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EXHIBIT 99.3
CONFORMED COPY
AGREEMENT AND SECOND AMENDMENT dated as of November 14,
2000 (this "Amendment"), to the Competitive Advance and
Revolving Credit Facility Agreement (Facility B) dated as of
June 27, 1997, as amended by Agreement and First 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"."
""Consolidated Interest Coverage Ratio" means, for any period,
the ratio of (a) Consolidated EBITDA of the Company and its
Subsidiaries for such period minus
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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."
""Second 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
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 Second
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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 A 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 Second
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 the Facility A Credit Agreement) plus
(B) Assured Obligations of its Subsidiaries to exceed $700,000,000
after the Second Amendment Effective Date."
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(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 Second 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 Second 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 Second
Amendment Effective Date (or, in the case of Debt incurred after the
Second 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.
(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
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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 Second 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 Second 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 Second 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
(d) the representations and warranties set forth in Section 2
shall be true and correct;
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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:
611102 SASKATCHEWAN LTD.
By
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Name:
Title:
SERVICE CORPORATION
INTERNATIONAL PLC
By
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Name:
Title:
SCI INTERNATIONAL LIMITED
By
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Name:
Title:
SERVICE CORPORATION
INTERNATIONAL AUSTRALIA PTY
LIMITED
By
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Name:
Title:
SCI NEDERLAND B.V.
By
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Name:
Title:
SERVICIOS FUNERARIOS XX XXXXXXXX, X.X.
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 SECURITIES 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:
SANPAOLO IMI S.P.A.
By
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Name:
Title:
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Name of Institution:
CIBC INC.
By
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Name:
Title:
Name of Institution:
SUNTRUST BANK
By
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Name:
Title:
Name of Institution:
CREDIT COMMERCIAL DE FRANCE
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:
THE FUJI BANK, LIMITED
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:
