<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 1997
REGISTRATION NO. 333-12319
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
POST-EFFECTIVE AMENDMENT NO. 6
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------------
SERVICE EXPERTS, INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 7623 62-1639453
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
111 WESTWOOD PLACE, SUITE 420
BRENTWOOD, TENNESSEE 37027
(615) 371-9990
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
ALAN R. SIELBECK
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND PRESIDENT
SERVICE EXPERTS, INC.
111 WESTWOOD PLACE, SUITE 420
BRENTWOOD, TENNESSEE 37027
(615) 371-9990
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
---------------------
COPY TO:
J. CHASE COLE, ESQ.
WALLER LANSDEN DORTCH & DAVIS,
A PROFESSIONAL LIMITED LIABILITY COMPANY
2100 NASHVILLE CITY CENTER
511 UNION STREET
NASHVILLE, TENNESSEE 37219
(615) 244-6380
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
---------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
---------------------
THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933.
================================================================================
<PAGE> 2
PROSPECTUS
$50,000,000
[SERVICE EXPERTS LOGO]
COMMON STOCK, COMMON STOCK WARRANTS AND DEBT SECURITIES
---------------------
This Prospectus relates to the offer by Service Experts, Inc., a Delaware
corporation (the "Company"), of shares of the Company's Common Stock, $.01 par
value per share ("Common Stock"), warrants to purchase Common Stock ("Common
Stock Warrants") and the shares of Common Stock issuable thereunder upon the
exercise of such Common Stock Warrants, or debt securities ("Debt Securities"),
and the shares of Common Stock issuable thereunder upon the conversion thereof,
with a collective aggregate offering price of up to $50,000,000 on terms to be
determined at the time of any such offering. The Company may offer Common Stock,
Common Stock Warrants or Debt Securities (collectively, "Securities") from time
to time in connection with the acquisitions of the assets or securities of
heating, ventilating and air conditioning ("HVAC") service and replacement
businesses. The consideration for the acquisition of the assets or securities of
such entities may consist of cash, the assumption of liabilities, Securities, or
any combination thereof, as determined pursuant to negotiations between the
Company and the sellers of the assets or stock to be acquired.
Common Stock issued pursuant to this Prospectus and any applicable
supplement to this Prospectus (a "Prospectus Supplement") or post-effective
amendment (a "Post-Effective Amendment") to acquire the assets or stock of
individual HVAC service and replacement businesses, as described above, may be
reoffered pursuant hereto by the holders thereof (the "Selling Stockholders")
from time to time in transactions on the open market, in negotiated
transactions, through the writing of options on Securities, or a combination of
such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices relating to the prevailing market
prices, or negotiated prices. The Selling Stockholders may effect such
transactions by selling the Common Stock to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or the purchasers of shares for whom
such broker-dealer may act as agent or to whom they may sell as principal or
both.
The Company will not receive any part of the proceeds from the resale by
the Selling Stockholders of any Common Stock thereof pursuant hereto. The
Company will bear all expenses (other than selling discounts and commissions and
fees and expenses of the Selling Stockholders) in connection with the
registration of the Common Stock being reoffered by the Selling Stockholders.
The terms for the issuance of Securities may include provisions for the
indemnification of the Selling Stockholders for certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
---------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" APPEARING ON PAGES 3 THROUGH 6.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is August , 1997
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-4, including
amendments thereto, if any, with respect to the Securities (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission"). This
Prospectus and any accompanying Prospectus Supplement do not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. Statements contained in this Prospectus and any accompanying
Prospectus Supplement concerning the contents of any contract or other document
referred to are not necessarily complete and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement or as previously filed with the Commission and
incorporated herein by reference. For further information with respect to the
Company and the Securities, reference is made to the Registration Statement,
exhibits and schedules. A copy of the Registration Statement may be inspected by
anyone without charge at the Commission's principal office at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Commission upon payment of certain fees
prescribed by the Commission.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, as well as the following Commission Regional Offices:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material also can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission, and the address of such site is
http://www.sec.gov. The Company's Common Stock is listed on the New York Stock
Exchange (the "NYSE"), and such reports, proxy statements and other information
can also be inspected at the offices of the NYSE, located at 20 Broad Street,
New York, New York 10005, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated herein by reference as of the dates thereof:
(1) Annual Report on Form 10-K for the year ended December 31, 1996;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31,
1997;
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
(4) Current Report on Form 8-K dated April 9, 1997; and
(5) The description of the Common Stock contained in the Registration
Statement on Form 8-A, filed pursuant to Section 12 of the Exchange Act on
May 23, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference herein (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference in such documents).
Requests for such copies should be directed to Anthony M. Schofield, Service
Experts, Inc., 111 Westwood Place, Suite 420, Brentwood, Tennessee 37027
(telephone number 615-371-9990).
