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EXHIBIT 99.2
CONFORMED COPY
AGREEMENT AND FOURTH AMENDMENT dated as of November
14, 2000 (this "Amendment"), to the Competitive Advance
and Revolving Credit Facility Agreement (Facility A) dated
as of June 27, 1997, as amended by Agreement and First
Amendment dated as of June 26, 1998, Agreement and Second
Amendment dated as of June 25, 1999 and Agreement and
Third Amendment dated as of November 2, 1999 (the "Credit
Agreement"), among SERVICE CORPORATION INTERNATIONAL, a
Texas corporation (the "Company"), the borrowing
subsidiaries from time to time party thereto (the
"Borrowing Subsidiaries"), the banks from time to time
party thereto (the "Banks") and THE CHASE MANHATTAN BANK,
a New York banking corporation ("Chase"), as
administrative agent (in such capacity, the
"Administrative Agent") for the Banks.
The Company, the Majority Banks (such term and each other
capitalized term used and not otherwise defined herein having the meaning
assigned to it in the Credit Agreement) and the Administrative Agent have agreed
to amend the Credit Agreement on the terms and subject to the conditions set
forth herein. Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement is hereby amended as
follows:
(i) by inserting the following new definitions in the
appropriate alphabetical order therein:
""Asset Sale" means any sale, transfer or other disposition
(including by way of merger, casualty, condemnation or otherwise) by the
Company or any of its Subsidiaries (other than to the Company or any of
its Subsidiaries) of any asset (including any Equity Interest in any
Subsidiary or other Person), other than sales of (i) inventory, (ii)
excess land and (iii) other assets, in each case in the ordinary course
of business; provided that (A) each such sale, transfer or other
disposition that generates Net Cash Proceeds in excess of $1,000,000 per
transaction or series of related transactions cannot be made in reliance
on clauses (ii) and (iii) and shall be deemed to be an "Asset Sale" and
(B) all such sales, transfers or other dispositions made in reliance on
clauses (ii) and (iii) shall not exceed $10,000,000 in the aggregate."
""Asset Swap" shall mean any transfer of assets of the Company
or any Subsidiary to any Person other than the Company or an Affiliate of
the Company in exchange for assets of such Person."
""Capital Expenditures" means, for any period and with respect
to any Person, all expenditures during such period by such Person that
would be classified as capital expenditures in accordance with GAAP, but
excluding any such expenditure (other than of cash or cash equivalents)
deemed made by reason of any Asset Swap; provided that to the extent such
Asset Swap does require cash or cash equivalent consideration to be paid
(at the time of the Asset Swap or in the future) by the Company or any
Subsidiary in connection therewith, such cash consideration shall be
deemed to be a "Capital Expenditure"."
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""Consolidated Interest Coverage Ratio" means, for any period,
the ratio of (a) Consolidated EBITDA of the Company and its Subsidiaries
for such period minus Capital Expenditures of the Company and its
Subsidiaries for such period to (b) Interest Expense of the Company and
its Subsidiaries for such period."
""Distribution" means (a) dividends or other distributions or
payments on capital stock or other Equity Interests of the Company
(except distributions in such stock or other Equity Interests) and (b)
the redemption or acquisition for cash or any other consideration of
Equity Interests of the Company or of warrants, rights or other options
to purchase Equity Interests of the Company (except when solely in
exchange for Equity Interests of the Company) unless made,
contemporaneously, from the net proceeds of a sale of Equity Interests of
the Company."
""Equity Interests" means, with respect to any Person, shares
of the capital stock, partnership interests or other equity interests in
such Person or any warrants, options or other rights to acquire any such
equity interests."
""Equity Issuance" shall mean any issuance or sale by the
Company or any Subsidiary of any Equity Interests of the Company or any
Subsidiary, as applicable, or any obligations convertible into or
exchangeable for, or giving any Person a right, option or warrant to
acquire such Equity Interests or such convertible or exchangeable
obligations, except in each case for (a) any issuance or sale to the
Company or any Subsidiary, (b) any issuance of directors' qualifying
shares and (c) sales or issuances of common stock or stock options of the
Company to directors, management or employees of the Company or any
Subsidiary under any employee stock option or stock purchase plan or
employee benefit plan in existence from time to time."
""Fourth Amendment Effective Date" shall mean November 17,
2000."
""Net Cash Proceeds" means, with respect to any Asset Sale,
the cash proceeds thereof (including (a) any insurance, condemnation or
similar proceeds to the extent such proceeds are not applied within 365
days after receipt thereof to restore, replace or rebuild property to the
condition of such property immediately prior to any damage, loss,
destruction or condemnation of such property and (b) cash proceeds
subsequently received in respect of noncash consideration initially
received), net of (i) selling expenses (including reasonable broker's
fees or commissions, legal fees, transfer and similar taxes and the
Company's good faith estimate of income taxes paid or payable in respect
of such sale) and (ii) the principal, premium or penalty, if any, and
interest accrued on any Debt which is secured by the asset sold in such
Asset Sale and which is required to be repaid with the proceeds thereof."
(ii) by amending and restating the following definitions in
their entirety as follows:
""Interest Expense" means, with respect to any period, the
total interest expense of the Company and its consolidated Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP."
""Net Worth" means, in relation to the Company and its
Subsidiaries, Consolidated Assets of the Company less total consolidated
liabilities of the Company and its Consolidated Subsidiaries, as
determined in accordance with GAAP; provided that in
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computing Net Worth for all purposes other than Section 5.02(b), the
first $950,000,000 of diminishment in Net Worth recognized in accordance
with GAAP after the Fourth Amendment Effective Date in connection with
Asset Sales (including decreases in Net Worth from asset impairment
charges recognized in connection with writing down assets and
Subsidiaries to fair value before disposal in accordance with GAAP),
shall be excluded."
(b) Article II of the Credit Agreement is hereby amended by inserting a
new Section 2.24 at the end thereof, which shall read in its entirety as
follows:
"SECTION 2.24. Mandatory Commitment Reductions and Prepayments.
(a) Upon the receipt by the Company or any Subsidiary (or by any other
Person at the direction of the Company or any Subsidiary) of any Net Cash
Proceeds from any Asset Sale, the Commitments and the "Commitments" under
and as defined in the Facility B Credit Agreement shall, subject to
paragraph (b) of this Section, be reduced at such time as is specified in
paragraph (b) of this Section, ratably in accordance with the amounts
thereof, by an aggregate amount equal to 60% of the amount of such Net
Cash Proceeds (the "Reduction Percentage").
(b)(i) Individual Asset Sales which generate Net Cash Proceeds of
less than $250,000 are not subject to the requirements of this Section
2.24, (ii) individual Asset Sales which generate Net Cash Proceeds
between $250,000 and $5,000,000 will be aggregated over each fiscal
quarter and a mandatory Commitment reduction equal to the Reduction
Percentage of such aggregate Net Cash Proceeds shall be made on the last
Business Day of each fiscal quarter; provided that if the amount of Net
Cash Proceeds so aggregated at any time exceeds $10,000,000, a mandatory
Commitment reduction equal to the Reduction Percentage of such aggregated
proceeds shall be made on the third Business Day, with any remainder Net
Cash Proceeds generated after such time being applied to reduce
Commitments in an amount equal to the Reduction Percentage of such
remainder Net Cash Proceeds on the last Business Day of each fiscal
quarter, and (iii) with respect to individual Asset Sales which generate
Net Cash Proceeds in excess of $5,000,000, the Reduction Percentage of
such Net Cash Proceeds shall be applied by the third Business Day
following receipt thereof to reduce Commitments.
(c) Section 5.02(b)(i) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(i) The Company will not permit the ratio of Consolidated
Debt to Total Capitalization at any time to be greater than .55 to 1.0;
provided that in computing Consolidated Debt and Total Capitalization for
purposes of this paragraph, losses from asset impairment charges
recognized in connection with writing down assets and Subsidiaries to
fair value before disposal in accordance with GAAP after the Fourth
Amendment Effective Date in connection with proposed dispositions
thereof, shall be excluded until such time as such dispositions are
actually consummated."
