<PAGE>
SECURITIES EXCHANGE AND COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 23, 1999
URS Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-7567 94-1381538
(Commission File No.) (I.R.S. Employer Identification No.)
100 California Street, Suite 500,
San Francisco, California 94111-4529
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (415) 774-2700
1
<PAGE>
Item 2. Acquisition or Disposition of Assets
On June 9, 1999, URS Corporation, a Delaware corporation ("URS"), through its
wholly-owned subsidiary, Demeter Acquisition Corporation, a Delaware corporation
(the "Purchaser") accepted for payment 17,858,895 shares of common stock, par
value $.01 per share (the "Shares"), of Dames & Moore Group (the "Company"),
that had been validly tendered and not withdrawn, including approximately
245,236 Shares tendered pursuant to notices of guaranteed delivery, pursuant to
the Purchaser's tender offer for all outstanding Shares at a price of $16.00 per
Share (the "Offer"). The Offer expired at 12:00 midnight, New York City time,
on Tuesday, June 8, 1999. The Offer was made pursuant to an Offer to Purchase,
dated as of May 11, 1999, as amended, and pursuant to an Agreement and Plan of
Merger (the "Merger Agreement") dated as of May 5, 1999 among the Company, URS
and the Purchaser. On June 23, 1999, pursuant to the Merger Agreement, Purchaser
was merged with and into the Company, with the Company surviving as a wholly-
owned subsidiary of URS following the merger (the "Merger").
The Shares purchased pursuant to the Offer constituted approximately 96% of the
issued and outstanding Shares. The remaining Shares, other than shares owned
directly or indirectly by URS, Purchaser or the Company (and except for shares
of Common Stock owned by any holder who properly demands appraisal rights) have
been converted into the right to receive $16.00 in cash.
In accordance with the provisions of the Merger Agreement, effective upon
payment for the Shares by the Purchaser, the following designees of Purchaser
were appointed to the Company's Board of Directors: Kent P. Ainsworth, Martin M.
Koffel, Joseph Masters and Jean-Yves Perez. In accordance with the terms of the
Merger Agreement, Ursula M. Burns, Gary R. Krieger, George D. Leal, Michael R.
Peevey, Harald Peipers and Arthur E. Williams resigned as Directors of the
Company. Arthur C. Darrow, Robert F. Clarke and A. Ewan Macdonald will remain
on the Board of Directors of the Company through the Merger.
The total purchase price paid by Purchaser in connection with the Offer was
provided through the issuance by URS of $100 million of Series A and Series C
Preferred Stock to RCBA Strategic Partners, L.P., the issuance by URS of $200
milion of senior subordinated increasing rate notes pursuant to a bridge
financing facility provided by Morgan Stanley Senior Funding, Inc., and
borrowings of up to $450 million of the $550 million available under a senior
secured credit facility between URS, certain guarantors, including the Company,
and Wells Fargo Bank, National Association, as administrative agent, which
includes three term loan facilities in the aggregate amount of $450 million and
a revolving credit facility in the amount of $100 million. The term loan
facilities consist of a $250 million tranche ("Term Loan A"), a $100 million
tranche ("Term Loan B") and another $100 million tranche ("Term Loan C"). Term
Loan A matures six years from the funding date; Term Loan B matures seven years
from the funding date; Term Loan C matures eight years from the funding date;
and the revolving credit facility matures six years from the funding date.
2
<PAGE>
The revolving credit facility will be used for URS' working capital requirements
and for general corporate purposes and to pay for any appraisal rights that
dissenting stockholders may have.
The term loans each bear interest, at URS' option, at a rate per annum equal to
either (1) the Base Rate or (2) LIBOR, in each case plus an applicable margin.
The revolving credit facility bears interest, at URS' option, at a rate per
annum equal to either (a) the Base Rate, (b) LIBOR or (c) the Adjusted Sterling
Rate, in each case plus an applicable margin. The applicable margin adjusts
according to a performance pricing grid based on a ratio of Consolidated Total
Funded Debt to Consolidated EBITDA (as defined in the credit facility). The
"Base Rate" is defined as the higher of (1) Wells Fargo Bank, National
Association's Prime Rate and (2) the Federal Funds Rate plus 0.50%. "LIBOR" is
defined as the offered quotation that first class banks in the London interbank
market offer to Wells Fargo Bank, National Association for dollar deposits, as
adjusted for reserve requirements. The "Adjusted Sterling Rate" is defined as
the rate per annum displayed by Reuters at which Sterling is offered to Wells
Fargo Bank, National Association in the London interbank market as determined by
the British Bankers' Association.
On June 23, 1999, URS issued Senior Subordinated Notes in the aggregate
principal amount of $200 million. The Notes were placed by Morgan Stanley & Co.
Incorporated, bear interest at the rate of 12.25% and are due in 2009. URS used
the proceeds of the Notes to repay the existing $200 million of senior
subordinated increasing rate notes that were issued on June 9, 1999 pursuant to
the bridge facility provided by Morgan Stanley Senior Funding, Inc. URS has 210
days to complete an exchange offer for the Notes under an effective registration
statement or to register resales of the Notes under the Securities Act of 1933.
If URS does not complete the exchange offer within this time period, the annual
interest rate on the Notes will increase by 0.5% until the Notes are generally
freely transferable.
The press release issued by URS with respect to the Merger is filed as Exhibit
99.2 to this Form 8K.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Dames & Moore Group (filed as Exhibit 99.2 to
URS' Current Report on Form 8-K, dated May 11, 1999, and incorporated herein by
reference).
(b) Unaudited Pro Forma Combined Financial Information of URS and Dames &
Moore (filed as Exhibit 99.1 to URS' Current Report on Form 8-K/A, dated June
22, 1999, and incorporated herein by reference).
(c) Exhibit Number Exhibit
2.1 Agreement and Plan of Merger, dated May 5, 1999,
by and among Dames & Moore Group, URS Corporation
and Demeter Acquisition Corporation (filed as
Exhibit 2.1 to URS' Current Form 8-K, dated May 7,
1999, and incorporated herein by reference).
2.2 Credit Agreement, dated June 9, 1999, by and
between Wells Fargo Bank, N.A. and URS Corporation
(filed as Exhibit 2.2 to URS' Current Form 8-K,
dated June 11, 1999, and incorporated herein by
reference).
2.3 Note Purchase Agreement, dated June 9, 1999, by
and between Morgan Stanley Senior Funding, Inc.
and URS Corporation (filed as Exhibit 2.3 to URS'
Current Form 8-K, dated June 11, 1999, and
incorporated herein by reference).
2.4 Securities Purchase Agreement, dated May 5, 1999,
by and between RCBA Strategic Partners, L.P. and
URS Corporation (filed as Exhibit 2.4 to URS'
Current Form 8-K, dated June 11, 1999, and
incorporated herein by reference).
2.5 Indenture, dated June 23, 1999, by and between
Firstar Bank of Minnesota, N.A. and URS
Corporation.
2.6 Registration Rights Agreement, dated June 23,
1999, by and between Morgan Stanley & Co.
Incorporated and URS Corporation.
2.7 Placement Agreement, dated June 18, 1999, by
and between Morgan Stanley & Co. Incorporated
and URS Corporation.
23.1 Consent of Independent Auditors, dated
July 1, 1999
3
<PAGE>
99.1 Press Release, dated June 9, 1999 (filed as
Exhibit (a)(12) to URS' Schedule 14D-1 dated May
11, 1999, as amended, and incorporated herein by
reference).
99.2 Press Release, dated June 24, 1999.
99.3 Financial Statements of Dames & Moore Group.
(Filed as exhibit 99.2 to URS' Current Report on
Form 8-K, dated June 11, 1999, and incorporated
herein by reference).
Independent Auditors' Report.
Consolidated Statements of Financial Position as
of March 26, 1999 and March 27, 1998.
Consolidated Statements of Operations for the
years ended March 26, 1999, March 27, 1998 and
March 28, 1997.
Consolidated Statements of Changes in
Shareholders' Equity for the years ended March 26,
1999, March 27, 1998 and March 28, 1997.
Consolidated Statements of Cash Flows for the
years ended March 26, 1999, March 27, 1998 and
March 28, 1997.
Notes to Consolidated Financial Statements.
Supplementary Financial Information--Selected
Quarterly Financial Data (unaudited).
Schedule II--Valuation and Qualifying Accounts.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
URS Corporation
Dated: July 1, 1999 By: /s/ Kent P. Ainsworth
---------------------
Kent P. Ainsworth
Executive Vice President
Chief Financial Officer and Secretary
5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger, dated May 5, 1999, by and among Dames &
Moore Group, URS Corporation and Demeter Acquisition Corporation
(filed as Exhibit 2.1 to URS' Current Form 8-K, dated May 7, 1999, and
incorporated herein by reference).
2.2 Credit Agreement, dated June 9, 1999, by and between Wells Fargo Bank,
N.A. and URS Corporation (filed as Exhibit 2.2 to URS' Current Form 8-
K, dated June 11, 1999, and incorporated herein by reference).
2.3 Note Purchase Agreement, dated June 9, 1999, by and between Morgan
Stanley Senior Funding, Inc. and URS Corporation (filed as Exhibit 2.3
to URS' Current Form 8-K, dated June 11, 1999, and incorporated herein
by reference).
2.4 Securities Purchase Agreement, dated May 5, 1999, by and between RCBA
Strategic Partners, L.P. and URS Corporation (filed as Exhibit 2.4 to
URS' Current Form 8-K, dated June 11, 1999, and incorporated herein by
reference).
2.5 Indenture, dated June 23, 1999, by and between Firstar Bank of
Minnesota, N.A. and URS Corporation.
2.6 Registration Rights Agreement, dated June 23, 1999, by and between
Morgan Stanley & Co. Incorporated and URS Corporation.
2.7 Placement Agreement, dated June 18, 1999, by and between Morgan
Stanley & Co. Incorporated and URS Corporation.
23.1 Consent of Independent Auditors, dated July 1, 1999.
99.1 Press Release, dated June 9, 1999 (filed as Exhibit (a)(12) to URS'
Schedule 14D-1 dated May 11, 1999, as amended, and incorporated herein
by reference).
99.2 Press Release, dated June 24, 1999.
99.3 Financial Statements of Dames & Moore Group. (Filed as exhibit 99.2 to
URS' Current Report on Form 8-K, dated June 11, 1999, and incorporated
herein by reference).
Independent Auditors' Report.
Consolidated Statements of Financial Position as of March 26, 1999 and
March 27, 1998.
Consolidated Statements of Operations for the years ended March 26,
1999, March 27, 1998 and March 28, 1997.
Consolidated Statements of Changes in Shareholders' Equity for the
years ended March 26, 1999, March 27, 1998 and March 28, 1997.
Consolidated Statements of Cash Flows for the years ended March 26,
1999, March 27, 1998 and March 28, 1997.
Notes to Consolidated Financial Statements.
Supplementary Financial Information--Selected Quarterly Financial Data
(unaudited).
Schedule II--Valuation and Qualifying Accounts.
6
<PAGE>
EXHIBIT 2.5
================================================================================
URS CORPORATION,
Issuer
THE SUBSIDIARY GUARANTORS
(AS DEFINED HEREIN),
Subsidiary Guarantors
and
FIRSTAR BANK OF MINNESOTA, N.A.,
Trustee
------------
Indenture
Dated as of June 23, 1999
------------
12 1/4% Senior Subordinated Notes due 2009
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
TIA Sections Indenture Sections
- ------------ ------------------
<S> <C>
(s) 310(a)(1)................................................................ 7.10
(a)(2)................................................................ 7.10
(b)................................................................... 7.03; 7.08
(s) 311(a)................................................................... 7.03
(b)................................................................... 7.03
(s) 312(a)................................................................... 2.04
(b)................................................................... 13.02
(c)................................................................... 13.02
(s) 313(a)................................................................... 7.06
(b)(2)................................................................ 7.07
(c)................................................................... 7.05; 7.06; 13.02
(d)................................................................... 7.06
(s) 314(a)................................................................... 7.05; 13.02
(a)(4)................................................................ 4.17; 13.02
(c)(1)................................................................ 13.03
(c)(2)................................................................ 13.03
(e)................................................................... 4.17; 13.04
(s) 315(a)................................................................... 7.02
(b)................................................................... 7.05; 13.02
(c)................................................................... 7.02
(d)................................................................... 7.02
(e)................................................................... 6.11
(s) 316(a)(1)(A)............................................................. 6.05
(a)(1)(B)............................................................. 6.04
(b)................................................................... 6.07
(c)................................................................... 9.03
(s) 317(a)(1)................................................................ 6.08
(a)(2)................................................................ 6.09
(b)................................................................... 2.05
(s) 318(a)................................................................... 13.01
(c)................................................................... 13.01
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE ONE DEFINITIONS AND
INCORPORATION BY REFERENCE
SECTION 1.01. Definitions............................................................................. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act....................................... 24
SECTION 1.03. Rules of Construction................................................................... 25
ARTICLE TWO THE NOTES
ARTICLE TWO
SECTION 2.01. Form and Dating......................................................................... 26
---------------
SECTION 2.02. Restrictive Legends..................................................................... 27
-------------------
SECTION 2.03. Execution, Authentication and Denominations............................................. 29
-------------------------------------------
SECTION 2.04. Registrar and Paying Agent.............................................................. 29
--------------------------
SECTION 2.05. Paying Agent to Hold Money in Trust..................................................... 30
-----------------------------------
SECTION 2.06. Transfer and Exchange................................................................... 31
---------------------
SECTION 2.07. Book-Entry Provisions for Global Notes.................................................. 32
--------------------------------------
SECTION 2.08. Special Transfer Provisions............................................................. 33
---------------------------
SECTION 2.09. Replacement Notes....................................................................... 36
-----------------
SECTION 2.10. Outstanding Notes....................................................................... 36
-----------------
SECTION 2.11. Temporary Notes......................................................................... 37
---------------
SECTION 2.12. Cancellation............................................................................ 37
------------
SECTION 2.13. CUSIP Numbers........................................................................... 37
-------------
SECTION 2.14. Defaulted Interest...................................................................... 38
------------------
SECTION 2.15. Issuance of Additional Notes............................................................ 38
----------------------------
ARTICLE THREE REDEMPTION
SECTION 3.01. Right of Redemption..................................................................... 38
-------------------
SECTION 3.02. Notices to Trustee...................................................................... 39
------------------
SECTION 3.03. Selection of Notes to Be Redeemed....................................................... 39
---------------------------------
SECTION 3.04. Notice of Redemption.................................................................... 39
--------------------
SECTION 3.05. Effect of Notice of Redemption.......................................................... 40
------------------------------
SECTION 3.06. Deposit of Redemption Price............................................................. 40
---------------------------
SECTION 3.07. Payment of Notes Called for Redemption.................................................. 41
--------------------------------------
SECTION 3.08. Notes Redeemed in Part.................................................................. 41
----------------------
</TABLE>
ARTICLE FOUR COVENANTS
___________________________
Note: The Table of Contents shall not for any purpose be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<S> <C>
SECTION 4.01. Payment of Notes........................................................................ 41
----------------
SECTION 4.02. Maintenance of Office or Agency......................................................... 41
-------------------------------
SECTION 4.03. Limitation on Incurrence of Indebtedness................................................ 42
----------------------------------------
SECTION 4.04. Limitation on Senior Subordinated Indebtedness.......................................... 44
----------------------------------------------
SECTION 4.05. Limitation on Restricted Payments....................................................... 45
---------------------------------
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries..................................................... 50
---------------------------------
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Subsidiaries........................ 53
----------------------------------------------------------------
SECTION 4.08. Consummation of the D&M Acquisition..................................................... 53
-----------------------------------
SECTION 4.09. Limitation on Transactions with Shareholders and Affiliates............................. 53
-----------------------------------------------------------
SECTION 4.10. Limitation on Liens..................................................................... 55
-------------------
SECTION 4.11. Limitation on Asset Sales............................................................... 55
-------------------------
SECTION 4.12. Repurchase of Notes upon a Change of Control............................................ 58
--------------------------------------------
SECTION 4.13. Existence............................................................................... 59
---------
SECTION 4.14. Payment of Taxes........................................................................ 59
----------------
SECTION 4.15. Maintenance of Properties and Insurance................................................. 59
---------------------------------------
SECTION 4.16. Notice of Defaults...................................................................... 60
------------------
SECTION 4.17. Compliance Certificates................................................................. 60
-----------------------
SECTION 4.18. Commission Reports and Reports to Holders............................................... 61
-----------------------------------------
SECTION 4.19. Waiver of Stay, Extension or Usury Laws................................................. 61
---------------------------------------
ARTICLE FIVE SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc............................................................. 61
---------------------------
SECTION 5.02. Successor Substituted................................................................... 62
---------------------
ARTICLE SIX DEFAULT AND REMEDIES
SECTION 6.01. Events of Default....................................................................... 63
-----------------
SECTION 6.02. Acceleration............................................................................ 65
------------
SECTION 6.03. Other Remedies.......................................................................... 66
--------------
SECTION 6.04. Waiver of Past Defaults................................................................. 66
-----------------------
SECTION 6.05. Control by Majority..................................................................... 66
-------------------
SECTION 6.06. Limitation on Suits..................................................................... 66
-------------------
SECTION 6.07. Rights of Holders to Receive Payment.................................................... 67
------------------------------------
SECTION 6.08. Collection Suit by Trustee.............................................................. 67
--------------------------
SECTION 6.09. Trustee May File Proofs of Claim........................................................ 67
--------------------------------
SECTION 6.10. Priorities.............................................................................. 68
----------
SECTION 6.11. Undertaking for Costs................................................................... 68
---------------------
SECTION 6.12. Restoration of Rights and Remedies...................................................... 69
----------------------------------
SECTION 6.13. Rights and Remedies Cumulative.......................................................... 69
------------------------------
SECTION 6.14. Delay or Omission Not Waiver............................................................ 69
----------------------------
</TABLE>
ARTICLE SEVEN TRUSTEE
<PAGE>
<TABLE>
<S> <C>
SECTION 7.01. General................................................................................... 69
-------
SECTION 7.02. Certain Rights of Trustee................................................................. 70
-------------------------
SECTION 7.03. Individual Rights of Trustee.............................................................. 71
----------------------------
SECTION 7.04. Trustee's Disclaimer...................................................................... 71
--------------------
SECTION 7.05. Notice of Default......................................................................... 71
-----------------
SECTION 7.06. Reports by Trustee to Holders............................................................. 71
-----------------------------
SECTION 7.07. Compensation and Indemnity................................................................ 71
--------------------------
SECTION 7.08. Replacement of Trustee.................................................................... 72
----------------------
SECTION 7.09. Successor Trustee by Merger, Etc.......................................................... 73
--------------------------------
SECTION 7.10. Eligibility............................................................................... 73
-----------
SECTION 7.11. Money Held in Trust....................................................................... 74
-------------------
ARTICLE EIGHT DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations...................................................... 74
------------------------------------
SECTION 8.02. Defeasance and Discharge of Indenture..................................................... 75
-------------------------------------
SECTION 8.03. Defeasance of Certain Obligations......................................................... 77
---------------------------------
SECTION 8.04. Application of Trust Money................................................................ 78
--------------------------
SECTION 8.05. Repayment to Company...................................................................... 78
--------------------
SECTION 8.06. Reinstatement............................................................................. 79
-------------
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................................................ 79
--------------------------
SECTION 9.02. With Consent of Holders................................................................... 80
-----------------------
SECTION 9.03. Revocation and Effect of Consent.......................................................... 81
--------------------------------
SECTION 9.04. Notation on or Exchange of Notes.......................................................... 82
--------------------------------
SECTION 9.05. Trustee to Sign Amendments, Etc........................................................... 82
-------------------------------
SECTION 9.06. Conformity with Trust Indenture Act....................................................... 82
-----------------------------------
ARTICLE TEN NOTE GUARANTEES
SECTION 10.01. Note Guarantee........................................................................... 82
--------------
SECTION 10.02. Obligations Unconditional................................................................ 85
-------------------------
SECTION 10.03. Release of Note Guarantees............................................................... 85
--------------------------
SECTION 10.04. Notice to Trustee........................................................................ 85
-----------------
SECTION 10.05. This Article Not to Prevent Events of Default............................................ 86
---------------------------------------------
SECTION 10.06. Dames & Moore Guarantee.................................................................. 86
-----------------------
SECTION 10.07. Subsidiary Guarantors Listed on Schedule II.............................................. 86
-------------------------------------------
</TABLE>
ARTICLE ELEVEN
SUBORDINATION OF NOTES
<PAGE>
<TABLE>
<S> <C>
SECTION 11.01. Notes Subordinated to Senior Indebtedness................................................. 86
-----------------------------------------
SECTION 11.02. No Payment on Notes in Certain Circumstances.............................................. 86
--------------------------------------------
SECTION 11.03. Payment over Proceeds upon Dissolution, Etc............................................... 87
-------------------------------------------
SECTION 11.04. Subrogation............................................................................... 89
-----------
SECTION 11.05. Obligations of Company Unconditional...................................................... 90
------------------------------------
SECTION 11.06. Notice to Trustee......................................................................... 90
-----------------
SECTION 11.07. Reliance on Judicial Order or Certificate of Liquidating Agent............................ 91
--------------------------------------------------------------
SECTION 11.08. Trustee's Relation to Senior Indebtedness................................................. 91
-----------------------------------------
SECTION 11.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness......................................... 92
SECTION 12.10. Holders Authorize Trustee to Effectuate Subordination of Notes............................ 92
--------------------------------------------------------------
SECTION 12.11. Not to Prevent Events of Default.......................................................... 92
--------------------------------
SECTION 12.12. Trustee's Compensation Not Prejudiced..................................................... 92
-------------------------------------
SECTION 12.13. No Waiver of Subordination Provisions..................................................... 93
-------------------------------------
SECTION 12.14. Payments May Be Paid Prior to Dissolution................................................. 93
-----------------------------------------
SECTION 12.15. Consent of Holders of Senior Indebtedness Under the Credit Agreement...................... 93
--------------------------------------------------------------------
SECTION 12.16. Trust Moneys Not Subordinated............................................................. 93
-----------------------------
</TABLE>
<PAGE>
vi
ARTICLE TWELVE
SUBORDINATION OF NOTE GUARANTEES
<TABLE>
<S> <C>
SECTION 12.01. Note Guarantees Subordinated to Guarantor Senior Indebtedness........................... 94
-------------------------------------------------------------
SECTION 12.02. No Payment on Note Guarantees in Certain Circumstances.................................. 94
------------------------------------------------------
SECTION 12.03. Payment over Proceeds upon Dissolution, Etc............................................. 95
-------------------------------------------
SECTION 12.04. Subrogation............................................................................. 97
-----------
SECTION 12.05. Obligations of Subsidiary Guarantor Unconditional....................................... 98
-------------------------------------------------
SECTION 12.06. Notice to Trustee....................................................................... 98
-----------------
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent.......................... 99
--------------------------------------------------------------
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness..................................... 99
---------------------------------------------------
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of a Subsidiary
---------------------------------------------------------------------
Guarantor or Holders of Guarantor Senior Indebtedness.................................. 100
-----------------------------------------------------
SECTION 12.10. Holders Authorize Trustee to Effectuate Subordination of
Note Guarantees........................................................................ 100
SECTION 12.11. Not to Prevent Events of Default........................................................ 100
--------------------------------
SECTION 12.12. Trustee's Compensation Not Prejudiced................................................... 100
-------------------------------------
SECTION 12.13. No Waiver of Subordination Provisions................................................... 100
-------------------------------------
SECTION 12.14. Payments May Be Paid Prior to Dissolution............................................... 101
-----------------------------------------
SECTION 12.15. Consent of Holders of Guarantor Senior Indebtedness Under the Credit
---------------------------------------------------------------------
Agreement.............................................................................. 101
---------
ARTICLE THIRTEEN MISCELLANEOUS
SECTION 13.01. Trust Indenture Act of 1939............................................................. 101
---------------------------
SECTION 13.02. Notices101
-------
SECTION 13.03. Certificate and Opinion as to Conditions Precedent...................................... 103
--------------------------------------------------
SECTION 13.04. Statements Required in Certificate or Opinion........................................... 103
---------------------------------------------
SECTION 13.05. Rules by Trustee, Paying Agent or Registrar............................................. 103
-------------------------------------------
SECTION 13.06. Payment Date Other Than a Business Day.................................................. 103
--------------------------------------
SECTION 13.07. Governing Law........................................................................... 104
-------------
SECTION 13.08. No Adverse Interpretation of Other Agreements........................................... 104
---------------------------------------------
SECTION 13.09. No Recourse Against Others.............................................................. 104
--------------------------
SECTION 13.10. The D&M Acquisition and the D&M Financing............................................... 104
-----------------------------------------
SECTION 13.11. Successors.............................................................................. 104
----------
SECTION 13.12. Duplicate Originals..................................................................... 104
-------------------
SECTION 13.13. Separability............................................................................ 105
------------
</TABLE>
<PAGE>
vii
<TABLE>
<S> <C>
SECTION 13.14. Table of Contents, Headings, Etc........................................................ 105
--------------------------------
SCHEDULE I Subsidiary Guarantors
SCHEDULE II Subsidiary Guarantors
EXHIBIT A Form of Note............................................................................ A-1
EXHIBIT B Form of Certificate..................................................................... B-1
EXHIBIT C Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Non-QIB Accredited Investors..................................... C-1
EXHIBIT D Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S..................................................... D-1
</TABLE>
<PAGE>
INDENTURE, dated as of June 23, 1999, among URS CORPORATION, a Delaware
corporation (the "Company"), the SUBSIDIARY GUARANTORS (as defined herein), as
-------
guarantors (the "Subsidiary Guarantors") and FIRSTAR BANK OF MINNESOTA, N.A., a
---------------------
Minnesota corporation, trustee (the "Trustee").
-------
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $200,000,000 aggregate
principal amount of the Company's 12 1/4% Senior Subordinated Notes due 2009
(the "Notes") issuable as provided in this Indenture. All things necessary to
-----
make this Indenture a valid agreement of the Company and each Subsidiary
Guarantor, in accordance with its terms, have been done, and the Company and
each Subsidiary Guarantor have done all things necessary to make the Notes, when
executed by the Company and each Subsidiary Guarantor and authenticated and
delivered by the Trustee hereunder and duly issued by the Company, valid
obligations of the Company and each Subsidiary Guarantor as hereinafter
provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary; provided that Indebtedness of
such Person which is redeemed, defeased, retired or otherwise repaid at the time
of or immediately upon consummation of the transactions by which such Person
becomes a Restricted Subsidiary or such Asset Acquisition shall not be Acquired
Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with
<PAGE>
2
GAAP; provided that the following items shall be excluded in computing Adjusted
Consolidated Net Income (without duplication):
(i) the net income (or loss) of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any Restricted Subsidiary by
such Person during such period;
(ii) solely for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.05, the net income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or consolidated
with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by
the Company or any of its Restricted Subsidiaries;
(iii) the net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by
the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary;
(iv) any gains or losses (in each case on an after-tax basis)
attributable to sales of assets outside the ordinary course of business of
the Company and its Restricted Subsidiaries;
(v) solely for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.05, any amount paid or accrued as dividends on Preferred Stock of
the Company owned by Persons other than the Company and any of its
Restricted Subsidiaries;
(vi) any non-cash compensation expense incurred in connection with
the exercise of or paid or payable with Capital Stock (other than
Disqualified Stock) of the Company or any options, warrants or other rights
to acquire Capital Stock (other than Disqualified Stock) of the Company;
(vii) writeoffs of intangible assets, including research and
development, relating to assets acquired by the Company and its Restricted
Subsidiaries if such writeoffs are done in accordance with GAAP at the time
of or within one year after such acquisition; and
(viii) all extraordinary gains and extraordinary losses (in each
case on an after-tax basis).
<PAGE>
3
"Adjusted Net Assets" has the meaning provided in Section 10.01.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Co-Registrar, Paying Agent or authenticating
agent.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment, as
determined in good faith by the Board of Directors or a Senior Officer of the
Company, whose determination shall be conclusive, or (ii) an acquisition by the
Company or any of its Restricted Subsidiaries of the property and assets of any
Person other than the Company or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person;
provided that the property and assets acquired are related, ancillary or
complementary to the businesses of the Company and its Restricted Subsidiaries
on the date of such acquisition, as determined in good faith by the Board of
Directors or a Senior Officer of the Company, whose determination shall be
conclusive.
"Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of:
(i) all or any of the Capital Stock of any Restricted Subsidiary,
(ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted
Subsidiaries or
<PAGE>
4
(iii) any other property and assets (other than the Capital Stock or
other Investment in an Unrestricted Subsidiary) of the Company or any of
its Restricted Subsidiaries outside the ordinary course of business of the
Company or such Restricted Subsidiary and
in each case, that is not governed by the provisions of this Indenture
applicable to mergers, consolidations and sales of assets of the Company;
provided that "Asset Sale" shall not include:
(a) any sales or other dispositions of inventory, receivables
and other current assets, including cash and Temporary Cash
Investments,
(b) any sale, transfer, assignment or other disposition of
damaged, worn out or other obsolete property in the ordinary course of
business,
(c) any sale, transfer, assignment or other disposition of
assets having a fair market value of less than $1 million, or
(d) any sales, transfers, assignments or other dispositions of
assets constituting a Permitted Investment or Restricted Payment
permitted to be made under Section 4.05.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bank Agent" means Wells Fargo Bank, National Association, or its
successors as agent for the lenders under the Credit Agreement.
"Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act for such board of directors.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
<PAGE>
5
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, as applied to any Person, the
discounted present value of the rental obligations under a Capitalized Lease to
the extent such obligations would appear as a liability upon the consolidated
balance sheet of such Person in accordance with GAAP.
"Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other
than a Permitted Holder, becomes the ultimate "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of more than 35% of the total voting power
of the Voting Stock of the Company on a fully diluted basis; or (2) during any
period of 12 consecutive months after the Closing Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of the Company
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved, including new directors
designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially all
of the assets of the Company, if such agreement was approved by a vote of such
majority of directors) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
<PAGE>
6
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of the
Company (i) by its Chairman, a Vice Chairman, its President or a Vice President
and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary and delivered to the Trustee; provided, however, that such written
request or order may be signed by any two of the officers or directors listed in
clause (i) above in lieu of being signed by one of such officers or directors
listed in such clause (i) and one of the officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income:
(i) Consolidated Interest Expense;
(ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary gains or losses or sales of
assets);
(iii) depreciation expense;
(iv) amortization expense; and
(v) all other non-cash items reducing Adjusted Consolidated Net
Income (other than items that will require cash payments and for which an
accrual or reserve is, or is required by GAAP to be made), less all non-
cash items increasing Adjusted Consolidated Net Income, all as determined
on a consolidated basis for the Company and its Restricted Subsidiaries in
conformity with GAAP;
provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to (a) the amount of the
Adjusted Consolidated Net Income attributable to such Restricted Subsidiary
multiplied by (b) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by the Company or
any of its Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs
<PAGE>
7
associated with Interest Rate Agreements; and Indebtedness that is Guaranteed or
secured by the Company or any of its Restricted Subsidiaries), Preferred Stock
dividends in respect of Preferred Stock of a Restricted Subsidiary and all but
the principal component of rentals in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Restricted Subsidiaries during such period; excluding, however, (i) any amount
of such interest of any Restricted Subsidiary if the net income of such
Restricted Subsidiary is excluded in the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof (but only in the
same proportion as the net income of such Restricted Subsidiary is excluded from
the calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of
the definition thereof) and (ii) any premiums, fees and expenses (and any
amortization thereof) payable in connection with the D&M Acquisition and the
financing of the D&M Acquisition, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
For purposes of the preceding sentence, Preferred Stock dividends shall be
deemed to be an amount equal to the actual dividends paid divided by one minus
the combined federal, state, local and foreign income tax rate applicable to the
Company and its Subsidiaries (expressed as a decimal).
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity plus, to the extent not included, any Preferred Stock of
the Company as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Convertible Subordinated Debentures" means the 6 1/2% Convertible
Subordinated Debentures due 2012 of the Company issued pursuant to an Indenture
dated as of February 15, 1987 between the Company and First Interstate Bank of
California, as amended, and outstanding on the Closing Date.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at the address set forth in Section 13.02 herein.
"Credit Agreement" means the credit agreement dated as of June 9, 1999 by
and among the Company, certain of its Subsidiaries, certain financial
institutions and Wells Fargo Bank, National Association, as administrative
agent, and including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as such credit
agreement and/or related documents may be amended, restated, supplemented,
renewed, refinanced, extended,
<PAGE>
8
replaced, restructured or otherwise modified from time to time regardless of
whether with the same agent, trustee, representative lenders or holders,
including any agreement (i) extending the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (ii) adding or deleting borrowers or
guarantors thereunder, so long as borrowers and guarantors include one or more
of the Company and its Subsidiaries and their respective successors and assigns,
or (iii) increasing the amount of Indebtedness incurred thereunder or available
to be borrowed thereunder.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Dames & Moore" means Dames & Moore Group, a Delaware corporation.
"D&M Acquisition" means the consummation of (x) the tender offer by
Demeter Acquisition Corporation for all of the outstanding shares of capital
stock of Dames & Moore and (y) the merger of Demeter Acquisition Corporation
with and into Dames & Moore.
"D&M Financing" means the transactions entered into by the Company and
its Restricted Subsidiaries to finance the D&M Acquisition, including (v) the
sale of the Notes, (w) the establishment of the Credit Agreement, (x) the
issuance and sale of Preferred Stock to RCBA Strategic Partners, L.P., (y) the
issuance and sale of senior subordinated increasing rate notes of the Company
upon consummation of the tender offer for the stock of Dames & Moore and (z) the
repayment of Indebtedness in connection with the D&M Acquisition and the sale of
the Notes.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Demeter Acquisition Corporation" means Demeter Acquisition Corporation,
a Delaware corporation and Wholly Owned Subsidiary of the Company.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors.
"Designated Guarantor Senior Indebtedness" means (i) any Indebtedness
guaranteed by a Subsidiary Guarantor under the Credit Agreement (except that any
Indebtedness which represents a partial refinancing of Indebtedness theretofore
outstanding pursuant to the Credit Agreement, rather than a complete refinancing
thereof, shall only constitute Designated Guarantor Senior Indebtedness if such
partial refinancing meets the requirements of clause (ii) below) and (ii) any
other Indebtedness constituting Guarantor Senior Indebtedness that, at the date
of determination, has an aggregate principal amount outstanding of at least $25
million and that is specifically designated by the Company, in the instrument
creating or evidencing such Guarantor Senior Indebtedness as "Designated
Guarantor Senior Indebtedness."
<PAGE>
9
"Designated Senior Indebtedness" means (i) any Indebtedness under the
Credit Agreement (except that any Indebtedness which represents a partial
refinancing of Indebtedness theretofore outstanding pursuant to the Credit
Agreement, rather than a complete refinancing thereof, shall only constitute
Designated Senior Indebtedness if such partial refinancing meets the
requirements of clause (ii) below) and (ii) any other Indebtedness constituting
Senior Indebtedness that, at the date of determination, has an aggregate
principal amount outstanding of at least $25 million and that is specifically
designated by the Company, in the instrument creating or evidencing such Senior
Indebtedness as "Designated Senior Indebtedness."
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Notes shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 4.11 and Section
4.12 and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Section 4.11 and Section 4.12.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and this Indenture.
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors or a Senior Officer of the Company, whose
determination shall be conclusive; provided that if the non cash amount exceeds
$10 million, such amount shall be determined in good faith by the Board of
Directors, whose determination shall be conclusive if evidenced by a Board
Resolution.
<PAGE>
10
"Fixed Charge Coverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters prior to such Transaction Date for which reports have been filed
with the Commission or provided to the Trustee (the "Four Quarter Period") to
(ii) the aggregate Consolidated Interest Expense during such Four Quarter
Period. In making the preceding calculation,
(A) pro forma effect shall be given to any Indebtedness Incurred or
repaid during the period (the "Reference Period") commencing on the first
day of the Four Quarter Period and ending on and including the Transaction
Date (other than Indebtedness Incurred or repaid under a revolving credit
or similar arrangement to the extent of the commitment thereunder (or under
any predecessor revolving credit or similar arrangement) in effect on the
last day of such Four Quarter Period unless any portion of such
Indebtedness is projected, in the reasonable judgment of the senior
management of the Company, to remain outstanding for a period in excess of
12 months from the date of the Incurrence thereof), in each case as if such
Indebtedness had been Incurred or repaid on the first day of the Reference
Period;
(B) Consolidated Interest Expense attributable to interest on any
Indebtedness (whether existing or being Incurred) computed on a pro forma
basis and bearing a floating interest rate shall be computed as if the rate
in effect on the Transaction Date (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement
has a remaining term in excess of 12 months or, if shorter, at least equal
to the remaining term of such Indebtedness) had been the applicable rate
for the entire period;
(C) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during such Reference Period
as if they had occurred and such proceeds had been applied on the first day
of such Reference Period; and
(D) pro forma effect shall be given to asset dispositions and asset
acquisitions (including giving pro forma effect to the application of
proceeds of any asset disposition) that have been made by any Person that
has become a Restricted Subsidiary or has been merged with or into the
Company or any Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if
such asset dispositions or asset acquisitions were Asset Dispositions or
Asset Acquisitions that occurred on the first day of such Reference Period;
provided that to the extent that clause (C) or (D) of this sentence
requires that pro forma effect be given to an Asset Acquisition or Asset
Disposition, such pro forma calculation shall be based upon the four full
fiscal quarters immediately preceding the Transaction Date of the Person,
or division or line of business of the Person, that is acquired or disposed
for which financial information is available.
<PAGE>
11
"Foreign Subsidiary" means any Subsidiary of the Company that is an entity
which is a controlled foreign corporation under Section 957 of the Internal
Revenue Code.
"Funding Subsidiary Guarantor" has the meaning provided in Section 10.01.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization of any
expenses incurred in connection with the D&M Acquisition or D&M Financing and
(ii) except as otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Guarantee Payment Blockage Period" has the meaning provided in Section
12.02.
"Guarantor Senior Indebtedness" means, with respect to any Subsidiary
Guarantor, the Senior Indebtedness of such Subsidiary Guarantor.
"Holder" or "Noteholder" means the registered holder of any Note or Note
Guarantee.
<PAGE>
12
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an "Incurrence" of Acquired Indebtedness; provided that neither the
accrual of interest, the accretion of original issue discount nor the issuance
of pay-in-kind securities as an interest or dividend payment shall be considered
an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(i) all indebtedness of such Person for borrowed money to the
extent such indebtedness would appear as a liability upon the consolidated
balance sheet of such Person in accordance with GAAP;
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments to the extent such obligations would
appear as a liability upon the consolidated balance sheet of such Person in
accordance with GAAP;
(iii) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto, but excluding obligations with respect to letters of
credit (including trade letters of credit) securing obligations (other than
obligations described in (i) or (ii) above or (v), (vi) or (vii) below)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if drawn upon, to the
extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement);
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services,
except Trade Payables;
(v) all Capitalized Lease Obligations;
(vi) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, regardless of whether such Indebtedness is assumed by
such Person; provided that the amount of such Indebtedness shall be the
lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness so secured;
(vii) all Indebtedness of other Persons Guaranteed by such Person to
the extent such Indebtedness is Guaranteed by such Person;
<PAGE>
13
(viii) all obligations to redeem or repurchase Preferred Stock of a
Restricted Subsidiary; and
(ix) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements (other
than Currency Agreements and Interest Rate Agreements designed solely to
protect the Company or its Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates and that do not increase
the Indebtedness of the obligor outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest rates
or by reason of fees, indemnities and compensation payable thereunder).
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided
(A) that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness
less the remaining unamortized portion of the original issue discount of
such Indebtedness at such time as determined in conformity with GAAP,
(B) that money borrowed and set aside at the time of the Incurrence
of any Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such money
is held to secure the payment of such interest,
(C) that the amount of Indebtedness at any time of any Preferred
Stock shall be the greater of its voluntary or involuntary liquidation
preference and the maximum fixed redemption or repurchase price in respect
thereof,
(D) that Indebtedness shall not include:
(w) any liability for federal, state, local or other taxes,
(x) obligations under performance, bid, surety, appeal or similar
bonds provided in the ordinary course of business,
(y) obligations arising in the ordinary course of business out of
standby letters of credit covering workers' compensation, performance
or similar obligations to the extent such letters of credit are not
drawn upon or, if drawn upon, to the extent
<PAGE>
14
such drawing is reimbursed no later than the third Business Day
following receipt by the issuer of such letters of credit a demand for
reimbursement, or
(z) obligations pursuant to agreements providing for
indemnification, adjustment of purchase price or similar obligations,
or Guarantees or letters of credit, performance, bid, surety, appeal
or similar bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case
Incurred in connection with the disposition of any business, assets or
Restricted Subsidiary (other than Guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition),
so long as the principal amount does not to exceed the gross proceeds
actually received by the Company or any Restricted Subsidiary in
connection with such disposition.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on May
1 and November 1 of each year, commencing November 1, 1999.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but excluding advances to customers or suppliers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of the
Company or its Restricted Subsidiaries or endorsements for collection or deposit
arising in the ordinary course of business) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
such Person and shall include (i) the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary and (ii) the retention of the Capital Stock (or any
other Investment) by the Company or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary. For purposes of
the definition of "Unrestricted Subsidiary" and Section 4.05, the amount of or
a
<PAGE>
15
reduction in an Investment shall be equal to the fair market value thereof at
the time such Investment is made or reduced.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means:
(a) with respect to any Asset Sale, the proceeds of such Asset Sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal,
but not interest, component thereof) when received in the form of cash or
cash equivalents and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of:
(i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers)
related to such Asset Sale;
(ii) provisions for all taxes (regardless of whether such taxes
will actually be paid or are payable) as a result of such Asset Sale
without regard to the consolidated results of operations of the
Company and its Restricted Subsidiaries, taken as a whole;
(iii) payments made to repay Indebtedness or any other
obligation outstanding at the time of such Asset Sale that either (x)
is secured by a Lien on the property or assets sold or (y) is required
to be paid as a result of such sale; and
(iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated
with such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in
conformity with GAAP; and
(b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the
extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or cash equivalents and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of
<PAGE>
16
attorney's fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Non-U.S. Person" means a person who is not a "U.S. person" (as defined in
Regulation S).
"Note Guarantee" means any guarantee of the obligations of the Company
under this Indenture and the Notes by any Subsidiary Guarantor.
"Notes" means any of the securities, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include the Notes
initially issued on the Closing Date, any Exchange Notes to be issued and
exchanged for any Notes pursuant to the Registration Rights Agreement and this
Indenture and any other Notes issued after the Closing Date under this
Indenture. For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating:
(i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata
basis;
(ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed) (the "Payment Date");
(iii) that any Note not tendered will continue to accrue interest
pursuant to its terms;
(iv) that, unless the Company defaults in the payment of the
purchase price, any Note accepted for payment pursuant to the Offer to
Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with the
form entitled "Option of the Holder to Elect Purchase" on the reverse
side of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day immediately
preceding the Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately
<PAGE>
17
preceding the Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Notes
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in a principal amount of $1,000 or integral multiples
thereof.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or the
Chief Financial Officer and (ii) the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by one Officer listed in
clause (i) of the definition thereof and one Officer listed in clause (ii) of
the definition thereof or two officers listed in clause (i) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"Offshore Global Note" has the meaning provided in Section 2.01.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion signed by legal counsel, who
may be an employee of or counsel to the Company, that meets the requirements of
Section 13.04 hereof. Each such Opinion of Counsel shall include the statements
provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.04, except that, for
the purposes of Article Eight, the Paying Agent shall not be the Company or a
Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Payment Blockage Period" has the meaning provided in Section 11.02.
"Payment Date" has the meaning provided in the definition of Offer to
Purchase.
"Permitted Holder" means Richard C. Blum & Associates, L.P. and its
Affiliates.
"Permitted Investment" means:
(i) an Investment in the Company, a Subsidiary Guarantor or a
Person which will, upon the making of such Investment, become a Subsidiary
Guarantor or be merged or consolidated with or into or transfer or convey
all or substantially all its assets to, the
<PAGE>
18
Company or a Subsidiary Guarantor; provided that such person's primary
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such Investment, as
determined in good faith by the Board of Directors or a Senior Officer of
the Company, whose determination shall be conclusive;
(ii) cash and Temporary Cash Investments;
(iii) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP;
(iv) stock, obligations or securities received in satisfaction of
judgments or received in connection with the restructuring or workout of
the obligations of, or the bankruptcy of, suppliers, or customers, or
received pursuant to a plan of reorganization of any supplier or customer,
in each case in settlement of delinquent obligations or disputes with
customers or suppliers;
(v) an Investment in an Unrestricted Subsidiary to the extent
consisting of an Investment in another Unrestricted Subsidiary;
(vi) Interest Rate Agreements and Currency Agreements designed
solely to protect the Company or its Restricted Subsidiaries against
fluctuations in interest rates or foreign currency exchange rates;
(vii) any of the Notes;
(viii) an Investment in a Restricted Subsidiary that is a Foreign
Subsidiary; and
(ix) an Investment in a Restricted Subsidiary which is not a
Subsidiary Guarantor, provided that the aggregate amount of such
Investments under this clause (ix) does not exceed $25 million plus the net
reduction in Investments made pursuant to this clause (ix) resulting from
distributions on or repayments of such Investments or from the Net Cash
Proceeds from the sale or other disposition of any such Investment (except
in each case, in order to avoid duplication, to the extent any such
payments or proceeds have been or would be included in the calculation of
Adjusted Consolidated Net Income for purposes of clause (C)(1) of Section
4.05) or from such Person becoming a Subsidiary Guarantor (valued in each
case as provided in the definition of "Investments"); provided that the
net reduction in any Investment shall not exceed the amount of such
Investment.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
<PAGE>
19
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
outstanding on the Closing Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"Purchase Money Indebtedness" of any Person means any Indebtedness,
including Capitalized Leases, of such Person to any seller or other Person,
which is Incurred to finance the acquisition, construction, installation or
improvement of any Replacement Assets and which is incurred concurrently with,
or within 180 days following, such acquisition, construction, installation or
improvement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" means, when used with respect to any Note to be redeemed,
the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated June 23, 1999, among the Company, the Subsidiary Guarantors and Morgan
Stanley & Co. Incorporated and certain permitted assigns specified therein.
"Registration Statement" means the Registration Statement as defined and
described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the April 15 or October 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
<PAGE>
20
"Replacement Assets" means, on any date, property or assets (other than
current assets) of a nature or type or that are used or useful in a business (or
an Investment in a company having property or assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
and assets of, or the business of, the Company and its Restricted Subsidiaries
existing on such date, as determined in good faith by the Board of Directors or
a Senior Officer of the Company, whose determination shall be conclusive.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee in its corporate trust department customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.05.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-
Hill Companies, and its successors.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning provided in Section 2.04.
"Senior Indebtedness" means the following obligations of the Company or
any Subsidiary Guarantor, whether outstanding on the Closing Date or thereafter
Incurred: (i) all Indebtedness and all other monetary obligations (including,
without limitation, expenses, fees, principal, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim in such proceeding), reimbursement obligations
under letters of credit and indemnities payable in connection therewith) of the
Company under (or in respect of) the Credit Agreement or any Interest Rate
Agreement or Currency Agreement relating to the Indebtedness under the Credit
Agreement and (ii) all Indebtedness and all other monetary obligations of the
Company or any
<PAGE>
21
Subsidiary Guarantor (other than the Notes and the Note Guarantees, the
Convertible Subordinated Debentures and the Senior Subordinated Debentures),
including principal and interest on such Indebtedness, unless such Indebtedness,
by its terms or by the terms of any agreement or instrument pursuant to which
such Indebtedness is issued, is pari passu with, or subordinated in right of
payment to, the Notes; provided that the term "Senior Indebtedness" shall not
include (a) any Indebtedness of the Company or any Subsidiary Guarantor that,
when Incurred, was without recourse to the Company or to such Subsidiary
Guarantor, (b) any Indebtedness of the Company or any Subsidiary Guarantor to a
Subsidiary of the Company, or to a joint venture in which the Company has an
interest, (c) any Indebtedness of the Company or any Subsidiary Guarantor, to
the extent not permitted by Section 4.03 or Section 4.04, (d) any repurchase,
redemption or other obligation in respect of Disqualified Stock, (e) any
Indebtedness to any employee of the Company or any of its respective
Subsidiaries, (f) any liability for taxes owed or owing by the Company or any
Subsidiary Guarantor, or (g) any Trade Payables.
"Senior Officer" of any Person means the Chief Executive Officer or Chief
Financial Officer of such Person.
"Senior Subordinated Debentures" means the 8_% Senior Subordinated
Debentures due 2004 of the Company issued pursuant to the Indenture dated as of
March 16, 1989 between the Company and MTrust Corp., National Association, as
trustee, as amended.
"Senior Subordinated Obligations" means any principal of, premium, if
any, or interest on the Notes payable pursuant to the terms of the Notes or the
Note Guarantees or upon acceleration, including any amounts received upon the
exercise of rights of rescission or other rights of action (including claims for
damages) or otherwise, to the extent relating to the purchase price of the Notes
or amounts corresponding to such principal, premium, if any, or interest on the
Notes.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"Stated Maturity" means (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
<PAGE>
22
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.07.
"Subsidiary Guarantor" means each of the parties listed as such on
Schedule I hereto, and, upon (but not prior to) satisfaction of the conditions
set forth in Section 10.07, each of the parties listed as such on Schedule II
hereto, and any Restricted Subsidiary that provides a Guarantee of the Company's
obligations under this Indenture and the Notes; provided, however, that the term
"Subsidiary Guarantor" shall not include any Person whose Guarantee has been
released in accordance with the provisions hereof.
"Temporary Cash Investment" means any of the following:
(i) direct obligations of the United States of America or any
agency thereof or obligations fully and unconditionally guaranteed by the
United States of America or any agency thereof maturing no more than one
year from the date of acquisition thereof;
(ii) time deposit accounts, certificates of deposit, bankers'
acceptances and money market deposits maturing within one year of the date
of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $100 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating)
or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above entered
into with a bank or trust company meeting the qualifications described in
clause (ii) above;
(iv) commercial paper, maturing not more than one year after the
date of acquisition thereof, with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to Moody's or "A-
1" (or higher) according to S&P;
(v) securities with maturities of one year or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or Moody's; and
<PAGE>
23
(vi) any mutual fund that has at least 95% of its assets
continuously invested in investments of the types described in clauses (i)
through (v) and has the highest rating obtainable from either Moody's or
S&P.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S. Code (S)(S) 77aaa-77bbbb), as in effect on the date this Indenture was
executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended and as codified in Title 11 of the United States Code, as amended from
time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below; and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (a) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by
the Company or such Restricted Subsidiary (or both, if applicable) at the time
of such designation; (b) either (x) the Subsidiary to be so designated has total
assets of $1,000 or less or (y) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.05 and (c) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (a) of this proviso would be permitted under Section 4.03 and Section
4.05. The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
<PAGE>
24
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred (and shall be deemed to have been Incurred)
for all purposes of this Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding provisions.
"U.S. Global Notes" has the meaning provided in Section 2.01.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"U.S. Physical Notes" means the Notes issued in the form of permanent
certificated Notes in registered form in substantially the form set forth in
Exhibit A to Institutional Accredited Investors which are not QIBs (excluding
Non-U.S. Persons) who purchased Notes pursuant to Regulation D of the Securities
Act.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares, shares owned by professional engineers in
connection with licensing requirements or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
-------------------------------------------------
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
<PAGE>
25
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
<PAGE>
26
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate of
---------------
authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Company or any Subsidiary Guarantor is subject or usage. The Company shall
approve the form of the Notes and any notation, legend or endorsement on the
Notes. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes annexed hereto
as Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture. To the extent applicable, the Company, each Subsidiary Guarantor and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued initially
in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "U.S. Global Notes"),
-----------------
registered in the name of the nominee of the Depositary, deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, in accordance with the instructions given by the
Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on Regulation S
shall be issued initially in the form of one or more permanent global Notes in
registered form substantially in the form set forth in Exhibit A (the "Offshore
--------
Global Notes"), registered in the name of the nominee of the Depositary,
- ------------
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Offshore Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Notes issued pursuant to Section 2.07 in exchange for interests in the
Offshore Global Notes shall be in the form of permanent certificated Notes in
registered form substantially in the form set forth in Exhibit A (the "Offshore
--------
Physical Notes").
- --------------
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes." The U.S. Global Notes
--------------
and the Offshore Global Notes are sometimes referred to herein as the "Global
------
Notes."
- -----
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any
<PAGE>
27
securities exchange on which the Notes may be listed, all as determined by the
Officers executing such Notes, as evidenced by their execution of such Notes.
SECTION 2.02. Restrictive Legends. Unless and until a Note is exchanged
-------------------
for an Exchange Note or sold in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, (i) the U.S. Global
Notes and U.S. Physical Notes shall bear the legend set forth below on the face
thereof and (ii) the Offshore Physical Notes and Offshore Global Notes shall
bear the legend set forth below on the face thereof until at least the 41st day
after the Closing Date and receipt by the Company and the Trustee of a
certificate substantially in the form of Exhibit B hereto.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE
DATE OF TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
<PAGE>
28
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED
TO IN RULE 144(k) UNDER THE SECURITIES ACT AFTER THE ORIGINAL ISSUANCE OF
THE NOTES, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
<PAGE>
29
SECTION 2.03. Execution, Authentication and Denominations. Subject to
-------------------------------------------
Article Four and applicable law, the aggregate principal amount of Notes which
may be authenticated and delivered under this Indenture is unlimited. The Notes
shall be executed by two Officers of the Company. The signature of these
Officers on the Notes may be by facsimile or manual signature in the name and on
behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of a Company Order
authenticate for original issue Notes in the aggregate principal amount
specified in such Company Order; provided that the Trustee shall be entitled to
receive an Officers' Certificate and an Opinion of Counsel of the Company in
connection with such authentication of Notes. Such Company Order shall specify
the amount of Notes to be authenticated and the date on which the original issue
of Notes is to be authenticated and, in case of an issuance of Notes pursuant to
Section 2.15, shall certify that such issuance is in compliance with Article
Four.
The Trustee may appoint an authenticating agent to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or the Subsidiary Guarantors or
an Affiliate of the Company or the Subsidiary Guarantors.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount and any integral multiple
thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain an
--------------------------
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
---------
for payment (the "Paying Agent") and an office or agency where notices and
------------
demands to or upon the Company in respect of the Notes and this Indenture may be
served, which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Security Register"). The Security Register shall be
-----------------
in written form or any other form capable of being converted into written form
within a reasonable time. The Company may have one or more co-Registrars and
one or more additional Paying Agents.
<PAGE>
30
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall give prompt written
notice to the Trustee of the name and address of any such Agent and any change
in the address of such Agent. If the Company fails to maintain a Registrar,
Paying Agent and/or agent for service of notices and demands, the Trustee shall
act as such Registrar, Paying Agent and/or agent for service of notices and
demands. The Company may remove any Agent upon written notice to such Agent and
the Trustee; provided that no such removal shall become effective until (i) the
acceptance of an appointment by a successor Agent to such Agent as evidenced by
an appropriate agency agreement entered into by the Company and such successor
Agent and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise
comply with TIA (S) 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee as of each Regular Record Date and at such other
times as the Trustee may reasonably request the names and addresses of Holders
as they appear in the Security Register, including the aggregate principal
amount of Notes held by each Holder.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than 11:00
-----------------------------------
a.m. (New York City time) each due date of the principal, premium, if any, and
interest on any Notes, the Company shall deposit with the Paying Agent money in
immediately available funds sufficient to pay such principal, premium, if any,
and interest so becoming due. The Company shall require each Paying Agent other
than the Trustee to agree in writing that such Paying Agent shall hold in trust
for the benefit of the Holders or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, and interest on the Notes
(whether such money has been paid to it by the Company or any other obligor on
the Notes), and such Paying Agent shall promptly notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and account for any funds disbursed, and the Trustee
may at any time during the continuance of any payment default, upon written
request to a Paying Agent, require such Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed. Upon doing so, the
Paying Agent shall have no further liability for the money so paid over to the
Trustee. If the Company or any Subsidiary of the Company or any Affiliate of
any of them acts as Paying Agent, it will, on or before each due date of any
principal of, premium, if any, or interest on the Notes, segregate and hold in a
separate trust fund for the benefit of the Holders a sum of money sufficient to
pay such principal, premium, if any, or interest so becoming due until such sum
of money shall
<PAGE>
31
be paid to such Holders or otherwise disposed of as provided in this Indenture,
and will promptly notify the Trustee of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only in
---------------------
registered form. A Holder may transfer a Note only by written application to
the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Registrar in the
Security Register. Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee, and any agent of the Company shall
treat the person in whose name the Note is registered as the owner thereof for
all purposes whether or not the Note shall be overdue, and neither the Company,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent) and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry. When Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations (including an exchange of Notes for Exchange Notes),
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met (including that such Notes are
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder);
provided that no exchanges of Notes for Exchange Notes shall occur until a
Registration Statement shall have been declared effective by the Commission and
that any Notes that are exchanged for Exchange Notes shall be cancelled by the
Trustee. To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's request. No
service charge shall be made for any registration of transfer or exchange or
redemption of the Notes, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other similar governmental
charge payable upon exchanges pursuant to Section 2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The U.S.
--------------------------------------
Global Notes and Offshore Global Notes initially shall (i) be registered in the
name of the Depositary for such Global
<PAGE>
32
Notes or the nominee of such Depositary, (ii) be delivered to the Trustee as
custodian for such Depositary and (iii) bear legends as set forth in Section
2.02.
Members of, or participants in, the Depositary ("Agent Members") shall have
-------------
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Note, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such Global
Note in whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in Global Notes may be
transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 2.08. In addition, U.S. Physical Notes and Offshore
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the U.S. Global Notes or the Offshore Global
Notes, as the case may be, if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the U.S. Global Notes or the
Offshore Global Notes, as the case may be, and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) an Event of Default
has occurred and is continuing and the Registrar has received a request from the
Depositary or (iii) in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.08.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in such other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a Global Note to beneficial owners pursuant to paragraph (b) of
this Section 2.07, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of such Global Note in an amount equal to
the principal amount of the beneficial interest in such Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more U.S. Physical Notes or Offshore Physical Notes, as the
case may be, of like tenor and amount.
(e) In connection with the transfer of the U.S. Global Notes or the
Offshore Global Notes, in whole, to beneficial owners pursuant to paragraph (b)
of this Section 2.07, the U.S. Global Notes or Offshore Global Notes, as the
case may be, shall be deemed to be surrendered to the Trustee
<PAGE>
33
for cancellation, and the Company shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interest in the U.S. Global Notes or Offshore
Global Notes, as the case may be, an equal aggregate principal amount of U.S.
Physical Notes or Offshore Physical Notes, as the case may be, of authorized
denominations.
(f) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Notes pursuant to paragraph (b), (d) or (e) of this Section 2.07
shall, except as otherwise provided by paragraph (e) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the U.S. Physical Note set
forth in Section 2.02.
(g) Any Offshore Physical Note delivered in exchange for an interest in the
Offshore Global Notes pursuant to paragraph (b), (d) or (e) of this Section 2.07
shall, except as otherwise provided by paragraph (e) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the Offshore Physical Note
set forth in Section 2.02.
(h) The registered holder of a Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
---------------------------
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
-------------------------------------------------------
provisions shall apply with respect to the registration of any proposed transfer
of a Note to any Institutional Accredited Investor which is not a QIB (excluding
Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether or
not such Note bears the Private Placement Legend, if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act or (y) the proposed transferee has delivered to the
Registrar (A) a certificate substantially in the form of Exhibit C hereto
and (B) if the aggregate principal amount of the Notes being transferred is
less than $100,000, an opinion of counsel acceptable to the Company that
such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Notes, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Notes in an
amount equal to the principal amount of the beneficial interest in the U.S.
Global Notes to be transferred, and the Company
<PAGE>
34
shall execute, and the Trustee shall authenticate and deliver, one or more
U.S. Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
-----------------
to the registration of any proposed transfer of a Note to a QIB (excluding Non-
U.S. Persons):
(i) If the Note to be transferred consists of (x) either Offshore
Physical Notes prior to the removal of the Private Placement Legend or U.S.
Physical Notes, the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided for
on the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the U.S. Global Notes, the transfer of such interest may be
effected only through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred consists of U.S. Physical Notes, upon receipt by the Registrar
of the documents referred to in paragraph (i) above and instructions given
in accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of U.S. Global Notes in an amount equal to the
principal amount of the U.S. Physical Notes to be transferred, and the
Trustee shall cancel the U.S. Physical Notes so transferred.
(c) Transfers of Interests in the Offshore Global Notes or Offshore
---------------------------------------------------------------
Physical Notes. The following provisions shall apply with respect to any
- --------------
transfer of interests in Offshore Global Notes or Offshore Physical Notes:
(i) prior to the removal of the Private Placement Legend from the
Offshore Global Notes or Offshore Physical Notes pursuant to Section 2.02,
the Registrar shall refuse to register such transfer unless such transfer
complies with Section 2.08(b) or Section 2.08(d), as the case may be, and
<PAGE>
35
(ii) after such removal, the Registrar shall register the transfer of
any such Note without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following provisions
-----------------------------------------
shall apply with respect to any transfer of a Note to a Non-U.S. Person:
(i) The Registrar shall register any proposed transfer to any Non-
U.S. Person if the Note to be transferred is a U.S. Physical Note or an
interest in U.S. Global Notes, upon receipt of a certificate substantially
in the form of Exhibit D hereto from the proposed transferor.
(ii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Notes, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Notes in an
amount equal to the principal amount of the beneficial interest in the U.S.
Global Notes to be transferred, and (b) if the proposed transferee is an
Agent Member, upon receipt by the Registrar of instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Offshore Global Notes in an amount equal to
the principal amount of the U.S. Physical Notes or the U.S. Global Notes,
as the case may be, to be transferred, and the Trustee shall cancel the
Physical Note, if any, so transferred or decrease the amount of the U.S.
Global Notes.
(e) Private Placement Legend. Upon the transfer, exchange or replacement
------------------------
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend unless (i) the
Private Placement Legend is no longer required by Section 2.02, (ii) the
circumstances contemplated by paragraph (a)(i)(x) of this Section 2.08 exist or
(iii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(f) General. By its acceptance of any Note bearing the Private Placement
-------
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture. The
Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
<PAGE>
36
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.07 or this Section 2.08. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is surrendered to
-----------------
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such Note has been acquired by a bona fide purchaser, the Company shall
issue and the Trustee shall authenticate a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding;
provided that the requirements of this Section 2.09 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and each
Subsidiary Guarantor and shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are all
-----------------
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be outstanding
unless and until the Trustee and the Company receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the Company)
holds on the maturity date money sufficient to pay Notes payable on that date,
then on and after that date such Notes cease to be outstanding and interest on
them shall cease to accrue.
A Note does not cease to be outstanding because the Company or one of its
Affiliates holds such Note, provided, however, that in determining whether the
Holders of the requisite principal amount of the outstanding Notes have given
any request, demand, authorization, direction, notice,
<PAGE>
37
consent or waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Trustee has actual knowledge to be so owned shall be so disregarded. Notes so
owned which have been pledged in good faith may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or of such
other obligor.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready for
---------------
delivery, the Company may prepare and execute and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officers executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.12. Cancellation. The Company at any time may deliver to the
------------
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee shall cancel all Notes surrendered
for transfer, exchange, payment or cancellation and shall destroy them in
accordance with its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may use
-------------
"CUSIP", "CINS" or "ISIN" numbers (if then generally in use), and the Company
and the Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in
notices of redemption or exchange as a convenience to Holders; provided that any
such notice shall state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company shall promptly notify
the Trustee of any change in "CUSIP", "CINS" or "ISIN" numbers for the Notes.
<PAGE>
38
SECTION 2.14. Defaulted Interest. If the Company defaults in a payment of
------------------
interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.15. Issuance of Additional Notes. The Company may, subject to
----------------------------
Article Four of this Indenture and applicable law, issue additional Notes under
this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes are redeemable, at the
-------------------
Company's option, in whole or in part, at any time or from time to time, on or
after May 1, 2004 and prior to maturity, upon not less than 30 nor more than 60
days' prior notice mailed by first-class mail to each Holder's last address, as
it appears in the Security Register, at the following Redemption Prices
(expressed in percentages of principal amount), plus accrued and unpaid interest
to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date that is prior to the Redemption Date to receive
interest due on an Interest Payment Date), if redeemed during the 12-month
period commencing May 1 of the years set forth below:
Redemption
Year Price
---- ----------
2004................... 106.125%
2005................... 104.083%
2006................... 102.041%
2007 and thereafter.... 100.000%
(b) In addition, at any time prior to May 1, 2002, the Company may redeem
up to 35% of the aggregate principal amount of the Notes with the Net Cash
Proceeds of one or more sales of Capital Stock (other than Disqualified Stock),
at any time as a whole or from time to time in part, at a Redemption Price
(expressed as a percentage of principal amount) of 112.250%, plus accrued and
unpaid interest to the Redemption Date (subject to the rights of Holders of
record on the relevant Regular Record Date that is prior to the Redemption Date
to receive interest due on an Interest Payment Date); provided that (i) at least
65% of the aggregate principal amount of Notes originally
<PAGE>
39
issued on the Closing Date remains outstanding after each such redemption and
(ii) notice of such redemption is mailed within 60 days after such sale of
Capital Stock.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem Notes
------------------
pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Notes to be redeemed and the clause
of this Indenture pursuant to which redemption shall occur.
The Company shall give each notice provided for in this Section 3.02 in an
Officers' Certificate at least 45 days before the Redemption Date (unless a
shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of the
---------------------------------
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by the Company,
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not listed on a national securities exchange or
automated quotation system, by lot or by such other method as the Trustee in its
sole discretion shall deem fair and appropriate; provided that no Note of $1,000
in principal amount or less shall be redeemed in part.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount may only be redeemed in whole. The Trustee may select for redemption
portions (equal to $1,000 in principal amount or any integral multiple thereof)
of Notes that have denominations larger than $1,000 in principal amount.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company and the Registrar promptly in writing of the Notes or portions of Notes
to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
--------------------
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
<PAGE>
40
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be reissued;
and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption
------------------------------
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to any Redemption
---------------------------
Date, the Company shall deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, shall segregate and hold in trust as provided in
Section 2.05) money sufficient to pay the Redemption Price of and accrued
interest on all Notes to be redeemed on that date other than Notes or portions
thereof called for redemption on that date that have been delivered by the
Company to the Trustee for cancellation.
<PAGE>
41
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
--------------------------------------
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that is
----------------------
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder without service charge, a new Note equal in principal
amount to the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the principal of,
----------------
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment. If the Company or any Subsidiary of the Company or any
Affiliate of any of them acts as Paying Agent, an installment of principal,
premium, if any, or interest shall be considered paid on the due date if the
entity acting as Paying Agent complies with the last sentence of Section 2.05.
As provided in Section 6.09, upon any bankruptcy or reorganization procedure
relative to the Company, the Trustee shall serve as the Paying Agent, if any,
for the Notes.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company shall maintain
-------------------------------
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The
<PAGE>
42
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of the
Trustee as such office of the Company in accordance with Section 2.04.
SECTION 4.03. Limitation on Incurrence of Indebtedness. (a) The Company
----------------------------------------
shall not, and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes, the Note Guarantees and other Indebtedness
existing on the Closing Date); provided that the Company or any Subsidiary
Guarantor may Incur Indebtedness if, after giving effect to the Incurrence of
such Indebtedness and the receipt and application of the proceeds therefrom, the
Fixed Charge Coverage Ratio would be greater than 2:1.
Notwithstanding the preceding, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following:
(i) Indebtedness of the Company or any Subsidiary Guarantor
outstanding at any time pursuant to this clause (i) under the Credit
Agreement in an aggregate principal amount (together with refinancings
thereof incurred under clause (iii) of this paragraph) not to exceed $550
million, less any amount of such Indebtedness permanently repaid as
provided under Section 4.11;
(ii) Indebtedness owed (A) to the Company; provided that if such
Indebtedness exceeds $500,000 it shall be evidenced by a promissory note or
(B) to any Restricted Subsidiary; provided that (x) any event which results
in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
any subsequent transfer of such Indebtedness (other than to the Company or
another Restricted Subsidiary) shall be deemed, in each case, to constitute
an Incurrence of such Indebtedness not permitted by this clause (ii) and
(y) if the Company or any Subsidiary Guarantor is the obligor on such
Indebtedness, such
<PAGE>
43
Indebtedness must be expressly subordinated in right of payment to the
Notes, in the case of the Company, or the Note Guarantee, in the case of a
Subsidiary Guarantor;
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness and
any refinancings thereof in an amount not to exceed the amount so
refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that (a) Indebtedness the proceeds of which are used to
refinance or refund the Notes or Indebtedness that is pari passu with, or
subordinated in right of payment to, the Notes or the Note Guarantees shall
only be permitted under this clause (iii) if (x) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is pari passu with
the Notes or any Note Guarantees, such new Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made pari passu with, or
subordinate in right of payment to, the remaining Notes or such Note
Guarantees, or (y) in case the Indebtedness to be refinanced is
subordinated in right of payment to the Notes or any Note Guarantees, such
new Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes
or such Note Guarantees at least to the extent that the Indebtedness to be
refinanced is subordinated to the Notes or such Note Guarantees, (b) such
new Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded or the Stated Maturity of the
Notes, if sooner, and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness to be refinanced or
refunded, and (c) such new Indebtedness is Incurred by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness to be
refinanced or refunded;
(iv) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (a) used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control or (b) deposited to
defease the Notes as described under Section 8.02 or 8.03 or to discharge
the Notes as described under Section 8.01;
(v) Guarantees of the Notes and Guarantees of Indebtedness of the
Company or any Subsidiary Guarantor by any Restricted Subsidiary; provided
that the Guarantee of such Indebtedness is not prohibited by and is made in
accordance with Section 4.07;
(vi) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount outstanding at any time pursuant to this clause (vi) (together with
refinancings thereof incurred under clause (iii) of this paragraph) not to
exceed the greater of (x) $40 million and (y) 70% of the consolidated book
value of the accounts receivable of all the Foreign Subsidiaries;
<PAGE>
44
(vii) Guarantees of Indebtedness of any Foreign Subsidiary incurred
under clause (vi) above, by the Company or any Subsidiary Guarantor;
provided that the aggregate amount of Indebtedness guaranteed pursuant to
this clause (vii) does not exceed $40 million;
(viii) Purchase Money Indebtedness of the Company or any Subsidiary
Guarantor; provided that the aggregate amount of such Indebtedness
outstanding at any time pursuant to this clause (viii) (together with
refinancings thereof incurred under clause (iii) of this paragraph) shall
not exceed $15 million;
(ix) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount outstanding pursuant to this clause (ix)
(together with refinancings thereof incurred under clause (iii) of this
paragraph) not to exceed $5 million;
(x) the D&M Financing; and
(xi) Indebtedness of the Company or any Subsidiary Guarantor (in
addition to Indebtedness permitted under clauses (i) through (x) above),
including Indebtedness under the Credit Agreement, outstanding at any time
pursuant to this clause (xi) (together with refinancings thereof incurred
under clause (iii) of this paragraph) in an aggregate principal amount not
to exceed $25 million.
(b) Notwithstanding any other provision of this Section 4.03, the maximum
amount of Indebtedness that the Company or a Restricted Subsidiary may Incur or
that is deemed to be outstanding pursuant to this Section 4.03 shall not be
affected by fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (x) Indebtedness Incurred under the Credit Agreement on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (i)
of the second paragraph of clause (a) of this Section 4.03, (y) Guarantees,
Liens or obligations with respect to letters of credit supporting Indebtedness
otherwise included in the determination of such particular amount shall not be
included and (z) any Liens granted pursuant to the equal and ratable provisions
referred to in Section 4.10 shall not be treated as Indebtedness. For purposes
of determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described above (other than Indebtedness referred to in clause (x) of the
preceding sentence), the Company, in its sole discretion, shall classify, and
from time to time may reclassify, such item of Indebtedness and shall only be
required to include the amount and type of such Indebtedness in one of such
clauses.
SECTION 4.04. Limitation on Senior Subordinated Indebtedness. The Company
----------------------------------------------
shall not, and shall not permit any Subsidiary Guarantor to Incur any
Indebtedness that is subordinate in right
<PAGE>
45
of payment to any Senior Indebtedness unless such Indebtedness is pari passu
with, or subordinated in right of payment to, the Notes or any Note Guarantee.
SECTION 4.05. Limitation on Restricted Payments. The Company shall not,
---------------------------------
and shall not permit any Restricted Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or make any distribution on or with
respect to its Capital Stock held by persons other than the Company or any
of its Restricted Subsidiaries other than:
(x) dividends or distributions payable in shares of its Capital
Stock (other than Disqualified Stock) or in options, warrants or other
rights to acquire shares of such Capital Stock and
(y) pro rata dividends or distributions on Common Stock of
Restricted Subsidiaries,
(ii) purchase, redeem, retire or otherwise acquire for value any
shares of Capital Stock of the Company or any Subsidiary Guarantor
(including options, warrants or other rights to acquire such shares of
Capital Stock) held by any Person other than a Subsidiary Guarantor,
(iii) make any voluntary or optional principal payment, or voluntary
or optional redemption, repurchase, defeasance, or other voluntary or
optional acquisition or retirement for value, of Indebtedness of the
Company that is subordinated in right of payment to the Notes or any
Indebtedness of a Subsidiary Guarantor that is subordinated in right of
payment to the Note Guarantees or
(iv) make any Investment, other than a Permitted Investment, in any
Person (such payments or any other actions described in clauses (i) through
(iv) above being collectively ''Restricted Payments''),
if, at the time of, and after giving effect to, the proposed Restricted
Payment:
(A) a Default or Event of Default shall have occurred and be
continuing,
(B) the Company could not Incur at least $1.00 of Indebtedness
under the first paragraph of part (a) of Section 4.03 or
(C) the aggregate amount of all Restricted Payments made after
the Closing Date shall exceed the sum of
<PAGE>
46
(1) 50% of the aggregate amount of the Adjusted Consolidated
Net Income (or, if the Adjusted Consolidated Net Income is a
loss, minus 100% of the amount of such loss) accrued on a
cumulative basis during the period (taken as one accounting
period) beginning on the first day of the fiscal quarter
beginning immediately following the Closing Date and ending on
the last day of the last fiscal quarter preceding the Transaction
Date for which reports have been filed with the Commission or
provided to the Trustee plus
(2) the aggregate Net Cash Proceeds received by the Company
after the Closing Date from
(a) the issuance and sale of its Capital Stock (other
than Disqualified Stock) to a Person who is not a Subsidiary
of the Company,
(b) an issuance or sale to a Person who is not a
Subsidiary of the Company not prohibited by this Indenture
of Indebtedness of the Company or a Subsidiary of the
Company for cash subsequent to the Closing Date upon the
conversion or exchange of such Indebtedness into Capital
Stock (other than Disqualified Stock) of the Company,
(c) any exercise for, or exchange or conversion of,
securities (including options, warrants, rights and
convertible or exchangeable Indebtedness) of the Company or
a Subsidiary of the Company into Capital Stock (other than
Disqualified Stock) of the Company, and
(d) the issuance or sale to a Person who is not a
Subsidiary of the Company of any options, warrants or other
rights to acquire Capital Stock of the Company (in each
case, exclusive of any Disqualified Stock or any options,
warrants or other rights that are redeemable at the option
of the holder, or are required to be redeemed, prior to the
Stated Maturity of the Notes) plus
(3) an amount equal to the net reduction in Investments
(other than reductions in Permitted Investments) in any Person
resulting from distributions on or repayments of any Investments,
including payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other distributions or
transfers of assets, in each case to the Company or any
<PAGE>
47
Restricted Subsidiary or from the Net Cash Proceeds from the sale
or other disposition of any such Investment (except, in each
case, in order to avoid duplication to the extent any such
payment or proceeds have been or would be included in the
calculation of Adjusted Consolidated Net Income for purposes of
clause (C)(1) of this Section 4.05), or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in
each case as provided in the definition of ''Investments''), not
to exceed, in each case, the amount of Investments previously
made by the Company or any Restricted Subsidiary in such Person
or Unrestricted Subsidiary plus
(4) $5 million.
The amount of all Restricted Payments, if other than in cash, shall be
the fair market value thereof determined in good faith by the Board of
Directors or a Senior Officer of the Company, whose determination shall be
conclusive; provided that if the non cash amount of any single Restricted
Payment or series of related Restricted Payments exceeds $25 million, such
amount shall be determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution.
The preceding provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of its
declaration if, on the date of declaration, such payment would comply with
the foregoing paragraph;
(ii) the making of any principal payment or the redemption,
repurchase, defeasance or other acquisition or retirement for value of
Indebtedness that is subordinated in right of payment to the Notes or any
Note Guarantee including principal, premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of part (a) of Section 4.03;
(iii) the repurchase, redemption, retirement or other acquisition of
Capital Stock of the Company, a Subsidiary Guarantor or an Unrestricted
Subsidiary (or options, warrants or other rights to acquire such Capital
Stock) in exchange for, or out of the proceeds of a substantially
concurrent offering of, shares of Capital Stock (other than Disqualified
Stock) of the Company (or options, warrants or other rights to acquire such
Capital Stock; provided that such options, warrants or other rights are not
redeemable prior to the Stated Maturity of the Notes);
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness that is subordinated in right of payment to the Notes or any
Note Guarantee in exchange for, or out of the proceeds
<PAGE>
48
of, a substantially concurrent offering of, shares of the Capital Stock
(other than Disqualified Stock) of the Company (or options, warrants or
other rights to acquire such Capital Stock; provided that such options,
warrants or other rights are not redeemable prior to the Stated Maturity of
the Notes);
(v) payments or distributions to dissenting stockholders pursuant
to applicable law, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of this
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of the Company; provided that
no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence of such payment or distribution;
(vi) Investments acquired in exchange for, or out of the proceeds of
a substantially concurrent offering of, Capital Stock (other than
Disqualified Stock) of the Company;
(vii) the declaration or payment of dividends on Capital Stock (other
than Disqualified Stock) of the Company in an aggregate annual amount not
to exceed 6% of the Net Cash Proceeds received by the Company after the
Closing Date from the sale of such Capital Stock; provided that no Default
or Event of Default shall have occurred and be continuing or would occur as
a consequence of such action or payment;
(viii) any purchase of fractional shares of Common Stock of the
Company in connection with the conversion of the Convertible Subordinated
Debentures;
(ix) the D&M Acquisition;
(x) loans or advances to employees of the Company or its Restricted
Subsidiaries in the ordinary course of business to purchase Capital Stock
(other than Disqualified Stock) of the Company in an aggregate amount
outstanding at any time under this clause (x) not to exceed $10 million;
(xi) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of the Company and its
Restricted Subsidiaries on the date of such Investment; provided that the
aggregate amount of such Investments under this clause (xi) does not exceed
$20 million plus the net reduction in Investments made pursuant to this
clause (xi) resulting from distributions on or repayments of such
Investments, including payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other distributions or other transfers
of assets, in each case to the Company or any Restricted Subsidiary, or
from the Net Cash Proceeds from the sale or other disposition of any such
Investment (except, in each case, in order to avoid duplication to the
extent any such payments or proceeds have been or would be included in the
calculation of Adjusted
<PAGE>
49
Consolidated Net Income for purposes of clause (C)(1) of this Section 4.05)
or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"); provided that the net reduction in any Investments from
any Person shall not exceed the amount of such Investments in such Person;
provided further that no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence of such Investment;
(xii) repurchases of Capital Stock of the Company or a Subsidiary of
the Company or options, warrants or other rights to acquire Capital Stock
of the Company or a Subsidiary of the Company repurchased from employees
(or their heirs or estates) of the Company or its Subsidiaries upon the
death, disability or termination of employment in an aggregate amount under
this clause (xii) to all employees (or their heirs or estates) that shall
not during any one fiscal year exceed the sum of:
(a) $2 million plus
(b) the aggregate amount of repurchases that would have been
permitted to be made during each preceding fiscal year pursuant to
this clause (xii) and were not so made;
provided that no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence of such repurchase;
(xiii) purchases of shares of Capital Stock of any Subsidiary
Guarantor owned by professional engineers in connection with licensing
requirements in an aggregate amount not to exceed $500,000;
(xiv) repurchases of shares of Capital Stock of the Company that
constitute odd lots, pursuant to a program established by the Company for
the repurchase of odd lots, in an aggregate amount during any fiscal year
not to exceed the sum of $100,000 plus the aggregate amount of repurchases
that would have been permitted to be made under this clause (xiv) during
each preceding fiscal year and were not so made;
(xv) dividends on Preferred Stock of Restricted Subsidiaries
permitted to be issued pursuant to Section 4.03; or
(xvi) other Restricted Payments in an aggregate amount not to exceed
$10 million, measured by the fair market value thereof at the time made;
provided that no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence of such Restricted Payment.
<PAGE>
50
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof, an Investment acquired in exchange for Capital
Stock referred to in clause (vi) thereof, an Investment described in clause (ix)
thereof, any loan or advance referred to in clause (x) thereof, repurchases of
Capital Stock referred to in clause (xii) or clause (xiii) thereof, dividends on
Preferred Stock of Restricted Subsidiaries referred to in clause (xv) thereof or
Restricted Payments referred to in clause (xvi) thereof), and the Net Cash
Proceeds from any issuance of Capital Stock referred to in clauses (iii), (iv)
and (vi) thereof, shall be included in calculating whether the conditions of
clause (C) of the first paragraph of this Section 4.05 have been met with
respect to any subsequent Restricted Payments. For purposes of determining
compliance with this Section 4.05, in the event that a Restricted Payment meets
the criteria of more than one of the types of Restricted Payments described in
the above clauses, the Company, in its sole discretion, may order and classify,
and from time to time may reclassify, such Restricted Payment if it would have
been permitted at the time such Restricted Payment was made and at the time of
such reclassification.
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries. The Company shall not, and shall not permit
- ---------------------------------
any Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to:
(i) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Restricted Subsidiary owned by
the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary,
(iii) make loans or advances to the Company or any other Restricted
Subsidiary or
(iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The preceding provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements or Indebtedness in effect on the Closing
Date, and any extensions, refinancings, renewals or replacements of such
agreements or Indebtedness; provided that the encumbrances and restrictions
in any such extensions, refinancings, renewals or replacements are no less
favorable in any material respect to the Holders than those
<PAGE>
51
encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) contained in any agreements binding upon or relating to any
property, asset, business or any Person or the property, assets or
businesses of such Person, in each case acquired by the Company or any
Restricted Subsidiary and existing at the time of such acquisition and not
incurred in contemplation of such acquisition; provided that such
encumbrances or restrictions are not applicable to any property, asset,
business or any Person or the property, assets or businesses of such
Person, other than the property, asset, business or Person or the property,
assets or businesses of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
Section 4.06, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease, license,
conveyance or contract or similar property or asset, (B) existing by virtue
of any transfer of, agreement to transfer, option or right with respect to,
or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Indenture or (C) arising or
agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract
from the value of property or assets of the Company or any Restricted
Subsidiary in any manner material to the Company or any Restricted
Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed pursuant to
an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of,
such Restricted Subsidiary;
(vi) contained in the terms of any Indebtedness of the Company or
any Subsidiary Guarantor; provided that such encumbrances or restrictions
taken as a whole are no more restrictive in the aggregate than those
contained in this Indenture, as determined in good faith by the Board of
Directors or a Senior Officer of the Company, whose determination shall be
conclusive;
(vii) contained in any agreement or instrument governing Senior
Indebtedness not incurred in violation of Section 4.03; provided that such
encumbrances or restrictions taken as a whole are no more restrictive in
the aggregate than those contained in the Credit Agreement, as determined
in good faith by the Board of Directors or a Senior Officer of the Company,
whose determination shall be conclusive;
(viii) on cash or other deposits or net worth, imposed by customers
under contracts entered into in the ordinary course of business;
<PAGE>
52
(ix) with respect to any Restricted Subsidiary, contained in the terms
of any Indebtedness or Preferred Stock or any agreement pursuant to which
such Indebtedness or Preferred Stock was issued if:
(A) the encumbrance or restriction applies only in the event of
a payment default or a default with respect to a financial covenant
contained in such Indebtedness or agreement,
(B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in
comparable financings (as determined by the Company) and
(C) the Company determines that any such encumbrance or
restriction will not materially affect the Company's ability to make
principal or interest payments on the Notes, as determined in good
faith by the Board of Directors or a Senior Officer of the Company,
whose determination shall be conclusive;
(x) with respect to any property or assets acquired with Purchase
Money Indebtedness and imposed by such Purchase Money Indebtedness;
(xi) contained in any extensions, refinancings, renewals or
replacements of any of the agreements or instruments referred to in the
preceding clauses of this paragraph, provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements
taken as a whole are not materially less favorable to the Holders than
those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced, as determined in good
faith by the Board of Directors or a Senior Officer of the Company, whose
determination shall be conclusive; or
(xii)with respect to any Foreign Subsidiary, contained in the terms
of any Indebtedness or Preferred Stock or any agreement pursuant to which
such Indebtedness or Preferred Stock was issued if:
(A) either (i) the encumbrance or restriction applies only in the
event of a payment default or a default with respect to a financial
covenant in such Indebtedness or agreement or (ii) the Company
determines that any such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest
payments on the Notes, as determined in good faith by the Board of
Directors or a Senior Officer of the Company, whose determination
shall be conclusive and
<PAGE>
53
(B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in
comparable financings (as determined by the Company).
Nothing contained in this Section 4.06 shall prevent the Company or any
Restricted Subsidiary from (i) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.10 or (ii) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
---------------------------------------------------
Subsidiaries. The Company shall not permit any Restricted Subsidiary that is
- ------------
not a Subsidiary Guarantor, directly or indirectly, to Guarantee any
Indebtedness of the Company or any other Restricted Subsidiary (other than a
Foreign Subsidiary), unless (i) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture, in a form
reasonably satisfactory to the Trustee, providing for a Guarantee (a
''Subsidiary Guarantee'') of payment of the Notes by such Restricted Subsidiary
and (ii) such Restricted Subsidiary waives and shall not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee. The Subsidiary Guarantee may be
subordinated to Senior Indebtedness of the Subsidiary Guarantor to the same
extent as the Notes are subordinated to Senior Indebtedness of the Company.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (x) any sale, exchange or transfer,
to any Person (other than the Company or any other Restricted Subsidiary), of
all of the Company's and each Restricted Subsidiary's Capital Stock in, or all
or substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or (y) the release or
discharge of the Guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under such
Guarantee.
SECTION 4.08. Consummation of the D&M Acquisition. As soon as practicable
-----------------------------------
after the date hereof, the Company shall consummate the D&M Acquisition and
notify the Trustee thereof.
SECTION 4.09. Limitation on Transactions with Shareholders and Affiliates.
-----------------------------------------------------------
The Corporation shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction (including,
without limitation, the purchase, sale, lease or exchange of property or assets,
or the rendering of any service) with any holder (or any Affiliate of such
holder) of 5% or more of any class of Capital Stock of the Company or with any
Affiliate of the Company or any Restricted Subsidiary, except upon fair and
reasonable terms no less favorable
<PAGE>
54
to the Company or such Restricted Subsidiary than could be obtained, at the time
of such transaction or, if such transaction is pursuant to a written agreement,
at the time of the execution of the agreement providing therefor, in a
comparable arm's-length transaction with a Person that is not such a holder or
an Affiliate.
The preceding limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the disinterested
members of the Board of Directors, if there are any such disinterested
members or (B) for which the Company or a Restricted Subsidiary delivers to
the Trustee a written opinion of a nationally recognized investment
banking, accounting, appraisal firm, or valuation stating that the
transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view;
(ii) any transaction solely between the Company and any of its
Wholly Owned Restricted Subsidiaries or solely between Wholly Owned
Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company and
indemnification arrangements entered into by the Company in the ordinary
course of business;
(iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company
files a consolidated tax return or with which the Company is part of a
consolidated group for tax purposes;
(v) any sale of shares of Capital Stock (other than Disqualified
Stock) of the Company;
(vi) management and administrative services provided in the ordinary
course of business by the Company or any Restricted Subsidiary to any
Restricted Subsidiary or any Person in which the Company or any Restricted
Subsidiary has an Investment;
(vii) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business;
(viii) payments to Richard C. Blum or Richard C. Blum & Associates,
L.P. under consulting agreements in an aggregate amount not to exceed
$150,000 in any fiscal year; or
(ix) any Permitted Investments and any Restricted Payments not
prohibited by Section 4.05.
<PAGE>
55
Notwithstanding the preceding, any transaction or series of related transactions
covered by the first paragraph of this Section 4.09 and not covered by clauses
(ii) through (ix) of this Section 4.09, (a) the aggregate amount of which
exceeds $10 million in value, must be approved or determined to be fair in the
manner provided for in clause (i)(A) or (B) above and (b) the aggregate amount
of which exceeds $15 million in value, must be determined to be fair in the
manner provided for in clause (i)(B) above.
SECTION 4.10. Limitation on Liens. The Company shall not, and shall not
-------------------
permit any Subsidiary Guarantor to, Incur any Indebtedness secured by a Lien
(''Secured Indebtedness'') which is not Senior Indebtedness unless
contemporaneously with such Incurrence effective provision is made to secure the
Notes or the Note Guarantees equally and ratably with (or, if the Secured
Indebtedness is subordinated in right of payment to the Notes or the Note
Guarantees, prior to) such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
The preceding limitation does not apply to:
(i) any interest or title of a lessor in the property subject to
any Capitalized Lease;
(ii) Liens on shares of Capital Stock of any Unrestricted Subsidiary
to secure Indebtedness of such Unrestricted Subsidiary;
(iii) Liens on cash set aside at the time of the Incurrence of any
Indebtedness, or government securities purchased with such cash, in either
case to the extent that such cash or government securities prefund the
payment of interest on such Indebtedness and are held in an escrow account
or similar arrangements to be applied for such purpose;
(iv) Liens on assets or property purchased with Purchase Money
Indebtedness securing such Indebtedness; and
(v) Liens in favor of the Company.
