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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
Equity Corporation International
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share, including preferred share purchase
rights associated with the Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
294644 10 9
-----------------------------------------
(CUSIP Number)
James M. Shelger,
Service Corporation International,
1929 Allen Parkway,
Houston, Texas 77019
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 5, 1997
------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement. [ ] (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 8 Pages
<PAGE> 2
SCHEDULE 13D
- -------------------------- -----------------------
CUSIP NO. 294644 10 9 PAGE 2 OF 8 PAGES
------------ --- ---
- -------------------------- -----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Investment Capital Corporation
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
2
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OR ORGANIZATION
6
United States of America, State of Texas
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 225
SHARES --------------------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8
EACH 0
REPORTING --------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
WITH 9
225
--------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
225
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ]
12
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT ROW (11)
13
Less than 1%
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
SCHEDULE 13D
- -------------------------- -----------------------
CUSIP NO. 294644 10 9 PAGE 3 OF 8 PAGES
------------ --- ---
- -------------------------- -----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
SCI Capital Corporation
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
2
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OR ORGANIZATION
6
United States of America, State of Delaware
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 225
SHARES ---------------------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8
EACH 0
REPORTING ---------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
WITH 9
225
---------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
225
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ]
12
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT ROW (11)
13
Less than 1%
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 4
SCHEDULE 13D
- -------------------------- -----------------------
CUSIP NO. 294644 10 9 PAGE 4 OF 8 PAGES
------------ --- ---
- -------------------------- -----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
SCI Special, Inc.
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
2
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OR ORGANIZATION
6
United States of America, State of Delaware
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 225
SHARES ---------------------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8
EACH 0
REPORTING ---------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
9
225
---------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
225
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ]
12
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT ROW (11)
13
Less than 1%
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 5
SCHEDULE 13D
- -------------------------- -----------------------
CUSIP NO. 294644 10 9 PAGE 5 OF 8 PAGES
------------ --- ---
- -------------------------- -----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Service Corporation International
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
2
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [x]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OR ORGANIZATION
6
United States of America, State of Texas
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 225
SHARES ---------------------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8
EACH 0
REPORTING ---------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
WITH 9
225
---------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
225
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ]
12
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT ROW (11)
13
Less than 1%
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
C0
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 6
ITEM 1. SECURITY AND ISSUER
The Schedule 13D (together with Amendments No. 1, 2 and 3 thereto, the
"Schedule 13D") filed with the United States Securities and Exchange Commission
by Investment Capital Corporation ("ICC"), SCI Capital Corporation ("SCI
Capital"), SCI Special, Inc. ("SCI Special") and Service Corporation
International ("SCI") with respect to the common stock, par value $.01 per
share, including preferred share purchase rights associated with the common
stock (the "Common Stock") of Equity Corporation International, a Delaware
corporation (the "Issuer") is hereby amended to furnish the information set
forth below. All capitalized terms contained herein shall have the same
meanings ascribed to such terms in the Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Schedule 13D is hereby amended and restated to provide
the following information:
(a) According to the Issuer's Prospectus dated January 30, 1997,
there were 19,322,723 shares of Common Stock outstanding following completion
of an offering of Common Stock by the Issuer covered by such Prospectus. As of
the date hereof, the Reporting Persons are the beneficial owners of 225 shares
of Common Stock of the Issuer, which represents less than 1% of the outstanding
shares of Common Stock.
(b) Each Reporting Person has the sole power to (i) vote and
direct the vote of the shares of Common Stock and (ii) dispose or direct the
disposition of the shares of Common Stock.
(c) Pursuant to the Purchase Agreement dated January 30, 1997,
between SCI, the Issuer and certain underwriters named therein (the "Purchase
Agreement"), SCI sold 7,994,522 shares of Common Stock at a net price equal to
$18.48 per share. The effective date of this transaction was February 5, 1997.
In connection with the transactions contemplated by the
Purchase Agreement, SCI "cashed-out" options to purchase 691,501 shares of
Common Stock previously granted to certain officers and directors of SCI.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or their proceeds from the sale
of, the shares of Common Stock.
(e) As of February 5, 1997, the Reporting Persons ceased to be the
beneficial owner of more than 5% of Common Stock.
Page 6 of 8 Pages
<PAGE> 7
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
See Item 5 for a discussion of the Purchase Agreement between SCI, the
Issuer and certain underwriters named therein.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A Agreement Regarding Joint Filing of Schedule 13D
Exhibit B Purchase Agreement
Page 7 of 8 Pages
<PAGE> 8
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
February 12, 1997 INVESTMENT CAPITAL CORPORATION
By: /s/ JOHN H. LOHMAN, JR.
-----------------------------------------
Name: John H. Lohman, Jr.
Title: Treasurer
SCI CAPITAL CORPORATION
By: /s/ JOHN H. LOHMAN, JR.
-----------------------------------------
Name: John H. Lohman, Jr.
Title: Treasurer
SCI SPECIAL, INC.
By: /s/ JOHN H. LOHMAN, JR.
-----------------------------------------
Name: John H. Lohman, Jr.
Title: Treasurer
SERVICE CORPORATION INTERNATIONAL
By: /s/ JAMES M. SHELGER
-----------------------------------------
Name: James M. Shelger
Title: Senior Vice President,
Page 8 of 8 Pages
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
- ------ --------------------------
<S> <C>
A Agreement Regarding Joint Filing of Schedule 13D
B Purchase Agreement
</TABLE>
<PAGE> 1
EXHIBIT A
AGREEMENT REGARDING JOINT FILING OF SCHEDULE 13D
This will evidence our agreement, in accordance with Rule 13d-1(f)
promulgated under the Securities Exchange Act of 1934, as amended, that the
attached statement on Schedule 13D is filed on behalf of the undersigned.