(d) Section 5.02(b)(ii) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(ii) The Company will not permit the sum of (A) the aggregate
amount of Debt of its Subsidiaries (other than Debt held by the Company
and Debt under this Agreement and
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the Facility B Credit Agreement) plus (B) Assured Obligations of its
Subsidiaries to exceed $700,000,000 after the Fourth Amendment Effective
Date."
(e) Section 5.02(d)(vi) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(vi) The Company or any of its Subsidiaries may sell or
otherwise dispose of all or any part of their respective assets if, after
giving effect to such sale or other disposition, the aggregate amount of
all such sales and dispositions made by the Company and its Subsidiaries
on or after the Fourth Amendment Effective Date (including all
dispositions pursuant to clause (v) above), shall not exceed
$3,400,000,000 (it being agreed that the "amount" of any sale or
disposition shall equal the book value of the assets sold or disposed of
as of September 30, 2000)."
(f) Section 5.02(j) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"(j) Interest Coverage. The Company will not permit the
Consolidated Interest Coverage Ratio for any period of four consecutive
fiscal quarters, in each case taken as one accounting period, to be less
than 1.75 to 1.00."
(g) Section 5.02 of the Credit Agreement is hereby amended by inserting
the following new paragraphs (k), (l) and (m) at the end thereof, which shall
read in their entirety as follows:
"(k) Certain Acquisitions. The Company will not, and will not
permit its Subsidiaries to, acquire, whether directly or indirectly, and
whether by purchase, pursuant to any merger or other business combination
or otherwise, any Equity Interests in any Person, or any other assets;
provided, that the Company and its Subsidiaries may (i) purchase
inventory or make capital expenditures needed in the ordinary course of
the existing businesses of the Company and the Subsidiaries and (ii)
acquire other Equity Interests and assets to the extent that the
aggregate amount or fair market value of the consideration paid or
payable in cash and the Debt incurred or assumed in connection therewith
for all such acquisitions after the Fourth Amendment Effective Date does
not exceed $25,000,000.
(l) Prepayment, Etc. of Debt. The Company will not, and will
not permit its Subsidiaries to, prepay, redeem, repurchase, defease or
otherwise retire any Debt that by its terms becomes due after June 27,
2002, other than (i) Debt issued under the Indenture dated as of November
1, 1987 (the "Medium Term Notes"), between the Borrower and Irving Trust
Company, as trustee, up to an aggregate principal amount not to exceed
$36,000,000, (ii) the principal, premium or penalty, if any, and interest
accrued on any Debt which is secured by an asset sold and which is
required to be repaid with the proceeds thereof, or (iii) as required by
the terms of such Debt as in effect on the Fourth Amendment Effective
Date (or, in the case of Debt incurred after the Fourth Amendment
Effective Date, on the date such Debt is incurred), without giving effect
to any amendment or other modification thereof. Notwithstanding the
foregoing, the Company may prepay "Debt", as defined in this Agreement
and the Facility B Credit Agreement, with the proceeds of any Equity
Issuance.
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(m) Distributions. The Company will not, and will not permit
any Subsidiary to, at any time, declare or make, or incur any liability
to declare or make, any Distribution. Notwithstanding the foregoing, (i)
the Subsidiaries shall not be prohibited from making Distributions to the
Company and other Subsidiaries, (ii) so long as there shall exist no
Default or Event of Default, the Company may repurchase outstanding
shares of its common stock as required by employee plans or other
contracts existing on the Fourth Amendment Effective Date, provided that
the aggregate amount of such repurchases made by the Company pursuant to
this clause (ii) shall not exceed $5,000,000 in the aggregate and (iii)
so long as there shall exist no Default or Event of Default, the
Subsidiaries may make Distributions to minority shareholders in an
aggregate amount not to exceed $10,000,000.
SECTION 2. Representations and Warranties.