SECTION 4.11. Limitation on Asset Sales. The Company shall not, and shall
-------------------------
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Company or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of (a) cash or Temporary
Cash Investments, (b) the assumption of Indebtedness of the Company or any
Restricted Subsidiary (other than Indebtedness to the Company or any Restricted
Subsidiary), provided that the Company or such Restricted Subsidiary is
irrevocably and unconditionally released from all liability under such
Indebtedness or (c) Replacement Assets.
<PAGE>
56
In the event and to the extent that the Net Cash Proceeds received by the
Company or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceed $5 million, then the Company shall or shall cause the relevant Restricted
Subsidiary to:
(i) within 12 months after the date Net Cash Proceeds so received
exceed $5 million,
(A) apply an amount equal to such excess Net Cash Proceeds to
permanently repay Senior Indebtedness of the Company or of any
Subsidiary Guarantor or Indebtedness of any other Restricted
Subsidiary, in each case owing to a Person other than the Company or
any of its Restricted Subsidiaries, or
(B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such
agreement), in Replacement Assets, and
(ii) apply (no later than the end of the 12-month period referred to
in clause (i)) an amount equal to such excess Net Cash Proceeds (to the
extent not applied or committed to be applied pursuant to clause (i)) as
provided in the following paragraphs of this Section 4.11.
The amount of such excess Net Cash Proceeds required to be applied (or to
be committed to be applied) during such 12-month period as set forth in clause
(i) of the preceding sentence and not applied as so required by the end of such
period shall constitute ''Excess Proceeds.'' If, as of the first day of any
calendar month, the aggregate amount of Excess Proceeds not theretofore subject
to an Offer to Purchase pursuant to this Section 4.11 totals at least $5
million, the Company must commence, not later than the fifteenth Business Day of
such month, and consummate an Offer to Purchase from the Holders (and if
required by the terms of any Indebtedness that is pari passu with the Notes
(''Pari Passu Indebtedness''), from the holders of such Pari Passu Indebtedness)
on a pro rata basis an aggregate principal amount of Notes (and Pari Passu
Indebtedness) equal to the Excess Proceeds on such date, at a purchase price
equal to 100% of the principal amount thereof, plus, in each case, accrued
interest (if any) to the Payment Date.
If the Company is required by the terms of any Pari Passu Indebtedness to
apply any Excess Proceeds to purchase such Pari Passu Indebtedness, then the
Company shall apply a portion of the Excess Proceeds to purchase Notes pursuant
to an Offer to Purchase and a portion of the Excess Proceeds to conduct an offer
to purchase an amount of such Pari Passu Indebtedness from the holders of such
Pari Passu Indebtedness on the same terms and conditions as the Offer to
Purchase applicable to the Notes, and such purchase shall be consummated on the
same date as the date of consummation of the Offer to Purchase applicable to the
Notes.
<PAGE>
57
The principal amount of Notes that the Company shall purchase shall be an
aggregate principal amount equal to the lesser of:
(i) the aggregate outstanding principal amount of the Notes tendered
into such Offer to Purchase, and
(ii) the product of:
(a) the aggregate outstanding principal amount of the then
outstanding Notes times
(b) a fraction, (x) the numerator of which is the aggregate
amount of Excess Proceeds on such date and (y) the denominator of
which is the sum of the aggregate principal amount of outstanding
Notes plus the aggregate outstanding principal amount (or accreted
value in the case of Pari Passu Indebtedness issued with original
issue discount) of such Pari Passu Indebtedness.
The purchase price that the Company shall be required to pay for Notes
purchased pursuant to the preceding shall be equal to 100% of the principal
amount thereof, plus accrued interest, if any, to the Payment Date. If the
aggregate principal amount of Notes tendered by Holders of such Notes exceeds
the amount of Excess Proceeds applied by the Company pursuant to the preceding
to the purchase of Notes, the Company shall purchase tendered Notes on a pro
rata basis.
On the Payment Date, the Company shall:
(i) accept for payment on a pro rata basis Notes or portions thereof
tendered pursuant to an Offer to Purchase;
(ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee all Notes or
portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the
Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price of such Notes, and the Trustee
shall promptly authenticate and mail to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered; provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples of $1,000. The Company shall publicly announce
the results
<PAGE>
58
of an Offer to Purchase as soon as practicable after the Payment Date. The
Trustee shall act as the Paying Agent for an Offer to Purchase.
The Company shall comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture relating to such Offer to Purchase, the Company shall comply with
the applicable securities laws and regulations and shall be deemed to not have
breached its obligations under this Indenture with respect to such Offer to
Purchase by virtue of such compliance with applicable securities laws and
regulations.
Upon completion of any such Offer to Purchase, the amount of Excess
Proceeds shall be reset to zero.
SECTION 4.12. Repurchase of Notes upon a Change of Control. The Company
--------------------------------------------
shall commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the principal amount thereof, plus accrued interest, if
any, to the Payment Date.
On the Payment Date, the Company shall:
(i) accept for payment on a pro rata basis Notes or portions thereof
tendered pursuant to an Offer to Purchase;
(ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee all Notes or
portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the
Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price of such Notes, and the Trustee
shall promptly authenticate and mail to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered; provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples of $1,000. The Company shall publicly announce
the results of an Offer to Purchase as soon as practicable after the Payment
Date. The Trustee shall act as the Paying Agent for an Offer to Purchase.
<PAGE>
59
The Company shall comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture relating to such Offer to Purchase, the Company shall comply with
the applicable securities laws and regulations and shall be deemed to not have
breached its obligations under this Indenture with respect to such Offer to
Purchase by virtue of such compliance with applicable securities laws and
regulations.
SECTION 4.13. Existence. Subject to Articles Four and Five of this
---------
Indenture, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each Restricted Subsidiary and the
rights (whether pursuant to charter, partnership certificate, agreement, statute
or otherwise), licenses and franchises of the Company and each Restricted
Subsidiary; provided that the Company shall not be required to preserve any such
right, license or franchise, or the existence of any Restricted Subsidiary, if
the maintenance or preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes. The Company shall pay or discharge and
----------------
shall cause each of its Subsidiaries to pay or discharge, or cause to be paid or
discharged, before the same shall become delinquent all material taxes,
assessments and governmental charges levied or imposed upon (a) the Company or
any such Subsidiary, (b) the income or profits of any such Subsidiary which is a
corporation or (c) the property of the Company or any such Subsidiary; provided
that the Company shall not be required to pay or discharge, or cause any of its
Subsidiaries to pay or discharge, any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.
SECTION 4.15. Maintenance of Properties and Insurance. The Company shall
---------------------------------------
cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided that nothing in
this Section 4.15 shall prevent the Company or any Restricted Subsidiary from
discontinuing the use, operation or maintenance of any of such properties or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company, desirable in the conduct of the business of the Company or such
Restricted Subsidiary.
<PAGE>
60
The Company shall provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which the Company or any such Restricted Subsidiary, as the case may
be, is then conducting business.
SECTION 4.16. Notice of Defaults. In the event that any Officer becomes
------------------
aware of any Default or Event of Default, the Company shall promptly deliver to
the Trustee an Officers' Certificate specifying such Default or Event of
Default.
SECTION 4.17. Compliance Certificates. (a) The Company shall deliver to
-----------------------
the Trustee, within 90 days after the end of the Company's fiscal year, an
Officers' Certificate stating whether or not the signers know of any Default or
Event of Default that occurred during such fiscal year. Such certificate shall
contain a certification from the principal executive officer, principal
financial officer or principal accounting officer of the Company that a review
has been conducted of the activities of the Company and its Restricted
Subsidiaries and the Company's and its Restricted Subsidiaries' performance
under this Indenture and that the Company has complied with all conditions and
covenants under this Indenture. For purposes of this Section 4.17, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If any of the officers of
the Company signing such certificate has knowledge of such a Default or Event of
Default, the certificate shall describe any such Default or Event of Default and
its status. The first certificate to be delivered pursuant to this Section
4.17(a) shall be for the fiscal year in which this Indenture was executed.
(b) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, beginning with the fiscal year in which this Indenture was
executed, a certificate signed by the Company's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Notes as they relate to accounting matters,
(ii) that they have read the most recent Officers' Certificate delivered to the
Trustee pursuant to paragraph (a) of this Section 4.17 and (iii) whether, in
connection with their audit examination, anything came to their attention that
caused them to believe that the Company was not in compliance with any of the
terms, covenants, provisions or conditions of Article Four and Section 5.01 of
this Indenture as they pertain to accounting matters and, if any Default or
Event of Default has come to their attention, specifying the nature and period
of existence thereof; provided that such independent certified public
accountants shall not be liable in respect of such statement by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with generally accepted auditing standards in effect at the date of such
examination.
<PAGE>
61
SECTION 4.18. Commission Reports and Reports to Holders. Whether or not
-----------------------------------------
the Company is then required to file reports with the Commission, the Company
shall file with the Commission all such reports and other information as it
would be required to file with the Commission by Sections 13(a) or 15(d) under
the Exchange Act if it were subject thereto, unless the Commission will not
accept such filing. The Company shall supply the Trustee and each Holder or
shall supply to the Trustee for forwarding to each such Holder, without cost to
such Holder, copies of such reports and other information. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.19. Waiver of Stay, Extension or Usury Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. The Company shall not
---------------------------
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company, unless:
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of
the Company shall be a corporation organized and validly existing under the
laws of the United States of America or any jurisdiction thereof and shall
expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, all of the obligations of the Company on all of the Notes and
under this Indenture;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
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62
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or any Person becoming the successor obligor of
the Notes shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction; provided that this clause (iii) shall not apply to a
consolidation or merger;
(iv) immediately after giving effect to such transaction on a pro
forma basis, the Company, or any Person becoming the successor obligor of
the Notes, as the case may be, could Incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.03; provided that this clause (iv)
shall not apply to a consolidation, merger or sale of all (but not less
than all) of the assets of the Company if all Liens and Indebtedness of the
Company or any Person becoming the successor obligor on the Notes, as the
case may be, and its Restricted Subsidiaries outstanding immediately after
such transaction would have been permitted (and all such Liens and
Indebtedness, other than Liens and Indebtedness of the Company and its
Restricted Subsidiaries outstanding immediately prior to the transaction,
shall be deemed to have been Incurred) for all purposes of this Indenture;
(v) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clauses (iii) and (iv)) and Opinion of Counsel, in each case stating that
such consolidation, merger or transfer and such supplemental indenture
complies with this provision and that all conditions precedent provided for
herein relating to such transaction have been complied with; and
(vi) each Subsidiary Guarantor, unless such Subsidiary Guarantor is
the Person with which the Company has entered into a transaction under this
Section 5.01, shall have by amendment to its Note Guarantee confirmed that
its Note Guarantee shall apply to the obligations of the Company or the
surviving entity in accordance with the Notes and this Indenture;
provided, however, that clauses (iii) and (iv) above do not apply if, in
the good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company and any
such transaction shall not have as one of its purposes the evasion of the
preceding limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger, or
---------------------
any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor
<PAGE>
63
Person had been named as the Company herein; provided that the Company shall not
be released from its obligation to pay the principal of, premium, if any, or
interest on the Notes in the case of a lease of all or substantially all of its
property and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. Any of the following events shall
-----------------
constitute an "Event of Default" hereunder:
----------------
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise, regardless of whether such payment
is prohibited by the provisions described under Article Eleven;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30
days, regardless of whether such payment is prohibited by the provisions
described under Article Eleven;
(c) default in the performance or breach of the provisions of this
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the assets of the Company or the failure to make or
consummate an Offer to Purchase in accordance with Section 4.11 and Section
4.12;
(d) the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement of the Company
in this Indenture or under the Notes (other than a default specified in
clause (a), (b) or (c) above) and such default or breach continues for a
period of 60 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company, any Significant Subsidiary or any group of Subsidiary
Guarantors that taken together would constitute a Significant Subsidiary,
having an outstanding principal amount of $15 million or more in the
aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (i) an event of
default that has caused the holder thereof to declare such Indebtedness to
be due and payable prior to its Stated Maturity and such Indebtedness has
not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration or (ii) the failure to make a
principal payment at the final (but not any interim) fixed maturity and
such defaulted
<PAGE>
64
payment shall not have been made, waived or extended within 30 days of such
payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $15 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company, any Significant Subsidiary or any group of
Subsidiary Guarantors that taken together would constitute a Significant
Subsidiary, and shall not be paid or discharged, and there shall be any
period of 60 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or
orders outstanding and not paid or discharged against all such Persons to
exceed $15 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company, any Significant Subsidiary
or any group of Subsidiary Guarantors that taken together would constitute
a Significant Subsidiary, in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company, any Significant Subsidiary
or any group of Subsidiary Guarantors that taken together would constitute
a Significant Subsidiary, or for all or substantially all of the property
and assets of the Company, any Significant Subsidiary or any group of
Subsidiary Guarantors that taken together would constitute a Significant
Subsidiary, or (C) the winding up or liquidation of the affairs of the
Company, any Significant Subsidiary or any group of Subsidiary Guarantors
that taken together would constitute a Significant Subsidiary, and, in each
case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days;
(h) the Company, any Significant Subsidiary or any group of
Subsidiary Guarantors that taken together would constitute a Significant
Subsidiary, (A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to
the entry of an order for relief in an involuntary case under any such law,
(B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Company, any Significant Subsidiary or any group of Subsidiary
Guarantors that taken together would constitute a Significant Subsidiary,
or for all or substantially all of the property and assets of the Company,
or any Significant Subsidiary or any group of Subsidiary Guarantors that
taken together would constitute a Significant Subsidiary, or (C) effects
any general assignment for the benefit of creditors; or
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65
(i) except as permitted by this Indenture, any Subsidiary Guarantor
repudiates its obligations under its Note Guarantee or any Note Guarantee
is determined to be unenforceable or invalid or shall for any reason cease
to be in full force and effect.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event
------------
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company or a Subsidiary Guarantor that is a Significant
Subsidiary or any group of Subsidiary Guarantors that taken together would
constitute a Significant Subsidiary) occurs and is continuing under this
Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding, by written notice to the Company (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal of, premium, if any, and accrued
interest shall be immediately due and payable; provided that any such
declaration of acceleration shall not become effective until the earlier of (x)
five Business Days after receipt of the acceleration notice by the Bank Agent
and the Company or (y) acceleration of the Indebtedness under the Credit
Agreement; provided further that such acceleration shall automatically be
rescinded and annulled without any further action required on the part of the
Holders in the event that any and all Events of Default specified in the
acceleration notice under this Indenture shall have been cured, waived or
otherwise remedied as provided in this Indenture prior to the expiration of the
period referred to in the preceding clauses (x) and (y). In the event of a
declaration of acceleration because an Event of Default set forth in clause (e)
of Section 6.01 has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default triggering
such Event of Default pursuant to clause (e) shall be remedied or cured by the
Company, the relevant Significant Subsidiary or the relevant group of Subsidiary
Guarantors or waived by the holders of the relevant Indebtedness within 60 days
after the declaration of acceleration with respect thereto. If an Event of
Default specified in clause (g) or (h) of Section 6.01 occurs with respect to
the Company or a Subsidiary Guarantor that is a Significant Subsidiary or any
group of Subsidiary Guarantors that taken together would constitute a
Significant Subsidiary, the principal of, premium, if any, and accrued interest
on the Notes then outstanding shall automatically become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.
At any time after such declaration of acceleration, but before a judgment
or decree for the payment of the money due has been obtained by the Trustee, the
Holders of at least a majority in principal amount of the outstanding Notes by
written notice to the Company and to the Trustee, may waive all past Defaults
and rescind and annul a declaration of acceleration and its consequences if (a)
the Company has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Notes, (iii) the principal of and
premium, if any, on any Notes that have become due otherwise than by such
declaration or occurrence of acceleration and interest thereon at the rate
prescribed therefor by such
<PAGE>
66
Notes, and (iv) to the extent that payment of such interest is lawful, interest
upon overdue interest, if any, at the rate prescribed therefor by such Notes,
(b) all existing Events of Default, other than the non-payment of the principal
of, premium, if any, and accrued interest on the Notes that have become due
solely by such declaration of acceleration, have been cured or waived and (c)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may, and at the direction of the Holders of at least a
majority in principal amount of the outstanding Notes shall, pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07 and
-----------------------
9.02, the Holders of at least a majority in principal amount of the outstanding
Notes, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences, except a Default in the payment of principal of,
premium, if any, or interest on any Note as specified in clause (a) or (b) of
Section 6.01 or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority in
-------------------
aggregate principal amount of the outstanding Notes may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee; provided that the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction; and provided
further that the Trustee may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
-------------------
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) the Holder has previously given the Trustee written notice of a
continuing Event of Default;
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67
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to
pursue such remedy;
(iii) such Holder or Holders offer the Trustee indemnity reasonably
satisfactory to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the Trustee
a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06, the
Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
------------------------------------
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the principal of, premium, if any, or interest on, such Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
--------------------------
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor of the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal,
premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate specified
in the Notes, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such
--------------------------------
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and
<PAGE>
68
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07) and the Holders allowed in any judicial proceedings
relative to the Company (or any other obligor of the Notes), its creditors or
its property and shall be entitled and empowered to collect and receive any
monies, securities or other property payable or deliverable upon conversion or
exchange of the Notes or upon any such claims and to distribute the same, and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
----------
this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to the holders of Senior Indebtedness, and as to the extent
required by Article Eleven;
Third: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Notes for principal, premium, if any, and interest, respectively; and
Fourth: to the Company or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
---------------------
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a
<PAGE>
69
Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Company, Trustee and the Holders shall continue as though no such proceeding had
been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the Trustee
-------
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections 315(a)
-------------------------
through (d):
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70
(i) the Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper person;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 13.04. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion;
(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care by it hereunder;
(iv) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction;
(v) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers, provided that the Trustee's conduct does not constitute
negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate; and
(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
personally or by agent or attorney.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its
----------------------------
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or
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71
its Affiliates with the same rights it would have if it were not the Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
--------------------
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event of Default
-----------------
occurs and is continuing and if such Default or Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each
-----------------------------
May 15, beginning with May 15, 2000, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Securities are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
--------------------------
Trustee such compensation as shall be agreed upon in writing for its services
hereunder. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by the Trustee without negligence or bad faith on its part.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company and each Subsidiary Guarantor shall indemnify the Trustee for,
and hold it harmless against, any loss or liability or expense incurred by it
without negligence or bad faith on its part in connection with the acceptance or
administration of this Indenture and its duties under this Indenture and the
Notes, including the costs and expenses of defending itself against any claim or
liability and of complying with any process served upon it or any of its
officers in connection with the exercise or performance of any of its powers or
duties under this Indenture and the Notes. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure
<PAGE>
72
by the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder, unless the Company is materially prejudiced thereby. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
Unless otherwise set forth herein, the Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.
If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in clause (g) or (h) of Section 6.01, the expenses
and the compensation for the services will be intended to constitute expenses of
administration under Title 11 of the United States Bankruptcy Code or any
applicable federal or state law for the relief of debtors.
The provisions of this Section 7.07 shall survive the termination of this
Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
----------------------
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign at any time by so notifying the Company in writing
at least 30 days prior to the date of the proposed resignation. The Holders of
a majority in principal amount of the outstanding Notes may remove the Trustee
by so notifying the Trustee in writing and may appoint a successor Trustee with
the consent of the Company. The Company may remove the Trustee if: (i) the
Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged a
bankrupt or an insolvent; (iii) a receiver or other public officer takes charge
of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding
<PAGE>
73
Notes may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 7.07, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee shall
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder. No successor Trustee shall accept
its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of TIA
Section 310(b) may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.08, the Trustee shall resign immediately in the manner and with the
effect provided in this Section.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligation under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
--------------------------------
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein, provided such corporation shall be otherwise qualified and eligible
under this Article.
SECTION 7.10. Eligibility. This Indenture shall always have a Trustee who
-----------
satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have a
combined capital and surplus of at least $25 million as set forth in its most
recent published annual report of condition that is subject to the requirements
of applicable Federal or state supervising or examining authority. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in this Article.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
-------------------
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by
<PAGE>
74
the Trustee need not be segregated from other funds except to the extent
required by law and except for money held in trust under Article Eight of this
Indenture.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as otherwise
------------------------------------
provided in this Section 8.01, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 8.05) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by it hereunder;
or
(ii) (A) all Notes not previously delivered to the Trustee for
cancellation have become due and payable or will become due and payable at
their Stated Maturity within one year or are to be called for redemption
within one year upon arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company has deposited or caused to
be deposited with the Trustee funds in trust for such purpose in an amount
sufficient to pay and discharge the entire Indebtedness on such Notes not
previously delivered to the Trustee for cancellation, for principal (and
premium, if any, on), and interest on the Notes to the date of such deposit
(in the case of Notes that have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be, (B) no Default or Event of
Default with respect to the Notes shall have occurred and be continuing on
the date of such deposit, (C) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is
bound and (D) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that the
Company has complied with all conditions precedent provided for herein
relating to the satisfaction and discharge of this Indenture.
With respect to the foregoing clause (i), the Company's obligations under
Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the
Notes are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.04, 8.05 and 8.06 and Article Eleven (with respect to payments
in respect of Senior Subordinated Obligations other than with the assets held in
trust as described in clause (ii) above) shall survive. After any such
irrevocable deposit, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under the Notes and this Indenture except
for those surviving obligations specified above.
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75
SECTION 8.02. Defeasance and Discharge of Indenture. The Company will be
-------------------------------------
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 91st day after the date of the deposit referred to
in clause (A) of this Section 8.02, and the provisions of this Indenture will no
longer be in effect with respect to the Notes, and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same if:
(A) with reference to this Section 8.02, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.10) and conveyed
all right, title and interest to the Trustee for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust, specifically
pledged to the Trustee for the benefit of the Holders as security for
payment of the principal of, premium, if any, and interest, if any, on the
Notes, and dedicated solely to, the benefit of the Holders, in and to (1)
money in an amount, (2) U.S. Government Obligations that, through the
payment of interest, premium, if any, and principal in respect thereof in
accordance with their terms, will provide, not later than one day before
the due date of any payment referred to in this clause (A), money in an
amount or (3) a combination thereof in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest or on the applicable Redemption
Date, as the case may be, and the Company must specify whether the Notes
are being defeased to maturity or to a particular Redemption Date; provided
that the Company shall have irrevocably instructed the Trustee to apply
such money or the proceeds of such U.S. Government Obligations to the
payment of such principal, premium, if any, and interest with respect to
the Notes;
(B) the Company has delivered to the Trustee (1) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised, which Opinion of Counsel shall be based upon (and accompanied by
a copy of) a ruling of the Internal Revenue Service to the same effect
unless there has been a change in applicable federal income tax law after
the Closing Date such that a ruling is no longer required or (y) a ruling
directed to the Trustee received from the Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel and (2) an Opinion of
Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and that after the passage of 90
days following the deposit, the trust funds will not be subject
<PAGE>
76
to the effect of Section 547 of the United States Bankruptcy Code in a case
commenced by or against the Company under such statute, and either (I) the
trust funds will no longer remain the property of the Company (and
therefore will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) or (II) if a court were to rule under any such law in any case
or proceeding that the trust funds remained property of the Company, (a)
assuming such trust funds remained in the possession of the Trustee prior
to such court ruling to the extent not paid to the Holders, the Trustee
will hold, for the benefit of the Holders, a valid and perfected security
interest in such trust funds that is not avoidable in bankruptcy or
otherwise except for the effect of Section 552(b) of the United States
Bankruptcy Code on interest on the trust funds accruing after the
commencement of a case under such statute and (b) the Holders will be
entitled to receive adequate protection of their interests in such trust
funds if such trust funds are used in such case or proceeding;
(C) immediately after giving effect to such deposit, on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the 91/st/ day
after such date of such deposit, and such deposit shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound and is permitted by Article Eleven; and
(D) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 90-day period
referred to in clause (B)(2) of this Section 8.02, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 90-day period with respect to this Section 8.02, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02,
8.04, 8.05, 8.06 and the rights, powers, trusts, duties and immunities of the
Trustee hereunder and Article Eleven (with respect to payments in respect of
Senior Subordinated Obligations other than with the assets held in trust as
described in this Section 8.02) shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.07, 8.04,
8.05 and 8.06 shall survive. If and when a ruling from the Internal Revenue
Service or an Opinion of Counsel referred to in clause (B)(1) of this Section
8.02 is able to be provided specifically without regard to, and not in reliance
upon, the continuance of the Company's obligations under Section 4.01, then the
Company's obligations under such Section 4.01 shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance contemplated
by this Section 8.02.
<PAGE>
77
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company may omit to
---------------------------------
comply with any term, provision or condition set forth in clauses (iii) and (iv)
of Section 5.01 and Sections 4.03 through 4.11 and clause (c) of Section 6.01
with respect to clauses (iii) and (iv) of Section 5.01, clauses (d) of Section
6.01 with respect to Sections 4.01, 4.02 and 4.12 through 4.19 and clauses (e),
(f), (i) and, except with respect to the Company or a Subsidiary Guarantor,
clauses (g) and (h) of Section 6.01 shall be deemed not to be Events of Default
and Article Eleven shall not apply to the money and/or U.S. Government
Obligations held by the trust referred to in clause (i) below, in each case with
respect to the outstanding Notes if:
(i) with reference to this Section 8.03, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.10) and conveyed
all right, title and interest to the Trustee for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust, specifically
pledged to the Trustee for the benefit of the Holders as security for
payment of the principal of, premium, if any, and interest, if any, on the
Notes, and dedicated solely to, the benefit of the Holders, in and to (A)
money in an amount, (B) U.S. Government Obligations that, through the
payment of interest, premium, if any, and principal in respect thereof in
accordance with their terms, will provide, not later than one day before
the due date of any payment referred to in this clause (i), money in an
amount or (C) a combination thereof in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest or on the applicable Redemption
Date, as the case may be, and the Company must specify whether the Notes
are being defeased to maturity or to a particular Redemption Date; provided
that the Trustee shall have been irrevocably instructed to apply such money
or the proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Notes;
(ii) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that (A) the creation of the defeasance trust does not violate
the Investment Company Act of 1940, (B) after the passage of 90 days
following the deposit, the trust funds will not be subject to the effect of
Section 547 of the United States Bankruptcy Code in a case commenced by or
against the Company under such statute, and either (1) the trust funds will
no longer remain the property of the Company (and therefore will not be
subject to the effect
<PAGE>
78
of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (2) if a court were to rule under
any such law in any case or proceeding that the trust funds remained
property of the Company, (x) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not paid
to the Holders, the Trustee will hold, for the benefit of the Holders, a
valid and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise (except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such statute) and (y) the
Holders will be entitled to receive adequate protection of their interests
in such trust funds if such trust funds are used in such case or
proceeding, (C) the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of
certain covenants and Events of Default and will be subject to federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit and defeasance had not occurred
and (D) the Trustee, for the benefit of the Holders, has a valid first-
priority security interest in the trust funds;
(iii) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the 91/st/ day
after such date of such deposit, and such deposit shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound and is permitted by Article Eleven; and
(iv) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06, the
--------------------------
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
--------------------
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company
upon request set forth in an Officers' Certificate any excess money held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years; provided that the Trustee or
Paying Agent before being required
<PAGE>
79
to make any payment may cause to be published at the expense of the Company once
in a newspaper of general circulation in The City of New York or mail to each
Holder entitled to such money at such Holder's address (as set forth in the
Security Register) notice that such money remains unclaimed and that after a
date specified therein (which shall be at least 30 days from the date of such
publication or mailing) any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any money or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 8.01, 8.02 or
8.03, as the case may be; provided that, if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when authorized by
--------------------------
a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder to:
(1) cure any ambiguity, defect or inconsistency in this Indenture;
provided that such amendments or supplements do not, in the good faith
opinion of the Board of Directors as evidenced by a Board Resolution,
adversely affect the interests of the Holders in any material respect;
(2) comply with Article Five;
(3) comply with any requirements of the Commission in connection with
the qualification of this Indenture under the TIA;
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80
(4) create a Subsidiary Guarantee in accordance with Section 4.07;
(5) evidence and provide for the acceptance of appointment hereunder
by a successor Trustee; or
(6) make any change that, in the good faith opinion of the Board of
Directors as evidenced by a Board Resolution, does not materially and
adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and 6.07
-----------------------
and without prior notice to the Holders, the Company, when authorized by its
Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding, and the Holders of a majority in aggregate principal
amount of the Notes then outstanding by written notice to the Trustee may waive
future compliance by the Company with any provision of this Indenture or the
Notes.
Notwithstanding the provisions of this Section 9.02, without the consent of
each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
(ii) change the optional redemption dates or optional redemption
prices of the Notes from that stated under Section 3.01;
(iii) reduce the principal amount of, premium, if any, or interest on
any Note;
(iv) change any place or currency of payment of principal of,
premium, if any, or interest on, any Note;
(v) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of redemption, on
or after the Redemption Date) on any Note;
(vi) waive a default in the payment of principal of, premium, if
any, or interest on, any Note;
(vii) release any Subsidiary Guarantor from its Note Guarantee,
except as provided in this Indenture;
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81
(viii) modify any of the provisions of Article Eleven in a manner
adverse to the Holders; or
(ix) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is required pursuant to
Sections 6.4 or 6.7 or this Section 9.02.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
--------------------------------
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it is of the type described in the second paragraph of
Section 9.02. In case of an amendment or waiver of the type described in the
second paragraph of Section 9.02, the amendment or waiver shall bind each Holder
who has consented to it and every subsequent Holder of a Note that evidences the
same indebtedness as the Note of the consenting Holder.
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82
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
--------------------------------
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver such Note to the Trustee. At the Company's expense, the
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder and the Trustee may place an appropriate notation on
any Note thereafter authenticated. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation, or issue a new Note, shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
-------------------------------
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and that it will be valid and binding upon the Company. Subject to
the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver that affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
NOTE GUARANTEES
SECTION 10.01 Note Guarantee. By its execution hereof, each of the
--------------
parties listed on Schedule I hereto or Schedule II hereto acknowledges and
agrees that it receives substantial benefits from the Company and that such
party is providing its Guarantee for good and valuable consideration, including,
without limitation, such substantial benefits and services. Accordingly,
subject to the provisions of this Article Ten, each of the Subsidiary Guarantors
hereby, jointly and severally, fully and unconditionally Guarantees, to the
extent permitted by law, to each Holder of Notes hereunder and to the Trustee on
behalf of the Holders: (i) the due and punctual payment of the principal of,
premium, if any, on and interest on each Note, when and as the same shall become
due and payable, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal of and interest, if any,
on the Notes, to the extent lawful, and the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee, all in
accordance with the terms of such Note and this Indenture and (ii) in the case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, at Stated Maturity, by
acceleration or otherwise, subject,
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83
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in the second succeeding paragraph.
Each Note Guarantee shall be Guaranteed on a senior subordinated basis in
accordance with Article Twelve hereof.
Each Subsidiary Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the Guarantee by such
Subsidiary Guarantor pursuant to its Note Guarantee not constitute a fraudulent
transfer or conveyance for purposes of the United States Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the Holders
and such Subsidiary Guarantor hereby irrevocably agree that the obligations of
such Subsidiary Guarantor under its Note Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Note Guarantee or pursuant to the following paragraph, result in the
obligations of such Subsidiary Guarantor under its Note Guarantee not
constituting such fraudulent transfer or conveyance.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
----- --
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Note Guarantee, such Funding
Subsidiary Guarantor shall be entitled to a contribution from all other
Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets of
--- ----
each Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor in
discharging the Company's obligations with respect to the Notes or any other
Subsidiary Guarantor's obligations with respect to its Note Guarantee.
"Adjusted Net Assets" of such Subsidiary Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Note Guarantee, of such Subsidiary Guarantor at such date
and (y) the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary of such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Note Guarantee of such Subsidiary Guarantor), excluding debt in respect of its
Note Guarantee, as they become absolute and matured.
<PAGE>
84
Each of the Subsidiary Guarantors hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first against the
Company, the benefit of discussion, protest or notice with respect to any such
Note or the debt evidenced thereby and all demands whatsoever (except as
specified above), and covenants that this Note Guarantee will not be discharged
as to any such Note except by payment in full of the principal thereof and
interest thereon and as provided in Sections 8.01, 8.02 and 8.03. In the event
of any declaration of acceleration of such obligations as provided in Article
Six, such obligations (whether or not due and payable) shall forthwith become
due and payable by the Subsidiary Guarantors for the purposes of this Article
Ten. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article Six, the Trustee shall promptly
make a demand for payment on the Notes under the Note Guarantee provided for in
this Article Ten.
The obligations of each Subsidiary Guarantor under its Note Guarantee are
independent of the obligations Guaranteed by such Subsidiary Guarantor
hereunder, and a separate action or actions may be brought and prosecuted by the
Trustee on behalf of, or by, the Holders, subject to the terms and conditions
set forth in this Indenture, against a Subsidiary Guarantor to enforce this
Guarantee, irrespective of whether any action is brought against the Company or
whether the Company is joined in any such action or actions.
If the Trustee or the Holder is required by any court or otherwise to
return to the Company or any Subsidiary Guarantor, or any custodian, receiver,
liquidator, trustee, sequestrator or other similar official acting in relation
to Company or such Subsidiary Guarantor, any amount paid to the Trustee or such
Holder in respect of a Note, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each of the Subsidiary
Guarantors further agrees, to the fullest extent that it may lawfully do so,
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, the maturity of the obligations Guaranteed hereby may be accelerated
as provided in Article Six hereof for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition extant under any
applicable bankruptcy law preventing such acceleration in respect of the
obligations Guaranteed hereby.
Each of the Subsidiary Guarantors hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the Company or any
other Subsidiary Guarantor that arise from the existence, payment, performance
or enforcement of its obligations under this Note Guarantee and this Indenture,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of the Holders against the Company or any Subsidiary Guarantor
or any collateral which any such Holder or the Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Company or a Subsidiary Guarantor,
<PAGE>
85
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to a Subsidiary Guarantor in violation of the preceding
sentence and the principal of, premium, if any, and accrued interest on the
Notes shall not have been paid in full, such amount shall be deemed to have been
paid to such Subsidiary Guarantor for the benefit of, and held in trust for the
benefit of, the Holders, and shall forthwith be paid to the Trustee for the
benefit of the Holders to be credited and applied upon the principal of,
premium, if any, and accrued interest on the Notes. Each of the Subsidiary
Guarantors acknowledges that it will receive direct and indirect benefits from
the issuance of the Notes pursuant to this Indenture and that the waivers set
forth in this Section 10.01 are knowingly made in contemplation of such benefits
The Note Guarantee set forth in this Section 10.01 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.
SECTION 10.02 Obligations Unconditional. Nothing contained in this
-------------------------
Article Ten or elsewhere in this Indenture or in the Notes is intended to or
shall impair, as among any Subsidiary Guarantor and the holders of the Notes,
the obligation of such Subsidiary Guarantor, which is absolute and
unconditional, upon failure by the Company, to pay to the holders of the Notes
the principal of, premium, if any, and interest on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of such
Subsidiary Guarantor, nor shall anything herein or therein prevent any Holder or
the Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture.
Without limiting the foregoing, nothing contained in this Article Ten will
restrict the right of the Trustee or the Holders to take any action to declare
the Note Guarantee to be due and payable prior to the Stated Maturity of any
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder.
SECTION 10.03 Release of Note Guarantees. The Note Guarantee issued by
--------------------------
any Subsidiary Guarantor will be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer to any Person (other than the
Company or another Subsidiary of the Company) of all of the Capital Stock of
such Subsidiary Guarantor or (ii) the designation of such Subsidiary Guarantor
as an Unrestricted Subsidiary, in each case in compliance with the terms of this
Indenture.
SECTION 10.04 Notice to Trustee. A Subsidiary Guarantor shall give prompt
-----------------
written notice to the Trustee of any fact known to such Subsidiary Guarantor
which would prohibit the making of any payment to or by the Trustee in respect
of the Note Guarantee pursuant to the provisions of this Article Ten.
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86
SECTION 10.05 This Article Not to Prevent Events of Default. The failure
---------------------------------------------
to make a payment on account of principal of, premium, if any, or interest on
the Notes by reason of any provision of this Article Ten will not be construed
as preventing the occurrence of an Event of Default.
SECTION 10.06. Dames & Moore Guarantee. Notwithstanding any other
-----------------------
provision in this Indenture, until the consummation of the D&M Acquisition,
Dames & Moore's Guarantee under this Indenture will be limited to the amount of
its Guarantee under the Credit Agreement. Upon consummation of the D&M
Acquisition, Dames & Moore's Guarantee under this Indenture will no longer be
limited to the extent described above, but will be the same, to the extent
permitted by law, as the Guarantee under this Indenture of each other Subsidiary
Guarantor listed on Schedule I hereto.
SECTION 10.07. Subsidiary Guarantors Listed on Schedule II.
-------------------------------------------
Notwithstanding any other provision in this Indenture, the Guarantee of each
Subsidiary Guarantor listed on Schedule II hereto under this Indenture will not
become effective until the consummation of the D&M Acquisition and notification
thereof to the Trustee. Upon consummation of the D&M Acquisition and such
notification, the Guarantee of each Subsidiary Guarantor listed on Schedule II
hereto will be the same, to the extent permitted by law, as the Guarantee under
this Indenture of each other Subsidiary Guarantor listed on Schedule I hereto.
ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinated to Senior Indebtedness. The Company and
-----------------------------------------
the Trustee each covenants and agrees, and each Holder, by its acceptance of a
Note, likewise covenants and agrees that all Notes shall be issued subject to
the provisions of this Article Eleven; and each Person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that Senior Subordinated Obligations shall, to the extent and in the
manner set forth in this Article Eleven, be subordinated in right of payment to
the prior payment in full, in cash or cash equivalents, of all existing and
future Senior Indebtedness.
SECTION 11.02. No Payment on Notes in Certain Circumstances. (a) No
--------------------------------------------
direct or indirect payment by or on behalf of the Company of Senior Subordinated
Obligations (other than with the money, securities or proceeds held under any
defeasance trust established in accordance with this Indenture), whether
pursuant to the terms of the Notes or upon acceleration or otherwise shall be
made if, at the time of such payment, there exists a default in the payment of
all or any portion of the obligations on any Senior Indebtedness of the Company
and such default shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the holders of such Senior Indebtedness.
<PAGE>
87
(b) During the continuance of any other event of default with respect to
any Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated, upon receipt by the Trustee of written notice from the trustee or
other representative for the holders of such Designated Senior Indebtedness (or
the holders of at least a majority in principal amount of such Designated Senior
Indebtedness then outstanding), no payment of Senior Subordinated Obligations
(other than with the money, securities or proceeds held under any defeasance
trust established in accordance with this Indenture) may be made by or on behalf
of the Company upon or in respect of the Notes for a period (a "Payment Blockage
----------------
Period") commencing on the date of receipt of such notice and ending 179 days
- ------
thereafter (unless, in each case, such Payment Blockage Period has been
terminated by written notice to the Trustee from such trustee of, or other
representatives for, such holders or by payment in full in cash or cash
equivalents of such Designated Senior Indebtedness or such event of default has
been cured or waived). Not more than one Payment Blockage Period may be
commenced with respect to the Notes during any period of 360 consecutive days.
Notwithstanding anything in this Indenture to the contrary, there must be 180
consecutive days in any 360-day period in which no Payment Blockage Period is in
effect. No event of default (other than an event of default pursuant to the
financial maintenance covenants under the Credit Agreement) that existed or was
continuing (it being acknowledged that any subsequent action that would give
rise to an event of default pursuant to any provision under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose) on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or shall be made, the basis for the
commencement of a second Payment Blockage Period by the trustee or other
representative for the holders of such Designated Senior Indebtedness, whether
or not within a period of 360 consecutive days, unless such event of default
shall have been cured or waived for a period of not less than 90 consecutive
days.
(c) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
11.02(a) or 11.02(b) of this Indenture, the Trustee shall promptly notify the
holders of Senior Indebtedness of such prohibited payment and such payment shall
be held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that, upon notice from the Trustee to the holders of Senior
Indebtedness that such prohibited payment has been made, the holders of the
Senior Indebtedness (or their representative or representatives of a trustee)
within 30 days of receipt of such notice from the Trustee notify the Trustee of
the amounts then due and owing on the Senior Indebtedness, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness and any excess above such amounts due and owing on Senior
Indebtedness shall be paid to the Company.
<PAGE>
88
SECTION 11.03. Payment over Proceeds upon Dissolution, Etc. (a) Upon any
-------------------------------------------
payment or distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities (other than with the money,
securities or proceeds held under any defeasance trust established in accordance
with this Indenture), in connection with any dissolution or winding up or total
or partial liquidation or reorganization of the Company, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings or
other marshalling of assets for the benefit of creditors, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full, in cash or
cash equivalents, before the Holders or the Trustee on their behalf shall be
entitled to receive any payment by (or on behalf of) the Company on account of
Senior Subordinated Obligations, or any payment to acquire any of the Notes for
cash, property or securities, or any distribution with respect to the Notes of
any cash, property or securities. Before any payment may be made by, or on
behalf of, the Company on any Senior Subordinated Obligations (other than with
the money, securities or proceeds held under any defeasance trust established in
accordance with this Indenture), in connection with any such dissolution,
winding up, liquidation or reorganization, any payment or distribution of assets
or securities for the Company of any kind or character, whether in cash,
property or securities, to which the Holders or the Trustee on their behalf
would be entitled, but for the provisions of this Article Eleven, shall be made
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person making such payment or distribution or by the
Holders or the Trustee if received by them or it, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders) or their representatives or
to any trustee or trustees under any indenture pursuant to which any such Senior
Indebtedness may have been issued, as their respective interests appear, to the
extent necessary to pay all such Senior Indebtedness in full, in cash or cash
equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee or other
similar Person, the Senior Indebtedness or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. To the extent the obligation to repay any Senior Indebtedness
is declared to be fraudulent, invalid, or otherwise set aside under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
the obligation so declared fraudulent, invalid or otherwise set aside (and all
other amounts that would come due with respect thereto had such obligation not
been so affected) shall be deemed to be reinstated and outstanding as Senior
Indebtedness for all purposes hereof as if such declaration, invalidity or
setting aside had not occurred.
<PAGE>
89
(c) In the event that, notwithstanding the provision in Section 11.03(a)
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder at a time when
such payment or distribution is prohibited by Section 11.03(a) of this Indenture
and before all obligations in respect of Senior Indebtedness are paid in full,
in cash or cash equivalents, such payment or distribution shall be received and
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
representatives or to any trustee or trustees under any indenture pursuant to
which any such Senior Indebtedness may have been issued, as their respective
interests appear, for application to the payment of all such Senior Indebtedness
remaining unpaid, in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
(d) For purposes of this Section 11.03, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of this clause
is not to cause the Notes to be treated in any case or proceeding or similar
event described in this Section 11.03 as part of the same class of claims as the
Senior Indebtedness or any class of claims pari passu with, or senior to, the
Senior Indebtedness for any payment or distribution, securities of the Company
or any other corporation provided for by a plan of reorganization or
readjustment that are subordinated, at least to the extent that the Notes are
subordinated, to the payment of all Senior Indebtedness then outstanding;
provided that (1) if a new corporation results from such reorganization or
readjustment, such corporation assumes the Senior Indebtedness and (2) the
rights of the holders of the Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company with or into, another
corporation or the liquidation or dissolution of the Company following the sale,
conveyance, transfer, lease or other disposition of all or substantially all of
its property and assets to another corporation upon the terms and conditions
provided in Article Five of this Indenture shall not be deemed a dissolution,
winding up, liquidation or reorganization for the purposes of this Section 11.03
if such other corporation shall, as a part of such consolidation, merger, sale,
conveyance, transfer, lease or other disposition, comply (to the extent
required) with the conditions stated in Article Five of this Indenture.
SECTION 11.04. Subrogation. (a) Upon the payment in full of all Senior
-----------
Indebtedness in cash or cash equivalents, the Holders shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of, premium, if any, and interest on the Notes
shall be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders or the Trustee on their behalf would be entitled
except for the provisions of this Article Eleven, and no payment pursuant to the
provisions of this Article Eleven to the holders of Senior Indebtedness by
<PAGE>
90
the Holders or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders, be deemed
to be a payment by the Company to or on account of the Senior Indebtedness. It
is understood that the provisions of this Article Eleven are intended solely for
the purpose of defining the relative rights of the Holders, on the one hand, and
the holders of the Senior Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Eleven shall have been
applied, pursuant to the provisions of this Article Eleven, to the payment of
all amounts payable under Senior Indebtedness, then, and in such case, the
Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full, in cash
or cash equivalents, of such Senior Indebtedness of such holders.
SECTION 11.05. Obligations of Company Unconditional. (a) Nothing
------------------------------------
contained in this Article Eleven or elsewhere in this Indenture or in the Notes
is intended to or shall impair, as among the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of, premium, if any, and interest on the Notes as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Holders or the Trustee on their behalf
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Eleven
of the holders of the Senior Indebtedness.
(b) Without limiting the generality of the foregoing, nothing contained in
this Article Eleven will restrict the right of the Trustee or the Holders to
take any action to declare the Notes to be due and payable prior to their Stated
Maturity pursuant to Section 6.01 of this Indenture or to pursue any rights or
remedies hereunder; provided, however, that all Senior Indebtedness then due and
payable or thereafter declared to be due and payable shall first be paid in
full, in cash or cash equivalents, before the Holders or the Trustee are
entitled to receive any direct or indirect payment from the Company of Senior
Subordinated Obligations.
SECTION 11.06. Notice to Trustee. (a) The Company shall give prompt
-----------------
written notice to the Trustee of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee in respect of the Notes
pursuant to the provisions of this Article Eleven. The Trustee shall not be
charged with the knowledge of the existence of any default or event of default
with respect to any Senior Indebtedness or of any other facts that would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an Officer of the Company, or by a holder of Senior
Indebtedness or trustee or agent thereof; and prior to the receipt of any such
written notice, the
<PAGE>
91
the Trustee shall, subject to Article Seven, be entitled to assume that no such
facts exist; provided that, if the Trustee shall not have received the notice
provided for in this Section 11.06 at least two Business Days prior to the date
upon which, by the terms of this Indenture, any monies shall become payable for
any purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Note), then, notwithstanding anything herein
to the contrary, the Trustee shall have full power and authority to receive any
monies from the Company and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it on or after such prior date except for an acceleration of the
Notes prior to such application. Nothing contained in this Section 11.06 shall
limit the right of the holders of Senior Indebtedness to recover payments as
contemplated by this Article Eleven. The foregoing shall not apply if the Paying
Agent is the Company. The Trustee shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself or itself to be a holder
of any Senior Indebtedness (or a trustee on behalf of, or other representative
of, such holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee or representative on behalf of any such
holder.
(b) In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eleven, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Eleven and, if such evidence is not
furnished to the Trustee, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 11.07. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets or securities referred to in
- -----
this Article Eleven, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending, or upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person making such payment or
distribution, delivered to the Trustee or to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Eleven.
SECTION 11.08. Trustee's Relation to Senior Indebtedness. (a) The
-----------------------------------------
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article Eleven with respect to any Senior Indebtedness that may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Indebtedness and nothing in this Indenture shall deprive
the Trustee or any Paying Agent of any of its rights as such holder.
<PAGE>
92
(b) With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eleven, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Sections 11.02(c) and 11.03(c) of this Indenture) and shall not be liable to any
such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Holders of Notes or to the Company or to any other person cash,
property or securities to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article Eleven or otherwise.
SECTION 11.09. Subordination Rights Not Impaired by Acts or Omissions of
---------------------------------------------------------
the Company or Holders of Senior Indebtedness. No right of any present or
- ---------------------------------------------
future holders of any Senior Indebtedness to enforce subordination as provided
in this Article Eleven will at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with. The provisions of this
Article Eleven are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Indebtedness.
SECTION 11.10. Holders Authorize Trustee to Effectuate Subordination of
--------------------------------------------------------
Notes. Each Holder by his acceptance of any Notes authorizes and expressly
- -----
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Eleven, and
appoints the Trustee his attorney-in-fact for such purposes, including, in the
event of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the property and assets of the
Company, the filing of a claim for the unpaid balance of its Notes in the form
required in those proceedings. If the Trustee does not file a proper claim or
proof in indebtedness in the form required in such proceeding at least 30 days
before the expiration of the time to file such claim or claims, each holder of
Senior Indebtedness is hereby authorized to file an appropriate claim for and on
behalf of the Holders.
SECTION 11.11. Not to Prevent Events of Default. The failure to make a
--------------------------------
payment on account of principal of, premium, if any, or interest on the Notes by
reason of any provision of this Article Eleven will not be construed as
preventing the occurrence of an Event of Default.
SECTION 11.12. Trustee's Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article Eleven will apply to amounts due to the Trustee pursuant to other
sections of this Indenture, including Section 7.07.
<PAGE>
93
SECTION 11.13. No Waiver of Subordination Provisions. Without in any way
-------------------------------------
limiting the generality of Section 11.09, the holders of Senior Indebtedness
may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article Eleven
or the obligations hereunder of the Holders to the holders of Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 11.14. Payments May Be Paid Prior to Dissolution. Nothing
-----------------------------------------
contained in this Article Eleven or elsewhere in this Indenture shall prevent
(i) the Company, except under the conditions described in Section 11.02 or
11.03, from making payments of principal of, premium, if any, and interest on
the Notes, or from depositing with the Trustee any money for such payments, or
(ii) the application by the Trustee of any money deposited with it for the
purpose of making such payments of principal of, premium, if any, and interest
on the Notes to the holders entitled thereto unless, at least two Business Days
prior to the date upon which such payment becomes due and payable, the Trustee
shall have received the written notice provided for in Section 11.02(b) of this
Indenture (or there shall have been an acceleration of the Notes prior to such
application) or in Section 11.06 of this Indenture. The Company shall give
prompt written notice to the Trustee of any dissolution, winding up, liquidation
or reorganization of the Company.
SECTION 11.15. Consent of Holders of Senior Indebtedness Under the Credit
----------------------------------------------------------
Agreement. The provisions of this Article Eleven (including the definitions
- ---------
contained in this Article and references to this Article contained in this
Indenture) shall not be amended in a manner that would adversely affect the
rights of the holders of Senior Indebtedness under the Credit Agreement, and no
such amendment shall become effective unless the holders of Senior Indebtedness
under the Credit Agreement shall have consented (in accordance with the
provisions of the Credit Agreement) to such amendment. The Trustee shall be
entitled to receive and rely on an Officers' Certificate stating that such
consent has been given.
SECTION 11.16. Trust Moneys Not Subordinated. Notwithstanding anything
-----------------------------
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article Eight by the Trustee for the
payment of principal of, premium, if any, and interest on the Notes shall not be
subordinated to the prior payment of any Senior Indebtedness (provided that, at
the time deposited, such deposit did not violate any then outstanding Senior
Indebtedness), and none of the Holders shall be obligated to pay over any such
amount to any holder of Senior Indebtedness.
<PAGE>
94
ARTICLE TWELVE
SUBORDINATION OF NOTE GUARANTEES
SECTION 12.01. Note Guarantees Subordinated to Guarantor Senior
------------------------------------------------
Indebtedness. Each Subsidiary Guarantor and the Trustee each covenants and
- ------------
agrees, and each Holder, by its acceptance of a Note Guarantee, likewise
covenants and agrees that all Note Guarantees shall be issued subject to the
provisions of this Article Twelve; and each Person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that Senior Subordinated Obligations shall, to the extent and in the
manner set forth in this Article Twelve, be subordinated in right of payment to
the prior payment in full, in cash or cash equivalents, of all existing and
future Guarantor Senior Indebtedness of such Subsidiary Guarantor.
SECTION 12.02. No Payment on Note Guarantees in Certain Circumstances.
------------------------------------------------------
(a) No direct or indirect payment by or on behalf of any Subsidiary Guarantor of
Senior Subordinated Obligations (other than with the money, securities or
proceeds held under any defeasance trust established in accordance with this
Indenture), whether pursuant to the terms of the Note Guarantees or upon
acceleration or otherwise shall be made if, at the time of such payment, there
exists a default in the payment of all or any portion of the obligations on any
Guarantor Senior Indebtedness of such Guarantor and such default shall not have
been cured or waived or the benefits of this sentence waived by or on behalf of
the holders of such Guarantor Senior Indebtedness.
(b) During the continuance of any other event of default with respect to
any Designated Guarantor Senior Indebtedness pursuant to which the maturity
thereof may be accelerated, upon receipt by the Trustee of written notice from
the trustee or other representative for the holders of such Designated Guarantor
Senior Indebtedness (or the holders of at least a majority in principal amount
of such Designated Guarantor Senior Indebtedness then outstanding), no payment
of Senior Subordinated Obligations (other than with the money, securities or
proceeds held under any defeasance trust established in accordance with this
Indenture) may be made by or on behalf of any Subsidiary Guarantor upon or in
respect of the Note Guarantees for a period (a "Guarantee Payment Blockage
--------------------------
Period") commencing on the date of receipt of such notice and ending 179 days
- ------
thereafter (unless, in each case, such Guarantee Payment Blockage Period has
been terminated by written notice to the Trustee from such trustee of, or other
representatives for, such holders or by payment in full in cash or cash
equivalents of such Designated Guarantor Senior Indebtedness or such event of
default has been cured or waived). Not more than one Guarantee Payment Blockage
Period may be commenced with respect to the Note Guarantees during any period of
360 consecutive days. Notwithstanding anything in this Indenture to the
contrary, there must be 180 consecutive days in any 360-day period in which no
Guarantee Payment Blockage Period is in effect. No event of default (other than
an event of default pursuant to the financial maintenance covenants under the
Credit Agreement) that existed or was continuing (it being acknowledged that any
subsequent action that would give rise to an event of default pursuant to any
provision under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose) on the
<PAGE>
95
date of the commencement of any Guarantee Payment Blockage Period with respect
to the Designated Guarantor Senior Indebtedness initiating such Guarantee
Payment Blockage Period shall be, or shall be made, the basis for the
commencement of a second Guarantee Payment Blockage Period by the trustee or
other representative for the holders of such Designated Guarantor Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such event of default shall have been cured or waived for a period of not less
than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
12.02(a) or 12.02(b) of this Indenture, the Trustee shall promptly notify the
holders of Guarantor Senior Indebtedness of such prohibited payment and such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Guarantor Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that, upon notice from
the Trustee to the holders of Guarantor Senior Indebtedness that such prohibited
payment has been made, the holders of the Guarantor Senior Indebtedness (or
their representative or representatives of a trustee) within 30 days of receipt
of such notice from the Trustee notify the Trustee of the amounts then due and
owing on the Guarantor Senior Indebtedness, if any, and only the amounts
specified in such notice to the Trustee shall be paid to the holders of
Guarantor Senior Indebtedness and any excess above such amounts due and owing on
Guarantor Senior Indebtedness shall be paid to such Subsidiary Guarantor.
SECTION 12.03. Payment over Proceeds upon Dissolution, Etc. (a) Upon any
-------------------------------------------
payment or distribution of assets or securities of a Subsidiary Guarantor of any
kind or character, whether in cash, property or securities (other than with the
money, securities or proceeds held under any defeasance trust established in
accordance with this Indenture), in connection with any dissolution or winding
up or total or partial liquidation or reorganization of such Subsidiary
Guarantor, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings or other marshalling of assets for the benefit
of creditors, all amounts due or to become due upon all Guarantor Senior
Indebtedness shall first be paid in full, in cash or cash equivalents, before
the Holders or the Trustee on their behalf shall be entitled to receive any
payment by (or on behalf of) such Subsidiary Guarantor on account of Senior
Subordinated Obligations, or any payment to acquire any of the Note Guarantees
for cash, property or securities, or any distribution with respect to the Note
Guarantees of any cash, property or securities. Before any payment may be made
by, or on behalf of, any Subsidiary Guarantor on any Senior Subordinated
Obligations (other than with the money, securities or proceeds held under any
defeasance trust established in accordance with this Indenture), in connection
with any such dissolution, winding up, liquidation or reorganization, any
payment or distribution of assets or securities for such Subsidiary Guarantor of
any kind or character, whether in cash, property or securities, to which the
Holders or the Trustee on their behalf would be entitled, but for the provisions
of this Article Twelve, shall be made by such Subsidiary Guarantor or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
Person making
<PAGE>
96
such payment or distribution or by the Holders or the Trustee if received by
them or it, directly to the holders of Guarantor Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Guarantor Senior
Indebtedness held by such holders) or their representatives or to any trustee or
trustees under any indenture pursuant to which any such Guarantor Senior
Indebtedness may have been issued, as their respective interests appear, to the
extent necessary to pay all such Guarantor Senior Indebtedness in full, in cash
or cash equivalents, after giving effect to any concurrent payment, distribution
or provision therefor to or for the holders of such Guarantor Senior
Indebtedness.
(b) To the extent any payment of Guarantor Senior Indebtedness (whether by
or on behalf of any Subsidiary Guarantor, as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
if such payment is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee or other similar Person, the Guarantor Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred. To the
extent the obligation to repay any Guarantor Senior Indebtedness is declared to
be fraudulent, invalid, or otherwise set aside under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then the obligation so
declared fraudulent, invalid or otherwise set aside (and all other amounts that
would come due with respect thereto had such obligation not been so affected)
shall be deemed to be reinstated and outstanding as Guarantor Senior
Indebtedness for all purposes hereof as if such declaration, invalidity or
setting aside had not occurred.
(c) In the event that, notwithstanding the provision Section 12.03(a)
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Subsidiary Guarantor of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or any Holder at
a time when such payment or distribution is prohibited by Section 12.03(a) of
this Indenture and before all obligations in respect of Guarantor Senior
Indebtedness are paid in full, in cash or cash equivalents, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered to, the holders of Guarantor Senior Indebtedness (pro
rata to such holders on the basis of the respective amounts of Guarantor Senior
Indebtedness held by such holders) or their representatives or to any trustee or
trustees under any indenture pursuant to which any such Guarantor Senior
Indebtedness may have been issued, as their respective interests appear, for
application to the payment of all such Guarantor Senior Indebtedness remaining
unpaid in full, in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Indebtedness.
(d) For purposes of this Section 12.03, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of this clause
is not to cause the Note Guarantees to be treated in any case or proceeding or
similar event described in this Section 12.03 as part of the same
<PAGE>
97
class of claims as the Guarantor Senior Indebtedness or any class of claims pari
passu with, or senior to, the Guarantor Senior Indebtedness for any payment or
distribution, securities of any Subsidiary Guarantor or any other corporation
provided for by a plan of reorganization or readjustment that are subordinated,
at least to the extent that the Note Guarantees are subordinated, to the payment
of all Guarantor Senior Indebtedness then outstanding; provided that (1) if a
new corporation results from such reorganization or readjustment, such
corporation assumes the Guarantor Senior Indebtedness and (2) the rights of the
holders of the Guarantor Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment. The consolidation
of a Subsidiary Guarantor with, or the merger of a Subsidiary Guarantor with or
into, another corporation or the liquidation or dissolution of a Subsidiary
Guarantor following the sale, conveyance, transfer, lease or other disposition
of all or substantially all of its property and assets to another corporation
upon the terms and conditions provided in Article Five of this Indenture shall
not be deemed a dissolution, winding up, liquidation or reorganization for the
purposes of this Section 12.03 if such other corporation shall, as a part of
such consolidation, merger, sale, conveyance, transfer, lease or other
disposition, comply (to the extent required) with the conditions stated in
Article Five of this Indenture.
