time as the Closing Date but shall not be earlier than the Closing
Date nor later than the tenth full Business Day after the date of such notice
(unless such time and date are postponed in accordance with the provisions of
Section 9 of the Underwriting Agreement referred to below). Such
<PAGE> 44
-3-
notice shall be given at least two Business Days prior to the date and time
of delivery specified therein.]
The Underwritten Securities shall have the following terms:
Title: [ ]
Maturity: [ ]
Interest rate: [ ]
Interest payment dates: [ ]
Conversion provisions: [ ]
Redemption provisions: [ ]
Sinking fund provisions: [ ]
Public offering price: [ ]% of the principal
amount thereof
Additional terms: [ ]
All the provisions contained in the document entitled
"Underwriting Agreement -- Service Corporation International -- Debt
Securities" (the "Underwriting Agreement") and dated [ ], 199[ ], a
copy of which you have previously received, are herein incorporated by
reference in their entirety and shall be deemed to be a part of this Terms
Agreement to the same extent as if the Underwriting Agreement had been set
forth in full herein. Terms defined in the Underwriting Agreement are used
herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is
[ ]. [The additional exceptions to the first [and second sentences of
Section 5(h) are [ ]].]
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by [ ] alone on behalf of the
Representatives, and any such action taken by [ ] alone shall be
binding upon the Representatives. Notices to the Underwriters shall be given
to the Representatives c/o [ ] (facsimile: ([ ])
[ ]); Attention: [ ].
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof.
<PAGE> 45
-4-
Please accept this offer no later than [ ] o'clock [ ].M.
on [ ], 199[ ], by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us, or by sending us a
written acceptance in the following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated [ ], 199[ ], to purchase the Underwritten Securities
on the terms set forth therein [and hereby grant to the [U.S.] Underwriters the
option to purchase the Option Securities more fully set forth in the Terms
Agreement] and agree to and accept all other terms and provisions of the Terms
Agreement."
Very truly yours,
By: _____________________________
Name:
Title:
Accepted as of the date first
above written:
SERVICE CORPORATION INTERNATIONAL
By: _____________________________
Name:
Title:
<PAGE> 46
ANNEX A
<TABLE>
<CAPTION>
Aggregate
Principal Amount of
[U.S.] Underwritten
Securities
[U.S.] Underwriters To Be Purchased
- ------------------- -------------------
<S> <C>
---------
Total:
=========
</TABLE>
<PAGE> 47
ANNEX B
<TABLE>
<CAPTION>
Aggregate
Principal Amount
of International
Underwritten
Securities
International Managers To Be Purchased
- ---------------------- ----------------
<S> <C>
---------
Total:
=========
</TABLE>
<PAGE> 48
SCHEDULE I
Significant Subsidiaries of the Company
within the meaning of Rule 1-02 of
Regulation S-X under the Securities
Exchange Act of 1934.
<PAGE> 1
Exhibit 1.3
UNDERWRITING AGREEMENT
SCI FINANCE LLC
Preferred Securities
guaranteed to the extent set forth
in certain backup undertakings by
SERVICE CORPORATION INTERNATIONAL
[ ], 199[ ]
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
SCI Finance LLC, a limited liability company organized under the laws of the
State of Texas (the "Company"), and Service Corporation International, a Texas
corporation, as guarantor and provider of certain backup undertakings (the
"Guarantor"), propose to issue and sell from time to time shares of the
Preferred Securities, par value $1.00 per share, of the Company (the "Preferred
Securities") guaranteed (the "Guarantee") by the Guarantor as to the payment of
dividends, as, if and when legally declared, and as to payments on liquidation
or redemption. The Preferred Securities are convertible into shares of Common
Stock, $1.00 par value, of the Guarantor (the "Guarantor Common Stock"). The
Preferred Securities, together with the related Guarantee, are collectively
referred to herein as the "Securities." The Securities also are entitled to
the benefits of certain backup undertakings (the "Undertakings") described in
the Prospectus (as hereinafter defined) provided by the Guarantor, in addition
to the Guarantee (the Undertakings, together with the Guarantee, being referred
to herein collectively as the "Backup Undertakings"). The Securities and the
Guarantor Common Stock are registered under the registration statement
referred to in Section 4(i) hereof. The Securities may be issued in one or
more series, may have varying dividend and liquidation preferences, voting
rights and redemption provisions as described in a declaration and amendment
(the "Declaration") to the Company's regulations (as amended to the Closing
Date (as defined below), the "Regulations") adopted by the Guarantor as the
manager of the Company. The basic provisions set forth herein are intended to
be incorporated by reference in a terms agreement of the type referred to below
relating to, among
<PAGE> 2
-2-
other things, the designation and series of Preferred Securities and the number
of shares of Preferred Securities (together with the Guarantee, the
"Underwritten Securities") to be issued and sold by the Company and the
Guarantor pursuant thereto and to be purchased, severally, by the underwriter
or several underwriters named therein (the "Underwriters"). The Terms
Agreement, which shall be in the form of Exhibit I hereto (the "Terms
Agreement"), relating to the Underwritten Securities and such additional shares
of Securities that the Underwriters may be granted an option to purchase by the
Company and the Guarantor to cover over-allotments in connection with any
offering of Underwritten Securities (the "Option Securities" and together with
the Underwritten Securities, the "Offered Securities"), together with the
provisions hereof incorporated therein by reference (which provisions shall not
become effective until so incorporated by reference), is herein referred to as
this "Agreement." The Terms Agreement may reflect that a portion of the
Underwritten Securities are to be sold to the several U.S. underwriters named
therein (the "U.S. Underwriters") in connection with the offering and sale of a
portion of the Underwritten Securities in the United States and Canada (the
"U.S. Underwritten Securities") to United States and Canadian persons (as
defined in the instruments governing the coordination of the offering by the
U.S. Underwriters and the International Managers (as defined below) named
therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein
of the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Company and the
Guarantor to sell, the Offered Securities are evidenced by the Terms Agreement
delivered at the time the Company and the Guarantor determine to sell the
Offered Securities and, without the execution and delivery of the Terms
Agreement, the Company and the Guarantor shall not be obligated to sell, and
the Underwriters shall not be obligated to purchase, any Securities pursuant to
this Agreement. The Terms Agreement specifies the firm or firms which will be
Underwriters, the amount of the Offered Securities to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters for the Offered
Securities, the
<PAGE> 3
-3-
public offering price, if any, of the Offered Securities and any terms of the
Offered Securities not otherwise specified in the applicable Declaration
(including, but not limited to, designations, denominations, conversion or
exchange provisions, covenants, dividend rates and payment dates, liquidation
preferences and redemption provisions). The Terms Agreement specifies any
details of the terms of the offering that should be reflected in a
post-effective amendment to the applicable Registration Statement or the
Prospectus Supplement (each as hereinafter defined).
The terms which follow, when used in this Agreement, shall have the meanings
indicated. "Registration Statement" shall mean the registration statement or
registration statements relating to the Offered Securities (and such other
securities of the Guarantor as may be included therein) which shall be the
registration statement on Form S-3 filed under the Securities Act of 1933, as
amended (collectively with the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder, the "Securities Act"),
referred to in Section 4(i) below, including all documents incorporated therein
by reference and all exhibits thereto, as from time to time amended or
supplemented pursuant to the Securities Act, the Securities Exchange Act of
1934, as amended (collectively with the rules and regulations of the Commission
thereunder, the "Exchange Act"), or otherwise, including as supplemented by the
Prospectus Supplement, on or prior to the date of execution and delivery of
the Terms Agreement (the "Representation Date") and, in the event any such
amendment or supplement is filed prior to the Closing Date (as defined in
Section 3 hereof), including by the filing of any Prospectus Supplement or
document incorporated by reference, shall also mean such registration statement
as so amended or supplemented. "Prospectus" shall mean the prospectus
(including the related Prospectus Supplement with respect to the Offered
Securities) relating to the Securities (and such other securities of the
Guarantor as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or otherwise; provided, however, that a
Prospectus Supplement shall be deemed to have supplemented the Prospectus only
with respect to the Offered Securities to which it relates. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange
Act after the effective date of the Registration Statement, or the issue date
of any preliminary prospectus or the Prospectus, as the case may be, and on or
prior to the completion of the applicable offering and which is deemed to be
incorporated therein by reference.
<PAGE> 4
-4-
1. Agreements to Sell and Purchase. Each of the Company and the Guarantor
agrees to issue and sell to each Underwriter as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
at the price per share set forth in the Terms Agreement, severally and not
jointly, from the Company and the Guarantor the respective number of
Underwritten Securities set forth opposite the name of such Underwriter on the
annex or annexes to Exhibit 1 hereto (or such number of Underwritten
Securities, as the case may be, increased as set forth in Section 9 hereof,
subject to such adjustments to eliminate any fractional Offered Securities as
the Representatives in their sole discretion may make). The Guarantor agrees
to issue the Backup Undertakings relating to the Underwritten Securities
concurrently with the issue and sale of the Underwritten Securities as
contemplated hereby.
If, pursuant to the Terms Agreement, the Company and the Guarantor shall
have granted the option to the Underwriters to purchase Option Securities, each
of the Company and the Guarantor agrees to sell to the Underwriters designated
in the Terms Agreement to purchase Option Securities (each, an "Option
Securities Underwriter" and collectively, the "Option Securities Underwriters")
the Option Securities, and the Option Securities Underwriters shall have a
one-time right to purchase, severally and not jointly, the Option Securities on
the terms set forth in the Terms Agreement. Option Securities may be purchased
as provided below solely for the purpose of covering over-allotments made in
connection with the offering of the Underwritten Securities. If any Option
Securities are to be purchased, each Option Securities Underwriter agrees,
severally and not jointly, to purchase the number of Option Securities (subject
to such adjustments to eliminate any fractional Offered Securities as the
Representatives designated in the Terms Agreement in their sole discretion may
make) that bears the same proportion to the total number of Option Securities
to be purchased as the number of Underwritten Securities set forth in the annex
or annexes to Exhibit 1 hereto opposite the name of such Option Securities
Underwriter bears to the total number of Underwritten Securities to be
purchased by all Option Securities Underwriters. The Guarantor agrees to issue
the Backup Undertakings relating to the Option Securities concurrently with the
issue and sale of the Option Securities as contemplated hereby.
The Option Securities Underwriters may exercise the option to purchase the
Option Securities at any time on or before the thirtieth day following the
Representation Date, by written notice from the Representatives designated in
the Terms Agreement to the Company and the Guarantor. Such notice shall set
forth the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and
<PAGE> 5
-5-
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the tenth full Business Day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 9 hereof). Such notice shall be
given at least two Business Days prior to the date and time of delivery
specified therein.
The Guarantor hereby irrevocably and unconditionally guarantees the timely
performance by the Company of the Company's obligations under this Section 1.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that proceeds of the sale of the Offered Securities will be
lent by the Company to SCI International Limited, a Delaware corporation and a
wholly-owned subsidiary of the Guarantor ("SCI Limited"), pursuant to the Loan
Agreement (as defined below) the Guarantor hereby agrees to pay at each of the
Closing Date and the Additional Closing Date to the Underwriters the amount per
Offered Security purchased by the Underwriters set forth in the Terms
Agreement.
2. Terms of Public Offering. The Company and the Guarantor understand that
the Underwriters intend (i) to make a public offering of the Offered Securities
as soon after the Prospectus Supplement has been filed and the Terms Agreement
has been executed and delivered as in the judgment of the Representatives is
advisable and (ii) initially to offer the Offered Securities upon the terms set
forth in the Prospectus Supplement, and the Underwriters will advise the
Company as to any alteration in the terms of such offering that would require,
pursuant to the Securities Act, any amendment or supplement to the Prospectus
Supplement.
3. Delivery of the Offered Securities and Payment Therefor. Payment for the
Offered Securities shall be made to the Company or to the Company's order by
certified or official bank check or checks payable in New York Clearing House
or other next day funds in such location as the Representatives shall designate
in the Terms Agreement at, in the case of the Underwritten Securities, such
time and date as are specified in the Terms Agreement, or at such other time on
the same or such other date, not later than the fifth Business Day (as
hereinafter defined) thereafter, as the Representatives, the Company and the
Guarantor may agree upon in writing or, in the case of the Option Securities,
on the date and at the time specified by the Representatives designated in the
Terms Agreement to exercise such option in the written notice by such
Representatives of the election to purchase such Option Securities by the
Option Securities Underwriters. The time and date of such payment for the
Underwritten Securities are referred to herein as the "Closing Date" and the
time and date for such payment for the Option Securities, if other than the
Closing
<PAGE> 6
-6-
Date, are herein referred to as the "Additional Closing Date". As used herein,
the term "Business Day" means any day other than a day on which banks are
permitted or required to be closed in New York City. At the Closing Date or
the Additional Closing Date, as the case may be, the Guarantor will pay the
compensation payable to the Underwriters pursuant to Section 1 in respect of
the Offered Securities being purchased by the Underwriters on such date, such
payment to be made to the Representatives or their order for the account of the
several Underwriters by [wire transfer of immediately available funds]
[certified or official bank check or checks payable in New York Clearing House
or other next day funds].
Payment for the Offered Securities to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Offered Securities to be purchased on such date registered in such names
and in such denominations as the Representatives shall request in writing not
later than two full Business Days prior to the Closing Date or the Additional
Closing Date, as the case may be, with any transfer taxes payable in connection
with the transfer to the Underwriters of the Offered Securities duly paid by
the Guarantor. The Guarantor hereby agrees to pay any such transfer taxes.
The certificates for the Offered Securities will be made available for
inspection and packaging by the Representatives not later than 1:00 P.M., New
York City time, on the Business Day prior to the Closing Date or the Additional
Closing Date, as the case may be.
4. Representations and Warranties of the Company and the Guarantor. Each
of the Company and the Guarantor jointly and severally represents and warrants
to each Underwriter as of the Representation Date and as of the Closing Date
that:
(i) A registration statement on Form S-3 (Registration
No. 33-[ ]), including a prospectus, with respect to the
Securities (and such other securities of the Guarantor as may be
covered thereby), (i) has been prepared by the Company and the
Guarantor in conformity with the requirements of the Securities Act,
(ii) has been filed with the Commission and (iii) has become
effective. Such Registration Statement and the related prospectus may
have been amended or supplemented from time to time prior to the
Representation Date; any such amendment to the applicable Registration
Statement was so prepared and filed and any such amendment has become
effective. A prospectus supplement (the "Prospectus Supplement"),
including a prospectus, relating to the Offered Securities has been
prepared. The Prospectus Supplement and, if not previously filed,
such prospectus will be filed pursuant to Rule 424 under the
Securities Act. If the offering of the Offered Securities is to be
made by U.S. Underwriters and International Managers, two such
prospectus
<PAGE> 7
-7-
supplements, one relating to the Offered Securities to be sold by the
U.S. Underwriters and one relating to the Underwritten Securities to
be sold by the International Managers, and each identical to the other
except for the cover page, have been so prepared and filed. In such
event, the term "Prospectus Supplement" refers to such international
and U.S. prospectus supplements. Copies of such Registration
Statement and the Prospectus relating thereto, any such amendment or
supplement, the Prospectus Supplement and all documents incorporated
by reference therein which were filed with the Commission on or prior
to the Representation Date (including one fully executed copy of the
Registration Statement and of each amendment thereto for counsel for
the Underwriters) have been delivered to each of the Representatives.
The Company and the Guarantor have included in the Registration
Statement, as amended at the date the Registration Statement was
declared effective (the "Effective Date"), all information (other than
information relating specifically to the terms of any particular
series of Securities and the offering thereof) required by the
Securities Act to be included in the Prospectus with respect to the
Offered Securities (and the Guarantor Common Stock) and the offering
and sale thereof. Except to the extent that the Underwriters shall
agree in writing to a modification, the Registration Statement and the
Prospectus shall be in all substantive respects in the form furnished
to the Underwriters prior to the Representation Date or, to the extent
not completed at the Representation Date, shall contain only such
specific additional information and other changes as the Company and
the Guarantor have advised the Underwriters, a reasonable time prior
to the Representation Date, is to be included or made therein and as
to which the Underwriters have not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act; and no such document
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they
were made) not misleading;provided, however, that neither the Company
nor the Guarantor makes any representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information relating to any Underwriter furnished to the Guarantor by
or on behalf of any Underwriter expressly for use therein.
<PAGE> 8
-8-
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of
the Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) Ernst & Young and Coopers & Lybrand, who are
reporting upon the audited financial statements and the supporting
schedules of the Guarantor included or incorporated by reference in
the Registration Statement and the Prospectus, in the case of Ernst &
Young, were, at the time of their report, and, in the case of Coopers
& Lybrand, are, independent public accountants within the meaning of
the Securities Act. The financial statements, and the related notes
thereto, included or incorporated by reference in the Registration
Statement and the Prospectus, present fairly the consolidated
financial position of the Guarantor and its consolidated subsidiaries
as of the dates indicated and the results of their operations and the
changes in their consolidated cash flows for the periods specified;
and said financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis, except as set forth therein, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated
therein. If pro forma financial information is included in or
incorporated by reference into the Registration Statement and the
Prospectus, such pro forma financial information (including, without
limitation, the notes thereto) as of the date presented (A) presented
fairly in all material respects the information shown therein, (B) was
prepared in accordance with applicable requirements of Regulation S-X
promulgated under the Exchange Act, (C) was prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and (D) was properly computed on the bases
described therein. In the opinion of the Company and the Guarantor,
the assumptions used in the preparation of any such pro forma
financial information (including, without limitation, the notes
thereto) were fair and reasonable and the adjustments used therein
were appropriate to give effect to the transactions or circumstances
referred to therein. No pro forma financial
<PAGE> 9
-9-
statements or other pro forma financial information is required
to be included or incorporated by reference in the Registration
Statement and the Prospectus other than those included or incorporated
by reference therein.
(vi) The Company has been duly organized and is validly
existing as a limited liability company under the laws of the State of
Texas with power and authority (under the Texas Limited Liability
Company Act and otherwise) to own its properties and conduct its
business as described in the Registration Statement and the
Prospectus, and has been duly qualified as a foreign limited liability
company for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified and in
good standing could not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), earnings, business affairs or business prospects of the
Company (each, a "Company Material Adverse Effect") or a Guarantor
Material Adverse Effect (as defined below); and the Company does not
own, directly or indirectly, any shares of stock or any other equity
or short- or long-term debt securities (other than of SCI Limited) or
have any other equity interest in any firm, partnership, joint venture
or other entity.
(vii) The Guarantor has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the State of Texas, has the corporate power and authority to own its
property and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and the
Terms Agreement, and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing could not, singly or in the
aggregate, reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Guarantor and the Subsidiaries (as
hereinafter defined), taken as a whole (each, a "Guarantor Material
Adverse Effect").
(viii) All of the issued common membership interests, par
value $[ ] per share, of the Company (the "Common Shares") are
owned by the Guarantor, free and clear of all liens, encumbrances,
security interests, claims and restrictions on transferability and
voting (other than any restrictions on transferability as may arise
under the Company Agreements (as defined below) and state and federal
securities laws).
<PAGE> 10
-10-
(ix) Each direct and indirect foreign and domestic
subsidiary of the Guarantor listed on Schedule I hereto, which
constitute all of the significant subsidiaries of the Guarantor within
the meaning of Rule 1-02 of Regulation S-X under the Exchange Act
(each, a Subsidiary" and collectively, the "Subsidiaries"), has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Registration Statement and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so incorporated, be in
existence, have such power and authority, be so qualified or be in
good standing could not, singly or in the aggregate, reasonably be
expected to have a Guarantor Material Adverse Effect. All of the
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable, and,
except as set forth in the Registration Statement and the Prospectus,
are owned by the Guarantor, directly or indirectly, free and clear of
all liens, encumbrances, security interests, claims and restrictions
on transferability and voting (other than any restrictions on
transferability as may arise under state and federal securities laws).
Except as set forth in the Registration Statement and the Prospectus,
there are no outstanding (i) securities or obligations convertible
into or exchangeable or exercisable for any shares of capital stock
of, or other interest in, the Company, the Guarantor or any
Subsidiary, (ii) rights, warrants or options to acquire or purchase
any shares of capital stock of, or other interest in, the Company, the
Guarantor or any Subsidiary or any such convertible, exchangeable or
exercisable securities or obligations, or (iii) obligations or
understandings to issue or sell any shares of capital stock of, or
other interest in, the Company, the Guarantor or any Subsidiary, any
such convertible, exchangeable or exercisable securities or
obligations, or any such warrants, rights or options, except as have
been disclosed to the Underwriters in writing prior to the date hereof
and except for (A) issuances of shares of Guarantor Common Stock and
options to acquire Guarantor Common Stock after the date of the most
recent information set forth in the Registration Statement and the
Prospectus pursuant to the Guarantor's employee benefit plans as in
effect on the date hereof and (B) issuances after the date of the most
recent information set forth in the Registration Statement and the
Prospectus of convertible debentures of the Guarantor and Guarantor
Common Stock pursuant to the Guarantor's Registration Statement on
Form S-4 (Registration No. 33-54996) (the "S-4").
<PAGE> 11
-11-
(x) There are no partnerships in which the Guarantor
or any of the Subsidiaries has any direct or indirect controlling
interest that would constitute a significant subsidiary within the
meaning of Rule 1-02 of Regulation S-X under the Exchange Act. Except
for the capital stock of the Subsidiaries and except as set forth in
the Registration Statement and the Prospectus, the Guarantor does not
own, directly or indirectly, any shares of stock or any other equity
or long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity.
(xi) This Agreement and the Terms Agreement have been
duly and validly authorized, executed and delivered by each of the
Company and the Guarantor.
(xii) Since the date of the latest consolidated
financial statements of the Guarantor and the Subsidiaries included in
the Registration Statement and the Prospectus, except as set forth in
or expressly contemplated by the Registration Statement and the
Prospectus, there has not been (A) any change in the Guarantor's or
the Company's issued capital stock or options, except with respect to
the Guarantor (I) pursuant to the exercise of options or the
conversion or exchange of outstanding convertible or exchangeable
securities of the Guarantor or the Company, (II) issuances of shares
of Guarantor Common Stock and options to acquire Guarantor Common
Stock issued after the date of such financial statements pursuant to
the Guarantor's employee benefit plans as in effect or the date hereof
and (III) issuances after the date of such financial statements of
convertible debentures of the Guarantor and Guarantor Common Stock
pursuant to the S-4, (B) any material adverse change in the
management, condition (financial or otherwise), earnings, business
affairs or business prospects of the Company (each, a "Company
Material Adverse Change," and any event or state of facts which could,
singly or in the aggregate, reasonably be expected to result in a
Company Material Adverse Change is herein referred to as a
"Prospective Company Material Adverse Change"), whether or not arising
from transactions or events occurring in the ordinary course of
business, or (C) any material adverse change in the management,
condition (financial or otherwise), earnings, business affairs or
business prospects of the Guarantor and the Subsidiaries, taken as a
whole (each, a "Guarantor Material Adverse Change," and any event or
state of facts which could, singly or in the aggregate, reasonably be
expected to result in a Guarantor Material Adverse Change is herein
referred to as a "Prospective Guarantor Material Adverse Change"),
whether or not arising from transactions or events occurring in the
ordinary course of business.
<PAGE> 12
-12-
(xiii) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company, the Guarantor or any of the Subsidiaries (other than those in
the ordinary course of business) which are material to the Company, or
the Guarantor and the Subsidiaries considered as a whole and (B) there
has been no dividend or distribution of any kind declared, paid or
made by the Company or the Guarantor on any class of its capital stock
other than regularly scheduled quarterly dividends by the Guarantor in
accordance with past practice of the Guarantor.
(xiv) As of the date of the Prospectus Supplement, the
Guarantor has the authorized, issued and outstanding capitalization
set forth in the Prospectus under "Capitalization." The authorized
capital stock of each of the Company and the Guarantor conforms as to
legal matters to the description thereof contained in the Registration
Statement and the Prospectus, and all of the outstanding shares of
capital stock of each of the Company and the Guarantor have been duly
authorized and validly issued, are fully paid and non-assessable and
are not subject to any preemptive or similar rights. The rights
agreement dated as of July 18, 1988 between the Guarantor and Texas
Commerce Bank National Association as rights agent, as amended to date
(the Rights Agreement") has been duly authorized, executed and
delivered by the Guarantor; the rights (the "Rights") to purchase the
Guarantor's Series C Junior Participating Preferred Stock (the "Series
C Preferred Stock") outstanding thereunder and to be issued upon the
conversion of the Offered Securities have been duly authorized; the
Series C Preferred Stock to be issued upon exercise of the Rights has
been duly authorized; and the description of the Rights Agreement and
the Rights set forth in the Registration Statement and the Prospectus
is accurate in all material respects.
(xv) The Declaration establishing the Offered
Securities set forth in the Terms Agreement has been duly adopted by
the Guarantor as manager of the Company pursuant to the Company's
Articles of Organization (the Articles", and together with the
Regulations and the Declaration, the Company Agreements") and the
Regulations and is in full force and effect.
(xvi) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and
sufficiently taken by the Company and the Guarantor, including,
without limitation, by the Guarantor in
<PAGE> 13
-13-
its capacity as manager of the Company. The Offered Securities have
been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and the Terms Agreement and, when issued
and delivered by the Company pursuant to this Agreement and the Terms
Agreement against payment of the consideration set forth in the Terms
Agreement, the Offered Securities will be validly issued and fully
paid and nonassessable; no holder thereof will be subject to personal
liability solely by reason of being such a holder; the Offered
Securities will not be subject to the preemptive rights of any
stockholder of the Company. The Offered Securities are convertible
into Guarantor Common Stock in accordance with their terms and the
terms of the Declaration and the Payment, Guarantee and Conversion
Agreement by and between the Company and the Guarantor (the Guarantor
Agreement").
(xvii) The Guarantor Common Stock issuable upon
conversion of the Offered Securities pursuant to the terms of the
Declaration and the Guarantor Agreement has been duly authorized by
the Guarantor and validly reserved for issuance by the Guarantor upon
such conversion by all necessary corporate action and such Guarantor
Common Stock, when duly issued upon such conversion, will be validly
issued and fully paid and nonassessable; no holder thereof will be
subject to personal liability solely by reason of being such a holder;
and the issuance of such Guarantor Common Stock upon such conversion
will not be subject to preemptive rights.
(xviii) The Guarantee, the loan agreement (the "Loan
Agreement") among the Company, SCI Limited and the Guarantor relating
to the loan to SCI Limited by the Company of substantially all of the
proceeds of the issuance of the Common Shares and the Offered
Securities and the liability assumption agreement (the "Liability
Agreement;" the Guarantor Agreement, the Loan Agreement and the
Liability Agreement being collectively referred to as the "Guarantor
Agreements") between the Company and the Guarantor have each been duly
and validly authorized, executed and delivered by the Guarantor and,
to the extent each is a party thereto, by the Company and SCI Limited,
and constitute legal, valid and binding obligations of the Guarantor,
the Company and SCI Limited to the extent the Guarantor, the Company
or SCI, as the case may be, is a party thereto, enforceable against
the Guarantor, the Company and SCI Limited, as the case may be, to the
extent any of the Guarantor, the Company or SCI, as the case may be,
is a party thereto in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject to general principles of equity (regardless of whether
<PAGE> 14
-14-
enforcement is sought in a proceeding in equity or at law); each of
the Guarantor Agreements conform in all material respects to the
descriptions thereof in the Registration Statement and the Prospectus.