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<PAGE> 4
BUSINESS
GENERAL
The Company is one of the leading providers of residential HVAC services
and replacement equipment in the United States, and management believes that the
Company will continue to be a leading consolidator of the fragmented HVAC
service and replacement industry. The Company currently operates Service Centers
across the country. The Service Centers install, service and maintain central
air conditioners, furnaces and heat pumps, primarily in existing homes. The
Company focuses on the service and replacement segment of the HVAC industry
rather than the new construction segment because management believes that the
service and replacement segment offers higher margins and exposes the Company to
less credit risk.
RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus, the following risk factors should be considered carefully in
evaluating an investment in the Securities offered hereby and any accompanying
Prospectus Supplement or Post-Effective Amendment, as applicable.
This discussion also identifies important cautionary factors that could
cause the Company's actual results to differ materially from those expressed in
forward-looking statements included or incorporated by reference herein by, or
on behalf of, the Company. In particular, the Company's forward-looking
statements included or incorporated by reference in this Prospectus, including
those regarding the successful integration of the businesses of the Company's
subsidiaries (the "Subsidiaries"), the effective implementation of the Company's
strategy, the availability of additional HVAC businesses for acquisition, the
adequacy of the Company's capital resources and other statements regarding
trends relating to the HVAC industry and various revenue and expense items,
could be affected by a number of risks and uncertainties including those
described below.
The term "Service Centers" as used herein refers to HVAC service and
replacement businesses operated by the Company.
LIMITED COMBINED OPERATING HISTORY
The Company was incorporated in March 1996 and, simultaneously with the
closing of the Company's initial public offering of Common Stock on August 21,
1997 (the "IPO"), consummated the acquisition of 12 HVAC service and replacement
businesses and Contractor Success Group, Inc. ("CSG") (collectively, the
"Predecessor Companies") in exchange for shares of Common Stock and cash (the
"Combination"). Since the IPO, the Company has acquired numerous additional
Service Centers. Because of the limited operating history of the Company as a
combined entity, there can be no assurance that the Company will be able to
integrate successfully the businesses of the Subsidiaries or to operate
profitably. There can be no assurance that the Company's management will be able
to manage effectively the combined entity and implement effectively the
Company's operating and acquisition strategies. Failure to integrate
successfully the Subsidiaries and to implement successfully the Company's
operating and acquisition strategies could have a material adverse effect on the
Company's net revenue and earnings.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY AND FINANCING
The success of the Company's acquisition strategy will depend on a number
of factors, including (i) the Company's ability to locate and successfully
negotiate the acquisition of HVAC businesses and to successfully integrate the
operations of acquired Service Centers into the Company's operations and (ii)
the availability of adequate financing to develop or acquire additional HVAC
businesses. In addition, the Company competes with other HVAC and residential
service companies for desirable acquisition candidates. Some of these companies
may have access to capital, personnel and other resources equal to or greater
than those of the Company. The Company expects that its capital needs over the
next several years, primarily for acquisitions, will exceed capital generated
from operations. The Company plans to incur indebtedness and to issue, from time
to time, additional
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<PAGE> 5
debt or equity securities, including the issuance of Securities in connection
with the types of transactions identified on the cover page of this Prospectus.
In the event that the Common Stock does not maintain a sufficient market value,
or potential acquisition candidates are unwilling to accept Common Stock as part
of the consideration for the sale of their businesses, the Company may be
required to utilize more of its cash resources, if available, in order to
maintain its acquisition program. There can be no assurance that the Company's
acquisition strategy will be successful, that modifications to the Company's
strategy will not be required, that the Company will be able to manage
effectively and enhance the profitability of additional Service Centers or that
the Company will be able to obtain adequate financing on reasonable terms to
develop or acquire additional HVAC service businesses.
RISKS ASSOCIATED WITH DEVELOPMENT, IMPLEMENTATION, AND INTEGRATION OF OPERATING
SYSTEMS AND POLICIES
As a rapidly growing provider of HVAC services, the Company is faced with
the development, implementation and integration of Company-wide policies and
systems related to its operations. Each of the Subsidiaries and companies to be
acquired may need, to some extent, to modify or adopt certain systems and
policies they have utilized historically in order to implement the Company's
systems and policies, which management is continuing to formulate. The Company
is implementing a uniform general ledger system and electronic mail system at
each of the Service Centers. The Company plans to implement and integrate
certain other information and operating systems and procedures for the Service
Centers including, but not limited to, uniform purchasing programs and certain
centralized marketing programs. The Company may experience delays, complications
and expenses in implementing, integrating and operating such systems, any of
which could have a material adverse effect on the Company's operations, net
revenue and earnings.
COMPETITION
The HVAC service and replacement industry is highly competitive. The
Company's Service Centers compete with other full-service HVAC businesses
primarily on the basis of quality, reliability, customer service and price.
