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EXHIBIT 99.4
AGREEMENT AND THIRD AMENDMENT
TO COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT (FACILITY A)
THIS AGREEMENT AND THIRD AMENDMENT TO COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT (FACILITY A) (this "Amendment") dated as of
November 2, 1999 is among:
(a) SERVICE CORPORATION INTERNATIONAL, a Texas corporation
(the "Company");
(b) the banks and other financial institutions listed on the
signature pages hereof, (collectively, the "Banks"); and
(c) THE CHASE MANHATTAN BANK, a New York banking corporation,
as administrative agent for the Banks (in such capacity, the "Administrative
Agent").
PRELIMINARY STATEMENT
The Company, the Banks, the Administrative Agent and the
Co-Agents (defined therein), are parties to a Competitive Advance and Revolving
Credit Facility Agreement (Facility A) dated as of June 27, 1997, as amended
pursuant to an Agreement and First Amendment to Competitive Advance and
Revolving Credit Facility Agreement (Facility A) dated as of June 26, 1998 and
an Agreement and Second Amendment to Competitive Advance and Revolving Credit
Facility Agreement (Facility A) dated as of June 25, 1999 (said Competitive
Advance and Revolving Credit Facility Agreement (Facility A), as so amended,
being the "Credit Agreement"). All capitalized terms defined in the Credit
Agreement and not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement. The Company, the Banks and the Administrative Agent
have agreed, upon the terms and conditions specified herein, to amend the Credit
Agreement as hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Company, the Banks and the
Administrative Agent hereby agree as follows:
SECTION 1. Amendments to Section 1.01 of the Credit Agreement.
(a) The definitions of the term "Consolidated Net Income" and
contained in Section 1.01 of the Credit Agreement is hereby amended in its
entirety to read as follows:
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"'Consolidated Net Income' means, for any period, the net
income of the Company and its Subsidiaries for such period (taken as a
cumulative whole), determined on a consolidated basis in accordance
with GAAP and adjusted to exclude (a) net after-tax extraordinary gains
or losses, (b) restructuring charges, and (c) the cumulative effect of
any changes in accounting principles.
(b) The following defined terms are hereby added to Section
1.01 of the Credit Agreement:
(i) "Applicable Percentage" means, for any day, (a) with
respect to any Eurodollar Loan, the applicable percentage set
forth below under the caption "Eurodollar Spread" and (b) with
respect to the Facility Fee, the applicable percentage set
forth below under the caption "Facility Fee Rate", in each
case determined by reference to the highest level applicable
based upon the ratings by S&P and Moody's in effect on such
date for the Index Debt:
Level 1 Level 2 Level 3 Level 4
------- ------- ------- -------
Ratings >=BBB and >=BBB- and >=BB+ and <BB+ or
(S&P/Moody's) >=Baa2 >=Baa3 >=Ba1 <Ba1
- ------------- -------- -------- ------- -----
Eurodollar Spread 1.00% 1.25% 1.375% 1.50%
Facility Fee Rate 0.25% 0.25% 0.375% 0.50%
For purposes of the foregoing, (i) if either Moody's or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this paragraph), then
such rating agency shall be deemed to have established a rating below
BB+ or Ba1, as the case may be; (ii) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt
shall fall within different levels, the Applicable Percentage shall be
based on the lower of the two ratings; and (iii) if the ratings
established or deemed to have been established by Moody's or S&P for
the Index Debt shall be changed (other than as a result of a change in
the rating system of Moody's or S&P), such change shall be effective as
of the date on which it is first announced by the applicable rating
agency. Each change in the Applicable Percentage shall apply for
purposes of determining interest on the outstanding Eurodollar Loans
and the Facility Fee during the period commencing on the effective date
of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Moody's
or S&P shall change, or if either such rating agency shall cease to be
in the business of rating corporate debt obligations, the Company and
the Banks shall negotiate in good faith to amend this definition to
reflect such changed rating system or the absence of ratings from such
rating agency and, pending the
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effectiveness of such amendment, the Applicable Percentage shall be
determined by reference to the rating most recently in effect prior to
such change or cessation.
(ii) "Consolidated EBITDA" means, in respect of any fiscal
quarter, the sum of (a) Consolidated Net Income for such fiscal quarter
and (b) the amount of all Interest Expense, taxes paid during such
fiscal quarter, depreciation and amortization allowances and other
non-cash expenses of the Company and its Subsidiaries, as determined on
a consolidated basis in accordance with GAAP, but in the case of clause
(b) only to the extent deducted in the determination of Consolidated
Net Income for such fiscal quarter.
(iii) "Interest Expense" means, with respect to any fiscal
quarter, without duplication, the following (in each case, eliminating
all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the
Company and its Subsidiaries in accordance with GAAP): all interest in
respect of Debt of the Company and its Subsidiaries (including imputed
interest on Capital Lease Obligations) paid in cash during, and
deducted in determining Consolidated Net Income for, such fiscal
quarter.
(iv) "Third Amendment" means the Agreement and Third Amendment
to Competitive Advance and Revolving Credit Facility Agreement
(Facility A) dated as of November 2, 1999 among the Company, the Banks
party thereto and the Administrative Agent.
(v) "Third Amendment Execution Date" means the date the Third
Amendment has been executed by all the parties thereto.
(c) The defined term "Utilization Fees" and the definition
thereof is hereby deleted from Section 1.01 of the Credit Agreement.
SECTION 2. Amendments to Article II of the Credit Agreement.
(a) Section 2.07 of the Credit Agreement is hereby amended in its entirety to
read as follows:
"SECTION 2.07. Fees.
(a) The Company agrees to pay in immediately available funds
to the Administrative Agent for the account of each Bank, through the
Administrative Agent, (i) on each March 31, June 30, September 30 and
December 31 commencing December 31, 1999 from the Third Amendment
Execution Date to the date on which the Commitment of such Bank has
been terminated and (ii) on the Maturity Date and on any other date on
which the Commitment of such Bank has been terminated, facility fees
(each a "Facility Fee" and collectively, the "Facility
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Fees"), which shall accrue at the Applicable Percentage on the amount
of the Commitment of such Bank from time to time outstanding, whether
used, deemed used or unused, during the preceding quarter (or shorter
period commencing with the Third Amendment Execution Date and/or ending
with the Maturity Date); provided, however, if any Loans are
outstanding to any Bank after the Maturity Date then such Facility Fee
shall continue to accrue on the daily amount of such Bank's outstanding
Loans from and including the Maturity Date to but excluding the date
all such Loans are paid in full.
(b) Intentionally Omitted.
(c) All Facility Fees shall be computed by the Administrative
Agent on the basis of the actual number of days elapsed in a year of
360 days, and such computations, made in good faith, shall create a
rebuttable presumption that they are accurate. The Facility Fees due to
each Bank shall commence to accrue on the Execution Date and shall
cease to accrue on the earlier of the Maturity Date and the termination
of the Commitment of such Bank as provided herein.
(d) The Facility Fees due under this Section 2.07 shall be
paid on the date due, in immediately available funds, to the
Administrative Agent for distribution among the Banks.
(e) The Company agrees to pay to the Administrative Agent the
fees as provided in the Agent's Fee Letter.
(f) Notwithstanding the foregoing, in no event shall any Bank
be permitted to receive any compensation hereunder constituting
interest in excess of the Highest Lawful Rate.".
(b) Section 2.09(a) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(a) Subject to the provisions of Section 2.09(d) and Section
2.10, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal to (i) in the case
of each Eurodollar Committed Loan, the lesser of (A) the IBO Rate for
the Interest Period in effect for such Borrowing plus the Applicable
Percentage in effect for such Loans from time to time and (B) the
Highest Lawful Rate, and (ii) in the case of each Eurodollar
Competitive Loan, the lesser of (A) the IBO Rate for the Interest
Period in effect for such Borrowing plus the Margin offered by the Bank
making such Loan and accepted by a Borrower pursuant to Section 2.03
and (B) the Highest Lawful Rate.".
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SECTION 3. Amendments to Article V. Article V of the Credit
Agreement is hereby amended as follows:
(a) The penultimate sentence of Section 5.01(a) is hereby
amended in its entirety to read as follows:
"Together with each delivery of financial statements required
by clauses (i) and (ii) above, the Company will deliver to each Bank
(y) schedules and/or computations demonstrating that the Company is in
compliance with its covenants in Sections 5.02(a), 5.02(b), 5.02(c),
5.02(g) and 5.02(j) or reflecting any noncompliance therewith as at the
applicable date and (z) an Officer's Certificate stating that there
exists no Event of Default or Default, or, if any Event of Default or
Default, stating the nature thereof, the period of existence thereof
and what action the Company or any other Borrower has taken or proposes
to take with respect thereto.".
(b) Section 5.02(a) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(a) Net Worth. The Company will not permit Net Worth at any
time to be less than the sum of (a) $2,500,000,000, plus (b) 50% of
Consolidated Net Income (if positive) for each fiscal quarter ending
during the period from January 1, 1999 to the end of its most recently
completed fiscal quarter, plus (c) 100% of the net proceeds received by
the Company on or after January 1, 1999 from all shares, rights to
purchase, warrants, options, participations or other equivalents of the
Company's equity, including all common stock and preferred stock.".
(c) Section 5.02(b) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(b) Debt. (i) The Company will not permit the ratio of
Consolidated Debt to Total Capitalization at any time to be greater
than .60 to 1.0.
(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) plus (B) Assured Obligations of its
Subsidiaries to exceed 20% of Net Worth.".
(d) Section 5.02 of the Credit Agreement is hereby amended to
add the following as Section 5.02(j):
"(j) EBITDA. The Company will not permit the ratio of
Consolidated EBITDA to Interest Expense at any time to be less than
2.75 to 1.0, calculated at the
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end of each fiscal quarter for such fiscal quarter and the immediately
preceding three fiscal quarters.".