(xix) The execution and delivery by the Company, SCI
Limited or the Guarantor, as the case may be, of, and the full and
timely performance by the Company, SCI Limited or the Guarantor, as
the case may be, of their respective obligations under, this
Agreement, the Terms Agreement, the Company Agreements and the
Guarantor Agreements, the consummation of each of the transactions
contemplated herein and therein, the issuance of the Guarantor Common
Stock upon conversion of the Offered Securities and the full and
timely performance by the Guarantor of the Backup Undertakings, (A)
have been duly authorized by all necessary corporate action on the
part of each of the Company, the Guarantor and SCI Limited, (B) do not
and will not result in any violation of the Articles or Regulations of
the Company or the articles of incorporation or by-laws of the
Guarantor or SCI Limited and (C) do not and will not conflict with, or
result in a breach or violation of, any of the terms or provisions of,
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or give rise to any
right to accelerate the maturity or require the prepayment of any
indebtedness under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material property or assets of,
the Company, the Guarantor or any Subsidiary under (I) any indenture,
mortgage, loan agreement, note, lease, license, partnership agreement,
franchise agreement or other agreement or instrument to which the
Company, the Guarantor or any Subsidiary is a party or by which any of
them may be bound or affected or to which any of their respective
properties or assets may be subject (each, a "Contract" and
collectively, the "Contracts"), other than any such conflict, breach,
default, acceleration, prepayment, lien, charge or encumbrance that
could not, individually or in the aggregate, reasonably be expected to
result in any Material Adverse Effect, (II) any existing applicable
law, rule or regulation (other than the securities or Blue Sky laws of
the various states and other jurisdictions of the United States of
America) or (III) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company, the Guarantor or any Subsidiary or any
of their respective properties or assets.
(xx) No authorization, approval, consent or license of,
or filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act or as may be
required under the securities or
<PAGE> 15
-15-
Blue Sky laws of the various states and other jurisdictions of the
United States of America), is required for the valid authorization,
issuance, sale and delivery of the Offered Securities by the Company
or the Guarantee by the Guarantor, the issuance of the Guarantor
Common Stock, the execution and delivery by the Company, the Guarantor
and SCI Limited of, or the full and timely performance by the Company,
the Guarantor and SCI Limited of each of their respective obligations
under, this Agreement, the Terms Agreement, each of the Company
Agreements and each of the Guarantor Agreements.
(xxi) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(xxii) No holder of any securities of the Company or of
the Guarantor or any Subsidiary has any rights, not effectively
satisfied or waived, to require the Company or the Guarantor to
register the sale of any securities under the Securities Act in
connection with the filing of the Registration Statement or the
consummation of the transactions contemplated therein or pursuant to
this Agreement or the Terms Agreement.
(xxiii) Each of the Company, the Guarantor and the
Subsidiaries is in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health or the environment or imposing liability or
standards of conduct concerning any Hazardous Material (collectively,
"Environmental Laws"), except where such noncompliance with
Environmental Laws could not, singly or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect or a Guarantor
Material Adverse Effect. The term Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
(xxiv) Each of the Company, the Guarantor and each of the
Subsidiaries owns, possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal,
state, local and other governmental
<PAGE> 16
-16-
authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as
conducted as of the date hereof, except in each case where the failure
to obtain licenses, permits, certificates, consents, orders, approvals
and other authorizations, or to make all declarations and filings,
could not, singly or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect or a Guarantor Material Adverse
Effect, and none of the Company, the Guarantor or any Subsidiary has
received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the
Registration Statement and the Prospectus and except, in each case,
where such revocation or modification could not, singly or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect or a Guarantor Material Adverse Effect; and the Company, the
Guarantor and each Subsidiary are in compliance with all laws and
regulations relating to the conduct of their respective businesses as
conducted as set forth in the Registration Statement and the
Prospectus, except where noncompliance with such laws or regulations
could not, singly or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect or a Guarantor Material Adverse
Effect.
(xxv) To the best knowledge of the Guarantor, each of
the Guarantor and the Subsidiaries owns or possesses the patents,
patent licenses, trademarks, service marks, trade names, copyrights
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Guarantor Material Adverse
Effect, and, except as set forth in the Registration Statement and the
Prospectus, neither the Guarantor nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property, except for notices the
content of which if accurate could not, singly or in the aggregate,
reasonably be expected to have a Guarantor Material Adverse Effect.
(xxvi) Except as set forth in the Registration Statement
and the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any
<PAGE> 17
-17-
jurisdiction in which the Guarantor or any of the Subsidiaries conduct
their respective businesses in connection with the ownership by the
Guarantor of capital stock of any Subsidiary, any foreign exchange
controls or the repatriation of any amount from or to the Guarantor
and the Subsidiaries, except to the extent such authorizations,
approvals or consents have been obtained and are in full force and
effect and except to the extent that the failure to obtain any such
authorization, approval or consent could not, singly or in the
aggregate, reasonably be expected to have a Guarantor Material Adverse
Effect.
(xxvii) Neither the Company nor the Guarantor has taken or
will take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Offered Securities or the Guarantor
Common Stock, and neither the Company nor the Guarantor has
distributed and neither the Company nor the Guarantor will distribute
any prospectus or other offering material in connection with the
offering and sale of the Offered Securities other than any preliminary
prospectus filed with the Commission or the Prospectus or other
materials permitted under the Securities Act.
(xxviii) Except as set forth in the Registration Statement
and the Prospectus, there is no action, suit or proceeding before or
by any government, governmental or regulatory instrumentality, agency
or body or court, domestic or foreign, or any arbitrator, now pending
or, to the best knowledge of the Company or the Guarantor, threatened
against or affecting the Company, the Guarantor or any Subsidiary or
any affiliate of the Company or the Guarantor that, singly or in the
aggregate with all such actions, suits and proceedings (i) could
reasonably be expected to have a Company Material Adverse Effect or a
Guarantor Material Adverse Effect or could reasonably be expected to
have a material adverse effect on the consummation of the transactions
contemplated in this Agreement, any Company Agreement or any Guarantor
Agreement or (ii) is required to be described in the Registration
Statement or the Prospectus that is not so described.
(xxix) None of the Company, the Guarantor or any of the
Subsidiaries (i) is in violation of, with respect to the Company, the
Articles or Regulations, or, with respect to the Guarantor and the
Subsidiaries, its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement, any Company Agreement, any Guarantor
<PAGE> 18
-18-
Agreement or any Contract or of any permit, order, decree, judgment,
statute, rule or regulation, foreign or domestic, applicable to the
Company, the Guarantor or any Subsidiary, except for such violations,
breaches or defaults that could not, singly or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect or a
Guarantor Material Adverse Effect.
(xxx) Neither the Company nor the Guarantor is an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended or a holding company or a subsidiary of a holding
company under the Public Utility Holding Company Act of 1935.
(xxxi) Each of the Company and the Guarantor has complied
with all provisions of Section 517.075, Florida Statutes (Chapter
92-198, Laws of Florida).
(xxxii) The statistical and market-related data included
or incorporated by reference in the Registration Statement and
the Prospectus are based on or derived from sources which the Company
and the Guarantor believe to be reliable and accurate or represent the
Company's and the Guarantor's good faith estimates that are made on
the basis of data derived from such sources.
(xxxiii) Neither the Company nor the Guarantor knows of any
outstanding claims for services, either in the nature of a finder's
fee or origination fee, with respect to the transactions contemplated
hereby and by the Terms Agreement, other than the underwriting fees
and compensation to be paid to the Underwriters in accordance with
this Agreement.
(xxxiv) No labor disputes exist with employees of the
Guarantor or of the Subsidiaries that could, singly or in the
aggregate, reasonably be expected to have a Guarantor Material Adverse
Effect.
Any certificate signed by any officer of the Company or of the
Guarantor and delivered to the Underwriters or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company and the Guarantor
to each Underwriter as to the matters covered thereby.
5. Agreements of the Company and the Guarantor. Each of
the Company and the Guarantor jointly and severally covenants and agrees with
each Underwriter as follows (with respect to clauses (l) and (n) below of this
Section 5, solely the Guarantor so agrees):
<PAGE> 19
-19-
(a) To use their respective reasonable best efforts to
cause any amendment to the Registration Statement to become effective
at the earliest possible time.
(b) To furnish to each of the Representatives, without
charge, as many signed copies of the Registration Statement (as
originally filed) and each amendment thereto and each document
incorporated or deemed incorporated therein, in each case including
exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of their
intention to file or prepare any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether
pursuant to the Securities Act, the Exchange Act or otherwise, to
furnish the Underwriters and their counsel with copies of any such
amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and not to file any such
amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall object. Subject to
the foregoing sentence, the Company and the Guarantor will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
(d) To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any comments from the Commission or of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Prospectus or Prospectus
Supplement or the initiation or threatening of any proceeding for that
<PAGE> 20
-20-
purpose and (v) of the receipt by the Company or the Guarantor of any
notification with respect to any suspension of the qualification of
the Offered Securities for offer and sale in any jurisdiction or the
initiation of any proceeding for such purpose; and to use their
respective reasonable best efforts to prevent the issuance of any such
stop order or notification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(e) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Guarantor, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company or
the Guarantor) to which Offered Securities may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(f) To endeavor to qualify the Offered Securities (and,
if applicable, the Guarantor Common Stock) for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to pay all fees and expenses (including fees and disbursements of
counsel to the Underwriters) incurred in connection with such
qualification;provided, however, that neither the Company nor the
Guarantor shall be required to file a general consent to service of
process in any jurisdiction or subject itself to general taxation in
any jurisdiction.
(g) To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months, after the date of each Terms Agreement an earnings
statement, covering a period of at least 12 months
<PAGE> 21
-21-
beginning after the later of (i) the effective date of the
Registration Statement, (ii) the effective date of the most recent
post- effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such Terms Agreement, which will
satisfy the provisions of Rule 158 under the Securities Act and
Section 11(a) of the Securities Act.
(h) For a period of 120 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
Subsidiary to, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, any shares of securities of the
Company or of the Guarantor of the same class as the Offered
Securities (including, without limitation, any depositary shares
representing the same) or the Guarantor Common Stock or any
securities convertible into or exchangeable or exercisable for shares
of securities of the Company or of the Guarantor of the same class as
the Offered Securities or the Guarantor Common Stock, other than (A)
the Offered Securities to be sold pursuant to the Terms Agreement, (B)
shares of capital stock of the Guarantor issued upon conversion,
exchange or exercise of convertible, exchangeable or exercisable
securities (including, without limitation, the Offered Securities) of
the Company, of the Guarantor or of any Subsidiary outstanding on the
Representation Date and (C) shares of Guarantor Common Stock and
options thereunder issued pursuant to employee benefit plans of the
Guarantor in place on the Representation Date as in effect on the
Representation Date, and other than pursuant to such other exceptions,
if any, as are agreed to by the Representatives and set forth in the
Terms Agreement.
(i) Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Company's and
the Guarantor's obligations hereunder, including, without limiting the
generality of the foregoing, all costs and expenses (i) incurred in
connection with the preparation, issuance, execution and delivery of
the Offered Securities (and the Guarantor Common Stock issuable upon
conversion thereof), (ii) incurred in connection with the preparation,
printing and filing under the Securities Act and the Exchange Act of
the Registration Statement, the Prospectus, any preliminary prospectus
and each Prospectus Supplement (including in each case all exhibits,
amendments and supplements thereto and all documents incorporated
therein by reference), (iii) incurred in connection with the
<PAGE> 22
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registration or qualification of the Offered Securities (and the
Guarantor Common Stock issuable upon conversion thereof) under the
laws of such jurisdictions as the Representatives may request
(including filing fees and the fees of counsel for the Underwriters
and their disbursements), (iv) in connection with the listing of the
Offered Securities (and the Guarantor Common Stock issuable upon
conversion thereof) on the New York Stock Exchange, (v) relating to
any filing with the National Association of Securities Dealers Inc.
(the NASD") in connection with the offering of the Offered Securities,
(vi) incurred in connection with the engagement of any qualified
independent underwriter as may be required by NASD rules and
regulations, (vii) incurred in connection with the rating of the
Offered Securities, (viii) incurred in connection with advertising
relating to the Offered Securities approved by the Guarantor (which
approval shall not be unreasonably withheld or delayed), (ix) relating
to the fees and expenses of the transfer agent and registrar for the
Offered Securities (and the Guarantor Common Stock issuable upon
conversion thereof) and (x) relating to or in connection with the
printing (including word processing and duplication costs) and
delivery of this Agreement, the Terms Agreement, each Company
Agreement, each Guarantor Agreement, the agreement among underwriters,
each other document or instrument relating to the underwriting
arrangements and the coordination of the offering of the Offered
Securities by the U.S. Underwriters and the International Managers, if
applicable, any dealer agreements, the Preliminary and Supplemental
Blue Sky Memoranda and the furnishing to the Underwriters and dealers
of copies of the Registration Statement, the Prospectus and each
Prospectus Supplement, including mailing and shipping, as herein
provided.
(j) To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Company's or the Guarantor's capital stock, and copies of any reports
and financial statements furnished to or filed with the Commission.
(k) To use, and to cause the Company to use, the proceeds
of the sale of the Offered Securities to make the loans to SCI Limited
contemplated by the Loan Agreement; and to use the net proceeds of the
offering of the Offered Securities as set forth in the Prospectus
under the caption "Use of Proceeds."
(l) During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, to file all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within
<PAGE> 23
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the time period required by the Exchange Act and the Exchange Act
Regulations.
(m) To use their respective best efforts to effect the
listing of the Offered Securities (including the shares of Guarantor
Common Stock issuable upon the conversion of the Offered Securities)
on the New York Stock Exchange on the Representation Date.
(n) To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Guarantor Common Stock to
satisfy any obligations to issue shares of Guarantor Common Stock upon
conversion of all of the Offered Securities that are convertible into
the Guarantor Common Stock.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
(a) If any amendment to the Registration Statement filed
prior to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M. on the Representation Date; and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission. The
price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided evidence satisfactory to the Underwriters of such timely
filing.
(b) The representations and warranties of each of the
Company and the Guarantor contained herein and in the Terms Agreement
shall be true and correct on and as of the Closing Date as if made on
and as of the Closing Date and each of the Company and the Guarantor
shall have complied with all agreements and satisfied all conditions
on their respective part to be performed or satisfied hereunder at or
prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to
the Closing Date, there shall not have occurred any Company Material
Adverse Change or any Guarantor Material Adverse Change or any
development involving a Prospective Company Material Adverse Change or
any Prospective Guarantor Material Adverse Change other than as set
forth in the Registration Statement and the Prospectus, the effect of
which in the
<PAGE> 24
-24-
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the
Underwritten Securities on the terms and in the manner contemplated in
the Registration Statement and the Prospectus. As used in this
Section 6(c), "Prospectus" shall mean the Prospectus first used to
confirm sales of the Offered Securities exclusive of any amendment or
supplement thereto thereafter.
(d) The Representatives shall have received on and as of
the Closing Date a certificate of each of the Company and of the
Guarantor signed by the Chief Executive Officer, the Chief Operating
Officer or the Chief Financial Officer of each of the Company and of
the Guarantor to the effect set forth in subsections (a) and (b) of
this Section 6 and to the further effect that since the most recent
date as of which information is given in the Prospectus there shall
not have occurred any Company Material Adverse Change or any Guarantor
Material Adverse Change, or any development involving a Prospective
Company Material Adverse Change or any Prospective Guarantor Material
Adverse Change. As used in this Section 6(d), "Prospectus" shall mean
the Prospectus first used to confirm sales of the Offered Securities
exclusive of any amendment or supplement thereto thereafter.
(e) The Representatives shall have received on the
Closing Date a signed opinion of Fulbright & Jaworski L.L.P., special
counsel for the Company and the Guarantor, addressed to the
Underwriters and dated the Closing Date and satisfactory to counsel
for the Underwriters, to the effect that:
(i) Each of the Agreement and the Terms
Agreement has been duly and validly authorized, executed and
delivered by each of the Company and the Guarantor.
(ii) The number of authorized shares of capital
stock of the Company and the Guarantor is as set forth in the
Prospectus under "Capitalization" and the authorized capital
stock of each of the Company and the Guarantor conforms as to
legal matters in all material respects to the description
thereof contained in the Prospectus.
(iii) The Offered Securities have been duly
authorized for issuance and sale to the Underwriters in
accordance with this Agreement and the Terms Agreement and,
when issued and delivered by the Company to the Underwriters
pursuant to this Agreement and the Terms Agreement against
payment of the consideration set forth in the Terms Agreement,
will be validly issued and fully paid and non-assessable.
<PAGE> 25
-25-
(iv) The issuance of the Offered Securities is
not subject to preemptive rights arising by operation of law
or under the Articles or Regulations; and no holder of the
Offered Securities will be subject to personal liability
solely by reason of being such a holder.
(v) Upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Guarantor
Agreement; the Guarantor Common Stock issuable upon conversion
of the Offered Securities has been duly authorized and validly
reserved for issuance upon such conversion by all necessary
corporate action on the part of the Guarantor, and such
Guarantor Common Stock, when issued upon such conversion, will
be validly issued, fully paid and nonassessable; no holder of
the Guarantor Common Stock will be subject to personal
liability solely by reason of being such a holder; and the
issuance of such shares upon such conversion or exchange will
not be subject to preemptive rights arising by operation of
law or under the charter or by-laws of the Guarantor.
(vi) Each of the Guarantor Agreements has been
duly and validly authorized, executed and delivered by the
Guarantor, the Company and SCI Limited to the extent each is a
party thereto and constitutes a legal, valid and binding
obligation of each of them to the extent a party thereto,
enforceable against each of them to the extent a party thereto
in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer and similar laws affecting
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
and each of the Guarantor Agreements conforms in all material
respects to the description thereof in the Registration
Statement and the Prospectus.
(vii) At the time the Registration Statement and
each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) appear on their face to be
appropriately responsive to the applicable requirements of the
Securities Act.
<PAGE> 26
-26-
(viii) The statements set forth or incorporated
by reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities and the Guarantor Common
Stock provide a fair summary of such provisions.
(ix) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(x) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or the
valid authorization, issuance and delivery of the Guarantor
Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, each of
the Company Agreements and each of the Guarantor Agreements by
the Company, the Guarantor or SCI Limited, except such as may
be required under the Securities Act or state securities laws
or under the Company's and the Guarantor's listing agreement
with the New York Stock Exchange.
(xi) To the best of such counsel's knowledge
and information, the execution, delivery and the full and
timely performance of this Agreement, the Terms Agreement,
each of the Company Agreements and each of the Guarantor
Agreements, the consummation of each of the transactions
contemplated herein and therein (including the issuance, sale
and delivery of the Offered Securities and the issuance of the
Guarantor Common Stock upon conversion of the Offered
Securities), the performance by the Guarantor of the Backup
Undertakings and compliance by each of the Company and the
Guarantor with their respective obligations hereunder and
thereunder will not conflict with or constitute a breach of,
or default under (including, without limitation, any event
which, with notice or lapse of time or both would constitute a
breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Guarantor or any
<PAGE> 27
-27-
of the Subsidiaries pursuant to, any contract identified on a
schedule to such opinion, nor will such action result in any
violation of the provisions of the Articles, Regulations,
charter or by-laws of the Company or of the Guarantor or SCI
Limited, as the case may be, or any applicable law, rule,
regulation or administrative, regulatory or court judgment,
order or decree, except for any breach, default, lien, charge
or encumbrance under any such contract as could not, singly or
in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(xii) Each document filed pursuant to the
Exchange Act (other than the financial statements, schedules
and other financial and statistical data included therein, as
to which such counsel need express no opinion) and
incorporated or deemed to be incorporated by reference in the
Prospectus appears on its face to be appropriately responsive
to the applicable requirements of the Exchange Act.
(xiii) Neither the Company nor the Guarantor is
an investment company under the Investment Company Act of
1940, or a holding company or a subsidiary of a holding
company under the Public Utility Holding Company Act of 1935.
Such counsel shall also state that they have been advised by
the Commission that the Registration Statement has become effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion), when it became effective contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (2) the Prospectus (other than the
financial statements and schedules and other financial and statistical
data included or incorporated by
<PAGE> 28
-28-
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of the
Guarantor and of public officials; provided, however, that (a) such
counsel shall state that both such counsel, the Underwriters and
counsel for the Underwriters are justified in relying upon such
certificates and (b) such certificates shall have been delivered to
the Representatives prior to the Closing Date. In rendering such
opinion, such counsel may rely as to matters involving the application
of laws of any jurisdiction other than the State of Texas, the State
of New York or the United States or the General Corporation Law of the
State of Delaware, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel who are reasonably
satisfactory to counsel for the Underwriters; provided, however, that
such counsel shall state that such counsel, the Underwriters and
counsel for the Underwriters are justified in relying upon such
opinion.
(f) The Representatives shall have received on the
Closing Date a signed opinion of James M. Shelger, General Counsel of
the Guarantor, addressed to the Underwriters and dated the Closing
Date and satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Texas, with power and authority (under
the Texas Limited Liability Company Act and otherwise) to own
its properties and conduct its business as described in the
Registration Statement and the Prospectus and to the best of
such counsel's knowledge and information is duly qualified as
a foreign limited liability company for the transaction of
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
could not, singly or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect or a Guarantor
Material Adverse Effect.
<PAGE> 29
-29-
(ii) The Guarantor has been duly incorporated,
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Guarantor Material Adverse
Effect.
(iii) Each Subsidiary has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing could not, singly or in
the aggregate, reasonably be expected to have a Guarantor
Material Adverse Effect.
(iv) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
each of the Company and the Guarantor.
(v) All of the outstanding shares of capital
stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and are not subject
to any preemptive or similar rights; to the best of such
counsel's knowledge and information, after due inquiry, all of
the issued Common Shares are owned by the Guarantor, free and
clear of all liens, encumbrances, security interests, claims
and restrictions on transferability and voting (other than
such restrictions on transferability as may arise under the
Company Agreements and state and federal securities laws).
(vi) The number of authorized shares of capital
stock of the Company and the Guarantor is as set forth in the
Prospectus under "Capitalization" and the authorized capital
stock of each of the Company and the Guarantor conforms as to
legal matters in all material respects to the description
thereof contained in the Prospectus.
<PAGE> 30
-30-
(vii) The Declaration has been duly adopted by
the Guarantor as manager of the Company pursuant to the
Company's Articles and Regulations and is in full force and
effect.
(viii) The Offered Securities have been duly
authorized for issuance and sale to the Underwriters in
accordance with this Agreement and the Terms Agreement and,
when issued and delivered by the Company to the Underwriters
pursuant to this Agreement and the Terms Agreement against
payment of the consideration set forth in the Terms Agreement,
will be validly issued and fully paid and non-assessable.
(ix) The issuance of the Offered Securities is
not subject to preemptive rights arising by operation of law
or under the Articles or Regulations; and no holder of the
Offered Securities will be subject to personal liability
solely by reason of being such a holder.
(x) Upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Guarantor
Agreement; the Guarantor Common Stock issuable upon conversion
of the Offered Securities has been duly authorized and validly
reserved for issuance upon such conversion by all necessary
corporate action on the part of the Guarantor, and such
Guarantor Common Stock, when issued upon such conversion, will
be validly issued, fully paid and nonassessable; no holder of
the Guarantor Common Stock will be subject to personal
liability solely by reason of being such a holder; and the
issuance of such shares upon such conversion will not be
subject to preemptive rights arising by operation of law or
under the charter or by-laws of the Guarantor.
(xi) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Guarantor, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge, after due inquiry, any other
security interests or claims.
(xii) Each of the Guarantor Agreements has been
duly and validly authorized, executed and delivered by the
Guarantor, the Company and SCI Limited to the extent
<PAGE> 31
-31-
each is a party thereto and constitutes a legal, valid and
binding obligation of each of them to the extent a party
thereto, enforceable against each of them to the extent a
party thereto in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer and similar laws
affecting creditors' rights and remedies generally and subject
to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
and each of the Guarantor Agreements conforms in all material
respects to the descriptions thereof in the Registration
Statement and the Prospectus.
(xiii) The statements set forth or incorporated
by reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities and the Guarantor Common
Stock provide a fair summary of such provisions.
(xiv) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(xv) To the best of such counsel's knowledge
and information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xvi) Based on such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or the
valid authorization, issuance and delivery of the Guarantor
Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, each of
the Company Agreements and each of the Guarantor Agreements by
the Company, the Guarantor or SCI Limited, except such as may
be required under the
<PAGE> 32
-32-
Securities Act or state securities laws or under the Company's
and the Guarantor's listing agreement with the New York Stock
Exchange, Inc.
(xvii) To the best of such counsel's knowledge
and information, the execution, delivery and the full and
timely performance of this Agreement, the Terms Agreement,
each of the Company Agreements and each of the Guarantor
Agreements, the consummation of each of the transactions
contemplated herein and therein (including the issuance, sale
and delivery of the Offered Securities and the issuance of the
Guarantor Common Stock upon conversion of the Offered
Securities), the performance by the Guarantor of the Backup
Undertakings and compliance by each of the Company and the
Guarantor with their respective obligations hereunder and
thereunder will not conflict with or constitute a breach of,
or default under (including, without limitation, any event
which, with notice or lapse of time, or both, would constitute
a breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Guarantor or any of the
Subsidiaries pursuant to, any contract identified on a
schedule to such opinion, nor will such action result in any
violation of the provisions of the Articles, Regulations,
charter or by-laws of the Company or of the Guarantor or SCI
Limited, as the case may be, or any applicable law, rule,
regulation or administrative, regulatory or court judgment,
order or decree, except for any breach, default, lien, charge
or encumbrance under any such contract as could not, singly or
in the aggregate, reasonably be expected to have a Material
Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (2) the Prospectus (other than the
financial statements and schedules and other financial or statistical
data included or incorporated by reference therein, as to which such
counsel need not make any statement or express any opinion) as of its
date or at the Representation Date contained and, as of the date such
opinion is delivered, contains any untrue statement of a material fact
<PAGE> 33
-33-
or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of the
Guarantor and of public officials; provided, however, that (a) such
counsel shall state that such counsel, the Underwriters and counsel
for the Underwriters are justified in relying upon such certificates
and (b) such certificates shall have been delivered to the
Representatives prior to the Closing Date. In rendering such opinion,
such counsel may rely as to matters involving the application of laws
of (1) the State of New York or the General Corporation Law of the
State of Delaware upon the written opinion of Fulbright & Jaworski
L.L.P. delivered pursuant to clause (e) above of this Section 6 and
(2) any jurisdiction other than the State of Texas or the United
States, to the extent he deems proper and specifies in such opinion,
upon the opinion of other counsel who are reasonably satisfactory to
counsel for the Underwriters; provided, however, that such counsel
shall state that such counsel, the Underwriters and counsel for the
Underwriters are justified in relying upon such opinion.
(g) The Representatives shall have received on the
Closing Date a signed opinion of Miller & Chevalier, special counsel
to the Company and the Guarantor, addressed to the Underwriters and
dated the Closing Date and satisfactory to counsel to the
Underwriters, to the effect that the statements made in the Prospectus
under the caption "Certain Federal Income Tax Considerations Regarding
LLC Preferred Securities," to the extent that they constitute matters
of law or legal conclusions, have been reviewed by such counsel and
fairly and accurately present the information disclosed therein in all
material respects.
(h) On the Representation Date and also on the Closing
Date, Ernst & Young and Coopers & Lybrand shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
(i) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Cahill Gordon & Reindel,
counsel to the Underwriters, with respect to the
<PAGE> 34
-34-
Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably request, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters.
(j) On the Representation Date, the Offered Securities
and the Guarantor Common Stock issuable upon conversion of the Offered
Securities shall have been approved for listing on the New York Stock
Exchange upon notice of issuance.
(k) At the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
and the Guarantor in connection with the issuance and sale of the
Offered Securities (and the Guarantor Common Stock) as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(l) On or prior to the Closing Date the Company and the
Guarantor shall have furnished to the Representatives such further
certificates and documents as the Representatives shall reasonably
request.
(m) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or the Guarantor by any
"nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act.
(n) The Guarantor shall have delivered to the
Representatives written agreements, in form and substance satisfactory
to the Representative designated in the Terms Agreement, with each of
its executive officers who own capital stock of the Guarantor of a
class which includes the Guarantor Common Stock that no offer, sale or
other disposition, or request or demand for registration under the
Securities Act or inclusion in any other registration statement filed
by the Company or the Guarantor under the Securities Act, of any
capital stock of the Guarantor of a class which includes the Guarantor
Common Stock, or warrants,
<PAGE> 35
-35-
options, convertible, exercisable or exchangeable securities, or other
rights to purchase or acquire, such capital stock (or any such right
or exchangeable, exercisable or convertible security) owned by such
person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the
Representation Date, directly or indirectly, by such executive
officer, otherwise than (i) with the prior written consent of the
Representative designated in the Terms Agreement and (ii) pursuant to
such exceptions, if any, as are agreed to by the Representatives and
set forth in the Terms Agreement.
(o) There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement, subject to the conditions set forth in paragraph (a) to and
including paragraph (o) above on and as of the Additional Closing Date
(references therein to the Closing Date shall be deemed references to the
Additional Closing Date for this purpose), except that the certificate called
for by paragraph (d), the opinions called for by paragraphs (e), (f), (g) and
(i) and the letters called for by paragraph (h) shall be dated as of, and
delivered on, the Additional Closing Date, and to the delivery to the
Representatives on the Additional Closing Date of such other documents as they
may reasonably request.
7. Indemnification and Contribution. Each of the
Company and the Guarantor, jointly and severally, agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either 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 the legal fees and other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company or the Guarantor shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Guarantor in writing
<PAGE> 36
-36-
by such Underwriter through the Representatives expressly for use therein;
provided, however, that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Offered Securities if
such untrue statement or omission or alleged untrue statement or omission made
in such preliminary prospectus is eliminated or remedied in the Prospectus and
the Company or the Guarantor has provided such Prospectus in accordance with
paragraph 5(ii) hereof (as amended or supplemented if the Company or the
Guarantor shall have furnished any amendments or supplements thereto) and if it
shall be established in the related action or proceeding that a copy of the
Prospectus, if required by law (as so amended or supplemented, but exclusive of
any documents incorporated therein by reference), shall not have been furnished
to such person at or prior to the written confirmation of the sale of such
Offered Securities to such person, except to the extent that such Prospectus
contains any other untrue statement or omission or alleged untrue statement or
omission of a material fact that was the subject matter of the related action
or proceeding. For purposes of the proviso to the immediately preceding
sentence, the term "Prospectus" shall not be deemed to include the documents
incorporated therein by reference, and no Underwriter shall be obligated to
send or give any supplement or amendment to any document incorporated by
reference in any preliminary prospectus or the Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Guarantor, the directors of the
Company, the directors of the Guarantor, the officers of the Company and of the
Guarantor who sign the Registration Statement and each person, if any, who
controls the Company or the Guarantor within the meaning of either 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,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company or the
Guarantor shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Guarantor in writing by such
Underwriter through the Representatives expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus. For purposes of this Section 7 and Section 4(ii), the
only written information
<PAGE> 37
-37-
furnished by the Underwriters to the Guarantor expressly for use in the
Registration Statement and the Prospectus is the information in the last
paragraph of the cover page of the Prospectus Supplement and [ ] and
[ ] under the table under the caption "Underwriting" in the Prospectus
Supplement.
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 indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall promptly retain counsel satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. 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) there has been a failure by the
Indemnifying Person to retain promptly counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties to 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 that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, the
Guarantor, their respective directors, their respective officers who sign the
Registration Statement and each person, if any, who controls the Company or the
Guarantor within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by the Representatives. In the case
of any such separate firm for the Company, the Guarantor, and such directors,
officers and control persons of the Company or the Guarantor, such firm shall
be designated in writing by the Guarantor. 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
<PAGE> 38
-38-
Person agrees to indemnify any 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
an Indemnifying Person to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such 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 prior 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 indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (1) includes an unconditional
written release of such Indemnified Person, in form and substance satisfactory
to such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (2) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, 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 as follows: as between the
Company and the Guarantor on the one hand and the Underwriters on the other (i)
in such proportion as is appropriate to reflect the aggregate relative benefits
received by the Company and the Guarantor on the one hand and by the
Underwriters on the other from the offering of the Offered Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Guarantor on the one hand and of the Underwriters 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 benefits received by the Company and the
Guarantor on the one hand and by the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and the total underwriting
compensation received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus bear to the aggregate public offering
price of
<PAGE> 39
-39-
the Offered Securities. The relative fault of the Company and the Guarantor on
the one hand and of the Underwriters 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, the Guarantor or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantor and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters 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 the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay or has
paid 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 Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Offered
Securities they have purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and of the
Guarantor contained in this Agreement 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 any Underwriter or any person controlling
any Underwriter or the Company, the Guarantor, their respective officers or
directors or any other person controlling the Company or the
<PAGE> 40
-40-
Guarantor and (iii) acceptance of and payment for any of the Offered
Securities.
8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Company or the Guarantor, if after the execution and delivery of this
Agreement and prior to the Closing Date (or, in the case of the Option
Securities, prior to the Additional Closing Date) (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange, the National Association of Securities Dealers,
Inc., the American Stock Exchange or the [ ], (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York or [ ] shall have been declared by either U.S.
Federal, New York State or [ ] authorities or exchange controls shall
have been imposed by the United States, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material
and adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Offered Securities which it or they have agreed to purchase hereunder
on such date, and the aggregate number of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Offered Securities to be
purchased on such date, the other Underwriters (with respect to the Option
Securities, to the extent such Underwriters are Option Securities Underwriters)
shall be obligated severally in the proportions that (1) with respect to
Underwritten Securities the number of Underwritten Securities set forth
opposite their respective names in the annex
<PAGE> 41
-41-
or annexes to Exhibit 1 hereto bears to the aggregate number of Underwritten
Securities set forth opposite the names of all such non-defaulting Underwriters
and (2) with respect to Option Securities, the number of Underwritten
Securities set forth opposite their respective names in the annex or annexes to
Exhibit 1 hereto bears to the aggregate number of Underwritten Securities set
forth opposite the names of all such non-defaulting Underwriters who are Option
Securities Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided, however, that in no event shall the number of Offered
Securities that any Underwriter has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Offered Securities without the written consent of such
Underwriter. If, on the Closing Date or the Additional Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Offered Securities which it or they have agreed to purchase hereunder on such
date, and the number of Offered Securities with respect to which such default
occurs is more than one-tenth of the aggregate number of Offered Securities to
be purchased on such date, and arrangements satisfactory to the
Representatives, the Company and the Guarantor for the purchase of such Offered
Securities are not made within 36 hours after such default, this Agreement (or
the obligations of the several Underwriters to purchase the Option Securities,
as the case may be) shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Guarantor. In any such case
either the Representatives or the Company and the Guarantor shall have the
right to postpone the Closing Date (or, in the case of the Option Securities,
the Additional Closing Date), but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or the Guarantor
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company or the Guarantor shall be unable to perform
their respective obligations under this Agreement, each of the Company and the
Guarantor jointly and severally agrees to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder and pursuant to the Terms
Agreement. In no event, however, shall the Company or the Guarantor be
responsible to the Underwriters for any loss of profits for failure to
consummate the offering and sale of the Offered Securities.
<PAGE> 42
-42-
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Company, the Guarantor, the Underwriters,
any controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Offered Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives at the address as set
forth in the Terms Agreement. Notices to the Company shall be given to it at
SCI Finance LLC c/o Service Corporation International, 1929 Allen Parkway,
Houston, Texas 77019 (facsimile: (713) [ ]); Attention: [ ].
Notices to the Guarantor shall be given to it at Service Corporation
International, 1929 Allen Parkway, Houston, Texas 77019 (facsimile: (713)
[ ]); Attention: [ ].
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
<PAGE> 43
-43-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SCI FINANCE LLC
By:______________________________
Name:
Title:
SERVICE CORPORATION
INTERNATIONAL,
as Guarantor
By:______________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
[Insert Signature block(s) for the
Representative or Representatives
acting on behalf of the Underwriters,
or for each Underwriter if
no Syndicate]
<PAGE> 44
EXHIBIT I
SCI FINANCE LLC
[ ] Shares
[TITLE OF SECURITIES]
(liquidation preference $[ ] per share)
guaranteed to the extent set forth
in certain backup undertakings by
SERVICE CORPORATION INTERNATIONAL
TERMS AGREEMENT
[ ], 199[ ]
SCI Finance LLC
Service Corporation International
1929 Allen Parkway
Houston, Texas 77019
Attention: [ ]
Ladies and Gentlemen:
[ ] (the "Representative(s)") understand that
SCI Finance LCC, a Texas limited liability corporation (the "Company"), and
Service Corporation International, a Texas corporation, as guarantor and
provider of certain backup undertakings (the "Guarantor"), propose to issue and
sell [ ] shares of [describe Preferred Securities] (the "Underwritten
Securities"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, the [U.S.] Underwriters named in Annex A
attached hereto [and the International Managers named in Annex B attached
hereto] offer to purchase, severally and not jointly, the number of
Underwritten Securities set forth opposite the name of each such Underwriter on
Annex A [and Annex B] hereto at a price of $[ ] per share (the "Purchase
Price"). The Closing Date shall be [ ], 199[ ], at [ ] A.M. at the
offices of [ ].
As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that proceeds of the sale of the Offered
Securities will be lent by the Company to SCI Limited pursuant to the Loan
Agreement, the Guarantor hereby
<PAGE> 45
-2-
agrees to pay at [each of] the Closing Date [and the Additional Closing Date]
to the Underwriters $[ ] per Offered Security (as defined below)
purchased by the Underwriters.
[It is understood that, subject to the conditions hereinafter
stated, [ ] Underwritten Securities (the "U.S. Underwritten
Securities") will be sold to the several U.S. Underwriters named in Annex A
hereto (the "U.S. Underwriters") in connection with the offering and sale of
such U.S. Underwritten Securities in the United States and Canada to United
States and Canadian Persons (as such terms are defined in the Agreement between
U.S. and International Underwriting Syndicates of even date herewith between
the U.S. Underwriters and the International Managers), and [ ]
Underwritten Securities (the "International Securities") will be sold to the
several international managers named in Annex B hereto (the "International
Managers") in connection with the offering and sale of such International
Securities outside the United States and Canada to persons other than United
States and Canadian Persons. [ ] shall act as
representatives (the "U.S. Representatives") of the several U.S. Underwriters,
and [ ] shall act as representatives (the "International
Representatives") of the several International Managers. The U.S. Underwriters
and the International Managers are hereinafter collectively referred to as the
"Underwriters", and the U.S. Representatives and the International
Representatives are hereinafter collectively referred to as the
"Representatives."]
[In addition, the Representatives understand that the Company
and the Guarantor propose to issue and sell to the several [U.S.] Underwriters,
for the sole purpose of covering over-allotments in connection with the sale of
the Underwritten Securities, at the option of the [U.S.] Underwriters, up to an
additional [ ] shares of the [describe Preferred Securities] (the
"Option Securities"). The Underwritten Securities and the Option Securities
are herein referred to as the "Offered Securities."]
[The offer herein contained is further conditioned upon the
Company and the Guarantor agreeing to sell to the [U.S.] Underwriters the
Option Securities, and agreeing that the [U.S.] Underwriters shall have a
one-time right to purchase, severally and not jointly, up to [ ] Option
Securities at the Purchase Price. Option Securities may be purchased as
provided below solely for the purpose of covering over-allotments made in
connection with the offering of the Underwritten Securities. If any Option
Securities are to be purchased, each [U.S.] Underwriter agrees, severally and
not jointly, to purchase the number of Option Securities (subject to such
adjustments to eliminate any fractional Offered Securities as the [U.S.]
<PAGE> 46
-3-
Representatives in their sole discretion may make) that bears the same
proportion to the total number of Option Securities to be purchased as the
number of [U.S.] Underwritten Securities set forth in Annex A hereto opposite
the name of such [U.S.] Underwriter bears to the total number of [U.S.]
Underwritten Securities.]
[The Company's and the Guarantor's agreement to sell the
Option Securities shall entitle the [U.S.] Underwriters to exercise the option
to purchase the Option Securities at any time on or before the thirtieth day
following the date of this Terms Agreement, by written notice from the [U.S.]
Representatives to the Company and the Guarantor. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for which may be the same date and time as the Closing Date but shall
not be earlier than the Closing Date nor later than the tenth full Business Day
after the date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 9 of the Underwriting Agreement
referred to below). Such notice shall be given at least two Business Days
prior to the date and time of delivery specified therein.]
The Underwritten Securities shall have the following terms:
Title: [ ]
Liquidation preference: [ ]
Dividend rate: [ ]
Dividend payment dates: [ ]
Conversion or exchange provisions: [ ]
Redemption provisions: [ ]
Public offering price: $[ ] per share
Additional terms: [ ]
All the provisions contained in the document entitled
"Underwriting Agreement -- SCI Finance LLC -- Preferred Securities -- Service
Corporation International" (the "Underwriting Agreement") and dated
[ ], 199[ ], a copy of which you have previously received, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Terms Agreement to the same extent as if the Underwriting Agreement had
been set forth in full herein. Terms defined in the Underwriting Agreement are
used herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is
[ ]. [The additional exceptions to Section 5(h) are [ ].]
<PAGE> 47
-4-
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by [ ] alone on behalf of the
Representatives, and any such action taken by [ ] alone shall be
binding upon the Representatives. Notices to the Underwriters shall be given
to the Representatives c/o [ ] (facsimile: ([ ])
[ ]); Attention: [ ].
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof.
Please accept this offer no later than [ ] o'clock [ ].M.
on [ ], 199[ ], by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us, or by sending us a
written acceptance in the following form:
<PAGE> 48
-5-
"We hereby accept your offer, set forth in the Terms
Agreement, dated [ ], 199[ ], to purchase the Underwritten Securities
on the terms set forth therein and agree to and accept all other terms and
provisions of the Terms Agreement [and hereby grant the [U.S.] Underwriters the
option to purchase the Option Securities as more fully set forth in the Terms
Agreement]."
Very truly yours,
By:______________________________
Name:
Title:
Accepted as of the date
first above written:
SCI FINANCE LLC
By:______________________________
Name:
Title:
SERVICE CORPORATION INTERNATIONAL,
as Guarantor
By:______________________________
Name:
Title:
<PAGE> 49
ANNEX A
<TABLE>
<CAPTION>
Number of
[U.S.] Underwritten
Securities
[U.S.] Underwriters To Be Purchased
- ------------------- -------------------
<S> <C>
-------------
Total:
=============
</TABLE>
<PAGE> 50
ANNEX B
<TABLE>
<CAPTION>
Number of
International
Underwritten
International Securities
Managers To be Purchased
- ------------- ---------------
<S> <C>
-----------
Total:
===========
</TABLE>
<PAGE> 51
SCHEDULE I
Significant Subsidiaries of the Guarantor
Within the Meaning of Rule 1-02 of Regulation
S-X under the Securities Exchange Act of 1934
<PAGE> 1
EXHIBIT 1.4
UNDERWRITING AGREEMENT
SCI FINANCING [I][II]
(a Delaware Trust)
Trust Issued Preferred Securities ("TIPS")
guaranteed to the extent set forth
in certain undertakings by
SERVICE CORPORATION INTERNATIONAL
[ ], [ ]
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
SCI Financing [I][II], a statutory business trust organized
under the Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Section 3801 et seq.)
(the "Trust"), and Service Corporation International, a Texas corporation, as
guarantor and provider of certain undertakings (the "Guarantor"), propose to
issue and sell from time to time shares of Trust Issued Preferred Securities of
the Trust (the "Preferred Securities") guaranteed by the Guarantor as to the
payment of dividends, as, if and when legally declared, and as to distributions
and payments upon liquidation, redemption and otherwise (the "Preferred
Securities Guarantee" and together with the Common Securities Guarantee (as
hereinafter defined), the "Guarantees") pursuant to the Preferred Securities
Guarantee Agreement (the "Preferred Securities Guarantee Agreement") dated as
of [ ], [ ], between the Guarantor and [ ], as Trustee
(the "Guarantee Trustee"). The Preferred Securities, together with the related
Preferred Securities Guarantee, are collectively referred to herein as the
"Securities." The Preferred Securities will be entitled to the benefits of
certain backup undertakings described in the Prospectus (as defined below) with
respect to the Guarantor's agreement pursuant to the Supplemental Indenture (as
defined below) or the Guarantor Supplemental Indenture (as defined below), as
the case
<PAGE> 2
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may be, to pay all expenses relating to the administration of the Trust (the
"Undertakings"). The Preferred Securities may be convertible into shares of
Common Stock, $1.00 par value, of the Guarantor (the "Guarantor Common Stock")
or exchangeable for shares of Preferred Stock, $1.00 par value, of the
Guarantor (the "Guarantor Preferred Stock"), in each case as set forth in the
Prospectus Supplement (as defined below). The Securities, unsecured debt
securities (the "Debt Securities") to be issued and sold to the Trust by SCI
Financing Corporation ("SCI Financing"), a Delaware corporation and a wholly
owned subsidiary of the Guarantor, the subordinated guarantee of the Debt
Securities by the Guarantor (the "Debt Securities Guarantee"), the Guarantor
Preferred Stock and the Guarantor Common Stock are registered under the
registration statement referred to in Section 4(i) hereof. The Preferred
Securities and the Common Securities will be issued pursuant to the amended and
restated declaration of trust of the Trust, dated as of [ ], [ ] (the
"Declaration"), among the Guarantor, as Sponsor, [ ] and [ ] (the
"Regular Trustees") and [ ], a Delaware banking corporation, as property
trustee (the "Property Trustee" and together with the Regular Trustees, the
"Trustees") and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Preferred Securities may be issued in one or
more series, may have varying distribution, payment and liquidation
preferences, voting rights and redemption provisions as described in the
Declaration. The Debt Securities will be issued pursuant to an indenture,
dated as of [ ], [ ] (the "Base Indenture"), among the
Guarantor, SCI Financing and [ ], as trustee (the "Debt Trustee"), and a
supplement to the Base Indenture, dated as of [ ], [ ] (the
"Supplemental Indenture", and together with the Base Indenture and any other
amendments or supplements thereto, the "Indenture"), among the Guarantor, SCI
Financing and the Debt Trustee. The entire proceeds of the sale of the
Securities will be combined with the entire proceeds from the sale by the Trust
to the Guarantor of its Common Securities (the "Common Securities") guaranteed
by the Company, to the extent set forth in the Prospectus, with respect to
distributions and payments upon liquidation and redemption (the "Common
Securities Guarantee") and together with the Preferred Securities Guarantee,
the "Guarantees") pursuant to the Common Securities Guarantee Agreement (the
"Common Securities Guarantee Agreement" and together with the Preferred
Securities Guarantee Agreement, the "Guarantee Agreements"), dated as of [
], [ ] between the Guarantee Trustee, as Trustee, and will be used by
the Trust to purchase Debt Securities, as set forth in the Prospectus
Supplement.
The basic provisions set forth herein are intended to be
incorporated by reference in a terms agreement of the type referred to below
relating to, among other things, the designation and series of Preferred
Securities and the number of shares of
<PAGE> 3
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Preferred Securities (together with the Preferred Securities Guarantee, the
"Underwritten Securities") to be issued and sold by the Trust and the Guarantor
pursuant thereto and to be purchased, severally, by the underwriter or several
underwriters named therein (the "Underwriters"). The Terms Agreement, which
shall be in the form of Exhibit I hereto (the "Terms Agreement"), relating to
the Underwritten Securities and such additional shares of Securities that the
Underwriters may be granted an option to purchase by the Trust and the
Guarantor to cover over-allotments in connection with any offering of
Underwritten Securities (the "Option Securities" and together with the
Underwritten Securities, the "Offered Securities"), together with the
provisions hereof incorporated therein by reference (which provisions shall not
become effective until so incorporated by reference), is herein referred to as
this "Agreement." The Terms Agreement may reflect that a portion of the
Underwritten Securities are to be sold to the several U.S. underwriters named
therein (the "U.S. Underwriters") in connection with the offering and sale of a
portion of the Underwritten Securities in the United States and Canada (the
"U.S. Underwritten Securities") to United States and Canadian persons (as
defined in the instruments governing the coordination of the offering by the
U.S. Underwriters and the International Managers (as defined below) named
therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein
of the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Trust
and the Guarantor to sell, the Offered Securities are evidenced by the Terms
Agreement delivered at the time the Trust and the Guarantor determine to sell
the Offered Securities and, without the execution and delivery of the Terms
Agreement, the Trust and the Guarantor shall not be obligated to sell, and the
Underwriters shall not be obligated to purchase, any Securities pursuant to
this Agreement. The Terms Agreement specifies the firm or firms which will be
Underwriters, the amount of the Offered Securities to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters for the Offered
Securities, the public offering price, if any, of the Offered Securities and
any
<PAGE> 4
-4-
terms of the Offered Securities not otherwise specified in the applicable
Declaration (including, but not limited to, designations, denominations,
conversion or exchange provisions, covenants, dividend rates and payment dates,
distributions, payments, liquidation preferences and redemption provisions).
The Terms Agreement specifies any details of the terms of the offering that
should be reflected in a post-effective amendment to the applicable
Registration Statement or the Prospectus Supplement (each as hereinafter
defined).
The terms which follow, when used in this Agreement, shall
have the meanings indicated. "Registration Statement" shall mean the
registration statement or registration statements relating to the Offered
Securities, the Guarantees, the Debt Securities and the Debt Securities
Guarantee (and such other securities of the Guarantor and its subsidiaries or
other controlled or sponsored entities as may be included therein) which shall
be the registration statement on Form S-3 filed under the Securities Act of
1933, as amended (collectively with the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder, the "Securities Act"),
referred to in Section 4(i) below, including all documents incorporated therein
by reference and all exhibits thereto, as from time to time amended or
supplemented pursuant to the Securities Act, the Securities Exchange Act of
1934, as amended (collectively with the rules and regulations of the Commission
thereunder, the "Exchange Act"), or otherwise, including as supplemented by
the Prospectus Supplement, on or prior to the date of execution and delivery of
the Terms Agreement (the "Representation Date") and, in the event any such
amendment or supplement is filed prior to the Closing Date (as defined in
Section 3 hereof), including by the filing of any Prospectus Supplement or
document incorporated by reference, shall also mean such registration statement
as so amended or supplemented. "Prospectus" shall mean the prospectus
(including the related Prospectus Supplement with respect to the Offered
Securities) relating to the Securities (and such other securities of the
Guarantor as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or otherwise; provided, however, that a
Prospectus Supplement shall be deemed to have supplemented the Prospectus only
with respect to the Offered Securities to which it relates. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange
Act after the effective date of the Registration Statement, or the issue date
of any preliminary prospectus or the Prospectus, as the case may be, and on or
prior to the completion of the applicable offering and which is deemed to be
incorporated therein by reference.
<PAGE> 5
-5-
1. Agreements to Sell and Purchase. Each of the Trust
and the Guarantor agrees to issue and sell to each Underwriter as hereinafter
provided, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase at the price per share set forth in the Terms Agreement,
severally and not jointly, from the Trust and the Guarantor the respective
number of Underwritten Securities set forth opposite the name of such
Underwriter on the annex or annexes to Exhibit 1 hereto (or such number of
Underwritten Securities, as the case may be, increased as set forth in Section
9 hereof, subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives in their sole discretion may make).
If, pursuant to the Terms Agreement, the Trust and the
Guarantor shall have granted the option to the Underwriters to purchase Option
Securities, each of the Trust and the Guarantor agrees to sell to the
Underwriters designated in the Terms Agreement to purchase Option Securities
(each, an "Option Securities Underwriter" and collectively, the "Option
Securities Underwriters") the Option Securities, and the Option Securities
Underwriters shall have a one-time right to purchase, severally and not
jointly, the Option Securities on the terms set forth in the Terms Agreement.
Option Securities may be purchased as provided below solely for the purpose of
covering over-allotments made in connection with the offering of the
Underwritten Securities. If any Option Securities are to be purchased, each
Option Securities Underwriter agrees, severally and not jointly, to purchase
the number of Option Securities (subject to such adjustments to eliminate any
fractional Offered Securities as the Representatives designated in the Terms
Agreement in their sole discretion may make) that bears the same proportion to
the total number of Option Securities to be purchased as the number of
Underwritten Securities set forth in the annex or annexes to Exhibit 1 hereto
opposite the name of such Option Securities Underwriter bears to the total
number of Underwritten Securities to be purchased by all Option Securities
Underwriters.
The Option Securities Underwriters may exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the Representation Date, by written notice from the Representatives
designated in the Terms Agreement to the Trust and the Guarantor. Such notice
shall set forth the aggregate number of Option Securities as to which the
option is being exercised and the date and time when the Option Securities are
to be delivered and paid for, which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing
Date nor later than the tenth full Business Day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the
<PAGE> 6
-6-
provisions of Section 9 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
The Guarantor hereby irrevocably and unconditionally
guarantees the timely performance by the Trust of the Trust's obligations under
this Section 1. As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that proceeds of the sale of the Offered
Securities will be combined with the entire proceeds from the sale by the
Trust to the Guarantor of the Common Securities and will be used by the Trust
to purchase the Debt Securities issued by SCI Financing or the Guarantor, as
the case may be, the Guarantor hereby agrees to pay at each of the Closing Date
and the Additional Closing Date to the Underwriters the amount of compensation
per Offered Security purchased by the Underwriters set forth in the Terms
Agreement.
2. Terms of Public Offering. The Trust and the
Guarantor understand that the Underwriters intend (i) to make a public offering
of the Offered Securities as soon after the Prospectus Supplement has been
filed and the Terms Agreement has been executed and delivered, and the
Declaration, the applicable Indenture and the Preferred Securities Guarantee
have been qualified under the Trust Indenture Act of 1939, as amended (the
"1939 Act") as in the judgment of the Representatives is advisable and (ii)
initially to offer the Offered Securities upon the terms set forth in the
Prospectus Supplement, and the Underwriters will advise the Trust as to any
alteration in the terms of such offering that would require, pursuant to the
Securities Act, any amendment or supplement to the Prospectus Supplement.
3. Delivery of the Offered Securities and Payment
Therefor. Payment for the Offered Securities shall be made to the Trust or to
the Trust's order by certified or official bank check or checks payable in New
York Clearing House or other next day funds in such location as the
Representatives shall designate in the Terms Agreement at, in the case of the
Underwritten Securities, such time and date as are specified in the Terms
Agreement, or at such other time on the same or such other date, not later than
the fifth Business Day (as hereinafter defined) thereafter, as the
Representatives, the Trust and the Guarantor may agree upon in writing or, in
the case of the Option Securities, on the date and at the time specified by the
Representatives designated in the Terms Agreement to exercise such option in
the written notice by such Representatives of the election to purchase such
Option Securities by the Option Securities Underwriters. The time and date of
such payment for the Underwritten Securities are referred to herein as the
"Closing Date" and the time and date for such payment for the Option
Securities, if other than the Closing Date, are herein referred to as the
"Additional Closing Date". As used
<PAGE> 7
-7-
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City. At the Closing Date
or the Additional Closing Date, as the case may be, the Guarantor will pay the
compensation payable to the Underwriters pursuant to Section 1 in respect of
the Offered Securities being purchased by the Underwriters on such date, such
payment to be made to the Representatives or their order for the account of the
several Underwriters by [wire transfer of immediately available funds]
[certified or official bank check or checks payable in New York Clearing House
or other next day funds].
Payment for the Offered Securities to be purchased on the
Closing Date or the Additional Closing Date, as the case may be, shall be made
against delivery to the Representatives for the respective accounts of the
several Underwriters of the Offered Securities to be purchased on such date
registered in such names and in such denominations as the Representatives shall
request in writing not later than two full Business Days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Offered Securities duly paid by the Guarantor. The Guarantor hereby agrees to
pay any such transfer taxes. The certificates for the Offered Securities will
be made available for inspection and packaging by the Representatives not later
than 1:00 P.M., New York City time, on the Business Day prior to the Closing
Date or the Additional Closing Date, as the case may be.
4. Representations and Warranties of the Trust and the
Guarantor. Each of the Trust and the Guarantor jointly and severally
represents and warrants to each Underwriter as of the Representation Date and
as of the Closing Date that:
(i) A registration statement on Form S-3 (Registration
Nos. 33-[ ] and 33-[ ]-01), including a prospectus, with
respect to the Securities (and such other securities of the Guarantor
and its subsidiaries or other controlled or sponsored entities as may
be covered thereby), (i) has been prepared by the Trust and the
Guarantor in conformity with the requirements of the Securities Act,
(ii) has been filed with the Commission and (iii) has become
effective. Such Registration Statement and the related prospectus may
have been amended or supplemented from time to time prior to the
Representation Date; any such amendment to the applicable Registration
Statement was so prepared and filed and any such amendment has become
effective. A prospectus supplement (the "Prospectus Supplement"),
including a prospectus, relating to the Offered Securities has been
prepared. The Prospectus Supplement and, if not previously filed,
such prospectus will be filed pursuant to Rule 424 under the
Securities Act. If the offering of the Offered Securities is to be
made by U.S.
<PAGE> 8
-8-
Underwriters and International Managers, two such prospectus
supplements, one relating to the Offered Securities to be sold by the
U.S. Underwriters and one relating to the Underwritten Securities to
be sold by the International Managers, and each identical to the other
except for the cover page, have been so prepared and filed. In such
event, the term "Prospectus Supplement" refers to such international
and U.S. prospectus supplements. Copies of such Registration
Statement and the Prospectus relating thereto, any such amendment or
supplement, the Prospectus Supplement and all documents incorporated
by reference therein which were filed with the Commission on or prior
to the Representation Date (including one fully executed copy of the
Registration Statement and of each amendment thereto for counsel for
the Underwriters) have been delivered to each of the Representatives.
The Trust and the Guarantor have included in the Registration
Statement, as amended at the date the Registration Statement was
declared effective (the "Effective Date"), all information (other than
information relating specifically to the terms of any particular
series of Securities and the offering thereof) required by the
Securities Act to be included in the Prospectus with respect to the
Offered Securities (and the Guarantor Common Stock) and the offering
and sale thereof. Except to the extent that the Underwriters shall
agree in writing to a modification, the Registration Statement and the
Prospectus shall be in all substantive respects in the form furnished
to the Underwriters prior to the Representation Date or, to the extent
not completed at the Representation Date, shall contain only such
specific additional information and other changes as the Trust and the
Guarantor have advised the Underwriters, a reasonable time prior to
the Representation Date, is to be included or made therein and as to
which the Underwriters have not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act; and no such document
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they
were made) not misleading; provided, however, that neither the Trust
nor the Guarantor makes any representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus in
<PAGE> 9
-9-
reliance upon and in conformity with written information relating to
any Underwriter furnished to the Guarantor by or on behalf of any
Underwriter expressly for use therein.
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) Ernst & Young and Coopers & Lybrand, who are
reporting upon the audited financial statements and the supporting
schedules of the Guarantor included or incorporated by reference in
the Registration Statement and the Prospectus, in the case of Ernst &
Young, were, at the time of their report, and, in the case of Coopers
& Lybrand, are, independent public accountants within the meaning of
the Securities Act. The financial statements, and the related notes
thereto, included or incorporated by reference in the Registration
Statement and the Prospectus, present fairly the consolidated
financial position of the Guarantor and its consolidated subsidiaries
as of the dates indicated and the results of their operations and the
changes in their consolidated cash flows for the periods specified;
and said financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis, except as set forth therein, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated
therein. If pro forma financial information is included in or
incorporated by reference into the Registration Statement and the
Prospectus, such pro forma financial information (including, without
limitation, the notes thereto) as of the date presented (A) presented
fairly in all material respects the information shown therein, (B) was
prepared in accordance with applicable requirements of Regulation S-X
promulgated under the Exchange Act, (C) was prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and (D) was properly computed on the bases
described therein. In the opinion of the Trust and the Guarantor, the
assumptions
<PAGE> 10
-10-
used in the preparation of any such pro forma financial information
(including, without limitation, the notes thereto) were fair and
reasonable and the adjustments used therein were appropriate to give
effect to the transactions or circumstances referred to therein. No
pro forma financial statements or other pro forma financial
information is required to be included or incorporated by reference in
the Registration Statement and the Prospectus other than those
included or incorporated by reference therein.
(vi) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act
with power and authority to own its properties and conduct its
business as described in the Registration Statement and the Prospectus
and to enter into and perform its obligations under this Agreement,
the Terms Agreement, the Preferred Securities, the Common Securities
and the Declaration (collectively, the "Trust Documents"), and is not
required to be authorized to do business in any other jurisdiction;
the Trust is not a party to or otherwise bound by any agreement other
than those described in the Prospectus; the Trust is not and will not
be classified as an association taxable as a corporation for United
States federal income tax purposes; the Trust is and will be treated
as a consolidated subsidiary of the Guarantor pursuant to generally
accepted accounting principles; and the Trust does not own, directly
or indirectly, any shares of stock or any other equity or short- or
long-term debt securities (other than the Debt Securities) or have any
other equity interest in any firm, partnership, joint venture or other
entity.
(vii) The Guarantor has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas; the Guarantor has the corporate power and authority to own
its property and to conduct its business as described in the
Registration Statement and the Prospectus, to enter into this
Agreement, the Terms Agreement, the Declaration, the Indenture and the
Debt Securities Guarantee and each of the Guarantees (collectively,
the "Guarantor Documents") and to purchase, own, and hold the Common
Securities issued by the Trust; and the Guarantor is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing could not, singly or
in the aggregate, reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Guarantor and its
<PAGE> 11
-11-
subsidiaries, taken as a whole (each, a "Guarantor Material Adverse
Effect").
(viii) SCI Financing has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Registration Statement
and the Prospectus and to enter into the Indenture; SCI Financing
conducts no business other than serving as a financing subsidiary of
the Guarantor; and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing could not, singly or in the
aggregate, reasonably be expected to have a Guarantor Material Adverse
Effect.
(ix) The Common Securities have been duly authorized by
the Declaration and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration
Statement and Prospectus, will be validly issued and (subject to the
terms of the Declaration) fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and will conform to
all statements relating thereto contained in the Prospectus; and the
issuance of the Common Securities is not subject to preemptive or
other similar rights. All of the issued and outstanding Common
Securities are owned by the Guarantor, free and clear of all liens,
encumbrances, security interests, claims and restrictions on
transferability and voting (other than any restrictions on
transferability as may arise under the Trust Agreements (as defined
below) and state and federal securities laws).
(x) Each direct and indirect foreign and domestic
subsidiary of the Guarantor listed on Schedule I hereto, which
constitute all of the significant subsidiaries of the Guarantor within
the meaning of Rule 1-02 of Regulation S-X under the Exchange Act
(each, a "Subsidiary" and collectively, the "Subsidiaries"), has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Registration Statement and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so incorporated, be in
existence, have such power and authority, be so qualified or be in
good standing could not, singly or in
<PAGE> 12
-12-
the aggregate, reasonably be expected to have a Guarantor Material
Adverse Effect. All of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable, and, except as set forth in the
Registration Statement and the Prospectus, are owned by the Guarantor,
directly or indirectly, free and clear of all liens, encumbrances,
security interests, claims and restrictions on transferability and
voting (other than any restrictions on transferability as may arise
under state and federal securities laws). Except as set forth in the
Registration Statement and the Prospectus, there are no outstanding
(i) securities or obligations convertible into or exchangeable or
exercisable for any shares of capital stock of, or other interest in,
the Trust, the Guarantor or any Subsidiary, (ii) rights, warrants or
options to acquire or purchase any shares of capital stock of, or
other interest in, the Trust, the Guarantor or any Subsidiary or any
such convertible, exchangeable or exercisable securities or
obligations, or (iii) obligations or understandings to issue or sell
any shares of capital stock of, or other interest in, the Trust, the
Guarantor or any Subsidiary, any such convertible, exchangeable or
exercisable securities or obligations, or any such warrants, rights or
options, except as have been disclosed to the Underwriters in writing
prior to the date hereof and except for (A) issuances of shares of
Guarantor Common Stock and options to acquire Guarantor Common Stock
after the date of the most recent information set forth in the
Registration Statement and the Prospectus pursuant to the Guarantor's
employee benefit plans as in effect on the date hereof and (B)
issuances after the date of the most recent information set forth in
the Registration Statement and the Prospectus of convertible
debentures of the Guarantor and Guarantor Common Stock pursuant to the
Guarantor's Registration Statement on Form S-4 (Registration No.
33-54996) (the "S-4").
(xi) There are no partnerships in which the Guarantor or
any of the Subsidiaries has any direct or indirect controlling
interest that would constitute a significant subsidiary within the
meaning of Rule 1-02 of Regulation S-X under the Exchange Act. Except
for the capital stock of the Trust, SCI Finance LLC, a Texas
corporation ("LLC") and the Subsidiaries and except as set forth in the
Registration Statement and the Prospectus, the Guarantor does not own,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity.
<PAGE> 13
-13-
(xii) This Agreement and the Terms Agreement have been duly
and validly authorized, executed and delivered by each of the Trust
and the Guarantor.
(xiii) Since the date of the latest consolidated financial
statements of the Guarantor and the Subsidiaries included or
incorporated by reference in the Registration Statement and the
Prospectus, except as set forth in or expressly contemplated by the
Registration Statement and the Prospectus, there has not been (A) any
change in the Guarantor's or the Trust's issued capital stock or
options, except with respect to the Guarantor (I) pursuant to the
exercise of options or the conversion or exchange of outstanding
convertible or exchangeable securities of the Guarantor, LLC or the
Trust, (II) issuances of shares of Guarantor Common Stock and options
to acquire Guarantor Common Stock issued after the date of such
financial statements pursuant to the Guarantor's employee benefit
plans as in effect or the date hereof and (III) issuances after the
date of such financial statements of convertible debentures of the
Guarantor and Guarantor Common Stock pursuant to the S-4, (B) any
material adverse change in the management, condition (financial or
otherwise), earnings, business affairs or business prospects of the
Trust (each, a "Trust Material Adverse Change," and any event or state
of facts which could, singly or in the aggregate, reasonably be
expected to result in a Trust Material Adverse Change is herein
referred to as a "Prospective Trust Material Adverse Change"), whether
or not arising from transactions or events occurring in the ordinary
course of business, or (C) any material adverse change in the
management, condition (financial or otherwise), earnings, business
affairs or business prospects of the Guarantor and the Subsidiaries,
taken as a whole (each, a "Guarantor Material Adverse Change," and any
event or state of facts which could, singly or in the aggregate,
reasonably be expected to result in a Guarantor Material Adverse
Change is herein referred to as a "Prospective Guarantor Material
Adverse Change"), whether or not arising from transactions or events
occurring in the ordinary course of business.
(xiv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Trust, the Guarantor or any of the Subsidiaries (other than those in
the ordinary course of business) which are material to the Trust, or
the Guarantor and the Subsidiaries considered as a whole and (B) there
has been no dividend or distribution of any kind declared, paid or
made by the Trust or the Guarantor on any class of its capital
<PAGE> 14
-14-
stock other than regularly scheduled quarterly dividends by the
Guarantor in accordance with past practice of the Guarantor.
(xv) As of the date of the Prospectus Supplement, the
Guarantor has the authorized, issued and outstanding capitalization
set forth in the Prospectus under "Capitalization." The authorized
capital stock of each of the Trust and the Guarantor conforms as to
legal matters to the description thereof contained in the Registration
Statement and the Prospectus, and all of the outstanding shares of
capital stock of the Guarantor have been duly authorized, validly
issued, and are fully paid and non-assessable and are not subject to
any preemptive or similar rights. The rights agreement dated as of
July 18, 1988 between the Guarantor and Texas Commerce Bank National
Association as rights agent, as amended to date (the "Rights
Agreement") has been duly authorized, executed and delivered by the
Guarantor; the rights (the "Rights") to purchase the Guarantor's
Series C Junior Participating Preferred Stock (the "Series C Preferred
Stock") outstanding thereunder and, if the Offered Securities are
convertible into the Guarantor Preferred Stock, to be issued upon the
conversion of the Offered Securities have been duly authorized; the
Series C Preferred Stock to be issued upon exercise of the Rights has
been duly authorized; and the description of the Rights Agreement and
the Rights set forth in the Registration Statement and the Prospectus
is accurate in all material respects.
(xvi) The Declaration establishing the Offered Securities
set forth in the Terms Agreement has been duly authorized by the
Guarantor as Sponsor of the Trust pursuant to the Certificate of Trust
filed with the State of Delaware on [ ], [ ] (the
"Certificate of Trust", and together with the Declaration, the "Trust
Agreements") and, on the Closing Date, will have been duly executed
and delivered by the Guarantor and the Trustees and, assuming due
authorization, execution and delivery of the Declaration by the
Property Trustee (as defined below), the Declaration will, on the
Closing Date, be a valid and binding obligation of the Guarantor and
the Trustees, enforceable against the Guarantor and the Trustees in
accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) (such exceptions to
enforceability being collectively referred to herein as the "Bankruptcy
Exceptions") and will conform to all statements relating thereto in
the Prospectus; and on the Closing Date,
<PAGE> 15
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the Declaration will have been duly qualified under the 1939 Act.
(xvii) All necessary action (corporate or otherwise)
required to be taken for the authorization, issuance and sale of the
Offered Securities pursuant to this Agreement and the Terms Agreement
has been validly and sufficiently taken by the Trust and the
Guarantor, including, without limitation, by the Guarantor as Sponsor.
If the Offered Securities are convertible into Guarantor Common
Stock, the Offered Securities are convertible into Guarantor Common
Stock in accordance with their terms and the terms of the Declaration
and the Indenture.
(xviii) If the Offered Securities are convertible into
Guarantor Common Stock, the Guarantor Common Stock issuable upon
conversion of the Offered Securities pursuant to the terms of the
Declaration and the Indenture has been duly authorized by the
Guarantor and validly reserved for issuance by the Guarantor upon such
conversion by all necessary corporate action and such Guarantor Common
Stock, when duly issued upon such conversion, will be validly issued
and fully paid and nonassessable; no holder thereof will be subject to
personal liability solely by reason of being such a holder; and the
issuance of such Guarantor Common Stock upon such conversion will not
be subject to preemptive rights.
(xix) If the Offered Securities are exchangeable for
Guarantor Preferred Stock, the Guarantor Preferred Stock issuable upon
exchange of the Offered Securities pursuant to the terms of the
Declaration and the Indenture has been duly authorized by the
Guarantor and validly reserved for issuance by the Guarantor upon such
exchange by all necessary corporate action and such Guarantor
Preferred Stock, when duly issued upon such exchange, will be validly
issued and fully paid and nonassessable; no holder thereof will be
subject to personal liability solely by reason of being such a holder;
and the issuance of such Guarantor Preferred Stock upon such exchange
will not be subject to preemptive rights.
(xx) Each of the Guarantee Agreements between the
Guarantor and the Guarantee Trustee has been duly and validly
authorized, executed and delivered by the Guarantor, and constitutes a
legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with their respective terms,
except to the extent that the enforcement thereof is subject to the
Bankruptcy Exceptions; each of the Guarantee Agreements conforms in
all material respects to the descriptions thereof in the Registration
Statement and the Prospectus; and the Preferred Securities
<PAGE> 16
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Guarantee Agreement, on the Closing Date, will have been duly
qualified under the 1939 Act.
(xxi) The Preferred Securities have been duly authorized by
the Declaration and, when issued and delivered pursuant to this
Agreement against payment of the consideration set forth in the Terms
Agreement, will be validly issued and (subject to the terms of the
Declaration) fully paid and non-assessable undivided beneficial
interests in the Trust, will be entitled to the benefits of the
Declaration and will conform to all statements relating thereto
contained in the Prospectus; the issuance of the Preferred Securities
is not subject to preemptive or other similar rights; and holders of
Preferred Securities will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit.
(xxii) The Indenture has been duly authorized by SCI
Financing and the Guarantor and, when validly executed and delivered
by SCI Financing and the Guarantor, will constitute a valid and
binding agreement of each of SCI Financing and the Guarantor,
enforceable against each of SCI Financing and the Guarantor in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture
complies in all material respects with the requirements of the 1939
Act; the SCI Financing Indenture will conform to all statements
relating thereto contained in the Prospectus; on the Closing Date, the
Indenture will have been duly qualified under the 1939 Act; the Debt
Securities Guarantee has been duly authorized by the Guarantor and,
when validly executed and delivered by the Guarantor, will constitute
a valid and binding agreement of the Guarantor, enforceable against
the Guarantor in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions; and
the Debt Securities Guarantee will conform to all statements relating
thereto contained in the Prospectus.
(xxiii) The Debt Securities have been duly authorized by SCI
Financing and, on the Closing Date, will have been duly executed by
SCI Financing and, when authenticated in the manner provided for in
the Indenture and delivered against payment therefor as described in
the Prospectus, will constitute valid and binding obligations of SCI
Financing, enforceable against SCI Financing in accordance with their
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions; and will be in the form contemplated by,
and entitled to the benefits of, the Indenture and will conform to all
statements relating thereto in the Prospectus.
<PAGE> 17
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(xxiv) The Guarantor's obligations under the Preferred
Securities Guarantee and Common Securities Guarantee are subordinate
and junior in right of payment to all liabilities of the Guarantor
(except as set forth in the Preferred Securities Guarantee Agreement)
and are pari passu with the most senior preferred stock issued or
guaranteed by the Guarantor. The Financing Debt Securities and the
Financing Debt Securities Guarantee are subordinate and junior in
right of payment to all "Senior Indebtedness" as defined in the
Financing Supplemental Indenture.
(xxv) The Regular Trustees are employees of the Guarantor
and have been duly authorized by the Guarantor to execute and deliver
the Declaration; the Declaration has been duly executed and delivered
by the Regular Trustees and is a valid and binding obligation of each
Regular Trustee, enforceable against such Regular Trustee in
accordance with its terms.
(xxvi) The execution and delivery by the Trust, SCI
Financing or the Guarantor, as the case may be, of, and the full and
timely performance by the Trust, SCI Financing or the Guarantor, as
the case may be, of their respective obligations under, this
Agreement, the Terms Agreement, the Trust Agreements, the Preferred
Securities, the Common Securities, the Debt Securities, the Guarantee
Agreements, the Indenture and the Debt Securities Guarantee, the
consummation of each of the transactions contemplated herein and
therein, the issuance of the Guarantor Common Stock upon conversion of
the Offered Securities (if the Offered Securities are convertible into
the Guarantor Common Stock), the issuance of the Guarantor Preferred
Stock upon exchange for the Offered Securities (if the Offered
Securities are exchangeable for Guarantor Preferred Stock) and the
full and timely performance by the Guarantor of the Undertakings, (A)
have been duly authorized by all necessary action (corporate or
otherwise) on the part of each of the Trust, SCI Financing or the
Guarantor, as the case may be, (B) do not and will not result in any
violation of the Trust Agreements or the articles of incorporation or
by-laws of the Guarantor or SCI Financing, as the case may be, and (C)
do not and will not conflict with, or result in a breach or violation
of, any of the terms or provisions of, or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the maturity
or require the prepayment of any indebtedness under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material property or assets of, the Trust, SCI Financing, the
Guarantor or any Subsidiary under (I) any indenture, mortgage, loan
agreement, note, lease, license, partnership agreement, franchise
agreement or other agreement or
<PAGE> 18
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instrument to which the Trust, SCI Financing, the Guarantor or any
Subsidiary is a party or by which any of them may be bound or affected
or to which any of their respective properties or assets may be
subject (each, a "Contract" and collectively, the "Contracts"), other
than any such conflict, breach, default, acceleration, prepayment,
lien, charge or encumbrance that could not, individually or in the
aggregate, reasonably be expected to result in any material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Trust (each, a "Trust Material
Adverse Effect") or any Guarantor Material Adverse Effect or, with
respect to the Trust and SCI Financing, a material adverse effect on
the rights or remedies of any of the purchasers of the Offered
Securities, (II) any existing applicable law, rule or regulation
(other than the securities or Blue Sky laws of the various states and
other jurisdictions of the United States of America) or (III) any
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Trust, SCI Financing, the Guarantor or any Subsidiary or any
of their respective properties or assets.
(xxvii) No authorization, approval, consent or license of, or
filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act or as may be
required under the securities or Blue Sky laws of the various states
and other jurisdictions of the United States of America), is or will
be required for the valid authorization, issuance, sale and delivery
of the Offered Securities or the Common Securities by the Trust, the
Debt Securities or the Debt Securities Guarantee, the Guarantees by
the Guarantor, the Indenture, the issuance of the Guarantor Common
Stock (if the Offered Securities are convertible into Guarantor Common
Stock), the issuance of the Guarantor Preferred Stock (if the Offered
Securities are exchangeable for Guarantor Preferred Stock), the
execution and delivery by the Trust, SCI Financing and the Guarantor
of, or the full and timely performance by the Trust, SCI Financing and
the Guarantor of each of their respective obligations under, this
Agreement, the Terms Agreement, the Trust Agreements, the Preferred
Securities, the Common Securities, the Debt Securities and the Debt
Securities Guarantee, the Guarantee Agreements and the Indenture.
(xxviii) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
<PAGE> 19
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(xxix) No holder of any securities of the Trust or of the
Guarantor or any Subsidiary has any rights, not effectively satisfied
or waived, to require the Trust or the Guarantor to register the sale
of any securities under the Securities Act in connection with the
filing of the Registration Statement or the consummation of the
transactions contemplated therein or pursuant to this Agreement or the
Terms Agreement.
(xxx) Each of the Trust, SCI Financing, the Guarantor and
each of the Subsidiaries is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health or the environment or imposing liability or
standards of conduct concerning any Hazardous Material (collectively,
"Environmental Laws"), except where such noncompliance with
Environmental Laws could not, singly or in the aggregate, reasonably
be expected to have a Trust Material Adverse Effect or a Guarantor
Material Adverse Effect. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
(xxxi) Each of the Trust, SCI Financing, the Guarantor and
each of the Subsidiaries owns, possesses or has obtained all licenses,
permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals, domestic or foreign,
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date
hereof, except in each case where the failure to obtain licenses,
permits, certificates, consents, orders, approvals and other
authorizations, or to make all declarations and filings, could not,
singly or in the aggregate, reasonably be expected to have a Trust
Material Adverse Effect or a Guarantor Material Adverse Effect or,
with respect to the Trust and SCI Financing, a material adverse effect
on the rights or remedies of the purchasers of the Offered Securities,
and none of the Trust, SCI Financing, the Guarantor or any Subsidiary
has received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as
<PAGE> 20
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described in the Registration Statement and the Prospectus and except,
in each case, where such revocation or modification could not, singly
or in the aggregate, reasonably be expected to have a Trust Material
Adverse Effect or a Guarantor Material Adverse Effect or, with respect
to the Trust and SCI Financing, a material adverse effect on the
rights or remedies of the purchasers of the Offered Securities; and
the Trust, SCI Financing, the Guarantor and each Subsidiary are in
compliance with all laws and regulations relating to the conduct of
their respective businesses as conducted as set forth in the
Registration Statement and the Prospectus, except where noncompliance
with such laws or regulations could not, singly or in the aggregate,
reasonably be expected to have a Trust Material Adverse Effect or a
Guarantor Material Adverse Effect or, with respect to the Trust and
SCI Financing, a material adverse effect on the rights or remedies of
the purchasers of the Offered Securities.
(xxxii) To the best knowledge of the Guarantor, each of the
Guarantor and the Subsidiaries owns or possesses the patents, patent
licenses, trademarks, service marks, trade names, copyrights and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Guarantor Material Adverse
Effect, and, except as set forth in the Registration Statement and the
Prospectus, neither the Guarantor nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property, except for notices the
content of which if accurate could not, singly or in the aggregate,
reasonably be expected to have a Guarantor Material Adverse Effect.
(xxxiii) Except as set forth in the Registration Statement and
the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in
which the Guarantor or any of the Subsidiaries conduct their
respective businesses in connection with the ownership by the
Guarantor of capital stock of any Subsidiary, any foreign exchange
controls or the repatriation of any amount from or to the Guarantor
and the Subsidiaries, except to the extent such authorizations,
approvals or consents have been obtained and are in full force and
effect and except to the extent that the failure to obtain any such
authorization, approval or consent could not, singly or in the
aggregate,
<PAGE> 21
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reasonably be expected to have a Guarantor Material Adverse Effect.