Several companies have been organized to pursue the acquisition of businesses
that offer HVAC services. Some of these competitors have access to capital,
personnel, marketing and technological resources that are equal to or greater
than those of the Company. In certain markets, the Company competes with utility
companies which have access to capital, personnel, marketing and technological
resources that are equal to or greater than those of the Company. Because of the
fragmented nature of the industry and relatively low barriers to entry,
additional competitors, including companies that offer other home improvement
services in addition to HVAC services, may emerge with greater access than the
Company to capital, personnel and technological resources. There can be no
assurance that the Company will be able to compete successfully or that such
competition will not make it more difficult to acquire HVAC businesses on terms
beneficial to the Company.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is dependent upon the continued services of the
Company's senior management, particularly upon its Chairman of the Board, Chief
Executive Officer and President, Alan R. Sielbeck. The loss of the services of
Mr. Sielbeck or any of the Company's senior management would have a material
adverse effect upon the Company's business and prospects.
LABOR AVAILABILITY
The timely provision of high-quality service by the Service Centers
requires an adequate supply of skilled labor. In addition, the operating costs
of each Service Center may be adversely affected by high turnover in skilled
positions. Accordingly, the Company's ability to increase productivity and net
earnings is limited to a degree by its ability to employ the skilled laborers
necessary to meet the Company's service requirements. There can be no assurance
that the Company will be able to maintain an adequate skilled labor force
necessary to operate efficiently its Services Centers or that the Company's
labor expenses will not increase as a result of a shortage in the supply of
skilled workers.
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SEASONAL AND CYCLICAL NATURE OF THE INDUSTRY
The HVAC service industry generally experiences increased demand during the
summer and winter months. The Company may, in certain periods, be affected by
these seasonal trends. The residential HVAC service and replacement industry
historically has been highly cyclical and is influenced by many of the same
national and regional economic and demographic factors which affect demand for
durable consumer goods, including consumer confidence, interest rates,
availability of financing, regional population and employment trends, and
general economic conditions. There can be no assurance that the HVAC service and
replacement industry will not experience future declines or that such declines
will not have a material adverse effect on the Company.
CONTROL BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
As of August 27, 1997, directors, officers and 5% stockholders of the
Company beneficially owned approximately 16.5% of the outstanding Common Stock.
Accordingly, these persons have substantial influence over the affairs of the
Company, including the ability to influence the election of directors and other
matters requiring stockholder approval.
REGULATION
HVAC systems are subject to various environmental statutes and regulations,
including, but not limited to, laws and regulations implementing the Clean Air
Act, as amended (the "Clean Air Act"), relating to minimum energy efficiency
standards of HVAC systems and the production, servicing and disposal of certain
ozone depleting refrigerants used in such systems. In connection with the entry
into new markets, the Company may become subject to compliance with additional
regulations, and there can be no assurance that the regulatory environment in
which the Company operates will not change significantly in the future.
Various local, state and federal laws and regulations, including those
implementing the Clean Air Act, impose licensing standards on technicians who
service heating and air conditioning units. While the installers and technicians
employed by the Service Centers are duly certified by applicable local, state
and federal agencies and have been able to meet or exceed such standards to
date, there can be no assurance that they will be able to meet future standards.
In some states, warranties provided for in the Company's service agreements
may be deemed insurance contracts by applicable state insurance regulatory
agencies thereby subjecting the Company and the service agreements to the
insurance laws and regulations of such state.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Restated Certificate of Incorporation
("Restated Certificate") and Bylaws and Delaware law may make a change in the
control of the Company more difficult to effect, even if a change in control
were in the stockholders' interest. Section 203 of the Delaware General
Corporation Law would prevent an "interested stockholder" (defined in Section
203, generally, as a person owning 15% or more of the Company's outstanding
voting stock) from engaging in a "business combination" (as defined in Section
203) with the Company for three years following the date such person became an
interested stockholder unless certain conditions, including approval by the
Company's Board of Directors, are met. The Company's Restated Certificate and
Bylaws include certain super-majority voting requirements. The Restated
Certificate also allows the Board to determine the terms of preferred stock
which may be issued by the Company without approval of the holders of the Common
Stock. The ability of the Company to issue preferred stock in this manner could
enable the Board to prevent changes in management and control of the Company.
The Board of the Company is divided into three classes of directors, with
directors being elected for staggered three-year terms. Such staggered terms may
affect the ability of the holders of the Common Stock to change control of the
Company. In addition, certain provisions of the employment agreements between
the Company and the executive officers of the Company may make a change of
control more difficult. Pursuant to these employment agreements, upon a change
in control of the Company, each executive officer is to be paid as severance pay
such officer's base salary for the remaining term of the employment agreement.
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VOLATILITY OF MARKET PRICE
From time to time, there may be significant volatility in the market price
of the Common Stock. Quarterly operating results of the Company, changes in
earnings estimated by analysts, changes in general conditions in the economy or
the financial markets or other developments affecting the Company could cause
the market price of the Common Stock to fluctuate substantially. In addition, in
recent years the stock market has experienced extreme price and volume
fluctuations. This volatility has had a significant effect on the market prices
of securities issued by many companies for reasons unrelated to their operating
performance.