SECTION 12.04. Subrogation. (a) Upon the payment in full of all
-----------
Guarantor Senior Indebtedness in cash or cash equivalents, the Holders shall be
subrogated to the rights of the holders of Guarantor Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Subsidiary Guarantors made on such Guarantor Senior Indebtedness until all
obligations arising under the Note Guarantees shall be paid in full; and, for
the purposes of such subrogation, no payments or distributions to the holders of
the Guarantor Senior Indebtedness of any cash, property or securities to which
the Holders or the Trustee on their behalf would be entitled except for the
provisions of this Article Twelve, and no payment pursuant to the provisions of
this Article Twelve to the holders of Guarantor Senior Indebtedness by the
Holders or the Trustee on their behalf shall, as between each Subsidiary
Guarantor, its creditors other than holders of Guarantor Senior Indebtedness,
and the Holders, be deemed to be a payment by such Subsidiary Guarantor to or on
account of the Guarantor Senior Indebtedness. It is understood that the
provisions of this Article Twelve are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
the Guarantor Senior Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Twelve shall have been
applied, pursuant to the provisions of this Article Twelve, to the payment of
all amounts payable under Guarantor Senior Indebtedness, then, and in such case,
the Holders shall be entitled to receive from the holders of such Guarantor
Senior Indebtedness any payments or distributions received by such holders of
Guarantor Senior Indebtedness in excess of the amount required to make payment
in full, in cash or cash equivalents, of such Guarantor Senior Indebtedness of
such holders.
<PAGE>
98
SECTION 12.05. Obligations of Subsidiary Guarantor Unconditional. (a)
-------------------------------------------------
Nothing contained in this Article Twelve or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Subsidiary Guarantors and
the Holders, the obligation of such Subsidiary Guarantors, which is absolute and
unconditional, to pay to the Holders all obligations arising under the Note
Guarantees as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Subsidiary Guarantors other than the holders of the
Guarantor Senior Indebtedness, nor shall anything herein or therein prevent the
Holders or the Trustee on their behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Twelve of the holders of the Guarantor Senior
Indebtedness.
(b) Without limiting the generality of the foregoing, nothing contained in
this Article Twelve will restrict the right of the Trustee or the Holders to
take any action to declare the Notes to be due and payable prior to their Stated
Maturity pursuant to Section 6.01 of this Indenture or to pursue any rights or
remedies hereunder; provided, however, that all Guarantor Senior Indebtedness
then due and payable or thereafter declared to be due and payable shall first be
paid in full, in cash or cash equivalents, before the Holders or the Trustee are
entitled to receive any direct or indirect payment from any Subsidiary Guarantor
of Guarantor Senior Subordinated Obligations.
SECTION 12.06. Notice to Trustee. (a) Each Subsidiary Guarantor shall
-----------------
give prompt written notice to the Trustee of any fact known to such Subsidiary
Guarantor that would prohibit the making of any payment to or by the Trustee in
respect of the Note Guarantees pursuant to the provisions of this Article
Twelve. The Trustee shall not be charged with the knowledge of the existence of
any default or event of default with respect to any Guarantor Senior
Indebtedness of any Subsidiary Guarantor or of any other facts that would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an Officer of such Subsidiary Guarantor, or by a holder of
such Guarantor Senior Indebtedness or trustee or agent thereof; and prior to the
receipt of any such written notice, the Trustee shall, subject to Article Seven,
be entitled to assume that no such facts exist; provided that, if the Trustee
shall not have received the notice provided for in this Section 12.06 at least
two Business Days prior to the date upon which, by the terms of this Indenture,
any monies shall become payable for any purpose (including, without limitation,
the payment of all obligations arising under any Note Guarantee), then,
notwithstanding anything herein to the contrary, the Trustee shall have full
power and authority to receive any monies from such Subsidiary Guarantor and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary that may be received by it on or after
such prior date except for an acceleration of the Notes prior to such
application. Nothing contained in this Section 12.06 shall limit the right of
the holders of Guarantor Senior Indebtedness to recover payments as contemplated
by this Article Twelve. The foregoing shall not apply if the Paying Agent is the
Company. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Guarantor Senior Indebtedness (or a trustee on behalf of, or other
representative
<PAGE>
99
of, such holder) to establish that such notice has been given by a holder of
such Guarantor Senior Indebtedness or a trustee or representative on behalf of
any such holder.
(b) In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve and, if
such evidence is not furnished to the Trustee, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets or securities referred to in
- -----
this Article Twelve, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending, or upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person making such payment or
distribution, delivered to the Trustee or to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Guarantor Senior Indebtedness and other Indebtedness of a
Subsidiary Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article Twelve.
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness. (a)
---------------------------------------------------
The Trustee and any Paying Agent shall be entitled to all the rights set forth
in this Article Twelve with respect to any Guarantor Senior Indebtedness that
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Guarantor Senior Indebtedness and nothing in
this Indenture shall deprive the Trustee or any Paying Agent of any of its
rights as such holder.
(b) With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness (except as provided in Sections 12.02(c) and 12.03(c) of this
Indenture) and shall not be liable to any such holders if the Trustee shall in
good faith mistakenly pay over or distribute to Holders of Note Guarantees or to
a Subsidiary Guarantor or to any other person cash, property or securities to
which any holders of Guarantor Senior Indebtedness shall be entitled by virtue
of this Article Twelve or otherwise.
<PAGE>
100
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of a
-----------------------------------------------------------
Subsidiary Guarantor or Holders of Guarantor Senior Indebtedness. No right of
- ----------------------------------------------------------------
any present or future holders of any Guarantor Senior Indebtedness to enforce
subordination as provided in this Article Twelve will at any time in any way be
prejudiced or impaired by any act or failure to act on the part of a Subsidiary
Guarantor or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by such Subsidiary Guarantor with the terms of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with. The provisions of this Article Twelve are intended to
be for the benefit of, and shall be enforceable directly by, the holders of
Guarantor Senior Indebtedness.
SECTION 12.10. Holders Authorize Trustee to Effectuate Subordination of
--------------------------------------------------------
Note Guarantees. Each Holder by his acceptance of any Note Guarantees
- ---------------
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding up, liquidation or
reorganization of a Subsidiary Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
property and assets of such Subsidiary Guarantor, the filing of a claim for the
unpaid balance of its Note Guarantees in the form required in those proceedings.
If the Trustee does not file a proper claim or proof in indebtedness in the form
required in such proceeding at least 30 days before the expiration of the time
to file such claim or claims, each holder of Guarantor Senior Indebtedness is
hereby authorized to file an appropriate claim for and on behalf of the Holders.
SECTION 12.11. Not to Prevent Events of Default. The failure to fulfill
--------------------------------
any obligation arising under the Note Guarantees by reason of any provision of
this Article Twelve will not be construed as preventing the occurrence of an
Event of Default.
SECTION 12.12. Trustee's Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article Twelve will apply to amounts due to the Trustee pursuant to other
sections of this Indenture, including Section 7.07.
SECTION 12.13. No Waiver of Subordination Provisions. Without in any way
-------------------------------------
limiting the generality of Section 12.09, the holders of Guarantor Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders, without incurring responsibility to the
Holders and without impairing or releasing the subordination provided in this
Article Twelve or the obligations hereunder of the Holders to the holders of
Guarantor Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Guarantor Senior Indebtedness or any instrument evidencing the same or
any agreement under which Guarantor Senior Indebtedness is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any
Person liable in any manner for the
<PAGE>
101
collection of Guarantor Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution. Nothing
-----------------------------------------
contained in this Article Twelve or elsewhere in this Indenture shall prevent
(i) a Subsidiary Guarantor, except under the conditions described in Section
12.02 or 12.03, from fulfilling any obligation arising under the Note
Guarantees, or from depositing with the Trustee any money for such payments, or
(ii) the application by the Trustee of any money deposited with it for the
purpose of fulfilling any obligation arising under the Note Guarantees to the
holders entitled thereto unless, at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 12.02(b) of this Indenture (or there
shall have been an acceleration of the Note Guarantees prior to such
application) or in Section 12.06 of this Indenture. The Company shall give
prompt written notice to the Trustee of any dissolution, winding up, liquidation
or reorganization of such Subsidiary Guarantor.
SECTION 12.15. Consent of Holders of Guarantor Senior Indebtedness Under
---------------------------------------------------------
the Credit Agreement. The provisions of this Article Twelve (including the
- --------------------
definitions contained in this Article and references to this Article contained
in this Indenture) shall not be amended in a manner that would adversely affect
the rights of the holders of Guarantor Senior Indebtedness under the Credit
Agreement, and no such amendment shall become effective unless the holders of
Guarantor Senior Indebtedness under the Credit Agreement shall have consented
(in accordance with the provisions of the Credit Agreement) to such amendment.
The Trustee shall be entitled to receive and rely on an Officers' Certificate
stating that such consent has been given.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act of 1939. Prior to the effectiveness of
---------------------------
the Registration Statement, this Indenture shall incorporate and be governed by
the provisions of the TIA that are required to be part of and to govern
indentures qualified under the TIA. After the effectiveness of the Registration
Statement, this Indenture shall be subject to the provisions of the TIA that are
required to be a part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 13.02. Notices. Any notice or communication shall be sufficiently
-------
given if in writing and delivered in person, mailed by first-class mail or sent
by telecopier transmission addressed as follows:
<PAGE>
102
if to the Company:
-----------------
URS Corporation
100 California Street, Suite 500
San Francisco, CA 94111
Telecopier No.: (415) 398-2621
Attention: Chief Financial Officer
if to the Trustee:
-----------------
Firstar Bank of Minnesota, N.A.
101 East Fifth Street
St. Paul, MN 55101
Telecopier No.: (651) 229-6415
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to it at its
address as it appears on the Security Register by first-class mail and shall be
sufficiently given to him if so mailed within the time prescribed. Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee and each Agent at the
same time.
Failure to mail a notice or communication to a Holder as provided herein or
any defect in any such notice or communication shall not affect its sufficiency
with respect to other Holders. Except for a notice to the Trustee, which is
deemed given only when received, and except as otherwise provided in this
Indenture, if a notice or communication is mailed in the manner provided in this
Section 13.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
<PAGE>
103
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 13.03. Certificate and Opinion as to Conditions Precedent. Upon
--------------------------------------------------
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 13.04. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.05. Rules by Trustee, Paying Agent or Registrar. The Trustee
-------------------------------------------
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 13.06. Payment Date Other Than a Business Day. If an Interest
--------------------------------------
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case
<PAGE>
104
may be, need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest Payment
Date, Payment Date or Redemption Date, or at the Stated Maturity or date of
maturity of such Note; provided that no interest shall accrue for the period
from and after such Interest Payment Date, Payment Date, Redemption Date, Stated
Maturity or date of maturity, as the case may be.
SECTION 13.07. Governing Law. This Indenture and the Notes shall be
-------------
governed by the laws of the State of New York. The Trustee, the Company, each
Subsidiary Guarantor and the Holders agree to submit to the jurisdiction of the
courts of the State of New York in any action or proceeding arising out of or
relating to this Indenture or the Notes.
SECTION 13.08. No Adverse Interpretation of Other Agreements. This
---------------------------------------------
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.09. No Recourse Against Others. No recourse for the payment of
--------------------------
the principal of, premium, if any, or interest on any of the Notes, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company contained in this
Indenture or in any of the Notes, or because of the creation of any Indebtedness
represented thereby, shall be had against any incorporator or against any past,
present or future partner, stockholder, other equityholder, officer, director,
employee or controlling person, as such, of the Company or of any successor
Person, either directly or through the Company or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issue of the Notes.
SECTION 13.10. The D&M Acquisition and the D&M Financing. Notwithstanding
-----------------------------------------
any other provision to the contrary in this Indenture, no covenant or other
provision of this Indenture will prevent the Company and its Subsidiaries from
consummating the D&M Acquisition and the D&M Financing and the D&M Acquisition
and the D&M Financing shall be deemed to not violate any provision of this
Indenture.
SECTION 13.11. Successors. All agreements of the Company in this
----------
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 13.12. Duplicate Originals. The parties may sign any number of
-------------------
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
<PAGE>
105
SECTION 13.13. Separability. In case any provision in this Indenture or
------------
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 13.14. Table of Contents, Headings, Etc. The Table of Contents,
--------------------------------
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
and provisions hereof.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
URS CORPORATION
By /s/Kent P. Ainsworth
---------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President, Chief
Financial Officer and Secretary
SUBSIDIARY GUARANTORS: DAMES & MOORE GROUP
By /s/ Kent P. Ainsworth
---------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President and Secretary
DEMETER ACQUISITION CORPORATION
URS CONSULTANTS, INC. -- FLORIDA
URS GREINER WOODWARD-CLYDE
CONSULTANTS, INC.
URS GREINER WOODWARD-CLYDE
CONSULTANTS, INC. -- COLORADO
URS GREINER WOODWARD-CLYDE
ENGINEERING, INC.
URS GREINER WOODWARD-CLYDE GROUP
CONSULTANTS, INC.
URS GREINER WOODWARD-CLYDE, INC. --
CALIFORNIA
<PAGE>
URS GREINER WOODWARD-CLYDE, INC. --
OHIO
URS GREINER WOODWARD-CLYDE, INC. --
WASHINGTON
URS GREINER WOODWARD-CLYDE, INC.
(COLORADO)
URS GREINER WOODWARD-CLYDE, INC.
(CONNECTICUT)
URS GREINER WOODWARD-CLYDE, INC.
GREAT LAKES
URS GREINER WOODWARD-CLYDE, INC.
(MARYLAND)
URS GREINER WOODWARD-CLYDE, INC.
PACIFIC
URS GREINER WOODWARD-CLYDE, INC.
SOUTHERN
URS GREINER WOODWARD-CLYDE, INC.
SOUTHWEST
URS GREINER WOODWARD-CLYDE
INTERNATIONAL - AMERICAS, INC.
URS GREINER WOODWARD-CLYDE
INTERNATIONAL HOLDINGS, INC.
By /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President, Chief
Financial Officer and Secretary
<PAGE>
WVP CORPORATION
By /s/ Kent P. Ainsworth
-------------------------------------------
Name: Kent P. Ainsworth
Title: Vice President, Chief Financial Officer
and Secretary
URS GREINER WOODWARD-CLYDE
GROUP, INC.
By /s/ Kent P. Ainsworth
-------------------------------------------
Name: Kent P. Ainsworth
Title: Chief Financial Officer and Secretary
<PAGE>
GCH ACQUISITION CORP.
By /s/ Jean-Yves Perez
---------------------------------------
Name: Jean-Yves Perez
Title: President
GEO-CON, INC.
By /s/ Jean-Yves Perez
---------------------------------------
Name: Jean-Yves Perez
Title: Vice President
URS GREINER WOODWARD-CLYDE
FEDERAL SERVICES, INC.
By /s/ Gary V. Jandegian
---------------------------------------
Name: Gary V. Jandegian
Title: President
URS GREINER WOODWARD-CLYDE
LICENSING CORP.
By /s/ Cynthia L. Jorgensen
---------------------------------------
Name: Cynthia L. Jorgensen
Title: President and Treasurer
URS GREINER WOODWARD-CLYDE
OPERATING SERVICES, INC.
By /s/ Cynthia L. Jorgensen
---------------------------------------
Name: Cynthia L. Jorgensen
Title: Vice President and Treasurer
<PAGE>
AMAN ENVIRONMENTAL CONSTRUCTION,
INC.
By /s/ Mark A. Snell
----------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
BRW GROUP, INC.
By /s/ Mark A. Snell
----------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
CLEVELAND WRECKING COMPANY
By /s/ Mark A. Snell
----------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
CONTRACTING RESOURCES INTERNATIONAL, INC.
By /s/ Mark A. Snell
----------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
DAMES & MOORE, INC.
By /s/ Mark A. Snell
----------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
DECISIONQUEST, INC.
By /s/ Mark A. Snell
---------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
<PAGE>
O'BRIEN-KREITZBERG, INC.
By /s/ Mark A. Snell
--------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
RADIAN ACQUISITION CORP.
By /s/ Mark A. Snell
--------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
RADIAN INTERNATIONAL LLC
By /s/ Mark A. Snell
--------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
SIGNET TESTING LABORATORIES, INC.
By /s/ Mark A. Snell
--------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
WALK, HAYDEL & ASSOCIATES, INC.
By /s/ Mark A. Snell
--------------------------------------
Name: Mark A. Snell
Title: Chief Financial Officer
<PAGE>
FIRSTAR BANK OF MINNESOTA, N.A.
By: /s/ Frank P. Leslie III
-------------------------
Name: Frank P. Leslie III
Title: Vice President
<PAGE>
SCHEDULE I
----------
SUBSIDIARY GUARANTORS
Demeter Acquisition Corporation
URS Consultants, Inc. -- Florida
URS Greiner Woodward-Clyde Consultants, Inc.
URS Greiner Woodward-Clyde Consultants, Inc. -- Colorado
URS Greiner Woodward-Clyde Engineering, Inc.
URS Greiner Woodward-Clyde Group Consultants, Inc.
URS Greiner Woodward-Clyde, Inc. -- California
URS Greiner Woodward-Clyde, Inc. -- Ohio
URS Greiner Woodward-Clyde, Inc. -- Washington
URS Greiner Woodward-Clyde, Inc. (Colorado)
URS Greiner Woodward-Clyde, Inc. (Connecticut)
URS Greiner Woodward-Clyde, Inc. Great Lakes
URS Greiner Woodward-Clyde, Inc. (Maryland)
URS Greiner Woodward-Clyde, Inc. Pacific
URS Greiner Woodward-Clyde, Inc. Southern
URS Greiner Woodward-Clyde, Inc. Southwest
URS Greiner Woodward-Clyde International -- Americas, Inc.
URS Greiner Woodward-Clyde International Holdings, Inc.
WVP Corporation
URS Greiner Woodward-Clyde Group, Inc.
GCH Acquisition Corp.
Geo-con, Inc.
URS Greiner Woodward-Clyde Federal Services, Inc.
URS Greiner Woodward-Clyde Licensing Corp.
URS Greiner Woodward-Clyde Operating Services, Inc.
Dames & Moore Group
<PAGE>
SCHEDULE II
-----------
SUBSIDIARY GUARANTORS
Aman Environmental Consultation, Inc.
BRW Group, Inc.
Cleveland Wrecking Company
Contracting Resources International, Inc.
Dames & Moore, Inc.
DecisionQuest, Inc.
O'Brien-Kreitzberg, Inc.
Radian Acquisition Corp.
Radian International LLC
Signet Testing Laboratories, Inc.
Walk, Haydel & Associates, Inc.
<PAGE>
EXHIBIT A
---------
[APPLICABLE LEGENDS]
[FACE OF NOTE]
URS CORPORATION
12 1/4% Senior Subordinated Note due 2009
[CUSIP] [CINS] [ISIN] [__________]
No. ____ $200,000,000
URS CORPORATION, a Delaware corporation (the "Company", which term includes
any successor under the Indenture hereinafter referred to), for value received,
promises to pay to _____________, or its registered assigns, the principal sum
of ____________ ($____) on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1999.
Regular Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
URS CORPORATION
By: _________________________________
Name: Martin M. Koffel
Title: Chief Executive Officer
By: _________________________________
Name: Kent P. Ainsworth
Title: Chief Financial Officer
(Trustee's Certificate of Authentication)
This is one of the 12 1/4% Senior Subordinated Notes due 2009 described in the
within-mentioned Indenture.
Date: June 23, 1999 FIRSTAR BANK OF MINNESOTA, N.A.
as Trustee
By: _______________________________
Authorized Signatory
<PAGE>
A-3
[REVERSE SIDE OF NOTE]
URS CORPORATION
12 1/4% Senior Subordinated Note due 2009
1. Principal and Interest.
----------------------
The Company will pay the principal of this Note on May 1, 2009.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the April 15 or October 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
November 1, 1999.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the "Shelf
Registration Statement") under the Securities Act with respect to resales of the
Notes is not declared effective by the Commission, on or before January 23, 2000
in accordance with the terms of the Registration Rights Agreement dated June 23,
1999 between the Company, each Subsidiary Guarantor and Morgan Stanley & Co.
Incorporated, the annual interest rate borne by the Notes after January 23, 2000
shall be increased by 0.5% from the rate shown above accruing from January 23,
2000, payable in cash semiannually, in arrears, on each Interest Payment Date,
commencing May 1, 2000 until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from June 23, 1999;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
same rate per annum payable on the principal of this Note.
<PAGE>
A-4
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the principal
amount of the Notes as provided above on each May 1 and November 1, commencing
November 1, 1999 to the persons who are Holders (as reflected in the Security
Register at the close of business on the April 15 or October 15 immediately
preceding the Interest Payment Date), in each case, even if the Note is
cancelled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Paying
Agent on or after May 1, 2009.
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as authenticating agent, Paying Agent and
Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
----------------------
The Company issued the Notes under an Indenture dated as of June 23, 1999
(the "Indenture"), between the Company, each Subsidiary Guarantor and Firstar
Bank of Minnesota, N.A., trustee (the "Trustee"). Capitalized terms herein are
used as defined in the Indenture unless otherwise indicated. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act. The Notes are subject to all such
terms, and Holders are referred to the Indenture and the Trust Indenture Act for
a statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company.
The Company may, subject to Article Four of the Indenture and applicable
law, issue additional Notes under the Indenture.
<PAGE>
A-5
5. Optional Redemption.
-------------------
The Notes are redeemable, at the Company's option, in whole or in part, at
any time or from time to time, on or after May 1, 2004 and prior to maturity,
upon not less than 30 nor more than 60 days' prior notice mailed by first class
mail to each Holder's last address, as it appears in the Security Register, at
the following Redemption Prices (expressed in percentages of principal amount,
plus accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing May 1 of the years set forth
below:
Year Redemption Price
---- ----------------
2004..................... 106.125%
2005..................... 104.083%
2006..................... 102.041%
2007 and thereafter...... 100.000%
At any time prior to May 1, 2002, the Company may redeem up to 35% of the
aggregate principal amount of the Notes with the Net Cash Proceeds of one or
more sales of Capital Stock (other than Disqualified Stock), at any time as a
whole or from time to time in part, at a Redemption Price (expressed as a
percentage of principal amount of 112.250%, plus accrued and unpaid interest to
the Redemption Date (subject to the rights of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest due
on an Interest Payment Date); provided that (i) at least 65% of the aggregate
principal amount of Notes originally issued on the Closing Date remains
outstanding after each such redemption and (ii) notice of such redemption is
mailed within 60 days after such sale of Capital Stock.
Notes in original denominations larger than $1,000 may be redeemed in part.
On and after the Redemption Date, interest ceases to accrue on Notes or portions
of Notes called for redemption, unless the Company defaults in the payment of
the Redemption Price.
6. Repurchase upon Change of Control.
---------------------------------
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Payment Date").
<PAGE>
A-6
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at its last address as it appears in the
Security Register. Notes in original denominations larger than $1,000 may be
sold to the Company in part. On and after the Payment Date, interest ceases to
accrue on Notes or portions of Notes surrendered for purchase by the Company,
unless the Company defaults in the payment of the purchase price.
7. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons in denominations of $1,000
of principal amount and multiples of $1,000 in excess thereof. A Holder may
register the transfer or exchange of Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of any Notes selected for redemption. Also, it need not register
the transfer or exchange of any Notes for a period of 15 days before the day of
mailing of a notice of redemption of Notes selected for redemption.
8. Persons Deemed Owners.
---------------------
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain provisions thereof, and (b) to the Stated Maturity,
the Company will be discharged from certain covenants set forth in the
Indenture.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then
<PAGE>
outstanding, and any existing default or compliance with any provision may be
waived with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, defect or inconsistency and make any
change that does not materially and adversely affect the rights of any Holder.
12. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the Company and
its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, to Incur Indebtedness that is subordinate to any Senior
Indebtedness but senior to the Notes or Note Guarantees, make Restricted
Payments, suffer to exist restrictions on the ability of Restricted Subsidiaries
to make certain payments to the Company, Guarantee Indebtedness of the Company,
engage in transactions with Affiliates, incur Indebtedness secured by Liens, use
the proceeds from Asset Sales, or merge, consolidate or transfer substantially
all of its assets. Within 90 days after the end of each fiscal year, the Company
shall deliver to the Trustee an Officers' Certificate stating whether or not the
signers thereof know of any Default or Event of Default under such restrictive
covenants.
13. Successor Persons.
-----------------
When a successor person or other entity assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor person will be
released from those obligations.
14. Defaults and Remedies.
---------------------
Any of the following events constitutes an "Event of Default" under the
Indenture:
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise, regardless of whether such payment
is prohibited by the provisions described under Article Eleven;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30
days, regardless of whether such payment is prohibited by the provisions
described under Article Eleven;
(c) default in the performance or breach of the provisions of the
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the assets of the Company or the failure to make or
consummate an Offer to Purchase in accordance with Section 4.11 and Section
4.12;
<PAGE>
A-8
(d) the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement of the Company
in the Indenture or under the Notes (other than a default specified in
clause (a), (b) or (c) above) and such default or breach continues for a
period of 60 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company, any Significant Subsidiary or any group of Subsidiary
Guarantors that taken together would constitute a Significant Subsidiary,
having an outstanding principal amount of $15 million or more in the
aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (i) an event of
default that has caused the holder thereof to declare such Indebtedness to
be due and payable prior to its Stated Maturity and such Indebtedness has
not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration or (ii) the failure to make a
principal payment at the final (but not any interim) fixed maturity and
such defaulted payment shall not have been made, waived or extended within
30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $15 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company, any Significant Subsidiary or any group of
Subsidiary Guarantors that taken together would constitute a Significant
Subsidiary, and shall not be paid or discharged, and there shall be any
period of 60 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or
orders outstanding and not paid or discharged against all such Persons to
exceed $15 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company, any Significant Subsidiary
or any group of Subsidiary Guarantors that taken together would constitute
a Significant Subsidiary, in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company, any Significant Subsidiary
or any group of Subsidiary Guarantors that taken together would constitute
a Significant Subsidiary, or for all or substantially all of the property
and assets of the Company, any Significant Subsidiary or any group of
Subsidiary Guarantors that taken together would constitute a Significant
Subsidiary, or (C) the winding up or liquidation of the affairs of the
Company, any Significant Subsidiary or any group of Subsidiary Guarantors
that taken together would constitute a
<PAGE>
A-9
Significant Subsidiary, and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days;
(h) the Company, any Significant Subsidiary or any group of
Subsidiary Guarantors that taken together would constitute a Significant
Subsidiary, (A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to
the entry of an order for relief in an involuntary case under any such law,
(B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Company, any Significant Subsidiary or any group of Subsidiary
Guarantors that taken together would constitute a Significant Subsidiary,
or for all or substantially all of the property and assets of the Company,
or any Significant Subsidiary or any group of Subsidiary Guarantors that
taken together would constitute a Significant Subsidiary, or (C) effects
any general assignment for the benefit of creditors; or
(i) except as permitted by the Indenture, any Subsidiary Guarantor
repudiates its obligations under its Note Guarantee or any Note Guarantee
is determined to be unenforceable or invalid or shall for any reason cease
to be in full force and effect.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding shall, declare all
the Notes to be due and payable. If a bankruptcy or insolvency default with
respect to the Company or a Subsidiary Guarantor occurs and is continuing, the
Notes automatically become due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of at least a majority in
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
15. Subordination.
-------------
The payment of the Notes will, to the extent set forth in the Indenture, be
subordinated in right of payment to the prior payment in full, in cash or cash
equivalents, of all Senior Indebtedness.
16. Guarantee.
---------
The Company's obligations under the Notes are guaranteed, to the extent
permitted by law, on a senior subordinated basis by each Subsidiary Guarantor.
Each Subsidiary Guarantor's obligation with respect to a Note Guarantee will, to
the extent set forth in the Indenture, be subordinated in right of payment to
the prior payment in full, in cash, of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor.
<PAGE>
A-10
17. Trustee Dealings with the Company.
---------------------------------
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from and perform services for the Company,
the Subsidiary Guarantors or their Affiliates and may otherwise deal with the
Company, the Subsidiary Guarantors or their Affiliates as if it were not the
Trustee.
18. No Recourse Against Others.
--------------------------
No incorporator or any past, present or future partner, stockholder, other
equityholder, officer, director, employee or controlling person, as such, of the
Company or of any successor Person shall have any liability for any obligations
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
19. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish a copy of the Indenture to any Holder upon written
request and without charge. Requests may be made to URS Corporation, 100
California Street, Suite 500, San Francisco, CA 94111; Attention: Chief
Financial Officer.
<PAGE>
A-11
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ____________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED OFFSHORE GLOBAL NOTES AND
UNLEGENDED OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
---------
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
--
[ ] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
<PAGE>
A-12
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:___________________ ____________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:__________________ ________________________________________________
NOTICE: To be executed by an executive officer
<PAGE>
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or 4.12 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or 4.12 of the Indenture, state the amount:
$___________________.
Date: _________________
Your Signature:-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Note)
Signature Guarantee: ______________________________
<PAGE>
EXHIBIT B
---------
Form of Certificate
-------------------
_____,__
Firstar Bank of Minnesota, N.A.
101 East Fifth Street
St. Paul, MN 55101
Attention: Corporate Trust Department
Re: URS Corporation (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Notes")
--------------------------------------------------------
Dear Sirs:
This letter relates to U.S. $_______________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.02 of
the Indenture dated as of June 23, 2009 (the "Indenture") relating to the Notes,
we hereby certify that we are (or we will hold such securities on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933. Accordingly, you are hereby requested to exchange the legended
certificate for an unlegended certificate representing an identical principal
amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By: _____________________________
Authorized Signature
<PAGE>
EXHIBIT C
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
____________, ____
Firstar Bank of Minnesota, N.A.
101 East Fifth Street
St. Paul, MN 55101
Attention: Corporate Trust Department
Re: URS Corporation (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Notes")
--------------------------------------------------------
Dear Sirs:
In connection with our proposed purchase of $__________________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture dated as of June
23, 2009 (the "Indenture") relating to the Notes and the undersigned agrees to
be bound by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with such restrictions and conditions and the Securities Act of 1933,
amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes within the time period referred to in Rule
144(k) of the Securities Act, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of an aggregate principal amount of less than $100,000,
an opinion of counsel acceptable to the Company that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available) or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing any of
<PAGE>
C-2
the Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:___________________________
Authorized Signature
<PAGE>
EXHIBIT D
---------
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
--------------------------------------------------
_____,___
Firstar Bank of Minnesota, N.A.
101 East Fifth Street
St. Paul, MN 55101
Attention: Corporate Trust Department
Re: URS Corporation (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Notes")
--------------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$__________________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of 1933
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:__________________________
<PAGE>
EXHIBIT 2.6
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated June 23, 1999
between
URS CORPORATION
THE GUARANTORS LISTED ON ANNEX A HERETO
and
MORGAN STANLEY & CO. INCORPORATED
================================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into June 23, 1999, between URS CORPORATION, a Delaware corporation (the
"Company"), the subsidiaries of the Company listed in Annex A (the "Guarantors")
and MORGAN STANLEY & CO. INCORPORATED (the "Placement Agent").
This Agreement is made pursuant to the Placement Agreement dated June
18, 1999, among the Company, the Guarantors and the Placement Agent (the
"Placement Agreement"), which provides for the sale by the Company to the
Placement Agent of an aggregate of $200,000,000 principal amount of the
Company's 12 1/4% Senior Subordinated Notes Due 2009 (the "Securities"). The
Securities will be fully and unconditionally guaranteed on an senior
subordinated basis by the Guarantors. In order to induce the Placement Agent to
enter into the Placement Agreement, the Company and the Guarantors have agreed
to provide to the Placement Agent and its direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
--------
to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
--------
from time to time.
"Closing Date" shall mean the Closing Date as defined in the Placement
------------
Agreement.
"Company" shall have the meaning set forth in the preamble and shall
-------
also include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company of
--------------
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
<PAGE>
2
"Exchange Offer Registration" shall mean a registration under the 1933
---------------------------
Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
-------------------------------------
registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Exchange Securities" shall mean securities issued by the Company and
-------------------
severally guaranteed by the Guarantors under the Indenture containing terms
identical to the Securities (except that the Exchange Securities will not
contain restrictions on transfer) and to be offered to Holders of
Securities in exchange for Securities pursuant to the Exchange Offer.
"Guarantors" shall have the meaning set forth in the preamble and
----------
shall also include any Guarantor's successor.
"Holder" shall mean the Placement Agent, for so long as it owns any
------
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
--------
Agreement, the term "Holder" shall include Participating Broker-Dealers (as
defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Securities dated
---------
as of June 23, 1999 among the Company, the Guarantors and Firstar Bank of
Minnesota, N.A., as trustee, and as the same may be amended from time to
time in accordance with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the
----------------
aggregate principal amount of outstanding Registrable Securities; provided
--------
that whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Company or any of its affiliates (as such term is defined in
Rule 405 under the 1933 Act) (other than the Placement Agent or subsequent
Holders of Registrable Securities if such subsequent holders are deemed to
be such affiliates solely by reason of their holding of such Registrable
Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage or amount.
<PAGE>
3
"Person" shall mean an individual, partnership, limited liability
------
company, corporation, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"Placement Agent" shall have the meaning set forth in the preamble.
---------------
"Placement Agreement" shall have the meaning set forth in the
-------------------
preamble.
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to such prospectus,
and in each case including all material incorporated by reference therein.
"Registrable Securities" shall mean the Securities and the guarantees
----------------------
thereof by the Guarantors; provided, however, that the Securities and the
-------- -------
guarantees shall cease to be Registrable Securities (i) when a Shelf
Registration Statement with respect to such Securities and guarantees shall
have been declared effective under the 1933 Act and such Securities and
guarantees shall have been disposed of pursuant to such Shelf Registration
Statement, (ii) when a Registration Statement with respect to such
Securities and guarantees shall have been declared effective under the 1933
Act and the Company shall have complied with the provisions of Section 2(a)
hereof, (iii) when such Securities and guarantees have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but
not Rule 144A) under the 1933 Act or (iv) when such Securities and
guarantees shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
---------------------
performance of or compliance by the Company and the Guarantors with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection with
blue sky qualification of any of the Exchange Securities or Registrable
Securities), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) all fees and disbursements relating to the
qualification of the Indenture under applicable securities
<PAGE>
4
laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii)
the fees and disbursements of counsel for the Company and the Guarantors
and, in the case of a Shelf Registration Statement, the fees and
disbursements of one counsel for the Holders (which counsel shall be
counsel for the Placement Agent) and (viii) the fees and disbursements of
the independent public accountants of the Company and the Guarantors,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, but excluding
fees and expenses of counsel to the underwriters (other than fees and
expenses set forth in clause (ii) above) or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale
or disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
----------------------
Company and the Guarantors that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
---
"Shelf Registration" shall mean a registration effected pursuant to
------------------
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
----------------------------
statement of the Company and the Guarantors pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable
Securities (but no other securities unless approved by the Holders whose
Registrable Securities are covered by such Shelf Registration Statement) on
an appropriate form under Rule 415 under the 1933 Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Securities under
-------
the Indenture.
"Underwriter" shall have the meaning set forth in Section 3 hereof.
-----------
"Underwritten Registration" or "Underwritten Offering" shall mean a
------------------------- ---------------------
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.
<PAGE>
5
2. Registration Under the 1933 Act.
-------------------------------
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company and the Guarantors shall use
their best efforts to cause to be filed an Exchange Offer Registration Statement
covering the offer by the Company and the Guarantors to the Holders to exchange
all of the Registrable Securities for Exchange Securities and to have such
Registration Statement remain effective until the closing of the Exchange Offer.
The Company and the Guarantors shall commence the Exchange Offer promptly after
the Exchange Offer Registration Statement has been declared effective by the SEC
and use its best efforts to have the Exchange Offer consummated not later than
60 days after such effective date. The Company and the Guarantors shall
commence the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities validly
tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period of
at least 20 business days from the date such notice is mailed) (the
"Exchange Dates");
(iii) that any Registrable Security not tendered will remain
outstanding and continue to accrue interest, but will not retain any rights
under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Security exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Security, together with the enclosed letters of transmittal, to
the institution and at the address (located in the Borough of Manhattan,
The City of New York) specified in the notice prior to the close of
business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the last Exchange Date, by sending to
the institution and at the address (located in the Borough of Manhattan,
The City of New York) specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Securities delivered for exchange and a statement
that such Holder is withdrawing his election to have such Securities
exchanged.
As soon as practicable after the last Exchange Date, the Company and
the Guarantors shall:
<PAGE>
6
(i) accept for exchange Registrable Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted for
exchange by the Company and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Security equal in
principal amount to the principal amount of the Registrable Securities
surrendered by such Holder.
The Company and the Guarantors shall use their best efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the 1933 Act, the 1934 Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall not
be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
The Company shall inform the Placement Agent of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Placement Agent shall have
the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.
(b) In the event that (i) the Company and the Guarantors determine
that the Exchange Offer Registration provided for in Section 2(a) above is not
available or may not be consummated as soon as practicable after the last
Exchange Date because it would violate applicable law or the applicable
interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for any
other reason consummated by January 23, 2000 or (iii) the Exchange Offer has
been completed and in the opinion of counsel for the Placement Agent a
Registration Statement must be filed and a Prospectus must be delivered by the
Placement Agent in connection with any offering or sale of Registrable
Securities, the Company and the Guarantors shall use their best efforts to cause
to be filed as soon as practicable after such determination, date or notice of
such opinion of counsel is given to the Company, as the case may be, a Shelf
Registration Statement providing for the sale by the Holders of all of the
Registrable Securities and to have such Shelf Registration Statement declared
effective by the SEC. In the event the Company and the Guarantors are required
to file a Shelf Registration Statement solely as a result of the matters
referred to in clause (iii) of the preceding sentence, the Company and the
Guarantors shall use their best efforts to file and have declared effective by
the SEC a Shelf Registration Statement (which may be a combined Registration
Statement with the Exchange Offer Registration Statement) with respect to offers
and sales of Registrable Securities held by the Placement Agent after completion
of the Exchange Offer. The Company and the Guarantors agree to use their best
efforts to keep the Shelf Registration Statement continuously effective until
the expiration of the period referred to in Rule 144(k) with respect to the
Registrable Securities or such shorter period that will terminate when all of
the Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration
<PAGE>
7
Statement. The Company and the Guarantors further agree to supplement or amend
the Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the 1933 Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder, and to use its best
efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Company and the Guarantors agree to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) The Company and the Guarantors shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or Section 2(b).
Each Holder shall pay all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that, if, after it has been declared effective, the
-------- -------
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume. As provided for in the Indenture, in
the event the Exchange Offer is not consummated and the Shelf Registration
Statement is not declared effective on or prior to January 23, 2000, the annual
interest rate on the Securities will be increased by .5% until the Exchange
Offer is consummated or the Shelf Registration Statement is declared effective
by the SEC.
(e) Without limiting the remedies available to the Placement Agent and
the Holders, the Company and the Guarantors acknowledge that any failure by the
Company or the Guarantors to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Placement
Agent or the Holders for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Placement Agent or any Holder may obtain such
relief as may be required to specifically enforce the Company's or the
Guarantors' obligations under Section 2(a) and Section 2(b) hereof.
<PAGE>
8
3. Registration Procedures.
-----------------------
In connection with the obligations of the Company and the Guarantors
with respect to the Registration Statements pursuant to Section 2(a) and Section
2(b) hereof, the Company and the Guarantors shall as promptly as practicable:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and the Guarantors and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and (z) shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and use its
best efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to
keep each Prospectus current during the period described under Section 4(3)
and Rule 174 under the 1933 Act that is applicable to transactions by
brokers or dealers with respect to the Registrable Securities or Exchange
Securities;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Placement Agent, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or Underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and the Company and the
Guarantors consent to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the selling
Holders of Registrable Securities and any such Underwriters in connection
with the offering and sale of the Registrable Securities covered by and in
the manner described in such Prospectus or any amendment or supplement
thereto in accordance with applicable law;
(d) use their best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective
<PAGE>
9
by the SEC, to cooperate with such Holders in connection with any filings
required to be made with the National Association of Securities Dealers,
Inc. and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder to consummate the disposition
in each such jurisdiction of such Registrable Securities owned by such
Holder; provided, however, that neither the Company nor any Guarantor shall
-------- -------
be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (ii) file any general consent to service
of process or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and counsel for the
Placement Agent promptly and, if requested by any such Holder or counsel,
confirm such advice in writing (i) when a Registration Statement has become
effective and when any post-effective amendment thereto has been filed and
becomes effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company or any Guarantor contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and correct in
all material respects or if the Company or any Guarantor receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, (v) of the happening of any event during
the period a Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any changes
in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the
Company or any Guarantor that a post-effective amendment to a Registration
Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment and provide prompt notice to each Holder of the withdrawal
of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement
<PAGE>
10
and any post-effective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and enable such Registrable Securities
to be in such denominations (consistent with the provisions of the
Indenture) and registered in such names as the selling Holders may
reasonably request at least one business day prior to the closing of any
sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use its best efforts to
prepare and file with the SEC a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Company and the Guarantors agree to notify the
Holders to suspend use of the Prospectus as promptly as practicable after
the occurrence of such an event, and the Holders hereby agree to suspend
use of the Prospectus until the Company and the Guarantors have amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to the Placement Agent and its counsel and make such of the
representatives of the Company and the Guarantors as shall be reasonably
requested by the Placement Agent or its counsel available for discussion of
such document, and shall not at any time file or make any amendment to the
Registration Statement, any Prospectus or any amendment of or supplement to
a Registration Statement or a Prospectus, of which the Placement Agent and
its counsel shall not have previously been advised and furnished a copy or
to which the Placement Agent or its counsel, acting on behalf of both the
Placement Agent and the Holders, shall reasonably object;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;
<PAGE>
11
(l) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts
to cause the Trustee to execute, all documents as may be required to effect
such changes and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for inspection
by a representative of the Holders of the Registrable Securities, any
Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, all financial and
other records, pertinent documents and properties of the Company and the
Guarantors, and cause the respective officers, directors and employees of
the Company and the Guarantors to supply all information reasonably
requested by any such representative, Underwriter, attorney or accountant
in connection with a Shelf Registration Statement; provided, however, that
any information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information shall be
kept confidential by the Holders or any such Underwriter, attorney,
accountant or other agent, unless such disclosure is made in connection
with a court proceeding or required by law, or such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality.
(n) in the case of a Shelf Registration, use its best efforts to cause
all Registrable Securities to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the
Company or any Guarantor are then listed if requested by the Majority
Holders, to the extent such Registrable Securities satisfy applicable
listing requirements;
(o) use its best efforts to cause the Exchange Securities to continue
to be rated by two nationally recognized statistical rating organizations
(as such term is defined in Rule 436(g)(2) under the 1933 Act), if the
Registrable Securities have been rated;
(p) if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information with
respect to such Holder as such Holder reasonably requests to be included
therein and (ii) make all required filings of such
<PAGE>
12
Prospectus supplement or such post-effective amendment as soon as the
Company has received notification of the matt ers to be incorporated in
such filing;
(q) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith
(including those requested by the Holders of a majority of the Registrable
Securities being sold) in order to expedite or facilitate the disposition
of such Registrable Securities including, but not limited to, an
Underwritten Offering and in such connection, (i) to the extent possible,
make such representations and warranties to the Holders and any
Underwriters of such Registrable Securities with respect to the business of
the Company and its material subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated
by reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (ii) obtain opinions of counsel to
the Company and the Guarantors (which counsel and opinions, in form, scope
and substance, shall be reasonably satisfactory to the Holders and such
Underwriters and their respective counsel) addressed to each selling Holder
and Underwriter of Registrable Securities, covering the matters customarily
covered in opinions requested in underwritten offerings, (iii) obtain "cold
comfort" letters from the independent certified public accountants of the
Company and the Guarantors (and, if necessary, any other certified public
accountant of any subsidiary of the Company or any Guarantor, or of any
business acquired by the Company or any Guarantor for which financial
statements and financial data are or are required to be included in the
Registration Statement) addressed to each selling Holder and Underwriter of
Registrable Securities, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority in
principal amount of the Registrable Securities being sold or the
Underwriters, and which are customarily delivered in underwritten
offerings, to evidence the continued validity of the representations and
warranties of the Company and the Guarantors made pursuant to clause (i)
above and to evidence compliance with any customary conditions contained in
an underwriting agreement; and
(r) in the case of a Shelf Registration Statement, in the event that,
in the reasonable judgment of the Company, it is advisable to suspend use
of the Prospectus for a discrete period of time due to pending material
corporate developments or similar material events that have not yet been
publicly disclosed and as to which the Company reasonably believes public
disclosure will be prejudicial to the Company, the Company shall deliver a
certificate in writing, signed by its Chief Executive Officer or Chief
Financial Officer, to the Holders to the effect of the foregoing and, upon
receipt of such certificate, each such Holder shall not commence selling
its Registrable Securities
<PAGE>
13
pursuant to such Prospectus until such Holder's receipt of copies of the
supplemented or amended Prospectus, or until it is advised in writing by
the Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. The Company will use its best
efforts to ensure that the use of the Prospectus may be resumed, as
promptly as is practicable and as soon as the earlier of (x) public
disclosure of such pending material corporate development or similar
material event or (y) in the reasonable judgment of the Company, public
disclosure of such pending material corporate development or similar
material event would not be prejudicial to the Company.
In the case of a Shelf Registration Statement, the Company and the
Guarantors may require each Holder of Registrable Securities to furnish to the
Company and the Guarantors such information regarding the Holder and the
proposed distribution by such Holder of such Registrable Securities as the
Company and the Guarantors may from time to time reasonably request in writing.
No Holder of Registrable Securities will be entitled to have such Registrable
Securities included in a Shelf Registration Statement if such Holder does not
furnish the information required by the Company and the Guarantors.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company and the Guarantors of the
happening of any event of the kind described in Section 3(e)(v) or Section 3(r)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
3(i) hereof, and, if so directed by the Company and the Guarantors, such Holder
will deliver to the Company and the Guarantors (at its expense) all copies, if
any, in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice. The Company and the Guarantors may give any
such notice only twice during any 365 day period and any such suspensions may
not exceed, in the aggregate, 60 days, regardless of whether consecutive, during
any 365 day period.
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
--------------------------------------------------
<PAGE>
14
(a) The Staff of the SEC has taken the position that any broker-
dealer that receives Exchange Securities for its own account in the Exchange
Offer in exchange for Securities that were acquired by such broker-dealer as a
result of market-making or other trading activities (a "Participating Broker-
Dealer"), may be deemed to be an "underwriter" within the meaning of the 1933
Act and must deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities.
The Company and the Guarantors understand that it is the Staff's
position that if the Prospectus contained in the Exchange Offer Registration
Statement includes a plan of distribution containing a statement to the above
effect and the means by which Participating Broker-Dealers may resell the
Exchange Securities, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Securities owned by them, such Prospectus may
be delivered by Participating Broker-Dealers to satisfy their prospectus
delivery obligation under the 1933 Act in connection with resales of Exchange
Securities for their own accounts, so long as the Prospectus otherwise meets the
requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company and the Guarantors agree that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be, reasonably requested by the Placement Agent or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:
--------
(i) the Company and the Guarantors shall not be required to amend or
supplement the Prospectus contained in the Exchange Offer Registration
Statement, as would otherwise be contemplated by Section 3(i), for a period
exceeding 180 days after the last Exchange Date (as such period may be
extended pursuant to the penultimate paragraph of Section 3 of this
Agreement) and Participating Broker-Dealers shall not be authorized by the
Company and the Guarantors to deliver and shall not deliver such Prospectus
after such period in connection with the resales contemplated by this
Section 4; and
(ii) the application of the Shelf Registration procedures set forth in
Section 3 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the Staff of the SEC or the 1933
Act and the rules and regulations thereunder, will be in conformity with
the reasonable request to the Company and the Guarantors by the Placement
Agent or with the reasonable request in writing to the Company and the
Guarantors by one or more broker-dealers who certify to the Placement Agent
and the Company and the Guarantors in writing that they anticipate
<PAGE>
15
that they will be Participating Broker-Dealers; and provided further that,
-------- -------
in connection with such application of the Shelf Registration procedures
set forth in Section 3 to an Exchange Offer Registration, the Company and
the Guarantors shall be obligated (x) to deal only with one entity
representing the Participating Broker-Dealers, which shall be Morgan
Stanley & Co. Incorporated unless it elects not to act as such
representative, (y) to pay the fees and expenses of only one counsel
representing the Participating Broker-Dealers, which shall be counsel to
the Placement Agent unless such counsel elects not to so act and (z) to
cause to be delivered only one, if any, "cold comfort" letter with respect
to the Prospectus in the form existing on the last Exchange Date and with
respect to each subsequent amendment or supplement, if any, effected during
the period specified in clause (i) above.
(c) The Placement Agent shall have no liability to the Company, any
Guarantor or any Holder with respect to any request that it may make pursuant to
Section 4(b) above.
5. Indemnification and Contribution.
--------------------------------
<PAGE>
16
(a) Each of the Company and the Guarantors agrees jointly and
severally to indemnify and hold harmless the Placement Agent, each Holder and
each Person, if any, who controls the Placement Agent or any Holder within the
meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or
is under common control with, or is controlled by, the Placement Agent or any
Holder, from and against all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred by the
Placement Agent, any Holder or any such controlling or affiliated Person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) pursuant to which Exchange
Securities or Registrable Securities were registered under the 1933 Act,
including all documents incorporated therein by reference, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company and the
Guarantors shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Placement Agent or any Holder furnished to the Company or the Guarantors in
writing by Morgan Stanley & Co. Incorporated or any selling Holder expressly for
use therein; provided that the foregoing indemnity with respect to any
preliminary Prospectus shall not inure to the benefit of any Holder from whom
the person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Holder, if a copy of the final
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Holder to such person at or prior to the written confirmation of the sale
of the Securities to such person, and if the final Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability. In connection with any Underwritten Offering permitted by
Section 3, the Company and the Guarantors will also indemnify the Underwriters,
if any, selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of the 1933 Act and the 1934 Act)
to the same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Guarantors, the Placement Agent and the other
selling Holders, and each of their respective directors, officers who sign the
Registration Statement and each Person, if any, who controls the Company, the
Guarantors, the Placement Agent and any other selling Holder within the meaning
of either Section 15 of the 1933 Act or Section 20 of the
<PAGE>
17
1934 Act to the same extent as the foregoing indemnity from the Company and the
Guarantors to the Placement Agent and the Holders, but only with reference to
information relating to such Holder furnished to the Company and the Guarantors
in writing by such Holder expressly for use in any Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel and the
indemnifying party has agreed to pay the fees and expenses of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Placement
Agent and all Persons, if any, who control the Placement Agent within the
meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, the Guarantors, their directors, their officers who
sign the Registration Statement and each Person, if any, who controls the
Company or the Guarantors within the meaning of either such Section and (c) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Holders and all Persons, if any, who control any Holders within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred upon written request and presentation of
invoices. In such case involving the Placement Agent and Persons who control
the Placement Agent, such firm shall be designated in writing by Morgan Stanley
& Co. Incorporated. In such case involving the Holders and such Persons who
control Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified
<PAGE>
18
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party for such fees and expenses of
counsel in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by this Section 8(c)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent that it in good
faith considers such request to be reasonable and (ii) provides written notice
to the indemnified party substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 5 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company, the Guarantors and the Holders shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantors or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this Section 5(d) are several in
proportion to the respective principal amount of Registrable Securities of such
Holder that were registered pursuant to a Registration Statement.
(e) The Company, the Guarantors and each Holder agree that it would
not be just or equitable if contribution pursuant to this Section 5 were
determined by pro rata
--- ----
<PAGE>
19
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Securities
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Placement Agent, any Holder or any Person controlling the Placement Agent or
any Holder, or by or on behalf of the Company, the Guarantors, their officers or
directors or any Person controlling the Company or the Guarantors, (iii)
acceptance of any of the Exchange Securities and (iv) any sale of Registrable
Securities pursuant to a Shelf Registration Statement.
6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. Neither the Company nor the
--------------------------
Guarantors have entered into, and on or after the date of this Agreement will
not enter into, any agreement which is inconsistent with the rights granted to
the Holders of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof. The rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's or the Guarantors' other issued and outstanding
securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Guarantors have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or consent; provided, however, that no amendment,
-------- -------
modification, supplement, waiver or consent to any departure from the provisions
of Section 5
<PAGE>
20
hereof shall be effective as against any Holder of Registrable Securities unless
consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Placement Agent,
the address set forth in the Placement Agreement; and (ii) if to the Company or
the Guarantors, initially at the Company's address set forth in the Placement
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
--------
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Placement Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof. The Placement Agent
(in its capacity as Placement Agent) shall have no liability or obligation to
the Company or the Guarantors with respect to any failure by a Holder to comply
with, or any breach by any Holder of, any of the obligations of such Holder
under this Agreement.
(e) Purchases and Sales of Securities. The Company shall not, and
---------------------------------
shall use its best efforts to cause its affiliates (as defined in Rule 405 under
the 1933 Act) not to, purchase and then resell or otherwise transfer any
Securities.
<PAGE>
21
(f) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Placement Agent, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by the laws of
-------------
the State of New York.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Very truly yours,
URS CORPORATION
By /s/ Kent P. Ainsworth
----------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President, Chief
Financial Officer and Secretary
GUARANTORS: DAMES & MOORE GROUP
By /s/ Kent P. Ainsworth
----------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President and
Secretary
DEMETER ACQUISITION CORPORATION
URS CONSULTANTS, INC. -- FLORIDA
URS GREINER WOODWARD-CLYDE CONSULTANTS,
INC.
URS GREINER WOODWARD-CLYDE CONSULTANTS,
INC. -- COLORADO
URS GREINER WOODWARD-CLYDE ENGINEERING,
INC.
URS GREINER WOODWARD-CLYDE GROUP
CONSULTANTS, INC.
URS GREINER WOODWARD-CLYDE, INC. --
CALIFORNIA
<PAGE>
URS GREINER WOODWARD-CLYDE, INC. -- OHIO
URS GREINER WOODWARD-CLYDE, INC. --
WASHINGTON
URS GREINER WOODWARD-CLYDE, INC.
(COLORADO)
URS GREINER WOODWARD-CLYDE, INC.
(CONNECTICUT)
URS GREINER WOODWARD-CLYDE, INC. GREAT
LAKES
URS GREINER WOODWARD-CLYDE, INC.
(MARYLAND)
URS GREINER WOODWARD-CLYDE, INC. PACIFIC
URS GREINER WOODWARD-CLYDE, INC.
SOUTHERN
URS GREINER WOODWARD-CLYDE, INC.
SOUTHWEST
URS GREINER WOODWARD-CLYDE INTERNATIONAL
-- AMERICAS, INC.
URS GREINER WOODWARD-CLYDE INTERNATIONAL
HOLDINGS, INC.
By /s/ Kent P. Ainsworth
--------------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President, Chief
Financial Officer and Secretary
<PAGE>
WVP CORPORATION
By /s/ Kent P. Ainsworth
--------------------------------------
Name: Kent P. Ainsworth
Title: Vice President, Chief
Financial Officer and Secretary
URS GREINER WOODWARD-CLYDE GROUP, INC.
By /s/ Kent P. Ainsworth
--------------------------------------
Name: Kent P. Ainsworth
Title: Chief Financial Officer and
Secretary
<PAGE>
GCH ACQUISITION CORP.
By /s/ Jean-Yves Perez
-------------------------------------
Name: Jean-Yves Perez
Title: President
GEO-CON, INC.
By /s/ Jean-Yves Perez
-------------------------------------
Name: Jean-Yves Perez
Title: Vice President
URS GREINER WOODWARD-CLYDE FEDERAL
SERVICES, INC.
By /s/ Gary V. Jandegian
--------------------------------------
Name: Gary V. Jandegian
Title: President
URS GREINER WOODWARD-CLYDE LICENSING
CORP.
By /s/ Cynthia L. Jorgensen
--------------------------------------
Name: Cynthia L. Jorgensen
Title: President and Treasurer
URS GREINER WOODWARD-CLYDE OPERATING
SERVICES, INC.
By /s/ Cynthia L. Jorgensen
--------------------------------------
Name: Cynthia L. Jorgensen
Title: Vice President and Treasurer
<PAGE>
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By /s/ Bryan Andrzejewski
----------------------------
Name: Bryan Andrzejewski
Title: Vice-President
<PAGE>
Annex A
GUARANTORS
Demeter Acquisition Corporation
URS Consultants, Inc. -- Florida
URS Greiner Woodward-Clyde Consultants, Inc.
URS Greiner Woodward-Clyde Consultants, Inc. -- Colorado
URS Greiner Woodward-Clyde Engineering, Inc.
URS Greiner Woodward-Clyde Group Consultants, Inc.
URS Greiner Woodward-Clyde, Inc. -- California
URS Greiner Woodward-Clyde, Inc. -- Ohio
URS Greiner Woodward-Clyde, Inc. -- Washington
URS Greiner Woodward-Clyde, Inc. (Colorado)
URS Greiner Woodward-Clyde, Inc. (Connecticut)
URS Greiner Woodward-Clyde, Inc. Great Lakes
URS Greiner Woodward-Clyde, Inc. (Maryland)
URS Greiner Woodward-Clyde, Inc. Pacific
URS Greiner Woodward-Clyde, Inc. Southern
URS Greiner Woodward-Clyde, Inc. Southwest
URS Greiner Woodward-Clyde International -- Americas, Inc.
URS Greiner Woodward-Clyde International Holdings, Inc.
WVP Corporation
URS Greiner Woodward-Clyde Group, Inc.
GCH Acquisition Corp.
Geo-con, Inc.
URS Greiner Woodward-Clyde Federal Services, Inc.
URS Greiner Woodward-Clyde Licensing Corp.
URS Greiner Woodward-Clyde Operating Services, Inc.
Dames & Moore Group
<PAGE>
EXHIBIT 2.7
$200,000,000
URS CORPORATION
12 1/4% Senior Subordinated Notes Due 2009
PLACEMENT AGREEMENT
June 18, 1999
<PAGE>
June 18, 1999
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
URS Corporation, a Delaware corporation (the "COMPANY"), proposes to issue
and sell to Morgan Stanley & Co. Incorporated (the "PLACEMENT AGENT")
$200,000,000 principal amount of its 12 1/4% Senior Subordinated Notes due 2009
(the "SECURITIES") to be issued pursuant to the provisions of an Indenture dated
as of June 23, 1999 (the "INDENTURE") among the Company, the subsidiaries of the
Company listed on Schedule I hereto (collectively, the "GUARANTORS"), as
guarantors, and Firstar Bank of Minnesota, N.A., as Trustee (the "TRUSTEE").
The obligations of the Company under the Securities and the Indenture will be
jointly and severally guaranteed on a senior subordinated basis by the
Guarantors pursuant to the terms of the Indenture (the "GUARANTEES").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act and in offshore transactions in reliance
on Regulation S under the Securities Act ("REGULATION S").
The Placement Agent and its direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement, substantially in
the form attached hereto as Exhibit A, dated the date hereof between the
Company, the Guarantors and the Placement Agent (the "REGISTRATION RIGHTS
AGREEMENT").
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will prepare
a final offering memorandum (the "FINAL MEMORANDUM" and, with the Preliminary
Memorandum, each a "MEMORANDUM") including or incorporating by reference a
description of the terms of the Securities, the terms of the offering and a
description of the Company. As used herein, the term "Memorandum" shall mean,
as of any date or time referred to in this Agreement, the most recent offering
memorandum (whether the Preliminary Memorandum or the Final Memorandum,
including any amendment or supplement to either such document) and including any
exhibits or schedules thereto and shall include in each case the documents
incorporated by reference therein. The terms "SUPPLEMENT", "AMENDMENT" and
"AMEND" as used herein with respect to a Memorandum shall include all documents
deemed to be incorporated by reference in the Preliminary Memorandum or Final
Memorandum that are filed subsequent to the date of such Memorandum with the
Securities and Exchange Commission (the "COMMISSION") pursuant to the Securities
Exchange Act of 1934, as
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2
amended (the "EXCHANGE ACT").
The Securities are being issued and sold in connection with the acquisition
(the "ACQUISITION") by the Company of all of the issued and outstanding shares
of the capital stock of Dames & Moore Group, a Delaware corporation ("DAMES &
MOORE"). The Acquisition is being accomplished through a tender offer (the
"TENDER OFFER") by Demeter Acquisition Corporation, a Delaware corporation and a
wholly owned subsidiary of the Company ("DEMETER"), for up to all of the issued
and outstanding shares of the capital stock of Dames & Moore, followed by a
merger (the "MERGER") of Demeter with and into Dames & Moore, pursuant to an
Agreement and Plan of Merger, dated May 5, 1999, among the Company, Demeter and
Dames & Moore (the "MERGER AGREEMENT"), pursuant to which Dames & Moore will
continue as the surviving corporation. In connection with the Acquisition, on
June 9, 1999, the date of the consummation of the Tender Offer, the Company (i)
issued $100,000,000 of new Series A Preferred Stock and new Series C Preferred
Stock (the "RCBA EQUITY INVESTMENT") to RCBA Strategic Partners, L.P. ("RCBA")
pursuant to a Securities Purchase Agreement, dated May 5, 1999, between RCBA and
the Company (the "RCBA AGREEMENT"), (ii) issued $200,000,000 principal amount of
its Senior Subordinated Increasing Rate Notes due 2009 (the "BRIDGE NOTES") to
the Placement Agent pursuant to a Note Purchase Agreement, dated June 9, 1999,
between the Placement Agent and the Company (the "BRIDGE NOTES PURCHASE
AGREEMENT"), and (iii) entered into a Credit Agreement, dated June 9, 1999,
among the Company, Wells Fargo Bank, National Association, as administrative
agent, and the lenders party thereto (the "CREDIT AGREEMENT"). The Merger
Agreement, the RCBA Agreement, the Bridge Notes Purchase Agreement, the Credit
Agreement, this Agreement, the Indenture, the Registration Rights Agreement, and
all documents contemplated hereunder and thereunder, are collectively referred
to herein as the "TRANSACTION DOCUMENTS".
1. Representations and Warranties. The Company and each of the Guarantors
represents and warrants to, and agrees with, you that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Memorandum complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder and (ii) the
Preliminary Memorandum does not contain and the Final Memorandum, in the form
used by the Placement Agent to confirm sales and on the Closing Date (as defined
in Section 4), will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in either Memorandum based upon information relating to
the Placement Agent furnished to the Company in writing by the Placement
<PAGE>
3
Agent expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole (a "MATERIAL
ADVERSE EFFECT").
(c) The Guarantors constitute the "Initial Subsidiary Guarantors" as
such term is defined in the Preliminary Memorandum.
(d) Each Guarantor has been duly organized, is validly existing as an
organization in good standing under the laws of the jurisdiction of its
organization, has the power and authority to own its property and to
conduct its business as described in the Memorandum and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect;
all of the issued shares of capital stock or other equity interests of each
Guarantor have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims, other than
(i) as contemplated pursuant to the Credit Agreement, (ii) any director's
qualifying shares, shares owned by professional engineers in connection
with licensing requirements or investments by foreign nationals mandated by
applicable law, or (iii) any outstanding shares of Dames & Moore not owned
by the Company on the date hereof, which shares will be acquired by the
Company upon consummation of the Merger.
(e) This Agreement has been duly authorized, executed and delivered
by the Company and each Guarantor.
(f) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Placement Agent in accordance with the
terms of this Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity, and will be entitled to the
benefits of the Indenture and the Registration Rights Agreement.
<PAGE>
4
(g) Each of the Merger Agreement, the RCBA Agreement, the Bridge
Notes Purchase Agreement, the Credit Agreement, the Indenture, and the
Registration Rights Agreement has been duly authorized and, when executed
and delivered by the Company and, if applicable, each Guarantor, will be a
valid and binding agreement of the Company and, if applicable, each
Guarantor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity, and except as rights to
indemnification and contribution may be limited under applicable law.
(h) The execution and delivery by the Company and, if applicable,
each Guarantor of, and the performance by the Company and, if applicable,
each Guarantor of its obligations under the Transaction Documents and, in
the case of the Company, the Securities will not contravene any provision
of applicable law or the certificate of incorporation or by-laws of the
Company or, if applicable, any Guarantor or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company and, if applicable,
each Guarantor of its obligations under the Transaction Documents and, in
the case of the Company, the Securities, other than consents, approvals,
authorizations or orders, which the failure to receive would not have a
Material Adverse Effect, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Securities and by Federal and state securities laws with
respect to the Company's and each Guarantor's obligations under the
Registration Rights Agreement.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Final Memorandum.
(j) There are no legal or governmental proceedings pending or to the
knowledge of the Company threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject, other than proceedings accurately
described in all material respects in each Memorandum and proceedings that
would not have a Material Adverse Effect or a material adverse effect on
the power or ability of the Company and, if applicable, each Guarantor to
perform its obligations under the Transaction Documents or, in the case of
the Company, the Securities, or to consummate the transactions contemplated
by the Final Memorandum.
<PAGE>
5
(k) Except as disclosed in the Memorandum, the Company and its
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a Material Adverse
Effect.
(l) Except as disclosed in the Memorandum, there are no costs or
liabilities of the Company or its subsidiaries associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a Material Adverse
Effect.
(m) Neither the Company nor any Guarantor is, nor after giving effect
to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, will be an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
(n) Neither the Company, any Guarantor nor any affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act, an "AFFILIATE") of
the Company or of any Guarantor has directly, or through any agent, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising in
connection with the offering of the Securities (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(o) None of the Company, its Affiliates or any person acting on its
or their behalf (other than the Placement Agent, as to which no
representation is made) has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Securities
and the Company and its Affiliates and any person acting on its or their
behalf (other than the Placement Agent, as to which no
<PAGE>
6
representation is made) have complied and will comply with the offering
restrictions requirement of Regulation S.
(p) It is not necessary in connection with the offer, sale and
delivery of the Securities and the Guarantees to the Placement Agent in the
manner contemplated by this Agreement to register the Securities or the
Guarantees under the Securities Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended.
(q) The Securities and the Guarantees satisfy the requirements set
forth in Rule 144A(d)(3) under the Securities Act.
(r) The Securities and the Guarantees conform in all material respects
to the description thereof contained in the Final Memorandum under the
heading "Description of the Notes".
(s) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations of
the Company or any of its subsidiaries will be affected by the Year 2000
Problem (that is, any significant risk that computer hardware or software
applications used by the Company and its subsidiaries will not, in the case
of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000); as a result of such review, the Company has no
reason to believe, and does not believe, that (A) there are any issues
related to the Company's preparedness to address the Year 2000 Problem that
are of a character required to be described or referred to in the Final
Memorandum which have not been accurately described in the Final Memorandum
and (B) the Year 2000 Problem will have a Material Adverse Effect.
(t) The Company and each of its subsidiaries (i) have all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and have made all declarations and filings with, all federal,
state, local and other governmental, administrative or regulatory
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use their respective properties and
assets and to conduct their respective businesses in the manner described
in the Memorandum, except to the extent that the failure to obtain such
consents, authorizations, approvals, orders, certificates and permits or
make such declarations and filings would not have a Material Adverse
Effect, and (ii) have not received any notice of proceedings relating to
revocation or modification of any such consent, authorization, approval,
order, certificate or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, except as described in the Memorandum.
<PAGE>
7
(u) The Company and each of the Guarantors have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them which is material to their respective
businesses, in each case free and clear of all liens, encumbrances and
defects, other than as contemplated pursuant to the Credit Agreement,
except such as (i) are described in the Memorandum, (ii) do not materially
affect the value of such property or (iii) do not interfere with the use
made and proposed to be made of such property by them; and any real
property and buildings held under lease by them are held under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not materially interfere with the use made and proposed to be made
of such property and buildings by them, in each case except as described in
the Memorandum.
(v) No material labor dispute exists with the employees of the Company
or any of its subsidiaries, except as described in or contemplated by the
Memorandum, or, to its knowledge, is imminent; and it is not aware of any
existing, threatened or imminent labor disturbance by the employees of any
of its principal suppliers, manufacturers or contractors that could have a
Material Adverse Effect.
(w) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; since November 1, 1998, neither the Company nor any of its
subsidiaries has been refused any insurance coverage sought or applied for;
and neither the Company nor any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect, except as described in each
Memorandum.
(x) Except for the presentation of Adjusted EBITDA (as defined in the
Memorandum), the financial statements and pro forma financial information
contained in the Memorandum comply with the requirements of Regulation S-X
of the Commission.
(y) The Tender Offer has been consummated in accordance with the terms
of the Merger Agreement, no term, provision or condition of which has been
amended, supplemented, waived or otherwise modified in any material respect
without the prior written consent of the Placement Agent and the Merger
Agreement is in full force and effect.
(z) The RCBA Equity Investment has been consummated in accordance with
the terms of the RCBA Agreement, no term, provision or condition of which
has been
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8
amended, supplemented, waived or otherwise modified in any material respect
and the RCBA Agreement is in full force and effect.
(aa) The Bridge Notes Purchase Agreement has been executed by the
parties thereto and is in full force and effect and the Company has issued
the Bridge Notes to the Placement Agent.
(aa) The Credit Agreement has been executed by the parties thereto and
is in full force and effect, all conditions to the initial loans thereunder
have been satisfied or waived and the initial Term Loans and Acquisition
Revolving Loans (each as defined in the Credit Agreement) have been made to
the Company and the proceeds of the loans have been applied by the Company
as contemplated under the Credit Agreement.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the Placement Agent, and the Placement Agent, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase from the Company $200,000,000 principal
amount of the Securities at a purchase price of 97.25% of the principal amount
thereof (the "PURCHASE PRICE") plus accrued interest, if any, to the Closing
Date.
The Company hereby agrees that, without the prior written consent of
the Placement Agent, it will not, during the period beginning on the date hereof
and continuing to and including the Closing Date, offer, sell, contract to sell
or otherwise dispose of any debt of the Company or warrants to purchase debt of
the Company substantially similar to the Securities (other than the sale of the
Securities under this Agreement.)
3. Terms of Offering. You have advised the Company and the
Guarantors that the Placement Agent will make an offering of the Securities
purchased by the Placement Agent hereunder on the terms to be set forth in the
Final Memorandum, as soon as practicable after this Agreement is entered into as
in your judgment is advisable.
4. Payment and Delivery. Payment for the Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Securities for the account of the Placement Agent at
10:00 a.m., New York City time, on June 23, 1999, or at such other time on the
same or such other date, not later than June 30, 1999, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the "CLOSING DATE."
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates
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9
evidencing the Securities shall be delivered to you on the Closing Date for the
account of the Placement Agent, with any transfer taxes payable in connection
with the transfer of the Securities to the Placement Agent duly paid, against
payment of the Purchase Price therefor plus accrued interest, if any, to the
date of payment and delivery.
5. Conditions to the Placement Agent's Obligations. The obligations
of the Placement Agent to purchase and pay for the Securities on the Closing
Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Company
or any of the Company's securities or in the rating outlook for the
Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Final Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms and in
the manner contemplated in the Final Memorandum.
(b) The Placement Agent shall have received on the Closing Date
certificates from the Company and each Guarantor, dated the Closing Date
and signed by an executive officer of the Company and of each Guarantor, to
the effect set forth in Section 5(a)(i), if applicable, and to the effect
that the representations and warranties of the Company and each Guarantor
contained in this Agreement are true and correct as of the Closing Date and
the Company and each Guarantor has complied in all material respects with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
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10
(c) The Placement Agent shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for
the Company, dated the Closing Date, to the effect set forth in Exhibit B.
Such opinion shall be rendered to the Placement Agent at the request of the
Company and shall so state therein.
(d) (i) The Placement Agent shall have received on the Closing
Date an opinion of Cooley Godward LLP, special counsel for the Company,
dated the Closing Date, to the effect set forth in Exhibit C. Such opinion
shall be rendered to the Placement Agent at the request of the Company and
shall so state therein.
(ii) The Placement Agent shall have received on the Closing
Date an opinion of Vorys, Sater, Seymour and Pease LLP, special Ohio
counsel for URS Greiner Woodward-Clyde, Inc.- Ohio, dated the Closing
Date, in form and substance satisfactory to you.
(iii) The Placement Agent shall have received on the Closing
Date an opinion of Marshall Hill Cassas & de Lipkau, special Nevada
counsel for each of URS Greiner Woodward-Clyde International-Americas,
Inc., URS Greiner Woodward-Clyde Engineering, Inc. and URS Greiner
Woodward-Clyde, Inc. Pacific, dated the Closing Date, in form and
substance satisfactory to you.
(e) The Placement Agent shall have received on the Closing Date an
opinion of Latham & Watkins, special counsel for Dames & Moore, dated the
Closing Date, to the effect set forth in Exhibit D.
(f) The Placement Agent shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Placement Agent, dated the
Closing Date, in form and substance satisfactory to you.
(g) The Placement Agent shall have received on each of the date
hereof and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Placement Agent, from PricewaterhouseCoopers LLC, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements of the Company and certain financial information
contained in or incorporated by reference into the Final Memorandum;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(h) The Placement Agent shall have received on each of the date
hereof and
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11
the Closing Date a letter, dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Placement Agent,
from KPMG Peat Marwick LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
of Dames & Moore and certain financial information contained in or
incorporated by reference into the Final Memorandum; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
(i) The Placement Agent shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
(j) On or prior to the Closing Date, the Bridge Notes shall have been
redeemed by the Company.
6. Covenants of the Company and the Guarantors. In further
consideration of the agreements of the Placement Agent contained in this
Agreement, the Company and the Guarantors each covenants with the Placement
Agent as follows:
(a) To furnish to you in New York City, without charge, prior to 5:00
p.m. New York City time on the business day next succeeding the date of
this Agreement (or such other date as you and we may mutually agree) and
during the period mentioned in Section 6(c), as many copies of the Final
Memorandum and any supplements and amendments thereto as you may reasonably
request.
(b) Before amending or supplementing either Memorandum, to furnish to
you a copy of each such proposed amendment or supplement and not to use any
such proposed amendment or supplement to which you reasonably object;
provided, however, that your consent to such amendment or supplement may
not be unreasonably withheld or delayed.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Placement
Agent, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Memorandum in order to make the
statements therein, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Placement Agent, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Placement Agent, either
amendments or supplements to the Final Memorandum so that the statements in
the Final Memorandum as so amended or supplemented will not, in the light
of the
<PAGE>
12
circumstances when the Final Memorandum is delivered to a purchaser, be
misleading or so that the Final Memorandum, as amended or supplemented,
will comply with applicable law.
(d) To endeavor to qualify the Securities and the Guarantees for
offer and sale under the securities or Blue Sky laws of such jurisdictions
as you shall reasonably request; provided, however, that the Company shall
not be required in connection therewith to register or qualify as a foreign
corporation where it is not now so qualified.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including:
(i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the issuance
and sale of the Securities and all other fees or expenses in
connection with the preparation of each Memorandum and all amendments
and supplements thereto, including all printing costs associated
therewith, and the delivering of copies thereof to the Placement
Agent, in the quantities herein above specified,
(ii) all costs and expenses related to the transfer and
delivery of the Securities to the Placement Agent, including any
transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection
with the qualification of the Securities for offer and sale under
state securities laws as provided in Section 6(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for
the Placement Agent in connection with such qualification and in
connection with the Blue Sky or legal investment memorandum,
(iv) any fees charged by rating agencies for the rating of the
Securities,
(v) the fees and expenses, if any, incurred in connection with
the admission of the Securities for trading in PORTAL or any
appropriate market system,
(vi) the costs and charges of the Trustee and any transfer
agent, registrar or depositary,
<PAGE>
13
(vii) the cost of the preparation, issuance and delivery of the
Securities and the Guarantees,
(viii) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Securities, including,
without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval
of the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and
(ix) all other costs and expenses incident to the performance
of the obligations of the Company and the Guarantors hereunder for
which provision is not otherwise made in this Section.
It is understood, however, that except as provided in this Section,
Section 8, and the last paragraph of Section 10, the Placement Agent will
pay all of its costs and expenses, including fees and disbursements of its
counsel, transfer taxes payable on resale of any of the Securities by it
and any advertising expenses connected with any offers it may make.
(f) Neither the Company, any Guarantor nor any Affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require
the registration under the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(h) While any of the Securities remain "restricted securities" within
the meaning of the Securities Act, to make available, upon request, to any
seller of the Securities the information specified in Rule 144A(d)(4) under
the Securities Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.
(i) If requested by you, to use its best efforts to permit the
Securities to be
<PAGE>
14
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market.
(j) None of the Company, its Affiliates or any person acting on its
or their behalf (other than the Placement Agent) will engage in any
directed selling efforts (as that term is defined in Regulation S) with
respect to the Securities, and the Company and its Affiliates and each
person acting on its or their behalf (other than the Placement Agent) will
comply with the offering restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them.
(l) The Company will apply the Purchase Price as set forth in the
Final Memorandum under the caption "The Dames & Moore Acquisition, The
Financing Plan and Use of Proceeds".
(m) The Company will use its best efforts to consummate the Merger, in
accordance with the Merger Agreement, as soon as practicable following the
date hereof.
7. Offering of Securities; Restrictions on Transfer. (a) The
Placement Agent represents and warrants that it is a qualified institutional
buyer as defined in Rule 144A under the Securities Act (a "QIB"). The Placement
Agent agrees with the Company and the Guarantors that (i) it will not solicit
offers for, or offer or sell, such Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (ii) it will solicit
offers for such Securities only from, and will offer such Securities only to,
persons that it reasonably believes to be (A) in the case of offers inside the
United States, QIBs and (B) in the case of offers outside the United States, to
persons other than U.S. persons ("FOREIGN PURCHASERS," which term shall include
dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or
trust)) in reliance upon Regulation S under the Securities Act that, in each
case, in purchasing such Securities are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Transfer Restrictions".
(b) The Placement Agent represents, warrants, and agrees with respect to
offers and sales outside the United States that:
(i) it understands that no action has been or will be taken in any
jurisdiction
<PAGE>
15
by the Company or the Guarantors that would permit a public offering of the
Securities, or possession or distribution of either Memorandum or any other
offering or publicity material relating to the Securities, in any country
or jurisdiction where action for that purpose is required;
(ii) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes either Memorandum or any such other
material, in all cases at its own expense;
(iii) the Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Rule 144A
or Regulation S under the Securities Act or pursuant to another exemption
from the registration requirements of the Securities Act;
(iv) it has offered the Securities and will offer and sell the
Securities (A) as part of its distribution at any time and (B) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S or as
otherwise permitted in Section 7(a); accordingly, neither the Placement
Agent, its Affiliates nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (within the meaning
of Regulation S) with respect to the Securities, and the Placement Agent,
its Affiliates and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S;
(v) it has (A) not offered or sold and, prior to the date six
months after the Closing Date, will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (B) complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom, and (C) only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on;
<PAGE>
16
(vi) it understands that the Securities have not been and will not
be registered under the Securities and Exchange Law of Japan, and
represents that it has not offered or sold, and agrees not to offer or
sell, directly or indirectly, any Securities in Japan or for the account of
any resident thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law; and
(vii) it agrees that, at or prior to confirmation of sales of the
Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
Terms used in this Section 7(b) have the meanings given to them by
Regulation S.
8. Indemnity and Contribution. (a) The Company and each Guarantor
agrees to indemnify and hold harmless the Placement Agent and each person, if
any, who controls the Placement Agent within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Memorandum (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Placement Agent furnished to the Company in writing
by the Placement Agent expressly for use therein; provided, however, that the
foregoing indemnity with respect to any Preliminary Memorandum shall not inure
to the benefit of the Placement Agent from whom the person asserting any such
losses, claims, damages or liabilities purchased Securities, or any person
controlling the Placement Agent, if a copy of the Final Memorandum (as then
amended or supplemented if the Company shall have furnished any
<PAGE>
17
amendments or supplements thereto) was not sent or given by or on behalf of the
Placement agent to such person at or prior to the written confirmation of the
sale of the Securities to such person, and if the Final Memorandum (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability.
(b) The Placement Agent agrees to indemnify and hold harmless the Company,
the Guarantors, their directors, their officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to the Placement Agent, but only with reference to
information relating to the Placement Agent furnished to the Company in writing
by the Placement Agent expressly for use in either Memorandum or any amendments
or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel and the
indemnifying party has agreed to pay the fees and expenses of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred upon written request and presentation of invoices. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by
<PAGE>
18
the second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party for such fees
and expenses of counsel in accordance with such request prior to the date of
such settlement. Notwithstanding the immediately preceding sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by this Section 8(c) effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance with such
request to the extent that it in good faith considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Placement Agent on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause 8(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors on the one hand
and of the Placement Agent on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors on the one hand and the Placement
Agent on the other hand in connection with the offering of the Securities shall
be deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total discounts and commissions received by the Placement Agent in
respect thereof, as set forth in the Final Memorandum, bear to the aggregate
offering price of the Securities, as set forth in the Final Memorandum. The
relative fault of the Company and the Guarantors on the one hand and of the
Placement Agent on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates
<PAGE>
19
to information supplied by the Company, the Guarantors or by the Placement Agent
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company, the Guarantors and the Placement Agent agree that it
would not be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 8(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, the Placement Agent shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities resold by
it in the initial placement of such Securities were offered to investors exceeds
the amount of any damages that the Placement Agent has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company and the
Guarantors contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Placement Agent or any person
controlling the Placement Agent or by or on behalf of the Company and the
Guarantors, their officers or directors or any person controlling the Company or
the Guarantors and (iii) acceptance of and payment for any of the Securities.
9. Termination. This Agreement shall be subject to termination by
notice given by you to the Company and the Guarantors, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, or the National Association of Securities Dealers, Inc., (ii) trading
of any securities of the Company or the Guarantors shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 9(a)(i) through 9(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment,
<PAGE>
20
impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum.
10. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Placement Agent, because
of any failure or refusal on the part of the Company or any Guarantor to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company or any Guarantor shall be unable to perform its
obligations under this Agreement, the Company and the Guarantors will reimburse
the Placement Agent for all out-of-pocket expenses (including the fees and
disbursements of its counsel) reasonably incurred by the Placement Agent in
connection with this Agreement or the offering contemplated hereunder.
11. Notices. All notices and other communications under this
Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Placement Agent, Morgan Stanley & Co.
Incorporated, 1585 Broadway, New York, New York 10036, attention: High Yield New
Issues Group, facsimile number (212) 761-0587 and if sent to the Company or the
Guarantors, to URS Corporation, 100 California Street, Suite 500, San Francisco,
CA, attention: General Counsel, facsimile number (415) 834-1506.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
<PAGE>
Very truly yours,
URS CORPORATION
By /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President, Chief
Financial Officer and Secretary
GUARANTORS: DAMES & MOORE GROUP
By /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President and Secretary
DEMETER ACQUISITION CORPORATION
URS CONSULTANTS, INC. -- FLORIDA
URS GREINER WOODWARD-CLYDE CONSULTANTS, INC.
URS GREINER WOODWARD-CLYDE CONSULTANTS, INC. --
COLORADO
URS GREINER WOODWARD-CLYDE ENGINEERING, INC.
URS GREINER WOODWARD-CLYDE GROUP CONSULTANTS, INC.
URS GREINER WOODWARD-CLYDE, INC. -- CALIFORNIA
URS GREINER WOODWARD-CLYDE, INC. -- OHIO
URS GREINER WOODWARD-CLYDE, INC. -- WASHINGTON
<PAGE>
URS GREINER WOODWARD-CLYDE, INC. (COLORADO)
URS GREINER WOODWARD-CLYDE, INC. (CONNECTICUT)
URS GREINER WOODWARD-CLYDE, INC. GREAT LAKES
URS GREINER WOODWARD-CLYDE, INC. (MARYLAND)
URS GREINER WOODWARD-CLYDE, INC. PACIFIC
URS GREINER WOODWARD-CLYDE, INC. SOUTHERN
URS GREINER WOODWARD-CLYDE, INC. SOUTHWEST
URS GREINER WOODWARD-CLYDE INTERNATIONAL --
AMERICAS, INC.
URS GREINER WOODWARD-CLYDE
INTERNATIONAL HOLDINGS, INC.
By /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President, Chief
Financial Officer and Secretary
<PAGE>
WVP CORPORATION
By /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Vice President, Chief Financial Officer
and Secretary
URS GREINER WOODWARD-CLYDE
GROUP, INC.
By /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Chief Financial Officer and Secretary
<PAGE>
GCH ACQUISITION CORP.
By /s/ Jean-Yves Perez
----------------------------------------
Name: Jean-Yves Perez
Title: President
GEO-CON, INC.
By /s/ Jean-Yves Perez
----------------------------------------
Name: Jean-Yves Perez
Title: Vice President
URS GREINER WOODWARD-CLYDE FEDERAL SERVICES, INC.
By /s/ Gary V. Jandegian
----------------------------------------
Name: Gary V. Jandegian
Title: President
URS GREINER WOODWARD-CLYDE LICENSING CORP.
By /s/ Cynthia L. Jorgensen
----------------------------------------
Name: Cynthia L. Jorgensen
Title: President and Treasurer
URS GREINER WOODWARD-CLYDE OPERATING
SERVICES, INC.
By /s/ Cynthia L. Jorgensen
----------------------------------------
Name: Cynthia L. Jorgensen
Title: Vice President and Treasurer
<PAGE>
Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Brian Andrzejewski
--------------------------------------
Name: Bryan Andrzejewski
Title: Vice-President
<PAGE>
SCHEDULE I
GUARANTORS
Demeter Acquisition Corporation
URS Consultants, Inc. -- Florida
URS Greiner Woodward-Clyde Consultants, Inc.
URS Greiner Woodward-Clyde Consultants, Inc. -- Colorado
URS Greiner Woodward-Clyde Engineering, Inc.
URS Greiner Woodward-Clyde Group Consultants, Inc.
URS Greiner Woodward-Clyde, Inc. -- California
URS Greiner Woodward-Clyde, Inc. -- Ohio
URS Greiner Woodward-Clyde, Inc. -- Washington
URS Greiner Woodward-Clyde, Inc. (Colorado)
URS Greiner Woodward-Clyde, Inc. (Connecticut)
URS Greiner Woodward-Clyde, Inc. Great Lakes
URS Greiner Woodward-Clyde, Inc. (Maryland)
URS Greiner Woodward-Clyde, Inc. Pacific
URS Greiner Woodward-Clyde, Inc. Southern
URS Greiner Woodward-Clyde, Inc. Southwest
URS Greiner Woodward-Clyde International -- Americas, Inc.
URS Greiner Woodward-Clyde International Holdings, Inc.
WVP Corporation
URS Greiner Woodward-Clyde Group, Inc.
GCH Acquisition Corp.
Geo-con, Inc.
URS Greiner Woodward-Clyde Federal Services, Inc.
URS Greiner Woodward-Clyde Licensing Corp.
URS Greiner Woodward-Clyde Operating Services, Inc.
Dames & Moore Group
<PAGE>
Exhibit 23.1
The Board of Directors
Dames & Moore Group
We consent to the incorporation by reference of our report dated May 21, 1999
with respect to the consolidated statements of financial position of Dames &
Moore Group and subsidiaries as of March 26, 1999 and March 27, 1998, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the years in the three-year period ended March 26, 1999, which
report appears in the Form 8-K of URS Corporation dated June 11, 1999.
/s/ KPMG, LLP
Los Angeles, California
July 1, 1999
<PAGE>
EXHIBIT 99.2
Sard Verbinnen & Co.
Andrew Merrill/Kim Polan
(212) 687-8080
URS Corporation
Kent P. Ainsworth
Executive Vice President
& Chief Financial Officer
(415) 774-2700
URS CORPORATION COMPLETES ACQUISITION OF
DAMES & MOORE GROUP
_____________________________________________________________
SAN FRANCISCO, CA, June 24, 1999 - URS Corporation (NYSE: URS) today
announced that it has completed its previously announced acquisition of Dames &
Moore Group (NYSE: DM) for $16 per share in cash, or approximately $300 million.
URS also refinanced approximately $300 million in Dames & Moore debt. The
combination, which was announced on May 5, 1999, creates a leading global
engineering company with revenues of approximately $2 billion and over 15,000
employees in more than 30 countries around the world.
Martin M. Koffel, Chairman and Chief Executive Officer of URS
Corporation said, "The strategic benefits of combining URS and Dames & Moore are
considerable--together we will have the resources, the technical expertise and
the geographic reach to meet the evolving needs of our clients and to compete
with the largest firms on a global basis."
Added Koffel, "We are working hard to achieve a seamless integration of
our two companies and look forward to the opportunities this important
combination creates for both our customers and our employees."
URS completed the acquisition on June 23, 1999, through a short-form
merger of its wholly owned subsidiary into Dames & Moore after accepting
approximately 17.6 million, or approximately 95% of the outstanding Dames &
Moore shares for payment on June 9, 1999, upon the conclusion
<PAGE>
of the previously announced tender offer. As a result of the short-form merger,
Dames & Moore has become a direct, wholly owned subsidiary of URS and, subject
to appraisal rights, each remaining outstanding Dames & Moore share has been
converted into the right to receive $16.00 in cash, without interest.
Financing for the Dames & Moore acquisition consists of $550 million
of senior bank debt arranged by Wells Fargo Bank, N.A., $200 million of
subordinated debt placed by Morgan Stanley Dean Witter and $100 million from a
private placement of preferred stock with RCBA Strategic Partners. Financing
proceeds in excess of the purchase price are being used to refinance existing
URS and Dames & Moore debt and will be available for working capital purposes.
The Company also reported the delisting of Dames & Moore common stock from the
New York Stock Exchange effective as of June 24, 1999.
Headquartered in San Francisco, URS offers a broad range of engineering,
planning, design, and program and construction management services for
transportation, hazardous waste, industrial processing and petrochemical,
general building and water/wastewater projects. URS serves federal, state and
local governmental agencies as well as private clients in the chemical,
manufacturing, pharmaceutical, forest products, mining, oil and gas, and
utilities industries.
This press release contains "forward-looking statements" within the
meaning of the securities laws, including statements about the continued
strength of the Company's business and the effect of the Dames & Moore
acquisition. We believe that our expectations are reasonable and are based on
reasonable assumptions. However, risks and uncertainties relating to future
events that could cause actual results to differ materially from our
expectations include our dependency on government programs and contracts,
competitive practices in the industry, our ability to attract and retain
qualified professionals, exposure to potential liability, and other factors
discussed more fully in the Company's 1998 Form 10-K, its Form 10-Q for the
quarter ended April 30, 1999 filed with the Securities and Exchange Commission
on June 14, 1999 and other publicly available reports filed with the Securities
and Exchange Commission from time to time. The Company does not intend, and
assumes no obligation, to update any forward-looking statements.
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