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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 11, 1998
SERVICE CORPORATION INTERNATIONAL
(Exact name of registrant as specified in its charter)
TEXAS
(State or other jurisdiction of incorporation)
1-6402-1 74-1488375
(Commission File Number) (IRS Employer Identification No.)
1929 Allen Parkway, Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 522-5141
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ITEM 5. OTHER EVENTS
On August 27, 1996, Service Corporation International (the "Company")
filed with the Securities and Exchange Commission a registration statement on
Form S-3 (File No. 333-10867) under the Securities Act of 1933, as amended,
relating to the public offering from time to time of up to $1,000,000,000 in
aggregate initial offering price of debt securities, common stock and common
stock warrants of the Company.
On March 11, 1998, the Company entered into (i) an Underwriting
Agreement with J.P. Morgan Securities Inc., Chase Securities Inc., Citicorp
Securities, Inc., BancAmerica Robertson Stephens and Societe Generale Securities
Corporation with respect to $200,000,000 aggregate principal amount of its 6.50%
Notes due March 15, 2008, and (ii) an Underwriting Agreement with J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and UBS Securities LLC with respect to $300,000,000
aggregate principal amount of its 6.30% Dealer remarketable securities sm
("Drs.sm") due March 15, 2020. On March 16, 1998, the Company entered into a
Remarketing Agreement with J.P. Morgan Securities Inc. with respect to the
remarketing of the Drs. Both Underwriting Agreements, the Global Securities
issued pursuant thereto and the Remarketing Agreement are attached as exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits to Registration Statement on Form S-3
(Registration No. 333-10867) are filed as part of this report
on Form 8-K.
Exhibit 1.1 Underwriting Agreement dated as of March 11, 1998 between the
Company and J.P. Morgan Securities Inc., Chase Securities
Inc., Citicorp Securities, Inc., BancAmerica Robertson
Stephens and Societe Generale Securities Corporation with
respect to $200,000,000 aggregate principal amount of the
Company's 6.50% Notes due March 15, 2008.
Exhibit 1.2 Underwriting Agreement dated as of March 11, 1998 between the
Company and J.P. Morgan Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated and UBS Securities LLC with respect to
$300,000,000 aggregate principal amount of the Company's 6.30%
Dealer remarketable securities sm due March 15, 2020.
Exhibit 1.3 Remarketing Agreement dated as of March 16, 1998 between the
Company and J.P. Morgan Securities Inc.
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Exhibit 1.4 Form of Global Security dated March 16, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6.50%
Notes due March 15, 2008.
Exhibit 1.5 Form of Global Security dated March 16, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6.30%
Dealer remarketable securitiessm due March 15, 2020.
Exhibit 1.6 Form of Global Security dated March 16, 1998 with respect to
$100,000,000 aggregate principal amount of the Company's 6.30%
Dealer remarketable securitiessm due March 15, 2020.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SERVICE CORPORATION INTERNATIONAL
Date: March 24, 1998 By: /s/ James M. Shelger
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James M. Shelger
Senior Vice President
General Counsel and Secretary
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
1.1 Underwriting Agreement dated as of March 11, 1998 between the
Company and J.P. Morgan Securities Inc., Chase Securities
Inc., Citicorp Securities, Inc., BancAmerica Robertson
Stephens and Societe Generale Securities Corporation with
respect to $200,000,000 aggregate principal amount of the
Company's 6.50% Notes due March 15, 2008.
1.2 Underwriting Agreement dated as of March 11, 1998 between the
Company and J.P. Morgan Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated and UBS Securities LLC with respect to
$300,000,000 aggregate principal amount of the Company's 6.30%
Dealer remarketable securities sm due March 15, 2020.
1.3 Remarketing Agreement dated as of March 16, 1998 between the
Company and J.P. Morgan Securities Inc.
1.4 Form of Global Security dated March 16, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6.50%
Notes due March 15, 2008.
1.5 Form of Global Security dated March 16, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6.30%
Dealer remarketable securitiessm due March 15, 2020.
1.6 Form of Global Security dated March 16, 1998 with respect to
$100,000,000 aggregate principal amount of the Company's 6.30%
Dealer remarketable securitiessm due March 15, 2020.
</TABLE>
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EXHIBIT 1.1
UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Debt Securities
March 11, 1998
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the
"Company"), may issue and sell from time to time its debt securities,
consisting of (i) unsecured senior debt securities (the "Senior Debt
Securities"), (ii) unsecured senior subordinated debt securities (the "Senior
Subordinated Debt Securities") and (iii) subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities
and the Senior Subordinated Debt Securities, the "Debt Securities"). The Debt
Securities are registered under the registration statement referred to in
Section 4(i) hereof. The Debt Securities may be issued in one or more series
and may have varying designations, denominations, interest rates and payment
dates, maturities, redemption provisions, conversion provisions, exchange
provisions and selling prices. The Senior Debt Securities will be issued under
an indenture (the "Senior Indenture") dated February 1, 1993 entered into
between the Company and The Bank of New York, as trustee (the "Senior
Trustee"). The Senior Subordinated Debt Securities will be issued under an
indenture (the "Senior Subordinated Indenture") to be entered into between the
Company and Texas Commerce Bank National Association, as trustee (the "Senior
Subordinated Trustee"). The Subordinated Debt Securities will be issued under
an indenture (as amended by the First Amendment thereto dated as of August 23,
1996, the "Subordinated Indenture" and, together with the Senior Indenture and
the Senior Subordinated Indenture, the "Indentures") dated September 1, 1991
between the Company and Chase Bank of Texas, National Association, formerly
known as Texas Commerce Bank National Association, as trustee (the
"Subordinated Trustee" and, together with the Senior Trustee and the Senior
Subordinated Trustee,
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the "Trustees"). The Senior Subordinated Debt Securities and the Subordinated
Debt Securities may be convertible into shares of common stock, par value $1.00
per share, of the Company (the "Common Stock"). The basic provisions set forth
herein are intended to be incorporated by reference in a terms agreement of the
type referred to below relating to, among other things, the designation and
series of Debt Securities and the aggregate principal amount of Debt Securities
(the "Underwritten Securities") to be issued and sold by the Company pursuant
thereto and to be purchased, severally, by the underwriter or several
underwriters named therein (the "Underwriters"). The Terms Agreement, which
shall be in the form of Exhibit I hereto (the "Terms Agreement"), relating to
the Underwritten Securities and such additional aggregate principal amount of
Debt Securities that the Underwriters may be granted an option to purchase by
the Company to cover over-allotments in connection with any offering of
Underwritten Securities (the "Option Securities" and together with the
Underwritten Securities, the "Offered Securities"), together with the
provisions hereof incorporated therein by reference (which provisions shall not
become effective until so incorporated by reference), is herein referred to as
this "Agreement." The Terms Agreement may reflect that a portion of the
Underwritten Securities are to be sold to the several U.S. underwriters named
therein (the "U.S. Underwriters") in connection with the offering and sale of a
portion of the Underwritten Securities in the United States and Canada (the
"U.S. Underwritten Securities") to United States and Canadian persons (as
defined in the instruments governing the coordination of the offering by the
U.S. Underwriters and the International Managers (as defined below) named
therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Company to sell, the
Offered Securities are evidenced by
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the Terms Agreement delivered at the time the Company determines to sell the
Offered Securities and, without the execution and delivery of the Terms
Agreement, the Company shall not be obligated to sell, and the Underwriters
shall not be obligated to purchase, any Debt Securities pursuant to this
Agreement. The Terms Agreement specifies the firm or firms which will be
Underwriters, the aggregate principal amount of the Offered Securities to be
purchased by each Underwriter, the purchase price to be paid by the
Underwriters for the Offered Securities, the public offering price, if any, of
the Offered Securities and any terms of the Offered Securities not otherwise
specified in the applicable Indenture (including, but not limited to,
designations, denominations, conversion or exchange provisions, covenants,
interest rates and payment dates, maturity, redemption provisions and sinking
fund requirements). The Terms Agreement specifies any details of the terms of
the offering that should be reflected in a post-effective amendment to the
applicable Registration Statement or the Prospectus Supplement (each as
hereinafter defined).
The terms which follow, when used in this Agreement, shall
have the meanings indicated. "Registration Statement" shall mean the
registration statement or registration statements relating to the Offered
Securities (and such other securities of the Company as may be included
therein), which shall be the registration statement on Form S-3 filed under the
Securities Act of 1933, as amended (collectively with the rules and regulations
of the Securities and Exchange Commission (the "Commission") thereunder, the
"Securities Act"), referred to in Section 4(i) below, including all documents
incorporated therein by reference and all exhibits thereto, as from time to
time amended or supplemented pursuant to the Securities Act, the Securities
Exchange Act of 1934, as amended (collectively with the rules and regulations
of the Commission thereunder, the "Exchange Act"), or otherwise, including as
supplemented by the Prospectus Supplement, on or prior to the date of execution
and delivery of the Terms Agreement (the "Representation Date") and, in the
event any such amendment or supplement is filed prior to the Closing Date (as
defined in Section 3 hereof), including by the filing of any Prospectus
Supplement or document incorporated by reference, shall also mean such
registration statement as so amended or supplemented. "Prospectus" shall mean
the prospectus (including the related Prospectus Supplement with respect to the
Offered Securities) relating to the Debt Securities (and such other securities
of the Company as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or
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otherwise; provided, however, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the Offered Securities to
which it relates. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the effective date of the
Registration Statement, or the issue date of any preliminary prospectus or the
Prospectus, as the case may be, and on or prior to the completion of the
applicable offering (which shall be deemed to be not earlier than such time as
no Underwriter or dealer is required by law to deliver a prospectus in
connection with sales of the Offered Securities) and which is deemed to be
incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees
to issue and sell to each Underwriter as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
at the purchase price set forth in the Terms Agreement, severally and not
jointly, from the Company the respective aggregate principal amount of
Underwritten Securities set forth opposite the name of such Underwriter on the
annex or annexes to Exhibit I hereto (or such aggregate principal amount of
Underwritten Securities, as the case may be, increased as set forth in Section
9 hereof, subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives in their sole discretion may make).
If, pursuant to the Terms Agreement, the Company shall have
granted the option to the Underwriters to purchase Option Securities, the
Company agrees to sell to the Underwriters designated in the Terms Agreement to
purchase Option Securities (each an "Option Securities Underwriter" and
collectively, the "Option Securities Underwriters") the Option Securities, and
the Option Securities Underwriters shall have a one-time right to purchase,
severally and not jointly, the Option Securities on the terms set forth in the
Terms Agreement. Option Securities may be purchased as provided below solely
for the purpose of covering over-allotments made in connection with the
offering of the Underwritten Securities. If any Option Securities are to be
purchased, subject to the conditions hereinafter stated, each Option Securities
Underwriter agrees, severally and not jointly, to purchase the number of Option
Securities (subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives designated in the Terms Agreement in their
sole discretion may make) that bears
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the same proportion to the total number of Option Securities to be purchased as
the number of Underwritten Securities set forth in the annex or annexes to
Exhibit I hereto opposite the name of such Option Securities Underwriter bears
to the total number of Underwritten Securities to be purchased by all Option
Securities Underwriters.
The Option Securities Underwriters may exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the Representation Date, by written notice from the Representatives
designated in the Terms Agreement to the Company. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of
such notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands
that the Underwriters intend (i) to make a public offering of the Offered
Securities as soon after the Prospectus Supplement has been filed and the Terms
Agreement has been executed and delivered as in the judgment of the
Representatives is advisable and (ii) initially to offer the Offered Securities
upon the terms set forth in the Prospectus Supplement and the Underwriters will
advise the Company as to any alteration in the terms of such offering that
would require, pursuant to the Securities Act, any amendment or supplement to
the Prospectus Supplement.
3. Delivery of the Offered Securities and Payment
Therefor. Payment for the Offered Securities shall be made to the Company or
to the Company's order by wire transfer of immediately available funds in such
location as the Representatives shall designate in the Terms Agreement at, in
the case of the Underwritten Securities, such time and date as are specified in
the Terms Agreement, or at such other time on the same or such other date, not
later than the fifth Business Day (as hereinafter defined) thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of
the Option Securities, on the date and at the time specified by the
Representatives designated in the Terms Agreement to exercise such option in
the written notice by such Representatives of the election
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to purchase such Option Securities by the Option Securities Underwriters. The
time and date of such payment for the Underwritten Securities are referred to
herein as the "Closing Date" and the time and date for such payment for the
Option Securities, if other than the Closing Date, are herein referred to as
the "Additional Closing Date." As used herein, the term "Business Day" means
any day other than a day on which banks are permitted or required to be closed
in New York City.
Payment for the Offered Securities to be purchased on the
Closing Date or the Additional Closing Date, as the case may be, shall be made
against delivery to the Representatives for the respective accounts of the
several Underwriters of the Offered Securities to be purchased on such date
registered in such names and in such denominations as the Representatives shall
request in writing not later than two full Business Days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Offered Securities duly paid by the Company. The Company hereby agrees to pay
any such transfer taxes. The certificates for the Offered Securities will be
made available for inspection and packaging by the Representatives not later
than 1:00 P.M., New York City time, on the Business Day prior to the Closing
Date or the Additional Closing Date, as the case may be.
4. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter as of the Representation
Date and as of the Closing Date that:
(i) A registration statement on Form S-3 (Registration
No. 333-10867), including a prospectus, with respect to the Debt
Securities (and such other securities of the Company as may be covered
thereby), (i) has been prepared by the Company in conformity with the
requirements of the Securities Act, (ii) has been filed with the
Commission and (iii) has become effective. Such Registration
Statement and the related prospectus may have been amended or
supplemented from time to time prior to the Representation Date; any
such amendment to the applicable Registration Statement was so
prepared and filed and any such amendment has become effective. A
prospectus supplement (the "Prospectus Supplement"), including a
prospectus, relating to the Offered Securities has been prepared. The
Prospectus Supplement and, if not previously filed, such prospectus
will be filed pursuant to Rule 424 under the Securities Act. If the
offering of the Offered Securities is to be made by U.S. Underwriters
and
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International Managers, two such prospectus supplements, one relating
to the Offered Securities to be sold by the U.S. Underwriters and one
relating to the Underwritten Securities to be sold by the
International Managers, and each identical to the other except for the
cover page, have been so prepared and filed. In such event, the term
"Prospectus Supplement" refers to such international and U.S.
prospectus supplements. Copies of such Registration Statement and the
Prospectus relating thereto, any such amendment or supplement, the
Prospectus Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior to the
Representation Date (including one fully executed copy of the
Registration Statement and of each amendment thereto for counsel for
the Underwriters) have been delivered to each of the Representatives.
The Company has included in the Registration Statement, as amended at
the date the Registration Statement was declared effective (the
"Effective Date"), all information (other than information relating
specifically to the terms of any particular series of Debt Securities
and the offering thereof) required by the Securities Act to be
included in the Prospectus with respect to the Offered Securities (and
the Common Stock, if applicable) and the offering and sale thereof.
Except to the extent that the Underwriters shall agree in writing to a
modification, the Registration Statement and the Prospectus shall be
in all substantive respects in the form furnished to the Underwriters
prior to the Representation Date or, to the extent not completed at
the Representation Date, shall contain only such specific additional
information and other changes as the Company has advised the
Underwriters, a reasonable time prior to the Representation Date, is
to be included or made therein and as to which the Underwriters have
not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act and the Trust Indenture Act
of 1939, as amended, and the Rules and Regulations of the Commission
thereunder (the "Trust Indenture Act"); and no such document included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
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Prospectus, in the light of the circumstances under which they were
made) not misleading; provided, however, that the Company makes no
representation or warranty as to (a) information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information relating to any
Underwriter furnished to the Company by or on behalf of any
Underwriter expressly for use therein and (b) that part of the
Registration Statement that constitutes the Statement of Eligibility
on Form T-1 of any of the Trustees under the Trust Indenture Act filed
as an exhibit to the Registration Statement (the "Form T-1").
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) Coopers & Lybrand L.L.P., who are reporting upon the
audited financial statements and the supporting schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants
within the meaning of the Securities Act. The financial statements,
and the related notes thereto, included or incorporated by reference
in the Registration Statement and the Prospectus, present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the
periods specified; and said financial statements have been prepared in
conformity with United States generally accepted accounting principles
applied on a consistent basis, except as set forth therein, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein. If pro forma financial information is included in or
incorporated by reference into the Registration
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Statement and the Prospectus, such pro forma financial information
(including, without limitation, the notes thereto) as of the date
presented (A) presented fairly in all material respects the
information shown therein, (B) was prepared in accordance with
applicable requirements of Regulation S-X promulgated under the
Exchange Act, (C) was prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements
and (D) was properly computed on the bases described therein. In the
opinion of the Company, the assumptions used in the preparation of any
such pro forma financial information (including, without limitation,
the notes thereto) were fair and reasonable and the adjustments used
therein were appropriate to give effect to the transactions or
circumstances referred to therein. No pro forma financial statements
or other pro forma financial information is required to be included or
incorporated by reference in the Registration Statement and the
Prospectus other than those included or incorporated by reference
therein.
(vi) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Registration Statement
and the Prospectus and to enter into this Agreement and the Terms
Agreement, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole (each, a "Material
Adverse Effect").
(vii) Each direct and indirect foreign and domestic
subsidiary of the Company listed on Schedule I hereto, which
constitute all of the significant subsidiaries of the Company within
the meaning of Rule 1-02 of Regulation S-X under the Exchange Act
(each, a "Subsidiary" and collectively, the "Subsidiaries") has been
duly incorporated or organized, is validly existing as a corporation
or entity in good standing under the laws of the jurisdiction of its
incorporation or organization, has the corporate or other power and
authority to own its property and to conduct
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its business as described in the Registration Statement and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so incorporated, be in
existence, have such power and authority, be so qualified or be in
good standing could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and, except as
set forth in the Registration Statement and the Prospectus, are owned
by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests, claims and restrictions on
transferability and voting (other than any restrictions on
transferability as may arise under state and federal securities laws).
Except as set forth in the Registration Statement and the Prospectus,
there are no outstanding (i) securities or obligations convertible
into or exchangeable or exercisable for any shares of capital stock
of, or other interest in, the Company or any Subsidiary, (ii) rights,
warrants or options to acquire or purchase any shares of capital stock
of, or other interest in, the Company or any Subsidiary or any such
convertible, exchangeable or exercisable securities or obligations, or
(iii) obligations or understandings to issue or sell any shares of
capital stock of, or other interest in, the Company or any Subsidiary,
any such convertible, exchangeable or exercisable securities or
obligations, or any such warrants, rights or options, except as have
been disclosed to the Underwriters in writing prior to the date hereof
and except for (A) issuances of shares of Common Stock and options to
acquire Common Stock after the date of the most recent information set
forth in the Registration Statement and the Prospectus pursuant to the
Company's employee benefit plans as in effect on the date hereof and
(B) issuances after the date of the most recent information set forth
in the Registration Statement and the Prospectus of convertible
debentures of the Company and Common Stock pursuant to the Company's
Registration Statement on Form S-4 (Registration No. 33-54996) and the
Company's Registration Statement on Form S-4 (Registration No.
333-01857) (together, the "S-4").
(viii) There are no partnerships in which the Company or any
of the Subsidiaries has any direct or indirect controlling interest
that would constitute a significant subsidiary
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within the meaning of Rule 1-02 of Regulation S-X under the Exchange
Act. Except for the capital stock of the Subsidiaries and except as
set forth in the Registration Statement and the Prospectus, the
Company does not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity.
(ix) This Agreement and the Terms Agreement have been duly
and validly authorized, executed and delivered by the Company.
(x) Since the date of the latest consolidated financial
statements of the Company and its subsidiaries included in the
Registration Statement and the Prospectus, except as set forth in or
expressly contemplated by the Registration Statement and the
Prospectus, there has not been (A) any change in the Company's issued
capital stock or options, except (I) pursuant to the exercise of
options or the conversion or exchange of outstanding convertible or
exchangeable securities of the Company or any of its subsidiaries,
(II) issuances of shares of Common Stock and options to acquire Common
Stock issued after the date of such financial statements pursuant to
the Company's employee benefit plans as in effect on the date hereof
and (III) issuances after the date of such financial statements of
convertible debentures of the Company and Common Stock pursuant to the
S-4, or (B) any material adverse change in the management, condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole (each,
a "Material Adverse Change," and any event or state of facts which
could, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Change is herein referred to as a "Prospective
Material Adverse Change"), whether or not arising from transactions or
events occurring in the ordinary course of business.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company or any of the Subsidiaries (other than those in the ordinary
course of business) which are material to the Company and its
subsidiaries, taken as a whole and (B) there has been no dividend or
distribution of any kind declared, paid or
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made by the Company on any class of its capital stock, other than
regularly scheduled quarterly dividends in accordance with the past
practice of the Company.
(xii) If the Prospectus contains a section entitled
"Capitalization," as of the date of the Prospectus Supplement, the
Company has the authorized, issued and outstanding capitalization set
forth in the Prospectus under "Capitalization." The authorized
capital stock of the Company (including, without limitation, the
Common Stock issuable upon conversion or exchange of the Offered
Securities, if applicable) conforms as to legal matters to the
description thereof contained in the Registration Statement and the
Prospectus, and all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are not subject to any preemptive or similar
rights. The rights agreement dated as of July 18, 1988 between the
Company and Chase Bank of Texas, National Association, formerly known
as Texas Commerce Bank National Association, as rights agent, as
amended to date (the "Rights Agreement"), has been duly authorized,
executed and delivered by the Company; the rights (the "Rights") to
purchase the Company's Series C Junior Participating Preferred Stock
(the "Series C Preferred Stock") outstanding thereunder and, if the
Offered Securities are convertible into shares of Common Stock, to be
issued upon issuance of the Common Stock upon conversion of such
Offered Securities, have been duly authorized; the Series C Preferred
Stock to be issued upon exercise of the Rights has been duly
authorized; and the description of the Rights Agreement and the Rights
set forth in the Registration Statement and the Prospectus is accurate
in all material respects.
(xiii) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and
sufficiently taken. The Offered Securities, when executed by the
Company and authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture (assuming the due authorization,
execution and delivery of such Indenture by the Trustee thereunder),
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement and the Terms Agreement and the applicable
Indenture (assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), will constitute the valid and
binding obligations of the Company entitled to the benefits
<PAGE> 13
-13-
of the applicable Indenture and enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). The Company has all the requisite
corporate power and authority to execute and deliver the applicable
Indenture and any supplemental indenture to such Indenture relating to
the Offered Securities (the "Supplemental Indenture") and to incur and
perform its obligations provided for therein. Each of the Indenture
and the Supplemental Indenture relating to the Offered Securities,
when executed by the Company and the Trustee thereunder (assuming the
due authorization, execution and delivery of such Indenture and
Supplemental Indenture by the Trustee thereunder), will constitute the
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). If the Offered
Securities are convertible into Common Stock, the Offered Securities
are convertible into Common Stock in accordance with their terms and
the terms of the applicable Supplemental Indenture relating to the
Offered Securities.
(xiv) If the Offered Securities are convertible into Common
Stock, the Common Stock issuable upon conversion of the Offered
Securities pursuant to the terms of the Supplemental Indenture has
been duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action and such Common Stock,
when duly issued upon such conversion will be validly issued and fully
paid and nonassessable; no holder thereof will be subject to personal
liability solely by reason of being such a holder; and the issuance of
such Common Stock upon such conversion will not be subject to
preemptive rights.
(xv) The Offered Securities and the Indenture and
Supplemental Indenture relating thereto conform in all material
respects to the descriptions thereof in the Prospectus.
<PAGE> 14
-14-
(xvi) The execution and delivery by the Company of, and the
full and timely performance by the Company of its obligations under,
this Agreement and the Terms Agreement, the Indenture relating to the
Offered Securities, the Supplemental Indenture relating to the Offered
Securities and the Offered Securities, the compliance by the Company
with the terms thereof, and the consummation of each of the
transactions contemplated herein and therein, (A) have been duly
authorized by all necessary corporate action on the part of the
Company, (B) do not and will not result in any violation of the
articles of incorporation or by-laws of the Company and (C) do not and
will not conflict with, or result in a breach or violation of, any of
the terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the maturity
or require the prepayment of any indebtedness under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material property or assets of the Company or of any Subsidiary under
(I) any indenture, mortgage, loan agreement, note, lease, license,
partnership agreement, franchise agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which any of them may be bound or affected or to which any of their
respective properties or assets may be subject (each, a "Contract" and
collectively, the "Contracts"), other than any such conflict, breach,
default, acceleration, prepayment, lien, charge or encumbrance that,
could not individually or in the aggregate, reasonably be expected to
result in any Material Adverse Effect, (II) any existing applicable
law, rule or regulation (other than the securities or Blue Sky laws of
the various states and other jurisdictions of the United States of
America) or (III) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
respective properties or assets.
(xvii) No authorization, approval, consent or license of, or
filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act and the Trust
Indenture Act or as may be required under the securities or Blue Sky
laws of the various states and other jurisdictions of the United
States of America) is required for the valid authorization, issuance,
sale and delivery of the Offered Securities by the Company, the
execution and delivery by the Company of, or the full and timely
performance by the
<PAGE> 15
-15-
Company of each of its obligations under, this Agreement, the Terms
Agreement, the Indenture relating to the Offered Securities, the
Supplemental Indenture relating to the Offered Securities, and the
compliance by the Company with its obligations thereunder.
(xviii) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(xix) No holder of any securities of the Company has any
rights, not effectively satisfied or waived, to require the Company to
register the sale of any securities under the Securities Act in
connection with the filing of the Registration Statement or the
consummation of the transactions contemplated therein or pursuant to
this Agreement or the Terms Agreement.