The Company represents and warrants to each other party hereto
that on and as of the date of this Amendment, both immediately prior to
and after giving effect to this Amendment, (a) the representations and
warranties set forth in Article IV of the Credit Agreement are true and
correct in all material respects, except to the extent such
representations and warranties expressly relate to an earlier date, and
(b) no Default or Event of Default has occurred and is continuing.
SECTION 3. Amendment Fees.
In consideration of the agreements of the Banks contained herein,
the Company agrees to pay to each Bank that returns an executed signature
page of this Amendment not later than 5:00 p.m., Houston time, on
November 30, 2000, through the Administrative Agent, an amendment fee (an
"Amendment Fee") equal to 0.10% of the Commitment of such Bank (whether
used or unused); provided, that no Amendment Fees shall be payable
hereunder if this Amendment shall not have been executed by Banks
constituting the Majority Banks on or prior to November 30, 2000. The
Amendment Fees shall be payable in immediately available funds on the
Fourth Amendment Effective Date. Once paid, the Amendment Fees shall not
be refundable.
SECTION 4. Effectiveness.
The amendments provided for in Section 1 shall become effective as
of the Fourth Amendment Effective Date upon the satisfaction of the following
conditions:
(a) the Administrative Agent shall have received the Amendment
Fees owed to the Banks under Section 3;
(b) the Administrative Agent or its counsel shall have received
counterparts of this Amendment which, when taken together, bear the
signatures of the Company, each Borrowing Subsidiary and Banks
constituting the Majority Banks;
(c) the Administrative Agent or its counsel shall have received
counterparts of an Amendment to the Facility B Credit Agreement
comparable in substance to this Amendment which, when taken together,
bear the signatures of the Company, each "Borrowing Subsidiary" and
"Banks" constituting the "Majority Banks" (as such terms are defined in
the Facility B Credit Agreement); and
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(d) the representations and warranties set forth in Section 2
shall be true and correct;
provided, that if the foregoing conditions to effectiveness shall not have been
satisfied by 5:00 p.m., Houston time, on November 30, 2000, then such amendments
shall not thereafter become effective and shall be of no force or effect.
SECTION 5. Effect of Amendment.
Except as expressly set forth herein, this Amendment shall not by
implication or otherwise alter, modify, amend, constitute a waiver of or in any
way affect the rights and remedies of the Banks or the Administrative Agent
under, or any of the terms, conditions, obligations, covenants or agreements
contained in, the Credit Agreement or any related document, all of which are
ratified and affirmed in all respects and shall continue in full force and
effect. Nothing herein shall be deemed to entitle the Company to a consent to,
or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any related document in similar or different circumstances. This
Amendment shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to herein.
SECTION 6. Counterparts.
This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. Delivery of any
executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
SECTION 7. Applicable Law.
THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 8. Headings.
The headings of this Amendment are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first above written.
SERVICE CORPORATION
INTERNATIONAL
By
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Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By
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Name:
Title:
Name of Institution:
BAUPOST GROUP SECURTIES L.L.C.
By
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Name:
Title:
Name of Institution:
CREDIT LYONNAIS NEW YORK BRANCH
By
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Name:
Title:
Name of Institution:
ROYAL BANK OF CANADA
By
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Name:
Title:
Name of Institution:
UBS AG, STAMFORD BRANCH
By
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Name:
Title:
Name of Institution:
ABN AMRO BANK N.V.
By
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Name:
Title:
Name of Institution:
SUNTRUST BANK
By
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Name:
Title:
Name of Institution:
SOCIETE GENERALE
By
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Name:
Title:
Name of Institution:
WESTPAC BANKING CORPORATION
By
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Name:
Title:
Name of Institution:
COMMERZBANK AG, NEW YORK &
GRAND CAYMAN BRANCHES
By
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Name:
Title:
Name of Institution:
BANK OF AMERICA N.A.
By
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Name:
Title:
Name of Institution:
THE BANK OF NEW YORK
By
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Name:
Title:
Name of Institution:
BANK ONE, TEXAS, NA
By
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Name:
Title:
