AMENDMENT NO. 1
This Amendment No. 1 dated as of February 19, 1998 ("Agreement") is among
Equity Corporation International, a Delaware corporation ("Borrower"), the
banks party to the Credit Agreement described below ("Banks"), and NationsBank
of Texas, N.A., as Agent for the Banks ("Agent").
INTRODUCTION
A. The Borrower, Agent and the Banks are parties to the Amended and Restated
Credit Agreement dated as of September 2, 1997 (as the same may be amended,
modified or supplemented from time-to-time, the "Credit Agreement").
B. The Borrower, the Agent and the Banks wish to amend certain provisions
contained in the Credit Agreement.
THEREFORE, the Borrower, the Agent and the Banks hereby agree as follows:
Section 1. Definitions; References. Unless otherwise defined in this
Agreement, each term used in this Agreement which is defined in the Credit
Agreement has the meaning assigned to such term in the Credit Agreement.
Section 2. Amendments. The Credit Agreement shall be amended as follows:
(a) Definition of Credit Documents. The definition of "Credit Documents"
contained in Section 1.01 shall be amended by deleting the phrase "Pledge
Agreement" and replacing it with the phrase "Pledge Agreements".
(b) Definition of Restricted Payments. The definition of "Restricted
Payments" contained in Section 1.01 shall be deleted and replaced with the
following:
"Restricted Payment" means (a) the declaration or making by the Borrower
or any of its Subsidiaries of any dividends or other distributions (in
cash, property, or otherwise) on, or any payment for the purchase,
redemption or other acquisition of, any shares of any capital stock (or
other ownership interests) of such Person, other than dividends payable in
such Person's stock or other ownership interests, as applicable, (b) the
making by the Borrower or any of its Subsidiaries of any payment
(scheduled or otherwise) in respect of Subordinated Debt, whether for
principal, interest, fees, indemnities or any other amount (except that
the conversion of any Subordinated Debt into common stock of the Borrower
or the issuance by the Borrower of shares of its common stock in exchange
for the extinguishment of amounts owing in respect of Subordinated Debt
shall not constitute a "Restricted Payment"), and (c) any defeasance or
covenant defeasance by the Borrower or any of its Subsidiaries in respect
of Subordinated Debt of such Person.
(c) Definition of Subordinated Debt. The definition of "Subordinated Debt"
contained in Section 1.01 shall be deleted and replaced with the following new
definition:
"Subordinated Debt" means (a) the Subordinated Notes and (b) all other
Debt of the Borrower that (i) is debt for borrowed money, (ii) is
unsecured, (iii) has no recourse to any of the Subsidiaries of the
Borrower (whether through a guaranty executed by any such Subsidiary, a
pledge of assets by such Subsidiary or otherwise), and (iv) is
subordinated on terms that are acceptable to the Agent and the Majority
Banks.
(d) New Definitions. The following new definitions are added to Section 1.01
in alphabetical order:
"Indenture" means the Indenture dated February 25, 1998 providing for the
issuance by the Borrower of the Subordinated Notes.
"Subordinated Notes" means the 4.5% Convertible Subordinated Debentures
due 2004 issued by the Borrower (including any such Convertible
Subordinated Debentures issued as a result of the exercise of any over-
allotment option) in an aggregate principal amount not to exceed
$143,750,000.
(e) Section 3.02. Section 3.02 is amended by deleting the phrase "Pledge
Agreement" in clause (a)(i) and replacing it with the phrase "Pledge
Agreements".
(f) Section 6.02. Section 6.02 is amended by deleting the amount
"$125,000,000" in clause (i) of such Section and replacing it with the amount
"$143,750,000."
(g) Section 6.05. Section 6.05 is amended by deleting such Section and
replacing it with the following:
Section 6.05. Restricted Payments. Neither the Borrower nor any of its
Subsidiaries shall make any Restricted Payments except that (a) the
Subsidiaries of the Borrower may make Restricted Payments to the Borrower
and other Subsidiaries of the Borrower, (b) so long as no Default exists
or would result from the making of such Restricted Payment, the Borrower
may (i) pay dividends to its shareholders in respect of its capital
stock, (ii) pay scheduled payments of interest and principal in respect of
Subordinated Debt, and (iii) redeem the Subordinated Notes with either
additional Subordinated Debt or equity, and (c) so long as no Default
exists or would result from the making of such Restricted Payment, the
Subsidiaries of the Borrower may make Restricted Payments to an Unrelated
Person (as defined in Section 6.10) and may purchase, redeem or otherwise
acquire any shares of capital stock or other ownership interests of a
Subsidiary held by such Unrelated Person.
(h) Section 6.10. Section 6.10 is amended by adding the following new
sentence to the end of Section 6.10:
Notwithstanding any of the foregoing to the contrary, nothing in this
Section 6.10 shall prohibit a Person that is neither the Borrower nor a
Subsidiary of the Borrower (such Person being an "Unrelated Person") from
owning a portion of the capital stock of any Subsidiary of the Borrower
except ECI Services, Inc., ECI Cemetery Services, Inc. and ECI Capital
Corporation ("ECI Entity") if such ownership by such Unrelated Party is,
in the good faith determination of the Borrower, necessary or desirable to
enable the Borrower or one of its Subsidiaries to maintain its ownership
interest in the ECI Entity, or enable the ECI Entity to continue to own
and legally operate its business or continue to legally conduct such
business under the name currently in use.
(i) Section 6.14. The following new Section 6.14 is added to the Credit
Agreement:
Section 6.14. Subordinated Debt. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or
consent to any amendment, modification or supplement of), any document,
agreement or instrument evidencing, or existing in connection with, the
Subordinated Debt (or any replacements, substitutions or renewals
thereof), and including, without limitation, the Subordinated Notes and
the Indenture, or make any payment required as a result of such an
amendment, modification or supplement, where such amendment, modification
or supplement provides for the following or which has any of the following
effects:
(i) increases the overall principal amount of the Subordinated Debt or
increases the amount of any single scheduled installment of principal or
interest;
(ii) shortens or accelerates the date upon which any installment of principal
or interest becomes due or adds any additional mandatory redemption
provisions;
(iii) shortens the final maturity date of the Subordinated Debt or otherwise
accelerates the amortization schedule with respect thereto;
(vi) amends or modifies any financial or negative covenant (or covenant which
prohibits or restricts the Borrower or a Subsidiary of the Borrower from
taking certain actions) in a manner which is more onerous or more restrictive
to the Borrower (or any Subsidiary of the Borrower) or which is otherwise
materially adverse to the Borrower or the Banks or, in the case of adding
covenants, which places additional restrictions on the Borrower (or a
Subsidiary of the Borrower) or which requires the Borrower or any such
Subsidiary to comply with more restrictive financial ratios or which requires
the Borrower to better its financial performance from that set forth in the
existing financial covenants;
(vii) amends, modifies or adds any affirmative covenant in a manner which,
when taken as a whole, is materially adverse to the Borrower or the Banks; or
(viii) amends or modifies in any manner either (A) the definitions of "Change
of Control" or "Senior Secured Indebtedness" contained in the Indenture or (B)
any of the subordination provisions contained in Article V of the Indenture.
Section 3. Representations and Warranties. The Borrower represents and
warrants to the Agent and the Banks that:
(a) The representations and warranties set forth in the Credit Agreement and
in the other Credit Documents are true and correct in all material respects as
of the date of this Agreement;
(b) The execution, delivery and performance of this Agreement are within the
corporate power and authority of the Borrower and have been duly authorized by
appropriate proceedings and (ii) this Agreement constitutes a legal, valid,
and binding obligation of the Borrower enforceable in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the rights of creditors generally and
general principles of equity; and
(c) As of the effectiveness of this Agreement, no Default or Event of Default
has occurred and is continuing.
Section 4. Effectiveness. This Agreement shall become effective as provided
herein upon satisfaction of the following conditions precedent:
(a) the Borrower, the Agent and the Banks shall have duly and validly
executed originals of this Agreement;
(b) the Agent and the Banks shall have received duly executed originals in
form and substance satisfactory to the Agent and the Banks of (i) the Pledge
Agreement in the form of the attached Exhibit A ("Pledge Agreement") providing
for the pledge by the Borrower of 51% of the outstanding shares of ECI
Services, Inc. and 51% of the outstanding shares of ECI Cemetery Services,
Inc. (collectively, the "Pledged Shares"); (ii) stock certificates evidencing
the Pledged Shares together with stock powers with respect to such Pledged
Shares executed in blank; (iii) any UCC-1 financing statements required in
connection with the perfection of the security interests granted under the
terms of the Pledge Agreement executed by the Borrower; (iv) (A) certified
copies of the resolutions of the Board of Directors of the Borrower approving
the Pledge Agreement and each other agreement executed in connection
therewith, and of the articles or certificate of incorporation and bylaws of
the Borrower (or a certification that such articles or certificate of
incorporation or bylaws have not been amended or modified since the date of
the Credit Agreement), and all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement and
each other agreement executed in connection herewith, and (B) certificates of
good standing, existence and authority for each of the Borrower; and (v) a
certificate of the Secretary or an Assistant Secretary of the Borrower dated
as of the date of this Agreement certifying the names and true signatures of
officers of the Borrower authorized to sign this Agreement and the other
Credit Documents executed in connection herewith; and
(c) the Agent and the Banks shall have received certified copies of the
Indenture and the Offering Memorandum executed and delivered in connection
with the issuance of the Convertible Subordinated Debentures.
Section 5. Choice of Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas.
Section 6. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original.
THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THE CREDIT
AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED as of the 19th day of February, 1998.
BORROWER:
EQUITY CORPORATION INTERNATIONAL
By:
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Name:
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Title:
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AGENT:
NATIONSBANK OF TEXAS, N.A., as Agent
By:
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Name:
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Title:
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BANKS:
NATIONSBANK OF TEXAS, N.A.
By:
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Name:
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Title:
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SOCIETE GENERALE,
SOUTHWEST AGENCY
By:
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Name:
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Title:
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THE SUMITOMO BANK, LIMITED
By:
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Name:
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Title:
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By:
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Name:
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Title:
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▇▇▇▇▇ FARGO BANK, (TEXAS)
NATIONAL ASSOCIATION
By:
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Name:
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Title:
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CIBC INC.
By:
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Name:
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Title:
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TORONTO-DOMINION (TEXAS), INC.
By:
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Name:
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Title:
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BANK OF AMERICA TEXAS, N.A.
By:
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Name:
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Title:
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CORESTATES BANK, N.A.
By:
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Name:
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Title:
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COOPERATIVE CENTRALE RAIFFEISEN
BOERENLEENBANK, N.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:
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Name:
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Title:
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By:
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Name:
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Title:
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THE BANK OF TOKYO-MITSUBISHI, LTD.,
HOUSTON AGENCY
By:
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Name:
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Title:
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BANQUE PARIBAS
By:
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Name:
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Title:
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