February 12, 1997 INVESTMENT CAPITAL CORPORATION
By: /s/ John H. Lohman, Jr.
----------------------------------------
Name: John H. Lohman, Jr.
Title: Treasurer
SCI CAPITAL CORPORATION
By: /s/ John H. Lohman, Jr.
----------------------------------------
Name: John H. Lohman, Jr.
Title: Treasurer
SCI SPECIAL, INC.
By: /s/ John H. Lohman, Jr.
----------------------------------------
Name: John H. Lohman, Jr.
Title: Treasurer
SERVICE CORPORATION INTERNATIONAL
By: /s/ James M. Shelger
---------------------------------------
Name: James M. Shelger
Title: Senior Vice President,
General Counsel and Secretary
<PAGE> 1
================================================================================
EQUITY CORPORATION INTERNATIONAL
(a Delaware corporation)
7,994,522 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
Dated: January 30, 1997
================================================================================
<PAGE> 2
EQUITY CORPORATION INTERNATIONAL
(A DELAWARE CORPORATION)
7,994,522 SHARES OF Common STOCK
(PAR VALUE $.01 PER SHARE)
PURCHASE AGREEMENT
January 30, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ABN AMRO CHICAGO CORPORATION
J.P. MORGAN SECURITIES INC.
RAYMOND JAMES & ASSOCIATES, INC.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Equity Corporation International, a Delaware corporation (the
"Company"), and Service Corporation International, a Texas corporation (the
"Selling Stockholder"), confirm their respective agreements with Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom Merrill Lynch, ABN AMRO Chicago
Corporation, J.P. Morgan Securities Inc. and Raymond James & Associates, Inc.
are acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Selling Stockholder and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("Common
Stock"), together with the Preferred Share Purchase Rights (the "Rights")
associated with such shares, set forth in Schedules A and B hereto and (ii) the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
1,199,178 additional shares of Common Stock, together with the Rights
associated with such shares, from the Company to cover over-allotments, if any.
The aforesaid 7,994,522 shares of Common Stock and associated Rights (the
<PAGE> 3
"Initial Securities") to be purchased by the Underwriters and all or any part
of the shares of Common Stock and associated Rights subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities."
The Company and the Selling Stockholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Commission File No.
333-17873) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), and such registration statement has
become effective. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 43OA") of the rules and regulations of the
Commission under the 1933 Act (the " 1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company
has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations,
prepare and file a term sheet (a "Term Sheet") in accordance with the
provisions of Rule 434 and Rule 424(b). The information included in such
prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, the schedules thereto, if any, and the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time it became effective and including the Rule 430A Information and the Rule
434 Information, as applicable, is herein called the "Registration Statement."
Any registration statement filed by the Company pursuant to Rule 462(b) of the
1933 Act Regulations to register a portion of the Securities is herein referred
to as the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final prospectus, including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished
to the Underwriters for use in connection with the offering of the Securities
is herein called the "Prospectus." If Rule 434 is relied on, the term
"Prospectus" shall refer to the preliminary prospectus dated January 9, 1997,
together with the Term Sheet, and all references in this Agreement to the date
of the Prospectus shall mean the date of the Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include, if applicable, the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
2
<PAGE> 4
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any documents under the Securities Exchange Act of 1934, as amended (the
"1 934 Act"), which are incorporated by reference in the Registration Statement,
such preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
The Registration Statement (including, if applicable, any Rule 462(b)
Registration Statement) has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
(including, if applicable, any Rule 462(b) Registration Statement) has
been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement (including,
if applicable, any Rule 462(b) Registration Statement) and any
post-effective amendments thereto became effective and at the Closing
Time (AND, if any Option Securities are purchased, at each Date of
Delivery), the Registration Statement (including, if applicable, any
Rule 462(b) Registration Statement) and any post-effective amendments
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not 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. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus or
any such amendment or supplement was issued and at the Closing Time
(and, if any Option Securities are purchased, at each Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will omit 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. If Rule 434
is used, the
3
<PAGE> 5
Company will comply with the requirements of Rule 434 and the
Prospectus shall not be " materially different", as such term is used
in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus or any
amendment or supplement thereto made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Merrill Lynch expressly for use in the
Registration Statement or Prospectus or any amendment or supplement
thereto.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations. If applicable, each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents or portions of
documents incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus, when they became
effective or at the time they were or hereafter are filed with the
Commission, as the case may be, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations or the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), as applicable,
and, when read together with the other information in the Prospectus,
at the date of the Prospectus and at the Closing Time (and, if any
Option Securities are purchased, at each Date of Delivery), will not
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, in the light of the circumstances under which they
were made, not misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules included
in the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements
included or incorporated by reference in the Registration Statement
and the Prospectus, together with the related schedules and notes,
present fairly (A) the financial position of each of the Company and
its consolidated subsidiaries and of MLI/The Loftis Corporation
("MLI") and its consolidated subsidiaries at the dates indicated, (B)
the statement of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries, MLI and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent
4
<PAGE> 6
basis throughout the periods involved. The supporting schedules, if
any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein.
The summary financial data and the selected financial data included in
the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has the corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each of the Company's
subsidiaries listed on Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (each a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly incorporated and
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, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and, except for 100 shares of common stock, par value $.01 per share,
of ECI Services of Ohio, Inc., a Delaware corporation, which are owned
5
<PAGE> 7
by an Ohio licensed funeral director as required by Ohio funeral home
ownership regulations and except as otherwise disclosed in the
Registration Statement, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary. There are no subsidiaries of the Company other than: (a)
the subsidiaries listed on Exhibit 2 1.1 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 and (b)
certain other subsidiaries of the Company which do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement or as permitted under
the terms of this Agreement). The shares of issued and outstanding
capital stock of the Company, including the Securities to be purchased
by the Underwriters from the Selling Stockholder, have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company,
including the Securities to be purchased by the Underwriters from the
Selling Stockholder, was issued in violation of the preemptive or
other similar rights of any securityholder of the Company arising by
operation of law, under the charter or bylaws of the Company or under
any agreement to which the Company or any of its subsidiaries is a
party or by which it is bound. Except as described in or incorporated
by reference as part of the Prospectus, the Company does not have
outstanding any options to purchase, or any warrants to subscribe for,
or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any Common Stock or other securities of
the Company or any such warrants, convertible securities or
obligations.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid
and non-assessable; the Common Stock conforms to all statements
relating thereto contained or incorporated by reference in the
Prospectus; after full payment for these Securities, no holder of the
Securities will be subject to personal liability for any debts,
liabilities or obligations of the Company by reason of being such a
holder; and the issuance of the Securities by the Company is not
subject to preemptive or other similar rights of any securityholder of
the Company arising by operation of law, under the charter
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<PAGE> 8
or bylaws of the Company or under any agreement to which the Company
or any of its subsidiaries is a party or by which it is bound.
(xi) Authorization and Issuance of Rights. The Rights
associated with the shares of Common Stock to be purchased by the
Underwriters from the Company have been duly authorized and, when the
shares of Common Stock with which such Rights are associated are sold
and delivered in accordance with this Agreement, will be validly
issued in accordance with the terms of the Rights Agreement, dated as
of October 13, 1994, as amended as of the date hereof, between the
Company and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agreement"), and will conform in all material respects to
the description thereof in the Company's registration statement on
Form 8-A (File No.0-24728), as amended, which is incorporated by
reference as part of the Prospectus. The Rights associated with the
shares of Common Stock to be purchased by the Underwriters from the
Selling Stockholder have been duly authorized and validly issued in
accordance with the terms of the Rights Agreement and conform in all
material respects to the description thereof contained in the
Prospectus.
(xii) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or
bylaws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries 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
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated herein (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder have been
duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, the Agreements
and Instruments, nor will such action result in any violation of the
provisions of the charter or bylaws of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require
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<PAGE> 9
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, might reasonably be expected to
result in a Material Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of this
Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto by the 1933 Act, the 1933
Act Regulations, the 1934 Act or the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") which
have not been so described and filed as required.
(xvi) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice of any
infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would reasonably be expected to render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
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<PAGE> 10
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, of consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, or in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of
the transactions contemplated by this Agreement, except such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them, except for such Governmental Licenses which the failure by the
Company to possess would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not,
singly or in the aggregate, have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries
have good and indefeasible title to all real property owned by the
Company and the subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of
any kind, except such as (a) are described in the Prospectus or
(b) do not, singly or in the aggregate, materially affect the value
of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company or any of the
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any subsidiary holds
properties described in the Prospectus, are in full force and effect,
and neither the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease which
might reasonably be expected to materially interfere with the use of
such leased or subleased property.
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<PAGE> 11
(xx) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, 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 (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except for such violations as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance or code or any judicial or administrative interpretation
thereof, or any judicial or administrative order, consent, decree or
judgment which names the Company or any of its subsidiaries as a party
or as being subject thereto, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials")
or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance
with their requirements, except where the failure to have such
permits, authorizations and approvals or to comply with their
requirements would not, singly or in the aggregate, have a Material
Adverse Effect, (C) there are no pending or, to the Company's
knowledge, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries
which, singly or in the aggregate, might reasonably be expected to
result in a Material Adverse Effect and (D) to the Company's
knowledge, there are no events or circumstances that might reasonably
be expected to form the basis of an order for clean-up or remediation,
or an action, suit or proceeding by any private party or governmental
body or agency, against or affecting the Company or any of its
subsidiaries relating to any Hazardous Materials or the violation of
any Environmental Laws which, singly or in the aggregate, might
reasonably be expected to result in a Material Adverse Effect. Based
on its prior experience with respect to compliance with Environmental
Laws as they apply to the business conducted by the Company and its
subsidiaries and the properties owned or leased by them, the Company
has reasonably concluded that the costs and liabilities associated
with compliance with Environmental Laws are not likely to have a
Material Adverse Effect.
(xxii) Taxes. Each of the Company and the Subsidiaries has
filed all federal, state and local income, franchise and other tax
returns which have been required to be filed and
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<PAGE> 12
has paid all taxes shown as due thereon. All such returns, as amended
if applicable, are complete, accurate and correct in all material
respects. Neither the Company nor any of the Subsidiaries has any
knowledge of any tax deficiency which might be asserted against it
which would have a Material Adverse Effect. The provisions and
reserves on the books of the Company in respect of federal, state,
local and other taxes for any taxable period as to which the Company's
liability for taxes has not been finally determined are, in the
opinion of the Company, adequate.
(xxiii) Insurance Coverage. The Company and each Subsidiary
maintains insurance, which is in full force and effect, of the types
and in the amounts customary in the funeral home and cemetery
business. Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from insurers at a cost that would not have a Material
Adverse Effect.
(xxiv) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(b) Representations and Warranties by the Selling Stockholder. The
Selling Stockholder represents and warrants to each Underwriter as of the date
hereof, and as of the Closing Time, and agrees with each Underwriter, as
follows:
(i) Accurate Disclosure. To the knowledge of the Selling
Stockholder, none of the representations and warranties of the Company
contained in Section 1(a) hereof are untrue or incorrect (in the case
of representations and warranties that are qualified as to
materiality) or are untrue or incorrect in any material respect (in
the case of representations and warranties that are not so qualified);
authorized representatives of the Selling Stockholder have reviewed
and are familiar with the Registration Statement and the Prospectus,
and, to the knowledge of the Selling Stockholder, the Prospectus does
not contain any untrue statement of a material fact or omit 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; provided, however, that the representations and warranties
in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Merrill Lynch expressly for use in the
Registration Statement or Prospectus; the Selling Stockholder is not
prompted to sell the Securities to be sold by the Selling Stockholder
hereunder by any information concerning the Company or any subsidiary
of the Company which is not set forth in the Prospectus.
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<PAGE> 13
(ii) Authorization of Agreements. The Selling Stockholder
has the full right, power and authority to enter into this Agreement
and to sell, transfer and deliver the Securities to be sold by the
Selling Stockholder hereunder. The execution and delivery of this
Agreement and the sale and delivery of the Securities to be sold by
the Selling Stockholder and the consummation of the transactions
contemplated herein and compliance by the Selling Stockholder with its
obligations hereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by the Selling Stockholder or any property or assets of the
Selling Stockholder pursuant to, any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which the Selling Stockholder is a party or
by which the Selling Stockholder may be bound, or to which any of the
property or assets of the Selling Stockholder is subject, nor will
such action result in any violation of the provisions of any
applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Selling Stockholder
or any of its properties.
(iii) Good and Valid Title. Investment Capital Corporation,
a Texas corporation and an indirect wholly-owned subsidiary of the
Selling Stockholder, has and will at the Closing Time have good and
valid title to the Securities to be sold by the Selling Stockholder
hereunder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement; and upon delivery of such Securities and
payment of the purchase price therefor as herein contemplated, each of
the Underwriters will receive good and valid title to the Securities
purchased by it from the Selling Stockholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind (other than any security interest, mortgage,
pledge, lien, charge, claim, equity or encumbrance that may be imposed
by or may arise through or under the Underwriters).
(iv) Absence of Manipulation. The Selling Stockholder has
not taken, and will not take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization OR manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(v) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification
or decree of, any court or governmental authority or agency, domestic
or foreign, is necessary or required for the performance by the
Selling Stockholder of its obligations hereunder or in connection with
the sale and delivery of the Securities hereunder or the consummation
of the transactions contemplated by this
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<PAGE> 14
Agreement, except such as may have previously been made or obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(vi) Restriction on Sale of Securities. During a period of
90 days from the date of the Prospectus, the Selling Stockholder will
not, without the prior written consent of Merrill Lynch, (i) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
cause any registration statement to be filed under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of
the Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the Securities to be sold hereunder.
(vii) Certificates Suitable for Transfer. Certificates for
all of the Securities to be sold by the Selling Stockholder pursuant
to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, will be delivered to the
Underwriters at Closing Time pursuant to this Agreement.
(viii) No Association with NASD. Neither the Selling
Stockholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article 1, Section I (m) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer
of the Company or any subsidiary delivered to the Representatives 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; and any
certificate signed by the Selling Stockholder as such and delivered to the
Representatives or to counsel for the Underwriters pursuant to the terms of
this Agreement shall be deemed a representation and warranty by the Selling
Stockholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, (i) the Selling Stockholder agrees to sell to the Underwriters,
severally and not jointly, the number of Initial Securities set forth in
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<PAGE> 15
Schedule B opposite the name of the Selling Stockholder at the price per share
set forth in Schedule C, and (ii) each Underwriter, severally and not jointly,
agrees to purchase from the Selling Stockholder, at the price per share set
forth in Schedule C, that proportion of the number of Initial Securities set
forth in Schedule B opposite the name of the Selling Stockholder which the
number of Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants to the Underwriters,
severally and not jointly, an option to purchase up to an additional 1,199,178
shares of Common Stock at the price per share set forth in Schedule C.
The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to
the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be less than two nor more than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined (unless the Representatives and the Company otherwise
agree). If the option is exercised as to all or any portion of the Option
Securities, (i) the Company will sell to the Underwriters, severally and not
jointly, the number of Option Securities as to which the option is exercised
and (ii) each of the Underwriters, acting severally and not jointly, will
purchase that proportion of such Option Securities which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter bears
to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of Vinson
& Elkins L.L.P., 2300 First City Tower, 1001 Fannin, Houston, Texas 77002, or
at such other place as shall be agreed upon by the Representatives, the Company
and the Selling Stockholder, at 10:00 A.M. (Eastern Time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern Time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives, the Company and
the Selling Stockholder (such time and date of payment and delivery being
herein called "Closing Time").
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In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on the Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company and the Selling Stockholder in
immediately available funds, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to
be purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose
payment has not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Representatives may request in writing at
least two full business days before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Representatives in The City of New York not later than 10:00
A.M. (Eastern Time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any posteffective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (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 preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) (including, if applicable, any
filings necessary pursuant
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to Rule 424(b) in accordance with the provisions of Rule 434) and will take
such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any amendment
to the Registration Statement (including any filing under Rule 462(b), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or to
the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not FILE or use any such document to which the Representatives shall
reasonably object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the Underwriters. If
applicable, the copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The COMPANY will
COMPLY with the 1933 Act AND THE 1933 ACT Regulations and the 1934 ACT and THE
1934 ACT Regulations
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so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result
of which it is necessary, in the judgment of the Representatives or the Company
based on the advice of their respective counsel, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit 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 at the time it
is delivered to a purchaser, or if it shall be necessary, in the judgment of
the Representations or the Company based on the advice of their respective
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions within the United States as the Representatives may designate;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement (including, if applicable, any
Rule 462(b) Registration Statement).
(g) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act and take such other actions as are necessary in order to make
generally available to its security holders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 193 3 Act.
(h) Use of Proceeds. The Company will use the net proceeds, if any,
received by it from the sale of the Option Securities in the manner specified
in the Prospectus under "Use of Proceeds."
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(i) Nasdaq Quotation. The Company will use its reasonable efforts
to effect the quotation of the Securities on the Nasdaq National Market and to
maintain the quotation of the Securities on the Nasdaq National Market or, in
lieu of maintaining the quotation of the Securities on the Nasdaq National
Market, to list the Securities on a national securities exchange. The Company
will file with the Nasdaq National Market (or any national securities exchange
on which the Securities are listed) all documents and notices required by the
Nasdaq National Market (or any such national securities exchange) of companies
that have securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq National Market (or that have
securities listed on such national securities exchange).
(j) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectus (the "Lock-Up Period"), the Company will not,
without the prior written consent of Merrill Lynch, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Option Securities to be sold hereunder, (B)
any shares of Common Stock issued by the Company upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus, (C) the issuance of Rights in accordance with
the terms of the Rights Agreement and any shares of Common Stock issued by the
Company upon the exercise of a Right, (D) any shares of Common Stock issued as
payment of any part of the purchase price for funeral homes or cemeteries (or
businesses or capital stock of businesses that operate funeral homes or
cemeteries) which are acquired by the Company (provided, however, that such
shares shall be subject to restrictions that will prohibit the transfer thereof
until after expiration of the Lock-Up Period), (E) options to purchase shares
of Common Stock granted pursuant to the Company's 1994 Long-Term Incentive Plan
(the "Incentive Plan") (provided, however, that such options shall not be
exercisable until after the expiration of the Lock-Up Period except upon the
termination of the option holder's employment by reason of a disability, death,
or qualified retirement of the option holder as provided in the option holder's
stock option agreement relating to such options) and (F) restricted shares,
restricted stock units, stock unit awards payable in the form of Common Stock
or performance shares issued or granted pursuant to the Incentive Plan;
provided, however, that (1) in the case of restricted shares, such shares shall
be subject to restrictions on transfer or sale which do not lapse until after
the expiration of the Lock-Up Period, (2) in the case of restricted stock units
or stock unit
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<PAGE> 20
awards payable in the form of Common Stock, the issuance of shares of Common
Stock in respect of such units shall be subject to restrictions which do not
lapse until after the expiration of the Lock-Up Period, and (3) in the case of
performance shares, such shares shall be subject to provisions to the effect
that they may not be earned by or vested in the participant prior to the end of
the Lock-Up Period. The Company shall not waive, release or modify any of the
restrictions referred to in the immediately preceding sentence without the
prior written consent of Merrill Lynch.
(k) Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the reproduction and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale
and delivery of the Securities, (iii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, including any stock or
other transfer taxes or duties payable upon the sale of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities and (x) the fees and
expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National Market, it being understood, however, that except as provided
for in this Section 4(a), Section 4(c), Section 6 and Section 7 hereof, the
Underwriters shall not be entitled to reimbursement under the terms hereof for
costs and expenses incurred by them incident to this Agreement, including the
fees of counsel.
(b) Expenses of the Selling Stockholder. The Selling Stockholder
will pay all expenses incident to the performance of its obligations under, and
the consummation of the transactions contemplated by, this Agreement, including
(i) any stamp duties, capital duties and stock
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<PAGE> 21
transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters, and (ii) the fees and disbursements of its
counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy (in the case
of representations and warranties that are qualified as to materiality) or
accuracy in all material respects (in the case of representations and
warranties that are not so qualified) of the representations and warranties of
the Company and the Selling Stockholder contained in Section I hereof or in
certificates of any officer of the Company or the Selling Stockholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement (including, if applicable, any Rule 462(b) Registration Statement)
has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of the Representatives based
on the advice of their counsel. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with Rule
424(b) (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for Company. At Closing Time the
Representatives shall have received (i) the favorable opinion, dated as of
Closing Time, of Andrews & Kurth, L.L.P., counsel for the Company, in form and
substance satisfactory to the Representatives based on the advice of their
counsel, together with signed or reproduced copies of such letter for each-of
the other Underwriters, to the effect set forth in Exhibit A-1 hereto, and (ii)
the favorable opinion of Cochran, Rooke & Craft, L.L.P., counsel for the
Company, in form and substance satisfactory to the Representatives based on the
advice of their counsel, together with signed or reproduced copies of such
letter for each of the other Underwriters, to the effect set forth in Exhibit
A-2 hereto.
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<PAGE> 22
(c) Opinion of Counsel for the Selling Stockholder. At Closing
Time the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., Selling
Stockholder's Counsel, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters, to the effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Vinson & Elkins L.L.P., counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters,
with respect to the matters set forth in 1, 4, 7 (solely as to preemptive or
other similar rights arising by operation of law or under the charter or bylaws
of the Company), 8 to 10, inclusive, and the penultimate paragraph of Exhibit
A-I hereto.
(e) Officers' Certificate. At Closing Time there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section I
(a) hereof are true and correct (in the case of representations and warranties
that are qualified as to materiality) or are true and correct in all material
respects (in the case of representations and warranties that are not so
qualified) with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Stockholder. At Closing Time, the
Representatives shall have received a certificate of the Selling Stockholder,
dated as of Closing Time, to the effect that (i) the representations and
warranties of the Selling Stockholder contained in Section I (b) hereof are
true and correct in all respects (in the case of representations and warranties
that are qualified as to materiality) or are true and correct in all material
respects (in the case of representations and warranties that are not so
qualified) with the same force and effect as though expressly made at and as of
Closing Time and (ii) the Selling Stockholder has complied in all material
respects with all agreements and all conditions on its part to be performed
under this Agreement at or prior to Closing Time.
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<PAGE> 23
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Coopers & Lybrand
L.L.P. a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the
type reasonably requested by the Representatives with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus, as of a specified date not more than three
calendar days prior to the date of this Agreement.
(h) Bring-down Comfort Letter. At Closing Time the Representatives
shall have received from Coopers & Lybrand L.L.P. a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the specified
date referred to shall be a date not more than three calendar days prior to
Closing Time.
(i) Inclusion for Quotation. At the Closing Time the Securities
shall have been approved for inclusion in the Nasdaq National Market.
(j) No Objection. The NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule D hereto.
(l) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the obligations of the
several Underwriters to purchase such Option Securities shall be subject to the
representations and warranties of the Company contained in Section I hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof being true and correct (in the case of representations and
warranties that are qualified as to materiality) or true and correct in all
material respects (in the case of representations and warranties that are not
so qualified) as of each Date of Delivery and, at the relevant Date of
Delivery, the Representatives having received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(e) hereof remains true and correct as of such Date of
Delivery.
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(ii) Opinions of Counsel for Company. The favorable
opinion of Andrews & Kurth, L.L.P., counsel for the Company, and the
favorable opinion of Cochran, Rooke & Craft, L.L.P., counsel for the
Company, each in form and substance satisfactory to the
Representatives based upon the advice of their counsel, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinions
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Vinson & Elkins L.L.P., counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Coopers &
Lybrand L.L.P., in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(g) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than three calendar days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of
Delivery 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 Securities as herein contemplated, 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 Selling Stockholder in connection with the
issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives based on the advice
of their counsel.
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company
at any time at or prior to Closing Time or such Date of Delivery as the case
may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 6 and 7
shall survive any such termination and remain in full force and effect.
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SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company and the Selling
Stockholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that subject to Section 6(d) below any such
settlement is effected with the written consent of the Company and the
Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred
including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (i) the foregoing indemnity shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) and (ii)
the foregoing indemnity with respect to any untrue statement contained in or
omission from a preliminary prospectus shall not inure to the benefit of any
Underwriter (or
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any person controlling such Underwriter) from whom the person asserting any
such loss, liability, claim, damage or expense purchased any of the Securities
which are the subject thereof if such person was not sent or given a copy of
the Prospectus (as amended or supplemented, if applicable) (in each case
exclusive of the documents from which information is incorporated by reference)
at or prior to the written confirmation of the sale of such Securities to such
person (other than as a result of the failure by the Company to comply with its
obligations under Section 3(d) hereof) and the untrue statement contained in or
omission from such preliminary prospectus was corrected in the Prospectus (as
amended or supplemented, if applicable). Notwithstanding anything in this
Agreement to the contrary, the Selling Stockholder's aggregate liability under
this Agreement (including this Section 6(a)) shall be limited to an amount
equal to the net proceeds (after deducting the Underwriters' discount but
before deducting expenses) received by the Selling Stockholder from the sale of
Securities pursuant to this Agreement and shall be subject to the procedures
set forth in Section 6(f) below.
(b) Indemnification of Company, Directors, Officers and the
Selling Stockholder. Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
and the Selling Stockholder, its directors, and each person, if any, who
controls the Selling Stockholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company and
approved by the Selling Stockholder, which approval shall not be unreasonably
withheld. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel
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<PAGE> 27
to the indemnified party. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the proposed terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement. Notwithstanding the immediately
preceding sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for specified fees and
expenses of counsel (the "Requested Expenses"), an indemnifying party shall not
be liable for any settlement of the nature contemplated by Section 6(a)(ii)
that is effected without its consent (after satisfaction of each of the
conditions set forth in the immediately preceding sentence) if, prior to the
date of such settlement, such indemnifying party (i) determines in good faith
that the Requested Expenses are not reasonable, reimburses such indemnified
party in accordance with such request for the portion of the Requested Expenses
it considers to be reasonable and provides written notice to the indemnified
party substantiating the fact that the unpaid balance of the Requested Expenses
is unreasonable, (ii) determines in good faith that the Requested Expenses are
not of a nature required to be paid or reimbursed by the Company under the
terms of Section 6(a)(iii) and provides written notice to the indemnified party
substantiating such determination or (iii) determines in good faith that the
Company is prohibited from reimbursing the Underwriters for the Requested
Expenses under mandatory provisions of applicable law (as set forth in express
statutory provisions or as interpreted pursuant to controlling legal precedent)
and provides written notice to the indemnified party substantiating such
determination.