(xxxiv) Neither the Trust nor the Guarantor has taken or will
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Offered Securities or, if the Offered
Securities are convertible into the Guarantor Common Stock, the
Guarantor Common Stock or, if the Offered Securities are exchangeable
for Guarantor Preferred Stock, the Guarantor Preferred Stock, and
neither the Trust nor the Guarantor has distributed and neither the
Trust nor the Guarantor will distribute any prospectus or other
offering material in connection with the offering and sale of the
Offered Securities other than any preliminary prospectus filed with
the Commission or the Prospectus or other materials permitted under
the Securities Act.
(xxxv) Except as set forth in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by
any government, governmental or regulatory instrumentality, agency or
body or court, domestic or foreign, or any arbitrator, now pending or,
to the best knowledge of the Trust or the Guarantor, threatened
against or affecting the Trust, SCI Financing, the Guarantor or any
Subsidiary or any affiliate of the Trust or the Guarantor that, singly
or in the aggregate with all such other actions, suits and proceedings
(i) could reasonably be expected to have a Trust Material Adverse
Effect or a Guarantor Material Adverse Effect or, with respect to the
Trust and SCI Financing, a material adverse effect on the rights or
remedies of the purchasers of the Offered Securities or could
reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated in this Agreement, any
Trust Document or Trust Agreement or any Guarantor Document or (ii) is
required to be described in the Registration Statement or the
Prospectus that is not so described.
(xxxvi) None of the Trust, SCI Financing, the Guarantor or
any of the Subsidiaries (i) is in violation of, with respect to the
Trust, any Trust Agreement or, with respect to the Guarantor and the
Subsidiaries, its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement, any Trust Document, the Preferred Securities, the
Common Securities, the Debt Securities, the Debt Securities Guarantee,
any Guarantee Agreement, the Indenture or any
<PAGE> 22
-22-
Contract or of any permit, order, decree, judgment, statute, rule or
regulation, foreign or domestic, applicable to the Trust, SCI
Financing, the Guarantor or any Subsidiary, except for such
violations, breaches or defaults that could not, singly or in the
aggregate, reasonably be expected to have a Trust Material Adverse
Effect or a Guarantor Material Adverse Effect.
(xxxvii) Neither the Trust nor the Guarantor is an "investment
company" or an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended or
a holding company or a subsidiary of a holding company under the
Public Utility Holding Company Act of 1935.
(xxxviii) Each of the Trust and the Guarantor has complied with
all provisions of Section 517.075, Florida Statutes (Chapter 92-198,
Laws of Florida).
(xxxix) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Guarantor
believes to be reliable and accurate or represent the Guarantor's good
faith estimates that are made on the basis of data derived from such
sources.
(xl) Neither the Trust nor the Guarantor knows of any
outstanding claims for services, either in the nature of a finder's
fee or origination fee, with respect to the transactions contemplated
hereby and by the Terms Agreement, other than the underwriting fees
and compensation to be paid to the Underwriters in accordance with
this Agreement.
(xli) No labor disputes exist with employees of the
Guarantor or of the Subsidiaries that could, singly or in the
aggregate, reasonably be expected to have a Guarantor Material Adverse
Effect.
(xlii) The Property Trustee has been appointed as property
trustee under the Declaration and as indenture trustee for the
purposes of the 1939 Act to undertake such actions and perform such
functions as set forth in a Prospectus Supplement.
Any certificate signed by any Trustee of the Trust or officer
of the Guarantor and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Trust and the
Guarantor to each Underwriter as to the matters covered thereby.
<PAGE> 23
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5. Agreements of the Trust and the Guarantor. Each of
the Trust and the Guarantor jointly and severally covenants and agrees with
each Underwriter as follows (with respect to clauses (l) and (n) below of this
Section 5, solely the Guarantor so agrees):
(a) To use their respective reasonable best efforts to
cause any amendment to the Registration Statement to become effective
at the earliest possible time.
(b) To furnish to each of the Representatives, without
charge, as many signed copies of the Registration Statement (as
originally filed) and each amendment thereto and each document
incorporated or deemed incorporated therein, in each case including
exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of their
intention to file or prepare any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether
pursuant to the Securities Act, the Exchange Act or otherwise, to
furnish the Underwriters and their counsel with copies of any such
amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and not to file any such
amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall object. Subject to
the foregoing sentence, the Trust and the Guarantor will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
(d) To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any comments from the Commission or of any request
by the
<PAGE> 24
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Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Prospectus or Prospectus
Supplement or the initiation or threatening of any proceeding for that
purpose and (v) of the receipt by the Trust or the Guarantor of any
notification with respect to any suspension of the qualification of
the Offered Securities for offer and sale in any jurisdiction or the
initiation of any proceeding for such purpose; and to use their
respective reasonable best efforts to prevent the issuance of any such
stop order or notification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(e) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Guarantor, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Trust or
the Guarantor) to which Offered Securities may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(f) To endeavor to qualify the Offered Securities and the
Debt Securities, as the case may be (and, if the Offered Securities
are convertible into Guarantor Common Stock as exchangeable for
Guarantor Preferred Stock, the Guarantor Common Stock and/or the
Guarantor Preferred Stock, as the case may be) for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to
<PAGE> 25
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pay all fees and expenses (including fees and disbursements of counsel
to the Underwriters) incurred in connection with such qualification;
provided, however, that neither the Trust nor the Guarantor shall be
required to file a general consent to service of process in any
jurisdiction or subject itself to general taxation in any
jurisdiction.
(g) To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months, after the date of each Terms Agreement an earnings
statement, covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement, (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Guarantor's most recent
Annual Report on Form 10-K filed with the Commission prior to the date
of such Terms Agreement, which will satisfy the provisions of Rule 158
under the Securities Act and Section 11(a) of the Securities Act.
(h) For a period of 120 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
subsidiary to, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, any shares of securities of the
Trust or of the Guarantor of the same class as the Offered Securities
(including, without limitation, any depositary shares representing the
same) or, if the Offered Securities are convertible into Guarantor
Common Stock, the Guarantor Common Stock or, if the Offered Securities
are exchangeable for Guarantor Preferred Stock, the Guarantor
Preferred Stock or any securities convertible into or exchangeable or
exercisable for shares of securities of the Trust or of the Guarantor
of the same class as the Offered Securities or, if the Offered
Securities are convertible into the Guarantor Common Stock, the
Guarantor Common Stock or, if the Offered Securities are exchangeable
for Guarantor Preferred Stock, the Guarantor Preferred Stock or of any
debt securities of or guaranteed by the Guarantor or SCI Financing
similar to the Debt Securities other than (A) the Offered Securities
to be sold pursuant to the Terms Agreement, (B) shares of capital
stock of the Guarantor issued upon conversion, exchange or exercise of
convertible, exchangeable or exercisable securities (including,
without limitation, the Offered Securities) of the Trust, of the
Guarantor, of LLC or of any Subsidiary outstanding on the
Representation Date and (C) shares of Guarantor Common Stock and
options thereunder issued pursuant to employee benefit plans of the
Guarantor in place on the Representation Date as in effect on the
<PAGE> 26
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Representation Date, and other than pursuant to such other exceptions,
if any, as are agreed to by the Representatives and set forth in the
Terms Agreement.
(i) Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Trust's and
the Guarantor's obligations hereunder, including, without limiting the
generality of the foregoing, all costs and expenses (i) incurred in
connection with the preparation, issuance, execution and delivery of
the Offered Securities and the Debt Securities (and, if the Offered
Securities are convertible into Guarantor Common Stock, the Guarantor
Common Stock issuable upon conversion thereof and, if the Offered
Securities are exchangeable for Guarantor Preferred Stock, the
Guarantor Preferred Stock issuable upon exchange therefor), (ii)
incurred in connection with the preparation, printing and filing under
the Securities Act and the Exchange Act of the Registration Statement,
the Prospectus, any preliminary prospectus and each Prospectus
Supplement (including in each case all exhibits, amendments and
supplements thereto and all documents incorporated therein by
reference), (iii) incurred in connection with the registration or
qualification of the Offered Securities and the Debt Securities (and,
if the Offered Securities are convertible into Guarantor Common Stock,
the Guarantor Common Stock issuable upon conversion thereof and, if
the Offered Securities are exchangeable for Guarantor Preferred Stock,
the Guarantor Preferred Stock issuable upon exchange therefor) under
the laws of such jurisdictions as the Representatives may request
(including filing fees and the fees of counsel for the Underwriters
and their disbursements), (iv) in connection with the listing of the
Offered Securities and the Debt Securities (and, if the Offered
Securities are convertible into Guarantor Common Stock, the Guarantor
Common Stock issuable upon conversion thereof and, if the Offered
Securities are exchangeable for Guarantor Preferred Stock, the
Guarantor Preferred Stock issuable upon exchange therefor), on the New
York Stock Exchange, (v) relating to any filing with the National
Association of Securities Dealers Inc. (the NASD") in connection with
the offering of the Offered Securities, (vi) incurred in connection
with the engagement of any qualified independent underwriter as may be
required by NASD rules and regulations, (vii) incurred in connection
with the rating of the Offered Securities, (viii) incurred in
connection with advertising relating to the Offered Securities
approved by the Guarantor (which approval shall not be unreasonably
withheld or delayed), (ix) relating to the fees and expenses of the
transfer agent and registrar for the Offered Securities (and,
<PAGE> 27
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if the Offered Securities are convertible into Guarantor Common Stock,
the Guarantor Common Stock issuable upon conversion thereof and, if
the Offered Securities are exchangeable for Guarantor Preferred Stock,
the Guarantor Preferred Stock issuable upon exchange therefor), (x)
relating to the fees and expenses of the Property Trustee, the
Guarantee Trustee and the Debt Trustee, including the fees and
disbursements of counsel for the Property Trustee, the Guarantee
Trustee and the Debt Trustee in connection with the Declaration, the
Certificate of Trust, the Guarantee Agreements and the Indentures,
(xi) relating to any fees payable in connection with the rating of the
Preferred Securities and the Debt Securities, (xii) relating to the
cost of qualifying the Preferred Securities with The Depository Trust
Company and (xiii) relating to or in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Terms Agreement, the Trust Agreements, the Preferred
Securities, the Common Securities, the Debt Securities, the Guarantee
Agreements, the Indentures, the agreement among underwriters, each
other document or instrument relating to the underwriting arrangements
and the coordination of the offering of the Offered Securities by the
U.S. Underwriters and the International Managers, if applicable, any
dealer agreements, the Preliminary and Supplemental Blue Sky Memoranda
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement, the Prospectus and each Prospectus Supplement,
including mailing and shipping, as herein provided.
(j) To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Trust's or the Guarantor's capital stock, and copies of any reports
and financial statements furnished to or filed with the Commission.
(k) To use, and to cause the Trust to use, the proceeds
of the sale of the Offered Securities, together with the proceeds from
the sale of the Common Securities to purchase the Debt Securities; and
to use the net proceeds of the offering of the Offered Securities as
set forth in the Prospectus under the caption "Use of Proceeds."
(l) During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, to file all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time period required by
the Exchange Act and the Exchange Act Regulations.
<PAGE> 28
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(m) To use their respective best efforts to effect the
listing of the Offered Securities (including, if the Offered
Securities are convertible into Guarantor Common Stock, the shares of
Guarantor Common Stock issuable upon the conversion of the Offered
Securities and, if the Offered Securities are exchangeable for
Guarantor Preferred Stock, the shares of Guarantor Preferred Stock
issuable upon the exchange of the Offered Securities) on the New York
Stock Exchange on the Representation Date; and if the Debt Securities
are issued in exchange for the Preferred Securities, to use their
reasonable best efforts to effect the listing of the Debt Securities
on the exchange on which the Preferred Securities are then listed.
(n) If the Offered Securities are convertible into
Guarantor Common Stock, to reserve and keep available at all times,
free of preemptive rights, sufficient shares of Guarantor Common Stock
to satisfy any obligations to issue shares of Guarantor Common Stock
upon conversion of all of the Offered Securities that are convertible
into Guarantor Common Stock.
(o) If the Offered Securities are exchangeable for
Guarantor Preferred Stock, to reserve and keep available at all times,
free of preemptive rights, sufficient shares of Guarantor Preferred
Stock to satisfy any obligations to issue shares of Guarantor
Preferred Stock upon exchange of all of the Offered Securities that
are exchangeable for Guarantor Preferred Stock.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
(a) If any amendment to the Registration Statement filed
prior to the Representation Date has not been declared effective as of
the Representation Date, such amendment shall have become effective
not later than 5:30 P.M. on the Representation Date; and at the
Closing Date no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
or proceedings therefor initiated or threatened by the Commission.
The price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided evidence satisfactory to the Underwriters of such timely
filing.
<PAGE> 29
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(b) The representations and warranties of each of the
Trust and the Guarantor contained herein and in the Terms Agreement
shall be true and correct on and as of the Closing Date as if made on
and as of the Closing Date and each of the Trust and the Guarantor
shall have complied with all agreements and satisfied all conditions
on their respective part to be performed or satisfied hereunder at or
prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to
the Closing Date, there shall not have occurred any Trust Material
Adverse Change or any Guarantor Material Adverse Change or any
development involving a Prospective Trust Material Adverse Change or
any Prospective Guarantor Material Adverse Change other than as set
forth in the Registration Statement and the Prospectus, the effect of
which in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Underwritten Securities on the terms and in the manner contemplated in
the Registration Statement and the Prospectus. As used in this
Section 6(c), "Prospectus" shall mean the Prospectus first used to
confirm sales of the Offered Securities exclusive of any amendment or
supplement thereto thereafter.
(d) The Representatives shall have received on and as of
the Closing Date a certificate of each of the Trust and of the
Guarantor signed by the Chief Executive Officer, the Chief Operating
Officer or the Chief Financial Officer of the Guarantor and a
certificate of a Trustee of the Trust to the effect set forth in
subsections (a) and (b) of this Section 6 and to the further effect
that since the most recent date as of which information is given in
the Prospectus there shall not have occurred any Guarantor Material
Adverse Change or any Trust Material Adverse Change, as the case may
be, or any development involving a Prospective Guarantor Material
Adverse Change or any Prospective Trust Material Adverse Change. As
used in this Section 6(d), Prospectus" shall mean the Prospectus first
used to confirm sales of the Offered Securities exclusive of any
amendment or supplement thereto thereafter.
(e) The Representatives shall have received on the
Closing Date a signed opinion of [ ],
counsel for the Guarantor and special Delaware counsel for the Trust,
addressed to the Underwriters and dated the Closing Date and
satisfactory to counsel for the Underwriters, to the effect that:
<PAGE> 30
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(i) Each of this Agreement and the Terms
Agreement has been duly and validly authorized, executed and
delivered by each of the Trust and the Guarantor.
(ii) The Trust has been duly created and is
validly existing in good standing as a business trust under
the Delaware Act; all filings required under the laws of the
State of Delaware with respect to the formation and valid
existence of the Trust as a business trust have been made; the
Trust has all necessary power and authority to own property
and to conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Terms Agreement, the
Preferred Securities and the Common Securities and is not
required to be authorized to do business in any other
jurisdiction; and the Trust is not a party to or otherwise
bound by any agreement other than those described in the
Prospectus.
(iii) The Declaration has been duly authorized,
executed and delivered by the Guarantor and the Trustees and
is a valid and binding obligation of the Guarantor enforceable
against the Company in accordance with their terms, except as
enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
or transfer and similar laws affecting creditors' rights and
remedies generally and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding
in equity or at law) (such exceptions being hereinafter
referred to as the "Bankruptcy Exceptions"); and the
Declaration has been duly qualified under the 1939 Act.
(iv) Each of the Trust and the Guarantor meets the
registrant requirements for use of Form S-3 under the
Securities Act.
(v) The statements in the Prospectus under the
captions "Risk Factors," "Description of Trust Preferred
Securities," "Description of Financing Subordinated Debt
Securities" and "Description of Company Debt Securities"
insofar as they constitute matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has
been reviewed by them and are correct in all material
respects.
(vi) The Common Securities, the Preferred
Securities, the Debt Securities, each of the Guarantees, the
Declaration, the Indenture and the Guarantee
<PAGE> 31
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Agreements conform to all statements relating thereto
contained in the Prospectus.
(vii) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Guarantor
free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(viii) Each of the Guarantee Agreements has been
duly authorized, executed and delivered by the Guarantor and,
assuming it is duly authorized, executed and delivered by the
Guarantee Trustee, constitutes a valid and binding obligation
of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy
Exceptions; the Preferred Securities Guarantee Agreement has
been duly qualified under the 1939 Act; and each of the
Guarantee Agreements conforms in all material respects to the
description thereof in the Registration Statement and the
Prospectus.
(ix) The Indenture has been duly authorized,
executed and delivered by SCI Financing and the Guarantor and,
assuming due authorization, execution and delivery thereof by
the Debt Trustee, is a valid and binding obligation of each of
SCI Financing and the Guarantor, enforceable against each of
SCI Financing and the Guarantor in accordance with its terms,
except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions; the Indenture complies as to
form in all material respects with the requirements of the
1939 Act; the Indenture has been duly qualified under the 1939
Act; the Debt Securities Guarantee has been duly authorized,
executed and delivered by the Guarantor and constitutes a
valid and binding agreement of the Guarantor, enforceable
against the Guarantor in accordance with its terms, except to
the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Debt Securities Guarantee
conforms in all material respects to all statements relating
thereto contained in the Prospectus.
(x) The Debt Securities are in the form
contemplated by the Indenture; and the Debt Securities have
been duly authorized, executed and delivered by SCI Financing
and, when authenticated by the Debt Trustee in the manner
provided in the Indenture and delivered against payment
therefor, will constitute valid and binding obligations of SCI
Financing, enforceable against SCI Financing in accordance
with their terms, except to
<PAGE> 32
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the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xi) The Guarantor's obligations under the
Guarantees are subordinate and junior in right of payment to
all liabilities of the Guarantor (except as set forth in the
Preferred Securities Guarantee Agreement) and are pari passu
with the most senior preferred stock issued or guaranteed by
the Guarantor.
(xii) The Declaration has been duly authorized,
executed and delivered by the Guarantor and each of the
Regular Trustees and constitutes a valid and binding
obligation of the Guarantor and each of the Regular Trustees,
enforceable against the Guarantor and each of the Regular
Trustees in accordance with its terms, except to the extent
that the enforcement thereof may be limited by the Bankruptcy
Exceptions.
(xiii) The Common Securities have been duly
authorized by the Declaration and are validly issued and
(subject to the terms of the Declaration) fully paid and
non-assessable beneficial interest in the assets of the Trust;
and the issuance of the Common Securities is not subject to
preemptive or other similar rights.
(xiv) The Preferred Securities have been duly
authorized by the Declaration and are validly issued and
(subject to the terms of the Declaration) when delivered to
and paid for by Underwriters pursuant to this Agreement will
be validly issued, fully paid and non-assessable beneficial
interests in the assets of the Trust; the holders of the
Preferred Securities will be entitled to the same limitation
of personal liability extended to stockholders of private
corporations for profit; and the issuance of the Preferred
Securities is not subject to preemptive or other similar
rights.
(xv) The issuance and sale by the Trust of the
Preferred Securities and Common Securities; the execution,
delivery and performance by the Trust of this Agreement and
the Terms Agreement; the consummation of the transactions
contemplated herein and therein; and compliance by the Trust
with its obligations hereunder and thereunder have been duly
authorized by all necessary actions of the Trust and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Trust pursuant
to, any contract, indenture, mortgage, loan
<PAGE> 33
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agreement, note, lease or other instrument to which the Trust
is a party or by which it or any of them may be bound, or to
which any of the property or assets of the trust is subject,
nor will such action result in any violation of the provisions
of the Certificate of Trust or the Declaration, or any
applicable law, administrative regulation or administrative or
court decree to which it is subject.
(xvi) The number of authorized shares of capital
stock of the Trust and the Guarantor is as set forth in the
Prospectus under "Capitalization" and the authorized capital
stock of each of the Trust and the Guarantor conforms as to
legal matters in all material respects to the description
thereof contained in the Prospectus.
(xvii) If the Offered Securities are convertible
into Guarantor Common Stock: upon issuance and delivery of
the Offered Securities, the Offered Securities shall be
convertible at the option of the holder thereof into Guarantor
Common Stock in accordance with the terms of the Offered
Securities and the Indenture; the Guarantor Common Stock
issuable upon conversion of the Offered Securities has been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action on the part of
the Guarantor, and such Guarantor Common Stock, when issued
upon such conversion, will be validly issued, fully paid and
nonassessable; no holder of the Guarantor Common Stock will be
subject to personal liability solely by reason of being such a
holder; and the issuance of such shares upon such conversion
will not be subject to preemptive rights arising by operation
of law or under the charter or by-laws of the Guarantor.
(xviii) If the Offered Securities are exchangeable
for Guarantor Preferred Stock: upon issuance and delivery of
the Offered Securities, the Offered Securities shall be
exchangeable at the option of the holder thereof into
Guarantor Preferred Stock in accordance with the terms of the
Offered Securities and the Indenture; the Guarantor Preferred
Stock issuable upon exchange of the Offered Securities has
been duly authorized and validly reserved for issuance upon
such exchange by all necessary corporate action on the part of
the Guarantor, and such Guarantor Preferred Stock, when issued
upon such exchange, will be validly issued, fully paid and
nonassessable; no holder of the Guarantor Preferred Stock will
be subject to personal liability solely by reason of being
such a holder; and the issuance of such shares upon
<PAGE> 34
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such exchange will not be subject to preemptive rights arising
by operation of law or under the charter or by-laws of the
Guarantor.
(xix) At the time the Registration Statement and
each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) appear on their face to be
appropriately responsive to the applicable requirements of the
Securities Act.
(xx) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities, the Debt Securities and,
if the Offered Securities are convertible into Guarantor
Common Stock, the Guarantor Common Stock and, if the Offered
Securities are exchangeable for Guarantor Preferred Stock, the
Guarantor Preferred Stock provide a fair summary of such
provisions.
(xxi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to a Trustee of the Trust or
the management of the Guarantor or to such counsel a present
intention to initiate such suit or proceeding).
(xxii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is or will be required in connection
with (A) the offering, issuance or sale of the Offered
Securities, the Common Securities or the Debt Securities, or,
if the Offered Securities are convertible into Guarantor
Common Stock, the valid authorization, issuance and delivery
of the Guarantor Common Stock issuable upon conversion of the
Offered Securities, or if the Offered Secutities are
exchangeable for Guarantor Preferred Stock, the valid
authorization, issuance and delivery of the Guarantor
Preferred Stock issuable upon exchange of the Offered
Securities or (B) the execution,
<PAGE> 35
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delivery or full and timely performance by, to the extent each
is a party thereto, each of the Trust, SCI Financing and the
Guarantor, of this Agreement, the Terms Agreement, each of the
Trust Agreements, the Preferred Securities, the Common
Securities or the Debt Securities, as the case may be or the
Indenture, the Debt Securities Guarantee and each of the
Guarantee Agreements, except such as may be required under the
Securities Act or state securities laws or under the Trust's
and the Guarantor's listing agreement with the New York Stock
Exchange.
(xxiii) To the best of such counsel's knowledge and
information, the execution, delivery and the full and timely
performance by, to the extent each is a party thereto, each of
the Trust, SCI Financing and the Guarantor, of this Agreement,
the Terms Agreement, each of the Trust Agreements, the
Preferred Securities, the Common Securities, the Debt
Securities, the Indenture, the Debt Securities Guarantee and
each of the Guarantee Agreements, the consummation of each of
the transactions contemplated herein and therein (including
the issuance, sale and delivery of the Offered Securities and,
if the Offered Securities are convertible into Guarantor
Common Stock, the issuance of the Guarantor Common Stock upon
conversion of the Offered Securities and, if the Offered
Securities are exchangeable for Guarantor Preferred Stock, the
issuance of the Guarantor Preferred Stock upon exchange of the
Offered Securities), the performance by the Guarantor of the
Undertakings do not and will not conflict with or constitute a
breach of, or default under (including, without limitation,
any event which, with notice or lapse of time or both would
constitute a breach of or a default under), or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Trust, SCI Financing, the
Guarantor or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion, nor will such action
result in any violation of the provisions of the Certificate
of Trust or Declaration or the charter or by-laws of SCI
Financing or the Guarantor, as the case may be, or any
applicable law, rule, regulation or administrative, regulatory
or court judgment, order or decree, except for any breach,
default, lien, charge or encumbrance under any such contract
as could not, singly or in the aggregate, reasonably be
expected to have a Guarantor Material Adverse Effect or a
Trust Material Adverse Effect or, with respect to the Trust
and SCI Financing, any material adverse effect on the rights
or remedies of the purchasers of the Offered Securities.
<PAGE> 36
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(xxiv) The Trust is not in violation of its
Certificate of Trust or the Declaration or in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or any other
instrument of which the Trust is a party or by which it may be
bound, or to which any of the property or assets of the Trust
is subject.
(xxv) Each document filed pursuant to the Exchange
Act (other than the financial statements, schedules and other
financial and statistical data included therein, as to which
such counsel need express no opinion) and incorporated or
deemed to be incorporated by reference in the Prospectus
appears on its face to be appropriately responsive to the
applicable requirements of the Exchange Act.
(xxvi) Neither the Trust nor the Guarantor is an
investment company under the Investment Company Act of 1940,
or a holding company or a subsidiary of a holding company
under the Public Utility Holding Company Act of 1935.
(xxvii) SCI Financing has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Guarantor Material Adverse
Effect.
Such counsel shall also state that they have been advised by
the Commission that the Registration Statement has become effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such
<PAGE> 37
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counsel which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective or at the
Representation Date contained or, as of the date such opinion is
delivered, contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(2) the Prospectus (other than the financial statements and schedules
and other financial and statistical data included or incorporated by
reference therein and those parts of the Registration Statement that
constitute the Debt Trustee's, the Property Trustee's and the
Guarantee Trustee's respective statements of Eligibility and
Qualification under the 1939 Act (Form T-1) (collectively, the T-1s"),
as to which such counsel need not make any statement or express any
opinion) or any amendment or supplement thereto as of its date or at
the Representation Date contained or, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of Trustees of the Trust and of
officers of the Guarantor and of public officials; provided, however,
that (a) such counsel shall state that both such counsel, the
Underwriters and counsel for the Underwriters are justified in relying
upon such certificates and (b) such certificates shall have been
delivered to the Representatives prior to the Closing Date. In
rendering such opinion, such counsel may rely as to matters involving
the application of laws of (1) unless such counsel is admitted to
practice in the State of Texas, the State of Texas, upon the written
opinion of James M. Shelger, General Counsel of the Guarantor,
delivered pursuant to clause (f) below of this Section 6 and (2) any
jurisdiction other than the State of New York or the United States or
the General Corporation Law of the State of Delaware or the Delaware
Act, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel who are reasonably satisfactory to
counsel for the Underwriters; provided, however, that such counsel
shall state that such counsel, the Underwriters and counsel for the
Underwriters are justified in relying upon such opinion.
<PAGE> 38
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(f) The Representatives shall have received on the
Closing Date a signed opinion of James M. Shelger, General Counsel of
the Guarantor, addressed to the Underwriters and dated the Closing
Date and satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Guarantor has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Guarantor Material Adverse
Effect.
(ii) Each Subsidiary has been duly incorporated,
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Guarantor Material Adverse
Effect.
(iii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
each of the Trust and the Guarantor.
(iv) The Declaration has been duly authorized by
the Guarantor as Sponsor of the Trust pursuant to the Trust's
Certificate of Trust and is in full force and effect.
(v) The Indenture has been duly authorized,
executed and delivered by SCI Financing and the Guarantor and,
assuming due authorization, execution and delivery thereof by
the Debt Trustee, is a valid and binding obligation of each of
SCI Financing and the Guarantor, enforceable against each of
SCI Financing and the Guarantor in accordance with its terms,
except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions; the Indenture complies as to
form in all material respects with the requirements of the
<PAGE> 39
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1939 Act; the Indenture has been duly qualified under the 1939
Act; the Debt Securities Guarantee has been duly authorized,
executed and delivered by the Guarantor and constitutes a
valid and binding agreement of the Guarantor, enforceable
against the Guarantor in accordance with its terms, except to
the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Debt Securities Guarantee
conforms in all material respects to all statements relating
thereto contained in the Prospectus.
(vi) The Debt Securities are in the form
contemplated by the Indenture; and the Debt Securities have
been duly authorized, executed and delivered by SCI Financing
and, when authenticated by the Debt Trustee in the manner
provided in the Indenture and delivered against payment
therefor, will constitute valid and binding obligations of SCI
Financing, enforceable against SCI Financing in accordance
with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(vii) If the Offered Securities are convertible
into Guarantor Common Stock: upon issuance and delivery of
the Offered Securities, the Offered Securities shall be
convertible at the option of the holder thereof into Common
Stock in accordance with the terms of the Offered Securities
and the Indenture; the Guarantor Common Stock issuable upon
conversion of the Offered Securities has been duly authorized
and validly reserved for issuance upon such conversion by all
necessary corporate action on the part of the Guarantor, and
such Guarantor Common Stock, when issued upon such conversion,
will be validly issued, fully paid and nonassessable; no
holder of the Guarantor Common Stock will be subject to
personal liability solely by reason of being such a holder;
and the issuance of such shares upon such conversion will not
be subject to preemptive rights arising by operation of law or
under the charter or by-laws of the Guarantor.
(viii) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Guarantor, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge, after due inquiry, any other
security interests or claims.
<PAGE> 40
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(ix) Each of the Guarantee Agreements has been
duly and validly authorized, executed and delivered by the
Guarantor and, assuming it is duly authorized, executed and
delivered by the Guarantee Trustee, constitutes a legal, valid
and binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with their respective terms,
except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions; and each of the Guarantee
Agreements conforms in all material respects to the
descriptions thereof in the Registration Statement and the
Prospectus.
(x) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities and, if the Offered
Securities are convertible into Guarantor Common Stock, the
Guarantor Common Stock and, if the Offered Securities are
exchangeable for Guarantor Preferred Stock, the Guarantor
Preferred Stock provide a fair summary of such provisions.
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to a Trustee of the Trust or
the management of the Guarantor or to such counsel a present
intention to initiate such suit or proceeding).
(xii) To the best of such counsel's knowledge and
information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xiii) Based on such counsel's review of applicable
law, no authorization, approval, consent or order of any court
or governmental or regulatory authority, body or agency or
third party is or will be required in connection with (A) the
offering, issuance or sale of the Offered Securities or the
Debt Securities, or, if the Offered Securities are convertible
into Guarantor Common Stock, the valid authorization, issuance
and delivery of the Guarantor Common Stock issuable upon
conversion of
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the Offered Securities, or, if the Offered Securities are
exchangeable for Guarantor Preferred Stock, the valid
authorization, issuance and delivery of the Guarantor
Preferred Stock, or (B) the execution, delivery or full and
timely performance by, to the extent each is a party thereto,
each of the Trust, SCI Financing and the Guarantor, of this
Agreement, the Terms Agreement, each of the Trust Agreements,
the Preferred Securities, the Common Securities, the Debt
Securities, the Indenture, the Debt Securities Guarantee and
each of the Guarantee Agreements, except such as may be
required under the Securities Act or state securities laws or
under the Trust's and the Guarantor's listing agreement with
the New York Stock Exchange, Inc.
(xiv) To the best of such counsel's knowledge and
information, the execution, delivery and the full and timely
performance by, to the extent each is a party thereto, each of
the Trust, SCI Financing and the Guarantor, of this Agreement,
the Terms Agreement, the Indenture, the Debt Securities
Guarantee and each of the Guarantee Agreements, the
consummation of each of the transactions contemplated herein
and therein (including the issuance, sale and delivery of the
Offered Securities and, if the Offered Securities are
convertible into Guarantor Common Stock, the issuance of the
Guarantor Common Stock upon conversion of the Offered
Securities and, if the Offered Securities are exchangeable
for Guarantor Preferred Stock, the issuance of the Guarantor
Preferred Stock upon exchange of the Offered Securities), the
performance by the Guarantor of the Undertakings do not and
will not conflict with or constitute a breach of, or default
under (including, without limitation, any event which, with
notice or lapse of time, or both, would constitute a breach of
or a default under), or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets
of SCI Financing or the Guarantor or any of the Subsidiaries
pursuant to, any contract identified on a schedule to such
opinion, nor will such action result in any violation of the
provisions of the Certificate of Trust or Declaration or the
charter or by-laws of SCI Financing or the Guarantor, as the
case may be, or any applicable law, rule, regulation or
administrative, regulatory or court judgment, order or decree,
except for any breach, default, lien, charge or encumbrance
under any such contract as could not, singly or in the
aggregate, reasonably be expected to have a Guarantor Material
Adverse Effect or a Trust Material Adverse Effect or, with
respect to the Trust and SCI Financing, any material
<PAGE> 42
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adverse effect on the rights or remedies of the purchasers of
the Offered Securities.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective or at the
Representation Date, contained or, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (2) the
Prospectus (other than the financial statements and schedules and
other financial or statistical data included or incorporated by
reference therein and those parts of the Registration Statement that
constitute the T-1s, as to which such counsel need not make any
statement or express any opinion) or any amendment or supplement
thereto as of its date or at the Representation Date contained or, as
of the date such opinion is delivered, contains any untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of Trustees of the Trust and of
officers of the Guarantor and of public officials; provided, however,
that (a) such counsel shall state that such counsel, the Underwriters
and counsel for the Underwriters are justified in relying upon such
certificates and (b) such certificates shall have been delivered to
the Representatives prior to the Closing Date. In rendering such
opinion, such counsel may rely as to matters involving the application
of laws of (1) the State of New York or the General Corporation Law of
the State of Delaware or the Delaware Act upon the written opinion of
[ ] delivered pursuant to clause (e) above of this
Section 6 and (2) any jurisdiction other than the State of Texas or
the United States, to the extent he deems proper and specifies in such
opinion, upon the opinion of other counsel who are reasonably
satisfactory to counsel for the Underwriters; provided, however, that
such counsel shall state that such counsel, the Underwriters and
counsel for the Underwriters are justified in relying upon such
opinion.
<PAGE> 43
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(g) The Representatives shall have received on the
Closing Date a signed opinion of [ ], counsel for [ ],
as Property Trustee, under the Declaration, and Guarantee Trustee
under the Guarantee Agreements, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) [ ] is a Delaware banking
corporation with trust powers, duly organized, validly
existing and in good standing under the laws of the State of
Delaware with all necessary power and authority to execute and
deliver, and to carry out and perform its obligations under
the terms of, the Declaration and the Guarantee Agreements.
(ii) The execution, delivery and performance by
the Property Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the
Guarantee Agreements have been duly authorized by all
necessary corporate action on the part of the Property Trustee
and the Guarantee Trustee, respectively. The Declaration and
the Guarantee Agreements have been duly executed and delivered
by the Property Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding
obligation of the Property Trustee and the Guarantee Trustee,
respectively, enforceable against the Property Trustee and the
Guarantee Trustee, respectively, in accordance with their
terms, except as enforcement thereof may be limited by the
Bankruptcy Exceptions.
(iii) The execution, delivery and performance of
the Declaration and the Guarantee Agreements by the Property
Trustee and the Guarantee Trustee, respectively, do not
conflict with or constitute a breach of the Articles of
Organization or Bylaws of the Property Trustee and the
Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee of the Declaration and by
the Guarantee Trustee of the Guarantee Agreements.
(v) The Property Trustee is the record holder of
the Debt Securities or the Guarantor Debt Securities, as the
case may be, and the Guarantees and no security interest,
mortgage, pledge, lien, encumbrance, claim or equity is noted
thereon or on the register.
<PAGE> 44
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(h) On the Representation Date and also on the Closing
Date, Ernst & Young and Coopers & Lybrand shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
(i) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Cahill Gordon & Reindel,
counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters. In giving its opinion, Cahill
Gordon & Reindel may rely as to certain matters of Texas law upon the
opinion of James M. Shelger, which shall be delivered in accordance
with Section 6(f) hereof, as to certain matters of Delaware law upon
the opinion of [ ], special Delaware counsel to the
Property Trustee and the Guarantee Trustee, which opinion shall be
delivered in accordance with Section 6(g) hereof, and as to certain
other matters of Delaware law upon the opinion of [ ],
special Delaware counsel to the Trust, which shall be delivered in
accordance with Section 6(e) hereof.
(j) On the Representation Date, the Offered Securities
and, if the Offered Securities are convertible into Guarantor Common
Stock, the Guarantor Common Stock issuable upon conversion of the
Offered Securities shall have been approved for listing on the New
York Stock Exchange upon notice of issuance.
(k) On the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Trust
and the Guarantor in connection with the issuance and sale of the
Offered Securities (and, if the Offered Securities are convertible
into Guarantor Common Stock, the Guarantor Common Stock and, if the
Offered Securities are exchangeable for Guarantor Preferred Stock, the
Guarantor Preferred Stock) as herein
<PAGE> 45
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contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(l) On or prior to the Closing Date the Trust and the
Guarantor shall have furnished to the Representatives such further
certificates and documents as the Representatives shall reasonably
request.
(m) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Trust or the Guarantor by any
"nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act.
(n) If the Offered Securities are convertible into
Guarantor Common Stock or exchangeable for Guarantor Preferred Stock,
the Guarantor shall have delivered to the Representatives written
agreements, in form and substance satisfactory to the Representative
designated in the Terms Agreement, with each of its executive officers
who own capital stock of the Guarantor of a class which includes the
Guarantor Common Stock or the Guarantor Preferred Stock, as the case
may be, that no offer, sale or other disposition, or request or demand
for registration under the Securities Act or inclusion in any other
registration statement filed by the Trust or the Guarantor under the
Securities Act, of any capital stock of the Guarantor of a class which
includes the Guarantor Common Stock or the Guarantor Preferred Stock,
as the case may be, or warrants, options, convertible, exercisable or
exchangeable securities, or other rights to purchase or acquire, such
capital stock (or any such right or exchangeable, exercisable or
convertible security) owned by such person, or with respect to which
such person has the power of disposition, will be made for a period of
90 days after the Representation Date, directly or indirectly, by such
executive officer, otherwise than (i) with the prior written consent
of the Representative designated in the Terms Agreement and (ii)
pursuant to such exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement.
(o) There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
<PAGE> 46
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(p) The Representatives shall have received on the Closing
Date a signed opinion of [ ], special counsel to the Trust and
the Guarantor, addressed to the Underwriters and dated the Closing
Date and satisfactory to counsel to the Underwriters, to the effect
that the statements made in the Prospectus under the caption "Certain
Federal Income Tax Considerations Regarding Trust Preferred
Securities," to the extent that they constitute matters of law or
legal conclusions, have been reviewed by such counsel and fairly and
accurately present the information disclosed therein in all material
respects.
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement, subject to the conditions set forth in paragraph (a) to and
including paragraph (p) above on and as of the Additional Closing Date
(references therein to the Closing Date shall be deemed references to the
Additional Closing Date for this purpose), except that the certificate called
for by paragraph (d), the opinions called for by paragraphs (e), (f), (g), (i)
and (p) and the letters called for by paragraph (h) shall be dated as of, and
delivered on, the Additional Closing Date, and to the delivery to the
Representatives on the Additional Closing Date of such other documents as they
may reasonably request.
7. Indemnification and Contribution. Each of the Trust
and the Guarantor, jointly and severally, agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of either 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 the legal fees and other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Trust or the Guarantor shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Guarantor in writing by such Underwriter through the
Representatives expressly for use therein; provided, however, that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter (or
<PAGE> 47
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the benefit of any person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Securities if such untrue statement or omission or alleged untrue statement or
omission made in such preliminary prospectus is eliminated or remedied in the
Prospectus and the Trust or the Guarantor has provided such Prospectus in
accordance with paragraph 5(ii) hereof (as amended or supplemented if the Trust
or the Guarantor shall have furnished any amendments or supplements thereto)
and if it shall be established in the related action or proceeding that a copy
of the Prospectus, if required by law (as so amended or supplemented, but
exclusive of any documents incorporated therein by reference), shall not have
been furnished to such person at or prior to the written confirmation of the
sale of such Offered Securities to such person, except to the extent that such
Prospectus contains any other untrue statement or omission or alleged untrue
statement or omission of a material fact that was the subject matter of the
related action or proceeding. For purposes of the proviso to the immediately
preceding sentence, the term "Prospectus" shall not be deemed to include the
documents incorporated therein by reference, and no Underwriter shall be
obligated to send or give any supplement or amendment to any document
incorporated by reference in any preliminary prospectus or the Prospectus to
any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Trust, the Guarantor, the Trustees of the
Trust, the directors of the Guarantor, the officers of the Guarantor who sign
the Registration Statement and each person, if any, who controls the Trust or
the Guarantor within the meaning of either 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, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Trust or the Guarantor shall have
furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Guarantor in writing by such Underwriter through
the Representatives expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
For purposes of this Section 7 and Section 4(ii), the only written information
furnished by the Underwriters to the Guarantor expressly for use in the
Registration Statement and the Prospectus is the information in the last
paragraph of the cover page of the
<PAGE> 48
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Prospectus Supplement and [ ] and [ ] under the table under the caption
"Underwriting" in the Prospectus Supplement.
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 indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall promptly retain counsel satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. 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) there has been a failure by the
Indemnifying Person to retain promptly counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties to 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 that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Trust, the Guarantor,
their respective Trustees, directors and officers who sign the Registration
Statement and each person, if any, who controls the Trust or the Guarantor
within the meaning of either such Section, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate
firm for the Underwriters and such control persons of Underwriters, such firm
shall be designated in writing by the Representatives. In the case of any such
separate firm for the Trust, the Guarantor, and such Trustees, directors,
officers and control persons of the Trust or the Guarantor, such firm shall be
designated in writing by the Guarantor. 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 any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing
<PAGE> 49
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sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses
of counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such 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 prior 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 indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (1) includes an unconditional
written release of such Indemnified Person, in form and substance satisfactory
to such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (2) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, 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 as follows: as between the
Trust and the Guarantor on the one hand and the Underwriters on the other (i)
in such proportion as is appropriate to reflect the aggregate relative benefits
received by the Trust and the Guarantor on the one hand and by the Underwriters
on the other from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Trust and
the Guarantor on the one hand and of the Underwriters 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 benefits received by the Trust and the Guarantor
on the one hand and by the Underwriters on the other shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Trust and the total underwriting
compensation received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus bear to the aggregate public offering
price of the Offered Securities. The relative fault of the Trust and the
Guarantor on the one hand and of the Underwriters on the other
<PAGE> 50
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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 Trust, the
Guarantor or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Trust, the Guarantor and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters 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 the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay or has
paid 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 Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Offered
Securities they have purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Trust and of the
Guarantor contained in this Agreement 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 any Underwriter or any person controlling
any Underwriter or the Trust, the Guarantor, their respective Trustees,
officers or directors or any other person controlling the Trust or the
Guarantor and (iii) acceptance of and payment for any of the Offered
Securities.
<PAGE> 51
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8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Trust or the Guarantor, if after the execution and delivery of this
Agreement and prior to the Closing Date (or, in the case of the Option
Securities, prior to the Additional Closing Date) (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange, the National Association of Securities Dealers,
Inc., the American Stock Exchange or the [ ], (ii) trading of any
securities of the Trust or the Guarantor shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York or [ ] shall have been
declared by either U.S. Federal, New York State or [ ] authorities or
exchange controls shall have been imposed by the United States, or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Offered Securities which it or they have agreed to purchase hereunder
on such date, and the aggregate number of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Offered Securities to be
purchased on such date, the other Underwriters (with respect to the Option
Securities, to the extent such Underwriters are Option Securities Underwriters)
shall be obligated severally in the proportions that (1) with respect to
Underwritten Securities the number of Underwritten Securities set forth
opposite their respective names in the annex or annexes to Exhibit 1 hereto
bears to the aggregate number of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters and (2) with respect to Option
Securities, the number of Underwritten Securities set forth opposite their
respective names in the annex or annexes to Exhibit 1 hereto bears to the
aggregate number of
<PAGE> 52
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Underwritten Securities set forth opposite the names of all such non-defaulting
Underwriters who are Option Securities Underwriters, or in such other
proportions as the Representatives may specify, to purchase the Offered
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided, however, that in no event shall
the number of Offered Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such number of Offered Securities without the written
consent of such Underwriter. If, on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Offered Securities which it or they have agreed to purchase
hereunder on such date, and the number of Offered Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Representatives, the Trust and the Guarantor for the purchase of such
Offered Securities are not made within 36 hours after such default, this
Agreement (or the obligations of the several Underwriters to purchase the
Option Securities, as the case may be) shall terminate without liability on the
part of any non-defaulting Underwriter, the Trust or the Guarantor. In any
such case either the Representatives or the Trust and the Guarantor shall have
the right to postpone the Closing Date (or, in the case of the Option
Securities, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them, because
of any failure or refusal on the part of the Trust or the Guarantor to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Trust or the Guarantor shall be unable to perform their
respective obligations under this Agreement, each of the Trust and the
Guarantor jointly and severally agrees to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder and pursuant to the Terms
Agreement. In no event, however, shall the Trust or the Guarantor be
responsible to the Underwriters for any loss of profits for failure to
consummate the offering and sale of the Offered Securities.
<PAGE> 53
-53-
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Trust, the Guarantor, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Offered Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives at the address as set
forth in the Terms Agreement. Notices to the Trust or the Guarantor shall be
given to it at: Service Corporation International, 1929 Allen Parkway,
Houston, Texas 77019 (facsimile: (713) [ ]); Attention: [ ].
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
<PAGE> 54
-54-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SCI FINANCING [I][II]
By:______________________________
Name:
Title: Trustee
By:______________________________
Name:
Title: Trustee
SERVICE CORPORATION
INTERNATIONAL,
as Guarantor
By:______________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
[Insert Signature block(s) for the
Representative or Representatives
acting on behalf of the Underwriters,
or for each Underwriter if
no Syndicate]
<PAGE> 55
EXHIBIT I
SCI FINANCING [I][II]
[ ] Shares
[TITLE OF SECURITIES]
(liquidation amount of $[ ] per Preferred Security)
guaranteed to the extent set forth
in certain undertakings by
SERVICE CORPORATION INTERNATIONAL
TERMS AGREEMENT
[ ], 199[ ]
[ ]
[ ]
[ ]
Attention: [ ]
Ladies and Gentlemen:
[ ] (the "Representative(s)") understand that
SCI Financing [I][II], a statutory business trust organized under the Business
Trust Act of the State of Delaware (the "Trust"), and Service Corporation
International, a Texas corporation, as guarantor and provider of certain
undertakings (the "Guarantor"), propose to issue and sell [ ] shares of
[describe Preferred Securities] (the "Underwritten Securities"). Subject to
the terms and conditions set forth herein or incorporated by reference herein,
the [U.S.] Underwriters named in Annex A attached hereto [and the International
Managers named in Annex B attached hereto] offer to purchase, severally and not
jointly, the number of Underwritten Securities set forth opposite the name of
each such Underwriter on Annex A [and Annex B] hereto at a price of $[ ]
per share (the "Purchase Price"). The Closing Date shall be [ ], 199[ ],
at [ ] A.M. at the offices of [ ].
As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that proceeds of the sale of the Offered
Securities will be used by the Trust to purchase [SCI Financing] [Guarantor]
Debt Securities, the Guarantor hereby agrees to pay at [each of] the Closing
Date [and the Additional Closing
<PAGE> 56
-2-
Date] to the Underwriters $[ ] per Offered Security (as defined below)
purchased by the Underwriters.
[It is understood that, subject to the conditions hereinafter
stated, [ ] Underwritten Securities (the "U.S. Underwritten
Securities") will be sold to the several U.S. Underwriters named in Annex A
hereto (the "U.S. Underwriters") in connection with the offering and sale of
such U.S. Underwritten Securities in the United States and Canada to United
States and Canadian Persons (as such terms are defined in the Agreement between
U.S. and International Underwriting Syndicates of even date herewith between
the U.S. Underwriters and the International Managers), and [ ]
Underwritten Securities (the "International Securities") will be sold to the
several international managers named in Annex B hereto (the "International
Managers") in connection with the offering and sale of such International
Securities outside the United States and Canada to persons other than United
States and Canadian Persons. [ ] shall act as
representatives (the "U.S. Representatives") of the several U.S. Underwriters,
and [ ] shall act as representatives (the "International
Representatives") of the several International Managers. The U.S. Underwriters
and the International Managers are hereinafter collectively referred to as the
"Underwriters", and the U.S. Representatives and the International
Representatives are hereinafter collectively referred to as the
"Representatives."]
[In addition, the Representatives understand that the Trust
and the Guarantor propose to issue and sell to the several [U.S.] Underwriters,
for the sole purpose of covering over-allotments in connection with the sale of
the Underwritten Securities, at the option of the [U.S.] Underwriters, up to an
additional [ ] shares of the [describe Preferred Securities] (the
"Option Securities"). The Underwritten Securities and the Option Securities
are herein referred to as the "Offered Securities."]
[The offer herein contained is further conditioned upon the
Trust and the Guarantor agreeing to sell to the [U.S.] Underwriters the Option
Securities, and agreeing that the [U.S.] Underwriters shall have a one-time
right to purchase, severally and not jointly, up to [ ] Option
Securities at the Purchase Price. Option Securities may be purchased as
provided below solely for the purpose of covering over-allotments made in
connection with the offering of the Underwritten Securities. If any Option
Securities are to be purchased, each [U.S.] Underwriter agrees, severally and
not jointly, to purchase the number of Option Securities (subject to such
adjustments to eliminate any fractional Offered Securities as the [U.S.]
Representatives in their sole discretion may make) that bears the same
proportion to the total
<PAGE> 57
-3-
number of Option Securities to be purchased as the number of [U.S.]
Underwritten Securities set forth in Annex A hereto opposite the name of such
[U.S.] Underwriter bears to the total number of [U.S.] Underwritten
Securities.]
[The Trust's and the Guarantor's agreement to sell the Option
Securities shall entitle the [U.S.] Underwriters to exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the date of this Terms Agreement, by written notice from the [U.S.]
Representatives to the Trust and the Guarantor. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for which may be the same date and time as the Closing Date but shall
not be earlier than the Closing Date nor later than the tenth full Business Day
after the date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 9 of the Underwriting Agreement
referred to below). Such notice shall be given at least two Business Days
prior to the date and time of delivery specified therein.]
The Underwritten Securities shall have the following terms:
Title: [ ]
Liquidation preference: [ ]
Dividend rate: [ ]
Dividend payment dates: [ ]
Conversion or exchange provisions: [ ]
Redemption provisions: [ ]
Public offering price: $[ ] per share
Additional terms: [ ]
All the provisions contained in the document entitled
"Underwriting Agreement -- [ ] -- Trust Issued Preferred
Securities -- Service Corporation International" (the "Underwriting Agreement")
and dated [ ], [ ], a copy of which you have previously received,
are herein incorporated by reference in their entirety and shall be deemed to
be a part of this Terms Agreement to the same extent as if the Underwriting
Agreement had been set forth in full herein. Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is
[ ]. [The additional exceptions to Section 5(h) are [ ].]
<PAGE> 58
-4-
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by [ ] alone on behalf of the
Representatives, and any such action taken by [ ] alone shall be
binding upon the Representatives. Notices to the Underwriters shall be given
to the Representatives c/o [ ] (facsimile: ([ ]) [
]); Attention: [ ].
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof.
Please accept this offer no later than [ ] o'clock [ ].M.
on [ ], [ ], by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us, or by sending us a
written acceptance in the following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated [ ], [ ], to purchase the Underwritten Securities
on the terms set forth therein and agree to and accept all other terms and
provisions of the Terms Agreement [and hereby grant the [U.S.] Underwriters the
option to
<PAGE> 59
-5-
purchase the Option Securities as more fully set forth in the Terms
Agreement]."
Very truly yours,
By:______________________________
Name:
Title:
Accepted as of the date
first above written:
SCI FINANCING [I][II]
By:_______________________________
Name:
Title: Trustee
By:_______________________________
Name:
Title: Trustee
SERVICE CORPORATION INTERNATIONAL,
as Guarantor
By:_______________________________
Name:
Title:
<PAGE> 60
ANNEX A
<TABLE>
<CAPTION>
Number of
[U.S.] Underwritten
Securities
[U.S.] Underwriters To Be Purchased
- ------------------- -------------------
<S> <C>
---------
Total:
=========
</TABLE>
<PAGE> 61
ANNEX B
<TABLE>
<CAPTION>
Number of
International
Underwritten
International Securities
Managers To be Purchased
- ------------- ---------------
<S> <C>
---------
Total:
=========
</TABLE>
<PAGE> 62
SCHEDULE I
Significant Subsidiaries of the Guarantor
Within the Meaning of Rule 1-02 of Regulation
S-X under the Securities Exchange Act of 1934
<PAGE> 1
Exhibit 3.12
CERTIFICATE OF TRUST
The undersigned, the trustees of SCI Financing I desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C, Section 3810
hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"SCI Financing I".
2. The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as
follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Dated: June 26, 1995
/s/ GREGORY L. CAUTHEN
------------------------------------
Gregory L. Cauthen, as Trustee
The Bank of New York (Delaware),
as Trustee
By: /s/ JOSEPH F. LEARY
------------------------------------
Name: Joseph F. Leary
Title: Vice President
<PAGE> 1
Exhibit 3.13
CERTIFICATE OF TRUST
The undersigned, the trustees of SCI Financing II desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C, Section 3810
hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"SCI Financing II".
2. The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as
follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Dated: June 26, 1995
/s/ GREGORY L. CAUTHEN
------------------------------------
Gregory L. Cauthen, as Trustee
The Bank of New York (Delaware),
as Trustee
By: /s/ JOSEPH F. LEARY
------------------------------------
Name: Joseph F. Leary
Title: Vice President
<PAGE> 1
EXHIBIT 3.14
DECLARATION OF TRUST
OF
SCI FINANCING I
June 26, 1995
THIS DECLARATION OF TRUST (this "Declaration") dated and effective as
of June 26, 1995 by the undersigned trustees (together with all other Persons
from time to time duly appointed and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), the Parent as trust sponsor
(the "Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration; and
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Delaware Business Trust Act for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debt Securities of the Debt Issuer;
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "this Declaration" are to this Declaration
of Trust as modified, supplemented or amended from time to
time;
(d) all references in this Declaration to Articles and Sections
and Exhibits are to Articles and Sections of and Exhibits to
this Declaration unless otherwise specified; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
<PAGE> 2
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Covered Person" means any employee or agent of the Trust or
its Affiliates.
"Debt Issuer" means SCI Financing Corporation, a Delaware
corporation, in its capacity as the issuer of the Debt Securities.
"Debt Securities" means the series of Debt Securities to be
issued by the Debt Issuer.
"Delaware Trustee" has the meaning set forth in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Holder" means the Person in whose name a Certificate
representing a Security is registered.
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee or any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee or any employee or agent of the Trust
or its Affiliates.
"Parent" means Service Corporation International, a Texas
corporation, or any successor entity in a merger.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
-2-
<PAGE> 3
"Regular Trustee" means any Trustee other than the Delaware
Trustee, acting in its capacity as Delaware Trustee.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 1.2 Name.
The Trust created by this Declaration is named "SCI Financing I". The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustee.
SECTION 1.3 Office.
The address of the principal office of the Trust is c/o Service
Corporation International, 1929 Allen Parkway, Houston, Texas 77019. At any
time, the Regular Trustee may designate another principal office.
SECTION 1.4 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debt
Securities, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments or, other than
as permitted herein, pledge any of its assets.
SECTION 1.5 Authority.
Subject to the limitations provided in this Declaration, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust. In dealing
with the Regular Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of the
-3-
<PAGE> 4
Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Regular
Trustees as set forth in this Declaration.
SECTION 1.6 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the Trust.
SECTION 1.7 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, that
the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities,
and, provided further, there shall be no interests in the
Trust other than the Securities and the issuance of the
Securities shall be limited to a one-time, simultaneous
issuance of both Preferred Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) cause the Trust to file with the Commission a
registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments
thereto;
(ii) determine the states in which to take appropriate
action to qualify or register for sale all or part of
the Preferred Securities and to take any and all such
acts as they deem necessary or advisable to comply
with the applicable laws of any of those states;
(iii) make an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance
any Preferred Securities; and
(iv) file with the Commission a registration statement on
Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable
compensation for such services;
(d) to incur expenses which are necessary or incidental to carry
out any of the purposes of this Declaration; and
-4-
<PAGE> 5
(e) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust
in all matters necessary or incidental to the foregoing.
SECTION 1.8 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 1.9 Duration of Trust.
The Trust, absent termination pursuant to the provisions of Section
4.2, shall have existence for 55 years from the date hereof.
ARTICLE II
TRUSTEES
SECTION 2.1 Trustees.
The number of Trustees shall initially be two, and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by
a written instrument signed by the Sponsor. The Sponsor is entitled to appoint
or remove without cause any Trustee at any time; provided, that the number of
Trustees shall in no event be less than two; and provided further that one
Trustee, in the case of a natural person, shall be a person who is a resident
of the State of Delaware or which, if not a natural person, has its principal
place of business in the State of Delaware (the "Delaware Trustee").
Except as expressly set forth in this Declaration, any power of the
Regular Trustees may be exercised by, or with the consent of, a majority of the
Regular Trustee; provided that if there is only one Regular Trustees, all
powers of the Regular Trustees shall be exercised by such one Regular Trustee.
The initial Regular Trustee shall be:
Gregory L. Cauthen
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 2.2 Delaware Trustee
Notwithstanding any other provision of this Declaration, the Delaware
Trustee, in its capacity as Delaware Trustee, shall not be entitled to exercise
any of the powers,
-5-
<PAGE> 6
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees described in this Declaration. The Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.
SECTION 2.3 Execution of Documents
(a) The Regular Trustees are authorized to execute on behalf of
the Trust any documents that the Regular Trustees have the power and authority
to cause the Trust to execute pursuant to Section 1.7; and
(b) The Regular Trustees may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 their
power for the purposes of signing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 1.7.
ARTICLE III
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 3.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to Holders might properly be paid.
SECTION 3.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict
-6-
<PAGE> 7
the duties and liabilities of an Indemnified Person otherwise existing at law
or in equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 3.3 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by
this Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage
-7-
<PAGE> 8
or claim incurred by such Indemnified Person by reason of gross negligence or
willful misconduct with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Sponsor prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Sponsor of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as authorized in
Section 3.3(a).
SECTION 3.4 Outsider Businesses.
Any Covered Person and the Delaware Trustee may engage in or possess
an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. No
Covered Person or the Delaware Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and any Covered Person and the Delaware Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other opportunity.
Any Covered Person may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
ARTICLE IV
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 4.1 Amendments.
At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by a majority of the
Regular Trustees and the Sponsor.
SECTION 4.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the
revocation of the Sponsor's charter or of the Trust's
certificate of trust;
-8-
<PAGE> 9
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent
of all of a majority of the Regular Trustees and the
Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 4.2(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
SECTION 4.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 4.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 4.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bond and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 4.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 4.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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<PAGE> 10
IN WITNESS WHEREOF, the undersigned has caused this Declaration of
Trust of SCI Financing I to be executed as of the day and year first above
written.
/s/ GREGORY L. CAUTHEN
---------------------------------------------
Gregory L. Cauthen, as Trustee
The Bank of New York (Delaware), as Trustee
By: /s/ JOSEPH F. LEARY
------------------------------------------
Name: Joseph F. Leary
Title: Vice President
Service Corporation International, as Sponsor
By: /s/ GREGORY L. CAUTHEN
------------------------------------------
Gregory L. Cauthen
Vice President
and Treasurer
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<PAGE> 11
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of SCI Financing I desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C. Section
3810 hereby certify as follows:
1. The name of the business trust being formed hereby (the
"Trust") is "SCI Financing I".
2. The name and business address of the trustee of the Trust
which has its principal place of business in the State of
Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Dated: , 1995
------------------------------------------------
Name:
The Bank of New York (Delaware), as Trustee
By:
---------------------------------------------
Name:
Title:
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<PAGE> 1
Exhibit 3.15
DECLARATION OF TRUST
OF
SCI FINANCING II
June 26, 1995
THIS DECLARATION OF TRUST (this "Declaration") dated and effective as
of June 26, 1995 by the undersigned trustees (together with all other Persons
from time to time duly appointed and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), the Parent as trust sponsor
(the "Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration; and
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Delaware Business Trust Act for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debt Securities of the Debt Issuer;
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "this Declaration" are to this Declaration
of Trust as modified, supplemented or amended from time to
time;
(d) all references in this Declaration to Articles and Sections
and Exhibits are to Articles and Sections of and Exhibits to
this Declaration unless otherwise specified; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
<PAGE> 2
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Covered Person" means any employee or agent of the Trust or
its Affiliates.
"Debt Issuer" means SCI Financing Corporation, a Delaware
corporation, in its capacity as the issuer of the Debt Securities.
"Debt Securities" means the series of Debt Securities to be
issued by the Debt Issuer.
"Delaware Trustee" has the meaning set forth in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Holder" means the Person in whose name a Certificate
representing a Security is registered.
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee or any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee or any employee or agent of the Trust
or its Affiliates.
"Parent" means Service Corporation International, a Texas
corporation, or any successor entity in a merger.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
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<PAGE> 3
"Regular Trustee" means any Trustee other than the Delaware
Trustee, acting in its capacity as Delaware Trustee.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 1.2 Name.
The Trust created by this Declaration is named "SCI Financing II".
The Trust's activities may be conducted under the name of the Trust or any
other name deemed advisable by the Regular Trustee.
SECTION 1.3 Office.
The address of the principal office of the Trust is c/o Service
Corporation International, 1929 Allen Parkway, Houston, Texas 77019. At any
time, the Regular Trustee may designate another principal office.
SECTION 1.4 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debt
Securities, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments or, other than
as permitted herein, pledge any of its assets.
SECTION 1.5 Authority.
Subject to the limitations provided in this Declaration, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust. In dealing
with the Regular Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of the
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<PAGE> 4
Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Regular
Trustees as set forth in this Declaration.
SECTION 1.6 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the Trust.
SECTION 1.7 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, that
the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities,
and, provided further, there shall be no interests in the
Trust other than the Securities and the issuance of the
Securities shall be limited to a one-time, simultaneous
issuance of both Preferred Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) cause the Trust to file with the Commission a
registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments
thereto;
(ii) determine the states in which to take appropriate
action to qualify or register for sale all or part of
the Preferred Securities and to take any and all such
acts as they deem necessary or advisable to comply
with the applicable laws of any of those states;
(iii) make an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance
any Preferred Securities; and
(iv) file with the Commission a registration statement on
Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable
compensation for such services;
(d) to incur expenses which are necessary or incidental to carry
out any of the purposes of this Declaration; and
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<PAGE> 5
(e) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust
in all matters necessary or incidental to the foregoing.
SECTION 1.8 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 1.9 Duration of Trust.
The Trust, absent termination pursuant to the provisions of Section
4.2, shall have existence for 55 years from the date hereof.
ARTICLE II
TRUSTEES
SECTION 2.1 Trustees.
The number of Trustees shall initially be two, and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by
a written instrument signed by the Sponsor. The Sponsor is entitled to appoint
or remove without cause any Trustee at any time; provided, that the number of
Trustees shall in no event be less than two; and provided further that one
Trustee, in the case of a natural person, shall be a person who is a resident
of the State of Delaware or which, if not a natural person, has its principal
place of business in the State of Delaware (the "Delaware Trustee").
Except as expressly set forth in this Declaration, any power of the
Regular Trustees may be exercised by, or with the consent of, a majority of the
Regular Trustee; provided that if there is only one Regular Trustees, all
powers of the Regular Trustees shall be exercised by such one Regular Trustee.
The initial Regular Trustee shall be:
Gregory L. Cauthen
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 2.2 Delaware Trustee
Notwithstanding any other provision of this Declaration, the Delaware
Trustee, in its capacity as Delaware Trustee, shall not be entitled to exercise
any of the powers,
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<PAGE> 6
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees described in this Declaration. The Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.
SECTION 2.3 Execution of Documents
(a) The Regular Trustees are authorized to execute on behalf of
the Trust any documents that the Regular Trustees have the power and authority
to cause the Trust to execute pursuant to Section 1.7; and
(b) The Regular Trustees may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 their
power for the purposes of signing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 1.7.
ARTICLE III
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 3.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to Holders might properly be paid.
SECTION 3.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict
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<PAGE> 7
the duties and liabilities of an Indemnified Person otherwise existing at law
or in equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 3.3 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by
this Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage
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<PAGE> 8
or claim incurred by such Indemnified Person by reason of gross negligence or
willful misconduct with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Sponsor prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Sponsor of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as authorized in
Section 3.3(a).
SECTION 3.4 Outsider Businesses.
Any Covered Person and the Delaware Trustee may engage in or possess
an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. No
Covered Person or the Delaware Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and any Covered Person and the Delaware Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other opportunity.
Any Covered Person may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
ARTICLE IV
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 4.1 Amendments.
At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by a majority of the
Regular Trustees and the Sponsor.
SECTION 4.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the
revocation of the Sponsor's charter or of the Trust's
certificate of trust;
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<PAGE> 9
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent
of all of a majority of the Regular Trustees and the
Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 4.2(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
SECTION 4.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 4.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 4.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bond and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 4.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 4.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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<PAGE> 10
IN WITNESS WHEREOF, the undersigned has caused this Declaration of
Trust of SCI Financing II to be executed as of the day and year first above
written.
/s/ GREGORY L. CAUTHEN
-----------------------------------------------
Gregory L. Cauthen, as Trustee
The Bank of New York (Delaware), as Trustee
By: /s/ JOSEPH F. LEARY
--------------------------------------------
Name: Joseph F. Leary
Title: Vice President
Service Corporation International, as Sponsor
By: /s/ GREGORY L. CAUTHEN
---------------------------------------------
Gregory L. Cauthen
Vice President
and Treasurer
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<PAGE> 11
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of SCI Financing II desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C. Section
3810 hereby certify as follows:
1. The name of the business trust being formed hereby (the
"Trust") is "SCI Financing II".
2. The name and business address of the trustee of the Trust
which has its principal place of business in the State of
Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Dated: , 1995
-----------------------------------------------
Name:
The Bank of New York (Delaware), as Trustee
By:
--------------------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 3.17
CERTIFICATE OF INCORPORATION
OF
SCI FINANCING CORPORATION
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of
the State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is SCI Financing Corporation.
SECOND: The address, including street, number, city, and county, of
the registered office of the corporation in the State of Delaware is 32
Loockerman Square, Suite L-100, City of Dover 19904, County of Kent; and the
name of the registered agent of the corporation in the State of Delaware at
such address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purposes to be conducted and
promoted by the corporation shall be to conduct any lawful business, to promote
any lawful purpose, and to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
FOURTH: The total number of shares of stock which the corporation
shall have authority to issue is 1,000. The par value of each of such shares is
$1.00. All such shares are of one class and are shares of Common Stock.
FIFTH: The name and the mailing address of the incorporator are as
follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Howard Volz 600 Travis, 18th Floor
Houston, TX 77002-2912
</TABLE>
SIXTH: The corporation is to have perpetual existence.
1
<PAGE> 2
SEVENTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs
of the corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
fixed by, or in the manner provided in, the Bylaws. The phrase "whole
Board" and the phrase "total number of directors" shall be deemed to have
the same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other Bylaws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
Delaware, and, after the corporation has received any payment for any of
its stock, the power to adopt, amend, or repeal the Bylaws of the
corporation may be exercised by the Board of Directors of the corporation;
provided, however, that any provision for the classification of
2
<PAGE> 3
directors of the corporation for staggered terms pursuant to the
provisions of subsection (d) of Section 141 of the General Corporation Law
of the State of Delaware shall be set forth in an initial Bylaw or in a
Bylaw adopted by the stockholders entitled to vote of the corporation
unless provisions for such classification shall be set forth in this
certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof
to notice of, and the right to vote at, any meeting of stockholders.
Whenever the corporation shall be authorized to issue more than one class
of stock, no outstanding share of any class of stock which is denied voting
power under the provisions of the certificate of incorporation shall
entitle the holder thereof to the right to vote at any meeting of
stockholders except as the provisions of paragraph (2) of subsection (b) of
Section 242 of the General Corporation Law of the State of Delaware shall
otherwise require; provided, that no share of any such class which is
otherwise denied voting power shall entitle the holder thereof to vote upon
the increase or decrease in the number of authorized shares of said class.
NINTH: The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7)
of subsection (b) of Section 102 of the General Corporation Law of the State
of Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities, or other matters referred to
in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
3
<PAGE> 4
ELEVENTH: From time to time any of the provisions of this certificate
of incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on June 21, 1995
/s/ HOWARD L. VOLZ
-------------------------------
Howard Volz, Incorporator
4
<PAGE> 1
EXHIBIT 3.18
BYLAWS OF
SCI FINANCING CORPORATION
A DELAWARE CORPORATION
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of shareholders shall be
held on the second Thursday in May of each year, at ten o'clock in the morning,
if not a legal holiday, and, if a legal holiday, then on the next succeeding
business day, for the purpose of electing directors. Any business may be
transacted at an annual meeting, except as otherwise provided by law or by these
bylaws. The Board of Directors may postpone the time of holding the annual
meeting of shareholders for such period not exceeding sixty (60) days as they
shall deem advisable.
Section 2. Special Meeting. A special meeting of shareholders may be
called at any time by the holders of at least 10 percent (10%) of the
outstanding stock entitled to be voted at such meeting, by the Board of
Directors, or by the President. Only such business shall be transacted at a
special meeting as may be stated or indicated in the notice of such meeting.
Section 3. Place. The Annual meeting of shareholders may be held at any
place within or without the state of incorporation as may be designated by the
Board of Directors. Special meetings of shareholders may be held at any place
within or without the state of incorporation as may be designated by the
President, if he shall call the meeting; or the Board of Directors, if they
shall call the meeting. Meetings of shareholders shall be held at
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the principal office of the corporation unless another place is designated for
meetings in the manner provided herein.
Section 4. Notice. Written or printed notice stating the place, day and
hour of each meeting of shareholders and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) nor more than fifty (50) days before the date of the meeting,
either personally or by mail, to each shareholder of record entitled to vote at
such meeting.
Section 5. Quorum. The holders of at least a majority of the
outstanding stock entitled to vote thereat and present in person or by proxy,
shall constitute a quorum. Except as otherwise required by law, the articles of
incorporation or these bylaws, the act of a majority of the stock at any meeting
at which a quorum is present shall be the act of the shareholders' meeting. The
shareholders present at any meeting, though less than a quorum, may adjourn the
meeting and any business may be transacted at the adjournment that could be
transacted at the original meeting. No notice of adjournment, other than the
announcement at the meeting, need be given.
Section 6. Proxies. At all meetings of shareholders, a shareholder may
vote either in person or by proxy executed in writing by the shareholder or by
his duly authorized attorney in fact. Such proxies shall be filed with the
Secretary of the corporation before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its execution unless
otherwise provided in the proxy. Each proxy shall be revocable unless expressly
provided therein to be irrevocable or unless otherwise made irrevocable by law.
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Section 7. Voting of Shares. Each outstanding share entitled to vote
upon a matter submitted to a vote at a meeting of shareholders shall be entitled
to one vote on such matter.
Section 8. Officers. The President shall preside at and the Secretary
shall keep the records of each meeting of shareholders, and in the absence of
either such officer, his duties shall be performed by some person appointed by
the meeting.
Section 9. List of Shareholders. A complete list of shareholders
entitled to vote at each shareholders' meeting, arranged in alphabetical order,
with the address of and number of share held by each, shall be prepared by the
Secretary and filed at the registered office of the corporation and subject to
inspection by any shareholder during usual business hours for a period of ten
(10) days prior to such meeting and shall be produced at such meeting and at all
times during such meeting be subject to inspection by any shareholder.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Number of Term of Office. The business and property of the
corporation shall be managed and controlled by the Board of Directors, and
subject to the restrictions imposed by law, by the articles of incorporation, or
by these bylaws, and they may exercise all the powers of the corporation.
The Board of Directors shall consist of not more than 7 and not less
than 3. The number of directors may be increased or decreased (provided such
decrease does not shorten the term of any incumbent director) from time to time
by amendment to the bylaws.
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Each director shall hold office for the term for which he is elected
and until his successor shall have been elected and qualified. Directors need
not be shareholders nor residents of state of incorporation. Any director may be
removed from office by a majority vote of the shareholders at any meeting at
which a quorum is present.
Any vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors through less than a
quorum of the Board of Directors. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. In case of any
increase in the number of directors the additional directors shall be elected at
an annual meeting or at a special meeting of shareholders called for that
purpose.
Section 2. Meeting of Directors. The directors may hold their meetings
and may have an office and keep the books of the corporation, except as
otherwise provided by statute, in such place or places within or without the
state of incorporation, as the Board of Directors may from time to time
determine.
Section 3. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as the
annual meeting of the shareholders, and no notice of such meeting shall be
necessary.
Section 4. Election of Officers. At the first meeting of the Board of
Directors in each year at which a quorum shall be present, held next after the
annual meeting of shareholders, the Board of Directors shall proceed to the
election of the officers of the corporation.
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Section 5. Regular Meeting. Regular meetings of the Board of Directors
shall be held at such times and places as shall be designated, from time to time
by resolution of the Board of Directors. Notice of such regular meetings shall
not be required.
Section 6. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the President or by a majority of the directors
for the time being in office.
Section 7. Notice. The Secretary shall give notice of each special
meeting in person, or by mail, or by telegraph at least two (2) days before the
meeting to each director. The attendance of a director at any meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
on the grounds that the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
Section 8. Quorum. A majority of the directors fixed by these bylaws
shall constitute a quorum for the transaction of business, but if at any meeting
of the Board of Directors there be less than a quorum present, a majority of
those present or any director solely present may adjourn the meeting from time
to time without further notice. The act of a majority of the directors present
at a meeting at which a quorum is in attendance shall be the act of the Board of
Directors, unless the act of a greater number is required by the articles of
incorporation or by these bylaws.
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Section 9. Order of Business. At meetings of the Board of Directors,
business shall be transacted in such order as from time to time the Board may
determine.
At all meetings of the Board of Directors, the President shall preside,
and in the absence of the President a chairman shall be chosen by the Board from
among the directors present.
The Secretary of the corporation shall act as Secretary of the meetings
of the Board of Directors, but in the absence of the Secretary, the presiding
officer may appoint any person to act as secretary of the meeting.
Section 10. Compensation. Directors as such shall not receive any
stated salary for their service, but by resolution of the Board a fixed sum and
expense of attendance, if any, may be allowed for attendance at such regular or
special meetings of the Board; provided, that nothing contained herein shall be
construed to preclude any director from serving the corporation in any other
capacity or receiving compensation therefor.
Section 11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
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Section 12. Committees. The Board of Directors may by resolution
provide for such standing or special committees as it from time to time deems
desirable, and discontinue the same at its pleasure. Each such committee shall
have such powers and perform such duties, not inconsistent with laws, as may be
assigned to it by the Board of Directors. If provision be made for any such
committee, the members thereof shall be appointed by the Board of Directors and
shall serve at the pleasure of the Board. Vacancies in such committees shall be
filled by the Board of Directors.
Section 13. Action Without Meeting. Any action permitted, or required
by law, these bylaws, or by the articles of incorporation of the corporation, to
be taken at a meeting of the Board of Directors or any executive may be taken
without a meeting if a consent in writing, setting forth the action so taken, is
signed by all members of the Board of Directors or executive committee, as the
case may be. Such consent shall have the same force and effect as a unanimous
vote at a meeting, and may be stated as such in any document or instrument filed
with the Secretary of State.
ARTICLE III
OFFICERS
Section 1. Number, Titles and Term of Office. The officers of the
corporation shall be a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Directors and may consist of one or
more Executive Vice Presidents and one or more Senior Vice Presidents if being
appropriate by the Board of Directors), a Treasurer, and a Secretary, and such
Assistant Treasurers, Assistant Secretaries or other officers as may
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be elected by the Board of Directors. Each officer shall hold office until his
successor shall have been duly elected and qualified or until his death or until
he shall resign or shall have been removed in the manner hereinafter provided.
One person may hold more than one office, except that the President shall not
hold the office of Secretary. None of the officers need be a director.
Section 2. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
Section 3. Vacancies. A vacancy in the office of any officer may be
filled by vote of a majority of the directors for the unexpired portion of the
term.
Section 4. Powers and Duties of the President. The President shall be
the principal executive officer of the corporation and, subject to the Board of
Directors he shall have general administrative charge, management and control of
the properties and operations of the corporation in the ordinary course of its
business with all such powers with respect to such properties and operations as
may be reasonably incident to such responsibilities, he shall preside at all
meetings of the shareholders and at all meetings of the Board of Directors, he
may agree upon and execute all bonds, contracts and all other obligations in the
name of the corporation, he may sign all certificates for shares of capital
stock of the corporation.
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Section 5. Vice Presidents. Each Vice President shall have the powers
and duties as may be assigned to him by the Board of Directors and shall
exercise the powers of the Board of Directors and shall exercise the powers of
the President during that officer's absence or inability to act. Any action
taken by a Vice President in the performance of the duties of the President
shall be conclusive evidence of the absence or inability to act of the President
at the time such action was taken.
Section 6. Treasurer. The Treasurer shall have custody of all the funds
and securities of the corporation which come into his hands. When necessary or
proper, he may endorse, on behalf of the corporation, for collection checks,
notes and other obligations and shall deposit the same to the credit of the
corporation in such bank or banks or depositories as shall be designated in the
manner prescribed by the Board of Directors, he may sign all receipts and
vouchers for payments made to the corporation, either alone or jointly with such
other officer as is designated by the Board of Directors. Whenever required by
the Board of Directors, he shall render a statement of his cash account, he
shall enter or cause to be entered regularly in the books of the corporation to
be kept by him for that purpose full and accurate accounts of all moneys
received and paid out on account of the corporation, he shall perform all acts
incident to the position of Treasurer subject to the control of the Board of
Directors, he shall, if required by the Board of Directors, give such bond for
the faithful discharge of his duties in such form as the Board of Directors may
require.
Section 7. Assistant Treasurer. Each Assistant Treasurer shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as
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may be assigned to him by the Board of Directors. The Assistant Treasurers shall
exercise the powers of the Treasurer during that officer's absence or inability
to act.
Section 8. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors and committees thereof and the minutes of all
meetings of the stockholders, in books provided for that purpose, he shall
attend to the giving and serving of all notices; he may sign with the President
in the name of the corporation, all contracts of the corporation and affix the
seal of the corporation thereto; he may sign with the President all certificates
for shares of the capital stock of the corporation; he shall have charge of the
certificate books, transfer books and stock edgers, and such other books and
papers as the Board of Directors may direct, all of which shall at all
reasonable times be open to inspection of any director upon application at the
office of the corporation during business hours, and he shall in general perform
all duties incident to the office of Secretary, subject to the control of the
Board of Directors.
Section 9. Assistant Secretaries. Each Assistant Secretary shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as may be assigned to him by the Board of Directors or the
Secretary. The Assistant Secretaries shall exercise the powers of the Secretary
during that officer's absence or inability to act.
ARTICLE IV
INDEMNIFICATION
Section 1. Each director and officer of the company and any person who
may have served at the request of the Company as a director or officer of
another corporation in
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which it owns shares or of which it is a creditor shall be indemnified by the
Company against any costs and expenses, including counsel fees, actually and
necessarily incurred in connection with the defense of any civil, criminal,
administrative, or other claim, action, suit, or proceeding, whether by or in
the right of the Company or otherwise, in which he may become involved or with
which he may be threatened by reason of his being or having been a director or
officer of the Company or by reason of his serving or having served at the
request of the Company as a director or officer of another corporation as
aforesaid, provided that, in connection with such matter, the said director or
officer acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Costs and expenses indemnified shall include payments in
settlement or in satisfaction of any judgment, fine or penalty.
The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the director, officer, or
representative did not act in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of the Company, or with respect to
any criminal action or proceeding that he had reasonable cause to believe his
conduct was unlawful.
Section 2. Any indemnification provided for herein, unless ordered by a
court, shall be made by the Company only as authorized in the specific case upon
a determination that indemnification of the director or officer is proper in the
circumstances because he had met the applicable standard of conduct set forth in
Section 1 hereof. Such determination shall
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be made (a) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit, or proceeding, or (b) if
such quorum is not obtainable, or, even if obtainable, and a quorum of
disinterested directors so directs, by independent legal counsel (who may be of
counsel to the corporation) in a written opinion, or (c) by the shareholders.
Section 3. It is specifically intended to provide indemnification with
regard to acts or omissions on the part of directors or officers which may be or
are adjudged to constitute negligence, misrepresentations, slander, libel,
misconduct, or other breach of duty, but only to the extent that such
indemnification may be provided for under law, and only upon a determination
under Section 2 hereof that such conduct was in good faith and reasonably
believed to be in or not opposed to the best interest of the Company and, with
respect to any criminal action or proceeding, that there was not reasonable
cause for belief that the conduct was unlawful.