SECTION 4. The Credit Agreement is hereby amended to delete
all references to the term "Utilization Fees".
SECTION 5. Conditions of Effectiveness. This Amendment shall
become effective when, and only when the following conditions shall have been
fulfilled:
(a) the Company, the Administrative Agent and the Majority
Banks shall have executed a counterpart hereof and delivered the same to the
Administrative Agent or, in the case of any Bank as to which an executed
counterpart hereof shall not have been so delivered, the Administrative Agent
shall have received written confirmation by telecopy or other similar writing
from such Bank of execution of a counterpart hereof by such Bank; and
(b) the Administrative Agent shall have received from the
Company a certificate of the Secretary or Assistant Secretary of the Company
certifying that attached thereto is (i) a true and complete copy of the general
borrowing resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of the Credit Agreement, as amended hereby,
and (ii) the incumbency and specimen signature of each officer of the Company
executing this Amendment.
SECTION 6. Representations and Warranties True; No Default or
Event of Default. The Company hereby represents and warrants to the
Administrative Agent, the Co-Agents and the Banks that after giving effect to
the execution and delivery of this Amendment: (a) the representations and
warranties set forth in the Credit Agreement are true and correct on the date
hereof as though made on and as of such date; provided, however, that for
purposes of this Section 6, the reference in the first sentence of Section 4.07
to the Company Financials shall be a reference to the consolidated financial
statements of the Company and its Subsidiaries most recently delivered to the
Administrative Agent and the Banks by the Company pursuant to Section 5.01(a)(i)
or 5.01(a)(ii), as the case may be, and (b) no event has occurred and is
continuing that constitutes either a Default or an Event of Default.
SECTION 7. Reference to the Credit Agreement and Effect on the
Other Documents Executed Pursuant to the Credit Agreement.
(a) Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement," "hereunder," "herein," "hereof" or
words of like import shall mean and be a reference to the Credit Agreement, as
amended hereby.
(b) Upon the effectiveness of this Amendment, each reference
in the documents and agreements delivered or to be delivered pursuant to the
Credit Agreement shall mean and be a reference to the Credit Agreement, as
amended hereby.
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(c) Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "Consolidated Net Income" shall mean and be a
reference to such term as amended hereby.
(d) The Credit Agreement and other documents and agreements
delivered pursuant to the Credit Agreement, and modified by the amendments
referred to above, shall remain in full force and effect and are hereby ratified
and confirmed.
SECTION 8. Execution in 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 to be an original and all of which taken together shall constitute but
one and the same instrument.
SECTION 9. GOVERNING LAW; BINDING EFFECT. THIS AMENDMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE
ADMINISTRATIVE AGENT, THE CO-AGENTS, THE BANKS AND THE RETIRING BANKS AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS.
SECTION 10. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
SECTION 11. ENTIRE AGREEMENT. THE CREDIT AGREEMENT (INCLUDING
THE EXHIBITS AND SCHEDULES HERETO), AS AMENDED HEREBY, THE BORROWING SUBSIDIARY
COUNTERPARTS, IF ANY, THE ASSIGNMENT AND ACCEPTANCES, IF ANY, AND THE AGENT'S
FEE LETTER EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE COMPANY, THE
ADMINISTRATIVE AGENT, THE CO-AGENTS, THE BANKS AND THE RETIRING BANKS RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ALL PRIOR PROPOSALS,
AGREEMENTS AND UNDERSTANDINGS RELATING TO SUCH SUBJECT MATTER.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed effective as of the date first stated herein, by their
respective officers thereunto duly authorized.
SERVICE CORPORATION INTERNATIONAL
By:
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Todd A. Matherne
Senior Vice President and Treasurer
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THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
-----------------------------
Name:
Title:
FACILITY A
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BANK:
ABN AMRO BANK N.V.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $15,000,000
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BANK:
BANK OF AMERICA, N.A.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $30,000,000
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BANK:
THE BANK OF NEW YORK
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $15,000,000
FACILITY A
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BANK:
BANK ONE, TEXAS, N.A.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $20,000,000
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BANK:
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $9,000,000
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BANK:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
f/k/a TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $44,000,000
FACILITY A
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BANK:
CITIBANK, N.A.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $25,500,000
FACILITY A
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BANK:
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $21,000,000
FACILITY A
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BANK:
CREDIT LYONNAIS NEW YORK BRANCH
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $20,000,000
FACILITY A
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BANK:
ROYAL BANK OF CANADA
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $25,500,000
FACILITY A
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BANK:
SOCIETE GENERALE
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $25,500,000
FACILITY A
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BANK:
SUNTRUST BANK, ATLANTA
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $15,000,000
FACILITY A
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BANK:
UBS AG, STAMFORD BRANCH,
f/k/a UNION BANK OF SWITZERLAND
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $25,500,000
FACILITY A
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BANK:
WESTPAC BANKING CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Commitment: $9,000,000
FACILITY A