(e) Cumulative Agreements. The provisions of this Section shall
not affect any agreement between the Company and the Selling Stockholder with
respect to indemnification.
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(f) Certain Procedures Regarding Enforcement Against Selling
Stockholder. In making a claim for indemnification under this Section 6 (other
than pursuant to Section 6(a)(iii), as to which the applicable procedures are
set forth below in this paragraph (f)) or contribution under Section 7 against
the Company or the Selling Stockholder, the indemnified parties may proceed
against either (i) both the Company and the Selling Stockholder or (ii) the
Company only, but may not proceed solely against the Selling Stockholder;
provided, however, that the indemnified parties may elect to proceed solely
against the Seller Stockholder if (i) the Company files a petition for relief
under the United States Bankruptcy Code (the "Bankruptcy Code"), (ii) an order
for relief is entered against the Company in an involuntary case under the
Bankruptcy Code and such order remains in effect for 60 consecutive days, (iii)
the Company makes an assignment for the benefit of its creditors or (iv) any
court orders or approves the appointment of a receiver or custodian for the
Company or a substantial portion of its assets and such order continues in
effect for 60 consecutive days (the events set forth in clauses (i) through
(iv) above, inclusive, being referred to herein as the "Company Insolvency
Events").
In the event that the indemnified parties are entitled to seek
indemnity or contribution hereunder against any loss, liability, claim, damage
and expense incurred with respect to a final judgment from a trial court then,
as a precondition to any indemnified party obtaining indemnification or
contribution from the Selling Stockholder (but not the Company alone), the
indemnified parties shall first obtain a final judgment from a trial court that
such indemnified parties are entitled to indemnity or contribution with respect
to such loss, liability, claim, damage or expense (the "Final Judgment") under
the terms of this Agreement and shall seek to satisfy such Final Judgment in
full from the Company by making a written demand upon the Company for such
satisfaction. Only in the event such Final Judgment shall remain unsatisfied in
whole or in part 45 days following the date of receipt by the Company of such
demand shall any indemnified party have the right to take action to satisfy
such Final Judgment by making demand directly on the Selling Stockholder (but
only if and to the extent the Company has not already satisfied such Final
Judgment, whether by settlement, release or otherwise). The indemnified parties
may exercise this right to first seek to obtain payment from the Company and
thereafter obtain payment from the Selling Stockholder without regard to the
pursuit by any party of its rights to the appeal of such Final Judgment. The
indemnified parties shall, however, be relieved of their obligation to first
obtain a Final Judgment, seek to obtain payment from the Company with respect
to such Final Judgment or, having sought such payment, to wait such 45 days
after failure by the Company to immediately satisfy any such Final Judgment if
any of the Company Insolvency Events shall have occurred.
The provisions of this paragraph (f) are not intended to require any
indemnified party to obtain a Final Judgment before obtaining reimbursement of
expenses pursuant to clause (a)(iii) of this Section 6. However, the
indemnified parties shall first seek to obtain such reimbursement in full from
the Company by making a written demand upon the Company for such reimbursement.
Only in the event such expenses shall remain unreimbursed in whole or in part
45 days following the date of receipt by the Company of such demand shall any
indemnified party have the right to
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receive reimbursement of such expenses from the Selling Stockholder by making
written demand directly on the Selling Stockholder (but only if and to the
extent the Company has not already satisfied the demand for reimbursement,
whether by settlement, release or otherwise). The indemnified parties shall,
however, be relieved of their obligation to first seek to obtain such
reimbursement in full from the Company or, having made written demand therefor,
to wait such 45 days after failure by the Company to immediately reimburse such
expenses if any of the Company Insolvency Events shall have occurred.
Notwithstanding anything to the contrary set forth in this paragraph
(f), the foregoing provisions shall not prohibit (i) the delivery by the
indemnified parties to the Selling Stockholder of a notice of commencement of
any action as required pursuant to pursuant to paragraph (c) above, (ii) the
commencement of any action against both the Company and the Selling Stockholder
to enforce a claim for indemnification under this Section 6 or contribution
under Section 7 (provided, however, that following the commencement of such
action, the indemnified parties shall comply in all respects with their
obligations under the second and third paragraphs of this paragraph (f) to
first seek indemnification or reimbursement of expenses in such action from the
Company before making written demand directly on the Selling Stockholder) or
(iii) the taking of any other action that is necessary, in the judgment of the
Representatives based on the advice of their counsel, to prevent the forfeiture
of the right to seek indemnification or contribution against the Selling
Stockholder, whether as a result of the application of any period of
limitations or repose or any procedural or other rules relating to the joinder
of necessary parties or otherwise.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is applicable in accordance with its terms but is unavailable
to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein (whether
because indemnification is held to be unenforceable or for any other reason),
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on the
one hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholder on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before
deducting expenses)
28
<PAGE> 30
received by the Company and the Selling Stockholder and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover
of the Prospectus, or, if Rule 434 is used, the corresponding location on the
Term Sheet, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholder 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 Selling Stockholder 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 which does
not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission and (ii) the Selling
Stockholder shall not be required to contribute any amount in excess of the
amount by which the net proceeds (after deducting the Underwriters' discount
but before deducting expenses) received by the Selling Stockholder from the
sale of Securities pursuant to this Agreement exceeds the aggregate amount the
Selling Stockholder has otherwise been required to pay pursuant to Section 6
hereof in respect of the applicable 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company
29
<PAGE> 31
who signed the Registration Statement, and each person, if any, who controls
the Company or the Selling Stockholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or the Selling Stockholder, as the case may be. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section 7 shall not affect any agreement among
the Company and the Selling Stockholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Stockholder, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Stockholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given
in the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock of the Company has been suspended or limited by the Commission or
the Nasdaq National Market, or (iv) if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or limited, or minimum or maximum prices for trading have been
fixed or maximum ranges for prices have been required, by any of said exchanges
or by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or if a banking
moratorium has been declared by either Federal, New York or Texas authorities,
in each case (with respect to the items referred to in this clause (iv)) the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities.
30
<PAGE> 32
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party, except as provided in Section 4 hereof, and provided further that
Sections 6 and 7 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase the relevant Option Securities, as
the case may be, either the Representatives or the Company and the Selling
Stockholder shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or
in any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Default by the Selling Stockholder or the Company.
31
<PAGE> 33
(a) If the Selling Stockholder shall fail at Closing Time to sell
and deliver the number of Securities which the Selling Stockholder is obligated
to sell hereunder, the Company shall have the right, to the extent permitted
under the 1933 Act and 1933 Act Regulations, to increase the number of shares
of Common Stock, together with associated Rights, to be sold by it hereunder to
equal the total number to be sold by the Company and the Selling Stockholder as
set forth in Schedule B hereto, in which event the terms "Initial Securities"
and "Securities" as used herein shall be deemed to include the additional
shares of Common Stock, together with associated Rights, to be sold by the
Company. If the Selling Stockholder shall fail at Closing Time to sell and
deliver the number of Securities which the Selling Stockholder is obligated to
sell hereunder and the Company does not exercise the right granted to it
pursuant to the immediately preceding sentence, then the Underwriters may, at
the option of the Representatives, by notice from the Representatives to the
Company either (i) terminate this Agreement without any liability on the fault
of any non- defaulting party, except that the provisions of Sections 4, 6 and 7
shall remain in full force and effect, or (ii) elect to purchase the Securities
which the Company has agreed to sell hereunder. No action taken pursuant to
this Section 11 shall relieve the Selling Stockholder from liability, if any,
in respect of such default.
In the event of a default by the Selling Stockholder as referred to in
this Section 11, each of the Representatives and the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order
to effect any required change in the Registration Statement or Prospectus or in
any other documents or arrangements.
(b) If the Company shall fail at the Date of Delivery to sell the
number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 4, 6
and 7 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Notices. 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 directed to the Representatives at 1221 McKinney, Suite
2700, Houston, Texas 77010, attention of Gregory Pipkin; notices to the Company
shall be directed to it at 415 South First Street, Suite 210, Lufkin, Texas
75901-0100, attention of James P. Hunter, III, Chairman, President and Chief
Executive Officer; and notices to the Selling Stockholder shall be directed to
1929 Allen Parkway, Houston, Texas 77019, attention of James M. Shelger, Senior
Vice President and General Counsel.
SECTION 13. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriters, the Company and the Selling
Stockholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
32
<PAGE> 34
Stockholder and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Stockholder
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
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<PAGE> 35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Stockholder a
counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters, the Company and the
Selling Stockholder in accordance with its terms.
Very truly yours,
EQUITY CORPORATION
INTERNATIONAL
By /s/ JAMES P. HUNTER, III
--------------------------------------
Name: James P. Hunter, III
Title: President and Chief Executive
Officer
SERVICE CORPORATION
INTERNATIONAL
By /s/ JAMES M. SHELGER
--------------------------------------
Name: James M. Shelger
Title: Senior Vice President
General Counsel and Secretary
34
<PAGE> 36
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
ABN AMRO CHICAGO CORPORATION
J.P. MORGAN SECURITIES INC.
RAYMOND JAMES & ASSOCIATES, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BY: /s/ ALI J. BLACKFIELD
-------------------------------
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
35
<PAGE> 37
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial
Name of Underwriter Securities
------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . 1,886,132
ABN AMRO Chicago Corporation . . . . . . . . . . . . . . . . . . . . 1,886,130
J.P. Morgan Securities Inc . . . . . . . . . . . . . . . . . . . . . 1,886,130
Raymond James & Associates, Inc. . . . . . . . . . . . . . . . . . . 1,886,130
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . . . . 300,000
TD Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.000
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,994,522
==========
</TABLE>
A-1
<PAGE> 38
SCHEDULE B
<TABLE>
<CAPTION>
Number of Initial
Securities to be Sold
---------------------
<S> <C>
Service Corporation International 7,994,522
Total . . . . . . . . . . . . . . 7,994,522
=========
</TABLE>
B-1
<PAGE> 39
SCHEDULE C
Pricing Information
1. The initial public offering price per share for the Securities
shall be $19.25.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $18.48, being an amount equal to the initial
public offering price per share set forth above less $.77 per share; provided
that the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be reduced
by an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities.
C-1
<PAGE> 40
SCHEDULE D
List of persons and entities
subject to lock-up
1. William C. McNamara
2. Jack D. Rottman
3. W. Cardon Gerner
4. Billy C. Wells
5. Jack T. Hammer
6. Thomas R. McDade
7. Kenneth W. Smith
8. James P. Hunter, III
D-1