(xx) The Company and its subsidiaries are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health, or the
environment or imposing liability or standards of conduct concerning
Hazardous Material (collectively, "Environmental Laws"), except where
such noncompliance with Environmental Laws could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The term "Hazardous Material" means (i) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended,
(iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl and (v) any pollutant or contaminant or hazardous, dangerous,
or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.
(xxi) Each of the Company and each of its subsidiaries
owns, possesses or has obtained all licenses, ermits, certificates,
consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and
other governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties
<PAGE> 16
-16-
and to carry on its business as conducted as of the date hereof,
except in each case where the failure to obtain licenses, permits,
certificates, consents, orders, approvals and other authorizations, or
to make all declarations and filings, could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and neither the Company nor any such subsidiary has received any
notice of any proceeding relating to revocation or modification of any
such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and
the Prospectus and except, in each case, where such revocation or
modification could not, reasonably be expected to singly or in the
aggregate, have a Material Adverse Effect; and the Company and each of
its subsidiaries are in compliance with all laws and regulations
relating to the conduct of their respective businesses as conducted as
set forth in the Registration Statement and the Prospectus, except
where noncompliance with such laws or regulations could not, singly or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(xxii) To the best knowledge of the Company, each of the
Company and each of its subsidiaries owns or possesses the patents,
patent licenses, trademarks, service marks, trade names, copyrights
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property, except for notices the
content of which if accurate could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xxiii) Except as set forth in the Registration Statement and
the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in
which the Company or any of the Subsidiaries conduct their respective
businesses
<PAGE> 17
-17-
in connection with the ownership by the Company of capital stock of
any Subsidiary, any foreign exchange controls or the repatriation of
any amount from or to the Company and the Subsidiaries, except to the
extent such authorizations, approvals or consents have been obtained
and are in full force and effect and except to the extent that the
failure to obtain such authorization, approval or consent could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(xxiv) The Company has not taken and will not take, directly
or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Offered Securities (or the Common Stock, if applicable),
and the Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Offered Securities other than any preliminary
prospectus filed with the Commission or the Prospectus or other
materials permitted under the Securities Act.
(xxv) Except as set forth in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by
any government, governmental or regulatory instrumentality, agency or
body or court, domestic or foreign, or any arbitrator, now pending or,
to the best knowledge of the Company, threatened, against or affecting
the Company or any subsidiary of the Company or any affiliate of the
Company that, singly or in the aggregate with all such actions, suits
and proceedings (i) could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to have a material
adverse effect on the consummation of the transactions contemplated by
this Agreement and the Terms Agreement or (ii) is required to be
described in the Registration Statement or the Prospectus that is not
so described.
(xxvi) Neither the Company nor any subsidiary of the Company
(i) is in violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement or any Contract or of any permit, order, decree,
judgment, statute, rule or regulation, foreign or domestic, applicable
to the Company or
<PAGE> 18
-18-
any Subsidiary, except for such violations, breaches or defaults that,
could not singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xxvii) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended or a holding
company or a subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
(xxviii) The Company has complied with all provisions
of Section 517.075, Florida Statutes (Chapter 92-1933 8, Laws of
Florida).
(xxix) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(xxx) The Company knows of no outstanding claims for
services, either in the nature of a finder's fee or origination fee,
with respect to the transactions contemplated hereby and by the Terms
Agreement, other than the underwriting fees and compensation to be
paid to the Underwriters in accordance with this Agreement.
(xxxi) No labor disputes exist with employees of the Company
or of the Subsidiaries that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
5. Agreements of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) To use its reasonable best efforts to cause any
amendment to the Registration Statement to become effective at the
earliest possible time.
(b) To furnish to each of the Representatives, without
charge, as many signed copies of the Registration
<PAGE> 19
-19-
Statement (as originally filed) and each amendment thereto and each
document incorporated or deemed incorporated therein, in each case
including exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of the
Company's intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the Securities Act, the Exchange Act
or otherwise, to furnish the Underwriters and their counsel with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and not to
file any such amendment or supplement or use any such prospectus to
which the Underwriters or counsel for the Underwriters shall object.
Subject to the foregoing sentence, the Company will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
(d) To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any comments from the Commission or of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Prospectus or Prospectus
Supplement or the initiation or threatening of any proceeding for that
purpose and (v) of the receipt
<PAGE> 20
-20-
by the Company of any notification with respect to any suspension of
the qualification of the Offered Securities for offer and sale in any
jurisdiction or the initiation of any proceeding for such purpose; and
to use its reasonable best efforts to prevent the issuance of any such
stop order or notification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(e) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Company, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company)
to which Offered Securities may have been sold by the Representatives
on behalf of the Underwriters and to any other dealers, upon request,
such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
(f) To endeavor to qualify the Offered Securities (and,
if applicable, the Common Stock) for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to pay all fees and expenses (including fees and disbursements of
counsel to the Underwriters) incurred in connection with such
qualification; provided, however, that the Company shall not be
required to file a general consent to service of process in any
jurisdiction or subject itself to general taxation in any
jurisdiction.
<PAGE> 21
-21-
(g) To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months after the date of each Terms Agreement, an earnings
statement, covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement, (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of
such Terms Agreement, which will satisfy the provisions of Rule 158
under the Securities Act and Section 11(a) of the Securities Act.
(h) For a period of 90 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
subsidiary of the Company to, directly or indirectly, effect any
offer, sale or other disposition of, or registration of, any Debt
Securities or any other long term debt, notes or debentures of or
guaranteed by the Company or any of its subsidiaries or any securities
convertible into or exchangeable or exercisable for Debt Securities or
any such long-term debt, notes or debentures, other than the Offered
Securities to be sold pursuant to the Terms Agreement and other than
pursuant to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement. If the Offered
Securities are convertible into Common Stock, during a period of 90
days from the Representation Date, the Company will not, without the
prior written consent of the Representative designated in the Terms
Agreement, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, shares of Common Stock or any
right to purchase or other security convertible into or exchangeable
or exercisable for or any securities of the Company substantially
similar to any such shares, other than (A) the Offered Securities to
be sold pursuant to the Terms Agreement, (B) shares of Common Stock
issued upon conversion, exercise or exchange of convertible,
exchangeable or exercisable securities of the Company or of any
subsidiary of the Company outstanding on the Representation Date and
(C) shares of Common Stock and options thereunder issued pursuant to
employee benefit plans of the Company in place on the Representation
Date as in effect on the Representation Date, and other than pursuant
<PAGE> 22
-22-
to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement.
(i) Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Company's
obligations hereunder, including, without limiting the generality of
the foregoing, all costs and expenses (i) incurred in connection with
the preparation, issuance, execution and delivery of the Offered
Securities (including, if applicable, the Common Stock issuable upon
conversion thereof), (ii) incurred in connection with the preparation,
printing and filing under the Securities Act and the Exchange Act of
the Registration Statement, the Prospectus, any preliminary prospectus
and each Prospectus Supplement (including in each case all exhibits,
amendments and supplements thereto and all documents incorporated
therein by reference), (iii) incurred in connection with the
registration or qualification of the Offered Securities (including, if
applicable, the Common Stock issuable upon conversion or exchange
thereof) under the laws of such jurisdictions as the Representatives
may request (including filing fees and the fees of counsel for the
Underwriters and their disbursements), (iv) relating to any filing
with the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the offering of the Offered Securities, (v)
incurred in connection with the engagement of any qualified
independent underwriter as may be required by NASD rules and
regulations, (vi) incurred in connection with the rating of the
Offered Securities, (vii) incurred in connection with advertising
relating to the Offered Securities approved by the Company (which
approval shall not be unreasonably withheld or delayed), (viii)
relating to the fees and expenses of the applicable Trustee, including
the fees and expenses of counsel to the applicable Trustee, and of the
transfer agent and registrar for the Common Stock if the Offered
Securities are convertible into the Common Stock and (ix) relating to
or in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Terms
Agreement, the Indenture relating to the Offered Securities, any
Supplemental Indenture relating thereto, the agreement among
underwriters, each other document or instrument relating to the
underwriting arrangements and the coordination of the offering of the
Offered Securities by the U.S. Underwriters and the International
Managers, if applicable, any
<PAGE> 23
-23-
dealer agreements, the Preliminary and Supplemental Blue Sky Memoranda
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement, the Prospectus and each Prospectus Supplement,
including mailing and shipping, as herein provided.
(j) To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Company's capital stock, and copies of any reports and financial
statements furnished to or filed with the Commission.
(k) To use the net proceeds of the offering of the
Offered Securities as set forth in the Prospectus Supplement under the
caption "Use of Proceeds."
(l) During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act in
connection with sales (including resales) of the Offered Securities,
to file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within the time
period required by the Exchange Act and the Exchange Act Regulations.
(m) If the Offered Securities are convertible into Common
Stock, the Company will use its best efforts to effect the listing of
the shares of Common Stock issuable upon conversion of the Offered
Securities on the New York Stock Exchange on the Representation Date.
(n) To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion of all of
the Offered Securities that are convertible into the Common Stock.
(o) To deliver copies of the Prospectus to such place or
places as shall be designated by the Representatives not later than
1:00 p.m., New York City time, on the day after the date of the Terms
Agreement.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
<PAGE> 24
-24-
(a) If any amendment to the Registration Statement filed
prior to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M., New York City time, on the Representation Date;
and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Securities
Act or proceedings therefor initiated or threatened by the Commission.
The price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided to the Representatives evidence satisfactory to the
Representatives of such timely filing.
(b) The representations and warranties of the Company
contained herein and in the Terms Agreement shall be true and correct
on and as of the Closing Date as if made on and as of the Closing Date
and the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to
payment for the Underwritten Securities on the Closing Date, there
shall not have occurred or become known any Material Adverse Change or
any development involving a Prospective Material Adverse Change other
than as set forth in the Registration Statement and the Prospectus,
the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Underwritten Securities on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
As used in this Section 6(c), "Prospectus" shall mean the Prospectus
first used to confirm sales of the Offered Securities exclusive of any
amendment or supplement thereto thereafter.
(d) The Representatives shall have received on and as of
the Closing Date a certificate of the Company signed by the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial
Officer or Treasurer of the Company to the effect set forth in
subsections (a) and (b) of this Section 6 and to the further effect
that since the most recent date as of which information is given in
the
<PAGE> 25
-25-
Prospectus to the Closing Date there shall not have occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change. As used in this Section 6(d), "Prospectus"
shall mean the Prospectus first used to confirm sales of the Offered
Securities exclusive of any amendment or supplement thereto
thereafter.
(e) The Representatives shall have received on the
Closing Date a signed opinion of Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P ("LSZHL"), special counsel for the Company, addressed to the
Underwriters and dated the Closing Date and satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus.
(ii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iii) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(iv) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities, and
the Offered Securities have been duly authorized by the
Company for issuance. The Offered
<PAGE> 26
-26-
Securities, when executed by the Company and authenticated by
the Trustee in accordance with the Indenture relating to the
Offered Securities (assuming the due authorization, execution
and delivery of the Indenture by the Trustee thereunder) and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and the Terms Agreement will
constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought.
(vi) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and the Supplemental Indenture
provide a fair summary of such provisions.
<PAGE> 27
-27-
(vii) The statements set forth in the Registration
Statement and the Prospectus under the caption "Certain United
States Federal Income Tax Considerations," insofar as such
statements constitute summaries of legal matters, are fair and
accurate in all material respects.
(viii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization". The authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus.
(ix) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(x) At the time the Registration Statement and
each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the Form T-1 and the financial
statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to
which such counsel need express no opinion) appear on their
face to be appropriately responsive to the applicable
requirements of the Securities Act. The applicable Indenture,
as amended by the Supplemental Indenture, complies with the
requirements of the Trust Indenture Act.
<PAGE> 28
-28-
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(xii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) or the
Offered Securities by the Company, except such as may be
required under the Securities Act, the Trust Indenture Act or
state securities laws.
(xiii) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture and the Supplemental Indenture (if
applicable) and the Offered Securities and the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), will not constitute a breach of,
or default under (including, without limitation, any event
which with notice or lapse of time, or both, would constitute
a breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries
pursuant to, any contract identified on a schedule to such
opinion (the scope of which list of contracts being reasonably
acceptable to the Representatives), nor will such action
result in any violation of the provisions of the charter or
by-laws of
<PAGE> 29
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the Company, or any applicable law, rule, regulation or
administrative, regulatory or court judgment, order or decree,
except for any breach, default, lien, charge or encumbrance
under any such contract as could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(xiv) Each document filed pursuant to the Exchange
Act (other than the financial statements, schedules and other
financial and statistical data included therein, as to which
such counsel need express no opinion) and incorporated or
deemed to be incorporated by reference in the Prospectus
appears on its face to be appropriately responsive to the
applicable requirements of the Exchange Act.
(xv) The Company is not an investment company
under the Investment Company Act of 1940, nor a holding
company or a subsidiary of a holding company under the Public
Utility Holding Company Act of 1935.
Such counsel shall also state that they have been advised by
the Commission that the Indenture has been qualified under the Trust
Indenture Act and that the Registration Statement became effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
<PAGE> 30
-30-
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of any jurisdiction other
than the State of Texas or the United States or the General
Corporation Law of the State of Delaware, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel who are reasonably satisfactory to counsel for the
Underwriters; provided, however, that LSZHL shall state that LSZHL,
the Underwriters and counsel for the Underwriters are justified in
relying upon such opinion. In addition, such counsel may assume for
purposes of such opinion that the laws of the State of New York are
identical to the laws of the State of Texas.
(f) The Representatives shall have received on the
Closing Date a signed opinion of James M. Shelger, General Counsel of
the Company, addressed to the Underwriters and dated the Closing Date
and satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to the
best of such counsel's knowledge and information, after due
inquiry, is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that
<PAGE> 31
-31-
the failure to be so qualified or be in good standing could
not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(ii) Each Subsidiary has been duly incorporated,
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(iii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iv) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities, and
the Offered Securities have been duly authorized by the
Company for issuance. The Offered Securities, when executed
by the Company and authenticated by the Trustee in accordance
with the Indenture relating to the Offered Securities
(assuming the
<PAGE> 32
-32-
due authorization, execution and delivery of the Indenture by
the Trustee thereunder) and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement
and the Terms Agreement will constitute valid and legally
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
or transfer and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
the discretion of the court before which any proceeding
therefor may be brought.
(vi) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought.
(vii) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and the Supplemental Indenture
provide a fair summary of such provisions.
(viii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital
stock of the Company is as set
<PAGE> 33
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forth in the Prospectus under "Capitalization". The
authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof
contained in the Prospectus.
(ix) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(x) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Company, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge and information, after due
inquiry, any other security interests or claims.
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
<PAGE> 34
-34-
(xii) To the best of such counsel's knowledge and
information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xiii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) or the
Offered Securities by the Company, except such as may be
required under the Securities Act, the Trust Indenture Act or
state securities laws.
(xiv) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture, the Supplemental Indenture (if
applicable) and the Offered Securities, the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), and compliance by the Company with
its obligations hereunder and thereunder will not conflict
with or constitute a breach of, or default under (including,
without limitation, any event which, with notice or lapse of
time, or both, would constitute a breach of or a default
under), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion (the scope of which
list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company, or
any applicable law, rule, regulation or administrative,
<PAGE> 35
-35-
regulatory or court judgment, order or decree, except for any
breach, default, lien, charge or encumbrance under any such
contract as could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
on omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of (1) the General
Corporation Law of the State of Delaware upon the written opinion of
LSZHL delivered pursuant to clause (e) above of this Section 6 and (2)
any jurisdiction other than the State of Texas or the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel who are reasonably satisfactory to counsel
for the Underwriters; provided, however, that James M. Shelger shall
state that James M. Shelger, the Underwriters and counsel for the
<PAGE> 36
-36-
Underwriters are justified in relying upon such opinion. In addition,
such counsel may assume for purposes of such opinion that the laws of
the State of New York are identical to the laws of the State of Texas.
(g) On the Representation Date and also on the Closing
Date, Coopers & Lybrand L.L.P. shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
(h) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Cahill Gordon & Reindel,
counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(i) If the Offered Securities are convertible into Common
Stock, on the Representation Date, the Common Stock issuable upon
conversion of the Offered Securities shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(j) At the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities
(and, if applicable, the Common Stock) as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(k) On or prior to the Closing Date the Company shall
have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
<PAGE> 37
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(l) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(m) If the Offered Securities are convertible into Common
Stock, the Company shall have delivered to the Representatives written
agreements, in form and substance satisfactory to the Representative
designated in the Terms Agreement, with each of its executive officers
who owns Common Stock that no offer, sale or other disposition, or
request or demand for registration under the Securities Act or
inclusion in any other registration statement filed by the Company
under the Securities Act, of any Common Stock or other capital stock
of the Company, or warrants, options, convertible, exercisable or
exchangeable securities, or other rights to purchase or acquire,
Common Stock or other capital stock (or any such right or
exchangeable, exercisable or convertible security) owned by such
person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the date of
this Agreement, directly or indirectly, by such executive officer,
otherwise than (i) with the prior written consent of the
Representative designated in the Terms Agreement and (ii) pursuant to
such exceptions, if any, as are agreed to by the Representative
designated in the Terms Agreement and set forth in the Terms
Agreement.
(n) There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
(o) The Company shall have complied with its obligations
under Section 5(o).
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement,
<PAGE> 38
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subject to the conditions set forth in paragraph (a) to and including paragraph
(n) above on and as of the Additional Closing Date (references therein to the
Closing Date shall be deemed references to the Additional Closing Date for this
purpose), except that the certificate called for by paragraph (d), the opinions
called for by paragraphs (e), (f) and (h) and the letters called for by
paragraph (g) shall be dated as of, and delivered on, the Additional Closing
Date, and to the delivery to the Representatives on the Additional Closing Date
of such other documents as they may reasonably request.
7. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation the
legal fees and other expenses reasonably incurred in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein; provided,
however, that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Offered Securities if
such untrue statement or omission or alleged untrue statement or omission was
made in such preliminary prospectus and is eliminated or remedied in the
Prospectus and the Company has provided such Prospectus in accordance with
Section 5(b) hereof (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and if it shall be established
in the related action or proceeding that a copy of the Prospectus, if required
by law (as so amended or supplemented, but exclusive of any documents
incorporated therein by reference), shall not have been furnished to such
person at or prior to the written confirmation of the sale of such Offered
Securities to such person, except
<PAGE> 39
-39-
to the extent that such Prospectus contains any other untrue statement or
omission or alleged untrue statement or omission of a material fact that was
the subject matter of the related action or proceeding. For purposes of the
proviso to the immediately preceding sentence, the term "Prospectus" shall not
be deemed to include the documents incorporated therein by reference, and no
Underwriter shall be obligated to send or give any supplement or amendment to
any document incorporated by reference in any preliminary prospectus or the
Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
For purposes of this Section 7 and Section 4(ii), the only written information
furnished by the Underwriters to the Company expressly for use in the
Registration Statement and the Prospectus is the information in the last
paragraph of the cover page of the Prospectus Supplement and the second
paragraph under the table under the caption "Underwriting" in the Prospectus
Supplement.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying,
<PAGE> 40
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Person, upon request of the Indemnified Person, shall promptly retain counsel
satisfactory to the Indemnified Person to represent the Indemnified Person in
such proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii) there has been a failure by the Indemnifying Person to
retain promptly counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties to any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by the Representatives. In the case
of any such separate firm for the Company, and such directors, officers and
control persons of the Company, such firm shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
an Indemnifying Person to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such
<PAGE> 41
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Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying
Person is contesting in good faith the request for reimbursement and all other
fees and expenses of counsel not so contested shall have been reimbursed. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement (1) includes an unconditional written release of such
Indemnified Person, in form and substance satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (2) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities as follows: as between the
Company on the one hand and the Underwriters on the other (i) in such
proportion as is appropriate to reflect the aggregate relative benefits
received by the Company and by the Underwriters from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and by the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and of
the
<PAGE> 42
-42-
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective number of Offered Securities they have
purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or the
Company, its officers or directors or any other person controlling the Company
and (iii) acceptance of and payment for any of the Offered Securities.
<PAGE> 43
-43-
8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Securities, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the National Association of Securities Dealers, Inc. or the American
Stock Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either U.S. Federal or New York State authorities or exchange
controls shall have been imposed by the United States, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives,
makes it impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the aggregate principal amount of Offered Securities which it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Offered Securities to be purchased on such date,
the other Underwriters (with respect to the Option Securities, to the extent
such Underwriters are Option Securities Underwriters) shall be obligated
severally in the proportions that (1) with respect to Underwritten Securities,
the aggregate principal amount of Underwritten Securities set forth opposite
their respective names in
<PAGE> 44
-44-
the annex or annexes to Exhibit I hereto bears to the aggregate principal
amount of Underwritten Securities set forth opposite the names of all such
non-defaulting Underwriters and (2) with respect to Option Securities, the
aggregate principal amount of Underwritten Securities set forth opposite their
respective names in the annex or annexes to Exhibit I hereto bears to the
aggregate principal amount of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters who are Option Securities
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the aggregate principal amount of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided, however, that in no event shall the aggregate principal
amount of Offered Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such aggregate principal amount of Offered Securities
without the written consent of such Underwriter. If, on the Closing Date or
the Additional Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase the aggregate principal amount of
Offered Securities which it or they have agreed to purchase hereunder on such
date, and the aggregate principal amount of Offered Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Offered Securities to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
aggregate principal amount of Offered Securities are not made within 36 hours
after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Securities, as the case may be) shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Representatives or the Company shall
have the right to postpone the Closing Date (or, in the case of the Option
Securities, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them, because
of any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company
<PAGE> 45
-45-
shall be unable to perform its obligations under this Agreement, the Company
agrees to reimburse the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering
contemplated hereunder and pursuant to the Terms Agreement. In no event,
however, shall the Company be responsible to the Underwriters for any loss of
profits for failure to consummate the offering and sale of the Offered
Securities.
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Company, the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Offered Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives at the address as set
forth in the Terms Agreement. Notices to the Company shall be given to it at
Service Corporation International, 1929 Allen Parkway, Houston, Texas 77019
(facsimile: (713) 525- 9067); Attention: James M. Shelger.
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
<PAGE> 46
-46-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION INTERNATIONAL
By: /s/ GREGORY L. CAUTHEN
-------------------------------------
Name: Gregory L. Cauthen
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written
J.P. MORGAN SECURITIES INC.
CHASE SECURITIES INC.
CITICORP SECURITIES, INC.
BANCAMERICA ROBERTSON STEPHENS
SOCIETE GENERALE SECURITIES CORPORATION
By: J.P. MORGAN SECURITIES INC.
By: /s/ RAYMOND SCHMITT
-------------------------------------
Name: Raymond Schmitt
Title:
<PAGE> 47
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
$200,000,000
6.50% Notes due March 15, 2008
TERMS AGREEMENT
March 11, 1998
Service Corporation International
1929 Allen Parkway
Houston, Texas 77019
Attention: James M. Shelger
Ladies and Gentlemen:
J.P. Morgan Securities Inc., Chase Securities Inc., Citicorp
Securities, Inc., BancAmerica Robertson Stephens and Societe Generale
Securities Corporation (the "Representatives") understand that Service
Corporation International, a Texas corporation (the "Company"), proposes to
issue and sell $200,000,000 aggregate principal amount of its 6.50% Notes due
March 15, 2008 (the "Notes") (the "Underwritten Securities"). The Notes are
Senior Debt Securities and are to be issued under the Senior Indenture.
Subject to the terms and conditions set forth herein or incorporated by
reference herein, the Underwriters named in Annex A attached hereto offer to
purchase, severally and not jointly, the aggregate principal amount of
Underwritten Securities set forth opposite the name of each such Underwriter on
Annex A hereto at a price of 98.959% of the principal amount thereof (the
"Purchase Price"). The Closing Date shall be March 16, 1998, at 9:00 A.M., New
York City time, at the offices of Cahill Gordon & Reindel.
The Underwritten Securities shall have the following terms:
Title: 6.50% Notes due March 15, 2008
Maturity: March 15, 2008
<PAGE> 48
-2-
Interest rate: 6.50% per annum
Interest payment dates: March 15 and September 15, commencing
September 15, 1998
Record Dates: March 1 and September 1
Redemption at option of Company: None
Sinking fund provisions: None
Public offering price: 99.609% of the principal amount thereof
All the provisions contained in the document entitled
"Underwriting Agreement -- Service Corporation International -- Debt
Securities" (the "Underwriting Agreement") and dated March 11, 1998, a copy of
which you have previously received, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Terms Agreement to the
same extent as if the Underwriting Agreement had been set forth in full herein.
Terms defined in the Underwriting Agreement are used herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is
J.P. Morgan Securities Inc. The text of the first sentence of Section 5(h) of
the Underwriting Agreement is hereby deleted for purposes of the purchase and
sale of the Notes and the following shall be deemed inserted therein in lieu
thereof: "For a period beginning on the Representation Date to and including
the Business Day following the Closing Date, not to, and not to cause or permit
any subsidiary of the Company to, directly or indirectly, effect any offer,
sale or other disposition of, or registration of, any debt securities or any
other long-term debt, notes or debentures of or guaranteed by the Company or
any of its Subsidiaries which are substantially similar to the Notes (which
expressly shall be deemed not to include any debt securities or guarantees of
debt securities issued under the S-4) without the prior written consent of J.P.
Morgan Securities Inc." The additional exceptions to Section 5(h) of the
Underwriting Agreement are: The Company may issue $300,000,000 aggregate
principal amount of its 6.30% Dealer remarketable securitiessm due March 15,
2020, pursuant to an underwriting agreement, together with the terms agreement
forming a part thereof of even date therewith, dated March 11, 1998 among the
Company and J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and UBS Securities LLC.
<PAGE> 49
-3-
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf
of the Representatives, and any such action taken by J.P. Morgan Securities
Inc. alone shall be binding upon the Representatives. Notices to the
Underwriters shall be given to the Representatives c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10260 (facsimile: (212) 648-5790);
Attention: Syndicate Department.
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof. Times referred to herein are to New York
City time.
<PAGE> 50
-4-
Please accept this offer no later than 6:00 P.M. on March 11,
1998 by signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated March 11, 1998, to purchase the Underwritten Securities on the
terms set forth therein and agree to and accept all other terms and provisions
of the Terms Agreement."
Very truly yours,
J.P. MORGAN SECURITIES INC.
CHASE SECURITIES INC
CITICORP SECURITIES, INC.
BANCAMERICA ROBERTSON STEPHENS
SOCIETE GENERALE SECURITIES CORPORATION
By: J.P. MORGAN SECURITIES INC.
By: /s/ RAYMOND SCHMITT
-------------------------------------
Name: Raymond Schmitt
Title:
Accepted as of the date first
above written:
SERVICE CORPORATION INTERNATIONAL
By: /s/ GREGORY L. CAUTHEN
-----------------------------------
Name: Gregory L. Cauthen
Title: Vice President and Treasurer
<PAGE> 51
ANNEX A
<TABLE>
<CAPTION>
Aggregate
Principal Amount
of Underwritten
Securities
Underwriters To Be Purchased
- ------------ ---------------
<S> <C>
J.P. Morgan Securities Inc. . . . . . . . . . . .. . . . . . $ 60,000,000
Chase Securities Inc. . . . . . . . . . . . . . .. . . . . . 50,000,000
Citicorp Securities, Inc. . . . . . . . . . . .. . . . . . 30,000,000
BancAmerica Robertson Stephens . . . . . . . . .. . . . . . 30,000,000
Societe Generale Securities Corporation . . . . .. . . . . . $ 30,000,000
------------
Total: $200,000,000
============
</TABLE>
<PAGE> 52
SCHEDULE I
Significant Subsidiaries of the Company
within the meaning of Rule 1-02 of
Regulation S-X under the Securities
Exchange Act of 1934.
Investment Capital Corporation, a Texas corporation
SCI Funeral Services of New York, Inc., a New York corporation
SCI Funeral Services, Inc., an Iowa corporation
SCI International Limited, a Delaware corporation
SCI Texas Funeral Services, Inc., a Texas corporation
SCIT Holdings, Inc., a Delaware corporation
OGF-PFG, a French corporation
Service Corporation International France, a French corporation
<PAGE> 1
EXHIBIT 1.2
UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Debt Securities
March 11, 1998
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the
"Company"), may issue and sell from time to time its debt securities,
consisting of (i) unsecured senior debt securities (the "Senior Debt
Securities"), (ii) unsecured senior subordinated debt securities (the "Senior
Subordinated Debt Securities") and (iii) subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities
and the Senior Subordinated Debt Securities, the "Debt Securities"). The Debt
Securities are registered under the registration statement referred to in
Section 4(i) hereof. The Debt Securities may be issued in one or more series
and may have varying designations, denominations, interest rates and payment
dates, maturities, redemption provisions, conversion provisions, exchange
provisions and selling prices. The Senior Debt Securities will be issued under
an indenture (the "Senior Indenture") dated February 1, 1993 entered into
between the Company and The Bank of New York, as trustee (the "Senior
Trustee"). The Senior Subordinated Debt Securities will be issued under an
indenture (the "Senior Subordinated Indenture") to be entered into between the
Company and Texas Commerce Bank National Association, as trustee (the "Senior
Subordinated Trustee"). The Subordinated Debt Securities will be issued under
an indenture (as amended by the First Amendment thereto dated as of August 23,
1996, the "Subordinated Indenture" and, together with the Senior Indenture and
the Senior Subordinated Indenture, the "Indentures") dated September 1, 1991
between the Company and Chase Bank of Texas, National Association, formerly
known as Texas Commerce Bank National Association, as trustee (the
"Subordinated Trustee" and, together with the Senior Trustee and the Senior
Subordinated Trustee,
<PAGE> 2
the "Trustees"). The Senior Subordinated Debt Securities and the Subordinated
Debt Securities may be convertible into shares of common stock, par value $1.00
per share, of the Company (the "Common Stock"). The basic provisions set forth
herein are intended to be incorporated by reference in a terms agreement of the
type referred to below relating to, among other things, the designation and
series of Debt Securities and the aggregate principal amount of Debt Securities
(the "Underwritten Securities") to be issued and sold by the Company pursuant
thereto and to be purchased, severally, by the underwriter or several
underwriters named therein (the "Underwriters"). The Terms Agreement, which
shall be in the form of Exhibit I hereto (the "Terms Agreement"), relating to
the Underwritten Securities and such additional aggregate principal amount of
Debt Securities that the Underwriters may be granted an option to purchase by
the Company to cover over-allotments in connection with any offering of
Underwritten Securities (the "Option Securities" and together with the
Underwritten Securities, the "Offered Securities"), together with the
provisions hereof incorporated therein by reference (which provisions shall not
become effective until so incorporated by reference), is herein referred to as
this "Agreement." The Terms Agreement may reflect that a portion of the
Underwritten Securities are to be sold to the several U.S. underwriters named
therein (the "U.S. Underwriters") in connection with the offering and sale of a
portion of the Underwritten Securities in the United States and Canada (the
"U.S. Underwritten Securities") to United States and Canadian persons (as
defined in the instruments governing the coordination of the offering by the
U.S. Underwriters and the International Managers (as defined below) named
therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
<PAGE> 3
-3-
In connection with the offer and sale by the Company of the
Underwritten Securities pursuant to this Agreement and the Terms Agreement, the
Company and J.P. Morgan Securities Inc., as the Remarketing Dealer (the
"Remarketing Dealer"), will enter into the Remarketing Agreement to be dated
the Closing Date (as defined herein) (the "Remarketing Agreement").
The obligations of the Underwriters to purchase, and the
Company to sell, the Offered Securities are evidenced by the Terms Agreement
delivered at the time the Company determines to sell the Offered Securities
and, without the execution and delivery of the Terms Agreement, the Company
shall not be obligated to sell, and the Underwriters shall not be obligated to
purchase, any Debt Securities pursuant to this Agreement. The Terms Agreement
specifies the firm or firms which will be Underwriters, the aggregate principal
amount of the Offered Securities to be purchased by each Underwriter, the
purchase price to be paid by the Underwriters for the Offered Securities, the
public offering price, if any, of the Offered Securities and any terms of the
Offered Securities not otherwise specified in the applicable Indenture
(including, but not limited to, designations, denominations, conversion or
exchange provisions, covenants, interest rates and payment dates, maturity,
redemption provisions and sinking fund requirements). The Terms Agreement
specifies any details of the terms of the offering that should be reflected in
a post-effective amendment to the applicable Registration Statement or the
Prospectus Supplement (each as hereinafter defined).
The terms which follow, when used in this Agreement, shall
have the meanings indicated. "Registration Statement" shall mean the
registration statement or registration statements relating to the Offered
Securities (and such other securities of the Company as may be included
therein), which shall be the registration statement on Form S-3 filed under the
Securities Act of 1933, as amended (collectively with the rules and regulations
of the Securities and Exchange Commission (the "Commission") thereunder, the
"Securities Act"), referred to in Section 4(i) below, including all documents
incorporated therein by reference and all exhibits thereto, as from time to
time amended or supplemented pursuant to the Securities Act, the Securities
Exchange Act of 1934, as amended (collectively with the rules and regulations
of the Commission thereunder, the "Exchange Act"), or otherwise, including as
supplemented by the Prospectus Supplement, on or prior to the date of execution
and delivery of the Terms Agreement (the "Representation Date") and, in the
event any such amendment or supplement is filed prior to the Closing Date (as
defined in Section 3 hereof), including by the filing of any Prospectus
Supplement or document incorporated by reference, shall also mean such
registration
<PAGE> 4
-4-
statement as so amended or supplemented. "Prospectus" shall mean the prospectus
(including the related Prospectus Supplement with respect to the Offered
Securities) relating to the Debt Securities (and such other securities of the
Company as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or otherwise; provided, however, that a
Prospectus Supplement shall be deemed to have supplemented the Prospectus only
with respect to the Offered Securities to which it relates. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange
Act after the effective date of the Registration Statement, or the issue date
of any preliminary prospectus or the Prospectus, as the case may be, and on or
prior to the completion of the applicable offering (which shall be deemed to be
not earlier than such time as no Underwriter or dealer is required by law to
deliver a prospectus in connection with sales of the Offered Securities) and
which is deemed to be incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees
to issue and sell to each Underwriter as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
at the purchase price set forth in the Terms Agreement, severally and not
jointly, from the Company the respective aggregate principal amount of
Underwritten Securities set forth opposite the name of such Underwriter on the
annex or annexes to Exhibit I hereto (or such aggregate principal amount of
Underwritten Securities, as the case may be, increased as set forth in Section
9 hereof, subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives in their sole discretion may make).
If, pursuant to the Terms Agreement, the Company shall have
granted the option to the Underwriters to purchase Option Securities, the
Company agrees to sell to the Underwriters designated in the Terms Agreement to
purchase Option Securities (each an "Option Securities Underwriter" and
collectively, the "Option Securities Underwriters") the Option Securities, and
the Option Securities Underwriters shall have a one-time right to purchase,
severally and not jointly, the Option Securities on the terms set forth in the
Terms Agreement. Option Securities may be purchased as provided below solely
for the purpose of covering over-allotments made in connection with
<PAGE> 5
-5-
the offering of the Underwritten Securities. If any Option Securities are to
be purchased, subject to the conditions hereinafter stated, each Option
Securities Underwriter agrees, severally and not jointly, to purchase the
number of Option Securities (subject to such adjustments to eliminate any
fractional Offered Securities as the Representatives designated in the Terms
Agreement in their sole discretion may make) that bears the same proportion to
the total number of Option Securities to be purchased as the number of
Underwritten Securities set forth in the annex or annexes to Exhibit I hereto
opposite the name of such Option Securities Underwriter bears to the total
number of Underwritten Securities to be purchased by all Option Securities
Underwriters.
The Option Securities Underwriters may exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the Representation Date, by written notice from the Representatives
designated in the Terms Agreement to the Company. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of
such notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands
that the Underwriters intend (i) to make a public offering of the Offered
Securities as soon after the Prospectus Supplement has been filed and the Terms
Agreement has been executed and delivered as in the judgment of the
Representatives is advisable and (ii) initially to offer the Offered Securities
upon the terms set forth in the Prospectus Supplement and the Underwriters will
advise the Company as to any alteration in the terms of such offering that
would require, pursuant to the Securities Act, any amendment or supplement to
the Prospectus Supplement.
3. Delivery of the Offered Securities and Payment
Therefor. Payment for the Offered Securities shall be made to the Company or
to the Company's order by wire transfer of immediately available funds in such
location as the Representatives shall designate in the Terms Agreement at, in
the case of the Underwritten Securities, such time and date as are specified in
<PAGE> 6
-6-
the Terms Agreement, or at such other time on the same or such other date, not
later than the fifth Business Day (as hereinafter defined) thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of
the Option Securities, on the date and at the time specified by the
Representatives designated in the Terms Agreement to exercise such option in
the written notice by such Representatives of the election to purchase such
Option Securities by the Option Securities Underwriters. The time and date of
such payment for the Underwritten Securities are referred to herein as the
"Closing Date" and the time and date for such payment for the Option
Securities, if other than the Closing Date, are herein referred to as the
"Additional Closing Date." As used herein, the term "Business Day" means any
day other than a day on which banks are permitted or required to be closed in
New York City.
Payment for the Offered Securities to be purchased on the
Closing Date or the Additional Closing Date, as the case may be, shall be made
against delivery to the Representatives for the respective accounts of the
several Underwriters of the Offered Securities to be purchased on such date
registered in such names and in such denominations as the Representatives shall
request in writing not later than two full Business Days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Offered Securities duly paid by the Company. The Company hereby agrees to pay
any such transfer taxes. The certificates for the Offered Securities will be
made available for inspection and packaging by the Representatives not later
than 1:00 P.M., New York City time, on the Business Day prior to the Closing
Date or the Additional Closing Date, as the case may be.
4. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter as of the Representation
Date and as of the Closing Date that:
(i) A registration statement on Form S-3 (Registration
No. 333-10867), including a prospectus, with respect to the Debt
Securities (and such other securities of the Company as may be
covered thereby), (i) has been prepared by the Company in conformity
with the requirements of the Securities Act, (ii) has been filed with
the Commission and (iii) has become effective. Such Registration
Statement and the related prospectus may have been amended or
supplemented from time to time prior to the Representation Date; any
such amendment to the applicable Registration Statement was so
prepared and filed and any such amendment
<PAGE> 7
-7-
has become effective. A prospectus supplement (the "Prospectus
Supplement"), including a prospectus, relating to the Offered
Securities has been prepared. The Prospectus Supplement and, if not
previously filed, such prospectus will be filed pursuant to Rule 424
under the Securities Act. If the offering of the Offered Securities
is to be made by U.S. Underwriters and International Managers, two
such prospectus supplements, one relating to the Offered Securities to
be sold by the U.S. Underwriters and one relating to the Underwritten
Securities to be sold by the International Managers, and each
identical to the other except for the cover page, have been so
prepared and filed. In such event, the term "Prospectus Supplement"
refers to such international and U.S. prospectus supplements. Copies
of such Registration Statement and the Prospectus relating thereto,
any such amendment or supplement, the Prospectus Supplement and all
documents incorporated by reference therein which were filed with the
Commission on or prior to the Representation Date (including one fully
executed copy of the Registration Statement and of each amendment
thereto for counsel for the Underwriters) have been delivered to each
of the Representatives. The Company has included in the Registration
Statement, as amended at the date the Registration Statement was
declared effective (the "Effective Date"), all information (other than
information relating specifically to the terms of any particular
series of Debt Securities and the offering thereof) required by the
Securities Act to be included in the Prospectus with respect to the
Offered Securities (and the Common Stock, if applicable) and the
offering and sale thereof. Except to the extent that the Underwriters
shall agree in writing to a modification, the Registration Statement
and the Prospectus shall be in all substantive respects in the form
furnished to the Underwriters prior to the Representation Date or, to
the extent not completed at the Representation Date, shall contain
only such specific additional information and other changes as the
Company has advised the Underwriters, a reasonable time prior to the
Representation Date, is to be included or made therein and as to which
the Underwriters have not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the
<PAGE> 8
-8-
requirements of the Securities Act and the Trust Indenture Act of
1939, as amended, and the Rules and Regulations of the Commission
thereunder (the "Trust Indenture Act"); and no such document included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were
made) not misleading; provided, however, that the Company makes no
representation or warranty as to (a) information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information relating to any
Underwriter furnished to the Company by or on behalf of any
Underwriter expressly for use therein and (b) that part of the
Registration Statement that constitutes the Statement of Eligibility
on Form T-1 of any of the Trustees under the Trust Indenture Act filed
as an exhibit to the Registration Statement (the "Form T-1").
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) Coopers & Lybrand L.L.P., who are reporting upon the
audited financial statements and the supporting schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants
within the meaning of the Securities Act. The financial statements,
and the related notes thereto, included or incorporated by reference
in the Registration Statement and the Prospectus, present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the
periods specified; and said financial statements have been prepared in
<PAGE> 9
-9-
conformity with United States generally accepted accounting principles
applied on a consistent basis, except as set forth therein, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein. If pro forma financial information is included in or
incorporated by reference into the Registration Statement and the
Prospectus, such pro forma financial information (including, without
limitation, the notes thereto) as of the date presented (A) presented
fairly in all material respects the information shown therein, (B) was
prepared in accordance with applicable requirements of Regulation S-X
promulgated under the Exchange Act, (C) was prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and (D) was properly computed on the bases
described therein. In the opinion of the Company, the assumptions
used in the preparation of any such pro forma financial information
(including, without limitation, the notes thereto) were fair and
reasonable and the adjustments used therein were appropriate to give
effect to the transactions or circumstances referred to therein. No
pro forma financial statements or other pro forma financial
information is required to be included or incorporated by reference in
the Registration Statement and the Prospectus other than those
included or incorporated by reference therein.
(vi) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Registration Statement
and the Prospectus and to enter into this Agreement and the Terms
Agreement, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole (each, a "Material
Adverse Effect").
(vii) Each direct and indirect foreign and domestic
subsidiary of the Company listed on Schedule I hereto, which
constitute all of the significant subsidiaries of
<PAGE> 10
-10-
the Company within the meaning of Rule 1-02 of Regulation S-X under
the Exchange Act (each, a "Subsidiary" and collectively, the
"Subsidiaries") has been duly incorporated or organized, is validly
existing as a corporation or entity in good standing under the laws of
the jurisdiction of its incorporation or organization, has the
corporate or other power and authority to own its property and to
conduct its business as described in the Registration Statement and
the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
incorporated, be in existence, have such power and authority, be so
qualified or be in good standing could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
All of the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued, are fully paid and
nonassessable, and, except as set forth in the Registration Statement
and the Prospectus, are owned by the Company, directly or indirectly,
free and clear of all liens, encumbrances, security interests, claims
and restrictions on transferability and voting (other than any
restrictions on transferability as may arise under state and federal
securities laws). Except as set forth in the Registration Statement
and the Prospectus, there are no outstanding (i) securities or
obligations convertible into or exchangeable or exercisable for any
shares of capital stock of, or other interest in, the Company or any
Subsidiary, (ii) rights, warrants or options to acquire or purchase
any shares of capital stock of, or other interest in, the Company or
any Subsidiary or any such convertible, exchangeable or exercisable
securities or obligations, or (iii) obligations or understandings to
issue or sell any shares of capital stock of, or other interest in,
the Company or any Subsidiary, any such convertible, exchangeable or
exercisable securities or obligations, or any such warrants, rights or
options, except as have been disclosed to the Underwriters in writing
prior to the date hereof and except for (A) issuances of shares of
Common Stock and options to acquire Common Stock after the date of the
most recent information set forth in the Registration Statement and
the Prospectus pursuant to the Company's employee benefit plans as in
effect on the date hereof and (B) issuances after the date of the most
recent information set forth in the Registration Statement and the
Prospectus of convertible debentures of the Company and Common Stock
pursuant to the Company's Registration
<PAGE> 11
-11-
Statement on Form S-4 (Registration No. 33-54996) and the Registration
Statement on Form S-4 (Registration No. 333-01857) (together, the
"S-4").
(viii) There are no partnerships in which the Company or any
of the Subsidiaries has any direct or indirect controlling interest
that would constitute a significant subsidiary within the meaning of
Rule 1-02 of Regulation S-X under the Exchange Act. Except for the
capital stock of the Subsidiaries and except as set forth in the
Registration Statement and the Prospectus, the Company does not own,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity.
(ix) This Agreement, the Terms Agreement, and the
Remarketing Agreement have been duly and validly authorized, and this
Agreement and the Terms Agreement have been duly and validly executed
and delivered by the Company.
(x) Since the date of the latest consolidated financial
statements of the Company and its subsidiaries included in the
Registration Statement and the Prospectus, except as set forth in or
expressly contemplated by the Registration Statement and the
Prospectus, there has not been (A) any change in the Company's issued
capital stock or options, except (I) pursuant to the exercise of
options or the conversion or exchange of outstanding convertible or
exchangeable securities of the Company or any of its subsidiaries,
(II) issuances of shares of Common Stock and options to acquire Common
Stock issued after the date of such financial statements pursuant to
the Company's employee benefit plans as in effect on the date hereof
and (III) issuances after the date of such financial statements of
convertible debentures of the Company and Common Stock pursuant to the
S-4, or (B) any material adverse change in the management, condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole (each,
a "Material Adverse Change," and any event or state of facts which
could, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Change is herein referred to as a "Prospective
Material Adverse Change"), whether or not arising from transactions or
events occurring in the ordinary course of business.
<PAGE> 12
-12-
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company or any of the Subsidiaries (other than those in the ordinary
course of business) which are material to the Company and its
subsidiaries, taken as a whole and (B) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock, other than regularly scheduled quarterly
dividends in accordance with the past practice of the Company.
(xii) If the Prospectus contains a section entitled
"Capitalization", as of the date of the Prospectus Supplement, the
Company has the authorized, issued and outstanding capitalization set
forth in the Prospectus under "Capitalization". The authorized
capital stock of the Company (including, without limitation, the
Common Stock issuable upon conversion or exchange of the Offered
Securities, if applicable) conforms as to legal matters to the
description thereof contained in the Registration Statement and the
Prospectus, and all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are not subject to any preemptive or similar
rights. The rights agreement dated as of July 18, 1988 between the
Company and Chase Bank of Texas, National Association, formerly known
as Texas Commerce Bank National Association, as rights agent, as
amended to date (the "Rights Agreement"), has been duly authorized,
executed and delivered by the Company; the rights (the "Rights") to
purchase the Company's Series C Junior Participating Preferred Stock
(the "Series C Preferred Stock") outstanding thereunder and, if the
Offered Securities are convertible into shares of Common Stock, to be
issued upon issuance of the Common Stock upon conversion of such
Offered Securities, have been duly authorized; the Series C Preferred
Stock to be issued upon exercise of the Rights has been duly
authorized; and the description of the Rights Agreement and the Rights
set forth in the Registration Statement and the Prospectus is accurate
in all material respects.
(xiii) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement, the Terms Agreement and the Remarketing Agreement has
been validly and sufficiently taken. The Offered Securities, when
executed by
<PAGE> 13
-13-
the Company and authenticated by the applicable Trustee in accordance
with the terms of the applicable Indenture (assuming the due
authorization, execution and delivery of such Indenture by the Trustee
thereunder), and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement and the Terms Agreement
and the applicable Indenture (assuming the due authorization,
execution and delivery thereof by the Trustee thereunder), will
constitute the valid and binding obligations of the Company entitled
to the benefits of the applicable Indenture and enforceable against
the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). The Company has all the
requisite corporate power and authority to execute and deliver the
applicable Indenture and any supplemental indenture to such Indenture
relating to the Offered Securities (the "Supplemental Indenture") and
to incur and perform its obligations provided for therein. Each of
the Indenture and the Supplemental Indenture relating to the Offered
Securities, when executed by the Company and the Trustee thereunder
(assuming the due authorization, execution and delivery of such
Indenture and Supplemental Indenture by the Trustee thereunder), will
constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
If the Offered Securities are convertible into Common Stock, the
Offered Securities are convertible into Common Stock in accordance
with their terms and the terms of the applicable Supplemental
Indenture relating to the Offered Securities.
(xiv) If the Offered Securities are convertible into Common
Stock, the Common Stock issuable upon conversion of the Offered
Securities pursuant to the terms of the Supplemental Indenture has
been duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action and such Common Stock,
when duly issued upon such conversion will be validly issued and fully
paid and nonassessable; no holder thereof will be subject to personal
liability solely by reason of being such a
<PAGE> 14
-14-
holder; and the issuance of such Common Stock upon such conversion
will not be subject to preemptive rights.
(xv) The Offered Securities, the Indenture and
Supplemental Indenture relating thereto and the Remarketing Agreement
conform in all material respects to the descriptions thereof in the
Prospectus.
(xvi) The execution and delivery by the Company of, and the
full and timely performance by the Company of its obligations under,
this Agreement and the Terms Agreement, the Indenture relating to the
Offered Securities, the Supplemental Indenture relating to the Offered
Securities, the Remarketing Agreement and the Offered Securities, the
compliance by the Company with the terms thereof, and the consummation
of each of the transactions contemplated herein and therein, (A) have
been duly authorized by all necessary corporate action on the part of
the Company, (B) do not and will not result in any violation of the
articles of incorporation or by-laws of the Company and (C) do not and
will not conflict with, or result in a breach or violation of, any of
the terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the maturity
or require the prepayment of any indebtedness under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material property or assets of the Company or of any Subsidiary under
(I) any indenture, mortgage, loan agreement, note, lease, license,
partnership agreement, franchise agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which any of them may be bound or affected or to which any of their
respective properties or assets may be subject (each, a "Contract" and
collectively, the "Contracts"), other than any such conflict, breach,
default, acceleration, prepayment, lien, charge or encumbrance that,
could not individually or in the aggregate, reasonably be expected to
result in any Material Adverse Effect, (II) any existing applicable
law, rule or regulation (other than the securities or Blue Sky laws of
the various states and other jurisdictions of the United States of
America) or (III) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
respective properties or assets.
<PAGE> 15
-15-
(xvii) No authorization, approval, consent or license of, or
filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act and the Trust
Indenture Act or as may be required under the securities or Blue Sky
laws of the various states and other jurisdictions of the United
States of America) is required for the valid authorization, issuance,
sale and delivery of the Offered Securities by the Company, the
execution and delivery by the Company of, or the full and timely
performance by the Company of each of its obligations under, this
Agreement, the Terms Agreement, the Indenture relating to the Offered
Securities, the Supplemental Indenture relating to the Offered
Securities and the Remarketing Agreement, and the compliance by the
Company with its obligations thereunder.
(xviii) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(xix) No holder of any securities of the Company has any
rights, not effectively satisfied or waived, to require the Company to
register the sale of any securities under the Securities Act in
connection with the filing of the Registration Statement or the
consummation of the transactions contemplated therein or pursuant to
this Agreement, the Terms Agreement or the Remarketing Agreement.
(xx) The Company and its subsidiaries are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health, or the
environment or imposing liability or standards of conduct concerning
Hazardous Material (collectively, "Environmental Laws"), except where
such noncompliance with Environmental Laws could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The term "Hazardous Material" means (i) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended,
(iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl and (v) any pollutant or contaminant or hazardous, dangerous,
or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.
<PAGE> 16
-16-
(xxi) Each of the Company and each of its subsidiaries
owns, possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and
other governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
conducted as of the date hereof, except in each case where the failure
to obtain licenses, permits, certificates, consents, orders, approvals
and other authorizations, or to make all declarations and filings,
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect, and neither the Company nor any such
subsidiary has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described
in the Registration Statement and the Prospectus and except, in each
case, where such revocation or modification could not, reasonably be
expected to singly or in the aggregate, have a Material Adverse
Effect; and the Company and each of its subsidiaries are in compliance
with all laws and regulations relating to the conduct of their
respective businesses as conducted as set forth in the Registration
Statement and the Prospectus, except where noncompliance with such
laws or regulations could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(xxii) To the best knowledge of the Company, each of the
Company and each of its subsidiaries owns or possesses the patents,
patent licenses, trademarks, service marks, trade names, copyrights
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has received
<PAGE> 17
-17-
any notice of infringement of or conflict with asserted rights of
others with respect to any Intellectual Property, except for notices
the content of which if accurate could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(xxiii) Except as set forth in the Registration Statement and
the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in
which the Company or any of the Subsidiaries conducts their
respective businesses in connection with the ownership by the Company
of capital stock of any Subsidiary, any foreign exchange controls or
the repatriation of any amount from or to the Company and the
Subsidiaries, except to the extent such authorizations, approvals or
consents have been obtained and are in full force and effect and
except to the extent that the failure to obtain such authorization,
approval or consent could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(xxiv) The Company has not taken and will not take, directly
or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Offered Securities (or the Common Stock, if applicable),
and the Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Offered Securities other than any preliminary
prospectus filed with the Commission or the Prospectus or other
materials permitted under the Securities Act.
(xxv) Except as set forth in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by
any government, governmental or regulatory instrumentality, agency or
body or court, domestic or foreign, or any arbitrator, now pending or,
to the best knowledge of the Company, threatened, against or affecting
the Company or any subsidiary of the Company or any affiliate of the
Company that, singly or in the aggregate with all such actions, suits
and proceedings (i) could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to have a material
adverse effect on the consummation of the transactions contemplated by
this Agreement, the Terms Agreement and the Remarketing Agreement or
(ii) is required to be described in the Registration Statement or the
Prospectus that is not so described.
<PAGE> 18
-18-
(xxvi) Neither the Company nor any subsidiary of the Company
(i) is in violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement, the Remarketing Agreement or any Contract or of any
permit, order, decree, judgment, statute, rule or regulation, foreign
or domestic, applicable to the Company or any Subsidiary, except for
such violations, breaches or defaults that, could not singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect
(xxvii) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended or a holding
company or a subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
(xxviii) The Company has complied with all provisions
of Section 517.075, Florida Statutes (Chapter 92-1933 8, Laws of
Florida).
(xxix) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(xxx) The Company knows of no outstanding claims for
services, either in the nature of a finder's fee or origination fee,
with respect to the transactions contemplated hereby and by the Terms
Agreement, other than the underwriting fees and compensation to be
paid to the Underwriters in accordance with this Agreement and other
than as set forth in the Remarketing Agreement.
(xxxi) No labor disputes exist with employees of the Company
or of the Subsidiaries that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
<PAGE> 19
-19-
Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
5. Agreements of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) To use its reasonable best efforts to cause any
amendment to the Registration Statement to become effective at the
earliest possible time.
(b) To furnish to each of the Representatives, without
charge, as many signed copies of the Registration Statement (as
originally filed) and each amendment thereto and each document
incorporated or deemed incorporated therein, in each case including
exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of the
Company's intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the Securities Act, the Exchange Act
or otherwise, to furnish the Underwriters and their counsel with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and not to
file any such amendment or supplement or use any such prospectus to
which the Underwriters or counsel for the Underwriters shall object.
Subject to the foregoing sentence, the Company will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
<PAGE> 20
-20-
(d) To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any comments from the Commission or of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Prospectus or Prospectus
Supplement or the initiation or threatening of any proceeding for that
purpose and (v) of the receipt by the Company of any notification with
respect to any suspension of the qualification of the Offered
Securities for offer and sale in any jurisdiction or the initiation of
any proceeding for such purpose; and to use its reasonable best
efforts to prevent the issuance of any such stop order or notification
and, if issued, to obtain as soon as possible the withdrawal thereof.
(e) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Company, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company)
to which Offered Securities may have been sold by the Representatives
on behalf of the Underwriters and to any other dealers, upon request,
such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
<PAGE> 21
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(f) To endeavor to qualify the Offered Securities (and,
if applicable, the Common Stock) for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to pay all fees and expenses (including fees and disbursements of
counsel to the Underwriters) incurred in connection with such
qualification; provided, however, that the Company shall not be
required to file a general consent to service of process in any
jurisdiction or subject itself to general taxation in any
jurisdiction.
(g) To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months after the date of each Terms Agreement, an earnings
statement, covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement, (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of
such Terms Agreement, which will satisfy the provisions of Rule 158
under the Securities Act and Section 11(a) of the Securities Act.
(h) For a period of 90 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
subsidiary of the Company to, directly or indirectly, effect any
offer, sale or other disposition of, or registration of, any Debt
Securities or any other long term debt, notes or debentures of or
guaranteed by the Company or any of its subsidiaries or any securities
convertible into or exchangeable or exercisable for Debt Securities or
any such long-term debt, notes or debentures, other than the Offered
Securities to be sold pursuant to the Terms Agreement and other than
pursuant to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement. If the Offered
Securities are convertible into Common Stock, during a period of 90
days from the Representation Date, the Company will not, without the
prior written consent of the Representative designated in the Terms
Agreement, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, shares of Common Stock or any
<PAGE> 22
-22-
right to purchase or other security convertible into or exchangeable
or exercisable for or any securities of the Company substantially
similar to any such shares, other than (A) the Offered Securities to
be sold pursuant to the Terms Agreement, (B) shares of Common Stock
issued upon conversion, exercise or exchange of convertible,
exchangeable or exercisable securities of the Company or of any
subsidiary of the Company outstanding on the Representation Date and
(C) shares of Common Stock and options thereunder issued pursuant to
employee benefit plans of the Company in place on the Representation
Date as in effect on the Representation Date, and other than pursuant
to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement.
(i) Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Company's
obligations hereunder, including, without limiting the generality of
the foregoing, all costs and expenses (i) incurred in connection with
the preparation, issuance, execution and delivery of the Offered
Securities (including, if applicable, the Common Stock issuable upon
conversion thereof), (ii) incurred in connection with the preparation,
printing and filing under the Securities Act and the Exchange Act of
the Registration Statement, the Prospectus, any preliminary prospectus
and each Prospectus Supplement (including in each case all exhibits,
amendments and supplements thereto and all documents incorporated
therein by reference), (iii) incurred in connection with the
registration or qualification of the Offered Securities (including, if
applicable, the Common Stock issuable upon conversion or exchange
thereof) under the laws of such jurisdictions as the Representatives
may request (including filing fees and the fees of counsel for the
Underwriters and their disbursements), (iv) relating to any filing
with the National Association of Securities Dealers Inc. (the "NASD")
in connection with the offering of the Offered Securities, (v)
incurred in connection with the engagement of any qualified
independent underwriter as may be required by NASD rules and
regulations, (vi) incurred in connection with the rating of the
Offered Securities, (vii) incurred in connection with advertising
relating to the Offered Securities approved by the Company (which
approval shall not be unreasonably withheld or delayed), (viii)
relating to the fees and expenses of the applicable Trustee, including
the fees and
<PAGE> 23
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expenses of counsel to the applicable Trustee, and of the transfer
agent and registrar for the Common Stock if the Offered Securities are
convertible into the Common Stock and (ix) relating to or in
connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Terms
Agreement, the Indenture relating to the Offered Securities, any
Supplemental Indenture relating thereto, the agreement among
underwriters, the Remarketing Agreement each other document or
instrument relating to the underwriting arrangements and the
coordination of the offering of the Offered Securities by the U.S.
Underwriters and the International Managers, if applicable, any dealer
agreements, the Preliminary and Supplemental Blue Sky Memoranda and
the furnishing to the Underwriters and dealers of copies of the
Registration Statement, the Prospectus and each Prospectus Supplement,
including mailing and shipping, as herein provided. The Company shall
not be required to pay any costs, fees or expenses with respect to the
remarketing of the Offered Securities except as expressly set forth in
the Remarketing Agreement.
(j) To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Company's capital stock, and copies of any reports and financial
statements furnished to or filed with the Commission.
(k) To use the net proceeds of the offering of the
Offered Securities as set forth in the Prospectus Supplement under the
caption "Use of Proceeds."
(l) During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act in
connection with sales (including resales) of the Offered Securities,
to file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within the time
period required by the Exchange Act and the Exchange Act Regulations.
(m) If the Offered Securities are convertible into Common
Stock, the Company will use its best efforts to effect the listing of
the shares of Common Stock issuable upon conversion of the Offered
Securities on the New York Stock Exchange on the Representation Date.
<PAGE> 24
-24-
(n) To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion of all of
the Offered Securities that are convertible into the Common Stock.
(o) To deliver copies of the Prospectus to such place or
places as shall be designated by the Representatives not later than
1:00 p.m., New York City time, on the day after the date of the Terms
Agreement.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
(a) If any amendment to the Registration Statement filed
prior to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M., New York City time, on the Representation Date;
and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Securities
Act or proceedings therefor initiated or threatened by the Commission.
The price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided to the Representatives evidence satisfactory to the
Representatives of such timely filing.
(b) The representations and warranties of the Company
contained herein and in the Terms Agreement shall be true and correct
on and as of the Closing Date as if made on and as of the Closing Date
and the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to
payment for the Underwritten Securities on the Closing Date, there
shall not have occurred or become known any Material Adverse Change or
any development involving a Prospective Material Adverse Change other
than as set forth in the Registration Statement and the Prospectus,
<PAGE> 25
-25-
the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Underwritten Securities on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
As used in this Section 6(c), "Prospectus" shall mean the Prospectus
first used to confirm sales of the Offered Securities exclusive of any
amendment or supplement thereto thereafter.
(d) The Representatives shall have received on and as of
the Closing Date a certificate of the Company signed by the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial
Officer or Treasurer of the Company to the effect set forth in
subsections (a) and (b) of this Section 6 and to the further effect
that since the most recent date as of which information is given in
the Prospectus to the Closing Date there shall not have occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change. As used in this Section 6(d), "Prospectus"
shall mean the Prospectus first used to confirm sales of the Offered
Securities exclusive of any amendment or supplement thereto
thereafter.
(e) The Representatives shall have received on the
Closing Date a signed opinion of Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P. ("LSZHL") special counsel for the Company, addressed to the
Underwriters and dated the Closing Date and satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus.
(ii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iii) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and
<PAGE> 26
-26-
delivery by the Trustee thereunder) constitutes a valid and
legally binding instrument of the Company, enforceable against
the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies
generally and subject to the effect of general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and the discretion of the
court before which any proceeding therefor may be brought.
(iv) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities, and
the Offered Securities have been duly authorized by the
Company for issuance. The Offered Securities, when executed
by the Company and authenticated by the Trustee in accordance
with the Indenture relating to the Offered Securities
(assuming the due authorization, execution and delivery of the
Indenture by the Trustee thereunder) and delivered to and paid
for by the Underwriters in accordance with the terms of this
Agreement and the Terms Agreement will constitute valid and
legally binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company
in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought.
(v) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency,
<PAGE> 27
-27-
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(vi) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Remarketing Agreement, and the Remarketing Agreement
has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and
delivery by the Remarketing Dealer under the Remarketing
Agreement) constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought, and except as any rights to indemnification or
contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(vii) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture, the Supplemental Indenture and the
Remarketing Agreement provide a fair summary of such
provisions.
(viii) The statements set forth in the Registration
Statement and the Prospectus under the caption "Certain United
States Federal Income Tax Considerations," insofar as such
statements constitute summaries of legal matters, are fair and
accurate in all material respects.
(ix) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital
stock of the Company is as set
<PAGE> 28
-28-
forth in the Prospectus under "Capitalization". The
authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof
contained in the Prospectus.
(x) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(xi) At the time the Registration Statement and
each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the Form T-1 and the financial
statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to
which such counsel need express no opinion) appear on their
face to be appropriately responsive to the applicable
requirements of the Securities Act. The applicable Indenture,
as amended by the Supplemental Indenture, complies with the
requirements of the Trust Indenture Act.
(xii) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
<PAGE> 29
-29-
(xiii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable), the
Remarketing Agreement or the Offered Securities by the
Company, except such as may be required under the Securities
Act, the Trust Indenture Act or state securities laws.
(xiv) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture, the Supplemental Indenture (if
applicable), the Remarketing Agreement and the Offered
Securities and the consummation of the transactions
contemplated herein (including the issuance, sale and delivery
of the Offered Securities and, if applicable, the issuance of
the Common Stock upon conversion of the Offered Securities),
will not constitute a breach of, or default under (including,
without limitation, any event which with notice or lapse of
time, or both, would constitute a breach of or a default
under), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion (the scope of which
list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation
of the provisions of the charter or by- laws of the Company,
or any applicable law, rule, regulation or administrative,
regulatory or court judgment, order or decree, except for any
breach, default, lien, charge or encumbrance under any such
contract as could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(xv) Each document filed pursuant to the Exchange
Act (other than the financial statements, schedules and other
financial and statistical data
<PAGE> 30
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included therein, as to which such counsel need express no
opinion) and incorporated or deemed to be incorporated by
reference in the Prospectus appears on its face to be
appropriately responsive to the applicable requirements of the
Exchange Act.
(xvi) The Company is not an investment company
under the Investment Company Act of 1940, nor a holding
company or a subsidiary of a holding company under the Public
Utility Holding Company Act of 1935.
Such counsel shall also state that they have been advised by
the Commission that the Indenture has been qualified under the Trust
Indenture Act and that the Registration Statement became effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
<PAGE> 31
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Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of any jurisdiction other
than the State of Texas or the United States or the General
Corporation Law of the State of Delaware, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel who are reasonably satisfactory to counsel for the
Underwriters; provided, however, that LSZHL shall state that LSZHL,
the Underwriters and counsel for the Underwriters are justified in
relying upon such opinion. In addition, such counsel may assume for
purposes of such opinion that the laws of the State of New York are
identical to the laws of the State of Texas.
(f) The Representatives shall have received on the
Closing Date a signed opinion of James M. Shelger, General Counsel of
the Company, addressed to the Underwriters and dated the Closing Date
and satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to the
best of such counsel's knowledge and information, after due
inquiry, is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(ii) Each Subsidiary has been duly incorporated, is
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact
<PAGE> 32
-32-
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
could not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(iii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iv) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities, and
the Offered Securities have been duly authorized by the
Company for issuance. The Offered Securities, when executed
by the Company and authenticated by the Trustee in accordance
with the Indenture relating to the Offered Securities
(assuming the due authorization, execution and delivery of the
Indenture by the Trustee thereunder) and delivered to and paid
for by the Underwriters in accordance with the terms of this
Agreement and the Terms Agreement will constitute valid and
legally binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company
in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws
<PAGE> 33
-33-
affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding
in equity or at law) and the discretion of the court before
which any proceeding therefor may be brought.
(vi) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought.
(vii) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Remarketing Agreement, and the Remarketing Agreement
has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and
delivery by the Remarketing Dealer under the Remarketing
Agreement) constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought, and except as any rights to indemnification or
contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
<PAGE> 34
-34-
(viii) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture, the Supplemental Indenture and the
Remarketing Agreement provide a fair summary of such
provisions.
(ix) If the Prospectus contains a section entitled
"Capitalization," the number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization". The authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus.
(x) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(xi) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Company, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge and information, after due
inquiry, any other security interests or claims.
<PAGE> 35
-35-
(xii) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(xiii) To the best of such counsel's knowledge and
information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xiv) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable), the
Remarketing Agreement or the Offered Securities by the
Company, except such as may be required under the Securities
Act, the Trust Indenture Act or state securities laws.
(xv) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture, the Supplemental Indenture (if
applicable), the Remarketing Agreement and the Offered
Securities, the consummation of the transactions contemplated
herein (including the issuance, sale and delivery of the
Offered Securities and, if applicable, the issuance of the
Common Stock upon conversion of the Offered Securities), and
compliance by the Company with its obligations hereunder and
thereunder will not conflict with or constitute a breach of,
or default under
<PAGE> 36
-36-
(including, without limitation, any event which, with notice
or lapse of time, or both, would constitute a breach of or a
default under), or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion (the scope of which
list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company, or
any applicable law, rule, regulation or administrative,
regulatory or court judgment, order or decree, except for any
breach, default, lien, charge or encumbrance under any such
contract as could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
on omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
<PAGE> 37
-37-
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of (1) the General
Corporation Law of the State of Delaware upon the written opinion of
LSZHL delivered pursuant to clause (e) above of this Section 6 and (2)
any jurisdiction other than the State of Texas or the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel who are reasonably satisfactory to counsel
for the Underwriters; provided, however, that James M. Shelger shall
state that James M. Shelger, the Underwriters and counsel for the
Underwriters are justified in relying upon such opinion. In addition,
such counsel may assume for purposes of such opinion that the laws of
the State of New York are identical to the laws of the State of Texas.
(g) On the Representation Date and also on the Closing
Date, Coopers & Lybrand L.L.P. shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
(h) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Cahill Gordon & Reindel,
counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(i) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Davis Polk & Wardwell, counsel
to the Underwriters, with respect to the validity of the Offered
Securities, the conformity of the Drs. to the description thereof in
the Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters.
<PAGE> 38
-38-
(j) If the Offered Securities are convertible into Common
Stock, on the Representation Date, the Common Stock issuable upon
conversion of the Offered Securities shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(k) At the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities
(and, if applicable, the Common Stock) as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(l) On or prior to the Closing Date, the Company shall
have executed and delivered the Remarketing Agreement, and the
Remarketing Agreement shall be satisfactory in form and substance to
the Underwriters and counsel for the Underwriters.
(m) On or prior to the Closing Date the Company shall
have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
(n) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(o) If the Offered Securities are convertible into Common
Stock, the Company shall have delivered to the Representatives written
agreements, in form and substance satisfactory to the Representative
designated in the Terms Agreement, with each of its executive officers
who owns Common Stock that no offer, sale or other disposition, or
<PAGE> 39
-39-
request or demand for registration under the Securities Act or
inclusion in any other registration statement filed by the Company
under the Securities Act, of any Common Stock or other capital stock
of the Company, or warrants, options, convertible, exercisable or
exchangeable securities, or other rights to purchase or acquire,
Common Stock or other capital stock (or any such right or
exchangeable, exercisable or convertible security) owned by such
person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the date of
this Agreement, directly or indirectly, by such executive officer,
otherwise than (i) with the prior written consent of the
Representative designated in the Terms Agreement and (ii) pursuant to
such exceptions, if any, as are agreed to by the Representative
designated in the Terms Agreement and set forth in the Terms
Agreement.
(p) There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
(q) The Company shall have complied with its obligations
under Section 5(o).
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement, subject to the conditions set forth in paragraph (a) to and
including paragraph (q) above on and as of the Additional Closing Date
(references therein to the Closing Date shall be deemed references to the
Additional Closing Date for this purpose), except that the certificate called
for by paragraph (d), the opinions called for by paragraphs (e), (f), (h) and
(i) and the letters called for by paragraph (g) shall be dated as of, and
delivered on, the Additional Closing Date, and to the delivery to the
Representatives on the Additional Closing Date of such other documents as they
may reasonably request.
7. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation the
legal fees and other expenses reasonably incurred in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material
<PAGE> 40
-40-
fact contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly
for use therein; provided, however, that the foregoing indemnity with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
(or the benefit of any person controlling such Underwriter) from whom the
person asserting any such losses, claims, damages or liabilities purchased
Offered Securities if such untrue statement or omission or alleged untrue
statement or omission was made in such preliminary prospectus and is eliminated
or remedied in the Prospectus and the Company has provided such Prospectus in
accordance with Section 5(b) hereof (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) and if it shall be
established in the related action or proceeding that a copy of the Prospectus,
if required by law (as so amended or supplemented, but exclusive of any
documents incorporated therein by reference), shall not have been furnished to
such person at or prior to the written confirmation of the sale of such Offered
Securities to such person, except to the extent that such Prospectus contains
any other untrue statement or omission or alleged untrue statement or omission
of a material fact that was the subject matter of the related action or
proceeding. For purposes of the proviso to the immediately preceding sentence,
the term "Prospectus" shall not be deemed to include the documents incorporated
therein by reference, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in any
preliminary prospectus or the Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or
<PAGE> 41
-41-
claim) caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any preliminary prospectus. For purposes of this Section 7 and
Section 4(ii), the only written information furnished by the Underwriters to
the Company expressly for use in the Registration Statement and the Prospectus
is the information in the last paragraph of the cover page of the Prospectus
Supplement and the second paragraph under the table under the caption
"Underwriting" in the Prospectus Supplement.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall promptly retain counsel satisfactory to the Indemnified Person to
represent the Indemnified Person in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary, (ii) there has
been a failure by the Indemnifying Person to retain promptly counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for
<PAGE> 42
-42-
all Underwriters and all persons, if any, who control any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by the Representatives. In the case
of any such separate firm for the Company, and such directors, officers and
control persons of the Company, such firm shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
an Indemnifying Person to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of
such settlement; provided, however, that the Indemnifying Person shall not be
liable for any settlement effected without its consent pursuant to this
sentence if the Indemnifying Person is contesting in good faith the request for
reimbursement and all other fees and expenses of counsel not so contested shall
have been reimbursed. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (1) includes an unconditional
written release of such Indemnified Person, in form and substance satisfactory
to such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (2) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnified Person.
<PAGE> 43
-43-
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities as follows: as between the
Company on the one hand and the Underwriters on the other (i) in such
proportion as is appropriate to reflect the aggregate relative benefits
received by the Company and by the Underwriters from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and by the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and of
the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or
<PAGE> 44
-44-
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Underwriter be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Offered
Securities they have purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or the
Company, its officers or directors or any other person controlling the Company
and (iii) acceptance of and payment for any of the Offered Securities.
8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Securities, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the National Association of Securities Dealers, Inc. or the American
Stock Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either U.S. Federal or New York State authorities or exchange
controls shall have been imposed by the United States, or (iv) there
<PAGE> 45
-45-
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the aggregate principal amount of Offered Securities which it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Offered Securities to be purchased on such date,
the other Underwriters (with respect to the Option Securities, to the extent
such Underwriters are Option Securities Underwriters) shall be obligated
severally in the proportions that (1) with respect to Underwritten Securities,
the aggregate principal amount of Underwritten Securities set forth opposite
their respective names in the annex or annexes to Exhibit I hereto bears to the
aggregate principal amount of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters and (2) with respect to Option
Securities, the aggregate principal amount of Underwritten Securities set forth
opposite their respective names in the annex or annexes to Exhibit I hereto
bears to the aggregate principal amount of Underwritten Securities set forth
opposite the names of all such non-defaulting Underwriters who are Option
Securities Underwriters, or in such other proportions as the Representatives
may specify, to purchase the aggregate principal amount of Offered Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided, however, that in no event shall the
aggregate principal amount of Offered Securities that any Underwriter has
agreed to purchase pursuant to Section 1 be increased pursuant to this Section
9 by an amount in excess of one-ninth of such aggregate principal amount of
Offered Securities without the written consent of such Underwriter. If, on the
Closing Date or the Additional Closing Date, as the case may be, any
Underwriter or Underwriters shall
<PAGE> 46
-46-
fail or refuse to purchase the aggregate principal amount of Offered Securities
which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Offered Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Representatives and the Company for the purchase of such aggregate
principal amount of Offered Securities are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Securities, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either the Representatives or the Company shall have the right to
postpone the Closing Date (or, in the case of the Option Securities, the
Additional Closing Date), but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them, because
of any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder and pursuant to the Terms Agreement. In no
event, however, shall the Company be responsible to the Underwriters for any
loss of profits for failure to consummate the offering and sale of the Offered
Securities.
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Company, the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Offered Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
<PAGE> 47
-47-
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives at the address as set
forth in the Terms Agreement. Notices to the Company shall be given to it at
Service Corporation International, 1929 Allen Parkway, Houston, Texas 77019
(facsimile: (713) 525- 9067); Attention: James M. Shelger.
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
<PAGE> 48
-48-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION INTERNATIONAL
By: /s/ GREGORY L. CAUTHEN
-------------------------------------
Name: Gregory L. Cauthen
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
By: J.P. MORGAN SECURITIES INC.
By: /s/ RAYMOND SCHMITT
--------------------------------------
Name: Raymond Schmitt
Title:
<PAGE> 49
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
$300,000,000
6.30% Dealer remarketable securitiesSM ("Drs.SM")
due March 15, 2020
TERMS AGREEMENT
March 11, 1998
Service Corporation International
1929 Allen Parkway
Houston, Texas 77019
Attention: James M. Shelger
Ladies and Gentlemen:
J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated and UBS Securities LLC
(the "Representatives") understand that Service Corporation International, a
Texas corporation (the "Company"), proposes to issue and sell $300,000,000
aggregate principal amount of its 6.30% Dealer remarketable securitiesSM
("Drs.SM") due March 15, 2020 (the "Underwritten Securities"). The Drs. are
Senior Debt Securities and are to be issued under the Senior Indenture.
Subject to the terms and conditions set forth herein or incorporated by
reference herein, the Underwriters named in Annex A attached hereto offer to
purchase, severally and not jointly, the aggregate principal amount of
Underwritten Securities set forth opposite the name of each such Underwriter on
Annex A hereto at a price of 99.290% of the principal amount thereof (the
"Purchase Price"). The Closing Date shall be March 16, 1998, at 9:00 A.M., New
York City time, at the offices of Cahill Gordon & Reindel.
The Underwritten Securities shall have the following terms:
<PAGE> 50
-2-
<TABLE>
<S> <C>
Title: 6.30% Dealer remarketable securitiesSM due March 15, 2020
Maturity: March 15, 2020
Initial Interest rate: 6.30% per annum until the First Remarketing Date
Interest payment dates: March 15 and September 15, commencing September 15, 1998
Record Dates: March 1 and September 1
Remarketing Agreement: In consideration of the Company entering into the Remarketing
Agreement with the Remarketing Dealer, the Remarketing Dealer
shall pay to the Company on the Closing Date in immediately
available funds an amount equal to 4.50% of the principal amount
of the Drs.
Redemption: The Drs. are subject to mandatory tender on March 15, 2003 and on
March 15, 2010 (the "First Remarketing Date" and the "Second
Remarketing Date," respectively, and, together, the "Remarketing
Dates"). As further set forth in the Remarketing Agreement, if
the Remarketing Dealer has elected to remarket the Drs. on a
Remarketing Date (as described in the Prospectus Supplement), the
Drs. will be subject to mandatory tender to the Remarketing Dealer
at 100% of the principal amount thereof for remarketing on such
Remarketing Date. If the Remarketing Dealer elects not to
remarket the Drs. on any Remarketing Date, or for any reason does
not purchase all of the Drs. on such Remarketing Date, the Company
will be required to purchase on such Remarketing Date any Drs.
that have not been purchased by the Remarketing Dealer at 100% of
the principal amount thereof plus accrued interest, if any. As
further set forth in the Remarketing Agreement, the Drs. will not
be redeemable by the Company, except as indicated above and except
that on either Remarketing Date the Company shall have the right
to redeem the Drs., in whole but not in part, from the Remarketing
Dealer at a redemption price equal to the sum of (i) 100% of the
aggregate principal amount of the Drs. and (ii) the Call Price
defined in the Remarketing Agreement).
</TABLE>
<PAGE> 51
-3-
Sinking fund provisions: None
Public offering price: 99.890% of the principal amount of the Drs.
The foregoing is a summary of the terms of the Drs. Reference
is hereby made to the Remarketing Agreement for a full description of the terms
of the Drs. To the extent the foregoing description is inconsistent with the
description of the Drs. set forth in the Remarketing Agreement, the Remarketing
Agreement shall control.
All the provisions contained in the document entitled
"Underwriting Agreement -- Service Corporation International -- Debt
Securities" (the "Underwriting Agreement") and dated March 11, 1998, a copy of
which you have previously received, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Terms Agreement to the
same extent as if the Underwriting Agreement had been set forth in full herein.
Terms defined in the Underwriting Agreement are used herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(o) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(o) of the Underwriting Agreement is
J.P. Morgan Securities Inc. The text of the first sentence of Section 5(h) of
the Underwriting Agreement is hereby deleted for purposes of the purchase and
sale of the Drs. and the following shall be deemed inserted therein in lieu
thereof: "For a period beginning on the Representation Date to and including
the Business Day following the Closing Date, not to, and not to cause or permit
any subsidiary of the Company to, directly or indirectly, effect any offer,
sale or other disposition of, or registration of, any debt securities or any
other long-term debt, notes or debentures of or guaranteed by the Company or
any of its Subsidiaries which are substantially similar to the Drs. (which
expressly shall be deemed not to include any debt securities or guarantees of
debt securities issued under the S-4) without the prior written consent of J.P.
Morgan Securities Inc." The additional exceptions
<PAGE> 52
-4-
to Section 5(h) of the Underwriting Agreement are: the Company may issue
$200,000,000 aggregate principal amount of its 6.50% Notes due March 15, 2008,
pursuant to an underwriting agreement, together with the terms agreement
forming a part thereof of even date therewith, dated March 11, 1998 among the
Company and J.P. Morgan Securities Inc., Chase Securities Inc., Citicorp
Securities, Inc., BancAmerica Robertson Stephens and Societe Generale
Securities Corporation.
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf
of the Representatives, and any such action taken by J.P. Morgan Securities
Inc. alone shall be binding upon the Representatives. Notices to the
Underwriters shall be given to the Representatives c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10260 (facsimile: (212) 648-5790);
Attention: Syndicate Department.
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof. Times referred to herein are to New York
City time.
<PAGE> 53
-5-
Please accept this offer no later than 6:00 P.M. on March 11,
1998 by signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated March 11, 1998, to purchase the Underwritten Securities on the
terms set forth therein and agree to and accept all other terms and provisions
of the Terms Agreement."
Very truly yours,
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
By: J.P. MORGAN SECURITIES INC.
By: /s/ RAYMOND SCHMITT
---------------------------------
Name: Raymond Schmitt
Title:
Accepted as of the date first
above written:
SERVICE CORPORATION INTERNATIONAL
By: /s/ GREGORY L. CAUTHEN
-----------------------------------
Name: Gregory L. Cauthen
Title: Vice President and Treasurer
<PAGE> 54
<TABLE>
<CAPTION>
ANNEX A
-------
Aggregate
Principal Amount
of Underwritten
Securities
Underwriters To Be Purchased
- ------------ ----------------
<S> <C>
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . . . . . $120,000,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated . . . . . . . . . . . . . . . . . . . . . 60,000,000
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . 60,000,000
UBS Securities LLC . . . . . . . . . . . . . . . . . . . . . . . 60,000,000
------------
Total: . . . . . . . . . . . . . . . . $300,000,000
============
</TABLE>
<PAGE> 55
SCHEDULE I
Significant Subsidiaries of the Company
within the meaning of Rule 1-02 of
Regulation S-X under the Securities
Exchange Act of 1934.
Investment Capital Corporation, a Texas corporation
SCI Funeral Services of New York, Inc., a New York corporation
SCI Funeral Services, Inc., an Iowa corporation
SCI International Limited, a Delaware corporation
SCI Texas Funeral Services, Inc., a Texas corporation
SCIT Holdings, Inc., a Delaware corporation
OGF-PFG, a French corporation
Service Corporation International France, a French corporation
<PAGE> 1
EXHIBIT 1.3
REMARKETING AGREEMENT
REMARKETING AGREEMENT dated as of March 16, 1998 (the "REMARKETING
AGREEMENT") between Service Corporation International, a Texas corporation (the
"COMPANY"), and J.P. Morgan Securities Inc. ("JPMSI" and, in its capacity as the
remarketing dealer hereunder, the "REMARKETING DEALER").
WHEREAS, the Company has issued $300,000,000 aggregate principal amount
of its 6.30% Dealer remarketable securities(sm)* ("DRS."(sm)) due March 15, 2020
(the "STATED MATURITY DATE") pursuant to an Indenture dated as of February 1,
1993, as supplemented (the "INDENTURE"), between the Company and The Bank of New
York, a New York banking corporation, as trustee (the "TRUSTEE"); and
WHEREAS, the Drs. are being sold initially pursuant to an Underwriting
Agreement dated as of March 11, 1998 (the "UNDERWRITING AGREEMENT") between the
Company and JPMSI, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and UBS Securities LLC, as Underwriters; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement (No. 333-10867) under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), in connection with
the offering of debt securities, including the Drs., which registration
statement was declared effective by order of the Commission, and has filed such
amendments thereto and such amended or supplemented prospectuses as may have
been required to the date hereof, and will file such additional amendments and
supplements thereto and such additional amended or supplemented prospectuses as
may hereafter be required (such registration statement, including any amendments
and supplements thereto, and all documents incorporated therein by reference, as
from time to time amended or supplemented pursuant to the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), the Securities Act, or otherwise,
are referred to herein as the "REGISTRATION STATEMENT"); all preliminary and
final prospectuses relating to such Registration Statement used in connection
with the offering of Drs., including the documents incorporated by reference
therein, are referred to herein collectively as the "PROSPECTUS"; provided that,
if any new or revised prospectus shall be p rovided to the Remarketing Dealer by
the Company for use in connection with any remarketing of the Drs. which differs
from the Prospectus filed with the
- -----------------
*"Dealer remarketable securities(sm)" and "Drs.(sm)" are service marks
of J.P. Morgan Securities Inc.
<PAGE> 2
Commission at the time of the initial issuance of the Drs. (whether or not such
new or revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) under the Securities Act), the term "PROSPECTUS" shall refer to such
new or revised prospectus from and after the time it is first provided to the
Remarketing Dealer for such use, and the term "REGISTRATION STATEMENt" shall
refer to the Registration Statement as deemed amended by the prospectus so
provided or any new registration statement of which such prospectus is a part;
and
WHEREAS, JPMSI is prepared to act as the Remarketing Dealer with
respect to the first remarketing of the Drs. (the "FIRST REMARKETING") on March
15, 2003 (the " FIRST REMARKETING DATE") and with respect to the second
remarketing of the Drs. (the "SECOND REMARKETING," and, together with the First
Remarketing, the "REMARKETING") on March 15, 2010 (the "SECOND REMARKETING
DATE," and, together with the First Remarketing Date, the "REMARKETING DATES"),
in each case pursuant to the terms of, but subject to the conditions set forth
in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
SECTION 1. Definitions. "BUSINESS DAY" means any day other than a
Saturday or Sunday or other day on which banking institutions in the City of New
York are authorized or obligated by law, executive order or governmental decree
to be closed.
SECTION 2. Representations and Warranties. (a) The Company represents
and warrants to the Remarketing Dealer as of the date hereof, each Notification
Date (as defined below), each Determination Date (as defined below) and each
Remarketing Date (each of the foregoing dates being hereinafter referred to as a
"REPRESENTATION DATE"), as follows:
(i) It has filed all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act (collectively, the "EXCHANGE ACT DOCUMENTS").
(ii) The applicable Remarketing Materials (as defined below) will
not, as of their date or any Remarketing Date, include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
2
<PAGE> 3
(iii) The representations and warranties contained in the
Underwriting Agreement are true and correct in all material respects
with the same force and effect as though expressly made at and as of
each Representation Date; provided that, for purposes of this
Agreement, representations and warranties in the Underwriting Agreement
shall be deemed modified by the Exchange Act Documents, as well as any
new or revised registration statement and new or revised prospectus
required by subsection 3(f) hereof (provided further, however, that no
such modification shall reflect, either singly or in the aggregate, a
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole), and the date as of which such representations and warranties
are made shall include each Representation Date.
(iv) Since the respective dates as of which information is given
in the Remarketing Materials or the Exchange Act Documents, there has
not been any material change in the capital stock or long-term debt of
the Company or any of its subsidiaries, or any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Remarketing Materials or the Exchange
Act Documents. Except as set forth or contemplated in the Remarketing
Materials or the Exchange Act Documents, neither the Company nor any of
its subsidiaries has entered into any transaction or agreement (whether
or not in the ordinary course of business) material to the Company and
its subsidiaries, taken as a whole.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The issue and sale of the Drs. and the performance by the
Company of all of its obligations under the Drs., the Indenture and
this Agreement and the consummation of the transactions herein and
therein contemplated will not (i) conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, (ii)
3
<PAGE> 4
result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or (iii) result in a
violation of any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of their
respective properties, except in the case of clause (i) or (iii) above
where such breach or violation (other than a violation of federal or
state securities laws) will not result in a material adverse change in
the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole. No consent, approval,
authorization, order, license, registration or qualification of or with
any such court or governmental agency or body is required for the issue
and sale of the Drs. or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except
such as have already been obtained and except as may be required under
the blue sky laws of any jurisdiction.
(vii) The Drs. conform in all material respects to the description
thereof contained in the Prospectus.
(b) Additional Certifications. Any certificate signed by any director
or officer of the Company and delivered to the Remarketing Dealer or to counsel
for the Remarketing Dealer in connection with the remarketing of the Drs. shall
be deemed a representation and warranty by the Company to the Remarketing Dealer
as to the matters covered thereby.
SECTION 3. Covenants of the Company. The Company covenants with the
Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), to the
Remarketing Dealer of the occurrence:
(i) at any time of any event set forth in clause (i), (ii) or
(iii) of subsection 8(c), or of any amendment to the Indenture
(including the Drs.); and
(ii) in connection with each Remarketing, on or after the relevant
Notification Date, of any event set forth in clauses (i) or (ii) of
subsection 8(d).
(b) The Company will furnish to the Remarketing Dealer upon request:
4
<PAGE> 5
(i) each Registration Statement and the Prospectus relating to the
Drs. (including in each case any amendment or supplement thereto and
each document incorporated therein by reference);
(ii) each Exchange Act Document filed after the date hereof; and
(iii) such other information relating to the Company and the Drs.
as the Remarketing Dealer may reasonably request from time to time for
use in connection with the remarketing of the Drs.
The Company agrees to provide the Remarketing Dealer with as many copies of the
foregoing written materials and information as the Remarketing Dealer may
reasonably request for use in connection with the remarketing of Drs. and
consents to the use thereof for such purpose.
(c) If, at any time within three months of the Remarketing Date, any
event or condition known to the Company relating to or affecting the Company,
any subsidiary thereof or the Drs. shall occur which could reasonably be
expected to cause any of the materials or information referred to in subsection
(b) above or any document incorporated therein by reference (collectively, the
"REMARKETING MATERIALS") to contain an untrue statement of a material fact or
omit to state a material fact, the Company shall promptly notify the Remarketing
Dealer in writing of the circumstances and details of such event or condition.
(d) So long as the Drs. are outstanding, the Company will file all
documents required to be filed with the Commission pursuant to the Exchange Act
within the time periods required by the Exchange Act and the rules and
regulations thereunder.
(e) The Company will comply with the Securities Act, the Exchange Act,
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT") and the
rules and regulations of the Commission thereunder so as to permit the
completion of the remarketing of the Drs. as contemplated in (i) this Agreement,
(ii) the Prospectus first used to confirm sales of the Drs. when the Drs. were
originally issued, and (iii) the prospectuses, if any, used in connection with
the Remarketings.
(f) If a new or amended Registration Statement in respect of the Drs.
is in the opinion of counsel for the Remarketing Dealer or for the Company
necessary to sell Drs. on an unrestricted basis on the relevant Remarketing
Date, then the Company, at its expense, will, on or before such Remarketing
Date:
5
<PAGE> 6
(i) prepare and file with the Commission such amended or new
Registration Statement (including a Prospectus) covering such sale of
Drs. by the Remarketing Dealer, and cause such Registration Statement
to become effective on or prior to such Remarketing Date;
(ii) furnish to the Remarketing Dealer such number of copies of
such Prospectus as the Remarketing Dealer may reasonably request;
(iii) furnish to the Remarketing Dealer an officers' certificate,
an opinion, including a statement as to the absence of material
misstatements in or omissions from the Registration Statement and the
Prospectus, of Liddell, Sapp, Zivley, Hill & LaBoon, LLP or such other
counsel to the Company reasonably satisfactory to the Remarketing
Dealer and a "comfort letter" from the Company's independent
accountants, in each case dated as of such Remarketing Date and in form
and substance satisfactory to the Remarketing Dealer, of the same tenor
as the officers' certificate, opinion and comfort letter, respectively,
delivered to satisfy the closing conditions of the Underwriting
Agreement, but modified to relate to such new or amended Registration
Statement and the Prospectus; and
(iv) provide to the Remarketing Dealer and any other securities
dealer participating in the remarketing of the Drs. the opportunity to
conduct an underwriters' due diligence investigation of the Company in
a scope customarily provided in connection with a public offering of
the Company's debt securities.
Furthermore, if at any time when, in the opinion of counsel for the
Remarketing Dealer, a prospectus is required by the Securities Act to be
delivered in connection with sales of the Drs., any event shall occur or
condition shall exist as a result of which it is necessary to amend the
Registration Statement or amend or supplement the Prospectus in order that such
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement the
Prospectus to comply with law, the Company, at its expense, will promptly
furnish to the Remarketing Dealer such amendments or supplements to the
Prospectus as may be needed so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law.
The Company agrees to reimburse the Remarketing Dealer for all of its
reasonable out-of-pocket expenses (including reasonable fees and disbursements
6
<PAGE> 7
of counsel) incurred in connection with any remarketing under circumstances
described in this subsection 3(f).
(g) The Company agrees that neither it nor any of its subsidiaries or
affiliates shall purchase or otherwise acquire, or enter into any agreement to
purchase or otherwise acquire, any of the Drs. on or prior to the Second
Remarketing, other than a repurchase of the Drs. in accordance with subsection
4(g) or a redemption of the Drs. in accordance with subsection 4(h).
(h) The Company will comply with each of the covenants set forth in
the Underwriting Agreement.
(i) In connection with each Remarketing, the Company will arrange for
the qualification of the Drs. for sale under the laws of such jurisdictions as
the Remarketing Dealer may designate, and will maintain such qualifications in
effect so long as required for the relevant Remarketing; the Company will pay
all expenses in connection with such qualification, including the fees and
disbursements of counsel for any dealers participating in the remarketing in
connection with such qualification and in connection with blue sky and legal
investment surveys.
(j) During each five Business Day period ending on the First
Remarketing Date or the Second Remarketing Date, as the case may be, the Company
will not, without the consent of the Remarketing Dealer, offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, or announce the
offering of, any debt securities, except debt securities issued to owners of
facilities in connection with the acquisition by the Company or any of its
subsidiaries of such facilities.
SECTION 4. Appointment and Obligations of the Remarketing Dealer. (a)
Unless this Agreement is otherwise terminated in accordance with Section 10
hereof, in accordance with the terms, but subject to the conditions, of this
Agreement, the Company hereby appoints JPMSI, and JPMSI hereby accepts such
appointment, as the exclusive Remarketing Dealer with respect to the Drs.,
subject further to (i) the obligation of the Company to repurchase the Drs. in
accordance with subsection 4(g) or (ii) the option of the Company to redeem the
Drs. in accordance with subsection 4(h) hereof.
(b) In connection with each Remarketing, the obligations of the
Remarketing Dealer hereunder to purchase the tendered Drs. on the relevant
Remarketing Date, to determine the relevant Reset Interest Rate pursuant to
subsection 4(d) below and to remarket the Drs. are conditioned on:
7
<PAGE> 8
(i) the issuance and delivery of such Drs. pursuant to the terms
and conditions of the Underwriting Agreement;
(ii) the Remarketing Dealer's election on the relevant
Notification Date to purchase the Drs. for remarketing on the relevant
Remarketing Date; and
(iii) satisfaction on the relevant Remarketing Date of all the
conditions set forth in Section 8 hereof, as determined in the
Remarketing Dealer's sole discretion.
(c) On a Business Day not later than fifteen Business Days prior to
each Remarketing Date (each a "NOTIFICATION DATE"), the Remarketing Dealer will
notify the Company and the Trustee as to whether it elects to purchase the Drs.
on such Remarketing Date. If, and only if, the Remarketing Dealer so elects with
respect to such Remarketing Date, the Drs. shall be subject to mandatory tender
to the Remarketing Dealer for purchase and remarketing on such Remarketing Date,
upon the terms and subject to the conditions described herein. The purchase
price of the Drs. shall be equal in each case to 100% of the principal amount
thereof.
(d) The Remarketing Dealer shall determine a new stated interest rate
on the Drs. as of the First Remarketing Date (the "INTEREST RATE TO THE SECOND
REMARKETING DATE") and as of the Second Remarketing Date (the "INTEREST RATE TO
MATURITY", and, together with the Interest Rate to the Second Remarketing Date,
the "RESET INTEREST RATES") as follows: on the third Business Day immediately
preceding the relevant Remarketing Date (each a "DETERMINATION DATE") by 3:30
p.m., New York City time, the Remarketing Dealer shall solicit the Reference
Corporate Dealers (defined below) for firm, committed bids to purchase all
outstanding Drs. at the Dollar Price (defined below), and by selecting the
lowest such firm, committed bid (regardless of whether each of the Reference
Corporate Dealers actually submits a bid). Each bid shall be expressed in terms
of the relevant Reset Interest Rate that the Drs. would bear (quoted as a spread
over 5.63% per annum (the "BASE RATE")), based on the following assumptions:
(i) the Drs. would be sold to such Reference Corporate Dealer on
the relevant Remarketing Date for settlement on the same day;
(ii) the Drs. would mature on the Second Remarketing Date or the
Stated Maturity Date, as the case may be; and
(iii) the Drs. would bear interest at a stated rate equal to the
rate bid by such Reference Corporate Dealer, payable semi-annually on
the interest payment dates for the Drs., from and including the First
8
<PAGE> 9
Remarketing Date to but excluding the Second Remarketing Date, or from
and including the Second Remarketing Date to but excluding the Stated
Maturity Date, as the case may be.
The relevant Reset Interest Rate announced by the Remarketing Dealer as
a result of such process will be quoted to the nearest one hundred-thousandth
(0.00001) of one percent per annum and, absent manifest error, will be binding
and conclusive upon holders of the Drs., the Company and the Trustee. Subject
only to subsection 4(e) below, the Remarketing Dealer shall have the discretion
to select the time at which each Reset Interest Rate is determined on the
relevant Determination Date.
The Remarketing Dealer shall have the right in its sole discretion to
either (i) remarket the Drs. for its own account or (ii) sell the Drs. to the
Reference Corporate Dealer submitting the lowest firm, committed bid pursuant to
this subsection 4(d). In the event that two or more Reference Corporate Dealers
submit equivalent bids which constitute the lowest firm, committed bid, the
Remarketing Dealer may in its sole discretion elect to sell the Drs. to any such
Reference Corporate Dealer.
"DOLLAR PRICE" means, with respect to each Remarketing Date, the
greater of (1) 100% of the principal amount of the Drs. and (2) the discounted
present value to such Remarketing Date of the cash flows on a bond
(x) with a principal amount equal to the aggregate principal
amount of the Drs.,
(y) maturing on (i) the Second Remarketing Date (in the case
of a determination made in connection with the First Remarketing), or
(ii) the Stated Maturity Date (in the case of a determination made in
connection with the Second Remarketing) and
(z) bearing interest at a rate equal to the Base Rate,
using a discount rate equal to the Treasury Rate (defined below), payable
semi-annually (assuming a 360-day year consisting of twelve 30-day months) on
the interest payment dates of the Drs.
(i) in the case of a determination made in connection with
the First Remarketing, from the First Remarketing Date to the Second
Remarketing Date, or
9
<PAGE> 10
(ii) in the case of a determination made in connection with
the Second Remarketing, from the Second Remarketing Date to the
Stated Maturity Date.
"REFERENCE CORPORATE DEALER" means J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated, UBS Securities LLC, Merrill, Lynch, Pierce, Fenner &
Smith Incorporated and Chase Securities Inc. If any of such persons shall cease
to be a leading dealer of publicly-traded debt securities of the Company, then
the Remarketing Dealer may, with the approval of the Company (not to be
unreasonably withheld), replace such person with any other leading dealer of
publicly-traded debt securities of the Company.
"TREASURY RATE" means, with respect to each Determination Date, the
annual rate equal to the semi-annual equivalent yield to maturity or
interpolated (on a 30/360 day count basis) yield to maturity on such
Determination Date of the Comparable Treasury Issue (defined below) for value on
the relevant Remarketing Date, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined below).
"COMPARABLE TREASURY ISSUE" means, with respect to each Determination
Date, the United States Treasury security selected by the Remarketing Dealer as
having an actual maturity on such Determination Date (or the United States
Treasury securities selected by the Remarketing Dealer to derive an interpolated
maturity on such Determination Date) comparable to (i) the time remaining to the
Second Remarketing Date (in the case of a determination made in connection with
the First Remarketing), or (ii) the remaining term of the Drs. (in the case of a
determination made in connection with the Second Remarketing).
"COMPARABLE TREASURY PRICE" means, with respect to each Determination
Date, (a) the offer price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) on such Determination Date, as set forth on
Telerate Page 500 (as defined below), adjusted to reflect settlement on the
relevant Remarketing Date, if prices quoted on Telerate Page 500 are for
settlement on any date other than such Remarketing Date, or (b) if such page (or
any successor page) is not displayed or does not contain such offer prices on
such Business Day, (i) the average of five Reference Treasury Dealer Quotations
(as defined below) for such Remarketing Date, excluding the highest and lowest
of such Reference Treasury Dealer Quotations (unless there is more than one
highest or lowest quotation, in which case only one such highest and/or lowest
quotation shall be excluded), or (ii) if the Remarketing Dealer obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.
10
<PAGE> 11
"TELERATE PAGE 500" means the display designated as "Telerate Page 500"
on Dow Jones Markets Limited (or such other page as may replace Telerate Page
500 on such service) or such other service displaying the offer prices specified
in (a) above as may replace Dow Jones Markets Limited.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Determination Date and each Reference Treasury Dealer, the offer price(s) for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) for settlement on the relevant Remarketing Date, quoted in writing to
the Remarketing Dealer by such Reference Treasury Dealer by 3:30 p.m., New York
City time, on such Determination Date. The Remarketing Dealer shall have the
discretion to select the time at which the Comparable Treasury Price is
determined on such Determination Date.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer in The City of New York (which may include the Remarketing Dealer)
selected by the Remarketing Dealer.
(e) In connection with each Remarketing, if the Remarketing Dealer has
elected to remarket the Drs. as provided in subsections 4(c) and 4(d), then it
shall notify the Company, the Trustee and The Depository Trust Company ("DTC")
by telephone, confirmed in writing (which may include facsimile or other
electronic transmission), by 5:00 p.m., New York City time, on the Determination
Date for such Remarketing of the relevant Reset Interest Rate applicable to the
Drs. effective (i) from and including the First Remarketing Date to but
excluding the Second Remarketing Date, or (ii) from and including the Second
Remarketing Date to but excluding the Stated Maturity Date, as the case may be.
(f) If any Remarketing is done as provided herein then, subject to
Section 8 hereof, the Remarketing Dealer will make, or cause the Trustee to
make, payment to DTC by the close of business on the relevant Remarketing Date
against delivery through DTC of the Drs. tendered in such Remarketing, of the
purchase price for all of the Drs. so tendered. The purchase price of the Drs.
tendered in such Remarketing will be equal to 100% of the principal amount
thereof and shall be paid in immediately available funds.
(g) If the Remarketing Dealer (i) does not elect to purchase the Drs.
for the relevant Remarketing pursuant to subsection 4(c); (ii) shall not have
received by the required time on the relevant Determination Date any firm,
committed bids to purchase all of the Drs. pursuant to subsection 4(d); or (iii)
for any reason does not purchase all of the Drs. on the relevant Remarketing
Date, then the Company shall repurchase on such Remarketing Date any Drs. that
have not been purchased by the Remarketing Dealer at a price equal to 100% of
the principal amount of
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such Drs. plus all accrued interest, if any, on such Drs. to (but excluding)
such Remarketing Date. The Remarketing Dealer shall notify the Company promptly
about the occurrence of circumstances set forth in clause (ii) or (iii) above.
(h) If the Remarketing Dealer has elected to remarket the Drs. on the
relevant Remarketing Date in accordance with subsection 4(c) hereof, the Company
may irrevocably elect to exercise its right to redeem the Drs., in whole but not
in part, from the Remarketing Dealer on such Remarketing Date, by giving written
notice of such election to the Remarketing Dealer no later than the later of
(i) the Business Day immediately prior to the relevant
Determination Date or
(ii) if fewer than three Reference Corporate Dealers submit firm,
committed bids in accordance with subsection 4(d) hereof, immediately
after the deadline set by the Remarketing Dealer for receiving such
bids has passed;
and by paying the amount equal to the sum of (x) 100% of the aggregate principal
amount of the Drs. and (y) the Call Price (as defined in Section 10).
In either such case, the Company shall pay such redemption price for
the Drs. in same-day funds by wire transfer on such Remarketing Date to an
account designated by the Remarketing Dealer. For purposes of calculating the
Call Price, the Remarketing Dealer shall be deemed to have made the request for
the Call Price on the date the Company makes its election to redeem the Drs.
If the Company exercises its right to redeem the Drs. pursuant to
clause (ii) above, it shall promptly reimburse the Remarketing Dealer for any
and all expenses (including any and all hedge losses resulting from intra-day
hedging associated with the determination of the Dollar Price on the
Determination Date by the Remarketing Dealer) incurred by the Remarketing Dealer
in connection with its having to break such associated intra-day hedging
transactions to enable the Company to exercise such redemption right. If any
such broken hedges result in a profit to the Remarketing Dealer, the Remarketing
Dealer shall promptly pay such profit over to the Company. The amount of any
hedge losses or profits shall be calculated by the Remarketing Dealer.
(i) In accordance with the terms and provisions of the Drs., the
tender and settlement procedures set forth in this Section 4, shall be subject
to modification without the consent of the holders of the Drs., to the extent
required by DTC or, if the book-entry system is no longer available for the Drs.
at the time of either Remarketing, to the extent required to facilitate the
tendering and
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<PAGE> 13
remarketing of Drs. in certificated form. In addition, the Remarketing Dealer
may, without the consent of the holders of the Drs., modify the settlement
procedures set forth in the Indenture and/or the Drs. in order to facilitate the
settlement process.
(j) In accordance with the terms and provisions of the Drs., the
Company hereby (i) agrees that at all times, it will use its best efforts to
maintain the Drs. in book-entry form with DTC or any successor thereto and to
appoint a successor depositary to the extent necessary to maintain the Drs. in
book-entry form and (ii) waives any discretionary right it otherwise may have
under the Indenture to cause the Drs. to be issued in certificated form.
SECTION 5. Fees and Expenses. Subject to subsection 3(f), the last
paragraph of subsection 4(h) and Section 10 hereof, the Remarketing Dealer will
not receive any fees or reimbursement of expenses from the Company for its
remarketing services set forth herein.
SECTION 6. Resignation of the Remarketing Dealer. The Remarketing
Dealer may resign and be discharged from its duties and obligations hereunder at
any time, such resignation to be effective ten Business Days after delivery of a
written notice to the Company and the Trustee of such resignation. The
Remarketing Dealer also may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be effective immediately,
upon termination of this Agreement in accordance with subsection 10(b) hereof.
The Company shall have the right, but not the obligation, to appoint a successor
Remarketing Dealer.
SECTION 7. Dealing in the Drs.; Purchase of Drs. by the Company;
Incorporation by Reference of Master Agreement. (a) JPMSI, when acting as the
Remarketing Dealer or in its individual or any other capacity, may, to the
extent permitted by law, buy, sell, hold and deal in any of the Drs. JPMSI, as
holder or beneficial owner of the Drs., may exercise any vote or join as a
holder or beneficial owner, as the case may be, in any action which any holder
or beneficial owner of Drs. may be entitled to exercise or take pursuant to the
Indenture with like effect as if it did not act in any capacity hereunder. The
Remarketing Dealer, in its capacity either as principal or agent, may also
engage in or have an interest in any financial or other transaction with the
Company as freely as if it did not act in any capacity hereunder.
(b) The Company may purchase Drs. in the Second Remarketing, provided
that the relevant Reset Interest Rate established with respect to Drs. in such
Remarketing is not different from the Reset Interest Rate that would have
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<PAGE> 14
been established if the Company had not purchased such Drs. in such Remarketing.
(c) Reference is made to the ISDA Master Agreement dated as of July 1,
1996 (the "MASTER AGREEMENT") between Morgan Guaranty Trust Company of New York
("MGT") and the Company, including, without limitation the Schedule thereto and
the Credit Support Annex dated as of July 1, 1996; provided that if the Master
Agreement is terminated, then, for the purposes hereof, the Master Agreement
shall mean the Master Agreement as of the date of termination.
The Company and JPMSI hereby agree to be bound by the Credit
Enhancement provisions set forth in Part 5 Sections 11 through 13 of the
Schedule to the Master Agreement and the Credit Support Annex, as if JPMSI were
MGT and as if the Company's obligations hereunder to pay the Call Price were the
only Transaction (within the meaning of the Master Agreement). In the event the
Company is required to post collateral pursuant to the provisions of the Master
Agreement incorporated herein, then, at the request of JPMSI, the Company will
enter into an agreement with JPMSI in the form substantially similar to the
Master Agreement (including, without limitation, Part 5 Sections 11 through 13
of the Schedule and the Credit Support Annex) with respect to such collateral,
and such agreement will supersede and replace this paragraph. In the event of
any inconsistency between the provisions of this Agreement and the provisions of
the Master Agreement incorporated herein, this Agreement shall prevail.
SECTION 8. Conditions to Remarketing Dealer's Obligations. In
connection with each Remarketing, the obligations of the Remarketing Dealer to
purchase the Drs. on the relevant Remarketing Date in accordance with the
provisions of this Agreement, to determine the relevant Reset Interest Rate
pursuant to subsection 4(d), and to remarket the Drs. in such Remarketing have
been undertaken in reliance on, and are subject to, the following conditions:
(a) the due performance in all material respects by the Company of
its obligations and agreements as set forth in this Agreement and the accuracy
in all material respects of the representations and warranties in this Agreement
and any certificate delivered pursuant hereto;
(b) the due performance in all material respects by the Company of
its obligations and agreements set forth in, and the accuracy in all material
respects as of the dates specified therein of the representations and warranties
contained in, the Underwriting Agreement;
(c) none of the following events shall have occurred at any time on or
prior to the relevant Remarketing Date:
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<PAGE> 15
(i) an Event of Default (as defined in the Indenture), or any
event which, with the giving of notice or passage of time, or both,
would constitute an Event of Default thereunder, with respect to the
Drs. shall have occurred and be continuing;
(ii) an Event of Default (as defined in the Master Agreement)
shall have occurred and be continuing under the Master Agreement
(whether or not the Master Agreement shall have terminated);
(iii) the Company shall have failed to comply with the provisions
of the Master Agreement (as incorporated herein pursuant to Section
7(c) above) or any agreement entered into pursuant to Section 7(c)
above or an event shall have occurred thereunder, if such failure or
such an occurrence is continuing and constitutes an Event of Default
(as defined in the Master Agreement or such other agreement entered
into pursuant to Section 7(c), as the case may be); or
(iv) without the prior written consent of the Remarketing Dealer,
the Indenture (including the Drs.) shall have been amended in any
manner, or otherwise contain any provision not contained therein as of
the date hereof, that in either case in the judgment of the Remarketing
Dealer materially changes the nature of the Drs. or the remarketing
procedures;
(d) in connection with such Remarketing, none of the following events
shall have occurred after the Remarketing Dealer elects on the relevant
Notification Date to purchase the Drs.:
(i) there shall have occurred any downgrading, or any notice shall
have been given of (A) any downgrading, (B) any intended or potential
downgrading or (C) any review or possible change that does not indicate
an improvement, in the rating accorded any debt securities of, or
guaranteed by, the Company by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) trading of any securities of, or guaranteed by, the Company
shall have been suspended on any exchange or in any over-the-counter
market;
(iii) a material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, business, prospects, management, financial position,
stockholders' equity
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<PAGE> 16
or results of operations of the Company and its subsidiaries, taken as
a whole, the effect of which is such as to make it, in the judgment of
the Remarketing Dealer, impracticable or inadvisable to remarket the
Drs. or to enforce contracts for the sale of the Drs.;
(iv) if a prospectus is required under the Securities Act to be
delivered in connection with such Remarketing, the Company shall fail
to furnish to the Remarketing Dealer on the relevant Remarketing Date
the officers' certificate, opinion and comfort letter referred to in
subsection 3(f) of this Agreement and such other documents and opinions
as counsel for the Remarketing Dealer may reasonably require for the
purpose of enabling such counsel to pass upon the sale of Drs. in such
Remarketing as herein contemplated and related proceedings, or in order
to evidence the accuracy and completeness of any of the representations
and warranties, or the fulfillment of any of the conditions, herein
contained;
(v) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade; or a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities;
(vi) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or
crisis that, in the judgment of the Remarketing Dealer, is material and
adverse and which, in the judgment of the Remarketing Dealer, makes it
impracticable to remarket the Drs. or to enforce contracts for the sale
of the Drs.;
(vii) the Treasury Rate used to determine the Dollar Price on the
relevant Determination Date exceeds the Base Rate; or
(viii) the Remarketing Dealer shall not have received by the
required time on the relevant Determination Date any firm, committed
bids to purchase all of the Drs. in accordance with subsection 4(d)
hereof;
(e) the Remarketing Dealer shall have received (as soon as practicable
following notification by the Remarketing Dealer to the Company on the relevant
Notification Date of its election to purchase the Drs. and in any event prior to
the relevant Determination Date) a certificate of any of the Chief Financial
Officer, the Treasurer, or the Controller of the Company, satisfactory to the
Remarketing Dealer, dated as of the relevant Notification Date, to the following
effect:
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<PAGE> 17
(i) the Company has, prior to the Remarketing Dealer's election on
such Notification Date to remarket the Drs., provided the Remarketing
Dealer with notice of all events as required under subsection 3(a) of
this Agreement;
(ii) the representations and warranties in this Agreement are true
and correct in all material respects at and as of such Notification
Date; and
(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 such Notification Date; and
(f) the Remarketing Dealer shall have received on the relevant
Remarketing Date a certificate of any of the Chief Financial Officer, the
Treasurer or the Controller of the Company, satisfactory to the Remarketing
Dealer, dated as of such Remarketing Date, to the following effect:
(i) the representations and warranties in this Agreement are true
and correct in all material respects with the same force and effect as
though expressly made at and as of such Remarketing Date;
(ii) 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 such Remarketing Date;
(iii) no material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, business prospects, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, shall have occurred since the date of
the most recent financial statements of the Company filed with the
Commission; and
(iv) the conditions specified in clauses (i), (ii) and (iii) of
subsection 8(c) and clauses (i) and (ii) of subsection 8(d) of this
Agreement have been satisfied.
SECTION 9. Indemnification. (a) The Company agrees to indemnify and
hold harmless the Remarketing Dealer and each person, if any, who controls the
Remarketing Dealer within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the reasonable legal
fees
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<PAGE> 18
and other expenses incurred in connection with any suit, action or proceeding or
any claim asserted):
(i) arising out of the failure to have an effective registration
statement under the Securities Act relating to the Drs., if required,
or the failure to satisfy the prospectus delivery requirements of the
Securities Act because the Company failed to notify the Remarketing
Dealer of such delivery requirement or failed to provide the
Remarketing Dealer with a prospectus for delivery,
(ii) caused by any untrue statement or alleged untrue statement of
a material fact contained in any of the Remarketing Materials or caused
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with information relating to the Remarketing Dealer
furnished to the Company in writing by the Remarketing Dealer expressly
for use therein, or
(iii) any violation by the Company of, or any failure by the
Company to perform any of its obligations under, this Agreement, or
(iv) the acts or omissions of the Remarketing Dealer in connection
with its duties and obligations hereunder, except to the extent finally
judicially determined to be due primarily to its gross negligence or
willful misconduct.
(b) The Remarketing Dealer agrees to indemnify and hold harmless the
Company, its directors and its officers and each person who controls the Company
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Remarketing Dealer in subsection 9(a)(ii) of this Agreement, but only with
reference to information relating to such Remarketing Dealer furnished to the
Company in writing by such Remarketing Dealer expressly for use in any of the
Remarketing Materials.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "INDEMNIFIED PERSON") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PERSON") in writing, and the Indemnifying Person, upon request
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<PAGE> 19
of the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person in such proceeding and
shall pay the reasonable fees and expenses of such counsel related to such
proceeding. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless
(i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary,
(ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them.
It is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Remarketing
Dealer and its directors and officers shall be designated in writing by it and
any such separate firm for the Company, its directors and its officers who sign
the Registration Statement and such control persons of the Company or authorized
representatives shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment.
(d) Notwithstanding the foregoing subsection (c), if at any time an
Indemnified Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by such
subsection (c), the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement; provided, however, that the Indemnifying Person shall
not be liable for any settlement effected without its consent pursuant to this
sentence
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if the Indemnifying Person is contesting in good faith the request for
reimbursement and all other fees and expenses of counsel not so contested shall
have been reimbursed. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
(e) If the indemnification provided for in subsections 9(a) and 9(b)
is unavailable to an Indemnified Person or insufficient in respect of any
losses, claims, damages or liabilities referred to, then each Indemnifying
Person, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Remarketing Dealer, on the other hand, from the remarketing of the
Drs. or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such propor tion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Remarketing Dealer, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. With respect to either Remarketing, the relative benefits
received by the Company, on the one hand, and the Remarketing Dealer, on the
other, shall be deemed to be in the same respective proportions as the aggregate
principal amount of the Drs. bears to the amount, if any, by which the price at
which the Drs. are sold by the Remarketing Dealer in such Remarketing exceeds
the price paid by the Remarketing Dealer for the Drs. tendered on the relevant
Remarketing Date plus, in the case of the First Remarketing, the value (if any)
of the remaining embedded interest rate option, as reasonably determined by the
Remarketing Dealer. The relative fault of the Company, on the one hand, and the
Remarketing Dealer, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Remarketing Dealer and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The Company and the Remarketing Dealer agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
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paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
(g) Notwithstanding the provisions of this Section 9, in no event
shall the Remarketing Dealer be required to contribute any amount in excess of
the amount by which the total price at which the Drs. remarketed by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Remarketing Dealer has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 9 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law of
in equity.
(h) The indemnity and contribution agreements of the Company and the
Remarketing Dealer contained in this Section 9 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement and
(ii) any investigation made by or on behalf of the Remarketing Dealer or any
person controlling the Remarketing Dealer or by or on behalf of the Company, its
officers or directors or any other person controlling the Company.
SECTION 10. Termination of Remarketing Agreement. (a) This Agreement
shall terminate as to the Remarketing Dealer on the earliest of
(i) the effective date of the resignation of the Remarketing
Dealer pursuant to Section 6;
(ii) the date of the occurrence of any of the events described in
clauses (i) through (iii) of subsection 4(g); or
(iii) the date the Company gives notice of its intention to redeem
all of the outstanding Drs. in accordance with subsection 4(h).
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement immediately by notifying the Company and the
Trustee of its election to do so, at any time on or before either Remarketing
Date, if:
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(i) any of the conditions referred to or set forth in subsection
8(a) or (b) hereof have not been met or satisfied in full or any of the
events set forth in subsection 8(c) or 8(d) shall have occurred; or
(ii) the Remarketing Dealer determines, in its sole discretion,
after consultation with the Company, that there is material, non-public
information about the Company that is not available to the Remarketing
Dealer which is necessary for it to fulfill its obligations under this
Agreement.
(c) If this Agreement is terminated pursuant to this Section 10, such
termination shall be without liability of any party to any other party, except
that, in the case of a termination resulting from a failure to observe the
conditions set forth in subsections 8(a) or 8(b), or the occurrence of any of
the events set forth in subsection 8(c) or any of clauses (i) through (iv) of
subsection 8(d), the Company shall reimburse the Remarketing Dealer for all of
its reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Remarketing Dealer. Section 9 and subsections
4(h), 10(c) and 10(d) shall survive such termination and remain in full force
and effect.
(d) Upon:
(i) the termination of this Agreement pursuant to subsection 10(b)
(except as a result of any event described in subsection 8(d)(vii) and
subject to the Remarketing Dealer's obligation to comply with Section
4(d) hereof), or
(ii) a repurchase by the Company of any Drs. due to a failure by
the holder thereof to deliver the Drs. to the Remarketing Dealer
against payment therefor in connection with a mandatory tender,
then, upon the request of the Remarketing Dealer, the Company shall pay the Call
Price (as defined below) to the Remarketing Dealer.
The Remarketing Dealer shall promptly notify the Company of the Call
Price by telephone, confirmed in writing (which may include facsimile or other
electronic transmission). The Call Price shall be paid in same-day funds by wire
transfer to an account designated by the Remarketing Dealer and shall be paid as
soon as practicable, and in any event not later than the earlier of (x) three
Business Days after written notification to the Company and (y) the first
Remarketing Date after notification to the Company.
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"CALL PRICE" means the fair market value of the embedded interest rate
option implicit in the Remarketing Dealer's right to purchase at par and
remarket on each Remarketing Date, pursuant to this Agreement, of any Drs. not
purchased (due to the prior termination of this Agreement or otherwise) by the
Remarketing Dealer on the relevant Remarketing Date (such principal amount of
Drs., the "UNPURCHASED DRS."). This amount shall equal:
(i) if the Remarketing Dealer's request for the Call Price payment
is made before the first Determination Date, the Commercially
Reasonable Option Value (as defined below) on the date of such request;
(ii) if the Remarketing Dealer's request for the Call Price
payment is made on or after the first Determination Date and on or
prior to the First Remarketing Date, the amount, if positive, equal to:
(1) the Commercially Reasonable Option Value, determined as
if the date of determination thereof was the first day
after the First Remarketing Date;
plus
(2)(a) the Drs. Premium for the first Determination Date;
multiplied by
(b)(x) the Unpurchased Drs. on the First Remarketing Date;
divided by
(y) the Original Amount of Drs.
"ORIGINAL AMOUNT OF DRS." means the principal amount of the Drs. issued
by the Company on the date hereof; and "DRS. PREMIUM" equals the
Dollar Price relating to the relevant Determination Date less the
Original Amount of Drs.;
(iii) if the Remarketing Dealer's request for a Call Price payment is
made after the First Remarketing Date but before the second
Determination Date, the amount equal to the Commercially Reasonable
Option Value on the date of such request;
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(iv) if the Remarketing Dealer's request for the Call Price payment is
made on or after the second Determination Date, an amount (if positive)
equal to:
(1) the Drs. Premium for the second Determination Date;
multiplied by
(2)(a) the Unpurchased Drs. on the Second Remarketing Date;
divided by
(b) the Original Amount of Drs.
"COMMERCIALLY REASONABLE OPTION VALUE" means, on any specified date, the amount
determined by the Remarketing Dealer on such date under Section 6(e) of the
Master Agreement on a "Market Quotation" basis in respect of the embedded
interest rate option(s) implicit in the Remarketing Dealer's option to purchase
at par the Unpurchased Drs. on each remaining Remarketing Date, as if a
"Termination Event" had occurred on such specified date under such interest rate
option with respect to the Company under the Master Agreement and the Company
was the "Affected Party". The determination of the Commercially Reasonable
Option Value shall be made using the provisions of the Master Agreement
regardless of any termination of the Master Agreement.
The Remarketing Dealer's determination of the Call Price, absent
manifest error, shall be binding and conclusive upon the parties hereto.
(e) This Agreement shall not be subject to termination by the Company.
SECTION 11. Remarketing Dealer's Performance; Duty of Care. The duties
and obligations of the Remarketing Dealer shall be determined solely by the
express provisions of this Agreement and the Indenture. No implied covenants or
obligations of or against the Remarketing Dealer shall be read into this
Agreement or the Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of this
Agreement and the Indenture, as to the truth of the statements expressed in any
of such documents. The Remarketing Dealer shall be protected in acting upon any
document or communication reasonably believed by it to have been signed,
presented or made by the proper party or parties. The Remarketing Dealer shall
incur no liability to the Company or to any beneficial owner or holder of Drs.
in its individual capacity or as Remarketing Dealer for any action or failure to
act in connection with the remarketing or otherwise, except to the extent
finally judicially determined to be due primarily to its gross negligence or
willful misconduct.
24
<PAGE> 25
SECTION 12. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.
SECTION 13. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full force
and effect from the date hereof until the earlier of the first day thereafter on
which no Drs. are outstanding or the completion of the Second Remarketing.
Regardless of any termination of this Agreement pursuant to any of the
provisions hereof, the obligations of the Company and the Remarketing Dealer
pursuant to Section 9 and of the Company under subsections 4(h), 10(c) and 10(d)
hereof shall remain operative and in full force and effect until fully
satisfied.
SECTION 14. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person (other
than as specified in Article Nine of the Indenture) without the prior written
consent of the Remarketing Dealer. The rights and obligations of the Remarketing
Dealer hereunder may not be assigned or delegated to any other person (other
than an affiliate of the Remarketing Dealer, with the consent of the Company,
not to be unreasonably withheld) without the prior written consent of the
Company. This Agreement shall inure to the benefit of and be binding upon the
Company and the Remarketing Dealer and their respective successors and assigns,
and will not confer any benefit upon any other person, partnership, association
or corporation other than persons, if any, controlling the Remarketing Dealer
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act or any other indemnified party to the extent provided in Section 9
hereof. The terms "successors" and "assigns" shall not include any purchaser of
any Drs. merely because of such purchase.
SECTION 15. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used in
the interpretation of any provisions of this Agreement.
SECTION 16. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable
as applied in any particular case in any or all jurisdictions because it
conflicts with any provision of any constitution, statute, rule or public policy
or for any other reason, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
25
<PAGE> 26
SECTION 17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
SECTION 18. Amendments; Waivers. This Agreement may be amended or
portions thereof may be waived by any instrument in writing signed by each of
the parties hereto so long as this Agreement as amended or the provisions as so
waived are not inconsistent with the Indenture in effect as of the date of any
such amendment or waiver.
SECTION 19. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing (which may include facsimile or other electronic
transmission) and shall be deemed to have been validly given or made when
delivered or, if earlier, three days after it was mailed, registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
(a) to the Company:
Service Corporation International
1929 Allen Parkway
P.O. Box 130548
Houston, Texas 77019
Attention: James M. Shelger
Facsimile No.: (713) 525-9067
(b) to JPMSI:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention: Syndicate Department
Facsimile No.: (212) 648-5909
or to such other address as the Company or the Remarketing Dealer shall specify
in writing.
26
<PAGE> 27
IN WITNESS WHEREOF, each of the Company and the Remarketing Dealer has
caused this Remarketing Agreement to be executed in its name and on its behalf
by one of its duly authorized officers as of the date first above written.
SERVICE CORPORATION
INTERNATIONAL
By /s/ GREGORY L. CAUTHEN
----------------------------------
Name: Gregory L. Cauthen
Title: Vice President and Treasurer
J.P. MORGAN SECURITIES INC.
By /s/ RAYMOND SCHMITT
----------------------------------
Name: Raymond Schmitt
Title:
<PAGE> 1
EXHIBIT 1.4
UNLESS AND UNTIL THIS GLOBAL NOTE IS EXCHANGED IN WHOLE OR IN PART FOR
THE NOTES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE (AS DEFINED
BELOW)) TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION FOR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
GLOBAL NOTE
No. 1 U.S. $200,000,000
CUSIP 817565AR5
SERVICE CORPORATION INTERNATIONAL
6.50% NOTES DUE MARCH 15, 2008
SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
at the office or agency of the Issuer, the principal sum of $200,000,000 U.S.
dollars on March 15, 2008 in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest at an annual rate of 6.50% payable
on March 15 and September 15 in each year, to the person in whose name the Note
is registered at the close of business on the record date for such interest
which shall be the preceding March 1 or September 1 (whether or not such record
date is a Business Day (as defined in the Indenture)), respectively, commencing
September 15, 1998, with interest on September 15, 1998 consisting of interest
accrued from March 16, 1998.
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
The statements set forth in the legend set forth above are an integral
part of the terms of this Note and by acceptance hereof the holder of this Note
agrees to be subject to, and bound by, the terms and provisions set forth in
each such legend, if any.
This Global Note is issued in respect of an issue of an aggregate of
U.S. $200,000,000 principal amount of 6.50% Notes due March 15, 2008 of the
Issuer and is governed by the Senior Indenture dated as of February 1, 1993,
duly executed and delivered by the Issuer to The Bank of New York, as Trustee
(the "Trustee"), as supplemented by Board Resolutions (as defined in the
Indenture) (such Indenture and Board Resolutions, collectively, the
"Indenture"). The terms of the Indenture are incorporated herein by reference.
This Global Note shall in all respects be entitled to the same benefits as
definitive Notes under the Indenture.
If and to the extent that any provision of the Indenture limits,
qualifies, or conflicts with any other provision of the Indenture which is
required to be included in the Indenture by any of Sections 310 to 317,
inclusive, or is deemed applicable to the Indenture by virtue of the provisions,
of the Trust Indenture Act of 1939, as amended, such required provision shall
control.
The Issuer hereby irrevocably undertakes to the holder hereof to
exchange this Global Note in accordance with the terms of the Indenture without
charge.
This Note shall not be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been mutually signed by the
Trustee under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
SERVICE CORPORATION INTERNATIONAL
By:
-------------------------------
Gregory L. Cauthen
Vice President and Treasurer
[Corporate Seal]
Attest:
- ---------------------------------------------------
Curtis G. Briggs
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated: March 16, 1998
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------
Authorized Signatory
-1-
<PAGE> 2
REVERSE OF GLOBAL NOTE
SERVICE CORPORATION INTERNATIONAL
6.50% NOTES DUE MARCH 15, 2008
This Global Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (the "Securities")
of the series hereinafter specified, all issued or to be issued under and
pursuant to the Indenture, to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different sinking, purchase or analogous funds (if any) and may otherwise
vary as provided in the Indenture. This Global Note is one of a series
designated as the 6.50% Notes due March 15, 2008 of the Issuer, limited in
aggregate principal amount to $200,000,000.
If an Event of Default (as defined in the Indenture) with respect to
Securities of any series then Outstanding (as defined in the Indenture) occurs
and is continuing, then and in each and every such case, unless the principal of
all of the Securities of such series shall have already become due and payable,
either the Trustee or the Holders (as defined in the Indenture) of not less than
25 percent in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Holders), may declare the unpaid principal amount of all the Securities of such
series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. Notwithstanding the preceding sentence, however, if
at any time after the unpaid principal amount of the Securities of such series
shall have been so declared due and payable and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration and the
reasonable compensation, disbursements, expenses and advances of the Trustee,
and any and all defaults under the Indenture, other than the nonpayment of such
portion of the principal amount of and accrued interest, if any, on Securities
of such series which shall become due by acceleration, shall have been cured or
shall have been waived or provision deemed by the Trustee to be adequate shall
have been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Securities of such series then Outstanding, by
written notice to the Issuer and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of any
series affected, evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the Holders of the Securities of each such series;
provided, however, that no such supplemental indenture shall (i) extend the
final maturity of any Security, or reduce the principal amount thereof or reduce
the rate or extend the time of payment of any interest thereon, change the coin
or currency in which principal and interest are payable, or impair or affect the
rights of any Holder to institute suit for the payment thereof, without the
consent of the Holder of each Security so affected, or (ii) reduce the aforesaid
percentage of Securities, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holder of each Security
affected. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Securities of any series, the
Holders of 66-2/3% in aggregate principal amount then Outstanding of the
Securities of such series (or, in the case of certain defaults or Events of
Default, all or certain series of the Securities, as the case may be) may on
behalf of the Holders of all the Securities of such series (or all or certain
series of the Securities, as the case may be) waive any such past default or
Event of Default and its consequences. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or interest on
any of the Securities of such series. Any such consent or waiver by the Holder
of this Note (unless revoked or provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Note
and any Notes which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.
No reference herein to the Indenture and no provision of this Note or
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note in
the manner, at the respective times, at the rate and in the coin or currency
herein prescribed.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal hereof and subject to the provisions on the face
hereof, interest hereon, and for all other purposes, and neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, past, present or
future stockholder, officer or director, as such of the Issuer or of any
successor, either directly or through the Issuer or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Security
by the Holder and as part of the consideration for the issue of the Security.
Interest shall be calculated on the basis of a 360-day year consisting
of 12 months of 30 days each.
This Note shall be construed in accordance with and governed by the
laws of the State of Texas.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indenture.
-2-
<PAGE> 1
EXHIBIT 1.5
UNLESS AND UNTIL THIS GLOBAL SECURITY IS EXCHANGED IN WHOLE OR IN PART
FOR THE SECURITIES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL SECURITY MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
(AS DEFINED BELOW)) TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
SERVICE CORPORATION INTERNATIONAL
6.30% DEALER REMARKETABLE SECURITY(SM) ("DRS.(SM)")
DUE MARCH 15, 2020
No. 1
$200,000,000 CUSIP: 817565AS3
Service Corporation International, a Texas corporation (hereinafter
called the "COMPANY"), for value received, hereby promises to pay to CEDE & CO.
or registered assigns, the principal sum of TWO HUNDRED MILLION U.S. DOLLARS on
March 15, 2020, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, State of New York, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest, semi-annually on
March 15 and September 15 of each year (each, an "INTEREST PAYMENT DATE"), on
said principal sum at the rate per annum specified below, at such office or
agency, in like coin or currency, from the March 15 or September 15, as the case
may be, to which interest on the Securities has been paid preceding the date
hereof (unless the date hereof is a March 15 or a September 15 to which interest
has been paid, in which case from the date hereof, or unless the date hereof is
prior to any interest having been paid, in which case from March 16, 1998) until
payment of said principal sum has been made or duly provided for.
- ------------------------------------
(sm) "Dealer remarketable security" and "Drs." are service marks of J.P. Morgan
Securities Inc.
<PAGE> 2
If the Company shall default in the payment of interest when due on such March
15 or September 15, then this Security shall bear interest at the rate in effect
immediately prior to the date of default from the next preceding date to which
interest has been paid, or, if no interest has been paid, from March 16, 1998.
The interest so payable on any March 15 or September 15 shall be paid to the
such person in whose name this Security shall be registered at the close of
business on the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date (each, a "REGULAR RECORD
DATE"). For purposes of this Security, "BUSINESS DAY" means any day other than a
Saturday, a Sunday or a day on which banking institutions in The City of New
York are authorized or obligated by law, executive order or government decree to
be closed.
If and to the extent the Company shall default in the payment of the
interest due on any Interest Payment Date, such defaulted interest shall be paid
to the person in whose name this Security is registered at the close of business
on a record date established for such payment by notice by or on behalf of the
Company to the holders of the Securities mailed by first-class mail not less
than fifteen days prior to such record date to their last address as they shall
appear upon the Security register, such record date to be not less than five
days preceding the date of payment of such defaulted interest. The Company may
pay interest by check mailed to the holder's address as it appears on the
Security register.
The rate of interest on this Security shall be 6.30% per annum to but
excluding March 15, 2003 (the "FIRST REMARKETING DATE"). If, acting pursuant to
the Remarketing Agreement dated as of March 16, 1998 (the "REMARKETING
AGREEMENT") between J.P. Morgan Securities Inc., as Remarketing Dealer (the
"REMARKETING DEALER") and the Company, the Remarketing Dealer remarkets the
Securities on the First Remarketing Date, then, from and including the First
Remarketing Date the interest rate on the Securities shall be reset to but
excluding March 15, 2010 (the "SECOND REMARKETING DATE" and, together with the
First Remarketing Date, the "REMARKETING DATES"), and if the Remarketing Dealer
remarkets the Securities on the Second Remarketing Date then, from and including
the Second Remarketing Date the interest rate on this Security shall be reset to
but excluding March 15, 2020 (the "STATED MATURITY DATE"), and, in each case,
the relevant rate of interest shall be determined by the Remarketing Dealer in
accordance with the procedures set forth in Section 4 on the reverse hereof. If
the Remarketing Dealer elects to remarket the Securities on either Remarketing
Date, then this Security shall be subject to mandatory tender to the Remarketing
Dealer for remarketing on such Remarketing Date, on the terms and subject to the
conditions set forth on the reverse hereof.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been executed by the
Trustee under the Indenture referred to on the reverse hereof.
2
<PAGE> 3
IN WITNESS WHEREOF, Service Corporation International has caused this
Security to be signed by its duly authorized officers and has caused its
corporate seal to be affixed hereunto.
SERVICE CORPORATION INTERNATIONAL
By:
------------------------------
Title:
Attest:
- -------------------------
Secretary
Certificate of Authentication
This is one of the Securities of the series designated therein and described in
the within mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
<PAGE> 4
Service Corporation International
6.30% Dealer remarketable security(sm) ("Drs.(sm)")
due March 15, 2020
1. Indenture. (a) This Security is one of the duly authorized issue of
debt securities of the Company (herein referred to as the "DEBT SECURITIES") of
the series hereinafter specified, all issued or to be issued under and pursuant
to a senior indenture dated as of February 1, 1993, as amended and supplemented
(the "INDENTURE") between the Company and The Bank of New York, a New York
banking corporation, as Trustee (herein referred to as the "TRUSTEE"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders (the words
"HOLDERS", "HOLDER", "SECURITYHOLDERS" or "SECURITYHOLDER" mean the registered
holder(s)) of the Debt Securities.
(b) The Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
denominated in different currencies, may be subject to different redemption
provisions, if any, may be subject to different sinking funds, if any, may be
subject to additional covenants and Events of Default and may otherwise vary as
provided in the Indenture. This Security is one of the series designated as the
6.30% Dealer remarketable securities(sm) ("DRS.(SM)") due March 15, 2020 of the
Company and such series is limited in aggregate principal amount to
$300,000,000. References herein to "SECURITIES" or "DRS." shall mean the Debt
Securities of said series.
(c) All capitalized terms used in this Security which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
2. Mandatory Tender on each Remarketing Date; Purchase and Settlement.
On a Business Day not later than fifteen Business Days prior to either
Remarketing Date (each a "NOTIFICATION DATE"), the Remarketing Dealer will
notify the Company and the Trustee as to whether it elects to purchase all of
the outstanding Drs. for remarketing on such Remarketing Date. If, and only if,
the Remarketing Dealer so elects on either Remarketing Date, the Drs. shall be
subject to mandatory tender to the Remarketing Dealer for purchase and
remarketing on such Remarketing Date, upon the terms and subject to the
conditions described herein and in the Remarketing Agreement. The purchase price
of the Drs. shall be equal to 100% of the principal amount thereof. No holder or
beneficial owner of any Securities shall have any rights or claims under the
Remarketing Agreement or against the Company or the Remarketing Dealer as a
result of the Remarketing Dealer not purchasing such Securities on either
Remarketing Date.
3. Maintenance of Book-Entry System. (a) The tender and settlement
procedures with respect to the Securities set forth in the Remarketing Agreement
shall be subject to modification, without the consent of the holders of the
Securities, to the extent required by DTC or, if the book-entry system is no
longer available for the Securities at the time of the remarketing, to the
extent required to facilitate the tendering and remarketing of Securities in
certificated form. In addition, the
R-1
<PAGE> 5
Remarketing Dealer may modify the settlement procedures without the consent of
the holders of the Securities in order to facilitate the settlement process.
(b) The Company hereby agrees with the Trustee and the holders of
Securities that (i) at all times, it will use its best efforts to maintain the
Securities in book-entry form with DTC or any successor thereto and to appoint a
successor depositary to the extent necessary to maintain the Securities in
book-entry form and (ii) it waives any discretionary right that it otherwise may
have under the Indenture to cause the Securities to be issued in certificated
form.
4. Determination of Reset Interest Rates; Notification Thereof. The
Remarketing Dealer shall determine the interest rate the Drs. will bear from and
including the First Remarketing Date to but excluding the Second Remarketing
Date (the "FIRST RESET INTEREST RATE") and from and including the Second
Remarketing Date to but excluding the Stated Maturity Date (the "SECOND RESET
INTEREST RATE" and together with the First Reset Interest Rate, the "RESET
INTEREST RATES") on the third Business Day immediately preceding the relevant
Remarketing Date (each a "DETERMINATION DATE") by soliciting by 3:30 p.m., New
York City time, the Reference Corporate Dealers (defined below) for firm,
committed bids to purchase all outstanding Drs. at the Dollar Price (defined
below), and by selecting the lowest such firm, committed bid (regardless of
whether each of the Reference Corporate Dealers actually submits a bid). Each
bid shall be expressed in terms of the Reset Interest Rate that the Drs. would
bear (quoted as a spread over 5.63% per annum (the "BASE RATE")) based on the
following assumptions:
(i) the Drs. would be sold to the Reference Corporate Dealer
on the relevant Remarketing Date for settlement on the same day;
(ii) the Drs. would mature on the Second Remarketing Date or
the Stated Maturity Date, as the case may be; and
(iii) the Drs. would bear interest at the rate bid by such
Reference Corporate Dealer, payable semi-annually on the Interest
Payment Dates from and including the First Remarketing Date to but
excluding the Second Remarketing Date or from and including the Second
Remarketing Date to but excluding the Stated Maturity Date, as the case
may be.
The relevant Reset Interest Rate announced by the Remarketing Dealer as a result
of such process will be quoted to the nearest one hundred-thousandth (0.00001)
of one percent per annum and, absent manifest error, will be binding and
conclusive upon holders of the Drs., the Company and the Trustee. The
Remarketing Dealer shall have the discretion to select the time at which each
Reset Interest Rate is determined on the relevant Determination Date.
The Remarketing Dealer shall have the right in its sole discretion to
either (i) remarket the Drs. for its own account or (ii) sell the Drs. to the
Reference Corporate Dealer submitting the lowest firm, committed bid pursuant to
Section 4 of this Security. If two or more Reference Corporate Dealers submit
equivalent bids which constitute the lowest firm, committed bid, the Remarketing
Dealer may in its sole discretion elect to sell the Drs. to any such Reference
Corporate Dealer.
R-2
<PAGE> 6
If the Remarketing Dealer has elected to remarket the Drs. on either
Remarketing Date as provided herein, then it shall notify the Company, the
Trustee and DTC by telephone, confirmed in writing (which may include facsimile
or other electronic transmission), by 5:00 p.m., New York City time, on the
relevant Determination Date of the relevant Reset Interest Rate applicable to
the Drs. effective from and including the First Remarketing Date or from and
including the Second Remarketing Date, as the case may be.
"DOLLAR PRICE" means, with respect to each Remarketing Date, the
greater of (1) 100% of the principal amount of the Drs. and (2) the discounted
present value to such Remarketing Date of the cash flows on a bond:
(x) with a principal amount equal to the aggregate principal amount of
the Drs.,
(y) maturing on (a) the Second Remarketing Date (in the case of a
determination made in connection with the First Remarketing Date), or (b) the
Stated Maturity Date (in the case of a determination made in connection with the
Second Remarketing Date) and
(z) bearing interest at a rate equal to the Base Rate,
using a discount rate equal to the Treasury Rate (defined below),
payable semi-annually (assuming a 360-day year consisting of twelve 30-day
months) on the Interest Payment Dates,
(i) in the case of a determination made in connection with the First
Remarketing Date, from and including the First Remarketing Date to but excluding
the Second Remarketing Date, or
(ii) in the case of a determination made in connection with the Second
Remarketing Date, from and including the Second Remarketing Date to but
excluding the Stated Maturity Date.
"REFERENCE CORPORATE DEALER" means J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated, UBS Securities LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Chase Securities Inc. If any of such persons shall cease
to be a leading dealer of publicly-traded debt securities of the Company, then
the Remarketing Dealer may replace, with the approval of the Company (not to be
unreasonably withheld), such person with any other leading dealer of
publicly-traded debt securities of the Company.
"TREASURY RATE" means, with respect to any Determination Date, the
annual rate equal to the semi-annual equivalent yield to maturity or
interpolated (on a 30/360 day count basis) yield to maturity on such
Determination Date of the Comparable Treasury Issue (defined below) for value on
the relevant Remarketing Date, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined below).
"COMPARABLE TREASURY ISSUE" means, with respect to any Determination
Date, the United States Treasury security selected by the Remarketing Dealer as
having an actual maturity on such Determination Date (or the United States
Treasury security selected by the Remarketing Dealer to derive an interpolated
maturity on such Determination Date) comparable to (i) the time remaining
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to the Second Remarketing Date (in the case of a determination made in
connection with the First Remarketing Date), or (ii) the remaining term of the
Drs. (in the case of a determination made in connection with the Second
Remarketing Date).
"COMPARABLE TREASURY PRICE" means, with respect to any Determination
Date, (a) the offer prices for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) on such Determination Date, as set forth on
Telerate Page 500 (as defined below), adjusted to reflect settlement on the
relevant Remarketing Date if prices quoted on Telerate Page 500 are for
settlement on any date other than such Remarketing Date, or (b) if such page (or
any successor page) is not displayed or does not contain such offer prices on
such Business Day, (i) the average of five Reference Treasury Dealer Quotations
for such Remarketing Date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations (unless there is more than one highest or
lowest quotation, in which case only one such highest and/or lowest quotation
shall be excluded), or (ii) if the Remarketing Dealer obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.
"TELERATE PAGE 500" means the display designated as "Telerate Page 500"
on Dow Jones Markets Limited (or such other page as may replace Telerate Page
500 on such service) or such other service displaying the offer prices specified
in clause (a) of the definition of Comparable Treasury Price as may replace Dow
Jones Markets Limited.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Determination Date and each Reference Treasury Dealer, the offer price for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) for settlement on the relevant Remarketing Date, quoted in
writing to the Remarketing Dealer by such Reference Treasury Dealer by 3:30
p.m., New York City time, on such Determination Date.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer in The City of New York (which may include the Remarketing Dealer)
selected by the Remarketing Dealer.
5. Repurchase. If the Remarketing Dealer for any reason does not
purchase all of the Drs. on either Remarketing Date, then the Company shall
repurchase on such Remarketing Date, at a price equal to 100% of the principal
amount of the Drs. plus all accrued interest, if any, on the Drs. to (but
excluding) the relevant Remarketing Date, any Drs. that have not been purchased
by the Remarketing Dealer on such Remarketing Date.
6. Redemption. If the Remarketing Dealer has elected to remarket the
Drs. on either Remarketing Date, the Company shall have the right to redeem the
Drs., in whole but not in part, from the Remarketing Dealer on such Remarketing
Date at a redemption price equal to the sum of (i) 100% of the aggregate
principal amount of the Drs. and (ii) the Call Price (as defined below), by
giving written notice of such redemption to the Remarketing Dealer no later than
the later of
(x) one Business Day prior to the relevant Determination Date or
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(y) if fewer than three Reference Corporate Dealers timely
submit firm, committed bids for all outstanding Drs. to the Remarketing
Dealer on the relevant Determination Date in accordance with Section 4
of this Security, immediately after the deadline set by the Remarketing
Dealer for receiving such bids has passed.
In either such case, the Company shall pay such redemption price for the Drs. in
same-day funds by wire transfer on the relevant Remarketing Date to an account
designated by the Remarketing Dealer. For purposes of calculating the Call
Price, the Remarketing Dealer shall be deemed to have made the request for the
Call Price on the date the Company makes its election to redeem the Drs.
The Drs. are not otherwise subject to redemption.
"CALL PRICE" means the fair market value of the embedded interest rate
option implicit in the Remarketing Dealer's right to purchase at par and
remarket on each Remarketing Date of any Drs. not purchased by the Remarketing
Dealer on the relevant Remarketing Date (such principal amount of Drs., the
"UNPURCHASED DRS."). This amount shall equal:
(i) if the Remarketing Dealer's request for the Call Price payment is
made before the first Determination Date, the Commercially Reasonable
Option Value (as defined below) on the date of such request;
(ii) if the Remarketing Dealer's request for the Call Price payment is
made on or after the first Determination Date and on or prior to the
First Remarketing Date, the amount, if positive, equal to:
(1) the Commercially Reasonable Option Value, determined as if
the date of determination thereof was the first day after the
First Remarketing Date;
plus
(2)(a) the Drs. Premium for the first Determination Date;
multiplied by
(b)(x) the Unpurchased Drs. on the First Remarketing Date;
divided by
(y) the Original Amount of Drs.
"ORIGINAL AMOUNT OF DRS." means $300,000,000; and "DRS. PREMIUM" equals the
Dollar Price relating to the relevant Determination Date less the Original
Amount of Drs.;
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(iii) if the Remarketing Dealer's request for a Call Price payment is
made after the First Remarketing Date but before the second
Determination Date, the amount equal to the Commercially Reasonable
Option Value on the date of such request;
(iv) if the Remarketing Dealer's request for the Call Price payment is
made on or after the second Determination Date, an amount (if positive)
equal to:
(1) the Drs. Premium for the second Determination Date;
multiplied by
(2)(a) the Unpurchased Drs. on the Second Remarketing Date;
divided by
(b) the Original Amount of Drs.
"COMMERCIALLY REASONABLE OPTION VALUE" means, on any specified date, the amount
determined by the Remarketing Dealer on such date under Section 6(e) of the ISDA
Master Agreement dated as of July 1, 1996 (the "MASTER AGREEMENT") between
Morgan Guaranty Trust Company of New York and the Company, on a "Market
Quotation" basis in respect of the embedded interest rate option(s) implicit in
the Remarketing Dealer's option to purchase at par the Unpurchased Drs. on each
remaining Remarketing Date, as if a "Termination Event" had occurred on such
specified date under such interest rate option with respect to the Company under
the Master Agreement and the Company was the "Affected Party". The determination
of the Commercially Reasonable Option Value shall be made using the provisions
of the Master Agreement regardless of any termination of the Master Agreement.
7. Certain Covenants. The Indenture restricts the Company's ability to merge,
consolidate or sell, lease, exchange or otherwise dispose of all or
substantially all of its assets. In addition, the Company is obliged to abide by
certain covenants, including a covenant limiting the ability of the Company or
any of its Subsidiaries to mortgage, pledge, encumber or subject to any lien or
security interest any of their assets and a covenant limiting entering into any
sale and leaseback transaction by the Company or any of its Subsidiaries, all as
more fully described in the Indenture. All of such covenants are subject to the
covenant defeasance procedures outlined in the Indenture.
8. Effect of Event of Default. If an Event of Default (as defined in the
Indenture) with respect to Debt Securities of any series then Outstanding (as
defined in the Indenture) occurs and is continuing, then and in each and every
such case, unless the principal of all of the Debt Securities of such series
shall have already become due and payable, either the Trustee or the Holders (as
defined in the Indenture) of not less than 25 percent in aggregate principal
amount of the Debt Securities of such series then Outstanding, by notice in
writing to the Company (and to the Trustee if given by Holders), may declare the
unpaid principal amount of all the Debt Securities of such series and the
interest, if any, accrued thereon to be due and payable immediately, and upon
any such
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declaration the same shall become and shall be immediately due and payable.
Notwithstanding the preceding sentence, however, if at any time after the unpaid
principal amount of the Debt Securities of such series shall have been so
declared due and payable and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest, if any, upon all of the Debt Securities of
such series and the principal of any and all Debt Securities of such series
which shall have become due otherwise than by acceleration and the reasonable
compensation, disbursements, expenses and advances of the Trustee, and any and
all defaults under the Indenture, other than the nonpayment of such portion of
the principal amount of and accrued interest, if any, on Debt Securities of such
series which shall become due by acceleration, shall have been cured or shall
have been waived or provision deemed by the Trustee to be adequate shall have
been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Debt Securities of such series then
Outstanding, by written notice to the Company and to the Trustee, may rescind
and annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
9. Tax Treatment; Agreement to Tender. The Company and the holders of this
Security (and each holder of a beneficial interest herein) by accepting this
Security, agree to treat the Drs. as fixed rate debt instruments that mature on
the First Remarketing Date for United States Federal income tax purposes.
Furthermore, each holder of this Security irrevocably agrees that this Security
shall automatically be tendered to the Remarketing Dealer if the Remarketing
Dealer elects to remarket the Securities on the terms and conditions set forth
herein.
10. Amendments and Waivers. Modifications and amendments of the Indenture will
be permitted to be made only with the consent of the holders of not less than a
majority in principal amount of all Outstanding Debt Securities issued under the
Indenture that are affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
holder of each such Debt Security affected thereby, (a) extend the stated
maturity of the principal of such Debt Security, reduce the principal amount
thereof, reduce the rate or extend the time of payment of any interest thereon,
reduce or alter the method of computation of any amount payable on redemption,
repayment or purchase thereof, change the coin or currency in which the
principal and interest, if any, are payable, impair or affect the right to
institute suit for the enforcement of any payment, repayment or purchase thereof
or (b) reduce the percentage in aggregate principal amount of Debt Securities of
any series issued under the Indenture, the consent of the holders of which is
required for any such modification or amendment. The holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
may, on behalf of all holders of Debt Securities of that series, waive, insofar
as that series is concerned, compliance by the Company with certain restrictive
covenants of the Indenture. Modifications and amendments of the Indenture will
be permitted to be made by the Company and the Trustee without the consent of
any holder of the Debt Securities: (a) to evidence the assumption by a successor
corporation of the obligations of the Company under the Indenture; (b) to add
covenants or new events of default for the protection of the holders of such
Debt Securities; (c) to establish the form and terms of any series of Debt
Securities; (d) to evidence the acceptance of
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appointment by a successor Trustee; (e) to secure such Debt Securities with any
property or assets; and (f) to cure any ambiguity or correct any inconsistency
in the Indenture or to amend the Indenture in any other manner which the Company
may deem necessary or desirable and which, in each case, will not adversely
affect the interests of the holders of the Debt Securities of any series issued
under the Indenture.
11. Denominations, Transfer and Exchange. (a) The Securities are issuable in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.
(b) Where certificated Securities are presented to at the corporate trust
offices of the Trustee or other transfer agent designated by the Company for
such purpose with a request to register their transfer or to exchange them for
an equal principal amount of Securities of other authorized denominations, the
Trustee or other transfer agent shall register the transfer or make the exchange
if its requirements for such transactions are met. The Company will not make any
charge for any registration of transfer or exchange but may require the payment
by the party requesting such registration of transfer or exchange of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
(c) Neither the Company nor any Trustee shall be required to (a) issue, register
the transfer of or exchange any Securities during a period beginning at the
opening of business 15 days before the selection of any Securities for
redemption and ending at the close of business on the day of mailing of the
notice of redemption; (b) register the transfer of or exchange any Security, or
portion thereof, so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part; or (c) issue,
register the transfer of or exchange any Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such
Security not to be so repaid.
12. No Liability of Certain Persons. No past, present or future stockholder,
employee, officer or director of the Company or any successor thereof shall have
any liability for any obligation, covenant or agreement of the Company contained
in this Security or the Indenture. Each holder by accepting this Security waives
and releases all such liability. This waiver and release are part of the
consideration for the issue of this Security.
13. Governing Law. The laws of the State of New York govern the Indenture and
this Security.
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto:
PLEASE INSERT TAXPAYER
IDENTIFICATION NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP
CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security of Service Corporation International and all rights
thereunder and hereby irrevocably constitutes and appoints
______________________ attorney to transfer said Security on the books of the
Company, with full power of substitution in the premises
Dated: ---------------------------------
Signature
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER. SIGNATURES MUST BE GUARANTEED BY AN "ELIGIBLE GUARANTOR
INSTITUTION" MEETING THE REQUIREMENTS OF THE TRUSTEE, WHICH
REQUIREMENTS INCLUDE MEMBERSHIP OR PARTICIPATION IN THE SECURITY
TRANSFER AGENT MEDALLION PROGRAM ("STAMP") OR SUCH OTHER
"SIGNATURE GUARANTEE PROGRAM" AS MAY BE DETERMINED BY THE TRUSTEE
IN ADDITION TO, OR IN SUBSTITUTION FOR, STAMP, ALL IN ACCORDANCE
WITH THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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EXHIBIT 1.6
UNLESS AND UNTIL THIS GLOBAL SECURITY IS EXCHANGED IN WHOLE OR IN PART
FOR THE SECURITIES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL SECURITY MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
(AS DEFINED BELOW)) TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
SERVICE CORPORATION INTERNATIONAL
6.30% DEALER REMARKETABLE SECURITY(SM) ("DRS.(SM)")
DUE MARCH 15, 2020
No. 2
$100,000,000 CUSIP: 817565AS3
Service Corporation International, a Texas corporation (hereinafter
called the "COMPANY"), for value received, hereby promises to pay to CEDE & CO.
or registered assigns, the principal sum of ONE HUNDRED MILLION U.S. DOLLARS on
March 15, 2020, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, State of New York, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest, semi-annually on
March 15 and September 15 of each year (each, an "INTEREST PAYMENT DATE"), on
said principal sum at the rate per annum specified below, at such office or
agency, in like coin or currency, from the March 15 or September 15, as the case
may be, to which interest on the Securities has been paid preceding the date
hereof (unless the date hereof is a March 15 or a September 15 to which interest
has been paid, in which case from the date hereof, or unless the date hereof is
prior to any interest having been paid, in which case from March 16, 1998) until
payment of said principal sum has been made or duly provided for.
- ------------------------------------
(sm) "Dealer remarketable security" and "Drs." are service marks of J.P. Morgan
Securities Inc.
<PAGE> 2
If the Company shall default in the payment of interest when due on such March
15 or September 15, then this Security shall bear interest at the rate in effect
immediately prior to the date of default from the next preceding date to which
interest has been paid, or, if no interest has been paid, from March 16, 1998.
The interest so payable on any March 15 or September 15 shall be paid to the
such person in whose name this Security shall be registered at the close of
business on the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date (each, a "REGULAR RECORD
DATE"). For purposes of this Security, "BUSINESS DAY" means any day other than a
Saturday, a Sunday or a day on which banking institutions in The City of New
York are authorized or obligated by law, executive order or government decree to
be closed.
If and to the extent the Company shall default in the payment of the
interest due on any Interest Payment Date, such defaulted interest shall be paid
to the person in whose name this Security is registered at the close of business
on a record date established for such payment by notice by or on behalf of the
Company to the holders of the Securities mailed by first-class mail not less
than fifteen days prior to such record date to their last address as they shall
appear upon the Security register, such record date to be not less than five
days preceding the date of payment of such defaulted interest. The Company may
pay interest by check mailed to the holder's address as it appears on the
Security register.
The rate of interest on this Security shall be 6.30% per annum to but
excluding March 15, 2003 (the "FIRST REMARKETING DATE"). If, acting pursuant to
the Remarketing Agreement dated as of March 16, 1998 (the "REMARKETING
AGREEMENT") between J.P. Morgan Securities Inc., as Remarketing Dealer (the
"REMARKETING DEALER") and the Company, the Remarketing Dealer remarkets the
Securities on the First Remarketing Date, then, from and including the First
Remarketing Date the interest rate on the Securities shall be reset to but
excluding March 15, 2010 (the "SECOND REMARKETING DATE" and, together with the
First Remarketing Date, the "REMARKETING DATES"), and if the Remarketing Dealer
remarkets the Securities on the Second Remarketing Date then, from and including
the Second Remarketing Date the interest rate on this Security shall be reset to
but excluding March 15, 2020 (the "STATED MATURITY DATE"), and, in each case,
the relevant rate of interest shall be determined by the Remarketing Dealer in
accordance with the procedures set forth in Section 4 on the reverse hereof. If
the Remarketing Dealer elects to remarket the Securities on either Remarketing
Date, then this Security shall be subject to mandatory tender to the Remarketing
Dealer for remarketing on such Remarketing Date, on the terms and subject to the
conditions set forth on the reverse hereof.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been executed by the
Trustee under the Indenture referred to on the reverse hereof.
2
<PAGE> 3
IN WITNESS WHEREOF, Service Corporation International has caused this
Security to be signed by its duly authorized officers and has caused its
corporate seal to be affixed hereunto.
SERVICE CORPORATION INTERNATIONAL
By:
------------------------------
Title:
Attest:
- -------------------------
Secretary
Certificate of Authentication
This is one of the Securities of the series designated therein and described in
the within mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
<PAGE> 4
Service Corporation International
6.30% Dealer remarketable security(sm) ("Drs.(sm)")
due March 15, 2020
1. Indenture. (a) This Security is one of the duly authorized issue of
debt securities of the Company (herein referred to as the "DEBT SECURITIES") of
the series hereinafter specified, all issued or to be issued under and pursuant
to a senior indenture dated as of February 1, 1993, as amended and supplemented
(the "INDENTURE") between the Company and The Bank of New York, a New York
banking corporation, as Trustee (herein referred to as the "TRUSTEE"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders (the words
"HOLDERS", "HOLDER", "SECURITYHOLDERS" or "SECURITYHOLDER" mean the registered
holder(s)) of the Debt Securities.
(b) The Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
denominated in different currencies, may be subject to different redemption
provisions, if any, may be subject to different sinking funds, if any, may be
subject to additional covenants and Events of Default and may otherwise vary as
provided in the Indenture. This Security is one of the series designated as the
6.30% Dealer remarketable securities(sm) ("DRS.(SM)") due March 15, 2020 of the
Company and such series is limited in aggregate principal amount to
$300,000,000. References herein to "SECURITIES" or "DRS." shall mean the Debt
Securities of said series.
(c) All capitalized terms used in this Security which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
2. Mandatory Tender on each Remarketing Date; Purchase and Settlement.
On a Business Day not later than fifteen Business Days prior to either
Remarketing Date (each a "NOTIFICATION DATE"), the Remarketing Dealer will
notify the Company and the Trustee as to whether it elects to purchase all of
the outstanding Drs. for remarketing on such Remarketing Date. If, and only if,
the Remarketing Dealer so elects on either Remarketing Date, the Drs. shall be
subject to mandatory tender to the Remarketing Dealer for purchase and
remarketing on such Remarketing Date, upon the terms and subject to the
conditions described herein and in the Remarketing Agreement. The purchase price
of the Drs. shall be equal to 100% of the principal amount thereof. No holder or
beneficial owner of any Securities shall have any rights or claims under the
Remarketing Agreement or against the Company or the Remarketing Dealer as a
result of the Remarketing Dealer not purchasing such Securities on either
Remarketing Date.
3. Maintenance of Book-Entry System. (a) The tender and settlement
procedures with respect to the Securities set forth in the Remarketing Agreement
shall be subject to modification, without the consent of the holders of the
Securities, to the extent required by DTC or, if the book-entry system is no
longer available for the Securities at the time of the remarketing, to the
extent required to facilitate the tendering and remarketing of Securities in
certificated form. In addition,
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the Remarketing Dealer may modify the settlement procedures without the consent
of the holders of the Securities in order to facilitate the settlement process.
(b) The Company hereby agrees with the Trustee and the holders of
Securities that (i) at all times, it will use its best efforts to maintain the
Securities in book-entry form with DTC or any successor thereto and to appoint a
successor depositary to the extent necessary to maintain the Securities in
book-entry form and (ii) it waives any discretionary right that it otherwise may
have under the Indenture to cause the Securities to be issued in certificated
form.
4. Determination of Reset Interest Rates; Notification Thereof. The
Remarketing Dealer shall determine the interest rate the Drs. will bear from and
including the First Remarketing Date to but excluding the Second Remarketing
Date (the "FIRST RESET INTEREST RATE") and from and including the Second
Remarketing Date to but excluding the Stated Maturity Date (the "SECOND RESET
INTEREST RATE" and together with the First Reset Interest Rate, the "RESET
INTEREST RATES") on the third Business Day immediately preceding the relevant
Remarketing Date (each a "DETERMINATION DATE") by soliciting by 3:30 p.m., New
York City time, the Reference Corporate Dealers (defined below) for firm,
committed bids to purchase all outstanding Drs. at the Dollar Price (defined
below), and by selecting the lowest such firm, committed bid (regardless of
whether each of the Reference Corporate Dealers actually submits a bid). Each
bid shall be expressed in terms of the Reset Interest Rate that the Drs. would
bear (quoted as a spread over 5.63% per annum (the "BASE RATE")) based on the
following assumptions:
(i) the Drs. would be sold to the Reference Corporate Dealer on
the relevant Remarketing Date for settlement on the same day;
(ii) the Drs. would mature on the Second Remarketing Date or the
Stated Maturity Date, as the case may be; and
(iii) the Drs. would bear interest at the rate bid by such
Reference Corporate Dealer, payable semi-annually on the Interest Payment
Dates from and including the First Remarketing Date to but excluding the
Second Remarketing Date or from and including the Second Remarketing Date
to but excluding the Stated Maturity Date, as the case may be.
The relevant Reset Interest Rate announced by the Remarketing Dealer as a result
of such process will be quoted to the nearest one hundred-thousandth (0.00001)
of one percent per annum and, absent manifest error, will be binding and
conclusive upon holders of the Drs., the Company and the Trustee. The
Remarketing Dealer shall have the discretion to select the time at which each
Reset Interest Rate is determined on the relevant Determination Date.
The Remarketing Dealer shall have the right in its sole discretion to
either (i) remarket the Drs. for its own account or (ii) sell the Drs. to the
Reference Corporate Dealer submitting the lowest firm, committed bid pursuant to
Section 4 of this Security. If two or more Reference Corporate Dealers submit
equivalent bids which constitute the lowest firm, committed bid, the Remarketing
Dealer may in its sole discretion elect to sell the Drs. to any such Reference
Corporate Dealer.
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If the Remarketing Dealer has elected to remarket the Drs. on either
Remarketing Date as provided herein, then it shall notify the Company, the
Trustee and DTC by telephone, confirmed in writing (which may include facsimile
or other electronic transmission), by 5:00 p.m., New York City time, on the
relevant Determination Date of the relevant Reset Interest Rate applicable to
the Drs. effective from and including the First Remarketing Date or from and
including the Second Remarketing Date, as the case may be.
"DOLLAR PRICE" means, with respect to each Remarketing Date, the
greater of (1) 100% of the principal amount of the Drs. and (2) the discounted
present value to such Remarketing Date of the cash flows on a bond:
(x) with a principal amount equal to the aggregate principal amount of
the Drs.,
(y) maturing on (a) the Second Remarketing Date (in the case of a
determination made in connection with the First Remarketing Date), or (b) the
Stated Maturity Date (in the case of a determination made in connection with the
Second Remarketing Date) and
(z) bearing interest at a rate equal to the Base Rate,
using a discount rate equal to the Treasury Rate (defined below),
payable semi-annually (assuming a 360-day year consisting of twelve 30-day
months) on the Interest Payment Dates,
(i) in the case of a determination made in connection with the First
Remarketing Date, from and including the First Remarketing Date to but excluding
the Second Remarketing Date, or
(ii) in the case of a determination made in connection with the Second
Remarketing Date, from and including the Second Remarketing Date to but
excluding the Stated Maturity Date.
"REFERENCE CORPORATE DEALER" means J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated, UBS Securities LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Chase Securities Inc. If any of such persons shall cease
to be a leading dealer of publicly-traded debt securities of the Company, then
the Remarketing Dealer may replace, with the approval of the Company (not to be
unreasonably withheld), such person with any other leading dealer of
publicly-traded debt securities of the Company.
"TREASURY RATE" means, with respect to any Determination Date, the
annual rate equal to the semi-annual equivalent yield to maturity or
interpolated (on a 30/360 day count basis) yield to maturity on such
Determination Date of the Comparable Treasury Issue (defined below) for value on
the relevant Remarketing Date, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined below).
"COMPARABLE TREASURY ISSUE" means, with respect to any Determination
Date, the United States Treasury security selected by the Remarketing Dealer as
having an actual maturity on such Determination Date (or the United States
Treasury security selected by the Remarketing Dealer to derive an interpolated
maturity on such Determination Date) comparable to (i) the time remaining to the
Second Remarketing Date (in the case of a determination made in connection with
the First Remarketing Date), or (ii) the remaining term of the Drs. (in the case
of a determination made in connection with the Second Remarketing Date).
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"COMPARABLE TREASURY PRICE" means, with respect to any Determination
Date, (a) the offer prices for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) on such Determination Date, as set forth on
Telerate Page 500 (as defined below), adjusted to reflect settlement on the
relevant Remarketing Date if prices quoted on Telerate Page 500 are for
settlement on any date other than such Remarketing Date, or (b) if such page (or
any successor page) is not displayed or does not contain such offer prices on
such Business Day, (i) the average of five Reference Treasury Dealer Quotations
for such Remarketing Date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations (unless there is more than one highest or
lowest quotation, in which case only one such highest and/or lowest quotation
shall be excluded), or (ii) if the Remarketing Dealer obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.
"TELERATE PAGE 500" means the display designated as "Telerate Page 500"
on Dow Jones Markets Limited (or such other page as may replace Telerate Page
500 on such service) or such other service displaying the offer prices specified
in clause (a) of the definition of Comparable Treasury Price as may replace Dow
Jones Markets Limited.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Determination Date and each Reference Treasury Dealer, the offer price for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) for settlement on the relevant Remarketing Date, quoted in
writing to the Remarketing Dealer by such Reference Treasury Dealer by 3:30
p.m., New York City time, on such Determination Date.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer in The City of New York (which may include the Remarketing Dealer)
selected by the Remarketing Dealer.
5. Repurchase. If the Remarketing Dealer for any reason does not
purchase all of the Drs. on either Remarketing Date, then the Company shall
repurchase on such Remarketing Date, at a price equal to 100% of the principal
amount of the Drs. plus all accrued interest, if any, on the Drs. to (but
excluding) the relevant Remarketing Date, any Drs. that have not been purchased
by the Remarketing Dealer on such Remarketing Date.
6. Redemption. If the Remarketing Dealer has elected to remarket the
Drs. on either Remarketing Date, the Company shall have the right to redeem the
Drs., in whole but not in part, from the Remarketing Dealer on such Remarketing
Date at a redemption price equal to the sum of (i) 100% of the aggregate
principal amount of the Drs. and (ii) the Call Price (as defined below), by
giving written notice of such redemption to the Remarketing Dealer no later than
the later of
(x) one Business Day prior to the relevant Determination Date or
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(y) if fewer than three Reference Corporate Dealers timely submit
firm, committed bids for all outstanding Drs. to the Remarketing Dealer
on the relevant Determination Date in accordance with Section 4 of this
Security, immediately after the deadline set by the Remarketing Dealer
for receiving such bids has passed.
In either such case, the Company shall pay such redemption price for the Drs. in
same-day funds by wire transfer on the relevant Remarketing Date to an account
designated by the Remarketing Dealer. For purposes of calculating the Call
Price, the Remarketing Dealer shall be deemed to have made the request for the
Call Price on the date the Company makes its election to redeem the Drs.
The Drs. are not otherwise subject to redemption.
"CALL PRICE" means the fair market value of the embedded interest rate
option implicit in the Remarketing Dealer's right to purchase at par and
remarket on each Remarketing Date of any Drs. not purchased by the Remarketing
Dealer on the relevant Remarketing Date (such principal amount of Drs., the
"UNPURCHASED DRS."). This amount shall equal:
(i) if the Remarketing Dealer's request for the Call Price payment is
made before the first Determination Date, the Commercially Reasonable
Option Value (as defined below) on the date of such request;
(ii) if the Remarketing Dealer's request for the Call Price payment is
made on or after the first Determination Date and on or prior to the
First Remarketing Date, the amount, if positive, equal to:
(1) the Commercially Reasonable Option Value, determined as if
the date of determination thereof was the first day after the
First Remarketing Date;
plus
(2)(a) the Drs. Premium for the first Determination Date;
multiplied by
(b)(x) the Unpurchased Drs. on the First Remarketing Date;
divided by
(y) the Original Amount of Drs.
"ORIGINAL AMOUNT OF DRS." means $300,000,000; and "DRS. PREMIUM" equals the
Dollar Price relating to the relevant Determination Date less the Original
Amount of Drs.;
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(iii) if the Remarketing Dealer's request for a Call Price payment is
made after the First Remarketing Date but before the second
Determination Date, the amount equal to the Commercially Reasonable
Option Value on the date of such request;
(iv) if the Remarketing Dealer's request for the Call Price payment is
made on or after the second Determination Date, an amount (if positive)
equal to:
(1) the Drs. Premium for the second Determination Date;
multiplied by
(2)(a) the Unpurchased Drs. on the Second Remarketing Date;
divided by
(b) the Original Amount of Drs.
"COMMERCIALLY REASONABLE OPTION VALUE" means, on any specified date, the amount
determined by the Remarketing Dealer on such date under Section 6(e) of the ISDA
Master Agreement dated as of July 1, 1996 (the "MASTER AGREEMENT") between
Morgan Guaranty Trust Company of New York and the Company, on a "Market
Quotation" basis in respect of the embedded interest rate option(s) implicit in
the Remarketing Dealer's option to purchase at par the Unpurchased Drs. on each
remaining Remarketing Date, as if a "Termination Event" had occurred on such
specified date under such interest rate option with respect to the Company under
the Master Agreement and the Company was the "Affected Party". The determination
of the Commercially Reasonable Option Value shall be made using the provisions
of the Master Agreement regardless of any termination of the Master Agreement.
7. Certain Covenants. The Indenture restricts the Company's ability to merge,
consolidate or sell, lease, exchange or otherwise dispose of all or
substantially all of its assets. In addition, the Company is obliged to abide by
certain covenants, including a covenant limiting the ability of the Company or
any of its Subsidiaries to mortgage, pledge, encumber or subject to any lien or
security interest any of their assets and a covenant limiting entering into any
sale and leaseback transaction by the Company or any of its Subsidiaries, all as
more fully described in the Indenture. All of such covenants are subject to the
covenant defeasance procedures outlined in the Indenture.
8. Effect of Event of Default. If an Event of Default (as defined in the
Indenture) with respect to Debt Securities of any series then Outstanding (as
defined in the Indenture) occurs and is continuing, then and in each and every
such case, unless the principal of all of the Debt Securities of such series
shall have already become due and payable, either the Trustee or the Holders (as
defined in the Indenture) of not less than 25 percent in aggregate principal
amount of the Debt Securities of such series then Outstanding, by notice in
writing to the Company (and to the Trustee if given by Holders), may declare the
unpaid principal amount of all the Debt Securities of such series and the
interest, if any, accrued thereon to be due and payable immediately, and upon
any such
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declaration the same shall become and shall be immediately due and payable.
Notwithstanding the preceding sentence, however, if at any time after the unpaid
principal amount of the Debt Securities of such series shall have been so
declared due and payable and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest, if any, upon all of the Debt Securities of
such series and the principal of any and all Debt Securities of such series
which shall have become due otherwise than by acceleration and the reasonable
compensation, disbursements, expenses and advances of the Trustee, and any and
all defaults under the Indenture, other than the nonpayment of such portion of
the principal amount of and accrued interest, if any, on Debt Securities of such
series which shall become due by acceleration, shall have been cured or shall
have been waived or provision deemed by the Trustee to be adequate shall have
been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Debt Securities of such series then
Outstanding, by written notice to the Company and to the Trustee, may rescind
and annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
9. Tax Treatment; Agreement to Tender. The Company and the holders of this
Security (and each holder of a beneficial interest herein) by accepting this
Security, agree to treat the Drs. as fixed rate debt instruments that mature on
the First Remarketing Date for United States Federal income tax purposes.
Furthermore, each holder of this Security irrevocably agrees that this Security
shall automatically be tendered to the Remarketing Dealer if the Remarketing
Dealer elects to remarket the Securities on the terms and conditions set forth
herein.
10. Amendments and Waivers. Modifications and amendments of the Indenture will
be permitted to be made only with the consent of the holders of not less than a
majority in principal amount of all Outstanding Debt Securities issued under the
Indenture that are affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
holder of each such Debt Security affected thereby, (a) extend the stated
maturity of the principal of such Debt Security, reduce the principal amount
thereof, reduce the rate or extend the time of payment of any interest thereon,
reduce or alter the method of computation of any amount payable on redemption,
repayment or purchase thereof, change the coin or currency in which the
principal and interest, if any, are payable, impaIr or affect the right to
institute suit for the enforcement of any payment, repayment or purchase thereof
or (b) reduce the percentage in aggregate principal amount of Debt Securities of
any series issued under the Indenture, the consent of the holders of which is
required for any such modification or amendment. The holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
may, on behalf of all holders of Debt Securities of that series, waive, insofar
as that series is concerned, compliance by the Company with certain restrictive
covenants of the Indenture. Modifications and amendments of the Indenture will
be permitted to be made by the Company and the Trustee without the consent of
any holder of the Debt Securities: (a) to evidence the assumption by a successor
corporation of the obligations of the Company under the Indenture; (b) to add
covenants or new events of default for the protection of the holders of such
Debt Securities; (c) to establish the form and terms of any series of Debt
Securities; (d) to evidence the acceptance of
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appointment by a successor Trustee; (e) to secure such Debt Securities with any
property or assets; and (f) to cure any ambiguity or correct any inconsistency
in the Indenture or to amend the Indenture in any other manner which the Company
may deem necessary or desirable and which, in each case, will not adversely
affect the interests of the holders of the Debt Securities of any series issued
under the Indenture.
11. Denominations, Transfer and Exchange. (a) The Securities are issuable in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.
(b) Where certificated Securities are presented to at the corporate trust
offices of the Trustee or other transfer agent designated by the Company for
such purpose with a request to register their transfer or to exchange them for
an equal principal amount of Securities of other authorized denominations, the
Trustee or other transfer agent shall register the transfer or make the exchange
if its requirements for such transactions are met. The Company will not make any
charge for any registration of transfer or exchange but may require the payment
by the party requesting such registration of transfer or exchange of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
(c) Neither the Company nor any Trustee shall be required to (a) issue, register
the transfer of or exchange any Securities during a period beginning at the
opening of business 15 days before the selection of any Securities for
redemption and ending at the close of business on the day of mailing of the
notice of redemption; (b) register the transfer of or exchange any Security, or
portion thereof, so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part; or (c) issue,
register the transfer of or exchange any Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such
Security not to be so repaid.
12. No Liability of Certain Persons. No past, present or future stockholder,
employee, officer or director of the Company or any successor thereof shall have
any liability for any obligation, covenant or agreement of the Company contained
in this Security or the Indenture. Each holder by accepting this Security waives
and releases all such liability. This waiver and release are part of the
consideration for the issue of this Security.
13. Governing Law. The laws of the State of New York govern the Indenture and
this Security.
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto:
PLEASE INSERT TAXPAYER
IDENTIFICATION NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP
CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security of Service Corporation International and all rights
thereunder and hereby irrevocably constitutes and appoints _____________________
attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises
Dated: --------------------------------
Signature
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. SIGNATURES
MUST BE GUARANTEED BY AN "ELIGIBLE GUARANTOR INSTITUTION" MEETING THE
REQUIREMENTS OF THE TRUSTEE, WHICH REQUIREMENTS INCLUDE MEMBERSHIP OR
PARTICIPATION IN THE SECURITY TRANSFER AGENT MEDALLION PROGRAM
("STAMP") OR SUCH OTHER "SIGNATURE GUARANTEE PROGRAM" AS MAY BE
DETERMINED BY THE TRUSTEE IN ADDITION TO, OR IN SUBSTITUTION FOR,
STAMP, ALL IN ACCORDANCE WITH THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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