Section 4. The Company shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation itself would have the power to indemnify him
against such liability under law.
Section 5. To the extent permitted by law, expenses incurred in
connection with a civil, criminal, administrative or investigative action, suit
or proceeding, or threat thereof,
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may be paid by the corporation in advance of the final disposition of such
action, suit or proceeding as authorized in the manner provided in Section 2 of
this Article, upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation as authorized in this Article.
Section 6. Should any of the indemnification rights provided for herein
be declared invalid, such declaration shall not invalidate the indemnification
provisions generally, and such of the indemnification rights provided for herein
as are permissible under law shall remain effective.
Section 7. The foregoing right of indemnification shall not be deemed
exclusive of any other rights to which any director, officer, or representative
may be entitled under any other bylaw, agreement, or vote of shareholders or
disinterested directors, as a matter of law or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, or representative and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
Section 8.
(a) In addition, and not in lieu of, any indemnity provided under the
preceding sections of this Article IV, the Company shall indemnify each
director, officer or employee and each former director, officer or employee of
the Company against any costs and expenses, including counsel fees, actually and
necessarily incurred in connection with the defense of any civil, criminal,
administrative or other claim, action, suit or proceeding,
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whether by or in the right of the Company or otherwise, in which he may become
involved or with which he may be threatened with regard to any error or omission
or breach of duty committed or alleged to have been committed in the discharge
of his fiduciary duties, obligations or responsibilities with respect to any
employee pension, deferred compensation, welfare benefit or other benefit plan,
including specifically, but without limitation, plans covered under the Employee
Retirement Income Security Act of 1974 (which plans are herein collectively
called "employee benefit plan"), of the corporation or any other corporation in
which it owns shares of capital stock, or of which it is a creditor (which
entities are herein collectively called the "Company") provided, that in
connection with such matter, the said director, officer or employee acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The Company shall be deemed to have requested a director, officer or
employee of the Company to serve an employee benefit plan where the performance
by such person of his duties to the Company also imposes duties on or otherwise
involves services by such person to such employee benefit plan or participants
or beneficiaries thereof; excise taxes assessed on a person with respect to any
employee benefit plan pursuant to said Act of Congress shall be deemed "fines;"
and action taken or omitted by such a person with respect to an employee benefit
plan in the performance of such person's duties for a purpose reasonably
believed by such person to be in the interest of the participants and
beneficiaries
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of the employee benefit plan, shall be deemed to be for a purpose which is not
opposed to the best interest of the Company.
Costs and expenses indemnified shall include payments in settlement of
in satisfaction of any judgement, fine or penalty. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the director, officer, or employee did not act in good faith.
(b) Any indemnification provided for herein, unless ordered by a court,
shall be made by the Company only as authorized in the specific case upon a
determination that indemnification of the director, officer or employee is
proper in the circumstances because he had met the applicable standard of
conduct set forth in Section 8(a) hereof. Such determination shall be made (a)
by the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit, or proceeding, or (b) if such quorum
is not obtainable, or even if obtainable, and a quorum of disinterested
directors so directs, by independent legal counsel (who may be of counsel to the
corporation) in a written opinion, or (c) by the shareholders.
(c) It is specifically intended to provide indemnification with regard
to acts or omissions on the part of directors, officers or employees which may
be or adjudged to constitute negligence, misrepresentations, slander, libel,
misconduct, or other breach of duty, but only to the extent that such
indemnification may be provided for under law, and only upon a determination
under Section 8(b) hereof that such conduct was in good faith.
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(d) The Company shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or agent of
the Company as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise (and "other enterprise"
shall in this Section 8 be deemed to include an employee benefit plan), against
any liability asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation itself would
have the power to indemnify him against such liability under law.
(e) To the extent permitted by law, expenses incurred in connection
with a civil, criminal, administrative or investigative action, suit or
proceeding, or threat thereof, may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding as authorized in the manner
provided in Section 8(b) hereof, upon receipt of an undertaking by or on behalf
of the director, officer or employee to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
(f) Should any of the indemnification rights provided for herein be
declared invalid, such declaration shall not invalidate the indemnification
provisions generally, and such of the indemnification rights provided for herein
as are permissible under law shall remain effective.
(g) The foregoing right of indemnification shall not be deemed
exclusive of any other rights to which any director, officer, employee or
representative may be entitled under any other bylaw, agreement, or vote of
shareholders or disinterested directors, as a matter of law or otherwise, both
as to action in his official capacity and as to action in another
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capacity while holding such office or performing such of his duties and shall
continue as to a person who has ceased to be a director, officer, employee or
representative and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
ARTICLE V
CAPITAL STOCK
Section 1. Certificates of Shares. The certificates for shares of the
capital stock of the corporation shall be in such form as shall be approved by
the Board of Directors. The certificates shall be signed by the President or a
Vice President, and also by the Secretary of an Assistant Secretary or by the
Treasurer or an Assistant Treasurer and may be sealed with the seal of this
corporation or a facsimile thereof. Where any such certificate is countersigned
by a transfer agent, or registered by a registrar, either of which is other than
the corporation itself or an employee of the corporation, the signatures of any
such President or Vice President and Secretary or Assistant Secretary may be
facsimiles. They shall be consecutively numbered and shall be entered in the
books of the corporation as they are issued and shall exhibit the holder's name
and the number of shares.
Section 2. Transfer of Shares. The shares of stock of the corporation
shall be transferable only on the books of the corporation by the holders
thereof in person or by their duly authorized attorneys or legal
representatives, upon surrender and cancellation of certificates for a like
number of shares.
Section 3. Closing of Transfer Books. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders, or
any
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adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purpose, the Board
of Directors of the corporation may provide that the stock transfer books shall
be closed for a stated period but not to exceed in any case, fifty (50) days. If
stock transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books shall
be closed for at least ten (10) days immediately preceding such meeting. In lieu
of closing the stock transfer books the Board of Directors may fix in advance a
date as to the record date for any such determination of shareholders, such date
in any case to be not more than fifty (50) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or stockholders entitled to receive payment of a dividend, the
date on which the notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
Section 4. Regulations. The Board of Directors shall have power and
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer and registration or the replacement of
certificates for shares of the capital stock of the corporation.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 1. Offices. Until the Board of Directors otherwise determines,
the registered office of the corporation required by law, shall be the principal
place of business of the corporation in the state of incorporation but such
registered office may be changed from time to time by the Board of Directors in
the manner provided by law and need not be identical to the principal place of
business of the corporation.
Section 2. Fiscal Year. The fiscal year of the corporation shall be
such as the Board of Directors shall, by resolution, establish.
Section 3. Seal. The seal of the corporation shall be such as from time
to time may be approved by the Board of Directors.
Section 4. Notice and Waiver of Notice. Whenever any notice whatever is
required to be given under the provisions of these bylaws, said notice shall be
deemed to be sufficient if given by depositing the same in a post office box in
a sealed postpaid wrapper addressed to the person entitled thereto at his post
office address, as it appears on the books of the corporation, and such notice
shall be deemed to have been given on the day of such mailing. A waiver of
notice, signed by the person or persons entitled to said notice, whether before
or after the time stated therein, shall be deemed equivalent thereto.
Section 5. Resignations. Any director or officer may resign at any
time. Such resignations shall be made in writing and shall take effect at the
time specified therein, or, if not time be specified, at the time of its receipt
by the President and Secretary. The
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acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 6. Securities of Other Corporation. The President or any Vice
President of the corporation shall have power and authority to transfer, endorse
for transfer, vote, consent or take any other action with respect to any
securities of another issuer which may be held or owned by the corporation and
to make, execute and deliver any waiver, proxy or consent with respect to any
such securities.
ARTICLE VII
AMENDMENTS
These bylaws may be altered, amended, or repealed by the affirmative
vote of the holders of a majority of the outstanding stock at any annual
meeting, or at any special meeting if notice of the proposed amendment be
contained in the notice of said special meeting, or by the affirmative vote of a
majority of the full Board of Directors at any regular or special meeting,
provided notice of said proposed amendment be contained in the notice of the
meeting.
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EXHIBIT 4.10
AGREEMENT TO FURNISH INSTRUMENTS
WITH RESPECT TO LONG-TERM DEBT
Pursuant to Item 601(b)(4) of Regulation S-K, there is not
filed with this Registration Statement certain instruments with respect to
long-term debt under which the total amount of securities authorized thereunder
does not exceed 10 per cent of the total assets of Registrant and its
subsidiaries on a consolidated basis. Registrant agrees to furnish a copy of
any such instrument to the Commission upon request.
SERVICE CORPORATION INTERNATIONAL
By: /s/ James M. Sheiger
Name: James M. Sheiger
Title: Senior Vice President,
General Counsel and
Secretary
Date: June 28, 1995
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 of our report, which includes an explanatory paragraph
pertaining to accounting changes, dated March 10, 1995 on our audit of the
consolidated financial statements and financial statement schedule of Service
Corporation International as of December 31, 1994, and for the year then ended,
which report is included in the Annual Report on Form 10-K for the year ended
December 31, 1994. We also consent to the reference to our firm under the
caption "Experts".
/s/ COOPERS & LYBRAND LLP
Houston, Texas
June 27, 1995
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Service Corporation
International, SCI Finance LLC, SCI Financing Corporation, SCI Financing I and
SCI Financing II for the registration of up to $1,000,000,000 of (i) Service
Corporation International Company Debt Securities, (ii) Service Corporation
International Common Stock, (iii) Service Corporation International Preferred
Stock, (iv) Service Corporation International Depositary Shares, (v) Service
Corporation International Depositary Receipts, (vi) Service Corporation
International Common Stock Warrants, (vii) SCI Finance LLC Preferred
Securities, (viii) SCI Financing Corporation Subordinated Debt Securities,
(ix) SCI Financing I Trust Preferred Securities, and (x) SCI Financing II Trust
Preferred Securities, and to the incorporation by reference therein of our
report dated February 8, 1993, with respect to the consolidated financial
statements and schedules of Service Corporation International included in its
Annual Report (Form 10-K) for the year ended December 31, 1992, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Houston, Texas
June 22, 1995
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 2
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 7th day of June, 1995.
/s/ R. L. Waltrip
-------------------------
R. L. Waltrip
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 4
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 7th day of June, 1995.
/s/ George R. Champagne
-------------------------
George R. Champagne
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 6
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 7th day of June, 1995.
/s/ Wesley T. McRae
-------------------------
Wesley T. McRae
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 8
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 7th day of June, 1995.
/s/ Anthony L. Coelho
-------------------------
Anthony L. Coelho
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 10
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 8th day of June, 1995.
/s/ Douglas M. Conway
-------------------------
Douglas M. Conway
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 12
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ Jack Finkelstein
-------------------------
Jack Finkelstein
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 14
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ A. J. Foyt, Jr.
----------------------------
A. J. Foyt, Jr.
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 16
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 13th day of June, 1995.
/s/ James J. Gavin, Jr.
----------------------------
James J. Gavin, Jr.
<PAGE> 17
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 18
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ James H. Greer
----------------------------
James H. Greer
<PAGE> 19
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 20
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ L. William Heiligbrodt
----------------------------
L. William Heiligbrodt
<PAGE> 21
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 22
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 7th day of June, 1995.
/s/ B. D. Hunter
----------------------------
B. D. Hunter
<PAGE> 23
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 24
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ John W. Mecom, Jr.
----------------------------
John W. Mecom, Jr.
<PAGE> 25
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 26
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 7th day of June, 1995.
/s/ Clifton H. Morris, Jr.
----------------------------
Clifton H. Morris, Jr.
<PAGE> 27
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 28
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ Samuel W. Rizzo
----------------------------
Samuel W. Rizzo
<PAGE> 29
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 30
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ E. H. Thornton, Jr.
----------------------------
E. H. Thornton, Jr.
<PAGE> 31
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 32
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ W. Blair Waltrip
----------------------------
W. Blair Waltrip
<PAGE> 33
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of Service Corporation International, a Texas
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne and James M. Shelger their true and lawful attorneys and agents (each
with authority to act alone), to do any and all acts and things and to execute
any and all instruments which said attorneys and agents deem necessary or
advisable: (i) to enable the Company to comply with the Securities Act of 1933,
as amended, and any rules, regulations, and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of the offering, sale and delivery of certain
securities of said corporation as set forth below (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as officer or director, or both, of the Company to Registration
Statements or to any amendments (including post-effective amendments) thereto
filed with the Securities and Exchange Commission in respect of said Securities,
and to any instrument or document filed as part of, as an exhibit to or in
connection with said Registration Statements or amendments; and (ii) to register
or qualify said Securities for sale and to register or license the Company as a
broker or dealer in said Securities under the securities or Blue Sky laws of all
such States as may be necessary or appropriate to permit therein the offering
and sale of said Securities as contemplated by said Registration Statements,
including specifically, without limitation, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer or
director, or both, of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are:
(i) Debt securities of the Company consisting of debentures
(whether senior, senior subordinated or subordinated), notes and/or other
unsecured evidences of indebtedness;
(ii) Common Stock, par value $1.00 per share ("Common Stock"),
of the Company and the related Series C Junior Participating Preferred Stock
Rights ("Rights"), including without limitation Common Stock of the Company
which may be issued upon conversion of any securities of the Company or any of
its subsidiaries;
(iii) Preferred stock, par value $1.00 per share, of the
Company and depositary shares and receipts representing fractional shares of
such stock;
<PAGE> 34
(iv) Warrants to acquire Common Stock (including any associated
Rights) of the Company;
(v) Debt or equity securities of any subsidiary of the Company,
including securities convertible into Common Stock (including any associated
Rights) of the Company; and
(vi) Guarantees by the Company of any debt or equity securities
of any subsidiary of the Company.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 6th day of June, 1995.
/s/ Edward E. Williams
----------------------------
Edward E. Williams
<PAGE> 35
POWER OF ATTORNEY
(SCI FINANCING CORPORATION)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of SCI Financing Corporation, a Delaware
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne, James M. Shelger and Gregory L. Cauthen their true and lawful
attorneys and agents (each with authority to act alone), to do any and all acts
and things and to execute any and all instruments which said attorneys and
agents deem necessary or advisable: (i) to enable the Company to comply with the
Securities Act of 1933, as amended, and any rules, regulations, and requirements
of the Securities and Exchange Commission in respect thereof, in connection with
the registration under the said Securities Act of the offering, sale and
delivery of certain securities of said corporation as set forth below (the
"Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as officer or director, or both, of the
Company to Registration Statements or to any amendments (including
post-effective amendments) thereto filed with the Securities and Exchange
Commission in respect of said Securities, and to any instrument or document
filed as part of, as an exhibit to or in connection with said Registration
Statements or amendments; and (ii) to register or qualify said Securities for
sale and to register or license the Company as a broker or dealer in said
Securities under the securities or Blue Sky laws of all such States as may be
necessary or appropriate to permit therein the offering and sale of said
Securities as contemplated by said Registration Statements, including
specifically, without limitation, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as officer or director, or
both, of the Company to any application, statement, petition, prospectus, notice
or other instrument or document, or to any amendment thereto, or to any exhibit
filed as a part thereof or in connection therewith, which is required to be
signed by the undersigned and to be filed with the public authority or
authorities administering said Securities or Blue Sky laws for the purpose of so
registering or qualifying said Securities or registering or licensing the
Company, and the undersigned does hereby ratify and confirm as his own act and
deed all that said attorney and agent shall do or cause to be done by virtue
hereof.
The Securities of the Company covered by this power of attorney
are debt securities of the Company consisting of debentures (whether senior,
senior subordinated or subordinated), notes and/or other unsecured evidences of
indebtedness.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 23rd day of June, 1995.
/s/ Gregory L. Cauthen
----------------------------
<PAGE> 36
POWER OF ATTORNEY
(SCI FINANCING CORPORATION)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of SCI Financing Corporation, a Delaware
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne, James M. Shelger and Gregory L. Cauthen their true and lawful
attorneys and agents (each with authority to act alone), to do any and all acts
and things and to execute any and all instruments which said attorneys and
agents deem necessary or advisable: (i) to enable the Company to comply with the
Securities Act of 1933, as amended, and any rules, regulations, and requirements
of the Securities and Exchange Commission in respect thereof, in connection with
the registration under the said Securities Act of the offering, sale and
delivery of certain securities of said corporation as set forth below (the
"Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as officer or director, or both, of the
Company to Registration Statements or to any amendments (including
post-effective amendments) thereto filed with the Securities and Exchange
Commission in respect of said Securities, and to any instrument or document
filed as part of, as an exhibit to or in connection with said Registration
Statements or amendments; and (ii) to register or qualify said Securities for
sale and to register or license the Company as a broker or dealer in said
Securities under the securities or Blue Sky laws of all such States as may be
necessary or appropriate to permit therein the offering and sale of said
Securities as contemplated by said Registration Statements, including
specifically, without limitation, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as officer or director, or
both, of the Company to any application, statement, petition, prospectus, notice
or other instrument or document, or to any amendment thereto, or to any exhibit
filed as a part thereof or in connection therewith, which is required to be
signed by the undersigned and to be filed with the public authority or
authorities administering said Securities or Blue Sky laws for the purpose of so
registering or qualifying said Securities or registering or licensing the
Company, and the undersigned does hereby ratify and confirm as his own act and
deed all that said attorney and agent shall do or cause to be done by virtue
hereof.
The Securities of the Company covered by this power of attorney
are debt securities of the Company consisting of debentures (whether senior,
senior subordinated or subordinated), notes and/or other unsecured evidences of
indebtedness.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 23rd day of June, 1995.
/s/ John H. Lohman, Jr.
----------------------------
<PAGE> 37
POWER OF ATTORNEY
(SCI FINANCING CORPORATION)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of SCI Financing Corporation, a Delaware
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne, James M. Shelger and Gregory L. Cauthen their true and lawful
attorneys and agents (each with authority to act alone), to do any and all acts
and things and to execute any and all instruments which said attorneys and
agents deem necessary or advisable: (i) to enable the Company to comply with the
Securities Act of 1933, as amended, and any rules, regulations, and requirements
of the Securities and Exchange Commission in respect thereof, in connection with
the registration under the said Securities Act of the offering, sale and
delivery of certain securities of said corporation as set forth below (the
"Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as officer or director, or both, of the
Company to Registration Statements or to any amendments (including
post-effective amendments) thereto filed with the Securities and Exchange
Commission in respect of said Securities, and to any instrument or document
filed as part of, as an exhibit to or in connection with said Registration
Statements or amendments; and (ii) to register or qualify said Securities for
sale and to register or license the Company as a broker or dealer in said
Securities under the securities or Blue Sky laws of all such States as may be
necessary or appropriate to permit therein the offering and sale of said
Securities as contemplated by said Registration Statements, including
specifically, without limitation, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as officer or director, or
both, of the Company to any application, statement, petition, prospectus, notice
or other instrument or document, or to any amendment thereto, or to any exhibit
filed as a part thereof or in connection therewith, which is required to be
signed by the undersigned and to be filed with the public authority or
authorities administering said Securities or Blue Sky laws for the purpose of so
registering or qualifying said Securities or registering or licensing the
Company, and the undersigned does hereby ratify and confirm as his own act and
deed all that said attorney and agent shall do or cause to be done by virtue
hereof.
The Securities of the Company covered by this power of attorney
are debt securities of the Company consisting of debentures (whether senior,
senior subordinated or subordinated), notes and/or other unsecured evidences of
indebtedness.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 23rd day of June, 1995.
/s/ Wesley T. McRae
----------------------------
<PAGE> 38
POWER OF ATTORNEY
(SCI FINANCING CORPORATION)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an
officer or director, or both, of SCI Financing Corporation, a Delaware
corporation (the "Company"), does hereby constitute and appoint George R.
Champagne, James M. Shelger and Gregory L. Cauthen their true and lawful
attorneys and agents (each with authority to act alone), to do any and all acts
and things and to execute any and all instruments which said attorneys and
agents deem necessary or advisable: (i) to enable the Company to comply with the
Securities Act of 1933, as amended, and any rules, regulations, and requirements
of the Securities and Exchange Commission in respect thereof, in connection with
the registration under the said Securities Act of the offering, sale and
delivery of certain securities of said corporation as set forth below (the
"Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as officer or director, or both, of the
Company to Registration Statements or to any amendments (including
post-effective amendments) thereto filed with the Securities and Exchange
Commission in respect of said Securities, and to any instrument or document
filed as part of, as an exhibit to or in connection with said Registration
Statements or amendments; and (ii) to register or qualify said Securities for
sale and to register or license the Company as a broker or dealer in said
Securities under the securities or Blue Sky laws of all such States as may be
necessary or appropriate to permit therein the offering and sale of said
Securities as contemplated by said Registration Statements, including
specifically, without limitation, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as officer or director, or
both, of the Company to any application, statement, petition, prospectus, notice
or other instrument or document, or to any amendment thereto, or to any exhibit
filed as a part thereof or in connection therewith, which is required to be
signed by the undersigned and to be filed with the public authority or
authorities administering said Securities or Blue Sky laws for the purpose of so
registering or qualifying said Securities or registering or licensing the
Company, and the undersigned does hereby ratify and confirm as his own act and
deed all that said attorney and agent shall do or cause to be done by virtue
hereof.
The Securities of the Company covered by this power of attorney
are debt securities of the Company consisting of debentures (whether senior,
senior subordinated or subordinated), notes and/or other unsecured evidences of
indebtedness.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 23rd day of June, 1995.
/s/ Curtis G. Briggs
----------------------------
<PAGE> 39
POWER OF ATTORNEY
(SCI FINANCING I)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee
of SCI Financing I, a Delaware business trust (the "Company"), does hereby
constitute and appoint George R. Champagne and James M. Shelger their true and
lawful attorneys and agents (each with authority to act alone), to do any and
all acts and things and to execute any and all instruments which said attorneys
and agents deem necessary or advisable: (i) to enable the Company to comply with
the Securities Act of 1933, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the said Securities Act of the offering,
sale and delivery of certain securities of the Company as set forth below (the
"Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as trustee of the Company to
Registration Statements or to any amendments (including post-effective
amendments) thereto filed with the Securities and Exchange Commission in respect
of said Securities, and to any instrument or document filed as part of, as an
exhibit to or in connection with said Registration Statements or amendments; and
(ii) to register or qualify said Securities for sale and to register or license
the Company as a broker or dealer in said Securities under the securities or
Blue Sky laws of all such States as may be necessary or appropriate to permit
therein the offering and sale of said Securities as contemplated by said
Registration Statements, including specifically, without limitation, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as trustee of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are preferred securities of the Company, including without limitation preferred
securities which may be convertible into equity securities of Service
Corporation International, and depositary shares and receipts representing
fractional shares of such equity securities.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 26th day of June, 1995.
/s/ Gregory L. Cauthen
----------------------------
<PAGE> 40
POWER OF ATTORNEY
(SCI FINANCING II)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee
of SCI Financing II, a Delaware business trust (the "Company"), does hereby
constitute and appoint George R. Champagne and James M. Shelger their true and
lawful attorneys and agents (each with authority to act alone), to do any and
all acts and things and to execute any and all instruments which said attorneys
and agents deem necessary or advisable: (i) to enable the Company to comply with
the Securities Act of 1933, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the said Securities Act of the offering,
sale and delivery of certain securities of the Company as set forth below (the
"Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as trustee of the Company to
Registration Statements or to any amendments (including post-effective
amendments) thereto filed with the Securities and Exchange Commission in respect
of said Securities, and to any instrument or document filed as part of, as an
exhibit to or in connection with said Registration Statements or amendments; and
(ii) to register or qualify said Securities for sale and to register or license
the Company as a broker or dealer in said Securities under the securities or
Blue Sky laws of all such States as may be necessary or appropriate to permit
therein the offering and sale of said Securities as contemplated by said
Registration Statements, including specifically, without limitation, the power
and authority to sign for and on behalf of the undersigned the name of the
undersigned as trustee of the Company to any application, statement, petition,
prospectus, notice or other instrument or document, or to any amendment thereto,
or to any exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said Securities or Blue Sky laws for the
purpose of so registering or qualifying said Securities or registering or
licensing the Company, and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
The Securities of the Company covered by this power of attorney
are preferred securities of the Company, including without limitation preferred
securities which may be convertible into equity securities of Service
Corporation International, and depositary shares and receipts representing
fractional shares of such equity securities.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents this 26th day of June, 1995.
/s/ Gregory L. Cauthen
----------------------------
<PAGE> 1
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________
Service Corporation International
(Exact name of obligor as specified in its charter)
Texas 84-0926774
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1929 Allen Parkway
Houston, Texas 77019
(Address of principal executive offices) (Zip code)
________________
Senior Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
- 2 -
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 28th day of June, 1995.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
<PAGE> 5
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries.
a member of the Federal Reserve System, at the close of business March 31,
1995, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin............ $ 3,575,856
Interest-bearing balances..................................... 747,540
Securities:
Held-to-maturity securities................................... 1,283,688
Available-for-sale securities................................. 1,615,292
Federal funds sold in domestic offices of the bank.............. 5,577,896
Loans and lease financing receivables:
Loans and leases, net of unearned income.......... 24,763,265
LESS: Allowance for loan and lease losses......... 532,411
LESS: Allocated transfer risk reserve............. 28,558
Loans and leases, net of unearned income,
allowance, and reserve...................................... 24,202,296
Assets held in trading accounts................................. 1,502,750
Premises and fixed assets (including capitalized leases)........ 618,958
Other real estate owned......................................... 47,755
Investments in unconsolidated subsidiaries and
associated companies.......................................... 184,149
Customers liability to this bank on acceptances outstanding..... 1,018,696
Intangible assets............................................... 101,149
Other assets.................................................... 1,227,291
-----------
Total assets.................................................... $41,703,316
===========
LIABILITIES
Deposits:
In domestic offices........................................... $18,543,633
Noninterest-bearing............................... 6,949,896
Interest-bearing.................................. 11,593,737
In foreign offices, Edge and Agreement
subsidiaries, and IBfs..................................... 11,303,075
Noninterest-bearing............................... 65,927
Interest-bearing.................................. 11,237,148
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaires, and in IBFs:
Federal funds purchased....................................... 1,327,537
Securities sold under agreements to repurchase................ 37,400
Demand notes issued to the U.S. Treasury........................ 97,827
Trading liabilities............................................. 1,349,293
Other borrowed money:
With original maturity of one year or less.................... 2,027,148
With original maturity of more than one year.................. 313,877
Bank's liability on acceptance executed and outstanding......... 1,018,848
Subordinated notes and debentures............................... 1,056,320
Other libilities................................................ 1,435,093
-----------
Total liabilities............................................... 38,510,051
-----------
EQUITY CAPITAL
Common stock.................................................... 942,284
Surplus......................................................... 525,666
Undivided profits and capital reserves.......................... 1,753,592
Net unrealized holding gains (losses) on
available-for-sale securities................................. (22,501)
Cumulative foreign currency translation adjustments............. (5,776)
-----------
Total equity capital............................................ 3,193,265
Total liabilities and equity capital............................ $41,703,316
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot }
Thomas A. Renyi } Directors
Alan R. Griffith }
- --------------------------------------------------------------------------------