RATIO OF EARNINGS TO FIXED CHARGES(1)
Set forth below is the ratio of earnings to fixed charges for the Company
for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------- SIX MONTHS ENDED
1992 1993 1994 1995 1996 JUNE 30, 1997
---- ---- ---- ---- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges.......................... 1.37 1.64 4.29 5.84 19.35 20.27
</TABLE>
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(1) Because the Company has no shares of Preferred Stock outstanding, the ratio
of earnings to combined fixed charges and preferred stock dividends is
identical to the ratio of earnings to fixed charges for each period listed
above.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants independently or together with
any other Securities pursuant to any Prospectus Supplement or Post-Effective
Amendment, as applicable, and may be attached to or separate from such
Securities. Each series of Common Stock Warrants will be issued under a separate
warrant agreement or certificate (each, a "Warrant Agreement") to be entered
into between the Company and the warrant recipient or, if the recipients are
numerous, a warrant agent identified in the Prospectus Supplement or Post-
Effective Amendment, as applicable (the "Warrant Agent"). The Warrant Agent, if
engaged, will act solely as an agent of the Company in connection with the
Common Stock Warrants of such series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
Common Stock Warrants. Further terms of the Common Stock Warrants and the
applicable Warrant Agreements will be set forth in the Prospectus Supplement or
Post-Effective Amendment, as applicable.
The Prospectus Supplement or Post-Effective Amendment, as applicable, will
describe the terms of any Common Stock Warrants in respect of which this
Prospectus is being delivered, including, where applicable, the following: (a)
the title of such Common Stock Warrants; (b) the aggregate number of such Common
Stock Warrants; (c) the price or prices at which such Common Stock Warrants will
be issued; (d) the designation, number and terms of the shares of Common Stock
purchasable upon exercise of such Common Stock Warrants; (e) the designation and
terms of the other Securities with which such Common Stock Warrants are issued
and the number of such Common Stock Warrants issued with each such offered
Security; (f) the date, if any, on and after which such Common Stock Warrants
and the related Common Stock will be separately transferable; (g) the price at
which each share of Common Stock purchasable upon exercise of such Common Stock
Warrants may be purchased; (h) the date on which the right to exercise such
Common Stock Warrants shall commence and the date on which such right shall
expire; (i) the minimum or maximum amount of such Common Stock Warrants which
may be exercised at any one time; (j) information with respect to book-entry
procedures, if any; (k) a discussion of certain federal income tax
considerations; and (l) any other terms of such Common Stock Warrants, including
terms, procedures and limitations relating to the exchange and exercise of such
Common Stock Warrants.
DESCRIPTION OF DEBT SECURITIES
The Company may issue Debt Securities under one or more trust indentures
(each an "Indenture") to be executed by the Company and a specified trustee. The
terms of Securities will include those stated in an Indenture and those made a
part of an Indenture (before any supplements) by reference to the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indenture will be qualified
under the TIA.
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The following description sets forth certain anticipated general terms and
provisions of the Debt Securities to which any Prospectus Supplement or
Post-Effective Amendment, as applicable, may relate. The particular terms of the
Debt Securities offered by any Prospectus Supplement or Post-Effective
Amendment, as applicable (which terms may be different than those stated below)
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement or
Post-Effective Amendment, as applicable, relating to such Debt Securities.
Accordingly, for a description of the terms of a particular issue of Debt
Securities, reference must be made to both the Prospectus Supplement or
Post-Effective Amendment, as applicable, relating thereto and the following
description. A form of Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
GENERAL
The indebtedness represented by Debt Securities will be subordinated in
right of payment to the prior payment in full of the Senior Debt (as such term
is defined in the Indenture) of the Company. The Debt Securities will be issued
pursuant to an Indenture between the Company and a trustee.
Except as set forth in an Indenture and described in a Prospectus
Supplement or Post-Effective Amendment, as applicable, relating thereto, the
Debt Securities may be issued without limit as to aggregate principal amount, in
one or more series, secured or unsecured, in each case as established from time
to time in or pursuant to authority granted by a resolution of the Board of
Directors of the Company or as established in an Indenture. All Debt Securities
of one series need not be issued at the time and, unless otherwise provided, a
series may be reopened, without the consent of the holders of the Debt
Securities of such series, for issuance of additional Debt Securities of such
series.
The Prospectus Supplement or Post-Effective Amendment, as applicable,
relating to any series of Debt Securities being offered will contain the
specific terms thereof, including, without limitation:
(a) the title of such Debt Securities;
(b) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(c) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or (if applicable) the portion of the
principal amount of such Debt Securities which is convertible into Common
Stock, or the method by which any such portion shall be determined;
(d) if convertible, any applicable limitations on the ownership or
transferability of the Common Stock into which such Debt Securities are
convertible;
(e) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(f) the rate or rates (which may be fixed or variable), or the method
by which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(g) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the interest payment dates on
which any such interest will be payable, the regular record dates for such
interest payment dates, or the method by which any such date shall be
determined, the person to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(h) the place or places where the principal of (and premium, if any)
and interest, if any, on such Debt Securities will be payable, such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and notices or demands to or upon the Company in respect of such
Debt Securities and an Indenture may be served;
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(i) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of the Company, if the
Company is to have such an option;
(j) the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which, the price or prices at which and the terms and conditions
upon which such Debt Securities will be redeemed, repaid or purchased, as a
whole or in part, pursuant to such obligation;
(k) if other than U.S. dollars, the currency or currencies in which
such Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(l) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit
or units or composite currency or currencies) and the manner in which such
amounts shall be determined;
(m) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default (as defined in
an Indenture) or covenants set forth in an Indenture;
(n) any provisions for collateral security for repayment of such Debt
Securities;
(o) whether such Debt Securities will be issued in certificated and/or
book-entry form;
(p) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(q) the applicability, if any, of defeasance and covenant defeasance
provisions of an Indenture;
(r) the terms, if any, upon which such Debt Securities may be
convertible into Common Stock of the Company and the terms and conditions
upon which such conversion will be effected, including, without limitation,
the initial conversion price or rate and the conversion period;
(s) whether and under what circumstances the Company will pay
additional amounts as contemplated in an Indenture on such Debt Securities
in respect of any tax assessment or governmental charge and, if so, whether
the Company will have the option to redeem such Debt Securities in lieu of
making such payment; and
(t) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement or Post-Effective
Amendment, as applicable.
Except as set forth in an Indenture, an Indenture will not contain any
provisions that would limit the ability of the Company to incur indebtedness or
that would afford holders of Debt Securities protection in the event of a highly
leveraged or similar transaction involving the Company or in the event of a
change of control. Reference is made to the applicable Prospectus Supplement or
Post-Effective Amendment, as applicable, for information with respect to any
deletions from, modifications of or additions to the Events of Default or
covenants of the Company that are described below, including any addition of a
covenant or other provision providing event risk or similar protection.
MERGER, CONSOLIDATION OR SALE
It is expected that an Indenture will provide that the Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into, any other corporation, provided that (a)
either the
8
<PAGE> 10
Company shall be the continuing corporation, or the successor corporation (if
other than the Company) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets shall expressly
assume payment of the principal of (and premium, if any), and interest on, all
of the Debt Securities and the due and punctual performance and observance of
all of the covenants and conditions contained in an Indenture; (b) immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any subsidiary as a result thereof as
having been incurred by the Company or such subsidiary at the time of such
transaction, no Event of Default under an Indenture, and no event which, after
notice or the lapse of time, or both, would become such an Event of Default,
shall have occurred and be continuing; and (c) an officer's certificate and
legal opinion covering such conditions shall be delivered to the trustee.
COVENANTS
An Indenture will contain covenants requiring the Company to take certain
actions and prohibiting the Company from taking certain actions. The covenants
with respect to any series of Debt Securities will be described in the
Prospectus Supplement or Post-Effective Amendment, as applicable, relating
thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Indenture will describe specific "Events of Defaults" with respect to
any series of Debt Securities issued thereunder. Such "Events of Defaults" are
likely to include (with grace and cure periods): (i) default in the payment of
any installment of interest on any Debt Security of such series; (ii) default in
the payment of principal of (or premium, if any, on) any Debt Security of such
series at its maturity; (iii) default in making any required sinking fund
payment, if any, for any Debt Security of such series; (iv) default in the
performance or breach of any other covenant or warranty of the Company contained
in the Indenture (other than a covenant added to the Indenture solely for the
benefit of a series of Debt Securities issued thereunder other than such series)
that is continued for a specified period of days after written notice as
provided in the Indenture; (v) default in the payment of specified amounts of
indebtedness of the Company or any mortgage, indenture or other instrument under
which such indebtedness is issued or by which such indebtedness is secured, such
default having occurred after the expiration of any applicable grace period and
having resulted in the acceleration of the maturity of such indebtedness, but
only if such indebtedness is not discharged or such acceleration is not
rescinded or annulled; and (vi) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of the
Company or any significant subsidiary or the property of either.
If an Event of Default under an Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case, subject to the rights of the holder of Senior Debt, the applicable
trustee or the holders of not less than 25% of the principal amount of the
outstanding Debt Securities of that series will have the right to declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities or indexed securities, such portion of the principal amounts
as may be specified in the terms thereof) of all the Debt Securities of that
series to be due and payable immediately by written notice thereof to the
Company (and to the applicable trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to Debt Securities of
such series (or of all Debt Securities then outstanding under any Indenture, as
the case may be) has been made, but before a judgment or decree for payment of
the money due has been obtained by the applicable trustee, the holders of not
less than a majority in principal amount of outstanding Debt Securities of such
series (or of all Debt Securities then outstanding under an Indenture, as the
case may be) may rescind and annul such declaration and its consequences if (a)
the Company shall have deposited with the trustee all required payments of the
principal of (and premium, if any) and interest on the Debt Securities of such
series (or of all Debt Securities then outstanding under an Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
trustee and (b) all events of default, other than the non-payment of accelerated
principal (or specified portion thereof), with respect to Debt Securities of
such series (or of all Debt Securities then outstanding under an Indenture, as
the case may be) have been cured or waived as provided in such Indenture. An
Indenture also will provide that the holders of not less than a majority in
principal amount of the outstanding Debt Securities of any series (or of all
Debt Securities then outstanding under an Indenture, as the case may be) may
waive any past default with respect to such series and its
9
<PAGE> 11
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (y) in
respect of a covenant or provision contained in an Indenture that cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security affected thereby.
The trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under an Indenture unless such default
shall have been cured or waived; provided, however, that such trustee may
withhold notice to the holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal of
(or premium, if any) or interest on any Debt Security of such series or in the
payment of any sinking fund installment in respect of any Debt Security of such
series) if specified responsible officers of such trustee consider such
withholding to be in the interest of such holders.
An Indenture will provide that no holders of Debt Securities of any series
may institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, except in the cases of failure of the
trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the holders of not
less than 25% in principal amount of the outstanding Debt Securities of such
series, as well as an offer of indemnity reasonably satisfactory to it. This
provision will not prevent, however, any holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof.
Subject to provisions in an Indenture relating to its duties in case of
default, the trustee will not be under any obligation to exercise any of its
rights or powers under such Indenture at the request or direction of any holders
of any series of Debt Securities then outstanding under such Indenture, unless
such holders shall have offered to the trustee thereunder reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under an Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or of exercising any trust or power conferred upon the
trustee. However, the trustee may refuse to follow any direction which is in
conflict with any law or an Indenture, which may involve the trustee in personal
liability or which may be unduly prejudicial to the holders of Debt Securities
of such series not joining therein.
Within 120 days after the close of each fiscal year, the Company will be
required to deliver to the trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under an Indenture and, if so, specifying each such default and the
nature and status thereof.
MODIFICATION OF AN INDENTURE
It is anticipated that modifications and amendments of an Indenture may be
made by the Company and the trustee, with the consent of the holders of not less
than a majority in aggregate principal amount of each series of the outstanding
Debt Securities issued under an Indenture which are affected by the modification
or amendment, provided that no such modification or amendment may, without the
consent of each holder of such Debt Securities affected thereby, (a) change the
stated maturity date of the principal of (or premium, if any) or any installment
of interest, if any, on any such Debt Security; (b) reduce the principal amount
of (or premium, if any) or the interest, if any, on any such Debt Security or
the principal amount due upon acceleration of an Original Issue Discount
Security; (c) change the place or currency of payment of principal of (or
premium, if any) or interest, if any, on any such Debt Security; (d) impair the
right to institute suit for the enforcement of any such payment on or with
respect to any such Debt Security; (e) reduce the above stated percentage of
holders of Debt Securities necessary to modify or amend such Indenture; or (f)
modify the foregoing requirements or reduce the percentage of outstanding Debt
Securities necessary to waive compliance with certain provisions of an Indenture
or for waiver of certain defaults. A record date may be set for any act of the
holders with respect to consenting to any amendment.
The holders of not less than a majority in principal amount of outstanding
Debt Securities of each series affected thereby will have the right to waive
compliance by the Company with certain covenants in an Indenture.
An Indenture will contain provisions for convening meetings of the holders
of Debt Securities of a series to take permitted action.
10
<PAGE> 12
CONVERSION OF SECURITIES
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock will be set forth in the applicable Prospectus
Supplement or Post-Effective Amendment, as applicable, relating thereto. Such
terms will include whether such Debt Securities are convertible into Common
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or the Company or such conversion will be automatic, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Debt Securities.
SUBORDINATION
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Debt Securities will be subordinated to the extent provided in an Indenture
in right of payment to the prior payment in full of all Senior Debt. No payment
of principal or interest will be permitted to be made on Debt Securities at any
time if a default in Senior Debt exists that permits the holders of such Senior
Debt to accelerate their maturity and the default is the subject of judicial
proceedings or the Company receives notice of the default. After all Senior Debt
is paid in full and until the Debt Securities are paid in full, holders of Debt
Securities will be subrogated to the right of holders of Senior Debt to the
extent that distributions otherwise payable to holders of Debt Securities have
been applied to the payment of Senior Debt. By reason of such subordination, in
the event of a distribution of assets upon insolvency, certain general creditors
of the Company may recover more, ratably, than holders of Debt Securities. If
this Prospectus is being delivered in connection with a series of Debt
Securities, the accompanying Prospectus Supplement or Post-Effective Amendment,
as applicable, or the information incorporated herein by reference will contain
the approximate amount of Senior Debt outstanding as of the end of the Company's
most recent fiscal quarter.
SELLING STOCKHOLDERS
The Company intends to offer Securities, from time to time, pursuant to
this Prospectus in connection with its acquisition of the assets or stock of
HVAC service and replacement businesses, as described herein. The recipients of
the Securities issued in connection with such transactions may determine to
reoffer the Common Stock issued in such transactions, the Common Stock issued
upon the exercise of the Common Stock Warrants or Common Stock issued upon the
conversion of the Debt Securities from time to time. Specific information
regarding the resale transactions by Selling Stockholders who may be deemed to
be "underwriters" as defined in the Securities Act, the identity of the Selling
Stockholders, and the number of shares of Common Stock to be reoffered may be
provided at the time of such acquisition by means of a Post-Effective Amendment
or Prospectus Supplement, as applicable.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Securities
offered hereby will be passed upon for the Company by Waller Lansden Dortch &
Davis, A Professional Limited Liability Company, Nashville, Tennessee.
EXPERTS
The consolidated financial statements of Service Experts, Inc. appearing in
Service Experts, Inc.'s Annual Report on Form 10-K for the year ended December
31, 1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
11
<PAGE> 13
======================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Business.............................. 3
Risk Factors.......................... 3
Ratio of Earnings to Fixed Charges.... 6
Description of Common Stock
Warrants............................ 6
Description of Debt Securities........ 6
Selling Stockholders.................. 11
Legal Matters......................... 11
Experts............................... 11
</TABLE>
======================================================
======================================================
[SERVICE EXPERTS LOGO]
$50,000,000
COMMON STOCK,
COMMON STOCK WARRANTS
AND DEBT SECURITIES
-------------------
PROSPECTUS
-------------------
August , 1997
======================================================
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) The Delaware General Corporation Law ("DGCL") provides that a
corporation may indemnify any person made party to an action by reason of such
person's status as a director, officer, employee or agent of the corporation
against expenses, judgments, fines and settlements provided such person acted
(i) in good faith, (ii) in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation and (iii) with respect to a criminal
action, had no reasonable cause to believe such person's conduct was unlawful.
The termination of an action by a judgment, order, settlement, conviction or
plea of nolo contendere shall not create a presumption that a person did not
meet the standard of conduct set forth above. In actions brought by or in the
right of the corporation, however, the DGCL provides that no indemnification may
be made if the person was adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such action
was brought shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper. To the extent that a person is successful, on the merits or
otherwise, in the defense of any proceeding instigated because of his or her
status as a director, officer, employee or agent of a corporation, the DGCL
mandates that the corporation indemnify such person against reasonable expenses
incurred in the proceeding. A corporation may advance litigation expenses,
including attorneys' fees, to a person who is a party to a proceeding upon such
person undertaking to repay such amount if it shall ultimately be determined
that such person is not entitled to indemnification. The indemnification and
advancement of expenses under the DGCL are not deemed exclusive of any other
rights to which a person may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
(b) Article VII of the Registrant's Restated Certificate of Incorporation
provides as follows:
(i) The Corporation shall indemnify, and upon request shall advance
expenses (including attorneys' fees) to, in the manner and to the fullest
extent permitted by law, any officer or director (or the estate of any such
person) who was or is a party to, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise, by reason of the fact that such person is or
was a director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan (an "indemnitee"). The
Corporation may, to the fullest extent permitted by law, purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan against any liability
which may be asserted against such person. To the fullest extent permitted
by law, the indemnification and advances provided for herein shall include
expenses (including attorneys' fees), judgments, penalties, fines and
amounts paid in settlement. The indemnification provided herein shall not
be deemed to limit the right of the Corporation to indemnify and any other
person for any such expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement to the fullest extent permitted by law, both
as to action in his official capacity and as to action in another capacity
while holding such office.
(ii) Notwithstanding the foregoing, the Corporation shall not
indemnify any such indemnitee who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to secure a judgment in its favor against
such indemnitee with the Corporation, unless and only to the extent that,
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such indemnitee
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(iii) The rights to indemnification and advancement of expenses set
forth in this Article VII are intended to be greater than those which are
otherwise provided for in the General Corporation Law of the
II-1
<PAGE> 15
State of Delaware, are contractual between the Corporation and the person
being indemnified, his heirs, executors and administrators, and, with
respect to this Article VII are mandatory, notwithstanding a person's
failure to meet the standard of conduct required for permissive
indemnification under the General Corporation Law of the State of Delaware,
as amended from time to time. The rights to indemnification and advancement
of expenses set forth in this Article VII are nonexclusive of other similar
rights which may be granted by law, this Certificate, the Bylaws, a
resolution of the Board of Directors or stockholders or an agreement with
the Corporation, which means of indemnification and advancement of expenses
are hereby specifically authorized.
(iv) Any repeal or modification of the provisions of this Article VII,
either directly or by the adoption of an inconsistent provision of this
Certificate, shall be prospective only and shall not adversely affect any
right or protection set forth herein existing in favor of a particular
individual at the time of such repeal or modification. In addition, if an
amendment to the General Corporation Law of the State of Delaware limits or
restricts in any way the indemnification rights permitted by law as of the
date hereof, such amendment shall apply only to the extent mandated by law
and only to activities of persons subject to indemnification under this
Article VII which occur subsequent to the effective date of such amendment.
(c) The Company has obtained insurance for its directors and executive
officers in amounts of $5,000,000 per claim and $5,000,000 for aggregate claims.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
3.1 -- Restated Certificate of Incorporation of the Registrant(a)
3.2 -- Bylaws of the Registrant(a)
4.1 -- Form of Common Stock Certificate(b)
4.2 -- Form of Subordinated Indenture(c)
4.3 -- Form of Common Stock Warrant(c)
5 -- Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company(c)
12 -- Ratio of Earnings to Fixed Charges
23.1 -- Consent of Ernst & Young LLP
23.2 -- Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (included in Exhibit 5)(c)
24 -- Power of Attorney(c)
</TABLE>
- ---------------
(a) Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-1, Registration No. 333-07037.
(b) Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form 8-A, File No. 000-21173.
(c) Filed previously.
(b) Financial Statement Schedules
All other schedules for which provision is made in the applicable
accounting regulations of the Commission are not required under the related
instructions or are inapplicable, and therefore have been omitted.
II-2
<PAGE> 16
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415 will be filed as part of an amendment
to the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a
II-3
<PAGE> 17
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act (the "TIA") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the TIA.
II-4
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 6 to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Nashville, State of Tennessee, on August 27, 1997.
SERVICE EXPERTS, INC.
By: /s/ ALAN R. SIELBECK
------------------------------------
Alan R. Sielbeck
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 6 to Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE(S) DATE
---- -------- ----
<C> <S> <C>
/s/ ALAN R. SIELBECK Chairman of the Board, Chief August 27, 1997
- ----------------------------------------------------- Executive Officer and
Alan R. Sielbeck President (principal executive
officer)
* Director August 27, 1997
- -----------------------------------------------------
James D. Abrams
/s/ ANTHONY M. SCHOFIELD Chief Financial Officer August 27, 1997
- ----------------------------------------------------- (principal financial and
Anthony M. Schofield accounting officer)
* Director August 27, 1997
- -----------------------------------------------------
Raymond J. DeRiggi
* Director August 27, 1997
- -----------------------------------------------------
Norman T. Rolf
* Director August 27, 1997
- -----------------------------------------------------
William G. Roth
Director
- -----------------------------------------------------
Timothy G. Wallace
* /s/ ANTHONY M. SCHOFIELD August 27, 1997
- ----------------------------------------------------
Anthony M. Schofield, Attorney-in-Fact
</TABLE>
II-5
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
3.1 -- Restated Certificate of Incorporation of the Registrant(a)
3.2 -- Bylaws of the Registrant(a)
4.1 -- Form of Common Stock Certificate(b)
4.2 -- Form of Subordinated Indenture(c)
4.3 -- Form of Common Stock Warrant(c)
5 -- Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company(c)
12 -- Ratio of Earnings to Fixed Charges
23.1 -- Consent of Ernst & Young LLP
23.2 -- Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (included in Exhibit 5)(c)
24 -- Power of Attorney(c)
- ---------------
</TABLE>
(a) Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-1, Registration No. 333-07037.
(b) Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form 8-A, File No. 000-21173.
(c) Filed previously.
<PAGE> 1
EXHIBIT 12
SERVICE EXPERTS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHANGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Six months
ended June 30,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
FIXED CHARGES:
Interest Expense $ 59 $ 97 $ 95 $ 104 $ 66 $ 21
Portion of rents representative
of interest factor $ 47 $ 52 $ 64 $ 70 $ 172 $ 332
Total fixed charges $ 106 $ 149 $ 159 $ 174 $ 238 $ 353
EARNINGS:
Earnings before income tax expense $ 39 $ 95 $ 523 $ 843 $ 4,398 $ 6,877
Undistributed equity in affiliate
earnings -- -- -- -- $ (30) $ (73)
Fixed charges $ 106 $ 149 $ 159 $ 174 $ 238 $ 353
Total earnings $ 145 $ 244 $ 682 $ 1,017 $ 4,606 $ 7,157
Ratio of earnings to fixed charges 1.37x 1.64x 4.29x 5.84x 19.35x 20.27x
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Post-Effective Amendment No. 6 to the Registration Statement (Form S-4
No. 333-12319) and related Prospectus of Service Experts, Inc. related to
$50,000,000 aggregate amount of shares of its $.01 par value common stock,
warrants to purchase its common stock ("Common Stock Warrants") and the shares
of its common stock issued thereunder upon the exercise of such Common Stock
Warrants or debt securities ("Debt Securities"), and the shares of common stock
issued thereunder upon the conversion thereof and to the incorporation by
reference therein of our report dated February 12, 1997, with respect to the
consolidated financial statements of Service Experts, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Nashville, Tennessee
August 26, 1997
